BusinessDay 13 Dec 2018 by BusinessDay

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Investors eye Nigeria solid minerals fortune in new mining rush J F

Homebuyers, renters vote with feet, relocate to affordable locations

ODINAKA ANUDU

oreign and local investors are acquiring new mining sites in Nigeria to tap from a cash-spinning sector that has remained largely underutilised and under the radar

Kian Smith breaks ground for first Gold Refinery

since the crude oil boom. “Investments, mainly from foreign companies, are taking place in the sector right now. The reason is that the mining

environment is getting more attention from the government and better too,” Shehu Sani, president of Miners Association of Nigeria (MAN), told Business-

Day in a telephone interview. Symbol Mining, an Australian publicly listed company, recent-

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... as worsening economic conditions hurt gated estate landlords, investors

CHUKA UROKO & STELLA ENENCHE, Abuja ob losses, shrinking personal/household income and cost-push inflation, which are reflections of the bad state of the Nigerian economy, have made it difficult and impossible, in some cases, for people to buy or rent houses and even pay house rents for those who already have accommodation. In effect, there have been a lot of movements, notably in the last three years when the economy took a drastic turn for the worse, leaving landlords and those who have invested in build-to-rent houses in dire straits. Continues on page 38

Inside Atiku signs Peace Accord, says credible polls doubtful without new Electoral Act P. 4

L-R: Funmi Ekundayo, MD/CEO, STL Trustees Limited; Isiaka Adegboyega Oyetola, Osun State governor, and Akin Oni, head of trust services and legal, STL Trustees Limited, during an official call on Isiaka Adegboyega Oyetola in Oshogbo, the state capital.

INVESTIGATION: Nigeria bleeds as NNPC’s under-recovery claims grew 600% in six months P. 24

BUSINESS DAY

Thursday 13 December 2018

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Atiku signs Peace Accord, says credible polls doubtful without new Electoral Act T

OWEDE AGBAJILEKE, Abuja

he Presidential candidate of the P e o p l e’s D e m o cratic Party (PDP), Atiku Abubakar, finally signed the Peace Accord after being absent from the Tuesday signing ceremony. The former Vice President who arrived the Kukah Centre in Wuse II, Abuja, at exactly 11:57am on Wednesday, was accompanied to the event by PDP National Chairman, Uche Secondus and other stalwarts of the party. He signed the document at exactly 12:07pm. The event was witnessed by the United States Ambassador to Nigeria, Stuart Symington, United Nations Special Representative of the SecretaryGeneral for West Africa and the Sahel, Mohamed Ibn Chambas, diplomats from the European Union (EU) and other members of the international com-

munity. Speaking after signing the document, Atiku said the only way for Nigerians to take Buhari’s commitment to peaceful elections seriously, was to sign the Electoral Act (Amendment) Bill into law, which he declined assent to recently. Atiku said: “I am a democrat ab initio. I was never converted. I have always been a democrat. And I fought the military to return this country to democracy. However, the best way to guarantee peace in any election is to ensure manifest justice to all concerned. “I am delighted that the President has agreed to sign this Peace Accord. I will want to appeal to him to also sign the Electoral Act (Amendment) Bill. The President needs to understand that as long as he refuses to sign the bill, we will have doubts that this govern-

ment is truly committed to free, fair and credible elections.” Some of the items on the accord include running an issue-based campaign at national, state and local government levels as well as refraining from speeches that would incite violence. The document also enjoined candidates to support the Independent National Electoral Commission (INEC) to ensure a free and fair process, speak out against provocative utterances and oppose all acts of electoral violence by supporters and/or opponents. Earlier in his remarks, Chair man of the National Peace Committee and former Head of State, Abdulsalami Abubakar, apologised to the PDP and other presidential candidates that failed to show up to sign the document on Tuesday due to a communications gap.

It would be recalled that President Buhari had on December 7 declined assent to the Electoral Act (Amendment) Bill for the fourth time. In separate letters addressed to Senate President Bukola Saraki and Speaker, House of Representatives Yakubu Dogara, the President explained that signing the amendment bill close to the 2019 elections could “create some uncertainty about the legislation to govern the process. “Any real or apparent change to the rules this close to the elections may provide an opportunity for disruption and confusion in respect of which law governs the electoral process”. He, therefore, asked the National Assembly to specifically state in the proposal that the amended Electoral Act would come into effect after the 2019 General Elections.

Fe d e ra l Hi g h Court in Lagos today adjourned to January 22, 2019, the case brought by telecom company, MTN against the Central Bank of Nigeria. MTN sued the central bank for sanctioning the South African company for foreign exchange regulatory breaches. The Apex bank had on August 29, 2018 ordered MTN and its four banks to refund $8.134 billion back into the country, sending the company’s shares plummeting. The CBN explained that the sanction was due to irregularities with respect to repatriations made by four banks on behalf of MTN Nigeria Limited. Since then there have been reports about the two parties working to settle the matter out of court. The matter came up for a

... FPI accounts for 60%

ODUNAYO OYASIJI

BUNMI BAILEY

Investors’ underweight Nigeria assets as capital importation down 48.2% in Q3 nvestors’ appetite for Nigerian assets fell in the third quarter (Q3) of 2018 as there was less capital inflow into the country in the period, compared to the amount imported in Q2, 2018, according to figures released Tuesday by the National Bureau of Statistics (NBS). The total value of capital importation into Nigeria stood at $2.86 billion in the third quarter of 2018, which represents a decrease of 48.2 percent compared to $5.51

Court adjourns MTN suit against CBN to January 22 on purported settlement talks report of settlement, with both MTN and CBN being represented by their staff. Chief Wole Olanipekun SAN, Damian Dodo SAN, Professor Fabian Ajogwu SAN,Adeniran Adegbonmire SAN, Olabode Olanipekun SAN and other lawyers represented MTN . Seyi Sowemimo SAN, Adebola Akinrele SAN and others represented CBN, while the Attorney General of the Federation was also represented. Chief Olanipekun SAN informed the court that the parties were still discussing, and urged the court to adjourn the matter to enable the parties prepare a report of the settlement. Seyi Sowemimo SAN confirmed what Chief Olanipekun, SAN, said and asked for the court to adjourn to January 22, 2019. Based on the request of counsels, Court adjourned the matter January 22, 2019, for a report of the settlement.

November records highest POS, NIP transactions in 2018 – NIBSS

Godwin Obaseki, Edo State governor, (m); Obi Peter Adigwe, director-general of National Institute for Pharmaceutical Research and Development (NIPRD) (2nd l); Abubakar Danraka, special assistant to the DG (2nd r); Charles Balogun, principal secretary, NIPRD (r), and Martins Ifijeh, communications lead, NIPRD, during a courtesy visit by NIPRD to the governor, in Government House, Benin City, Edo State.

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Thursday 13 December 2018

billion in Q2 2018 and a 31.12 percent drop compared to the $4.15 billion reported in the third quarter of 2017. Commenting on the report, Rafiq Raji, chief economist at Macroafricaintel said uncertainty around upcoming polls is likely a factor. “Q4 numbers would likely show a reduction as well, because it is closer to the polls and global portfolio managers would be tidying up their books for the year,” Raji told BusinessDay by phone from Lagos. Portfolio investors haven’t pumped so much money into

Nigeria since 2014, when oil prices were relatively higher and the economy was growing at an average of 6 percent, according to data compiled by BusinessDay. Nigeria suffered from a five-quarter contraction from Q1 2016 to Q2 2017 which resulted from the slump in global crude oil prices coupled with the drop in the country’s production level. Analysts familiar with Nigeria’s capital importation have disclosed that Nigeria largely attracts hot money, and not the more economyfriendly Foreign Direct In-

vestment (FDI) and according to them, it is a worry for fiscal authorities, The NBS report revealed that the largest amount of capital importation by type was received through Portfolio investment, which accounted for 60.5 percent ($1.72 billion), followed by Other Investment with $601.53million capital inflow representing 21.07 percent of total capital imports. This left foreign direct investor, bringing in only $530.63 million which accounted for 18.58 percent of total capital imported in the third quarter.

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ovember 2018 had the highest Point of Sales (POS) activities and the Nigeria Interbank Settlement System (NIBSS) instant payment (NIP) so far since January, according to data obtained from the settlement system. According to a BusinessDay analysis of the NIBSS data, the volume of POS transactions increased by 82.6 percent to 29.4 million in November 2018 from 16.1 million in January 2018, the highest recorded in the year until last month. In value terms, it rose by 52.1 percent to N230.0 billion. Also the NIP volume increased by 80.7 percent to 74.1 million in November from 41.0 million in January .The value increased by 38.6 percent to N7.9 trillion from N5.7 trillion Ayodeji Ebo, MD, Afrinvest Securities Limited attributed this to “Black Friday Transactions carried out by retail outlets as well as early purchases ahead of Christmas.” Ayodele Teriba, CEO, Economic Associates said that the end of the year purchases drove the high

transactions in November. For last year, December and November had highest and second-highest transaction volumes and values, in that order. “Usually during the festive periods, purchases are done in November, Ayo Akinwunmi, Head of Research, FSDH Merchant Bank said to BusinessDay in a telephone interview. “A lot of companies want to boost inventory and take advantage of sales that will be recorded in November and people take advantage for fear of a price increase in December. A number of companies pay their 13thmonth salaries in November,” he explained. Akinwunmi also noted that the Central Bank of Nigeria’s intervention through the reduction of electronic bank charges, additional investment in technology and cyber security is improving the confidence of Nigerians towards E-payment transactions than in the past. Ebo is optimistic that there may be further increase in the value and volume of electronic transactions due to the Yuletide season as business activities always increase during this period.

Thursday 13 December 2018

Ogun increases C of O distribution to 3,000 monthly

gun State governor, Ibikunle Amosun says the distribution of Certificate of Occupancy (C of O) and other land title documents, under Homeowners’ Charter Programme, will continue until all successful applicants get their documents. Allaying fear that the programme has not come to an end, Governor Amosun urged other applicants that had received notice of assessment to make payments, which was one of the requirements under the scheme, to be part of the subsequent batches of beneficiaries. In a statement by the press officer in the Bureau of Lands and Survey, Passover Adeshina, the governor, represented by the commissioner for agriculture, Adepeju Adebajo, stated this during the 36th edition of the presentation of C of O and building plan approval to over 3,000 beneficiaries at the Arcade Ground, OkeMosan, Abeokuta. He said the scheme would enable the citizenry benefit from the state government’s urban renewal policy, through effective planning of infrastructural facilities. “Our administration always put smiles on the faces of the people in the state with many laudable projects, just as we are presenting C of O to successful applicants every month. This programme will not end until those who meet up with the requirements and pay for assessment gets their land title documents,” he said. In his remarks, Biyi Ismail, special adviser and director-general, Bureau of Lands and Survey, said qualified applicants would have their documents processed, while the status of the unqualified would be reviewed for possible consideration, adding that government would try its best to sustain the distribution of 3,000 C of O on monthly basis. In his welcome address, Muyiwa Ojo, director, administration and supplies, Ministry of Finance, said the concerned Ministries, Agencies and political office holders meet regularly to ensure that the title documents were distributed to beneficiaries, after they must have passed through the laid down processes. Speaking on behalf of the beneficiaries, Philip Adika, from Unity Estate, Ibafo in Obafemi Owode Local Government Area, thanked the state government for the opportunity given them to have the legal documents.

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2019: Stakeholders validate framework for voting by IDPs JAMES KWEN, Abuja

o ensure that Nigerians who have been displaced as a result of crisis and other calamities are not denied the right to exercise their franchise in the 2019 general elections, stakeholders in the electoral process Wednesday validated the framework for voting by Internally Displaced Persons (IDPs). The stakeholders including the Independent National Electoral Commission (INEC), National Assembly Committees on Elections,

United States Agency for International Development (USAID), United Kingdom Department for International Development (UKAID), International Foundation for Electoral Systems (IFES), Security Agencies, among others, validated the framework at a conference in Abuja. According to the framework, intrastate IDPs shall participate in all election categories where and when applicable, while interstate shall only participate in presidential election in order to limit the challenges associated with political perception and suspicion over transmission of results

across state borders as well as constituency boundaries. The framework, which approved E - collation of results from IDPs camps, specified that results from partially displaced intrastate IDP will be merged at the Registration Area, level using IDP special result sheets and for interstate IDPs, results merging shall be at the state level for the presidential election while the location of RA and Local Government Area collation centres in affected areas shall be determined by the safety of location. It stated that collaboration between Resident

Electoral Commissioners (RECs) of affected states with shared IDP populations was required for the synergy of information and electoral resources required for a successful interstate IDP voting, while they should make adequate special arrangements to distribute Permanent Voter Cards (PVCs) at IDP camps in consultation with stakeholders. Under the framework, results sheets for voting at the IDP camps or voting centres will be reconfigured to RA level with a special form EC8, Smart Card Readers to be utilized for IDP voting

will be reconfigured to RA level and all polling units in a particular RA are to use one Card Reader for the authentication procedure. Also, direct communication through the production of specific audio and visual messages such as jingles of 30 - 60 seconds duration, docudrama for radio, short documentaries of between 15 - 30 minutes on thematic areas such as the right to vote and voting procedure, air messages, use of INEC publicity materials, conduct of sensitisation fora and voter education in local languages shall be done in IDP camps.

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Nigeria less attractive to investors as capital importation dropped 48.2% in Q3 ENDURANCE OKAFOR

nvestors’ appetite for Nigeria seems to have dwindled as there was less capital inflow into the country in the third quarter of 2018 as against the amount imported in Q2, figures released Tuesday by the National Bureau of Statistics (NBS) show. The total value of capital importation into Nigeria stood at $2.86 billion in the third quarter of 2018, which represents a decrease of 48.2 percent compared with $5.51 billion in Q2 2018 and a 31.12 percent drop as against the $4.15 billion reported in the third quarter of 2017. Commenting on the report, Rafiq Raji, chief economist at Macroafricaintel, said uncertainty around upcoming polls was likely a factor. “So Q4 numbers would likely show a reduction as well, because it is closer to the polls and global portfolio managers would be tidying up their books for the year,” Raji told BsuienssDay on phone in Lagos. Portfolio investors haven’t pumped so much money into Nigeria since 2014, when oil prices were relatively higher and the economy was growing at an average of 6 percent, according to data compiled by BusinessDay. Nigeria suffered from a five-quarter contraction from Q1 2016 to Q2 2017,

… FPI accounts for 60% which resulted from the slump in global crude oil prices coupled with the drop in the country’s production level. Analysts familiar with the Nigeria’s capital importation have disclosed that hot money bring dollars into Nigeria, and not the more economyfriendly Foreign Direct Investment (FDI), and according to them, it is a worry for fiscal authorities, The NBS report revealed that the largest amount of capital importation by type was received through Portfolio investment, which accounted for 60.5 percent ($1.72bn) of total capital importation, followed by Other Investment with $601.53 million capital inflow and represents 21.07 percent of total capital. This left foreign direct investor, bringing in only $530.63 million, which accounted for 18.58 percent of total capital imported in the third quarter. This is despite the fact that FPI in the review period declined by 58.05 percent from $4.1 billion in Q2 2018 to $1.72 billion in Q3. FDI on the other hand was up 103.03 percent, from $261.35 million in Q2 2018 to $530.63 million in Q3. The dominance paints a picture of external sector vulnerability and reinforces

why the central bank has had to keep interest rates at a record-high to get portfolio investors to stay, according to Bismarck Rewane, CEOr at Lagos-based advisory services firm, Financial Derivatives Company. “Portfolio flows are volatile and less stable compared to FDI,” Rewane told BusinessDay. The worry with dominant portfolio inflows of hot money is that it is only a trigger away from storming out at the first sign of danger, as was the case for Africa’s largest economy in 2016. That year capital importation into the country dropped after the CBN pegged the naira, to the chagrin of foreign investors. Their pull out led to a drop in capital importation that year, with Nigeria recording a drop to $5.12 billion in the full year of 2016 as against $12.22 billion in 2017. A breakdown of the report revealed that the instruments that made up FPI, Equities, Bonds and Money market reported $394.47 million, $37.48 million and $1.29 billion in Q3, respectively. Foreign direct investment at $530.63 million was imported only through Equities while Other Capital, as a medium of capital importation for foreign direct investor recorded no value in the review period.

Thursday 13 December 2018

BUSINESS DAY

8 BUSINESS DAY NEWS Edo have not taken loan from commercial banks in 10 years - Obaseki IDRIS UMAR MOMOH, Benin

do State governor, Godwin Obaseki, has justified the huge debt profile of the state, saying the loans were judiciously used to impact positively on infrastructural development. Obaseki spoke during the sensitisation workshop on sub-National Debt Management organised by the Debt Management Office (DMO) for top policy makers in South-South, South-East and South-West geopolitical zones on Wednesday in Benin City. The governor, who disclosed that the state had not taken any loan facility from commercial banks in the last 10 years, noted that borrowing was not a bad investment but to leverage for rapid economic growth and prosperity. The state is only indebted to multilateral institutions and contractors, he said. According to Obaseki, for us in Edo, we, like most other sub-nationals, have had to borrow. “In fact, it becomes a political issue about the size of the debt of the state, that the state is one of the top

four most indebted or borrowed states in the country. The good thing about that list is that many progressive states are also on the list. “But, it then raised this question; is debt necessarily a bad thing? Certainly not, because, in financing literatures debt is required to help optimise your capital structures. Debt is not a bad thing, but it only becomes a burden when such debt is not judiciously utilised. “When debts are used improperly and irresponsibly it does not foster economic growths and prosperity, but if use and invested properly, it helps to leverage the equities you have, then it can led to rapid economic growth and prosperity. “So, let me correct that notion and misunderstanding of the debt stock of Edo State, yes, we have large stock of debts but we are not over leveraged but we still have capacity to borrow. All our debts have been used for infrastructural projects. Not one kobo in the last 10 years of money borrow by Edo State was used for recurrent expenditure. “Also, Edo State does not owe any commercial bank in

this country. We have not borrowed from any commercial bank in the country. All our debts are to the multilateral agencies like the World Bank or the Federal Government,” he said. The DMO put both the internal and external debts profile of the state as of June 2018 at N69,004,633,290,09 billion for internal debt, making it the 21 most indebted state in the country as against N45,091,949,113,97 billion as of December 31, 2016 putting it at 25 position. While the external debt was $279,029,898,21 million as of June 30, 2018, second to Lagos State with Kaduna coming third with $232,965,533,73 million as against $183,641,998,74 million as of December 31, 2016, after Kaduna and Lagos with $222,882,926,46 million and $1,254,150,731,09 billion, respectively. The governor further added that 70 percent of the state’s debt interest rate was under 1 percent, some with moratorium for between five and seven years, and the terms of securing the multilateral loans better than those from the commercial banks.

Brilliant minds collide as Chimamanda, Michelle Obama review ‘Becoming’

he long anticipated review of “Becoming,” a memoir documenting the life of former First Lady of the United States, Michelle Obama, took place on December 3. The event was moderated by Chimamanda Adichie, one of the most sought after writers of this generation, with well over 2,000 people present at the Royal Festival Hall, Southbank Centre, in the UK. The rousing conversation between the two brilliant minds centred on Michelle’s early life and career, how she reinvented her role as the first lady of the US, and what she has been up to since leaving the White House. On her early life, Michelle recounted how her parents encouraged her to use her

voice as often as possible to get what she wants. “One of the things that my parents believed was that my voice was relevant, and my opinions were meaningful, and my anger and frustration was real, and that’s something that’s important for parents of any socioeconomic background to realise,” she said. She also revealed how she still suffers from what she calls “Imposter syndrome,” which she experienced while visiting the Queen of England in Windsor Castle, together with her husband Barrack Obama. “I still have a little impostor syndrome — it never goes away, that you’re actually listening to me,” she said. “It doesn’t go away, that feeling that you shouldn’t

take me that seriously. What do I know? I share that with you because we all have doubts in our abilities, about our power and what that power is.” Michelle also spoke on how women of colour are often excluded from positions of power in society. She encouraged younger women to fight for what they want instead of feeling sorry for themselves or languishing with feelings of inadequacy, saying, “My advice to young women is that you have to start by getting those demons out of your head.” Chimamanda’s wit, along with Michelle’s natural charm and allure left the audience satiated after the 90-minute long event, which will remain a reference point for a long time to come.

NB’s multi-million naira ad business lands in Leo Burnett Lagos DANIEL OBI

n a keenly contested multi-agency pitch, a Lagos-based ad agency, Leo Burnett Lagos, has clinched Nigerian Breweries Below-the-line (NB-BTL) design business account. NB is with over 32 brands in its portfolios. Feedbacks from the pitch indicate that Leo Burnett Lagos demonstrated a clear understanding of the target audience as shoppers, and not just

as consumers in designing trade channel communications that focused on Premium and Modern Trade. Sources said NB was impressed with the agency outing and therefore, congratulated Leo Burnett for its understanding of the brief. A NB representative who pleaded anonymity said, “We appreciate the quality of work presented and look forward to a fulfilling partnership with Leo Burnett.” While expressing optimism over the business,

Lekan Lawal, chief operating officer of Leo Burnett Lagos, in a statement, said, “We are both thrilled and honoured to be partnering with Nigerian Breweries as we collaborate in deepening the tremendous affinity of their brands in Nigeria through a thorough understanding of the consumers, using our proprietary ‘Arc’ shopper marketing tool that allows us understand people not just as consumers, but as shoppers.”

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Thursday 13 December 2018

Brokers to challenge NAICOM in court over SIP policy MODESTUS ANAESORONYE

nsurance brokers, under the umbrella body of the Nigerian Council of Registered Insurance Brokers (NCRIB), say it will challenge the insurance regulator, the National Insurance Commission (NAICOM), on the recently introduced State Insurance Producer (SIP) policy. The brokers, who disclosed this at its December Members Evening, said the policy was anti-broker and would rob its members the business opportunities they were presently enjoying. To this effect, the NCRIB has served the commission a 30-day pre-action notice while the brokers have engaged the service of a legal firm to fight this course. Shola Tinubu, president, NCRIB says SIP is a massive threat to broking business, especially as 70 percent of their businesses comes from government, an aspect that SIP is intended to serve. According to Tinubu, “In view of this, we have appointed a Legal firm consisting of three Senior Advocates of Nigeria (SAN) and would be engaging NAICOM on our behalf. Our lawyers have already served NAICOM,

and in view of this notice, we can have dialogue. This is to protect the interest and businesses of insurance brokers.” If the policy is allowed to take effect, he said, it would create crisis in insurance broking profession as well as insurance industry, noting that, the brokers will resist any action that will allow non-professionals hijack 70 percent of brokers’ business. The legal case, he pointed out, would ensure that the issue is pursued to a logical conclusion. Earlier, a group, Transparent Protection Ltd./Gte (TPL) has indicated its intention to challenge NAICOM in Court over recent Guidelines by which it sought to create Corporate Insurance Agents in the various States of the Federation. According to the Programme Director, TPL, Godson Ibekwe-Umelo, the body is a pro-active, rights-based non-governmental organisation working for the promotion of insurance culture in Nigeria. TPL, he said, believes that in making the guidelines which are billed to come into effect on January 1, 2019, the regulatory body acted in excess of its powers as enshrined in the National Insurance Commission Act

1997 and Insurance Act, 2003. The National Insurance Commission had earlier released the guidelines for SIP business, which is expected to commence January 1, 2019 and pegged the operational licence at N2 million. NAICOM had simplified the payment process of the licensing fee by allowing the SIP pay from the first commission earned, a step taken to Free State governments from financial burden in getting the licence. NAICOM, in the guidelines, stated that there will be a signed undertaking by an officer of the State Government not below the rank of a Permanent Secretary that the state undertakes and agree that the sum N2 million be deducted from accrued commission to be earned by the Licensed State Insurance Producer before payment of commission is made to the coffers of the Government. Commissioner for Insurance, Mohammed Kari, had earlier said, SIP business model would bring about 200 to 300 percent insurance penetration in two years. He said the initiative would increase the revenue base of state governments and insurance profits.

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2019 Budget: A stitch in time saves nine UCHE UWALEKE Uwaleke of Nasarawa State University Keffi is Nigeria’s first Professor of Capital Market and the President of the Association of Capital Market Academics of Nigeria

uring a special session which held on Friday December 7 2018, the Federal Executive Council (FEC) is reported to have given approval to the 2019 budget proposal. The Proposal, which is based on the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) approved by the FEC sometime in October this year, has a budget estimate of N8.73 trillion for the 2019 fiscal year based on crude oil price and output of US$60 per barrel and 2.3 million barrels per day respectively. A few months ago when the MTEF was still in the works, these fundamental assumptions seemed realistic. As a matter of fact, international crude oil price averaged US$75 per barrel in the third quarter of 2018 according to the Ministry of Petroleum Resources. So, it made sense to use US$60 per barrel at the time. But, that was then. The stark reality today is that developments in the international oil market already suggest a tear in the fabric of the 2019 budget estimates which should be promptly sewn up to avoid the need for a more diffi-

cult stitching at a later date when the hole must have become larger. According to Bloomberg, the two international oil benchmarks namely Brent crude and the US West Texas Intermediate crude have fallen by more than 30 per cent since October 2018 chiefly on the back of rising supply. Brent fell below US$60 per barrel on November 23, a threshold not breached in over a year while WTI also saw a significant collapse, almost breaking below US$50 per barrel. This comes as no surprise. The international crude oil market is well known for its volatility and so the recent spike in oil price following an agreement by OPEC and its allies to cut production by 1.2 million barrels per day starting in January 2019 may not be sustainable. In any case, the agreement which requires OPEC members to reduce production by 800,000 bpd while allies are expected to lower production by 400,000 bpd also leaves another hole in the 2019 budget material as it puts to question the realism of the 2.3 million bpd used for the 2019 budget. Granted that OPEC production numbers do not include condensates unlike those used in the budget, current oil production in Nigeria put at about 2.1 million bpd is still below the 2018 budget projection of 2.3 million barrels per day. It goes without saying that the present uncertainties surrounding the global economy could have adverse effects on crude oil price. In its latest World Economic Outlook, the IMF downgraded global economic growth to 3.7 per cent for 2018 and 2019, 0.2 per cent lower for both years than had been forecast earlier.

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An overly high benchmark that fails to crystallize will make the 2019 budget very difficult to implement. When this happens, it is usually the capital component that is sacrificed which will weigh on key targets including the 2019 GDP growth forecast of 3.01 per cent

’

The US-China frosty trade relations remain a key risk to global growth. Worse still, a lack of clarity about the recent U.S.-China trade truce, announced a few days ago by the Trump administration, is contributing to global uncertainties. According to the New York Times, President Trump is signalling caution on his trade truce with China with his “I am a Tariff Man.” tweet. Already, the term structure of interest rates is generating increasing fears about the growth outlook for the US econ-

omy following the fall of the yield on the 5-year treasury note below that of the 2-year note, a development that suggests investors are worried about the US economy’s longer-term health. Historically, inversions of the yield curve have preceded economic recessions in the United States. It is the same story in the UK and many other parts of the world. As noted in the November Communique (no 121) of the Central Bank of Nigeria’s Monetary Policy Committee, “in the United Kingdom, growth remained weak, hampered by uncertainties around Brexit negotiations. Growth in the Euro Area, projected at 2.0 per cent, appears to be subdued by low domestic aggregate demand amidst relatively high unemployment and reduced global trade. In the emerging markets and developing economies, growth was revised downwards to 4.7 per cent from the earlier projection of 4.9 per cent, largely in anticipation of a slowdown in China as the country is confronted with an adverse external trade environment”. Without any doubt, global economic slowdown will have far-reaching implications for the demand for Nigeria’s crude oil given that the Euro zone and the US account for a significant proportion of the country’s crude oil exports. On the supply side, there is equally the threat of oil glut in spite of the OPEC+ output cut agreement especially with the recent announcement by the US that it had become a net oil exporter. As noted by Citibank, US output has recently risen to an estimated 11.7 million bpd making the United States the world’s biggest crude oil producer. In its energy forecast, Citibank sees Brent crude trading within the range of US$55

to US$65 a barrel in 2019 which could drop to as low as US$40 per barrel in the event that the OPEC+ production cut agreement fails. It is instructive to note that Russia, a major oil producer, predicated its budget for 2018/2019 on US$40 per barrel. Against this backdrop, what has become clear is that the US$60 per barrel oil price benchmark for the 2019 budget is rather ambitious. Based on the forecast by Citibank, the lower limit of US$55 per barrel could be considered. Indeed, the current global economic headwinds and other downside risks to oil price underscore the need to be conservative in the estimation of benchmark oil price. An overly high benchmark that fails to crystallize will make the 2019 budget very difficult to implement. When this happens, it is usually the capital component that is sacrificed which will weigh on key targets including the 2019 GDP growth forecast of 3.01 per cent. Therefore, it is necessary to avoid engaging in acts that could necessitate spending cuts in the middle of a possible slump in crude oil price that will severely hurt the current efforts at economic recovery and growth. The Director-General of the Budget Office, Ben Akabueze, is reported to have expressed the willingness of the federal government to review downwards the US$60 per barrel oil price benchmark for the 2019 fiscal year “if it becomes clear that it is no longer sustainable”. There is now ample evidence to quickly do so for as the saying goes ‘a stitch in time saves nine’.

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How APEC can boost free trade in Asia Pacific

Dan Steinbock Dan Steinbock is the founder of Difference Group and has served as research director of international business at the India, China and America Institute (US) and a visiting fellow at the Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see http://www.differencegroup. net/

s the 21-member countries of the Asia Pacific Economic Cooperation (APEC) meet during the weekend in Papua New Guinea, there is an elevated international concern about the future of global trade amid the tide of nationalism and protectionism. APEC member economies represent some 40% of global population, the region’s combined GDP is more than 60% of global GDP and it accounts for almost 50% of global trade in goods and services. What APEC leaders decide matters. The paths to global trade

There are three possible (but two probable) paths to free trade in Asia Pacific. The ‘mini-TPP’. Founded in the early 2000s by a few smaller regional countries, the initial TransPacific Partnership (TPP) was more economic, open and inclusive by nature. Former President Obama’s ‘pivot to Asia’ opted for a more exclusive, geopolitical and secretive TPP, which aspired to a “gold standard” that would remove tariffs between its members that represented 40% of global economy. But TPP also deemed provisions on labour rights, environmental protection and state-owned enterprises. These “high standards” made it impossible for China and India to join the TPP, while boosting the role of US multinationals in Asia Pacific trade. On his first day in office, President Trump killed the TPP. He is considering rejoining a revised TPP, but only if the US is granted a “better deal.” Without US participation, other TPP members have agreed on a mini-deal (that is, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP), which may be progressive, but it cannot be comprehensive without China, India - and the US.

ASEAN-led RCEP. The Regional Comprehensive Economic Partnership (RCEP) is fueled by the 10 ASEAN members. Since 2012, the goal has been to harmonize free trade agreements among ASEAN countries, advanced economies (Australia, Japan, South Korea, and New Zealand), and China and India. The US has stayed on the sidelines. Seeking to exploit its economic clout, it prioritizes bilateral talks and seeks to defuse ASEAN’s bargaining power. As a trade pact, the RCEP is not as exclusive, broad and deep as the Obama TPP. But it is more multilateral, realistic, and inclusive – and could materialize in 2019. ‘America First’ Asia Pacific. Trump and his trade hawks are pushing a new Asia Pacific alignment, which strategically seeks to cement America’s Indo-Pacific Vision to contain China’s rise. Economically, it aspires to neutralize China’s ‘one road one belt’ initiative. Militarily, it is exploiting the “freedom of navigation” doctrine to dominate the South China Sea as 60% of U.S. naval fleet will be transferred into the region by 2020. However, any geopolitical sphere-ofinterest plan would split the region and thus derail the much anticipated Asian Century. Unsurprisingly, even America’s allies - Japan and South Korea - feel un-

settled about new US protectionism. And that leaves only one solution. Toward the FTAAP Within the APEC economies, the idea of regional free trade has been around since 1966 when Japanese economist Kiyoshi Kojima advocated a Pacific Free Trade agreement. Three decades later, APEC leaders opted for free and open trade and investment in the Asia Pacific. In 2006, C. Fred Bergsten, then chief of an influential US think-tank, advocated the Free Trade Area of the Asia Pacific (FTAAP). If the FTAAP could be achieved, he argued, it would represent the largest single liberalization in history. The TPP-11 is dominated by advanced high-income economies but excludes upper- and lowermiddle income regional engines. In contrast, RCEP includes these regional engines and a few highincome economies as well. Yet, the final pact must be able to include the interests of both advanced and emerging economies. Ultimately, only the FTAAP has potential to cover the interests of the RCEP, the TPP-11, the U.S. (when Trump or the next White House accepts a more inclusive deal), Russia, and other potential members. That’s the FTAAP goal that APEC

put forward in 2006 and Asian economies support, including China. Ultimately, the TPP-11 and RCEP must agree on harmonization that will facilitate trade and cooperation among regional members and can form a joint path to the FTAAP. It is very much in the long-term interest also of the US to accept the idea that all nations, including those in Asia Pacific, have interests of their own. Neither the US nor any other country can have a unipolar primacy in world trade; but all countries do have a critical stake in multilateral world trade. A tentative draft suggests that APEC leaders “acknowledge the importance of APEC’s regional economic integration agenda, including how to advance, in a comprehensive and systematic manner, the process toward the eventual realization of a Free Trade Area of the Asia Pacific.” A timely roadmap for the effective implementation of this agreement would be the right start for the region and the world. • The original version was published by China Daily on November 15, 2018 Send reactions to: comment@businessdayonline.com

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The importance of effective transport and project management systems in Nigeria (1)

Festus Okotie

Okotie, a maritime transport specialist, writes via fokotie.bernardhall@gmail.com, Fokotie@ bernardhallgroup.com

ransportation project management generally refers to but not limited to delivery of entire plants, large consignments of industrial equipment and manufacturing equipment. It is considered to be the most complex of all cargo movements and requires a great skill, professionalism, training, lifting, planning, coordination, team work and movement of very large equipment to deliver a certain task within a specified time frame. It covers pre-move project analysis, establishing a working group, management, route planning, optimization, cost planning, permit handling, customs clearance, attendance to authorities, loading, planning, insurance, warehousing, storage. Handling of such projects must be done by individuals with knowledge and experience in all aspects of movement of goods to ensure greater efficiency in the transport system. Transportation is the gateway of the economy of any nation and a major contributor to economic development of any society. This contribution however depends on the availability of the necessary

OKECHUKWU KESHI UKEGBU

ecently, Vice President Yemi Osinbajo at the closing ceremony of the 50th anniversary celebrations and annual conference of the Chartered Institute of Personnel Management in Abuja raised a very touching concern on the growing threat posed to humans by the deployment of robots and artificial intelligence in work places. The vice president’s concern further explained that in the next few years, Nigeria would be contending with having one of the largest youth populations in the world. “We will be the third most populous nation in the world. What sort of skills will these young men and women require? Where will they work? “Already, we are contending with how technology is redefining the structure of industry and commerce and the skills required to function in them. “But more disturbing is the growing apprehension of redundancy of many who today work in the millions of jobs that may be unnecessary as robots and artificial intelligence perform the same functions far more efficiently and even cheaper. “What will retraining this possibly redundant workforce entail? What happens to pensions of retired humans when the majority of cur-

transport infrastructure which are necessary drivers of national economic development, which can cover very long term periods from conception to completion, one of the major challenges of Nigeria’s social, infrastructural and economic conditions is the enormous waste of resources due to project delay, cost escalation as a result of abandonment, inconsistency in government ideas and choice of projects to implement. The major causes of project delays and cost escalation in Nigeria are as follows but not limited to the following points; inefficient manpower and materials systems, alternative financial strategies, increased contingency allowance pattern, lack of political will and continuity in government ideas of projects to implement, ineffective monitoring process, delays in the planning approval procedure. Transport management infrastructure is recognized as a major source of driving the economy of any nation which includes good roads network, airports, railways, water ways, pipelines, port, harbours and so the need for a better coordinated and well-structured system is highly important to bring about the needed change and progress. It is observed from the length and breadth of Nigeria that decaying infrastructure is one of the challenges affecting our nation that needs very urgent attention, as this has lingered on for a long time from past governments and the urgent need to address these challenges calls for more attention to support the efforts of this present government in rebuilding all abandoned projects and re-position our infrastructural systems.

‘

It is observed from the length and breadth of Nigeria that decaying infrastructure is one of the challenges affecting our nation that needs very urgent attention, as this has lingered on for a long time from past governments

’

In bridging the huge infrastructural gaps, there is an urgent need for a thorough appraisal of the process of infrastructure delivery in Nigeria. The alarming rates of project delay, abandonment and cost escalations in different sectors from the local, state and federal government for decades have caused wastage of billions of dollars for decades and some of the projects have completely wasted away as a result of abandonment. It is high time the various legislative arms of government both at the federal and state governments take stock of the total number of uncompleted or abandoned projects in the nation and make the necessary recommendations on how best to complete or sell them to add more resources to the economy of our nation. These challenges hugely affected

infrastructural provisions while new projects are being awarded, leaving the old ones to waste away. The importance of works, construction and transport sectors to the task of bridging this deficit or gap is obvious because of its social and economic relevance to the growth of any nation. The multiplier effect of a well-structured project monitoring systems contributes distinctively to the general smooth progress of any successful economy globally, such as the case with first world nations who are relentlessly working day and night to improve upon its project monitoring and management systems. The present government of President Muhammadu Buhari must be commended in all its efforts of establishing a very efficient project monitoring and management systems, especially after the Personal Assistant on New Media, Bashir Ahmad, recently disclosed the list of ongoing and completed projects across the 36 states in the nation which are as follows: Abia state rehabilitation of Enugu-Port Harcourt road section 1, UmuahiaAba township rail/road bridge crossing. Amaudo (NtalakwuBende) flood & erosion control project, cassava processing plant, rehabilitation and reconstruction of Enugu-Port-Harcourt dual carriage way section 1, Lokpanta-Umuahia Tower, Abia. Patching of potholes, pavement strengthening, repairs of failed sections and general maintenance works along UmuahiaBende-Ohafia road, Adamawa state reconstruction off Yola Mubi bridge at Kaa’a Shiwa and Mile 30- Kwambla road rehabilitation of Gombe-Numan-Yola road, phase 1. Patching of potholes, pavement

strengthening, repairs of failed sections and general maintenance works along Ngurore Mayobelwa road. Akwa Ibom state construction of Ididiep-Ekpeyong 10.125km asphalt pavement. University of Uyo erosion and flood control project Ikot Ebok/Mobil Pegasus School flood and erosion control project, Ikot-Ekpene transmission sub-station. Patching of potholes, pavement strengthening, repairs of failed sections and general maintenance works along Ete-Abak road. Anambra state Nanka recent landslide project, phase 1, remediation works on Nanka/Oko gully erosion control. Patching of potholes, pavement strengthening, repairs of failed sections and general maintenance works along Nnewi-EkwulobiaUmunze- Ibinta road. Others are: in Bayelsa state, construction of Ogbia Nembe 25km road, Sagbama erosion rehabilitation works and cassava processing plant. Patching of potholes, pavement strengthening, repairs of failed sections and general maintenance works along Mbiama-Yenagoa road. In Bauchi state, patching of potholes, pavement strengthening, repairs of failed sections and general maintenance works along Bauchi-Gombe road. Rehabilitation of Boto Dam, Tafawa Balewa LGA, Bauchi state construction of road in Boto Town, Tafawa Balewa LGA, Bauchi state. Benue state construction of Loko-Oweto bridge over River Benue in Nasarawa and Benue States. To be continued tomorrow

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The future of human labour and the automation of industrial processes rent workers are robots who earn nothing. “How about the growing concerns about work life balance? What sort of work environment makes for the most productive worker? “Is it the formal work space which we are used to or something less constraining more flexible as we are seeing in the new technology companies.” The vice president’s concern should not be wished away as it is characteristics of our governments. It will be recalled that in October 1930, a year after the Wall Street Crash but before the Manchurian crisis and the Nazi seizure of power, the London Economist expressed the same worry thus: “the supreme difficulty of our generation... is that our achievements on the economic plane of life have outstripped our progress on the political plane to such an extent that our economics and our political plane to such an end extent that our economics and our politics are perpetually falling out of gear with one another. On the economic plane, the world has been organised into single, all embracing unit of activity. On the political plane, it has not only remained partitioned into sixty or seventy sovereign national states, but the national units have been growing smaller and more numerous and the national consciousness more acute. The tension between

these two antithetical tendencies has been producing series of jolts and jars and smashes in the social life of humanity...” The same worries were also expressed by Paul Kennedy in his book “Preparing for the twentyfirst century”, when he opined that “human history has always been shaped by the growth and migration of populations, by the opportunities and the constraints provided by the environment, and by the rise of new technologies. Today, these factors are enmeshed in a state of unprecedented turbulence. World population has doubled in the past forty years... How will these vast numbers reshape the world’s borders, strain an already fragile ecosystem, and remake politics? New technologies are even now replacing traditional work with radically new systems of production and communication, promising enormous changes in both industrial and traditional agricultural societies. Will potential developments in biotechnology render traditional food producers obsolete? What is the role of robotics in a world where millions of new jobs are needed each to absorb the fast-growing population? The question that demands urgent attention where is “how prepared is Nigeria in this situation where automated processes, such as robotics and artificial intelligence, are threatening to displace human labour?

On this, Osinbajo said that to brace up for the challenge, the federal government was focusing on imparting employable skills on students from primary school to tertiary education. According to him, no sensible discussion of the economy can be done without acknowledging the role of the people. He said that the third major pillar of the economic recovery and growth plan was called investing in people; on human capital development. “Our plan, especially with regards to education and health, is one that we have spent a great deal of time working on, and we are, of course, in the process of ensuring that it is fully implemented. “One of the most important features of that Human Capital development plan is Science, Technology, Engineering, Arts and Mathematics (STEAM) Education. “The focus is on employable skills from primary school all the way up to tertiary education. But the focus on primary and secondary education is on employable skills, especially technology. “So, our focus is on teaching young people from the primary school, even pre-primary school, using all of the new techniques such as code writing skills, software writing skills and all that. “The new technologies that are developing and all of what we are seeing today clearly shows us that

anyone in the coming generation will be left behind if they are not at the cutting edge of technology. “We believe that our educational system must incorporate that, which is why a lot of attention, in the new curriculum, is focused on science, technology, engineering and mathematics.” He said that the federal government was also doing same with health care as for the first time, it was spending one per cent of the entire consolidated revenue fund on health care. It is noteworthy here to commend one man for his vision. The man is Gov Okezie Ikpeazu who conceived the Education for Employment initiative which concept is designed to ensure that education leads to employment by imbuing the youths with the technical skills that would enable them become either self-employed or sought after by others. Also, it will not be out of fashion if a model adopted in Japan sometimes ago is implemented here. Most large companies in Japan have a policy of lifetime employment, so that a worker whose job has been taken over by a robot will not be fired, but be retrained and relocated inside firm or in related companies within these industrial conglomerates.

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Igbos and the 2019 presidential election

Chiedu Uche Okoye

igeria, a federal nation-state, is a nation of nations. In fact, Nigeria is composed of more than 250 ethnic, cultural, and linguistic groups. It is Nigeria’s ethnic and cultural diversities that make it tick. In fact, nobody can gainsay the fact that Nigeria’s strength as well as greatness lies in its ethnic and cultural diversities. A multi-ethnic and heterogeneous country, Nigeria has a humongous population with one person out of every five black persons in our today’s world being a Nigerian. Millions of Nigerians are living in the Diaspora, today, too. And, Nigeria, as a country, stands on the tripod of Yoruba, Hausa-Fulani, and the Igbo ethnic groups. The Igbo people are natives of the South-East geographical cum geopolitical zone. And innumerable Igbo-speaking people are natives of states adjoining the South-East states. The Igbo ethnic group is a homogenous group that speaks

Jonathan Emmanuel IT/Programme Assistant Climate Transformation and Energy Remediation Society (CLIMATTERS) Jonathan.ugbede@climatters.org

nergy prosperity has always had a female face. Every day, women around the world face the worst consequences of not having modern energy access. They spend more than 40 per cent of family income on inefficient and dangerous kerosene and candles for lighting. They walk long distances to collect firewood. They deliver babies in darkness, and they toil in smoky kitchens and venture out at night to use outdoor latrines without adequate light. Girls are left behind without educational opportunities due to the lack of reliable light. Ensuring that women and girls have energy access is not just about women’s rights—it’s a fundamental human rights issue. A number of quantitative and qualitative studies have shown that clean energy access is linked with better chances for girls to complete primary education and for women to

the Igbo language, which has many dialects. And the Igbo people were adherents of the African Traditional Religion before the advent of the British imperialists, who brought Christianity to Nigeria. Christianity, which is a tool used by the white imperialists for extracting obedience from Africans in the colonial era , made in-road into the Igbo hinterland, then. But it failed to totally obliterate the Igbo people’s cultural practice, beliefs, and religion. And the Igbo people were among Nigerians, who fought fiercely for the political emancipation of Nigeria with the late Rt Hon. Dr Nnamdi Azikiwe leading the charge. Mokwugo Okoye, Nwafor Orizu, and Mbazulike Amaechi, who were Igbo men, fought for the political sovereignty of Nigeria, too. However, since the inception of Nigeria, through the colonial era, and until now, people of the Igbo ethnic stock have fallen victims to ethno-religious crisis in the north. Today, Nigeria is bifurcated by ethnicity and religion as Nigerians from diverse ethnic backgrounds are fiercely conscious of their ethnic origins. And they perceive themselves first as either Igbos or Yorubas or Hausas before acknowledging their Nigerian citizenship. And it’s sad that our erudite freedom fighters were the people, who introduced ethnic nationalism in our politics and national life. And who does not know that ethnicity

and religion are centrifugal forces that undermine and weaken our national cohesion and unity? The factors of our diverse ethnic origins and religious differences are not unconnected with the outbreak of the Nigeria-Biafra war, which led to the wastage of millions of human lives. The immediate cause of the gratuitous civil war was the secessionist bid embarked upon by the Igbo people in 1967. But has the rest of Nigeria forgiven the Igbo people for fighting that war? Now, to say that the Igbo people are being marginalized in our country’s scheme of things is to state an obvious fact. While the northern part of Nigeria has good road network, most Federal roads in the SouthEast are rutted death traps. The Enugu-Onitsha Expressway typifies the Federal Government’s neglect of Federal roads in the South-East. And the Federal Government is still dilly-dallying and shilly-shallying on the construction of the second Niger Bridge. Now that the Igbo people are being treated in a cavalier and condescending way in our country, there is a resurgence of separatist and ethnic sentiments among the Igbo people with Nnamdi Kanu, an unreconstructed political demagogue and rabble rouser, leading the charge for the liberation of the Igbo people. His separatist rhetoric has found resonance among the disgruntled dispirited and suffering

Igbo masses. But his approach to the issue of secession is desultory, unconvincing, and not methodical. The Igbo political elite(s), however, have not queued up behind him in his quest for the actualization of the state of Biafra owing to his impertinence and desultory approach to the issue of the marginalization of the Igbo people. Rather, they’re in support of the restructuring of Nigeria, which will lead to the speedy economic and technological development of Nigeria. And Alhaji Atiku Abubakar, who is the PDP’s Presidential candidate for the 2019 Presidential election, is an unrepentant and tireless advocate for the restructuring of Nigeria. More so, Atiku Abubakar’s selection of Mr. Peter Obi as his VicePresidential running mate is a plus and icing on the cake for the Igbo cause. Mr. Peter Obi, a former Governor of Anambra State, has proved his mettle in political leadership. His eight years in the saddle as the Governor of Anambra State has become referential in our political annals. It is to his eternal credit that schools in Anambra State are performing creditably in global competitions covering diverse areas. And he husbanded the state’s finances prudently and judiciously, then, placing it on a very sound footing. So, if the PDP wins the February 2019 Presidential election, which it is poised to win based on unimpeachable political permutations

and calculations, Mr. Peter Obi will deploy his enormous leadership experience and deep knowledge of business in helping to resuscitate and grow our ailing economy. Again, if the PDP wins the Presidential election, Mr. Peter Obi’s presence in the Presidency will assuage the feelings of a majority of the Igbo people, who feel that they are receiving a raw deal in Nigeria. And that will lead to the deceleration of the tempo of the IPOB agitation for the creation of the state of Biafra. If the PDP becomes the ruling political party in Nigeria, it means that the Igbo people are back in the top political power loop and mainstream political party. Based on that, the Igbo ethnic group stands a good chance of producing the President of Nigeria in the foreseeable future. The Igbo ethnic group’s producing of the President of Nigeria will disabuse the Igbo people’s minds of the erroneous notion that they are unwanted and second-class citizens in Nigeria. This will deepen our national cohesion and unity, and lead to the speedy economic and industrial development of our dear country. So I urge my Igbo compatriots to lend their unalloyed and total support to the Atiku /Obi political candidature. I stand with Atiku/Obi. Send reactions to:

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Empowering Nigerian women through sustainable energy earn better wages, while it also contributes to a reduction in gender-based violence. Ability to power mobile phones means better connectivity and better business opportunities. What clean energy access can do for women is only half the story. There is a strong case for what women can do to expand clean energy access and to fight on the front lines against climate change. The International Energy Agency (IEA) shows that about 600 million people in Sub-Saharan Africa lack access to electricity and rely on traditional energy sources like wood, charcoal, dung and agricultural residue for cooking and heating. Relief Web further estimates that 70 percent of people living in poverty in rural areas are women and girls and lack of access to energy constitutes a large part of this poverty. A recent United Nations study shows that women face the worst consequences from lack of access to clean and modern energy, particularly in developing countries. Women have to go through the time-consuming and physically draining task of collecting firewood and other sources of fossil fuel for their daily energy use. Furthermore, the World Health Organization, further states that there is noticeable rise in pollutant-based diseases, which

includes respiratory illness. Empowering women in Nigerian with renewable energy to power up their business will bring significance change to economic activities to the country. Women play a major role in agricultural practices, exposing them to solar powered technology will go a long way to improving their economic and social status. The decentralized renewable energy (DRE) revolution in Nigeria has women playing central roles in the quick and broader adoption of clean energy. Women in Nigeria are driving the DRE movement, as investors, solar business owners, workers, policy-makers and entrepreneurs – owning rural DRE powered micro-enterprise easy access to DRE technologies like basic solar lantern or larger stand-alone solar home systems, make significant differences in the lives of women. From cost savings, to time savings and more hours of light to run their homes and business – the ripple effect is truly impressive. Beyond being just end-users of DRE products, women entrepreneurs will use renewable energy technologies to scale their business or become solar distributors. These transitions come with clear, direct ben-

efits such as the replacement of smoky kerosene lamps with solar lamps; transition from firewood and charcoal stoves to cleaner cook-stoves. The impacts and benefits are also being seen in the reduction of indoor air pollution; solar-powered maternity and rural healthcare centers; and the availability of refrigerated vaccines which is leading to significant reduction in maternal death and diseases; and solar-powered boreholes for pumping clean water. More women will have to be recruited, trained and mentored as distributors and entrepreneurs in the market; with each woman earning a mark-up for selling a catalogue of solar energy and clean cook-stove. Even more women are taught to deploy these systems for productive usage; from fisheries to agricultural production and cold storage to starting solar-powered kiosks. Women play a key role in the use of renewable energy in alleviating energy poverty, they are an underutilized resource in the energy services delivery process. As the fastest growing cohort of entrepreneurs and business owners in Nigeria and many developing countries, involving women in energy projects, energy research, policy and analysis is essential. In curbing energy poverty in Nigeria, the following recommendations are

strongly suggested: Employ and utilize women participation in the energy value chain. This can be achieved by training them on soft skills on energy access programmes. By empowering active women leadership in local communities, donor institutions and government programs that enhance benefits for women will reap more meaningful results by targeting energy development programs that are spearheaded by women or women organizations. Women need to encourage their children, especially the girls to go into STEM education while they are still young, including them in science clubs, science fairs and science boot camps while in primary and secondary schools will make the child become interested and curious in science and technology related programs in the future, this is the starting point of raising children that will become professionals that build communities and transform nations. These professionals are in charge of solving the complex problems of today’s world and its future in finding solutions for global warming, cancer, world hunger, disappearing habitats, and an interdependent world economy. Send reactions to:

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Nigerian security forces, war crimes and crimes against humanity

editor Anthony Osae-Brown

inally, the International Criminal Court (ICC) acknowledged that the Nigerian security forces had committed a series of war crimes and crimes against humanity. The court recently acknowledged the receipt of “a total of 169 communications” from Nigerians and their assessment show that the security forces in Nigeria have committed war crimes varying from murder, torture, and intentionally attacking the civilian population. “Specifically, the office found a reasonable basis to believe that the NSF committed the war crimes of murder pursuant to article 8(2)(c)(i); torture , cruel treatment pursuant to article 8(2)(c)(ii); and intentionally directing attacks against the civilian population,” the prosecutor of the global court said. We a t B u s i n e s s d a y have constantly called out the Nigerian government over a series of extrajudicial killings and crimes against humanity committed by the security agencies in the country since 2015. It should shock normal Nigerians that the agencies estab-

Frank Aigbogun

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

Bashir Ibrahim Hassan

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

lished by the state and paid with their money will be turned against them, abusing their rights and killing their fellow citizens with reckless abandon and nothing is being down about it. Examples abound. On December 12, 2015, the military took the law into its hands and massacred over 347 members of the Islamic Movement of Nigeria (IMN) who allegedly blocked the convoy of the Chief of Army Staff, Lt.-Gen. Tukur Buratai. Although the military has us ed s everal lies to justify the killings, a panel set up by the Kaduna state government to investigate the killings indicted the Nigerian army for the Zaria massacre. Since then, nothing has been done to bring the killers to book. Rather, the leader of the group together with his wife and some followers has been illegally detained since then and the state has responded with lethal force against other members of the sect who have dared to protest their continued incarceration. Also, early in 2017, Amnesty International, the global human rights watchdog, released its report on Nigeria in which it accused the Nigerian Army of being directly responsible for the death of 240 people, includ-

ing infants, in a dreaded military detention centre in Borno in 2016 and the extra-judicial killing of over 177 pro-Biafran agitators and protestors same year. This is besides the hundreds of others killed in the Operation Python Dance and other incidences where the security forces opened fire on defenceless civilians. To show the real extent of the abuse of Nigerian’s human rights, some months ago, the US state department, indicted Nigerian security forces over human rights abuses in its annual report on human rights in Nigeria titled: “Nigeria 2017 Human Rights Report.” The report affirmed that human rights generally remained appalling in Nigeria. it listed these infractions to include: extrajudicial and arbitrary killings ; disappearances and arbitrary detentions; torture, p articularly in detention facilities, including sexual exploitation and abuse; use of children by some security elements, looting, and destruction of property; civilian detentions in military facilities, often based on flimsy evidenc e; denial of fair public trial; executive influence on the judiciary; infringement on citizens’ privacy rights; restrictions

on fre e doms of sp e e ch, press, assembly, and movement; official corruption; lack of accountability in cases involving violence against women and child r e n , i n c l u d i n g f e ma l e genital mutilation/cutting and s exual exploitation of children; trafficking in persons; early and forced marriages ; criminalization of status and samesex sexual conduct based on sexual orientation and gender identity; and forced and bonded labor.” For a long time, the Nigerian security apparatuses, aided, no doubt, by its corrupt political leadership, have acquired notoriety for treating citizens as enemies or a conquered people with no rights. Despite the return to democratic rule, that culture is yet to change. Also, the various attempts made by citizens and human rights groups to hold the security forces to account has failed to curtail their excesses. We hope that the opening of the cas es against Nigerian security forces will serve a powerful warning to the leadership of these agencies that they will be held to account by the ICC no matter how long it takes and that the wanton abuse of the rights of Nigerians will no longer be tolerated.

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

Enquiries NEWS ROOM 08023165438 08169609331 Lagos 08033160837 Abuja

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BUSINESS DAY

Thursday 13 December 2018

Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

15 CBN may issue licenses to cryptocurrency exchanges in 2019 BUSINESS DAY

Thursday 13 December 2018

FRANK ELEANYA

he Central Bank of Nigeria is likely to issue operating licenses to exchange that enables trade in the buying and selling of cryptocurrencies, according to an expert. Lu cky Uwa kw e, c o founder of Cheetaafrica.org disclosed this at the Luno Meetup which held in Lagos on Saturday, 8 December, 2018. Uwakwe who has collaborated with the CBN on different occasions in its efforts to study the new blockchain landscape and cryptocurrency market in Nigeria said the body-language of the apex bank is currently at neutral level. The CBN is no longer telling people that trading in cryptocurrencies is dangerous but just issuing caution with regard to the risks the market experiences. This is following a global trend in which authorities are beginning to realize

the potential of cryptocurrencies to disrupt financial services. Only recently Christine Lagarde, head of International Monetary Fund (IMF) called on central banks to consider a statebacked cryptocurrency in order to provide safety nets for citizens’ investment and also take advantage of an evolving financial system led by technology. Owenize Odia, country manager of Luno Nigeria said that a regulated cryptocurrency market will be a welcome development for exchanges as it will build investors’ confidence and increase adoption. The company affirms that issuing licenses to exchanges will bring trust to the cryptocurrency market in Nigeria. Interest in bitcoin is increasing. After an important recovery from a sharp fall in prices, public interest in bitcoin rose dramatically to a 4-month high. Google Trends also shows that the highest level of interest for this period was

recorded a week ago, and since then, the trend has remained above normal levels. The company said it is investing significantly in education having identified the need to keep its user well informed to enable them make better investment decisions. “We believe that crypto-

Nigeria’s DropQue, over 30 others participate in Seedstars Africa summit CALEB OJEWALE

ubbed the largest start-up competition for emerging markets and fastgrowing start-up scenes, the fourth edition of the Seedstars Africa Summit ends today, with over 30 start-ups participating in different activities. DropQue, a Nigerian startup which says it uses video interviews and Artificial Intelligence to help organisations find the right candidates, was also identified as one of 17 finalists before the summit. Start-ups identified before the event kicked off on Tuesday included 17 finalists at the Seedstars World tour, nine local finalists from Seedstars World Tanzania edition, three start-ups from Switzerland, and a delegation of three start-ups from Tanga, Tanzania. “This is the most ambitious Seedstars Africa Summit ever,” said Claudia Makadristo, regional manager for Seedstars in Africa. The line-up of events for the summit as contained in a statement sent to BusinessDay include: The Growth Bootcamp - A daylong Seedstars Growth Bootcamp, where 20 startups are to learn more about growth strategy and how to master the art of pitching. The

aim of the Bootcamp is for the participants to prepare for expansion and become more investable. Among othertheoretical and practical inputs, the Seedstars investment team will mentor the participants on growth models and acquisition channels. The Parallel Delegations Bootcamp - One of the main goals of the tour is to go beyond the capital cities, promoting young local communities and ecosystems. During the afternoon of the 11th, three start-ups from Tanzanian Tanga region had the opportunity to participate in this bootcamp, sponsored byFondation Botnar, including one-on-one mentoring sessions on the art of pitching, growth insights and scaling strategy with relevant local mentors. The Investor Forum - The Summit week brings together the most prominent and active investors in the region. An investor-only session was held in the morning for the investors to exchange best practices. It was an opportunity for them to meet with high representatives from the Tanzanian Private Sector Foundation, to get more insights into the Tanzanian private sector and share their concerns as investors. Entrepreneurs were also to pitch in front of these investors and participate in private

meetings to allow them to get an in-depth feedback about their business models, as well as create potential future funding opportunities. The Conference - The Conference day kicked-off with a number of invite-only workshops addressing a wide range of concrete topics related to African entrepreneurs reality on a daily basis, such as “Pathways to foster Innovations and Technology to bring stronger Civic Engagement” or “Leveraging innovation and academic research to create decent jobs for African youth”.Industry experts and experienced entrepreneurs facilitated the discussions and provided inputs on the context and main blocking points to sessions attendees, for them to collectively design concrete solutions to be implemented. The Ecosystem Tour Start-ups, mentors, Seedstars Ambassadors, and investors also had the opportunity to engage with the local ecosystem in a knowledge exchange session. The delegates will be visiting several incubation/ acceleration spaces and engage in discussions with local entrepreneurs and ecosystem shapers to get a better understanding of the successes and challenges met by the entrepreneurial scene in the country.

currencies is the future of money,” Odia said during a panel session. Luno which was launched in 2013 operates in forty countries and services almost three million customers. So far it, it has seen transaction volumes reach $3 billion and growth rate beyond 20 per cent.

A survey of one thousand people conducted by Luno Nigeria recently showed that 65 per cent were familiar with cryptocurrency. 25 per cent said own a cryptocurrency while 29 per cent own bitcoin and Ethereum. 51 per cent view cryptocurrencies as investment while 19 per cent say they

use it for remittance. 16 per cent have used it to make an online purchase and 11 per cent made transfers to family and friends using cryptcurrencies. Odia disclosed that it has plans to increase its physical presence in other parts of Nigeria as well as explore 20 new markets in Africa from 2019. “We are the crypto bank for Africa,” she said. In a statement released to BusinessDay, Marcus Swanpoel, co-founder and CEO of Luno said leveraging technology has the potential for meaningful and longterm positive impact on every member of the society. “Upgrading to this better financial system will empower billions of people by ultimately lowering their cost of living, providing them with more and better economic as well as new decentralised products and services, increase the value retention of their wealth, and overall providing more financial freedom,” he said.

IFC’s new investment shoots Kobo360 expansion fund to $7.2m FRANK ELEANYA

he International Finance Corporation (IFC) a member of the World Bank Group said it has invested $6 million equity investment in Kobo360, a Nigerian logistics startup that leverages technology to aggregate endto-end haulage operations to help cargo owners, truck owners and drivers, and cargo recipients to achieve an efficient supply chain framework. The investment announced on Friday, 7 December on the eve of the opening of the Next 100 African Startups Initiative brings Kobo360’s total funding round to $7.2 billion secured within one year. The round was led by the IFC with participation from WTI, YCombinator, TLcom Capital, Cardinal Stone Partners, and Chandaria Capital. The company had closed a $1.2 million Seed Round in January led by Western Technology Investment (WTI) with participation from Verod Capital Management. “IFC is committed to supporting the digital economy and young entrepreneurs in Nigeria and across Africa,” Phillippe Le Houerou, CEO of IFC said in a statement.

“IFC’s investment in Kobo demonstrates how disruptive technologies can enhance the development of key sectors and contribute to Nigeria’s economic diversification. This is an innovative startup that is making company operations more efficient and lowering transport costs.” Kobo360’s objective is build the Global Logistics Operating System that will power trade and commerce across Africa. To achieve this Kobo uses big data and technology to reduce logistics frictions, empowering rural farmers to earn more by reducing farm wastages and helping manufacturers of all sizes to find new markets. The company enables unprecedented efficiency and cost reduction in the supply chain, providing 360 visibility while delivering

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

products of all sizes safely, on time and in full. “We’re no longer an app, we’re a platform,” Obi Ozor co-founder of Kobo360 said in an interview with TechCrunch. “Large enterprises are asking us for very specific features related to movement, tracking and sales of their goods. We either integrate other services, like SAP, into Kobo or we build those solutions into our platform directly.” Kobo joins IFC’s growing venture capital portfolio of e-mobility startups in frontier markets. Aside expanding to other markets, Kobo has plans to deepen its physical presence throughtout Nigeria. To this end, it will open 100 hubs before the end of 2019. Ozor explains that the goal of the 100 hubs is “To be able to help operations collect proof of delivery, to monitor trucks on the roads and have closer access to truck owners for vehicle inspection and training.” The company will also add more warehousing capabilities in order to support its reverse logistics business, one of the ways it reduces prices by matching trucks with freight after they drop their loads, as against going back with no deliveries.

BUSINESS DAY

Thursday 13 December 2018

BUSINESS

COMPANIES & MARKETS

DAY

Nigeria Energy Sector Fund grows earnings by 33.6%

Pg. 18

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

INSURANCE

Axa Mansard’s Flejou calls time on 4yr stay …stock unchanged for 6th straight day OLUWASEGUN OLAKOYENIKAN

xa Mansard, the biggest insurance company by market capitalisation on the Nigerian Stock Exchange (NSE), has announced the resignation of Frederic Flejou, a Non-Executive Director, from its Board. The shake-up did not i m p a c t o n t h e p e r f o rmance of the stock after close of trade, Tuesday. In a notice sent filed with the NSE Tuesday, December 11, the insurer said the resignation was unanimously approved by its Board and was e f f e c t i v e f ro m F r i d ay , November 30, 2018. Fl e j ou wa s f i r s t ap pointed non-executive director in January 2015. “The Board and Management of AXA Mansard Insurance Plc will like t o c o m m e n d F re d e r i c Flejou for his leadership and overall contributions

to the growth of the Company during the period he served on the Board,” it stated. In s p i t e o f t h i s, t h e shares of AXA Mansard Insurance Plc continued to trade flat at N2 per share on the floor of the NSE after they appreciated by 9.89 percent on Tuesday, December 4 to close at N1.82 per share, indicating the stock has neither made profit nor recorded loss for the past one week. At the current share price, the equity is trading close to its 52-week low of N1.73 per share. Its market capitalisation was N21 billion at the close of business on Tuesday, while its total assets stood at N73.05 billion; placing the company as the second-biggest insurance company by assets after AIICO Insurance Plc with total assets worth N105.91 billion at the end of the third quarter of 2018.

Source: Bloomberg

The results of AXA Ma n s a rd f o r t h e p e r i od ended September 30 show that the group grew

its gross premium written by 28.09 percent to N28.95 billion in the first nine months of 2018 as

against N22.60 billion recorded in the corresponding period in 2017. Triggered by a 25.75

p e rc e n t g ro w t h i n t h e f i r m’s g r o s s p r e m i u m income to hit N24.71 billion, AXA Mansard recorded 40.64 percent increase in its net premium income to N14.53 billion in the review period. The profit before tax of the insurance firm also surged between January and September, 2018 to reach N3.36 billion, this is 18.20 percent higher than N2.84 billion achieved in the same period last year. However, the profit was chopped off by a 238.42 percent increas e in its income tax expense, causing the company’s post-tax profit to rise paltry by 0.61 percent. AXA Mansard Insurance Plc offers insurance, financial advisory, portfolio and risk managem e n t , a n d i nv e s t m e n t consulting services. The company was incorporated on June 23, 1989 while it got listed on the NSE on November 19, 2009.

GLOBAL

UBS predicts global economic deceleration, slowing company earnings in 2019 ... investors see the US lagging global markets next year Jumoke Akiyode-Lawanson

lthough a 2019 recession looks unlikely, the recently released Year Ahead report from UBS, a Swiss multinational investment bank and financial services company, predicts that global economic growth will decelerate next year to 3.6% from 3.8% in 2018, and company earnings will grow at a slower rate. The report by UBS Global Wealth Management’s Chief Investment Office (CIO) reveals that the price of many financial assets has already moved to reflect uncertain prospects. It enters 2019 with an overweight position in global equities. However, it suggests that as the market cycle matures, investors should diversify and hedge their portfolios to guard against volatility as well as political and other risks. They should also take advantage of growth in fields like sustainable and impact investing,

and pockets of value where financial asset prices are excessively low. Mark Haefele, chief investment officer at UBS Global Wealth Management, says: “Investors should retain positions in global equities but plan for market volatility. A slight slowdown in economic and earnings growth doesn’t mean no growth, and the recent sell-off has left a number of assets more attractively valued, but investors must also take into account the tense geopolitical environment as well as monetary policy tightening.” In its investment process, CIO seeks to test its ideas against professional investors’ views. Surveys of professional investors and wealthy US-based individuals reveal divergent outlooks for the year ahead. Close to half of professional investors see the US lagging global markets next year, while two-thirds of individual investors surveyed

expect US stocks to match or beat global equities. Nearly half of the professionals surveyed anticipate the US dollar declining versus the euro, compared with less than onesixth of individual investors. The report also revealed that the most popular asset class for professional investors entering the New Year is emerging market equities. For individual investors the top pick is US stocks. Professional investors are nevertheless more optimistic than individual investors on how much upside remains in the US equity bull market. However, few professionals regard US political risk as a bigger threat than USChina trade tensions and higher interest rates. Individual investors are more concerned about US political risks than professionals are. When asked when the next recession will start; the most common answer among professional investors is 2021. Half of the individual inves-

tors surveyed expect the next recession to start within two years. Investment recommendations CIO recommends that investors should retain an overweight position in global equities as we enter 2019. Nevertheless, they should also hedge against volatility by holding overweight positions in medium-duration US government bonds and the Japanese yen, as well as focusing on quality companies and avoiding excessive credit risk. They should also look to neglected areas of the market, including value stocks in the US and emerging markets, energy equities globally, and shares of financial companies in the US and China. Sustainable and impact investing continues to provide longerterm growth opportunities, as do emerging market and Japanese stocks, and US dollar-denominated emerging market sovereign bonds. For the Americas, it rec-

ommends that the US Federal Reserve should approach the end of its tightening cycle in 2019, while the support from US fiscal stimulus should wane. In this context, the US’s twin fiscal and current account deficits will likely weigh on the US dollar. Within Latin America, investors should keep an eye on Brazil, where the incoming administration has proposed a range of reforms that could improve the country’s fiscal sustainability. For Europe, Middle East, and Africa (EMEA) & Switzerland; the European Central Bank should start to normalize interest rates in 2019, which would support the euro against the greenback. A clear recovery by the euro is needed before the Swiss National Bank will hike rates, although the Swiss franc has limited scope to depreciate against the euro. Within emerging EMEA, CIO sees the recent sell off in crude oil prices as overdone, and expects prices to rise

towards USD 85 / barrel over the next six to 12 months, supporting prospects for the Middle East. However, investors should continue to diversify globally to avoid idiosyncratic political risks in emerging EMEA as well as the Eurozone and the UK, which is scheduled to leave the European Union next year. While the Asia Pacific market should see the Chinese yuan continue to decline, easing 5% in trade-weighted terms against a backdrop of ongoing US-China trade tensions, slowing Chinese economic growth, and a diminishing current account surplus. By contrast, in the wake of Japan’s Abenomics program, the yen is more than 30% undervalued relative to its estimated equilibrium on a purchasing power parity basis. Japanese bond yields could also rise as the Bank of Japan embarks on a slow normalization of monetary policy.

BUSINESS DAY

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Thursday 13 December 2018

COMPANIES & MARKETS ENERGY

Nigeria Energy Sector Fund grows earnings by 33.6% David Ibidapo

he Nigeria Energy Sector Fund (NESF) recorded a significant growth in earnings for the year ended March 2018, thanks to lower operating costs. Earnings for the year ended March 2018 released on Tuesday showed profit after tax increased by 33.6 percent to N135.7 million compared to N101.6 million recorded in 2017. The NESF is a closedend investment vehicle that was created in 1998 for the purpose of bridging the funding gap in the energy sector of the Nigerian economy through the mobilization of investment funds from individuals and corporate investors, both indigenous and foreign. The fund is also able to invest in equities and fixed income instruments. According to the fund manager, SCM Capital Ass e t ma nag e m e nt, “ Th e

significant performance of the fund despite the drop in the yields of most money market instruments, was as a result of the ingenuity of the fund manager not only to reduce the diminution to N18.81 million as at March 2018 from N62.03 million in March 2017, but also to exit the bond securities without any loss compared to a loss of N21.98 incurred in previous year.” During the period, operating expenses declined by 61.45 percent to N39.29 million in 2018 from N101.9 million recorded in 2017. This was largely driven by a reduction in diminution from N62.03 million to N18.81 million. N E S F h a s g ro w n i t s earnings by an average of 8 percent in the last five years, recording its lowest earnings in 2015 after profit after tax fell 61.5 percent to N35.37 million. Investors were however compensated with higher

TECHNOLOGY

Omnicom eyes bigger market share in expansion push IFEOMA OKEKE

mnicom Solutions, an innovative internet and mobile development centre, says it would step up operations in the coming years in order to dominate the market and give consumers more value for their money. Although the company is geared towards service delivery as against actually inventing new technology, the company is looking to explore ways by which these technologies can be implemented locally in a cost effective and efficient manner. Lanre Olaniyan, CEO Omnicom solutions says that constantly setting targets and goals have been able to help the company overcome challenges over the years. Olaniyan who spoke at the company’s tenth year anniversary dinner in Lagos said that “Every year we move forward by solving some of the problems we have such as capacity building. Every year there is a team, there is a goal and there is a target for overcoming some of the challenges we have.” This is coming at a time where players in the sector are expected to improve the quality of services rendered to its customers. Olaniyan said that even though current operators are doing its best to actually satisfy customer needs, he said power has a big role to play in the telecoms industry. Stating that

“no telecoms company can solve power issues, in more developed countries power is the responsibility of other arms of the industry and the telecoms industry are just part of the users”. Having been in the industry for the past ten years, Olaniyan noted that more can be done to improve the quality of services customers receive from telecoms operators. Citing power as a major challenge to this effect, he believes that stakeholders should come together to be able to surmount these challenges. “The government has to encourage infrastructure, either they put it into place or they attract investors and stakeholders interested in putting these infrastructure in place,” he said. The sustainability of the various power alternatives telecoms operators do use is quite uncertain and as such the urgent need for the government to come up with solutions to the power problems is indeed necessary. The industry which still has a lot of potential and Omnicom is repositioning itself to partake of it. The tenth year milestone is still one of many others the company intends to achieve in the coming years. “We believe there is a lot we could do and there’s a lot we are not doing even though we are doing a lot right now. We are looking at expanding into other areas of telecoms services in the country and to the African continent,” Olaniyan added.

L-R: Ayoola Olukanni, director-general, Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA); Yetunde Onanuga, deputy governor, Ogun State; Alaba Lawson, president, NACCIMA; Ganiyu Olanrewaju Rufai, permanent secretary, Lagos State ministry of commerce, industry and corporatives, and Tomi Somefun, MD/CEO, Unity Bank Plc, at the launch of the NACCIMA/Unity Bank prepared card partnership in Lagos, yesterday. Pic by Olawale Amoo

dividend as dividend per share increased simultaneously as earnings grew. Dividend per share

stood at N136, the highest in the last five years. Retained earnings during the period increased

PUBLIC INSTITUTIONS

AVIATION

NBS says foreign investment into Nigeria fell 47% in Q3 2018 BUNMI BAILEY

he total value of capital importation into Nigeria reduced quarter-onquarter by 47.2 percent in the third quarter of the year, the National Bureau of statistics (NBS) said in a report released Tuesday. The value of foreign investment fell to $2.9 billion from $5.5 billion in the second quarter. This shows also a 31.1 percent decrease compared to the value in the third quarter of 2017, according to the report. The largest amount of capital importation by type was Portfolio investment, which accounted for 60.5 percent ($1.7 billion) of total capital importation, followed by Other Investment, which accounted for 21.1 percent ($601.5 million) of total capital, and Foreign Direct Investment FDI, which accounted for 18.6 percent ($530.6 million) of total capital imported during the period. By sector, Capital importation as shares, which is closely related to Equity investment (FDI and Portfolio Investment) dominated the third quarter, reaching $1,667.8 of the total capital Importation within the three months. The United States emerged the top source of capital investment in Nigeria during the period under review, with $911.33 million. This accounted for 31.9 percent of the total capital inflow for the period.

by 19.6 percent to N363.8 million from N304.2 million recorded in 2017. Meanwhile, total mar-

ket value of NESF rose marginally by 5.7 percent to N1.10 billion from N1.05 billion in 2017.

Bristow boosts capacity development for Nigeria Immigration Service IFEOMA OKEKE

ristow Helicopters Nigeria Ltd., an aviation player in the service of Nigeria’s oil and gas has boosted human capital development as it donated two blocks of classrooms and two solar-powered boreholes to the Nigeria Immigration Training School, Kano as part of its corporate social responsibility. The company has also revealed that it will soon unveil similar projects at NIS training school in Ahoda River State in due course, with a view to guaranteeing good learning environment for the nation’s Immigration Officers whom it said deserves a very conducive training environment. Disclosing this last Friday during the official commissioning, Oladapo Oyeleke, managing director of Bristow Helicopters Nigeria Ltd., said the projects are strategically conceived to enhance quality of training for ef-

ficient service delivery by the Nigeria Immigration Service whom he observed are key to the nation’s development efforts. Specifically, Oyeleke said Bristow’s intention for embanking on the projects is in line with the organisation’s belief and commitment to professionalism through sustained capacity development. Besides, he said it is the vision of Bristow Helicopters Nigeria to replicate global standard centres across Nigeria Immigration Training Schools as parts of our corporate social responsibility. According to him, the face of Nigeria Immigration is so conspicuous. They are the last face on your way out of the country and the first face on your way into the country on arrival. So, it is important that Immigration staff acquires quality training equal to global standard in a conducive environment. For us at Bristow Helicopters, we consider the donation of the classrooms has a way

of enhancing our goals that is training intellectuals and bringing out the best in our Immigration Officers. We are extending the core value across the training schools of Nigeria Immigration as part of our community relations projects” Oyeleke explained. Responding on behalf of the Nigeria Immigration Service (NIS) Muhammed Babandede, Comptroller General of the Service, commended Bristow Helicopters supports while appealing to other corporate organisations to emulate the good gesture. The Comptroller-General revealed that the service under his leadership has enhanced both human and capital development for efficient service delivery and results achievements. Specifically, he disclosed that no fewer than 651 cadets are currently undergoing 6-months training programme at the NIS facility in Kano, a figure which he said is the highest in the history of NIS.

Thursday 13 December 2018

COMPANIES & MARKETS

L-R: Olubunmi Adeniola , key distributor, Ibadan; Ipsit Chakrabarti, sales director, PZ Wilmar; permanent secretary, Ministry of Education, Oyo, Adeyoola Theresa Olaitan; and category marketing Manager, PZ Wilmar, Chioma Mbanugo, at the official trade launch of the Mamador and Devon King’s seasonings at Jogor Centre, Ibadan, Oyo State.

L-R: Gbenga Adebija, director-general, Nigerian-German Business Association; Marc Lucassen, head, Delegation of German Industry and Commerce in Nigeria; Matthias Leder, CEO, Gieben-Friedberg Chamber of Industry and Commerce, and Kehinde Stephen Awoyele, project co-ordinator, dual vocational training partnership with Nigeria, Delegation of German Industry and Commerce in Nigeria, during a press conference on German dual vocational trading in Nigeria, held in Lagos, yesterday. Pic by Olawale Amoo

BUSINESS

DAY

Business Event

L – R : Osita Ede, head, consumer and liability products, Diamond bank Plc; Eleogu Alphonsus, past season 10 DiamondXtra winner; Chris Ofikulu, head, lagos directorate, Diamond Bank Plc; and Stella Adibe, independent reviewer KPMG during the DiamondXtra season 10 third quarterly draw held in Lagos, recently…

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

BUSINESS DAY

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Thursday 13 December 2018

COMPANIES & MARKETS POWER

Reps halt privatization of Afam power plant KEHINDE AKINTOLA, Abuja

i g e r i a ’s House of Representat ives on We dnes day dire cte d t h e Na t i o n a l C o u n cil on Privatization (NCP) to immediately suspend the p ro c e s s o f p r i v a t i z ing Afam Power Plc on a fast-track transaction basis to allow for completion of the repairs of Phases 4 & 5 machines pending the conclusion of its investigation. The resolution was passed sequel to the adoption of a motion o n t h e ‘ Ne e d t o i n vestigate the planned privatization of the Afam Power Plc by the Bureau of Public Enterprises (BPE) as a d i l ap i d at e d a s s e t ’, s p o n s o re d by Ay o dele Oladimeji (PDPEkiti). Some of the lawmakers who spoke in favour of the motion, namely: Yussuff Lasun, Deputy Speaker; Fe m i G b a j a b i a m i l a , Majority Leader ; Mohammed Monguno ( A P C - B o r n o ) ; S e rgius Ogun (PDP-Edo) and Nkiruka Onyejeocha (APCAbia), frowned at the state of previously

privatized public assets. In his lead debate, Oladimeji observed that the planned privatization of Afam power plant may suffer the same fate that the previous ones suffered in the privatization process. He however called for the repair of the faulty components of the plant so that good money for the value of the plant could be realized and the plant would be functional even after its sale, so it could be useful to Nigerians. O n h i s p a r t , Yu s suff Lasun (APC-Osun) stated that the privatization process in Nigeria is awkward and skewed towards personal, not national interest. He queried the practice of selling off assets that are in critical sectors such as power, mines and steel, educational or technological development. Lasun who called for review of the entire process, argue d that most assets p r i v a t i z e d h av e n o t met up to the aims for which they were privatized. He queried why

L-R: Mohammed Saleh, chairman sports committee (EFCC); Kikky Boboye, head of human resources Bet9ja, Mary Onyali-Omagbemi, Olympic Medalist; Ibrahim Magu chairman of EFCC, and Ayo Ojuroye, CEO, Bet9ja at the National Anti-Corruption Marathon tagged ‘Abuja Marathon 2018’in Abuja.

a nation looking to provide steady power to its citizenry w ould b e s elling off its power assets and not ensuring they function better than when they were in government control. In his contribut i o n , Fe m i G b a ja b i amila (APC-Lagos) urged the Committee oversighting BPE and the agency to be cognizant of the budget s t r u c t u r e t o a s c e rtain which part of the budget would be supposedly financed by the proposed sale of the power plant. Gbajabiamila who ha r p e d o n t h e n e e d

to put national interest at the front b u r n e r, q u e r i e d t h e plan to sell off the plant as scrap. In the same vein, Mo ha m m e d Mo n g u no (APC-Borno) who na r rate d h i s e x p e r i ence during the visit to Afam power plant, argued that it would be a waste to sell the power plant as being proposed. While noting the assets previously sold off are not functioning optimally, Monguno called for reinvestment by G overnment into the sector to boost power sup-

ply to Nigerians. In h i s v i e w , S e rgius Ogun (PDP-Edo) observed that the power plant is a critical asset that should not be sold off without due diligence. He stated that as a believer in privatization, proper procedures should be f o l l o w e d b e f o re t h e process is implemented. In her remarks, Nkeiruka Onyejeocha, chairman, House Committee on Aviation, queried how the spirits of l o a n - b o r row i ng a n d that of trading off all critical assets seem

t o h av e s i p p e d i n t o governance. She reminded members that most of these privatization processes lead to loss of Nigerian jobs. While ruling, S p e a k e r Ya k u b u Dogara mandated the Committee on Privatization and Commercialization t o i n v i t e t h e D i r e ct o r- G e n e ra l o f t h e Bureau of Public Enterprises (BPE) to ascertain the status of the transaction with a view to investigating same and report back within four weeks for further legislative action.

BANKING

Digitals Jewels celebrates 10yr anniversary Seyi John Salau

nformation Technology and Project Management Consulting firm, Digital Jewels Limited has celebrated 10 years of offering specialised IT Governance, Risk & Compliance Consulting and Capacity Building services to businesses across a diverse market spectrum in Africa. The anniversary celebration was marked with a thanksgiving

service, the SeventyFirst Information Value Chain (IVC) Forum and an anniversary dinner event, which was held in Lagos. Speaking on the landmark celebration, Adedoyin Odunfa, Managing Director, remarked that it was a special moment to appreciate stakeholders that have made Digital Jewels Limited a formidable reality. According to her, “Today, as we celebrate this significant mile-

stone, it is important to say special thanks to God Almighty who has been good to us, our supportive board of directors who stood with us, our faithful clientele who had faith in us, and our most industrious team who had given strength to the vision.” Odunfa listed some significant achievements of the firm in the past decade: “So far, we have worked assiduously to support the corporate players

in the African economic space with the requisite knowledge and expertise to utilize Information, Internet and Communications Technology to their strategic advantage.” “We have conducted over 65 Projects, delivered over 45 certifications, trained over 4,200 professionals, conducted over 500 training sessions and organized 71 IVC sessions which have been graced by over 100 speakers and 3800 del-

egates in attendance till date”, she concluded. Digital Jewels Limited is a specialised Information Value Chain Consulting & Capacity Building Firm. The firm specialises in Governance, Risk and Compliance, Capacity Building, Penetration Tests, PCI DSS Compliance Assessments, ISO 27001, ISO 20000, ISO 22301, Information Management Audits, E‐learning, Business Continuity, Recruitment, Enterprise Architecture, and Project

Management. Some of the company’s clientele list includes Galaxy Backbone Limited, Zenith Bank Ghana, Nigeria Inter-Bank Settlement System Plc (NBSS), National Identity Management Commission (NIMC), Seplat Petroleum Development Company Plc (Seplat), First Bank of Nigeria Plc, Mainone Cable Company, Guarantee Trust Bank Plc, Interswitch, Konga and Flutterwave.

Thursday 13 December 2018

BUSINESS DAY

Research & INSIGHT

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Thursday 13 December 2018

In association with

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

briu@businessday.ng

08098710024

How low credit to the private sector undermines Nigeria’s economic performance AMAMCHUKWU OKAFOR

ig e r ia’s e c o n o m i c growth as at the end of the third quarter of 2018 was below 2 percent. While this performance shows that we are not in recession, it also indicates that we are not too far off. Still fledgling out of the recession, Nigeria’s average growth rate since the beginning of the year hovers around 1.75 percent, which is well below the optimistic projection of 4.80 percent for 2018 in the Economic and Recovery Growth Plan (ERGP). High interest rate environment at 14 percent monetary policy rate, exchange rate pressures at N363/$ and inflation pressures at 11.26 percent as at October 2018, due to election spending, all make it increasingly difficult for businesses to thrive. Following the release of the Banking sector data for Q3 2018 to the third quarter 2018, BusinessDay Research and Intelligence Unit (BRIU) analysed the data to ascertain some economy-wide implication and the impact of past and recent policies on banks behaviour and those of the public. to funds provided by development and agricultural (credit) banks such as the Bank of Industry (BOI), the Bank of Agriculture (BOA) as well as other agricultural credit guarantee scheme of the government. Services Interestingly, bank credit to government takes the lead, well above agriculture, power and energy in the industrial sectors. Bank credit to government hiked to 9.38 percent from 4.75 in Q3 in the final quarter of 2015 and has trended high since then, reaching an all-time high of 9.61 in Q2 2018. It fell slightly to 8.99 percent in Q3 2018. It is followed by oil &gas services at 7.78 percent; trade and commerce at 6.89 percent, and financial markets which got 6.77 percent. Construction sub sector at 3.73 percent, power & energy received 2.09 percent; transportation & storage got 2.00 percent, and that leaves

it at the bottom rung while education got the least percentage of total credit at 0.39 percent – all in Q3 2018. This distribution of credit reveals the preferences of banks and the implication for socio-economic development. Deposits Total deposits have increased albeit at a decreasing rate. For demand deposits, private sector deposits with commercial banks take the most of the total. However, there has been slight and consistent decline in demand deposit since June 2018: from June to September 2018, total deposits declined by 7.23 percent. This may be due to a combination of economic hardship as perceived by many and the low rate of financial inclusion. Time deposits on the other hand, recorded some increase in the last one year (September-toSeptember) by 22.28 percent. Be-

Payment Channels The volume and value of transactions through non-cash channels are increasing as the number of alternative payment channels increase. Transactions through Automated Teller Machines (ATM) recorded the highest volume of transactions throughout the year. The value of transaction stands at N1.6 trillion as at Q3 2018 a 13.2 percent decline from N1.83 trillion in Q4 2017. Interestingly, transactions through Point of Sales (PoS) have maintained an increasing trend: it increased by 81 percent from the levels in Q4 2017 to Q3 2018. Between Q2 and Q3 2018 alone, the volume of transactions via PoS increased by 27.98 percent. This development is attributable to the growing adoption of the technology by market traders and the improving internet connectivity in many urban centres across the country. This represents a positive indication for cashless policy.

Nonetheless, Transactions over the internet, like other electronic platforms (NEFT, NIP) are still minimal, however increasing through the year by 44.9 percent. Non-performing loans (NPLs) According to the Basel definition, a loan is considered non-performing when the borrower is 90 days or more behind on the contractual payments or when the obligor “is unlikely to pay its credit obligations to the banking group in full, without recourse by the bank to actions such as realising the security.” NPL data shows that banks in Nigeria have been experiencing a rising trend in their NPL portfolio. The upward trend began in the final quarter of 2015, spiking in 2016 through 2017 due to the slow-down in growth during the period. The graphics above show some easing in the NPL from its peak in Q3 2017 into the first and second quarters of 2018 by 17.74 percent. This improvement which can be attributed to growth improvements due to counter-cyclical activities seem to be short-lived. The NPL is beginning to trend upward again, rising by 13.73 percent between Q2 and Q3 2018 to N2.25 trillion. Exchange rate, interest rate, Inflation rate and GDP growth rates are macroeconomic factors that can worsen the loan performances aside from other idiosyncratic factors of the banks. 12734BDN

Industry Based on the analysis of the latest data on credits to the different sectors of the Nigerian economy as at the end of the third quarter 2018, oil and gas takes the lead, claiming a portion no less than 22.56 percent on average since Q4 2017, and reaching a high of 23.08 in Q3 2014. Manufacturing follows with 13.79 percent in Q3 from 13.16 in Q2 2018. On the other hand, power & energy sub sector at 2.71 percent, and mining & quarrying at 0.04 percent, are the laggards behind agriculture which also got a paltry 3.80 percent in Q3 2018. Even though bank credit to the agricultural sector increased throughout the first three quarters of 2018, the average change is only 8.69 percent. The implication is that the banks are not placing huge bets on the mining sector and much of the progress touted about development in the agricultural sector is due largely

tween Q2 and Q3 2018, total time deposits increased by 3.48 percent despite growing political uncertainties due to the forthcoming elections. Even more interesting is to see that a significant proportion of time deposits are foreign currency deposits. The proportion of foreign currency deposits with commercial banks alone was 35.23 percent at Q3 2018, a slight increase from 34.89 percent in the previous quarter.

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Thursday 13 December 2018

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BUSINESS DAY

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

briu@businessday.ng

08098710024

Economic sectors not yet out of recession as at Q3 2018 Omobola Adu

paper products; plastic and rubber products; basic metal, iron and steel; and other manufacturing. The other sub-sectors that came out of a recession are livestock and air transport.

he gross domestic product (GDP) report for Q3 2018 released by the National Bureau of Statistics (NBS) reveals that 8 sub-sectors in the Nigerian economy have entered into an economic recession. Further analysis of the periodic data shows that another 8 sub-sectors have come out of a recession. An economic recession is typically characterised by two consecutive negative growth rates in the GDP (Quarter-on-Quarter). Based on this definition, the following sub-sectors experienced negative growth rates in Q2 and Q3 2018: fishing; coal mining; metal ores; motor vehicle and assembly; post and courier services; publishing; motion pictures, sound recording and music production; and financial institutions. Fishing For fishing, a sub-sector of agriculture, GDP growth rate declined by -26.11 percent in Q2 2018 and contracted further by -4.18 percent in Q3 2018 pushing the sub-sector into a recession. In Q3, fishing sub sectoral GDP fell to N76.7 billion from N80.1 billion in Q2 2018. The recession in the fishing sub-sector has been driven by mostly the rising cost of grains and other fishing inputs. In addition, the seasonal factors pertaining to the agricultural sector could also be responsible for the decline. Coal mining and metal ores In the mining and quarrying sector, coal mining and metal ores experienced negative GDP growth rate in Q2 and Q3 2018. Coal mining GDP fell by -10.63 percent in Q2 and declined also in Q3 2018 by an astonishing -77.36 percent. Metal ores’ GDP contracted by -60.51 percent in Q2 and declined also in Q3 2018 by -15.70 percent. The declining trend in the GDP growth rate in coal mining and metal ores in Q2 and Q3 2018 can be linked to the fall in credit to the mining and quarrying sector in the respective sectors. Data from NBS shows that in Q2 and Q3 credit to mining and quarrying declined by 2.73 percent and 39.04 percent, respectively. Motor vehicles and assembly The manufacturing sector comprises 12 sub-sectors, out of which BRIU analysis shows that motor vehicles and assembly entered into an economic recession in Q3 2018. Quarter-on-Quarter, the GDP

Livestock After experiencing negative GDP growth rates on a quarter on quarter basis in Q1 and Q2 2018, livestock had a positive growth rate in Q3 2018. Livestock’s GDP grew by 2.67 percent in Q3 from -3.01 percent in Q2 2018. Food, beverages and tobacco In the manufacturing sector, food, beverages and tobacco had a positive growth in GDP in Q3 (2.29 percent) 2018 to come out of a recession, having experienced negative GDP growth in Q1 and Q2. Textile, apparel and footwear Likewise, textile, apparel and footwear, a sub-sector of the manufacturing exited a recession in Q3 2018. The sub-sector grew by 5.77 percent in Q3 from -4.54 percent in Q2 and

growth rate of motor vehicles and assembly declined by -2.15 percent in Q2 2018 and contracted more by -16.38 percent in Q3 2018. Publishing and motion pictures, sound recording and music production The information and communication sector comprises four subsectors out of which two sub-sectors fell into a recession (publishing and motion pictures, sound recording and music production). In Q2 and Q3, publishing’s GDP decreased by -3.79 percent and -14.98 percent, respectively. On the other hand, motion pictures sound recording and music production’s GDP in the period under consideration fell by -20.17 percent and -6.57 percent respectively. The fall in the GDP growth rate in Q2 and Q3 could be attributed to the decreasing trend in banking credit to the information and communication sector in the period under consideration. NBS data reveals that credit declined to

-2.04 percent, -0.86 percent and 1.32 percent respectively. The positive growth rate in Q3 signified the exit of the sub-sector from a recession. Other manufacturing and basic metal, iron and steel Other manufacturing’s GDP experienced a growth rate of 16.55 percent in Q3 2018 as against the negative growth rates in Q1 (-4.19 percent) and Q2 (-17.72 percent) 2018. Basic metal, iron and steel sub-sector also came out of a recession. The sub-sector grew by 6.64 percent in Q3 2018 from the -0.96 percent in Q2 2018. The strong performance in manufacturing sub-sectors can be linked to the improvement in credit availability in the sector as credit to the sub sector grew by 6.48 percent in Q3 2018. Air transport Air transport’s GDP growth rate in Q3 2018 experienced a significant increase to 27.99 percent having had a negative growth rate in the previous two quarters. In Q1, air transport

N736.8 million in Q3 from N814.5 million in Q2 and the N865.3 million recorded in Q1. Post and courier services In the transportation and storage sector, post and courier services entered into a recession in Q3. The sub-sector’s GDP declined by -62.3 percent in Q2 and fell by -3.20 percent in Q3 2018. Financial institutions Financial institutions, a sub-sector of financial and insurance also experienced an economic recession as it fell by -6.36 percent in Q2 2018 and by -14.68 percent in Q3 2018. The sub-sectors that came out of a recession in Q3 BRIU analysis also indicates that eight sub-sectors came out of a recession in Q3. In the manufacturing sector alone, six sub-sectors came out a recession namely: food, beverages and tobacco; textile, apparel and footwear; pulp, paper and

-7.13 percent in Q1 2018. Pulp, paper and paper products This sub-sector grew by 3.20 percent in Q3 2018 from -2.00 percent in Q2 2018 to come out the recession. In Q1 and Q2, pulp, paper and paper products exhibited negative growth rates in its GDP. Plastic and rubber products Plastic and rubber products’ GDP growth rate in Q1, Q2 and Q3 were

contracted by -4.83 percent and declined also by -4.46 percent in Q2 2018. Sub-sectors still in a recession in Q3 Further observations show that the economic recession in the road transport sub-sector of transportation and storage sector persisted into Q3. BRIU analysis reveals that road transport’s GDP experienced negative growth rates in Q1 (-1.56 percent), Q2 (-12.32 percent) and Q3 (-1.26 percent) 2018.

BUSINESS DAY

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Thursday 13 December 2018

BUSINESSTRAVEL FAAN partners banks, contractors in boost for airport finance Stories by IFEOMA OKEKE

s the Federal Airports Authority of Nigeria (FAAN) looks to upgrade facilities across airports, financing has remained key to this drive. In making this a reality, the authority has entered into a fresh partnership with commercial banks and contractors. This partnership promises to encourage improved access to funding of contracts especially for Small and Medium Enterprises. The collaboration which will enhance the Gross Domestic Product (GDP) growth and help diversify our economy; will also assist in developing a financing mechanism aimed at optimizing the cash flow of FAAN and provide the much-needed support to our contractors, to enable them access opportunities for working capital enhancement. In addition to these, it will help FAAN improve on its revenue generation and collection and improve on its financial efficiency and enhance service delivery at all our airports. Speaking while hosting its contractors and commercial banks in a collaborative forum at Radisson Hotel, Ikeja, Lagos on Tuesday the Managing Director of the Authority, who was represented by Nurudeen Daura, the director of Engineering, noted that the forum is aimed at developing a financing mechanism which will optimize the cash flow of FAAN, while also providing the much

needed support to its contractors, to enable them access opportunities for working capital enhancement. He added, “The scope involves working with selected financial institutions, in order to provide liquidity to our major contractors through direct and contingent funding.” Stating that investment opportunities abound in the industry, especially FAAN, he encouraged the banks and contractors to take advantage of these opportunities through constructive partnership in the overall interest of all. According to Daura, “I wish to mention that Aviation Industry is highly technical and capital inten-

sive. The sector in recent past has undergone incisive and extensive transformation aimed at making our airports comfortable, safe, secure and conducive for commercial purposes. The achievements to date wouldn’t have been possible without support from all stakeholders like you. “Presently as at November 2018, we have seen marginal increase in our Aeronautical revenue compared to the same period in 2017. A few collective and collaborative efforts have been embarked upon and several measures have been put in place to improve revenue generation and collection.” Some of these collaborative efforts he mentioned include ongoing full

L-R: Jumoke Oni, general manager, operations; Honorious Anozie, director of Human Resources & Administration; Salisu Daura (director of Engineering Services), Representing the managing director, Federal Airports Authority of Nigeria (FAAN) & Nike Aboderin, director of Finance & Accounts at the dialogue between FAAN, Contractors and Commercial Banks aimed to enhance their operations in project financing.

Med-View Airline to relaunch Yola, Maiduguri flights Dec.18, increases Lagos-Abuja flights

ed-View Airline has said it will relaunch the Yola and Maiduguri routes on Tuesday, 18 December, and increase flights on LagosAbuja route, using the B737-800 NG aircraft. This development is coming with the return of some of its aircraft from

maintenance. A statement by Trevor Henry, head of commercial for the airline, said the relaunch of its traditional routes is anchored on the re-fleeting program of the airline. The number of flights on the Lagos-Abuja route will increase to three daily round trips on weekdays to offer better departure

timings throughout the day. Henry commended the MedView passengers for their continued patronage and assured them of better customer service and reliability. Med-View’s management wished all its loyal passengers a Happy Festive Season and a prosperous New Year in advance.

Air Peace scales safety test for B777 operations

ir Peace has scaled a major regulatory hurdle in its path to international flight services, successfully performing the partial emergency evacuation and ditching demonstrations as part of the safety tests for the operation of its Boeing 777 aircraft. Emergency aircraft evacuation refers to an exercise aimed at evacuating those on an aircraft when an emergency occurs on the ground, in water or mid-flight. The ditching demonstration, however, simulates a planned water landing and evaluates the airline’s ability to handle such emergency. An emergency evacuation demonstration is mostly required when an airline proposes operating a specific aircraft type and model entering into its service for the first time. Once the signal for is given, the aircraft’s emergency evacuation equipment and 50 percent of the

automation of car parks, cargo operations and other revenue points; metering of all customers to ensure current and full amounts are recovered for electricity consumption and reconciliation and renegotiation of outstanding debts to ensure better recoveries. Other efforts include engagement of customers to comply with the payment terms provided in its credit policy manual, enforcement of sanctions against reluctant or recalcitrant customers and introduction of pay as you go system for some of our revenue heads especially with difficult customers, amongst others. He noted that efforts have also been put in place to optimize cost

required emergency exits and slides must be ready for use in a maximum of 15 seconds. Although simulated, evacuation drills are a risky operation for crew and other participants - often leading to injury of varying degrees. Air Peace recently acquired four Boeing 777 for its long-haul operations to destinations including Dubai, Sharjah, London, Houston, GuangzhouChina, Mumbai and Johannesburg. The airline made history as the first Nigerian carrier to acquire and register the Boeing 777 in the country. Being the first time the Boeing 777 was entering its service, Air Peace was mandated by aviation regulations to demonstrate its capacity to handle emergency evacuation and ditching under the close supervision of officials of the Nigerian Civil Aviation Authority (NCAA). Once the signal for the exercise to commence was given, the crew set out to work, deploying the four slides

of the eight-exit Boeing 777 aircraft within 10.5 seconds - 4.5 seconds ahead of the maximum time allowed. They drew applause for their display of efficiency. Commenting on the assessment, Florence Opia, Air Peace cabin crew manager, and Patrick Achurefe, Quality manager, commended the NCAA team for going about the exercise in a diligent manner. They assured that the carrier would continue to priotise safety and compliance with aviation regulations in its preparations for the launch of its long-haul flights to Dubai, Sharjah, London, Houston, GuangzhouChina, Mumbai and Johannesburg. With the evacuation exercise off the way, Air Peace said it was now set for the next stage of regulatory requirements for the induction of its B777 aircraft into service and commencement of its international flights.

reduction by setting up Management Committee on Efficiency to develop strategies on efficiency, setting efficiency targets, strict monitoring and evaluation of processes and review of purchasing procedures. He said the authority has concluded on the audit of its 2015 and 2016 Financial statements and of its 2017 management accounts is still on – going and will be concluded shortly, adding that this demonstrates FAAN’s commitment to investing in infrastructure, safety, security, human capacity development and creating the environment to encourage innovation for efficiency. “Our revenue lines are growing, we are putting processes and systems in place to enhance efficiency, optimize our human capital and enhance our services delivery around all our airports. Though there is room for improvement we remain committed to our mission and to meeting all our obligations to our various stakeholders,” he added. In attendance at the event were Nike Aboderin, the authority’s director of Finance & Accounts, Anozie Honorius, director of human resources, representatives of First Bank Plc, FCMB, Fidelity Bank, Union Bank, Zenith Bank, Access Bank, Polaris Bank, Tam Tam Nig Ltd, Inland Chips Nig Ltd, Pencks Ltd, amongst others. Banks who were present at the occasion expressed their enthusiasm to work with FAAN and assured that in their dealings with the authority so far, it has proven to be credit worthy.

Turkish Airlines leverage customer service to deepen penetration in market

rom 2009 to 2017, Turkish Airlines said it has made concerted efforts to leverage customer service in drive its business. This is as the airline consecutively emerged as ‘Southern Europe’s best airline’. In 2017 alone, the Airline picked up four awards; “Best Airline in Southern Europe”, “Best Business Class Onboard Catering”, “World’s Best Business Class Lounge”, and “Best Business Class Dining Lounge”. The numerous awards that the national flag carrier has received from various leading organizations of the world is a testament to its excellent customer service. Why is customer service relevant? Most airlines have failed to realize that good and satisfying customer service goes beyond the interactions with customers at the point of flight bookings, boarding and in-flight communications. It goes a step further to include the effort made for that passenger that has a seating preference, and that passenger that is concerned about food and beverages on the flight. There is evidence that customer service is a major issue of concern for airlines across the globe. A report by the U.S Department of Transportation released in April 2017, showed that in just one month, complaints from passengers rose by 70%. Granted, airlines may never have perfect customer service, because

their operations are so complex and there are many conditions, such as the weather, that are outside their control which nonetheless affect passengers. However, airlines can improve on their treatment of customers as well as train their employees to focus on the need to communicate clearly. Regardless of the observed limitations in the sector, some airlines are getting it right in this area of customer service. Turkish Airlines is exemplary in this regard and their numerous awards testify to this. One area of commendation from flyers of Turkish Airlines is that the airline has no hidden costs for its passengers. The airline does not unbundle the products and put a price tag on each service, neither do they have ancillary services. This offers passengers the best competitive prices that they can enjoy with full service packages. Another area that Turkish Airline excels is that it provides a range of unique services to passengers onboard. Some of these include a vast range of special, delicious meals prepared by top chefs on board flights across extensive network of routes; inflight entertainment system; highspeed global Wi-Fi and many more. Flying is not always a relaxing experience for the passenger, but once on board the aircraft, a good treatment has the ability to make passengers relax and enjoy their journey.

Thursday 13 December 2018

BUSINESS DAY

C002D5556

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Market capitalisation

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (30 – 11–18)

38,243.19 30,874.17

N13.609 trillion

N11.271 trillion

2,162.10

1,410.41

788.24

Week close (07 – 12–18)

30,866.82

N11.269 trillion

2,150.26

1,416.20

788.24

Year Open

Percentage change (WoW) Percentage change (YTD)

-0.02 -19.29

-0.55 -16.14

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

735.02

276.03

2,205.70

1,244.53

1,162.82

739.70

281.49

2,207.42

1,218.68

1,163.13

NSE Banking Index

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

1,746.68

475.44

139.37

1,394.99 1,396.37

398.47

126.37

402.02

122.50

NSE 30 Index

0.41

0.00

0.10

-17.36

-27.51

-20.06

0.89 -15.44

976.10

-3.06

0.64

-12.10

-24.22

1.98 -14.88

0.08

-2.08

0.03

-13.79

-38.31

-15.70

Concerns over ‘Santa’ rally as sell-off persists …listed stocks value decreases by N2.34trn heanyi Nwachukwu

nless the current selloff on Nigerian Bourse wanes, a historical trend which shows the stock market rallies during Christmas season may not repeat itself this year. Overall investor sentiment remains weak on the back of political uncertainty. The Nigerian equities market got off to a quiet start in the first week of December, as the All Share Index (ASI) closed the week in red (- 0.02percent) at 30,866.82 points. As at week ended December 7, the NSE All-Share Index recorded negative year-to-date (ytd) return of -19.29percent which reflects on various sectoral Indexes. Stock investors have been looking out for a much lower return in this remaining part of the year (secondhalf), following a painful first-half (H1) when early year gains were wiped-off. Trend watch shows the value of listed Nigerian equities opened the year 2018 at N13.609trillion, increased to N15.896 trillion as at end of January; and rallied further to a record high of N16.019trillion as at end of June. But as at last week, the value of equities listed on the Nigerian Stock Exchange stood at N11.269 trillion, which represents year-to-date decline of N2.34trillion. The weak performance of the equity market so far in 2018 can

L– R: Emeka Ogbechie, senior financial advisor, African Capital Alliance; Ayodeji Wuraola, Leadway Capital & Trusts Limited, Trustees, Value Fund; Oscar N. Onyema, chief executive officer, The Nigerian Stock Exchange (NSE); Eno Atoyebi, executive director, CIO, ValuAlliance Asset Management; Sam Oniovosa, alternate director, ValuAlliance Asset Management, and Bunmi Olarinoye, executive director, Stanbic IBTC Stockbrokers Limited, during ValuAlliance Value Fund Facts Behind the Figures presentation to capital market stakeholders at the Exchange in Lagos.

be attributed to two main factors. First, is the pullback of some foreign investors from the market due to uncertainty ahead of next year’s general elections; the second factor is the rising global yields which are leading to reallocation of portfolio funds away from the equity market. The NSE Consumer Goods Index has negative return of -18.06percent ; NSE Premium Index (-16.14percent); NSE-Main Board Index (-17.36 percent); NSE ASeM Index (-27.51percent); NSE 30 Index (-20.06percent); NSE Banking Index (-15.44percent); NSE Insurance Index (-12.10percent);

and NSE Consumer Goods Index (-24.22percent). Others show NSE Oil/ Gas Index (-14.88percent); NSE Lotus II (-13.79percent); NSE Industrial Goods Index (-38.31percent); and NSE Pension Index (-15.70percent). Stock market opened this week in red as investors booked N93billion loss on this week’s first trading day. Same day, the National Bureau of Statistics (NBS) released Nigeria’s Real Gross Domestic product (GDP) figures for third-quarter (Q3) 2018. Gross Domestic Product (GDP) grew by 1.81percent (year-on-year) in real terms in the third quarter (Q3) of 2018 “We think the market loves

December because it is a month where players begin to trade their optimism about the New Year. It is also a month where portfolio managers - looking to re-balance their portfolios – take position ahead of year-end reporting. “Added to this, the market clearly looks attractively valued in light of the sell-off we have seen this year. This clearly offers an interesting entry-point ahead of the upcoming presidential elections and even to a multi-year recovery story. “If history is any indication of the future, we see reasons to believe that the Nigerian equity market could get a Christmas rally in December”, according to United Capital research analysts in their November 28 commentary. “First, history shows us that the All Share Index has averaged a return of 2.8percent in the final month of the year since 1998 - second only to May which has averaged 5.3percent. Also, in the past 21 years, the market has only seen four negative monthly returns in December (specifically in 2001, 2005, 2008, 2009) - the lowest of any other month. Thus, the probability that there would be a December rally is a whopping 81percent”, United Capital research analysts added. FSDH Research in their equities outlook expects to see increased activities in the equity market in this month of December “as well as an appreciation.” “We note that most share prices are in oversold positions and these stocks

may attract the interest of domestic investors. The Fund Managers’ strategies to position in the market towards year-end may also drive the market up in December. “However, we note that some investors willcontinue totread carefully in the equity market, particularly because of election considerations. We reiterate that the market has strong growth potential for investors with a medium-to-long-term view,” FSDH Research stated in a recent report seen by INVESTOR. Last week the ASI posted positive returns in three of the five trading sessions, which were effectively wiped off by the losses seen on Thursday and Monday’s sessions, Cordros Capital research analysts noted. “In the short to medium term, we expect the negative performance of the equities market to persist, amidst growing political concerns ahead 2019 elections, and absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term,” said Lagos-based research analysts at Cordros Capital in their December 7 note to investors. “This week, we anticipate that investors will take profit in early trades although we expect an upturn by the middle of the week. Nevertheless, we maintain a cautious outlook in the near-term as overall investor sentiment remains weak on the back of political uncertainty”, said Afrinvest research analysts.

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Thursday 13 December 2018

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United Capital investment views

A tepid end to an otherwise great week

n what seemed like a tussle between the bulls and the bears, the domestic market closedtheweekbarelybearish upon a 2basis points (bps) decline week-on-week (w/w). Although the market started the weekonabearishfooting,atrendof mixed performance was observed mid-week as the market closed in green territory on three of five trading days. Market capitalization faltered N2.7billion w/w to settle at N11.3trillion while year-to-date (YtD) return stood at -19.3percent as at close of the week. A g la n c e at s e c to ra l performance underscored the diverse performance recorded during the past week. Three of the sixsectorindiceswetrackadvanced and declined w/w concurrently. The Insurance (-3.1percent), Agriculture (-2.4percent) and Industrial Goods (-2.1percent) indiceswerethelaggardsasdeclines in CONTINSURE (-12.5percent), OKOMUOIL (-4.6percent), DANGCEM (-1.6percent) and WAPCO (-3.9percent) weighed. On the other hand, the Oil & Gas (+0.2percent), Banking (+0.9percent) and Consumer Goods (+0.6percent) indices trended northwards w/w owing to price appreciation in OANDO (+9.6percent), S E P L AT ( + 1 . 6 p e r c e n t ) , DIAMOND (+56.9percent), WEMA (+7.8percent), NESTLE (+4.3percent) and DANGSUGAR (+4.3percent). In the corporate information front, Lafarge (WAPCO)’s shareholders reached a resolution for the firm to raise N89.1bn via a RightsIssue.Thetransactionwould bedonebyissuingsixnewsharesfor every seven shares. Notably, NESTLE, NB and TOTAL’s Q3-18 interim dividend wouldbepaidthisweek,specifically on the 10th of December. The interim dividends are N20, 6kobo and N3 respectively. Additionally, towards the end of the week, Fitch ratings downgraded DIAMOND fromB-(HighlySpeculative)toCCC (Substantial credit risk). This reflected the rating organisation fears on the bank’s solvency and liquidity position, as well as the perceived onerous execution of the sale of its London subsidiary that could hamper the banks successful transition to a national bank. Investors’ sentiment remained underwater as market breadth closed at 0.8x; 30 stocks advanced while 37 declined. As the domestic boursehoversinanoversoldregion, we reiterate our expectations of a Santa Claus rally this month as year-end portfolio repositioning and bargain hunting provides support. Yet, the possibility of an unprecedented rally could be capped by the overhang of jitters in the polity. Money Market: CBN plays hardball with four OMO auctions In the week to 7th December, the CBN was a “ball of fire”, conducting a total of five OMO auctions (four regular and one special) worth N892.8bn in a bid to curbing system liquidity from maturing OMO bills (N684.8bn) andFAACpayments.Interestingly, stop rates on the 183-day and 351day maturities were maintained at 13.50percent and 15percent respectively, while the 92-day bill increased by 25bps to end at 11.90percent. Overall, average money market rates (Open Buy Back and Overnight rates) for the

WEEKLY REPORT

Investor’s Square •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

week settled at 12.5percent from details on the significance of 16.2percent in the preceding week. the trade agreement that was In the secondary market, OMO earlier celebrated. Adding to the uncertainty, activities of the week fueled selloffs as yields tracked higher by bearish sentiments were further STOCK MARKETtoREPORT 7TH 2018by geopolitical exacerbated an average of 82bps close FOR at DECEMBER 15.6percent [91-day (up 156bps to worries that trailed the arrest of 15.1percent),182-day(up130bpsto a top executive in a renowned techdeals company, Huawei, (upworth 64bps A16.2percent) total turnover ofand 1.107364-day billion shares N11.192Chinese billion in 14,430 were traded this week at tothe behest US shares authorities. 17.4percent)]. bytoinvestors on the floor of the Exchange in contrast a total of 1.199ofbillion valued at In the Looking the hands newlast week, N14.277 billion thatinto exchanged week in 15,841 deals.US, geo-politics overhang we expect to see more of OMO overshadowed a relatively cheery report that showed auctions, OMO(measured maturities The Financialfollowing Services Industry by volume) led thejob activity chart with 891.032 million still64.16% hovered worthvalued N498.7billion, astraded well inas8,929 the deals;that shares at N7.180 billion thusunemployment contributing 80.50% and to the at a 59-year low. Consequently, directive by the DMO that NTB’s total equity turnover volume and value respectively. The Oil and Gas Industry followed with 76.097 the S&P 500, DJIA and NASDAQ of N78billion bothmillion 13thin and million shares worth for N519.777 993 deals.The third place was Services Industry with a 4.6percent, 4.9percent 20th December would be millionallin shed turnover of 45.890 million 2018 shares worth N81.670 355 deals. fully redeemed. We expect the and 4.5percent respectively in the igeria’s first credit Rating territory on account of high profit and post-tax return on average tempo of all these events to guide holiday-shortened week. Agency and a pan African retention rate. This should pave equity (ROE) of 13.3percent and Trading in the Top Three Equities namely FBN HoldingsBearish Plc, First Citysentiments Monument Bank Plc, and also tradingsentimentsinthesecondary leader in credit reports, the way for dividend payment 15.8percent respectively. 547.260 million shares worth N2.409 billion Diamond Bank Plc, (measured by volume) accounted for pervaded into European markets Agusto & Co limited has just and strengthen relationship with market. While Agusto & Co considers in 2,605 deals, contributing 49.44% and 21.53% to the total equity turnover volume and value Bond Market: Lull theme as the Pan European STOXX assigned an ‘A-’ rating to Linkage shareholders. the Insurer’s profitability respectively. (-3.4percent), France’s CAC characterizes sentiments Assurance Plc. The Insurer prioritises ratios to be good by industry In the bonds space, The DMO (-3.8percent), and Germany’s The rating assigned to Linkage liquid assets in its investment standard, they are concerned DAX (-4.2percent) all trended issued an offer circular for its Equity Turnover - Last 5 days N100bn 7-year Sukuk issue priced southwardsw/w.Sentimentsinthe Assurance Plc is reflective of management in a bid to about the vulnerability of income at 15.743percent. In other news, a EU also weighed in the fuel tax hike an insurer with good financial maintain strong ability to meet to dividend from an investee protests that rocked Paris and the condition and strong capacity to obligations as and when they fall company. In the same vein, weak lull theme characterized Turnover trading Turnover Traded Advanced Declined Unchanged activities in the primary market, as run-off to BREXIT parliamentary meet its obligations as and when due. As a result, money market underwriting income remains a Date Deals Volume (N) vote. Stocks Stocks we will Stocks they fall due. The rating expires on securities which are highly liquid rating negative. In theStocks week ahead, FGN bondtradedsidewaystoValue close 03-‐D15.6percent. ec-‐18 3,122 249,736,735 101 19 on the14 outcomes 68 30 June 2019. The Nigerian Insurance represented about 45.5percent of tabs at Similarly,2,720,179,310.02 average be keeping 04-‐Dec-‐1for 8 2,802 101 24 63 votes and14 the ECB The rating is underpinned the investment portfolio as at 31 industry has contended with yield FGN 198,535,693 Eurobond2,115,323,178.23 edged of BREXIT policy 2,845 198,637,464 2,309,899,508.74 monetary 93 19 meeting. 18 56 by good capitalisation, good December 2017. As at the same multiple challenges which have higher from 8.3percent 05-‐Dec-‐18 fractionally Across emerging markets, the to average yield date, liquid assets accounted for been aggravated by the lingering 06-‐D8.2percent ec-‐18 3,030 while 280,939,009 2,490,161,522.88 100 17 22 61 investment return and good JALSH (+0.7percent) in 39.5percent of total assets and macroeconomic slowdown. As a 07-‐Dcorporate ec-‐18 2,631 Eurobonds 178,994,344 increased 1,556,184,073.36 South 101 African10 20 71 liquidity profile. Linkage’s to 10.7percent from 11.2percent. rode on the waves of cheery GDP investment in Stanbic IBTC covered outstanding claims 9.6 result, the insurance penetration There is a better balance of risk for reports, where the African nation Pensions Limited (the largest times. We consider the Insurer’s ratio is below 0.5percent and pension fund administrator) liquidity to be adequate for premium per capita is one of which accounted for 50percent current business risks. the lowest in Africa, according to of its investment portfolio Duringthefinancialyearended the Agusto & Co 2018 insurance has supported the Insurer’s 31 December 2017, Linkage’s Industry report. performance and liquidity performanceinthecoreinsurance In spite of growing confidence position. The rating is however business was constrained by high ininsuranceproducts,theappetite constrained by elevated underwriting expenses. As a of Nigerians for insurance remains underwriting expenses, sub-par result, underwriting profit margin abysmal. Nonetheless, potentials risk management, concentration plummeted to 0.1percent from for the industry remain strong. in the investment portfolio & 14percent in the prior year. Nigeria’s vast economy and investment income, sub-par The Insurer’s investment population (the largest in Africa) underwriting performance and income which was bolstered if harnessed could support the the fragile state of the economy. by dividend from Stanbic IBTC insurance industry. Although the As at 31 December 2017, Pensions Limited (accrued tier- based capitalisation policy Linkage’s shareholders’ funds over two years), augmented the has been cancelled, the capital stood at ₦20 billion, significantly impact of the high underwriting raising exercise by some insurers above the regulatory minimum expenses on profitability. In FY will increase risk underwriting for non-life insurers. Retained 2017, Linkage recorded post-tax capacity and spur initiatives to earnings also swung to positive return on average assets (ROA) deepen insurance in Nigeria. the market as some of the factors expanded 2.2percent in Q3-18, thatpredicatedEmerging&Frontier hence,exitingatechnicalrecession. Market fund flows during the year Russia’s RTSI (+2.8percent) and Experts say Nigeria needs more domestic participation in green bonds . seem to be abating. These factors China’s SCHOMP (+0.7percent) “Infrastructural deficit is bond verifiers, lack of investible coupled withContact: the 1.2mn barrelsDepartment per indices also escaped the global inancial market experts in For Further Inquiries Market Operations Page 1 day output cut by OPEC+ (which bear’s wrath. Meanwhile, Brazil’s Nigeriahavecalledformore expected to hit $878 billion by 2040 projects,costofverificationandlack portends a firming up for oil prices) IBOV (-1.6percent) and India’s domestic participation in and the future holds opportunities of understanding on the part of key should spur a bullish theme in the SENSEX (-1.4percent) trailed the green bonds investment for renewable energy, energy investors. bearish path. Beyond the BRICS- saying it will help boost efficiency, infrastructure, food, near term. “Green bond investors enjoy Foreign Exchange: Naira classified emerging markets, infrastructure, power and energy, agriculture and the task ahead is to waiversrelatingtotaxandinthenext appreciatesattheParallelmarket Turkey’s Nov-18 inflation fell from transportationaswellaseliminating ensurefundsarechanneledtogreen 15years,wewillrequire$7trillionin IntheForeignexchangemarket, the 15-year high recorded in Oct- environmental degradation. projectswithmultiplesocio-merits. investmentsconnectingsustainable the local currency strengthened 18 to 21.6percent while Mexico The Commission will continue finance to capital markets”,he said. Mary Uduk, Acting Director against the dollar at the parallel welcomed the swearing in of a new HerevealedthattheFMDQhas General, Securities and Exchange to promote an active enabling market, up by 1percent w/w to president. and regulative environment for set a sustainablefinancecommittee Commission (SEC) said during The past week was an average N364/$1 at the close of the week. On the flip side, the naira eventful one for the oil market. a panel session of the 2018 the issuance of this instrument”, toengageprivateandpublicandwill engage in training with partnership traded sideways in the official The week kicked off with a Capital Market Correspondents Agama said. Bola Onadele.Koko, Chief with FSD Africa and Climate Bond market to settle at N306.9/$1 while surprise announcement from Association of Nigeria (CAMCAN) ratesattheInvestors&Exporters(I& Qatar to divorce OPEC. The Annual workshop held in Lagos at Executive Officer, FMDQ OTC Initiative (CBI). Commenting further, Jubril E)marketdepreciatedtoN365.3/$1, island nation made the move the weekend that the issuance of Securities Exchange who was down 34bps w/w. Looking ahead, to exit the cartel, after almost 60 the first N10billion tranche of the represented by Emmanuel Adeojo, Director, Climate Finance we expect the sustained weekly years of membership, to focus on green bond received an excellent Etaderhi, Senior Vice President, Advisor,CBInotedthatgreenbonds FX intervention by the CBN to consolidating its leadership in gas A+ratingfromMoodywhileadding Economicdevelopmentdivisionat is made for Africa and with the continue to support the local unit production. Beyond Qatar’s exit, that SEC’s drive to the green bond the Exchange said that $155 billion deficits seen in major sectors of the at N360-N365/$1, especially at the Alberta’s unexpected but timely programisunprecedentedbecause has been gotten from the green economy, there is opportunity to announcement to cut crude and it touches human lives. I&E window. bonds issuance, thereby gaining focus more on renewable energy, Global equities caught in bitumen production by 325,000 hybridstoreducetheconsumption Uduk who was represented attention of investors. a roller-coaster of geopolitical barrels a day from next year also by Emomotimi Agama, Head, Etaderhi noted that the of fossil fuels. boosted sentiments. The major Registration and Market country’s resources is not events Adeojo said, “there is so Global equities started highlights of the past week for Infrastructure Department, growing in tandem with the rising much money to be made from the oil market were wrappedthe week on an upbeat note SEC said that it is necessary population while adding that green bonds and there is a way by as investors basked in the off by the outcome of OPEC’s the reason for Nigeria’s woeful euphoria of the US-China meeting. Despite initial reports Nigeria stands at the fore-front performance in the power and eliminating exposure to foreign exchange which is sticking to local of innovations and initiatives trade ceasefire agreed on the of an impasse, the cartel and its energysectorisdowntoitsinability currency debt instruments. Once while adding that the second allies agreed to cut production by sidelines of the G20 summit. tap into energy utilization from the However, the early gains 1.2mbpd from the beginning of tranche of green bonds which sun like other European countries. the real sector moves, things will changedrasticallyandIbelievethat quickly dissipated amid fears 2019. This buoyed crude prices has been issued, presents an Accordingtohim,thechallenges of recessionary signals sent by to a 5percent w/w gain to settle at opportunity for the country to affecting green bonds include low morepeoplehavetobeencouraged to invest in the bonds” solve its infrastructural deficit. the US bond market and murky $61.7/b. level of local participation in green

Agusto assigns ‘A-’ rating to Linkage Assurance

…based on Capitalisation, investment returns, liquidity profile

Thursday 13 December 2018

C002D5556

BUSINESS DAY

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N100bn Ijarah Sukuk: Attractive investment opportunity for ethically minded investors …offer closes next week Iheanyi Nwachukwu

he Federal Government of Nigeria (FGN) through the Debt Management Office (DMO) is currently raising another N100 billion through the issuance of second Sukuk (Al Ijarah Sukuk). Sukuk (Islamic bonds) is structured in such a way as to generate returns to investors without infringing Islamic law (that prohibits riba or i n t e re s t ) . It p rov i d e s at t ra c t i v e i nv e s t m e nt opportunity for investors who are ethically minded. Following the success of the debut Sukuk issuance, the FGN Roads Sukuk Company 1 Plc, w h o l l y - o w n e d by t h e Federal G overnment of Nigeria (the Issuer) is offering N100 billion 7-year Al Ijarah Sukuk due 2025 at a Rental Rate of 15.743percent payable semi-annually. The Financial Regulatory Advisory Council of Experts (FRACE) of the Central Bank of Nigeria (CBN) certified that the N100 billion 7-year Al Ijarah Sukuk due 2025 complies with the principles of Islamic commercial jurisprudence. Investors are paying N1,000 per unit of the second Sukuk subject to a minimum subscription of N10,000 and in multiples o f N 1 , 0 0 0 t h e r e a f t e r. The offer which opened December 6, 2018 closes on December 17, 2018 while the allotment date is December 21, 2018. Why you should invest in the FGN Sukuk The Sukuk provides attractive returns similar to conventional sovereign instruments issued in the domestic markets. Sukuk are specifically structured to ensure that all funds are utilized on visible infrastructure project. The returns on investment are tax-free. The payment obligation under the Sukuk is an irrevocable obligation of the Federal Government of Nigeria. The issuance is

supported by the full faith and credit of the Federal Government. Sukukholders can trade the Sukuk on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange. The Sukuk qualifies as liquid assets for banks and other institutions. The Sukuk investment certificate may be used as collateral for securing c re d i t f a c i l i t i e s f ro m financial institutions. The Sukuk provides additional flexibility in asset allocation for all classes of investors. Spons ors/financial adviser Debt Management Office (DMO) is the sponsor of the second Sukuk issuance while FBNQuest Merchant Bank Limited and Lotus Financial Services Limited are the financial advisers to the Sukuk, among other parties to the Sukuk issuance. Sukuk provides attractive returns similar to conventional sovereign instruments issued in the domestic market. Sukuk are specifically structured to ensure that all funds raised are utilized on v i s i b l e i n f ra s t r u c t u re project. The returns on investment in Sukuk are tax free. Stakeholders view “We are here to ensure

that Sukuk becomes one of the major vehicles for the Federal Government to develop Nigeria infrastructure. The first Sukuk was very successful and we believe this second Sukuk will be successful as well”, said Taiwo Okeowo, deputy managing director, FBNQuest Merchant Bank Limited. Patience Oniha, Director-General, DMO said the main objective of the second Sukuk is to sustain the rehabilitation and construction works on the 25 key economic roads in the 6 geopolitical zones with 3 roads now added for more reach. “Sukuk is one of the sources of the fund the Federal G overnment is dedicating for roads projects in the 2019 B u d g e t ,” O n i h a s a i d , adding that “The Federal Government of Nigeria is diversifying its domestic f u n d i n g s o u rc e s w i t h instruments such as Sukuk, Savings Bonds and Green Bonds”. The DMO DG said Nigeria’s increasing debt service cost is being managed by growth in revenue. “Government needs to generate more tax revenue. Debt and revenue are two sides of the same coin. Federal Government is extremely impressed with the success of the first Sukuk.

It w a s a w i n - w i n f o r ever ybody in Nigeria”, she said. The road projects and use of Sukuk proceeds The three (3) new roads projects disclosed during a presentation at a forum last Friday in Lagos for the prospective Sukuk investors are: reconstruction of Bida Lambata Road in Niger State, rehabilitation of Gwoza Bamboa Road in Borno State, and Constr uction of Ikom Br idge in Cross River

‘

The CBN as Paying Agent, transfers the periodic distribution amounts to Sukukholders on the scheduled dates. At maturity of the Sukuk, the Issuer SPV gives notice of the exercise of the Purchase Undertaking and the FGN as Obligor gives notice of exercise of the Sale Undertaking.

State. In September 2017, the Federal Government of Nigeria issued a N100billion, 7-year 16.47percent Sukuk which was 5.8percent oversubscribed. “The Sukuk has brought reprieve to road users across the country; improved travel t i m e s b e t w e e n maj o r commercial cities; linked borrowing and government expenditure to specific critical economic projects ; helped to ease the flow of cargo and passenger traffic across major cities; helped to improve infrastructure delivery across the country and has linked communities together”, according to representatives from the Federal Ministry of Power, Works and Housing at the forum in Lagos. D e t a i l s o f h ow t h e p ro c e e d s f ro m d e b u t Sukuk were utilised showed N16.67billion was used for road projects in each of Nigeria’s six geopolitical zones. The same amount applies t o t h e s e c o n d S u ku k issuance. Th e p ro c e e d s f ro m the second Sukuk will fund additional sections of the roads cover ing 642.6Km including earthwork, binder course, construction of culverts and drainages, road and bridges works. Transaction structure of second Sukuk T h e Fe d e r a l Government of Nigeria (FGN) incorporated FGN Roads Sukuk Company 1 Plc to issue the Sukuk on its behalf. The FGN issues a letter of allocation of specific sections of land to the Issuer/Tr uste e for construction and rehabilitation of identified roads. The FGN, through the Federal Ministry of Power, Wo rk s a n d Ho u s i n g executes a For ward Ijarah Agreement with the Issuer/Trustee to lease the Roads. A unilateral Purchase Undertaking is executed by the FGN to purchase the Roads from the Issuer/Trustee at maturity of the Sukuk. The Issuer/Trustee declares a trust over the

Roads in favour of the Sukuk holders under a declaration of Trust Deed and appoints FBNQuest Trustee and STL Trustees (the delegate trustees) to carry out its functions as Trustee under the trust. On the back of these contracts, the Issuer/Trustee issues demater ialis ed investment certificates to investors in an offer for subscription and funds realized are utilized to execute the Road project. The Issuer/Trustee enters into a Construction Agency Agreement with Federal Ministry of Power, Works and Housing to appoint contractors to construct/supervise the road construction. The Issuer/Trustee also e nt e r s i nt o a S e r v i c e Agency Agreement with t h e Fe d e r a l M i n i s t r y o f P o w e r, Wo r k s a n d Housing to undertake major repairs on the road after construction. The Issuer/Trustee pays the contractors through t h e Fe d e r a l M i n i s t r y o f P o w e r, Wo r k s a n d Housing for construction/ rehabilitation of roads from the Sukuk proceeds after the work done by the contractors are certified by the Federal Ministry o f P o w e r, Wo r k s a n d Housing and the Delegate Trustees. The contractor delivers the completed ro a d s t o t h e Is s u e r s / T r u s t e e, t h ro u g h t h e Federal Ministry of Power, Works and Housing. The Issuer/Trustee (as lessor) delivers the roads to the FGN (as lessee). The FGN pays periodic rentals for the use of the roads to the designated repayment account with the CBN. The CBN as Paying Agent, transfers the periodic distribution amounts to Sukukholders on the scheduled dates. At maturity of the Sukuk, the Issuer SPV gives notice of the exercise of the Purchase Undertaking and the FGN as Obligor gives notice of exercise of the Sale Undertaking. The roads are purchased by the FGN and the purchase a m ou nt i s u t i l i ze d to re d e e m t h e p r i n c i p a l investment made by investors.

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Thursday 13 December 2018

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Helping you to build wealth & make wise decisions

FSDH Research outlines factors that will influence yields on fixed income securities

SDH Research has outlined the factors that will influence yields on fixed income (FI) securities in December 2018. The research analysts in their December outlook said the factors include the strategy of the Debt Management Office (DMO) and that of the Central Bank of Nigeria (CBN) to repay t h e m a t u r i n g Ni g e r i a Treasury Bills (NTBs) in December and to cancel the December auction. Other factors according to the analysts include the need to maintain stability in the foreign exchange market; expectations of a further hike in the Fed Rate of the US; the need to mop up liquidity associated with electioneering spending; and the rising inflation rate expectations. FSDH Research analysts expect investors to take investment opportunities in bond market as the yield i n c r e a s e s . “A l t h o u g h

yields on bonds may increase above the current level early next y e a r, F S D H R e s e a rc h believes the yields are attractive at the current level. Investors should s t ra t e g i c a l l y p o s i t i o n in the bonds. Investors should take advantage

o f t h e c u r re n t y i e l d s in the long end of the secondary Treasury Bills market, particularly in the secondary market. We also spot some opportunities in the Eurobond market for investors with Dollar to invest”, FSDH Research stated.

They expect a total inflow of about N2.68trn to hit the money market from the various maturing government securities and FAAC in December 2018. “We estimate a total outflow of approximately N 5 7 9 b i l l i o n f ro m t h e various sources, leading

to a net inflow of about N2.10trillion.” FSDH Research noted that the Debt Management Office (DMO) through the CBN has cancelled the NTB auctions scheduled for the 13th and 20th December 2018 “while it

will redeem the maturing securities.” FSDH Research believes the DMO will use the proceeds of the Eurobond to redeem the maturing FGN Securities leaving investors with huge liquidity looking for investment outlet. Consequently, the yields on government securities and the interest rates in money market may drop in December. This is in line with the trend that FSDH Research observed in December 2017 following the issuance of Eurobonds. “ T h e C BN may n o t increase the yields on the fixed income securities in December unless there are indications of significant capital flight from the financial system from foreign investors. Given the limited investment options in Nigeria, the yields of the Open Market Operations (OMO) may remain at the current levels until the end of the year,” FSDH research analysts noted.

SENAAT lists debut international ASEA holds first African Exchanges Linkage Project roundtable ASEA, we are committed to across the continent as this promote innovations that Sukuk on London Stock Exchange he African Securities supporting ASEA through will become instrumental support diversification needs

ondon Stock Exchange ( L S E ) o n Mo n d ay December 10 listed SENAAT’s $300million sukuk on its Main Market. The fixed rate, senior unsecured sukuk is the first international instrument by the UAE industrial investment holding company, and the 10th shariah-compliant bond to list on London Stock Exchange’s dedicatedSukuksegmentthisyear. Thesukuksecuredstrongdomestic andinternationalsupportfromthe UAE, Asia and Europe. SENAAT’s sukuk is dual-listed inLondonandonAbuDhabiStock Exchange. The $300m sukuk has a seven-year tenor with a coupon of 4.76percent and has been issued as part of the Company’s $3billion TrustCertificate Issuance Programme. To celebrate SENAAT’s sukuk listing, Nikhil Rathi, CEO, London Stock Exchange Plc, welcomed Mabkhoot Al Menhali, CFO, SENAAT, to open trading in London. Mabkhoot Al Menhali, Chief Financial Officer, SENAAT said, “We are delighted to list SENAAT’s firstinternationalbondonLondon Stock Exchange and thank its officers for their kind welcome. The issuing of SENAAT’S sukuk enjoyed strong demand from

local and international markets, reflecting investor confidence in the emirate’s position in the global financial markets and its Economic Vision 2030. The level of oversubscription and the price achieved also reflects the high degree of confidence shown by investors in the company’s own ability to finance its investments and cover its operational costs.” Darko Hajdukovic, head of FixedIncome,FundsandAnalytics, UK Primary Markets, LSEG said, “London Stock Exchange Group warmly congratulates SENAAT on their landmark sukuk. Since its first sukuk listing in 2006, London has continued to support the development of Islamic Finance as an asset class. London has now hosted a total of 72 sukuk raising a combined $53.2bn, including over $8bn in 2018, a record year. SENAAT’s listing highlights London’s status as a leading international financing centre and a key global partner for Islamic financing.” Atotalof72sukuk,including48 fromGCC-basedcompanies,have listed on London Stock Exchange since 2006, raising a combined $53.2bn. 2018 has been a big year for sukuk issuance in London, with a record $8.6bn raised this year to date.

Exchanges Association (ASEA) last month held the first African Exchanges Linkage Project (AELP) roundtable meeting for brokers. It was held on the sidelines of the 22nd Annual ASEA Conference hosted by the Nigerian Stock Exchange (NSE) from November 26-27, 2018 at the Oriental Hotel in Lagos, Nigeria. The theme of the conference Champions on the Rise: Africa’s ascension to a more sustainable future aligns with the goals of the AELP which include: the creation of a central trading platform linked to exchange trading systems; (ii) The free flow of trading information between linked exchanges; broker access to the linked trading platform; and the creation of products based on securities from the linked exchanges. The African Exchanges Linkage Project (AELP) is a co-initiative by ASEA and the African Development Bank (AfDB) to enable and facilitate cross-border trading and settlement of securities across participating exchanges in Africa. The goal is to boost Pan-African investment flows,

of investors in Africa, and help address the lack of depth and liquidity in Africa’s financial markets. The AELP will in its initial phase create linkages between six (6) African capital markets that represent approximately 85 percent of Africa’s market capitalization. The participating Exchanges are: Nigerian Stock Exchange (NSE); ii) Nairobi Securities Exchange (NSE); Johannesburg Stock Exchange (JSE); Casablanca Stock Exchange (CSE); Bourse Régionale des Valeurs Mobilières SA (BRVM); and Stock Exchange of Mauritius (SEM). The project in November 2018, received a grant of $980,000 from the Korea-Africa Economic Cooperation (KOAFEC) fund via the Africa Development Bank (AfDB). The Manager, Capital Markets Division of the African Development Bank (AfDB) Mr. Emmanuel Diarra said: “Pan African integration of financial markets is of priority for the AfDB. As a co-initiator of the AELP along with

the implementation of the AELP and we look forward to working with ASEA to comply with the requirements of the Bank and KOAFEC in order to execute quickly” While making his presentation, the former President of ASEA and CEO of the Nigerian Stock Exchange, Oscar N. Onyema OON urged the market intermediaries to support the project by providing ASEA with feedback and recommendation to advance the project, engage their clients and with one another to determine the buy and sell side appetite, participate fully in the capacity building technical workshops, and support the project in identifying the optimal order routing technology option to facilitate the project. According to him, “The AELP will start off with the six (6) markets participating in the pilot with the goal of onboarding other markets in Africa who meet the minimum requirements. The countries participating in the AELP pilot phase are strategically spread

in the scaling up of the project. The model for the linkage will be Sponsored Access, meaning that the cross border trades will be required to pass through the risk management system of the sponsoring broker before flowing to the Exchange. We believe that this model will minimize the disruption to the local market and provide confidence for all stakeholders. Thus we anticipate that the initiative will be welcome by all stakeholders and will support ASEA’s goal of boosting intra Africa capital market trading activity. ” The President of ASEA and CEO of the Casablanca Stock Exchange, Karim Hajji who chaired the session noted that ASEA is committed to driving the project to completion and said: “On behalf of ASEA, we thank the AfDB and the KOAFEC fund for believing in the project and for the handwork in securing the funding for the AELP. We look forward to working with AfDB more closely and fostering a more connected African capital market.”

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Mini-Grids in Nigeria - The threepronged approach of investment opportunities, cost reduction and temporary political gains

Legal community in turmoil over fraud allegations against Bar president ...As members of NBA storm court premises ready to do battle with EFCC THEODORA KIO-LAWSON

esearch has shown that there is a strong correlation between economic growth and availability of affordable electric power. With Nigeria recently regarded as having the highest number of poor people in the world together with the very poor availability of electric power, we may be in more trouble than we actually realize. Unless the steps being taken by the current administration continue and are expanded to address issues related to the grid, it is widely agreed that mini-grids and off-grid solutions, alone, are not a sustainable solution to the challenges currently being faced in the power sector which is inextricably linked to the overall level of poverty in Nigeria. It is the writer’s view that the current administration is performing admirably well with respect to encouraging off-grid and mini-grid solutions with policies geared towards encouraging renewables. It should also be noted that the last administration laid a good foundation for much of what we see now. Structures that were put in place range from the actual privatization in the power sector to other

“ It is pertinent that policy formulation and implementation are not only for the short term but should be and be seen to be for the long term whilst also attempting to solve the immediate problems. “ crucial policies and initiatives such as setting up a bulk trader, providing sovereign support to eligible power projects, and issuing useful rules and regulations. The Nigerian Situation Research commissioned by Shell Petroleum Development Company (popularly just referred to as Shell), suggests that several millions of people across Nigeria still do not have access to affordable electric power. With Nigeria having a population Continues on page 32

Ayodele Oni {ayodeleoni@outlook. com}, a solicitor, specializes in international energy (oil, gas and electricity) investment law and policy. He holds a mini-MBA in power & electricity. Follow me on twitter @ayodelegoni.

embers of the legal profession have continued to react to allegations leveled against the president of the Nigerian Bar Association (NBA), Paul Usoro, SAN by the Economic and Financial Crimes Commission (EFCC). Whilst many believe that the commission is not only meddling with the affairs of lawyers, as it relates to professional fees but is also on a witch hunt against the bar leader, others hold the view that Usoro, as an individual, has a genuine case to answer to the financial crimes commission in court. The first of such reactions emanated from the office of the Publicity Secretary of the NBA in a statement tagged, “ASSAULT ON THE LEGAL PROFESSION MUST STOP.” It read, “Is the EFCC’s persecution Lead Counsel, Wole Olanipekun, SAN with other lawyers of the NBA President not an attempt to Nba president, Paul Usoro leaving Court Unarraigned! test the unity and brotherhood of the “I read the statement by Kunle Edun subject of both ethical and criminal FHC/418c/18, the EFCC has accused bar? Of course there is a bigger issue here: policing the fees lawyers charge to the effect that the planned arraign- controversies. As lawyers we must Usoro SAN of conniving with others to divert the sum of N1.4b of Akwa-Ibom clients. Therefore, the persecution is ment of Mr Paul Usoro, SAN will be an avoid sentiment. “Sentiments command no place in State Government funds to personal use not primarily targeted at the person assault on the unity and nobility of the legal proceedings. I have said before contrary to Section 18(a) of the a Money of Paul Usoro, SAN. It goes beyond Nigerian lawyers. “With the greatest respect to Mr and I say here again that as lawyers we Laundering (Prohibition) Act and liable the President. It is an attack on the sanctity of the age-long immutable Kunle Edun, his write up is laden with must live above board. As lawyers we to be punished, if found guilty, under and judicially established doctrine of sentiments and whipping of emotions have no immunity in our clients lawContinues on page 30 and it failed to address core issues of law yers relationships if and when crime lawyer-client privilege. is alleged to have been involved in the “The NBA President represents and ethics of the legal profession. “First there is no attack on the noble cause of that relationship. As lawyers an institution and it is that institution that is being targeted. It happened to profession. We must stop whipping up we must respect judicial process. INDUSTRY PERSPECTIVE IN HIGHLIGHTS! “The issues involving Usoro SAN the Judiciary and we thought we were sentiments. The legal profession is a spared. They also tried it with Mike noble profession. It does not encourage have been turned over to the judicial “No government agency has the power to regulate fees charged by members of any profession. conduct that aids and abets wrongs. arm of government. We should and Ozekhome, SAN and E.B. Ukiri. Lawyers have the right to take up briefs pro “No government agency has the The charge I read does not attempt to must have confidence in the judicial bono or also charge any amount. It is equally the power to regulate fees charged by regulate the fees charge. The charge process. Taking to social media to right of the client to reject or accept the terms of engagement. Third parties have no locus standi members of any profession. Lawyers does not try to intrude into client law- campaign as it were that Mr Paul Usoro in contractual matters. They are meddlesome have the right to take up briefs pro yers’ relationships. The charge seems to SAN is being persecuted with respect Interlopers. bono or also charge any amount. It is question the propriety of a lawyer being amount to interference with judicial …For us, this is a battle against the lawlessness of EFCC. The President waited for days to be served. equally the right of the client to reject paid from government coffers for a brief process. He reached out to them to be served. They never The court before which he has did. or accept the terms of engagement. done for private citizen. Is this how criminal trials are now conducted? “Whether that is right or not can been arraigned is the only competent Third parties have no locus standi in ” – Kunle Edun, NBA Publicity Secretary. contractual matters. They are meddle- only be decided by the court to which authority that can make the prothe matter has been turned over to. The nouncements. Those who believe in some Interlopers. Should we allow EFCC to continue charge wants to know whether what was his innocence can join the legal team There is no attack on the noble profession. We to present his case in court. I do not see this persecution? Today, it is the NBA done was right or wrong. must stop whipping up sentiments. The legal pro“I believe what is wrong is wrong and his arraignment as harassment of the fession President; tomorrow it may be used as is a noble profession. It does not encourage a precedent to launch criminal investi- no amount of baptismal colouration Bar or Nigerian lawyers. conduct that aids and abets wrongs. The charge I “Nigerian lawyers have to obey read does not attempt to regulate the fees charge. gations into fees charged by members can give a wrong the true meaning of The charge does not try to intrude into client of the Nigerian Medical Profession, right. We must be ready to learn and set the law of the land. The only persons lawyers’ relationships. ICAN, NSE and other professional precedents. The only institution that can who by my limited knowledge of law I believe what is wrong is wrong and no amount set binding precedents is the judiciary. have immunity from criminal and civil of baptismal colouration can give a wrong the true bodies. of right. We must be ready to learn and “Do we stand aloof or sit on the I get worried when as lawyers we play prosecution while in the office are the meaning set precedents. The only institution that can set fence and allow such brazen intrusion to public gallery and then ignore really President, Vice President of Nigeria binding precedents is the judiciary. on our privileges? Do professionals issues. I am not going to allow myself and Governors and Deputy Governors … The issues involving Mr Usoro SAN have been over to the judicial arm of government. We now allow external regulation of pro- or any other right thinking members of of the states in Nigeria. As lawyers we turned should and must have confidence in the judicial fessional fees or we should investigate the Bar to be dragged into purely what owe a duty of respect to and obedience process. ” the sources of fees paid to us by their is Mr Paul Usoro SAN personal issue to the rule of law and due process. I say Jibrin Okutepa, SAN clients for services rendered, before with security agents. The issues of fees no more. God bless Nigerian lawyers accepting the fees? Do we continue to he allegedly collected for the alleged and the Federal Republic of Nigeria.” Also lending his voice to the issue, If the Service on Paul Usoro was so important to say, as lawyers, we are not individually briefs he did for his clients are or were affected? We must stand up against not done in the cause of his duty when Corporate Commercial lawyer, Toluthe EFCC, Why wasn’t he served before today (Monday December 10, 2018)? he started occupying the seat of the lope Aderemi said, “I have carefully attack on our Noble profession!” But they served the media almost a week ago. Commenting on this reaction from president of NBA. This issue was there followed the unfolding events of the Does this not just prove that EFCC is not interthe NBA publicity secretary, an elder of before he put himself forward for NBA EFCC and the NBA President, Mr Paul ested in justice? ” the bar and Senior Advocate of Nigeria election. Even the election that led to Usoro SAN & Others. -Oghagha Emowwhanre “In a Charge Sheet marked (SAN), Jibrin Okutepa had this to say: his being declared NBA president is still

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Legal community in turmoil over fraud allegations against president... Continued from page 29

Section 15(3) of the same Act. “The President has equally (during his NEC report) and subsequently a press conference re-echoed his innocence. The matter is now sub judice. He continued, “Many of our colleagues and seniors/juniors have called for the resignation of the President on account of this. Some others have called the prosecution, persecution. I have called it none. The simple reason is because if law could speak for itself, it would complain of lawyers. We seem to be confusing the President’s legal and moral rights; both sometimes have a definition, which is the antithesis of the other. We sometimes confuse law for justice. The person of our NBA President deserves and must be treated fairly (as a matter of constitutional right) but at the same time be given the opportunity (as is now being done) to defend himself. He has a duty (as the Bar leader) to do so. “Criticising the EFCC on social media will therefore not help Mr President at this time; rather let us direct our brilliant legal analysis to the team of very senior lawyers led by Chief Olanipekun SAN for a robust defence of Paul USORO SAN. “I believe the learned SAN (if innocent) will get justice ; though justice may be blind, it certainly has sophisticated listening devices. God bless the Nigerian Bar Association (NBA)!!! God bless the Federal Republic of Nigeria!!!” Aderemi said with a note of finality. Emeka Nwadioke, Publisher of CityLawyer who also spoke on the issue said, “The fact of the matter is that it’s an entirely new day as between lawyers and money laundering. This is perhaps the second time the Bar is being called out on the issue of money laundering. “The first time was the battle that snowballed into the “SCUML CASE.” Having won that case, though there were a few efforts by the NBA to spotlight this all-important issue, much of the efforts would seem half-hearted. “In an era where other bar associations have provided copious guidelines to their members on their roles and obligations on the subject, the NBA would seem not to have aligned with this global best practice. The result is that most Nigerian lawyers are scarcely able to dimension the critical issues on the subject. “It therefore goes without saying that the issues go deeper than some have attempted to make out. While the undercurrents of the instant case may not be glossed over, the more fundamental challenges facing the Bar regarding the subject must be confronted. We may again wish same away under the cloud of ‘NBA v. EFCC.’ However, the issues are unlikely to go away. They may yet bounce back in another form - hopefully not in more devastating forms. Is it a case of ‘Let’s get the bull out of the China shop before asking, who let the bull in’? Time will tell,” Nwadioke said. Mild drama in court Earlier this week, the federal high court was a field of play for lawyers from all over Lagos, as the President of the NBA made his appearance in court on Monday in the company of a delegation of legal heavyweights and ‘supporters’ to receive and answer the EFCC Charge against him. The delegation of lawyers representing the NBA President was led by no other than the ‘Big Gun’, Chief Wole Olanipekun, SAN alongside seven Senior Advocates of Nigeria and 20

Usoro waiting in court to be served by Efcc officials

other lawyers, including the Chairman, NBA Lagos branch, Chukwuka Ikwazom. The prosecution was represented by Rotimi Oyedepo. The NBA President arrived quite early in court for his service and arraignment, while the EFCC officials were nowhere to be found. This punctuality by the President was commended by legal practitioners in court who saw it as a sign of one who had nothing to hide. The Publicity Secretary of the NBA, Kunle Edun was heard saying “He has been waiting for them. The plan of the EFCC is to dramatise his arrest today and bring him to court. This has always been their style. Media trial. For us, this is a battle against lawlessness of EFCC. The President waited for days to be served. He reached out to them to be served. They never did. Is this how criminal trials are now conducted?” Another practitioner in court added, “Court time is 9am. What are the EFCC officials still doing in their office? If the service on Paul Usoro were so important to them, why wasn’t he served before today? But they served the media almost a week ago. Does this not just show that EFCC is not interested in justice but to pull down the NBA President as planned by them and their cohorts? The Bar must rise against injustice and oppression in the guise of law enforcement. The time to act is now!” When the Prosecution (EFCC) finally arrived, not much progress was made as the prosecution still did not serve the Defendant (Paul Usoro) the charge but rather insisted that he goes with them to the EFCC office for service. The matter was adjourned to 18th December for arraignment while the Court ordered the EFCC to serve the defendant personally. As proceedings ended and lawyers trooped out of court, there was a mild drama within the court premises, as operatives of the EFCC attempted to forcefully take the NBA President to their offices. This move was foiled as the horde of lawyers who had gathered at the court premises in support of the president resisted this attempt. The President of the NBA left the court premises in his vehicle and went directly to the EFCC Office at Ikoyi where he was served with the charge.

APPOINTMENT

In another development, the President of the NBA, Paul Usoro, SAN was the following day, Tuesday December

11, 2018 appointed into the Committee On Autonomy Of State Legislature And State Judiciary. This appointment by President Muhammadu Buhari, was confirmed in a press statement by the Special Adviser to the President on Media and Publicity, Femi Adesina. This is following the constitution of a Presidential Implementation Committee on Autonomy of State Legislature and State Judiciary in accordance with the 4th Alteration to the 1999 Constitution. The purpose of the committee is to drive the actualization of the autonomy granted to the legislature and judiciary at the State level, and members of this committee include, Abubakar Malami, SAN, Hon Attorney General of the Federation and Minister of Justice, as Chairman; and Senator Ita Enang, Presidential Liaison (NASS), Secretary. Representatives of State Judiciary include, Hon. Justice N. Ajanah, Chief Judge of Kogi State, Hon. Justice K. Abiri, Chief Judge of Bayelsa State; Hon. Kadi Abdullahi Maikano Usman, Grand Khadi, Gombe State Sharia Court of Appeal; and Hon. Justice Abbazih Musa Abubakar Sadeeq, Ag. President of the FCT Customary Court of Appeal. State legislatures are to be represented by, Rt. Hon. Mudashiru Obasa, Chairman, Conference of Speakers of State Legislatures of Nigeria and Speaker, Lagos State House of Assembly, as well as Rt. Hon. Abel Peter Riah, Speaker, Taraba State House of Assembly. The Judiciary Staff Union of Nigeria is to be represented by Marwan Mustapha Adamu; Parliamentary Staff Association of Nigeria, Comrade Bala Hadi; Body of Chairmen of Houses of Assembly Service Commissions, Musa Mustapha Agwai; Senate Committee on Judiciary, Human Rights, and Legal Matters, Senator David Umaru; House of Representatives Committee on Federal Judiciary, Hon. Aminu Shagari; the Accountant General of the Federation, and the Secretary of the National Judicial Council. Others are: DG of the Nigerian Governors Forum or such other representative as the Forum may wish to nominate; Chairman of the Forum of Finance Commissioners in Nigeria; President of the Nigerian Bar Association, Paul Usoro, SAN; and Chike Adibuah Esq, representing Civil Society Organisations.

GLOBALREPORT Fraud office received ‘brown envelope’ leaks in ENRC probe, court document reveals

The long running dispute between mining company Eurasian Natural Resources Corporation (ENRC) and the Serious Fraud Office (SFO) shows no sign of abating with updated court documents containing new allegations surrounding the office’s use of information leaked via ’brown envelope’. In court documents filed last week, ENRC alleges that the SFO ‘received and used’ confidential and privileged material during its five-year investigation into allegations of corruption, which ENRC denies. International firm Hogan Lovells, acting for ENRC, claims in the document that in August 2013 the SFO received extra evidence from another international firm, Dechert, ENRC’s former adviser. The claims appear in an amended statement of facts and grounds for judicial review. Its submission follows an initial request for judical review, filed by ENRC in October. In that request, ENRC asked for an independent review of the SFO’s handling of evidence. In the updated claim, it is alleged that prosecutors at the SFO were handed confidential material, which was fed into its investigations despite being privileged. The amended complaint states: ‘This concern raises serious questions about the SFO’s improper receipt of the claimant’s confidential information, what it knew about the nature of those materials

and what it did with them subsequently.’ The amended paper, seen by the Gazette, claims the material was handed to the SFO’s then senior prosecutor James Coussey in 2013. According to the paper the SFO said that the material was ‘acquired from [Dechert partner] Neil Gerrard’. According to the latest court document, five years after it received the documents the SFO decided to ‘blue bag’ the material and instruct counsel to conduct an independent review to establish whether it contained privileged material. The review concluded the documents were privileged at least in part. ENRC denies any wrongdoing and no charges have been brought. A spokesperson for ENRC said: ’It is disgraceful that the company’s former solicitor was prepared to leak privileged documents in a brown envelope, and equally disgraceful that the SFO was willing to accept and use such material. Having concealed this serious wrongdoing for over five years, it is shocking that the SFO should now be backtracking on its previous commitment to launch a properly independent and impartial investigation.’ Both Dechert and the SFO declined to comment on the latest developments.

Thursday 13 December 2018

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Tax substitution: what the law says as FIRS seeks to recover taxes through commercial banks Continued from last week

BUSINESS DAY

ervice of an assessment on the taxpayer is followed by the taxpayer’s objection in writing to the tax authority stating its grounds of fact and law for the objection. The tax authority in turn considers the objection and also exercises one of three options namely: amending the assessment; discharging it outright or maintaining its position on the assessment. If it chooses the last of the three, it would issue a Notice of Refusal to Amend the Assessment (NORA). The assessment is said to be final and conclusive if at the expiration of the period stipulated by law for objection, the taxpayer fails to object to the assessment; or having objected and received a NORA, fails to further challenge the assessment in court within the stipulated period after the NORA. Paragraph 13 (3), 5th Schedule to the FIRS Act captures the latter instance. A disputed tax assessment that is under litigation becomes final and conclusive when the court upholds it in a final judgment, unless the taxpayer proceeds on appeal against the judgment within the stipulated time. Thus the assessment never becomes final and conclusive until all appellate opportunities up to the Supreme Court are exhausted. Paragraph 16(3), 5th Schedule to the FIRS Act however provides that despite the pendency of an appeal against a decision of the Tax Appeal Tribunal, tax shall be paid in accordance with that decision within one month of notification of the amount of tax payable. This is obviously meant to ensure that the revenue does not lose the time value of tax money to litigation considering that tax refund under Section 23 of the FIRS Act would avail the taxpayer who after paying the disputed tax, succeeds in the appeal. There have been judicial restatements of the prerequisites for tax enforcement in several decided cases. In Federal Inland Revenue Service v. Gazetta Communications Limited(2013) 10 TLRN 1, FIRS assessed the Defendant to various taxes following an audit exercise, upon the Defendant’s failure to pay or object to the taxes within 30 days of the assessment, FIRS brought an action in the Federal High Court under the undefended list procedure. The court held that the Defendant’s failure to react to the assessment as and when stipulated by law made the assessment final and conclusive, hence the tax became recoverable by FIRS. Also in Medos v. Commissioner for South African Revenue Service(2016) 21 TLRN 73, the Supreme Court of South Africa voiced the consensus that “where no objection is made to an assessment issued by the relevant tax authority, the assessment is final and conclusive as between the tax authority and the taxpayer.” When an assessment becomes final and conclusive, the tax therein becomes payable. In other words, the tax is payable immediately after the expiration of the period for objection or appeal as the case may be, or after exhaustion of all appellate opportunities. THE ASSESSMENT-OBJECTION PROCESS IN TAX SUBSTITUTION Section 31(1) and (2) of FIRS Act are open to an interpretation that the assessment and objection periods must have been exhausted,

hence the tax must have become payable before FIRS can appoint an agent for the taxpayer. Such a construction may however be incorrect because, as noted earlier, tax becoming payable under Section 31(2) in the process described above is a condition for recovery of the tax from the FIRS-appointed agent, and not a condition for appointing the agent ab initio. The agent is appointed based on FIRS’ discretion upon deeming it expedient to recover tax from the taxpayer’s money in the agent’s hands. But after the appointment, the actual recovery of tax is subject to the tax becoming payable. In this regard, Section 31 (5) of the FIRS Act implies that notification of the appointment of the tax agent doubles as a notice of assessment. The section provides: “The provisions of this Act with respect to objections and appeals shall apply to any notice given under this section as if such notice were an assessment.” The above provision means that in tax substitution (i.e. tax recovery from FIRS-appointed agents), the notice appointing the agent serves as a notice of assessment. Thus, the assessment-objection process starts with the notice of appointment of the agent. The first issue on the appointment notice is whether it ought to be served directly on that taxable person whose liability is alleged considering that it is deemed an assessment notice by virtue of Section 31(5) of the FIRS Act or whether service on only the appointed agent would suffice. Section 68 of CITA, with material similarity to Section 57 of PITA provides: “The Board shall cause to be served on or sent by registered post to each company, or person in whose name a company is chargeable, whose name appears on the assessment lists, a notice stating the amount of the total profits, the tax payable, the place at which such payment should be made, and setting out the rights of the company under the next following section.” (emphasis added) The highlighted part in the above provision indicates alternative service of the appointment cum assessment notice on the taxpayer or his appointed agent. In other words, FIRS’ choice to serve it on the agent could suffice and dispense with further service on the taxable person. Nonetheless, service on only the appointed agent (the banks in recent cases) offends the demands of fair hearing in Section 36(1), 1999 Constitution that a person against whom a decision would be taken must be given a prior opportunity of a representation. This constitutional angle is further addressed in details below. The above provision on assessment also requires that the notice of appointment being an assessment, must state the total profits, the tax payable and the right of objection to the assessment. FIRS’ POWER OF FUND FREEZING, CONFISCATION OR SEIZURE Section 44 of the 1999 Constitution (as amended) which creates a general ground for account freezing equally provides strict safeguards to that power. It states: “No moveable property or any interest in an immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall

be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by a law that, among other things – “(a) requires the prompt payment of compensation therefore and (b) gives to any person claiming such compensation a right of access for the determination of his interest in the property and the amount of compensation to a court of law or tribunal or body having jurisdiction in that part of Nigeria.” Subsection (2) of Section 44 provides: “Nothing in subsection (1) of this section shall be construed as affecting any general law (a) for the imposition or enforcement of any tax, rate or duty.” Money in a bank account is in the category of movable property referred to in Section 44 above. The section requires that the freezing of an account must conform to an enabling law. A pertinent question here is: which tax law enables FIRS to freeze accounts? By Section 8(1)(g) of the FIRS Act, FIRS can, “adopt measures to identify, trace, freeze, confiscate or seize proceeds derived from tax fraud or evasion.” This section seemingly throws a naked prerogative at FIRS as it lacks necessary safeguards from likely abuse. In comparison, Section 34(1) of the Economic and Financial Crimes Commissions (EFCC) Act which enables EFCC to freeze bank accounts pursuant to its investigative duties provides a shield from abuse. The provision mandates EFCC to first obtain an ex parte order of court prior to the freezing of an account. It is however clear that Section 8(1)(g) of the FIRS Act does not relate to tax substitution under Section 31 of the Act. From the wording of Section 8(1) (g), FIRS’ power to freeze accounts relates only to “proceeds derived from tax fraud or evasion.” Tax fraud or evasion are crimes specifically embodied in the law which must be established by judicial procedure; not administratively by an executive authority. Section 34(1) of the EFCC Act enables EFCC to freeze an account with an ex parte order of court upon mere suspicion by EFCC that the funds relate to a financial crime. Section 8(1)(g) of the FIRS Act, on the other hand, makes the issue of tax fraud and tax evasion conclusive. In other words, either or both of the two crimes must have been established before that section can be invoked to freeze an account or confiscate funds. Where a tax liability has not been subjected to the challenge process which might bring it under dispute, the issue of tax fraud or evasion is inexistent. It is also beyond contest that a person cannot be held culpable of tax fraud or evasion whose right to challenge an allegation of tax liability against him is still open. This means that Section 8(1)(g) of the FIRS Act does not justify FIRS’ directive to the banks to freeze their customers’ accounts for the purpose of tax substitution.

Dr. Jerome Okoro is a Senior Associate at AELEX, a full-service commercial and dispute resolution law firm in Nigeria and Ghana, and a member of the firm’s Tax Practice Group.

RIGHTSWATCH Human Rights: FIDA Abuja moves to stop violence against women and girls

o commemorate this year’s International Human Right’s Day, the International federation of women lawyers, FIDA, Abuja branch on Monday December 10, 2018 went on a public campaign to stop violence against women and girls. The event, which was part of FIDA’s 16-day activism to curb this social menace, was aimed at raising public awareness against the dangers of this vice. Speaking on a program at Wazobia FM Abuja, representatives of the body sensitized listeners about this menace. They highlighted the hazards of violence against women and girls; making specific reference to intimate partner violence and sexual violence, which according to them, is a major public health problem and a violation of women’s human rights. “Violence can negatively affect women’s physical, mental, sexual, and reproductive health, and may increase the risk of acquiring sexually transmitted diseases in some settings,” the group’s representative said. Thereafter, the women headed to Jabi motor park, were they discouraged men from carrying on violent acts, such as battering, rape and maiming of their part-

ners or other female members of their families, which most often than not led to loss of life, prison term, and various other consequences. FIDA also offered support to men who disclosed that their partners act violently towards them. FIDA’s campaign revealed that Men are more likely to perpetrate violence if they have low education, a history of child maltreatment, exposure to domestic violence against their mothers, harmful use of alcohol, unequal gender norms including attitudes accepting of violence, and a sense of entitlement over women. On the other hand, Women are more likely to experience intimate partner violence if they have low education, exposure to mothers being abused by a partner, abuse during childhood, and attitudes accepting violence, male privilege, and women’s subordinate status. The date was chosen to honour the United Nations General Assembly’s adoption and proclamation, on 10 December 1948, of the Universal Declaration of Human Rights (UDHR), the first global enunciation of human rights and one of the first major achievements of the new United Nations.

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Thursday 13 December 2018

BDLegalBusiness Mini-Grids in Nigeria - The three-pronged approach of investment opportunities, cost reduction an... Continued from page 29

of approximately 200 million people, over 120 million are either not connected to the electricity grid or receive less than four hours of power supply from the national grid each day. In fact, constructing a national grid which extends to the entire power grid remains a national aspiration that might take decades to achieve. This is due to lack of infrastructural development such that as population grew in geometric proportions, there was either no corresponding infrastructural development or in most dire cases, none at all. Despite the widening gulf between infrastructure required for electric power generation via the national grid and the demand for electricity, the demand for electric power has continued to grow substantially. Inability to meet the power needs of many businesses has meant that Nigeria’s neighbours, especially Ghana (which has a much better electric power supply situation), have gained more corporate citizens with many former Nigeria-based businesses relocating there. A lot is spent per person per kWh on generating their own electricity for their energy needs. In fact, market research suggests that people who live in rural Nigeria pay approximately N250/kWh for small generating sets which use premium motor spirits (in particular) to meet their electric power needs. Filling the Gap and Making a Business Case Having stated above that self-generation, especially with premium motor spirits (popularly referred as petrol) is quite expensive and almost ten times the actual tariff of grid-generated electric power, current policymakers in Nigeria with the support of private sector appears to now see that mini-grids can fill the gap between self-generation which is almost ten times more expensive than grid-power and the expensive grid extension projects which could end up being uneconomical. The huge population in Nigeria and the modest purchasing power could make it even more attractive to build or develop mini-grids especially since a reasonable business case can easily be shown in terms of having people see that they cut at least half of their current N250/kWh bill on electricity. There is really a large market for the underdeveloped mini-grid market to service. The writer is currently advising an international investor that confirms that there is over $8 billion (approx. N3 trillion) market for mini-grids in Nigeria. In Nigeria, at least by virtue of the legal and regulatory regime, there are two broad types of mini-grids:- the Isolated Mini-grid and the Interconnected Mini-rid which is connected to an electricity distribution company, which

serves as a conduit. Whilst an isolated mini-grid develops its own distribution facilities, an inter-connected mini-grid uses the existing facilities of an electricity distribution company to distribute the electricity. Isolated mini-grids may remain that way or convert to interconnected mini-grids by connecting to available distribution network. Very often, mini-grids are deployed in remote areas as a more costeffective and less expensive means of electrifying rural area instead of very costly grid expansion projects especially where those rural areas have less economic activities such that the cost-benefits analysis shows a deficit of benefits to the cost (at least, from a purely economic stand-point). The challenges with grid extension alongside current government policy which encourages off-grid power supply make off-grid alternatives such as mini-grids homes systems which are yet to fully penetrate the rural market, attractive. It is also the case that as a result of poor grid power supply, domestic and commercial consumers spend an estimated research has shown that up to 64% of people living in rural areas and who spend 70 cents to 1 dollar per kWh on small generating sets for their electricity needs are better served via off-grid means such as micro-grids and solar homes systems at rates up to 60% of the cost of using small generating sets run on fossil fuels. Many business owners list electricity supply challenge as their most significant impediment to doing business in Nigeria and research has further shown that nearly US30 billion economic loss is suffered annually from poor power supply in Nigeria. Considering the reducing costs, interest of development finance institutions and several donor agencies, mini-grids appear to provide an alternative to the costly grid expansion projects and a relatively quick fix to the rural electrification challenge. It must be said that the rural electrification agency (“REA”) is not doing badly, in this respect. Such projects can provide more cost-effective options to the grid and small generating sets and provide viable opportunities for investment and the development of the economy. In addition to the case made above, rural consumers already spend so much on self-generation of electricity and can therefore pay for mini-grid and other cheaper off-grid options, provided that they can be shown that those are cheaper options for them. Based on research by GIZ of Germany, there are already 30 solar mini-grids with a total installed capacity of 1mw serving 6,000 customers. The Nigerian mini-grid market is estimated to have the potential of N2.8trillion (approx. $8 billion) in annual revenues. The market is still nascent in Nigeria and in the writer’s view, there is no better time

to get involved in the market and reap the possible benefits of investing early and being amongst the first investors in this space. Structuring Mini-grid Projects in Nigeria It is important at the onset for an ideal location to be selected to reasonably ensure the financial viability of a mini grid project. A relatively densely populated area (for economies of scale purposes) with significant (socio-economic) activities and reasonable ability to pay is also crucial. Another important step is to continuously engage the relevant community and to carry them along. It may be important to involve the representatives of the community. It is also pertinent to look at the use of innovative financing techniques, such as lease structures. With this also comes the need to leverage technology especially mobile payment systems which a lot of financial technology businesses offer. If the relevant mini-grid is interconnected, it is important that the relevant distribution company is carried along. With respect to the community and the distribution company (if an interconnected mini-grid), relevant documentation should be signed. The writer has substantial experience providing support to some of the world’s leading energy companies developing such projects in Nigeria. Data-sharing, costreduction programs are also quite crucial in ensuring an efficiently developed and run project. The process of developing such projects is in three parts - project development when a lot of what has been mentioned above will be done and such activities will include the identification of the requisite site together with assessment, design of the system and planning. It is germane that an energy audit is part of the mix. The construction phase includes the procurement of necessary equipment, installation and commissioning. The foregoing occurs before the operations period which could last for several years. During operations, there will be plant maintenance and monitoring, equipment repairs, metering, billing and collections together with the commissioning and necessary integration with the customers’ facilities. Temporary Political Gains and Thinking Long Term As mentioned above, the federal government (especially through the REA) is not doing badly in its effort to electrify areas which almost have no coverage in terms electric power supply and in particular, some measure of success is being achieved especially by the REA in connection with mini-grids and other non-conventional rural electrification technologies. The problem is that, in a number of cases, the government can be rightly accused of creat-

PHOTOFILE

Beverly Agbakoba-Onyejianya, Unit Head, Sport, Entertainment & Fashion law, OLISA Agbakoba Legal, addressing young lawyers on sport law, at the Young Lawyers Forum, in Benin

L-R Senator Ihenyen, Beverley Agbakoba-Onyejianya, Olayemi Oladapo and Kelechi Ugbeva , resource persons and facilitators at the Benin Young Lawyers Forum, at NBA HOUSE, Benin city. Theme: NEW FRONTIERS IN LAW AND THE EXPANDING HORIZONES: TREADING THE UNCHARTED PATH AND CARVING A NICHE.

ing some form of creeping/ economic expropriated of the rights of investors- particularly the distribution companies. Another challenge is that the country cannot industrialize through mini-grid and other off-grid technologies as these will be too expensive to be competitive and cannot also ideally match the volume of electricity needed. Thus, it is crucial that attention is given to the on-grid system and the attendant wholesale and retail markets. Nigeria cannot truly achieve industrialization and be competitive in the global market, through pockets (even if several) of mini-grids and other solutions, such as solar homes systems alone. There is need for a strong mix such that there is power generated from large hydro plants, large thermal power plants using fossil fuels, especially mostly clean fuels such as natural gas, (and maybe clean coal technology and when the Nigerian market matures, nuclear fission. The reality is that mini-grids only extend access to electricity access and cannot ideally power industrialization or achieve what government seeks to do without paying corresponding attention to on-grid power supply. Maybe we could even practice ‘energy federalism’ where we could have solar mini0grids for certain areas in the North which are taken offgrid and use coal for far flung

places in the East so that there is then maybe enough capacity on the grid for large industrial users. Hence, to adequately power Nigeria and its quest for industrialization, there is need to, whilst advancing off-grid, pay attention to high capacity transmission and the relevant distribution networks. It is pertinent that policy formulation and implementation are not only for the short term but should be and be seen to be for the long term whilst also attempting to solve the immediate problems. Thus, mini-grids, solar homes systems and small-scale renewable energy solutions should complement the grid from which large-scale bulk power is transmitted rather than such being a substitute for the national grid. In taking steps for the long-term, it is germane that all stakeholders are carried along such that the current off-grid policy is not just considered as some form of cherry-picking which gives a sense of the expropriation (indirect or economic) of the franchises of the electricity distribution companies. It is the writer’s view that the Ministry of Power (as embodied by the Minister of Power) needs to keep the dialogue open so that there are more stakeholder engagements such that the current gains from a mini-grid/ offgrid perspective are not only

temporary as there is nowhere in the World that people live solely or almost solely on mini or micro grids or largely on off-grid solutions. That simply isn’t sustainable so we do need a mix of off-grid and large ongrid to achieve much success. Thus, it is germane to have an integrated development strategy, that details both on-grid, off-grids, mini-grids and other technologies. ConclusionIt is clearly the case that there is a good business case for investing in off-grid projects, but from a strategy point of view, it is critical that the development of Nigeria’s power sector is integrated and collaborative. This ensures longer lasting results and not just short-term political gains. It is also germane that local governments and the state get more involved in supporting off-grid projects. The writer believes that they should actually collaborate with the REA. The nutty issue of duties being paid on certain solar equipment may also need to be reviewed. There are indeed opportunities for more electricity access with the resulting effect being the reduction of poverty. It is crucial that everything is done to remove the toga of Nigeria being the poverty capital of the world and the steps to be taken should be sustainable steps.

BUSINESS DAY

Thursday 13 December 2018

CITYFile

NMA raises alarm over kidnapping of members in Ondo YOMI AYELESO, Akure

ndo State Chapter of the Nigeria Medical Association (NMA) has issued a seven-day ultimatum to the state government over the incessant kidnappings of their members and other health workers in the state. Gunmen suspected to be kidnappers had last week abducted three health workers of the Federal Medical Centre, Owo among whom were two nurses and a doctor. They were abducted alongside two lecturers of the Rufus Giwa Polytechnic at Amurin village on the Akure-Owo Expressway in the Owo local government area of the state. The NMA noted that they would not guarantee industrial peace in the state after the ultimatum if the government failed to take visible and lasting measures to stop the menace. Addressing journalists in Akure, the state chairman of the association, Wale Oke expressed worry over the recent kidnappings of doctors and health workers, adding that they now work under intense fear. He called on Governor Rotimi Akeredolu as the chief security officer of the state to pay more attention to the security of lives and property of residents. While commending the efforts of the security agents in the state for their quick response to urgent calls, he solicited more government supports by providing them with working tools for effective discharge of their duties. Oke said: “It is worthy of note that within the spate of three months, three cases of kidnapping have been linked to doctors not to mention other health workers and other good citizens of this state. This is becoming worrisome and highly unacceptable as our colleagues are now working under intense fear and getting to work place becoming a herculean task. “We wish to reiterate unequivocally that the government needs to urgently do the needful, failure of which we may not be able to guarantee the peaceful industrial harmony currently being enjoyed in the state from our members. We also demand visible and palpable solutions within the next seven days.”

NDLEA arrests man with 218kg of Indian hemp

he National Drug Law Enforcement Agency (NDLEA) has arrested a man with fake military uniform and 218 kilogrammes of substance suspected to be Indian hemp in Niger. The agency’s commander in the state, Sylvia Egwunwoke, said in Minna of Tuesday that the suspected was nabbed in Makwa, Makwa local government area of the state. She said that the drug was concealed in a Toyota Camry car with registration number KWL 874 FH at Makwa town. She said that the suspect was stopped at Jebba check point but refused to stop. “Our personnel, unknown to him were following him and was arrested where he stopped to eat at Makwa town,’’ Egwunwoke said. She said that the suspect would be charged to court after investigation. The commander appealed to the state government to provide patrol vehicles to pave way for the arrest of all those involved in illegal trades. “The interception of this concealment has in no small measure prevented the risk of having such large quantity of this deadly substance in circulation in our midst,” she said. She restated the resolve of the command to ensure that the “merchants of death’’ were chased out of the state through aggressive security measures that would stem their nefarious activities.

Work in Progress... Minister of Power, Works & Housing, Babatunde Fashola (m); Federal Controller of Works in Anambra State, Ajani Adeyemo and others, during the inspection of the Rehabilitation of Outstanding Sections of Onitsha -Enugu Expressway: Enugu – Amansea (Enugu State border) in Enugu State and Umunya – Amawbia Section in Anambra State on Monday.

Oyo installs N300m CCTV cameras in Ibadan AKINREMI FEYISIPO, Ibadan

yo State Security Trust Fund (OYSSTF) says it has spent over N300 million on the installation of Closed Circuit Television (CCTV) cameras to boost security in the state. The CCTV cameras were installed in 10 crime-prone areas in Ibadan, the state capital. The cameras, which feed a control room under a round-the-clock surveillance, monitor activities at major junctions in the city. Recall that the state governor, Abiola Ajimobi had on Monday commissioned a Safe City project. Femi Oyedipe, Executive Secretary, OYSSTF, who harped on the need for individuals and organisations in the state to pay their security levy, said with the successful installation of the CCTVs in 10 sites in Ibadan, the state is moving ahead to Oyo, Ogbomoso and Saki areas of the state embark on a similar project. He noted that the response had been commendable since OYSSTF began the collection of the security levy in July. He urged residents and visitors in the state to cooperate with the government to ensure a safer and secured environment for all. Meanwhile, Ajimobi has attributed the influx of blue chip companies and other businesses to the state to his administration’s huge investment

in security since he assumed office in 2011. The governor stated this while inaugurating the first phase of Oyo State Safe City Control Centre at Onireke, in Ibadan, on Monday. Activities in some black spots and business districts in Ibadan, as captured by CCTs installed in these areas are being monitored from the centre to curb criminal activities. The project, which is situated at the headquarters of OYSSTF, covers places like IdiArere, Beere, Oke-Ado, Ojoo, Sango, Dugbe and Mokola. Ajimobi said that his administration has delivered governance, which he attributed to the enabling environment brought about by the pervading peace and security of lives and property. He said: “I have always said that a good leader will take his people to where they want to be but a great leader will take them to where they ought to be, while he envisions movement to another greater level. “Our immediate effort in 2011 at stopping crime and criminal activities yielded results as our special joint security outfit which we codenamed “Operation Burst” had done a lot in restoring peace to our otherwise troubled state. “Today, Oyo State is ranked as one of the most peaceful states in Nigeria and this has reflected in the upsurge of commercial activities in the state. This has led to Oyo State being adjudged as one of the five states with ease of

doing business in the country.” The governor used the occasion to reiterate his call for the establishment of state police as the only panacea to crime in Nigeria. He said he was the first governor to present the proposal for state police at a national security meeting at Abuja where he gave the details of the advantages inherent in each state having its own police to fight local crimes. Ajimobi said: “Go round the world and see those advanced democracies; you will see that there is none of them without state police. All the states in the United States of America, France, Canada and other countries have their own respective police. “The state police will be staffed with people from the local communities where they have deep knowledge about the terrain and the inhabitants therein. That is why no crime goes undiscovered in the Western world. “I once presented a proposal on the need for state police at a national security meeting in Abuja because I believed then and now that it is an arrangement that is germane to the enthronement and maintenance of peace at the grassroots.” The Commissioner of Police, Abiodun Odude, commended the Ajimobi administration for its tremendous support to the police and other security agencies in the state to make their work easier.

Police foil kidnap attempt, arrest 48 suspects in Lagos

he police in Lagos say they have foiled kidnap attempts on some notable persons at Iba area of the state and arrested 47 suspected cultists at various hideouts. The Commissioner of Police (CP) in charge of the state, Imohimi Edgal, who briefed newsmen on the activities of his command in the last two weeks, said that the arrests were made following intelligence reports received by the police on the activities of criminals. “Acting on credible intelligence received on December 10 that a gang of kidnappers had sneaked into the state and were planning to kidnap some notable persons in Iba area,

“I directed the commander, anti-kidnapping squad to proactively ensure that the criminals do not affect their plan. Consequently, the squad swung into action immediately. “Tapping into the intelligence resource of the command, they were able to locate them in their hideout at Imota, Ikorodu on December 11. “However, when the hoodlums sighted the operatives approaching, they opened fire on them for which the police replied. During the gunfire exchange, a suspect was gunned down while two others from Arogbo, Ose-Odo, Ondo State were apprehended,’’ he said. The police added: “One locally cut-to-size

double barrel pistol, one expended cartridge and three live cartridges were recovered from them. “Effort is being made to arrest those on the run and on completion of investigation, suspects will be charged to court,” he said. The CP further said that on December 5, the command received information that suspected cultists would be performing their initiation ceremony at a hotel in Igando area of Lagos. “Based on the information, undercover operatives from Igando division were mobilised to the scene and 21 suspected cultists were arrested. “At Iyana Ipaja, 10 were arrested, seven from Ijora and 10 from Ketu Alapere,” the CP said.

BUSINESS DAY

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Thursday 13 December 2018

Investigation

Nigeria bleeds as NNPC’s under-recovery claims grew 600% in six months A BusinessDay investigation reveals that NNPC’s petrol import under recovery claims grew by over 600% between November 2017 and June 2018, which experts say cannot be traced to any logical increase in consumption of petrol and raises questions about good governance risks posed by the corporation’s sole right to withhold the claims it calls under recoveries, writes ISAAC ANYAOGU.

he smouldering fire from the makeshift incinerator exuded gray fumes strong enough to induce vomiting. Upon closer inspection, the three-foot, five meters wide concrete incinerator contained a jumble of discarded injection kits, tubes and all kinds of medical waste. But this is not in a discarded landfill; it is the rear entrance of Likosi Primary Healthcare Centre located in Simawa community, in Sagamu, Ogun State, south western Nigeria and home to over 250,000 people. The Nigerian National Petroleum Corporation (NNPC) donated the facility in 2011 to serve 30,000 people around the community. But the crumbling building mirrors the quality of the healthcare it provides. Peeling paint, mold forming graffiti on the brackish walls, broken ceilings, and cracked walls. The toilets seemed to dare you to use them. What passes for a pharmacy is a 12 by 12 room,holding a wooden bench with a sparse collection of paracetamols and aspirins. Healthcare centre matron Oluwaseun Akinsanya said only one doctor makes the rounds in the four primary healthcare centres in Simawa. Residents say the best medical advice is not to get sick enough and to avoid the facility all together.

“We performed the last delivery only two days ago using light from our mobile phones,” Akinsanya said. Likosi Primary Health Care Centre is one of many facilities that cannot provide the services it was built to, according to a report by non-profit organization Christain Aid. During recent budget presentations Nigerian state governors said they could not fund more hospitals and pay teachers. One of the governors principal lamentations? Insufficient federal allocations from Nigerian oil sales. The federating units comprising Nigeria share proceeds of oil sales handled by the NNPC but these allocations have been on the decline. The states who generate poor revenues depend on this allocation. In June this year, the governors walked out on a Federal Accounts Alloca-

NNPC undercovery claims between 2006 - 2015

tion Commitee (FAAC) meeting of finance commissioners convened to share allocations because N20bn was allegedly withheld by the NNPC. “NNPC owes a duty to Nigerians in the spirit of openness and transparency to be open and transparent to all stakeholders...,” Mamood Yunusa, chairman of the Finance Commissioners Forum, told journalists after the impasse. The NNPC counters that it is not withholding more than it should, but said the the cost of providing cheap petrol erodes revenue. The corporation told lawmakers during a probe in January that the Federal Government owes it N170.6 billion in subsidy payments due from January 2006 to December, 2015. Less than six months after the

retail price of petrol was pegged at N145 per litre in May 2016, oil prices rose above $50 per barrel (bb/l) from $40 bb/l. Oil marketers stopped importation because their was no provision to subsidize the cost of importation and NNPC became the sole importer of petrol in the country. NNPC terms the difference between actual cost of petrol and the control price at the pump as “under recovery” and reports it in its monthly financial and operational report published on its website. Since the government stopped budgetary allocations for subsidy on fuel imports in the 2016 budget, the corporation has been reeling. Scary reality An NNPC document presented to the Senate during a January 2018 subsidy probe exclusively obtained by BusinessDay shows that between 2006 - 2015, the NNPC claimed N170.6billion as under recoveries in ten years while it claimed N632.2billion in two years alone (2017 and 2018), a 217% percentage difference. Between November 2017 and May 2018, claims rose by 662% when compared to June and October 2017, according to BusinessDay analysis of NNPC under recovery claims presented in its monthly

operations and financial reports published since August 2015. The NNPC said in December last year that under recovery claims are rising because oil prices have increased but experts disagree about the extent of this increase. BusinessDay made repeated requests for comment on the analysis and this investigation but the Corporation did not respond. “It is true that there has been a steady increase in the price of crude oil at the international market for some time now,” Jean Balouga, economics professor at the University of Lagos, said. “Nevertheless it should be remembered that the template NNPC is using for the computation of subsidies (which the NNPC calls under-recoveries) has been queried over and over again.”

NNPC under recovery claims (June 2017 - May 2018

Thursday 13 December 2018

C002D5556

BUSINESS DAY

Investigation

NNPC fuel supply vs under-recovery claim “I find no justification whatsoever for the increase in NNPC’S PMS claims” said Balouga who was asked to respond to BusinessDay’s analysis of NNPC under recovery data. Balouga said the claims have been ‘grossly exaggerated.’ NNPC also said that its under recovery claims are rising because it is supplying more fuel as the supplier of last resort. But there is a wide disparity between NNPC’s recent under recovery witholdings with the amounts of fuel it claims it sold. NNPC’s data indicate a growing gulf between its reported figures for the petrol it supplies to the domestic market each month against the petrol it claims to have sold, with supply far outstripping sales in recent months.

Sokoto-Niger border Illela

NNPC’s explains that it is storing some of its imported fuel in tanks rather than selling all and that smuggling accounts for the bulk of the gap. “NNPC’s depots across the country, including the private ones engaged by the corporation on throughput basis, have an abundance of petroleum products to meet the needs of Nigerians,” the corporation said in September 26 press release. Interro gating smugg ling claims The NNPC said in March that smuggling of petrol products have led to abnormal rise in petrol import from less than 35 million litres to more than 60 milion litres daily. Maikanti Baru, NNPC group managing director said that 16 state-

saccount for 2,201 registered fuel stations. The fuel tanks, he noted, had a combined capacity of 144, 998, 700 litres of petrol. Eight states with coastal border communities spread across 24 LGAs amongst the states account for 866 registered fuel outlets with combined petrol tank capacity of 73, 443, 086 litres, according to Baru. The difference in petrol prices between Nigeria (N145 per litre) and neighboring countries (N350 per litre) makes it lucrative for smugglers to use frontier stations to smuggle products across the border, Baru said. Since smuggling activities have been well documented in the Southern borders, BusinessDay correspondent undertook a visit to one of the so-called notorious Nigerian border in illela, Sokoto to understand how much of Nigeria’s fuel is really smuggled. Acting as someone trying to enter the smuggling business, BusinessDay reporter established contacts within the three days spent in the community and gathered that while filling stations were springing up around border communities including Nura Kure and Baharazawa International within a five kilometre radius of the border, they rarely get adequate supply. “Fuel does not come every day,” said a young attendant at Nura Kure who gave his name as Mohammed “Sometimes we don’t get supply for weeks.” To enter the trade, one needed to be known by the Customs officers. It is better to be affiliated with someone who could teach tfhe tricks and secure an off-taker. Then one can begin moving his merchandise, bribing officials and he is in the business, three people farmiliar with the activities told BusinessDay Six persons familiar with the smuggling activity confirmed that the operation is largely rudimentary.Petrol is moved in carts, storage compartments built under trucks and modified fuel tanks of saloon cars to carry over 80 litres of petrol they said. “I have been carrying petrol across the border for a long time,” a motorcycle operator who gave his name as Hassan, said. “It is not difficult,” he assured. “I bribe the Customs and I move on.” In the three days spent around illela, BusinessDay estimated shipments of between 12,000 and 20,000 litres of fuel across the border. Two cart pushes lugging 20 pieces of 25-litre jerry cans twice across the border a day could move 6,000 litres. Five trucks bearing 4 pieces of 25-litre jerry can across the border over three days can deliver 1,500 litres. While seven saloon cars with a capacity to lift 80 litres making three rounds a day, within three days delivered about 5,040 litres of fuel. Though the investigation was limited to the day due to security concerns, BusinessDay understands that smuggling activities go on at night but without trucks. Using the NNPC’s monthly report as basis for analysis, t o move the volume of petrol the NNPC is ascribing to smuggling will entail a large-scale operation involving over 750 trucks with 33,000 litre capacity to convey over 25million litres of petrol daily out of Nigeria. “If that much trucks were divert-

Smuggling petrol across Illela border, Sokoto

ed from NNPC’s operations, clearly Nigeria will feel the pinch,” Olumide Adeosun, PwC Nigeria’s head of energy research said by phone. According to NNPC’s August operations and financial report, the Nigerian petrol trucking is undertaken by 1,017 trucks daily. The entire month sees 31,538 trucking operations . Taking 750 trucks daily outside the borders will not only leave a yawning gap but will question the existence of the Nigerian Custom Service. Jerry Attah, spokesperson for the Nigerian Customs when contacted for comments, said proliferation of licensed filling stations at border communities is encouraging artisanal smuggling of petrol outside Nigeria. But when confronted with accusations that Customs officer were enabling the practice, Attah said, “Customs cannot stop a car to measure their tanks least we are accused of being overbearing. “We can’t check everything on people or their houses but,no truck can be allowed to move petrol across the borders with fuel,” Attah said. “The bigger picture is reviewing the licenses of these filling stations.” Subsidy – a cat with many lives Successive administrations in Nigeria since 1999 have elected to keep the petrol subsidy despite years of abuse and a reported drain on national revenue. Government committees have recommended ending fuel subsidy yet it still in place. Following the 2011 subsidy scam where Nigeria lost over N2trillion to fraudulent oil marketers who collected money for fuel they did not deliver, a presidential committee was established to probe the allegations. The probe, headed by former managing director of Access Bank, Aigboje Aig-Imoukhuede, recommended a complete deregulation of the downstream petroleum sector. In 2012, Nuhu Ribadu, a former chairman of the Economic and Financial Crimes Commission was tasked to head a committee to review NNPC’s operations. An excerpt

of his report reads: ”In the course of the Task Force work, we did not receive sufficient justification and basis for the practice of deducting subsidies from the amounts payable to the Federation Account. Indeed this practice does not accord with the law, with particular reference to the Constitution.” The Ribadu report found that as its debt position worsened after 2009, NNPC also began using the non-refined portion of the domestic crude allocation in costly ways: “Withholding proceeds from sales of exported domestic crude oil: This practice began ostensibly to cover fuel subsidy costs. NNPC itself has denied this publicly, but our findings shows NNPC withheld N1.983trillion in subsidies between 2006 and 2011. “PPMC values the products stolen from its pipeline network between 2001 and 2010 at N178 billion. It is alleged that when products are stolen at ports and jetties, inspectors sign discharge sheets for the full landing amount, which allows importers to collect fuel subsidy on stolen products,” the report said. “Nigeria has to decide what it must do with fuel subsidy, because we can’t go on like this,” said Adeola Adenikinju, a professor of energy economics at the Federal Unversity Ibadan and current member of the Central Bank Monetry Policy Commitee. Balouga recommends a pragmatic approach. “Let’s start with overhauling the template, checking the prices and knowing exactly the daily PMS consumption in Nigeria, before any other thing. Balouga further recommended a phased approach to reforms. “Let the refineries be fixed and let their capacity utilization climb to at least 90 percent; let Dangote refinery and petrochemicals come on stream; let per capita income climb to a reasonable level; let unemployment reduce drastically; let there be a strong regulatory framework as well as strong institutions. Then, if necessary, deregulation.”

36 BUSINESS DAY

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Leadership

Thursday 13 December 2018

Shaping people into a team

Using bundled payments to improve the patient experience Karen Joynt Maddox, Arnold M. Epstein

n 2013, the Center for Medicare and Medicaid Innovation launched the Bundled Payments for Care Improvement, or BPCI, initiative, a program that proponents hoped could rein in health care costs by “bundling” payment for the full gamut of services that comprise an episode of care. The model certainly seemed like a good bet, as it would reward hospitals for reducing the cost of care for any of 48 conditions and penalize them for overruns. Indeed, bundled care for hip and knee replacement has been a dramatic success, with clear savings and no increase in emergency department visits, readmissions or 30-day mortality. However, our research suggests that bundles may not work as well for other types of conditions. That doesn’t necessarily mean that the problem lies with the bundled payment model itself. Rather, we think it could lie with the fragmented nature of the patient journey in a dysfunctional system, which is exposed by the medical bundles’ lack of impact. With our colleagues John Orav and Jie Zheng, we used Medicare claims from 2013 through 2015 to identify admissions for the five most common medical conditions covered under the Medicare bundled payment initiative: heart attack, heart failure, pneumonia, chronic obstructive pulmonary disease and sepsis. We calculated the costs of each “episode” for hospitals that joined BPCI as well as hospitals that didn’t join. We then looked to see whether costs dropped more in the BPCI hospitals than the control hospitals after the program started. Overall, the average Medicare payment per episode of care across the five conditions — about $24,000 — dipped just a few hundred dollars, a statistically insignificant amount. In addition, there was no difference in the change over time based on

whether hospitals were or weren’t participating in the program. We also didn’t find any differences in clinical complexity, length of stay, emergency department use or readmission within 30 or 90 days after hospital discharge, or death within 30 or 90 days after admission between the intervention and control hospitals. In short, for these five common medical conditions, bundled payment had no impact on costs or clinical outcomes — at least in the program’s first year. We don’t know exactly why bundles were successful for hip and knee replacements. Perhaps all the hospitals that signed up for the hip and knee bundles were much more motivated than the hospitals that signed up for the medical bundles. Or perhaps we just need to wait longer to see an impact of bundling on a wider range of conditions. However, we suspect that these patterns reflect the complexity and fragmentation of the patient journey for common medical conditions as a cause and shed light on not only how we might help hospitals succeed under bundles, but how we might also improve patient experience. Hip and knee replacements are discrete, preplanned events with a fairly standardized

and consistent patient journey, from preoperative evaluation to scheduled operating-room date to postoperative rehabilitation, and with a single “captain” of the ship. The surgeon performing the operation is ultimately responsible for the entirety of that patient’s clinical course. For the patient too, there is an obvious point person before the admission, during the hospitalization and after discharge. Most patients who have had a total joint replacement could tell you the name of their surgeon even years after the procedure, often with great fondness. Medical admissions follow an entirely different course. Consider what happens to a patient coming to the hospital with a heart failure exacerbation. She certainly did not plan the admission, and may have no pre-existing relationship with the clinician she sees in the hospital. She sees the emergency department physician who happens to be on duty that day, and depending on clinical severity, bed availability and the call schedule of the residents, could end up admitted to a general medical service, hospitalist service, cardiology service, medical intensive care unit or cardiac intensive care unit. Her care team

could change daily. During her stay in the hospital she may see cardiologists, internists and nephrologists, as well as physical therapists, pharmacists, social workers and discharge planners. At discharge, she may or may not be scheduled to come back to see anyone that was involved in her inpatient care, depending on where she wishes to establish or maintain cardiovascular follow-up, and there is likely no post-discharge protocol for follow-up and rehabilitation, nor formal relationships with the nursing facility or home health agency to which she is discharged. To improve this patient’s journey though the health care system — and increase the chance that bundled payments can help her achieve better outcomes and help the system lower its costs — we first need to understand the journey. Patterns of care are heterogeneous for medical conditions compared with discrete elective surgeries. And perhaps the overwhelming complexity and fragmentation of the patient journey for most unplanned medical admissions explains both why medical bundles are hard, and why they are so very important. The early failure of medical

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

bundles is a window into the disjointed, piecemeal health system most of our patients experience. Even the first step for hospitals electing to participate in BPCI for a medical condition — trying to figure out who needs to be around the table to discuss improving care across the clinical episode — is not an easy one. But rather than discourage us from using bundles as a way to improve care, this complexity makes it all the more critical to use mechanisms like bundled payment programs to incentivize health systems to change the paradigm. Hospitals can and should design and implement standardized clinical pathways and provide more coordinated, efficient care for medical conditions, and bundling may be a powerful policy mechanism to help get us there. The five years of experience we have had with BPCI seems like a sufficient time to have learned a lot about it. And perhaps with more time and greater incentives hospitals will be better able and more willing to make the changes needed in care delivery for medical bundles to be effective and to create a better experience for patients. For now, we are only scratching the surface, and there is much more to learn about the use of bundling for different conditions and different patients. Indeed, bundling is just one in a series of policy innovations that Medicare and others are experimenting with to move us past traditional fee for service. The road to better policy will be long and winding. We can only hope that on the way we will discover much about more efficient ways to control costs and improve outcomes that matter to patients.

Karen Joynt Maddox, Arnold M. Epstein is an assistant professor at Washington University School of Medicine and a cardiologist at Barnes-Jewish Hospital, both in St. Louis. Arnold M. Epstein is chair of the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health.

Thursday 13 December 2018

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INTERVIEW Digital technology, financial inclusion major successes for banking industry in 2018’ Ebehijie Momoh, head of Retail Banking, Standard Chartered Bank Nigeria Limited has been in the banking industry for over 26 years, and currently holds primary responsibility for the development and execution of the Retail Banking business strategy of the bank in Nigeria. Prior to her appointment as head of RB in Nigeria, Ebehijie was the head of SME Banking for Nigeria and West Africa. In this interview with Modestus Anaesoronye, she unveils the bank’s new partnership, retail development in Nigeria and the industry in 2018. Excerpts: Standard Chartered Bank is partnering with Visa to issue a Visa Credit Card, Dubbed the 360° Rewards. Tell us about this partnership? t is about adding value to our clients, and that is one of the things we take seriously at Standard Chartered Bank. Banking has gone beyond just collecting clients’ money and keeping it for them, but more of what values that could be added to the safety of their funds. Today, we have our credit card, and what we are doing in collaboration with Visa is bringing more value to the product we already have for our clients. And what does that mean? It means that today we are giving to our clients an opportunity that, while they spend with international banks as well as local ones (over 200,000 of them worldwide), they earn points. We are going to give to our client’s opportunity to earn points which they can redeem. So for example, if a customer has a gold card, for every N200 you spend on our credit card you earn a point, which you can redeem across the various brands wherever you shop, which include hotels, travelling is taken care of, wherever you shop here in Nigeria as well as outside Nigeria. When is this reward promo starting, and how can clients key in? It is starting right away. And one of the things we have done because it is about reward is that, if you have had a credit card and you have been spending, we will actually convert your existing spend into points, which means you have not lost anything because you are just going to register today. So, we will require our customers to go online and register so that they begin to enjoy these points. By the time you have activated, you can then use the points you have saved to shop at any of the stipulated merchants. So, for you that already have my credit card, what you need do is to just register. How does this align with your strategy of enhanced consumer experience? There are two things. One of the values we have communicated recently is how we have digitalized our platforms; how we have ensured that following the client’s behaviour being their life style. What are we saying? We said, “What is their behaviour, what is their spend.” So, we make

Ebehijie Momoh

banking industry has reached. It is now beyond just collecting clients’ money but creating more value for them. Many still believe that Standard Chartered is an elitist bank, maybe because of the spread in terms of branch network. What is your take on this? You know, one great thing that

‘ One of the

values we have communicated recently is how we have digitalized our platforms; how we have ensured that following the client’s behaviour being their life style

‘

it easy for you, whether you are on the go or at the comfort of your home or office, you can actually do your spending. Because we have digitalized all our platforms, it means with your credit card you can actually do all your transactions without having to visit any of our branches. I am sure there are some people who have the credit card and may not have activated it or forgotten their password. What you need do is to go online on our digital platform and change it. These are making customer experience wonderful. Now, what is the limit of this card that customers can enjoy? Credit card has various limits depending on the customer, but for the reward, I can say it has no limit or it is limitless because the more money you spend using your credit card, the more points you earn. You are to determine what you limit is. This is a good initiative, but what does it mean for the banking public in Nigeria? One of the things that come to mind in what we have done with this initiative really is to tell our customers that they deserve more. We have been on it for a couple of years, and they whole focus is creating value for the banking public. Today, if you have my ATM card you can use it anywhere and in any ATM machine and that is where the

has happened to the banking industry is digital technology. Yes, many have said we don’t have a lot of branches, but with technology at your home in the village, you can do banking with Standard Chartered because digitalisation gives you the opportunity to bank with us. I don’t know if you are aware that we are the first bank in West Africa to launch end-to-end digitalisation of our banking services. So today without any interaction with a human being, a customer can actually open account, end to end. What does that do? Today, I may not be in Kano or Kafanchan, but because I have a digital platform that can enable my customers and clients to bank anywhere, it means I can reach everywhere. As a matter of fact, with an android (system) on your palm, we are already everywhere that we would have been if we were opening physical branches. We are getting to the end of 2018. Looking at the retail space, what would you say was the success of the banking industry in the outgoing year? I think for the current year, if I look at the way a lot of the banks have developed their digital platform, I think that is the success. When it comes to retail, understanding consumer behaviour, their life style, knowing their spend and where they need to be,

if you ask me that is where a lot of progress has been made. If you look at the level of investment that banks have made in digital technology, you will agree with me that they are thinking about the retail customers. Second is financial inclusion, because the focus this year has been tremendous. Yes, there has been so much talk about financial inclusion the past years, but the significant efforts in terms of collaboration between the Central Bank of Nigeria (CBN) and the different banks this year has been remarkable. The regulator’s interest in financial inclusion, for me, is the second major success. The issue of cyber security has been a major concern for the industry and sometimes we hear cases of fraud on customers. As a player in the retail space, do you think we protected? I quite agree with you that in the era of digitalisation, one of the major concerns and indeed the concern, not just in Nigeria but all over the world, is cyber risk. This is not just limited to banks, but extends to other corporate institutions that are doing retail business and all that. But it also comes with it the opportunity to enhance those areas and ensure cyber security. The entire banking industry is aware of this, and you know, at Standard Chartered we are the leader when it comes to cyber security. In fact, there are actually certain certifications that you must have in place before you can expand your digital capabilities. I think everybody is aware. I won’t say it’s not a risk; it is. But we are constantly improving our technology to ensure we are ahead of the fraudsters. But the fact that there are policies and certifications required before you can operate or expand your digital capabilities gives us some comfort. But still, beyond just machine and certifications, the people. Today, in Standard Chartered Bank, from time to time especially during the Yuletide seasons like this, we send SMS, letting our customers to be aware that these things exist. If you ask me, making customers aware that these things exist and reminding them from time to time, giving examples of the kind of things that can come is extremely important and we have done that in Standard Chartered Bank a couple of times and we will continue to do it.

38 BUSINESS DAY NEWS Investors eye Nigeria solid minerals fortune in... Continued from page 1

ly commenced mining high-grade

zinc and lead in Bauchi State. Symbol has two local Joint Venture projects— Tawny in Nasarawa State and Imperial in Bauchi State, with total tenements spanning over 500km2. The company is not particularly new as it commenced operations in 2012 in Nigeria, but it has been expanding operations recently, completing over 12,000m of exploration drilling, according to Tim Wither, CEO of Symbol Mining during the Mining Week in Abuja, earlier in the year. “Symbol’s strategy is to generate early cash-flow from open pit mining at the Macy Deposit, which will facilitate further exploration activities at Imperial and Tawny, and potentially expand our resource base to grow the company,” Wither said. Also, PW Nigeria Limited is currently mining lead and zinc for Symbol Base Metals Limited at their Macy Base Metal project in Bauchi State. This project is fully mobilised and ore extraction has commenced. “We have acquired a number of licences the majority of which are in Niger state and are currently carrying out a detailed exploration programme,” said Martin O’Boyle, director of PW Nigeria Limited, at the Mining Week. Next is Minutor International, which is mining gold, zinc, lead, lithium and copper in many parts of Nigeria. “Nigeria has amazing blue-sky opportunitiesinthesolidmineralindustry: from IOCG deposits to hydrothermal and epithermal gold deposits, copper porphyries, sedimentary copper deposits, high grade battery minerals

includinglead,zinc,lithiumandgraphite to name but a few,” Riaan van der Westhuizen, MD, Minutor, said in an interview at the Mining Week. “The main challenge is security. Certain areas in the country are inaccessible to exploration crews and this has a direct impact on the speed of development of the solid mineral industry,” he said. African Industries, which has 12 subsidiaries that operate mainly in the steel sector, now has mining sites that will enable it get raw materials directly from ore. Similarly, Mines Geotechniques Nig. Limited, an Australian firm, and Northern Numero Resources Ltd. from the UK mine gold in Kebbi State. Moreover, Segilola Nigeria Ltd. and KCM Mining Ltd, two Australian firms, mine gold in Osun and iron ore in Kogi. Recently, the federal government issued Nigeria’s first gold refining licence to Kian Smith Limited. The company’s licence came on the back of its participation and presentation at the economic growth and recovery plan (EGRP) Focus Labs and it is breaking ground today on a new Gold Refinery located in Ogun State. Julius Berger is also in this game, according to industry sources. The owner of a twitter handle @ andrewfootie, who works for a South African banking group that raises capital for African focused investors, said on Twitter on Tuesday that funding for a new Nigerian mining complex will be in place by early 2019. “Final investment Decision (FID), for an integrated mining complex for iron ore and steel in Nigeria will be sanctioned by early next year and supported by international banks,”

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@andrewfootie said. Nigeria has at least 44 known mineral assets that include precious minerals, base metals, gold, iron ore, barite, bitumen, lead, zinc, tin and coal, among others. The sector lacks bankable data and suffers from state government interference. Small-scale miners often lack funding to operate as they complain of their inability to access governments N5 billion fund domiciled in the Bank of Industry. Just 18 of some 30 steel manufacturers in Nigeria are active, producing about 2.2 million tons a year and leaving the government with a $3.3 billion annual import bill, former Solid Minerals Development Minister Kayode Fayemi said last year. The government is talking with companies including Russia’s Technopromexport and Ansteel Group Corp. of China to complete and start production at the Ajaokuta Steel plant. It also plans to create a $1 billion mining exploration fund from state and private capital to improve data on Nigeria’s mineral wealth. Each exploration project will be supported with about $5 million. Nigeria also aims to increase mining’s contribution to gross domestic product to 7 percent within a decade, from 0.3 percent in 2017. “The new money being invested only represents two or three percent of what should be happening in this sector,” Babatunde Alatise, chairman of Lagos Chamber of Commerce and Industry Mining Group, told BusinessDay on the phone. “The question is, how do we make artisanal miners to make up 95 percent of this sector? We do not have commodity exchange, which makes it difficult to know exactly how bankers can check international prices of solid minerals,” he added.

Thursday 13 December 2018

Investor’s underweight Nigeria assets as... Continued from page 4

This is despite the fact that FPI in the review period declined by 58.05 percent from $4.1 billion in Q2 2018 to $1.72 billion in Q3. FDI on the other hand was up 103.03 percent, from $261.35 million in Q2 2018 to $530.63 million in Q3. The dominance paints a picture of external sector vulnerability and reinforces why the central bank has had to keep interest rates at a recordhigh to get portfolio investors to stay, according to Bismarck Rewane, the Chief Executive Officer at Lagosbased advisory services firm, Financial Derivatives Company. “Portfolio flows are volatile and less stable compared to FDI,” Rewane told BusinessDay. The worry with dominant portfolio inflows of hot money is that it is only a trigger away from storming out at the first sign of danger, as was the case for Africa’s largest economy in 2016. That year capital importation into the country dropped after the CBN pegged the naira, to the chagrin of foreign investors. Their pull out led to a drop in capital importation that year, with Nigeria recording a drop to $5.12 billion in the full year of 2016 as against $12.22 billion in 2017. Foreign direct investment at $530.63 million was imported only through Equities while Other Capital as a medium of capital importation for foreign direct investor recorded no value in the review period. Capital importation as shares, which is closely related to Equity

investment (FDI and Portfolio Investment) dominated the third quarter of 2018 reaching $1.67 billion of the total capital importation in the quarter. “Since the naira is likely to remain stable, especially after CBN governor Emefiele recently boasted about ample FX reserves for the task, some foreign portfolio investors may continue to play in the domestic fixed-income market. But in Q4, they are likely to be less,” Raji explained. Analysis of capital imported by Sector revealed that Shares reported $1.67 billion, Services $205.91 million, Banking $289.44million, Production $230.34 million, Financing $371.60million, Agriculture $23.31million, Trading $10.29million, IT Services $1.21 million, Oil And Gas $7.73 million, while Electrical, Transport, Construction, Telecoms, Consultancy, Brewing, Hotels and Marketing reported capital inflows of $5.67million, $0.40 million, $25.47 million, $11.42 million, $0.92 million,$0.31 million, $0.02 million and $3.43 million respectively. The United States emerged as the top source of capital investment in Nigeria in during the period, with $911.33 million. This accounted for 31.91 percent of the total capital inflow within the three months. Abia, Lagos and Abuja were the most attractive states of destination for foreign investment. Lagos attracted 30.08 percent of total capital imported into the country in the review period, while Abia and Abuja got 22.99 percent and 46.21 percent, respectively.

Homebuyers, renters vote with feet... Continued from page 1

In a recent report on the State of the Lagos Housing Market by Pison Housing Company, Roland Igbinoba, the company’s President/CEO, estimated that 30 percent of Lagos residents change location every year for reasons of rent or moving into their own homes. But movements as seen in the last couple of years, especially in the big cities of Lagos and Abuja, have far exceeded that number, meaning that, really, more and more Nigerians are slipping into poverty as economic condition worsens, crimping disposable income and eroding consumer purchasing power. At the receiving end of these developments are landlords, particularly those in gated estates and other highbrow locations. In these locations, many of the residents have moved, leaving behind empty houses. Many of those who have stayed back are defaulting in their rents and service charge payments which put the landlords under intense pressure living without rental income. “We have, in the past 12-24 months, seen a lot of movements and these cut across various segments of the property market. Some families are relocating while others are downgrading accommodation. And this applies to both residential and commercial properties, especially in the expensive locations,” Gbenga Olaniyan, CEO, Estate Links, confirmed to BusinessDay in an interview. He noted that because of the

poor state of the economy, the property market is struggling with over supply, falling demand, rent default and rising vacancy rate which is about 30 percent higher than what it was 12 months ago. Tayo Odunsi, CEO, Northcourt Real Estate, added however, that the high vacancy rate in the market was also caused by skewed supply, reduced purchasing power and people he described as “legacy landlords” who would rather keep their properties than give them out at prevailing rents or prices. Temidre Oguntade is a landlord in one of the gated estates in Lagos. He told BusinessDay that only one apartment in his twin-duplex is occupied and the rest had been empty in the past two years. “This is a huge challenge for me as a civil servant. That had been my major source of income. Today, I find it very difficult to pay my bills, especially my children’s school fees,” he lamented. In Abuja, there has been significant urban-rural movement occasioned by tenants’ inability to pay rents in the city centre. An estate surveyor and valuer, Alomaja Olajide , confirmed to BusinessDay that people are relocating from places like Garki, Wuse and other highbrow locations where they can no longer afford N1.3 million to N1.5 million rent to satellite towns like Kubwa where rent is more affordable at N700, 000 per annum for a three-bedroom apartment. Uvhe Ugochukwu is a public servant who lost his job and had to relocate from Suncity Estate where he was paying N1.4 million per annum to the Satelite town where he

Akinwunmi Ambode, Lagos State governor (2nd l); Modupe Adelabu (l), former deputy governor of Ekiti State; Kashim Shettima (2nd r), Borno State governor, and Seida Bugaje (r), at the APC Southwest’s National Peace and Reconciliation Committee interactive hearing with Osun and Oyo states members, at the Government House, Ibadan, Oyo State.

is presently paying N700, 000. “Before now, those estate managers would come up with different levies for you to pay; service charges, estate security, drainage etc. In this place (Abacha Road), I am not paying any of such bills,” he said. Similarly in Lagos, the mid to low end market has witnessed tenants’ movement. Areas like Maryland, Omole Phase 1, Magodo Estate, Ikeja GRA, Surulere, Ilupeju, Ajao Estate, among others, have seen relative vacancy rate that is unusual in such locations which are sought after by young executives that work in banks and other blue chip companies. But many of these young executives have been laid off and can no longer afford their rents. Some of those who are still at work are not

sure of their salaries, leading to high rent default rate. Some of them have moved from these mid-income locations where rents range from N2 million to N3 million per annum for a duplex, and N800,000 to N1.5 million per annum for a threebedroom apartment to areas like Ketu, Aguda, Ejigbo, Okota, Egbeda, Iyana-Ipaja, Oke Afa, etc where rents are relatively lower at N1million to N1.5 million per annum for a duplex and N500,000 to N750,000 per annum for a three-bedroom apartment. On Lagos island, people who occupied the N3 million to N3.5 million property in Lekki Phase 1 have moved down to the Chevron axis to pay N2 million rent. Some people have moved from Ikoyi or Victoria Island where rent is as

high as $70,000 per annum to Lekki Phase 1 where a flat goes for N6 million per annum. All these, however, come at great costs to both the tenants who are leaving and the landlords whose houses are left vacant. While the landlord loses rental income and spends more money maintaining an empty house to guard against depreciation, the tenants have some challenges to face in their new ‘affordable’ locations. These challenges come in form of new schools for children, paying more and spending longer time commuting to work or shoping, and incurring hospital bills as a result of strain and stress that come with driving or commuting long distances through bad roads on daily basis.

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‘Government need to embrace credit infrastructure to boost GDP growth’ KELECHI EWUZIE

ndustry experts in the financial sector have urged the Federal Government of Nigeria to take credit infrastructure very seriously if it hopes to reduce poverty in the country as well as increase GDP. They say credit infrastructure entails creating an enabling environment for the citizens, especially small and medium scale enterprises, in having seamless access to credit. Taiwo Ayedun, founder, Credit Registry, Lagos, says the credit penetration in Nigeria is currently at about 7.8 percent, showing that Nigeria has a long way to go. Ayedun states this while delivering a lecture at a twoday workshop themed: Credit Reporting As The Foundation of Credit Infrastructure, organised by Lagos Business School and Credit Bureau Association of Nigeria (CBAN) in Lagos. Speaking on the topic, Credit Reporting as a Foundation for Wealth Creation and Economic Growth in Nigeria, Ayedun observes that high interest rate in the country makes people not to actually perform on their loans and repayment behaviour of the borrower after taking the loan, making financial institutions close avenues for loan. He however says with the existence of a robust credit reporting system, financial

institutions will be encouraged to advance credit to this sector. According to Ayedun, “An efficient, reliable and stable credit reporting system will among other things effectively stimulate access to credit, ensure transparency in loan application, condense the rate of bad or non-performing loans and obviate the need for collateral.” He also adds that a sound credit reporting system also creates a sense of obligation on borrowers, as they will note that a bad credit history reduces the possibility of further accessing facilities. Listing other advantages of credit reporting, he states it leads to broader and fairer access to credit, better performing loans, prevent over-indebtedness as well as improve profitability and stability in financial sector. To further increase access to credit in the country, the expert says government, especially at the state level, needs to make title registration for homes and certificate of ownership cheaper to get so that owners can use it as collateral for loans and there will be more loans in the system. Tunde Popoola, chairman, CBAN, and managing director, CRC Credit Bureau Limited, says the Bureau had changed the behaviour of people, that now people are forced to pay their loan and also bar bad people from accessing the system.

Delta Assembly passes 2019 Appropriation Bill of N390.3bn FRANCIS SADHERE, Warri, with agency

elta State House of Assembly on Wednesday passed the state 2019 Appropriation Bill of N390.3 billion, showing an increase of N23.3 billion to the initial budget proposal earlier presented to the assembly by Governor Ifeanyi Okowa on October 17. The passage of the appropriation bill followed a report presented by Erhiatake IboriSuenu, chairman, House Committee on Finance and Appropriation. Presenting the report, Ibori-Suenu said Okowa had earlier presented the proposed budget of N367 billion to the assembly with N209 billion for capital expenditure and recurrent expenditure of N157 billion. She said after careful evaluation of the submissions of the various sub-committees of the assembly and the budget defence of the various Ministries, Departments and Agencies (MDAs), the appropriation committee had to return a budget size of N390.3 billion. She said with the increase of the budget size, the capital expenditure now stood at N233.2 billion while the recurrent expenditure remained at N157 billion, saying the committee observed that the appropriation bill took into consideration the new account code in compliance with the current In-

ternational Public Sector Accounting Standards (IPSAS). It also included the necessary macro-economic framework with national inflation, oil production benchmark, international exchange rate and the medium-term expenditure framework. “The 2019 Appropriation Bill was also carefully planned to improve inter and intra sector resources allocation by prioritising expenditures and dictating resources only to the most important activities with a view to ensuring overall fiscal discipline,” she said. The bill will address critical areas to ensure the growth that was common to all sectors, she said. Tim Owhefere, majority leader of the assembly, moved a motion for the House to receive the report that was unanimously adopted by the assembly and seconded by the member representing Udu Constituency, Peter Uviejetobor. Owhefere also moved a motion for the Assembly to suspend “Order 12, 77, 78, 79 and 90” to enable the assembly take the third reading and pass the bill. Speaker, Sheriff Oborevwori, thanked the lawmakers for their commitment to the passage of the Appropriation Bill, describing it as a milestone, saying Delta was among the first states to pass the 2019 Appropriation Bill, as the members’ dedication and commitment to duty was worthy of note.

Shittu accuses Oshiomhole of betrayal Edo approves N21.2bn contract for reconstruction JAMES KWEN, Abuja

inister of communications, A d e b a y o Shittu, has accused Adams Oshiomhole, national chairman, All Progressives Congress (APC), of betrayal, despite his contributions to chairman’s political ascension. Shittu revealed that he was the first to recommend Oshiomhole to President Muhammadu Buhari for appointment and later national chairman of APC, but was later stabbed by him. The minister in an interaction with journalists in his office on Wednesday in Abuja, said, “Oshiomhole was my friend. I am the first to speak to President Buhari on making him his Special Political Adviser; if anybody tries to play god, that’s a different issue, if justices is not done, there will be no peace.” Shittu aspired to be governor of Oyo State under APC but was disqualified by the party during the party screening for not having the mandatory National Youth Service Corps

(NYSC) certificate. He announced that a coalition for Buhari/Osinbajo campaign for the reelection of President Buhari in the 2019 would be inaugurated in Oyo State on January 5, 2019, adding that democracy in Nigeria was 19 years from 1999, but the country had not got the best, making him not to stop campaigning for President Buhari. Shittu stated that the state had no problem with President Buhari, assuring that the state must produce two million vote for his reelection, adding, “To say I will stop campaigning for Buhari is nonsensical as my interactions started with him long before now. “We shall inaugurate a coalition for Buhari/Osinbajo campaign on the 5 January, 2019 in Oyo State as we have no problem with President Buhari and we know, we shall get 2 million votes for his reelection. Remember, President Muhammadu Buhari is the first President in this country to reduce his monthly salary by half after the late General Murtala Mohammed.”

of 105.6km Benin-Abraka Road

he Edo State government has approved the contract for reconstruction of the 105.6-kilometre Benin-Abraka Road at the cost of twenty-one billion, two hundred and twenty-two million, six hundred and twenty-six thousand, six hundred and seventysix naira, thirty-two kobo (N21,222,626,676.32). The approval was given at the state’s weekly Executive Council (EXCO) meeting, presided over by Governor Godwin Obaseki, at Government House, Benin City, the state capital, on Wednesday. According to Obaseki, “The award of the contract is in fulfilment of my promise to reconstruct Benin-Abraka Road and bring to an end, the frustration and sufferings of Edo people that ply the road, daily. This project is the largest, longest and the most ambitious road project ever undertaken in Edo State. “The road has been dilapidated for over forty years and what is worthy of note is our ingenuity in bringing stakeholders to-

gether to appreciate the need to execute this road project that affects the lives of well over a million people, through co-financing.” He explained that the 105.6-kilometer BeninAbraka Road had encouraged the reconstruction of Aifuwa Street; Evboesi-Urherhue and Iguelaba communities. The governor noted that “the co-financing arrangement is contained in a Memorandum of Understanding (MoU) entered into by the Edo State Government, the Niger Delta Development Commission (NDDC) and the Edo State Oil and Gas Producing Area Development Commission (EDSOGPADEC) with a financing ratio of 25%:50%:25%.” He further said: “Orhionmwon Local Government Area is a major oil and gas producing LGA and deserves smooth roads linking the various communities. We have very industrious people in the area, whose productivity had been hampered by the poor condition of the Benin-Abraka Road.

39 NEWS

BUSINESS DAY

Afreximbank deepens drive to develop African businesses, signs $600m finance agreement

frican ExportImport Bank (Afreximbank) has reiterated its commitment to deepen its drive to facilitate the growth of intra-Africa trade and support the development of African businesses. Benedict Oramah, the bank’s president, said this in a statement signed by Obi Emekekwue, head of media of Afreximbank, on Wednesday in Abuja. To further drive its mandate, Oramah said the bank on Tuesday in Cairo signed a financing facility totalling $600 million with the Heirs Holdings Group, a pan-African proprietary investment holding company. According to the News Agency of Nigeria, Heirs Holdings positions itself as an African leader in integrated natural resources. It has significant investments across Africa in the financial services, resources, real estate and hospitality and power sectors, plans to deploy the facilities to further support its power, oil and gas strategy. Afreximbank’s president represented the Bank, while Tony Elumelu, chairman of Heirs Holdings, represented the group during the signing at the inaugural IntraAfrican Trade Fair (IATF) in Cairo. Oramah welcomed the continuing strong relations with Heirs Holdings and

commended its potential role in addressing some of the fundamental challenges that had affected the power and energy sectors in Africa. In his remarks, Elumelu said the proceeds of the facilities would support the Group’s vision of creating a dynamic resource-based division focused on ensuring value creation on the African continent. He said it would also ensure the development of value chains that directly benefit the broader African economy and consumer, saying, “We are delighted to be partnering with Afreximbank, the bank continues to play a critical role in the economic and social development of the continent. “Together, we illustrate that Africa can create World class institutions capable of successfully making the long-term investments necessary for Africa’s economic transformation and catalyse the enabling environment that will unleash Africa’s potential.” The IATF, organised by Afreximbank in collaboration with the African Union, and hosted by the Government of Egypt, will end on December 17. It is expected to attract about 70,000 visitors, transactions worth about $25 billion are expected to be concluded at the IATF, which has almost 1,100 registered exhibitors from 42 countries.

BUSINESS DAY

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Thursday 13 December 2018

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Why Nigeria’s trade sector exited recession in Q3 2018 Stories by Bunmi Bailey

he Central Bank of Nigeria (CBN) intervention in the Foreign Exchange (FX) market, improvement in profit margins of businesses, stability in prices and amongst others may be the reason for the positive growth in the trade sector, economic experts said. Johnson Chukwu, CEO, Cowry Asset Management Limited said, towards the third and fourth quarter of the year the demand for goods improved. “The bottlenecks in FX that hinder trade activities to a large extent reduced in the third quarter so there was easier access to foreign exchange and a downward movement with some stability in price levels, so these factors contributed to the demand of goods and services in the trade sector which corresponded to a positive growth in the sector

,” Chukwu added. The trade sector exited recession for the first time in 2018 after recording two negative growth rates. From the report, it grew by 0.98 percent in Q3 2018 after contracting by -2.14 percent and -2.57 percent in Q2 and Q1 respectively, making it the second positive growth since it existed recession in Q2 2017. “There was a delayed impact of CBN’s intervention in the FX market. So we are now bringing to see the effect now .Dollar supply has improved for businesses generally. For example, there are some businesses in Nigeria that does not produce, they just buy from abroad and sell,” Ibrahim Tajudeem, Head of Research, Chapel Hill Denham said “So for those ones, a lot of them have been able to have access to FX because of CBN intervention in the market. It has begun to have positive impact in the economy,” Tajudeem further said to BusinessDay in a telephone

interview. The low purchasing power and consumer spending in the economy had been attributed for the two negative growths in the previous quarters which prompted a reduction in trade activities. From the CBN’s Consumer Expectation Survey (CES) report for Q3 2018, consumers’ overall confidence in the economy grew by 12.0 basis points to 1.5 index point in Q3 2018 a reversal from the -10.5 index point recorded in the corresponding period in 2017. “The trade sector which is the second biggest is positive and this is very good meaning that profit margins are improving .I suspect that there is a lot of people are beginning to buy this locally,” Ayo Akinwunmi, Head of Research, FSDH Merchant Bank said Tajudeem is optimistic that there will be a sustained positive growth in the trade sector for q4 due to the trade conditions that are still existing in the sector

Prepaid meter consumers rises marginally by 2.36% in Q3 2018

he number of consumers that have access to prepaid meters by the Electricity Distribution Companies (Discos) increased slightly (quarter-on-quarter) by 2.36 percent to 1.65 million in the third quarter (Q)3of 2018 from 1.62 million in Q2 2018 in Nigeria, according to the newly released National Bureau of Statistics (NBS) power sector data. Prepaid meters are meters that enables consumers

to regulate their electronic energy consumption and recharge whenever the energy is used up. Also from the NBS report, Abuja Disco had the highest number of customers metered, followed by Benin Disco and Ibadan Disco while Yola Disco recorded the least total number of customers metered. In the previous quarter, Benin Disco overtook Abuja, having the highest. Additionally, the power generated for Q3 of this

year reflected that a total average of 78,917 Megawatt hour (MWh) of energy was generated daily by power stations. Daily energy generation attained a peak of 90,197 MWh on the 16th of August 2018. Thermal stations generated a peak of 85,948 MWh on July 10, 2018 while the hydro stations attained a peak of 30,164 MWh on August 28, 2018 . However, the lowest daily energy generation of 57,357 MWh was attained on July 8, 2018

NiajaLottery targets consumers with introduction of Blockchain Lottery ...pioneer Quanta as new Investor

nternational Lottery and Gaming Limited (ILGL), trade-named NaijaLottery is targeting more consumers with its signed contracts to introduce Quanta, the world’s first licensed blockchain lottery, as new investor, concluded the world’s first deal to see an important synergy of traditional and blockchain lottery. ILGL is one of the largest gaming companies in Nigeria, has been granted a Grade A National License from the National Lottery Regulatory Commission to offer lottery games throughout Nigeria. Under the agreement, Quanta and ILGL will combine forces to apply blockchain technology to revitalize the traditional lottery, and to act as a platform to further strengthen growth in African market. The partnership is a major development in the penetration of blockchain technol-

ogy into traditional business models. NaijaLotteryTM sells National Lottery tickets in every city and state, offering large prizes to winners. The company is committed to implementing the highest international standards of responsible gaming, protecting minors and discouraging addictive playing. ILGL employs best-in-class technology and related services. Quanta is the first fully licensed blockchain lottery in the world. Developed on the breakthrough Ethereum blockchain technology, Quanta transforms conventional lotteries for the better, revolutionizing the gaming industry. Its blockchain-based lottery games are fully certified to ensure utmost trust and transparency for the players and the regulators. “Now is the time to build

on the momentum of the traditional Nigerian lottery market. Together, we will continue to build a safe and trustful platform that ensures fairness and transparency, while offering amazing functionality to players and helping to boost the local economy, creating an even more compelling experience to optimize lottery playing for the 200-million Nigerian market,” Charbel Saadeh, Managing Director of Naija Lottery said. Kostas Farris, Chief Technology Officer (CTO) and Director of Quanta, commented on the partnership, “This is a profound opportunity to bolster the rapidly-evolving lottery business. We are confident that we can make blockchain lottery popular and this partnership represents a significant base for Quanta to target other emerging markets centered in Africa.”

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Promasidor unveils SunVita, with 75% local content By our reporters

romasidor Nigeria Limited, makers of Cowbell Milk, Loya Milk, Miksi Milk, Onga seasoning, Top Tea and other quality food products, have unveiled Nigeria’s first zip-lock packaged ready-to-go cereal. ‘‘75 per cent of the product’s inputs are sourced locally, reflecting the company’s robust backward integration programme,’’ said Anders Einarsson, managing director of Promasidor Nigeria, during the media launch in Lagos recently. According to Einarsson, the decision to look inward for raw materials is informed by the company’s desire to contribute to the growth of agricultural value chain. ‘‘This would create massive employment opportunities and reduce capital flight. It demonstrates our commitment to backward integration and local capacity utilisation in line with the economic need of the country,’’ the managing director said. ‘‘This will translate to more direct and indirect jobs for the youths as it will increase activities in agricultural value chain.” Einarsson said SunVita would help working mothers and those on tight

L-R: Andrew Enahoro, head, Legal/Corporate Communications, Promasidor Nigeria Limited; Anders Einarsson, managing director, Promasidor Nigeria; Leonard Kange, general manager (Large Enterprise), Bank of Industry; and Mario Russo, head of Commercial, Promasidor Nigeria; at the unveiling of SunVita Cereal recently in Lagos.

schedules to manage their time better and achieve their career goals without compromising their health and nutritional requirements. “At Promasidor Nigeria, we understand the constraint on time. 24 hours is no longer enough for individuals to complete their daily routines, have fun and rest,’’ he said. ‘‘Since we cannot increase the number of hours we have to work and play, we must continue to explore better ways of managing time. This is one of the ideas behind SunVita.’’ Continuing, the manag-

ing director said, “Consumers need a quick, convenient meal that can be taken as a formal meal at home or as an energy boosting snack during the day when they are away from home. ‘‘And this need can be met without compromising their health. This is what SunVita has done. The cereal does not need cooking, which requires time and energy.’’ Leonard Kange, general manager (Large Enterprise), Bank of Industry, who joined other dignitaries to tour the factory, said he was impressed

with the investment. According to him, the company’s backward integration agenda was in line with the country’s industrial revolution roadmap. “The production process is fantastic. I am particular excited because I can see the product of our intervention. It is good to know that the fund we gave to Promasidor is invested in a project that will address key challenges facing Nigerians,’’Kange said. “The investment is particularly relevant to the national industrial growth. About 75 per cent of the inputs used to manufacture the product are locally sourced. It means that Promasidor is providing direct and indirect jobs through suppliers of the inputs.’’ ‘‘That will help to grow the economy and reduce unemployment. I am extremely excited at the manner Promasidor has utilised the loan we gave them.” Bartholomew Brai, president, Nutrition Society of Nigeria, said the nutritional contents of Sunvita would help in the cognitive development of children. “I am happy that this product is meant for both children and adults. It is not healthy to skip breakfast. With this readyto-go cereal, this challenge is addressed,” Brai, who is also a university lecturer, stated.

BUSINESS DAY

Hubmart Stores delight customers as winners emerge in 2nd awoof promo

n the heels of the success of the first raffle draw of the on-going Awoof promotion and prize presentation ceremony, leading indigenous retail chain, Hubmart stores has concluded the second Awoof raffle draw with winners carting away shopping vouchers and freebies valued at N3.5 million. The raffle draw was conducted by Musician Isaac Geralds and Niyi Adeleke, asst. head, Enforcement Unit, National Lottery Regulatory Commission at Ikeja GRA store of Humbert. Cheng Fuller, vice president Marketing stated that the retail chain was pleased with the massive participation of her teeming customers in all Hubmart activations and was always happy to share delight. According to Fuller, “We were pleased with the customer’s participation in our Awoof promotions but even more pleasantly surprised at the massive turnout we experienced during the just concluded Black Friday promotions. For this, we are deeply grateful to you our beloved loyal customers”. He further stated that following the Black Friday sales and in a bid to further spread the spirit of celebration and goodwill among

its customers this Christmas, Hubmart stores would be having her first ever Orange Friday Fiesta, a customerdriven initiative which would eclipse the just concluded and hugely successful Black Friday sales promotion. The Orange Friday Fiesta, which has been scheduled to commence on the 14th of December 2018 will see Hubmart offer customers bumper flash discounts on electronics, alcoholic beverages, fresh produce, groceries as well as lots of other surprises. “Think of Black Friday, and amplify that a hundred times”, he said. The key thrust of the fiesta as explained by the Vice President, Marketing (Cheng Fuller) was the celebration of 3 years of Hubmart Stores delighting her teeming customers. Furthermore, as part of her new objective of delighting her customers, and in keeping with her key focus on Fresh, Hubmart is poised to roll out her weekly promotion on Fresh produce this weekend tagged, “Fresh weekly” – A bouquet of fantastic offers on fresh produce such as discounts on vegetables, meat, fish and poultry products as well as a weekly happy meals trend (where customers would always get a complete meal combo discounted to less than 500 naira).

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com

Trader in dire need of funds for dialysis, surgery Name: Mrs Ugbede Kehinde Oluwatoyin State of Origin: Ogun Age: 35 Dependents: Mother and three siblings Occupation: Trader I deal in eggs and foodstuffs at App market, Abuja. Before I ventured into this business, I worked in the bank having graduated from University of Abuja where I studied Economics. In 2008, I was employed at Oceanic Bank (now Ecobank) where I worked as a teller before I was moved to the customer service desk. I served in different branches of the bank before I was relieved my job. From App market, I moved to Kubuwa where I was trading until I was diagnosed of kidney failure in 2018. How did it start? It started in August, 2017

but like malaria and typhoid. I had the same experience every two weeks. By November, 2017, we were treating ulcer but unknown to us, what I had was bigger than ulcer. I was short of blood and was given two pints of blood. Before I got married in December, 2017, I was referred to Maitama Hospital for endoscopic but my fiancé did not allow me to go because of the cost. Two months after the wedding, my condition deteriorated and that was why I was diagnosed of kidney failure. The situation got worse in January, 2018 when I started bleeding through the nose and vomiting two or thrice a week. Second week in January, I was at Kubwa General Hospital. I asked the doctor the result of the general tests carried out

on me and she said they were all good. But, I wasn’t getting any better. The bleeding and vomiting still persist. I also lost appetite, had sleepless nights and coughed profusely. I was given antibiotic, malaria drugs and cough syrup. With the

medication, it even got worse. On February 23, 2018, I was diagnosed of Chronic Kidney Disease (CKD) at Kubwa General Hospital. I was referred to Gwagwalada Teaching Hospital for further treatment and dialysis.

Analyst: Chinwe Agbeze, Graphics: Fifen Eyemisanre Famous

I spent six weeks at the hospital before I moved to Zenith Medical and kidney centre in Abuja, where I have been receiving treatment till date. What is the cost implication? I was told the best treatment option for my condition is kidney transplantation and it would cost about N13.3m. This sickness is really capital intensive. My husband and I cannot bear the cost. I do dialysis twice a week and the treatment drugs cost N110,000 per week. On every dialysis, I take injection for blood because I’m anaemic and infusion because I lack vitamins and glucose. How have you coped so far? We get assistance from family, friends and good spirited individuals. This sickness is really capital intensive.

A plea for help My husband work is a mathematics teacher at ElisAngel model school. From the time I was diagnosed of this sickness till now, it has not been easy for him. My husband’s salar y couldn’t take care of the sessions of dialysis in a week. Since I was diagnosed of this disease, I couldn’t do any work to support my husband and the family. On monthly basis, I spend N1m dialysis, drugs and admission. The doctor said the lasting solution is the kidney transplant. N10m is required for the transplant but I sincerely do not know where or how to get that kind of money. I am calling on Nigerians to come to my aid and help me raise the funds for my kidney transplant.

BUSINESS DAY

Thursday 13 December 2018

End of year purchases rises November’s inflation rate by 11.28%-FSDH Stories by Bunmi Bailey

he current end of the year purchases increased marginally November’s Consumer Price Index (CPI) popularly known as inflation to 11. 28 percent from 11.26 percent in October 2018 in Nigeria, according to a forecast report by FSDH Merchant Bank Limited. “We expect the November 2018 inflation rate (yearon-year) to increase marginally to 11.28 percent from 11.26 percent recorded in October. The inflation rate dropped in October, following two consecutive months of increase. We expect a marginal increase as a result of end-of-year purchases,” the report stated.

The seasonal harvest that usually occurs yearly attributed to the marginal drop of October’s inflation rate. Now it seems it is expected to rise. The report also noted that the prices of food items monitored in November moved in varying directions, leading to 0.9 percent increase in thier Food and Non-Alcoholic Index. “This Index increased year-on-year by 13.2 percent to 292.4 points, up from 258.2 points recorded in November 2017. We also observed an increase in the prices of Transport and Housing, Water, Electricity, Gas & Other Fuels divisions between October and November 2018. We estimate that the increase in the Composite,” the report detailed The NBS is due to release the inflation rate for

the month of November on Thursday, 13 December 2018. Also, the November Food Price Index (FPI) report by the Food and Agriculture Organization published for the month of November 2018 noted that food prices in the international market further declined from the October levels and the FPI recorded the lowest figure since May 2016. Weaker prices in vegetable oil, dairy, cereal and meat depressed the values of the Index, while the sugar prices firmed up. Increased exports supplies from the main producing regions impacted the prices of most commodities. On the other hand, sugar prices increased for the third consecutive month due to low production prospects in the major sugar producing regions.

accelerator programme for beauty start-ups. Merger under scrutiny UK retailer Morrisons has become the latest grocer to warn the competition watchdog that the proposed merger between Asda and Sainsbury’s would lead to a duopoly in the grocery market. Market leader Tesco questioned the economy of the GBP 7.3 billion transaction. Future thinking After launching a brand refresh at Stop & Shop in the Northeast, Ahold Delhaize USA is now investing in an upgrade programme at its Giant Food banner. AH CEO Frans Muller said that the company needs to adopt an experimental approach and wants to see “more inspiration and creativity”. Good intentions Walmart has teamed up with the Colorado state government to support workforce development with a USD 4 million cash injection to assist with training and up-skilling. The retail giant has also announced that in-store shoppers can now order and pay for online orders. Walmart associates will be equipped to help customers. Growing partnership Supermarket operator Kroger plans to roll out a curated assortment of grocery products and Home Chef meal kits at select stores at pharmacy chain Walgreens. The effort aims to promote a convenient, one-stop shopping experience. Big Apple debut Ikea is finally arriving in New York — but not with its typical format.

The Swedish furniture giant will open its first-ever cityfocused location in the United States next spring. The Ikea Planning Studio will feature smart solutions for urban living and small spaces. Curbing competition South Korean convenience store operators have agreed not to engage in cut-throat competition to better protect struggling franchisees. The voluntary deal calls for retailers to decide “carefully” over whether to open a new outlet near an area where a rival store is already located.Tough outlook Australia’s largest wholesaler, Metcash, has seen its shares stumbling this week after the company offered a cautious forecast for the next few months. The retailer has reported an increase of 3% in net profit for the first six months, despite “challenging market conditions”. Top spenders Consumer electronics giant Samsung has just become the world’s spendiest advertiser. The South Korean giant spent USD 11.2 billion on advertising last year, knocking Proctor & Gamble off the top spot, according to data from AdAge. Click here for the largest advertisers. Diversity debt Europe’s start-up sector has a “shocking” lack of diversity, with 93% of all funds raised in 2018 going to all-male founding teams, according to a report by the investment firm Atomico. Out of 175 large start-ups included in the survey, just one had a female chief technology officer.

Global retail update

libaba continues its slew of worldwide trade pacts in Belgium, and Polish supermarkets are looking enticing. Amazon may experience higher costs for delivery services, and an Alibaba subsidiary invests in Chinese logistics. Meanwhile, wage stagnation is contributing to the retail slump. Discounter decisions in Europe German powerhouse Aldi is having an opening extravaganza, with 8 new UK stores opened in a single day. The stores are part of a planned 24, which will hopefully generate over 800 jobs. Meanwhile, its Swedish counterpart Clas Ohlson is being forced to close stores across Germany and the UK after a massive slump in profits. Trade deals Following trade pacts in Africa and Asia, Chinese e-commerce giant Alibaba has signed a deal with Belgium to create an online sales logistics base. The project will involve an initial EUR 75 million investment and 220,000 square metres in Liege Airport in Belgium. Polish focus Polish supermarket chain Stokrotka, owned by Romanian retailer Maxima Grupė, has acquired fellow Polish franchise Sano. The supermarket has 36 stores in Poland, and a staff of roughly 900. Maxima Grupė plans for swift expansion in the country. Local project Carrefour is staying busy. Besides all its digital activities, the French superstar is piloting a new

concept store aimed at local proximity (in French). Located in Clichy, Paris, and opened last week, it will be selling meat and cheese products, bakery items, and include a lounge section. Click here for pictures. European faces in United States Dutch dairy massive Royal FrieslandCampina, has acquired US cheese distributor Jana Foods, strengthening the business’s US presence. Meanwhile, Aldi continues its European opening streak in the US, with a shop opening in San Jacinto, California. Postal prices Packing charges might be on the increase for retailers, after President Donald Trump called out the losses sustained by the United States Postal Service. A task force set up by Trump wants to allow USPS greater leeway to increase prices for their services. Mobile Motile Retail titan Walmart is starting up a new branch of tech products sold entirely on its online platform. The new items, going by the name Motile, include charger-equipped backpacks and fold-able travel keyboards, and are intended to suit a tech-savvy, highly mobile customer. Indian horizon in Asia US online giant Amazon has made a new investment into its Indian presence, with nearly USD 352 million poured into Amazon Seller Services. Amazon India has now become an economic presence of almost the same scale as its US leg, though overheads remain higher.

Takeover interests Alibaba-backed fintech firm Ant Financial has invested into Chinese data service company Keking. The merger will provide a technology logistics service aimed at a variety of business ventures. Meanwhile, investment company KKR is set to purchase a stake in TWG Tea parent V3 for USD 366 million. Frugal consumers Struggling people are making for struggling retail, as thrifty spending darkens the horizon of the shopping market. Australia’s national economy has seen a difficult patch, with stagnating wages, plummeting house prices, and skyrocketing debt forcing consumers to get by on what they have. Machine earnings US Amazon employees are now earning less than the national government’s vending machine attendants. The stan-

dard Amazon minimum wage of 15 dollar per hour puts those employees squarely within the bottom quarter of the US’s hourly federal earners. French tech ventures Utilising its experience with Tencent in China, Carrefour is set to pilot a fully automated store in its home country using cameras and facial recognition. Competitor Casino also bets on digital technology - its e-commerce unit Cdiscount has acquired start-up Stootie (in French) which covers a wide range of services. Shake-up ahead Germany’s Beiersdorf will reshuffle its top management and expand internationally when new boss Stefan De Loecker takes over in January. The skincare company’s Nivea brand has already established an innovation hub in South Korea, which will act as an

Thursday 13 December 2018

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Corporate Social Impact

The new Miss World is a volunteer!

anessa Ponce de Leon is a 26-yearold graduate of International Relations. On Saturday 8th December, in Hainan, China, she was crowned the new Miss World. What stands her out though is that she is not just talking about what good she’ll do as Miss World; she’s already fully

involved, volunteering for a rehab centre for girls in her native country, while also sitting on the Board of Directors of ‘Migrantes en el Camino’, a migrant shelter. The beautiful woman obviously has her heart in the right place. May her reign stay scandal-free and may she remain a positive role model for women and men everywhere.

Schneider gives girls Stem Boost

The Winning Team with Christophe Begat, Managing Director, Schneider Electric Anglophone West Africa

emember your wideeyed self at that secondary school excursion? Everything was outside of your familiar zone. And you soaked it all in. Well, Schneider Electric, in partnership with Visiola Foundation, has been working at giving girls a brand new experience in Science, Technology, Engineering and Mathematics (STEM) as part of its commitment to developing local content as well as widening the pool of young women involved in these professions. The company did it not merely with an excursion but a one-week rigorous boot camp in Abuja as part of the STEM Girls 2018 Competition that took place in August. This year’s edition was fashioned to develop the girls’ technical skills in Solar Energy, IT and Robotics. Trust our brilliant girls to prove their mettle. Of the groups, the one comprising Aisha, Blessing, Memunat, Farida and Grace came up tops with their design and creation of a robot prototype able to collect and sort waste. When further developed, this will help improve the recycling

process and help enhance our environment. The winner girls were then given a 2-day tour of Schneider Electric in Lagos where they had interactive sessions with management and staff, a good number of whom were quality role models (female engineers, managers, etc.), to help boost the young ladies’ ambitions and blow the lid off any mental ceiling they might harbour. This was consonant with the statement by the company’s Marketing and Communication Manager, Vivian Mike-Eze: “At Schneider Electric, we see it as a responsibility to expose them to other women who are thriving in these areas, for them to know how limitless the possibilities are”. Great proposition! The partnership with Visiola Foundation is commendable as it delivers a world of good for the future of Nigeria’s young women. More Nigerian corporates need develop such partnerships with organisations that have the right impact skills they desire. We pray it’s sustained. Way to go!

BUSINESS DAY

Onuwa Lucky Joseph (08023314782) Editor.

Branson leads other philanthropists to launch $105M fund to eliminate Trachoma

frica is the continent most affected by Trachoma which according to the World Health Organisation is ‘responsible for the blindness or visual impairment of 1.9million people worldwide’. Its swathe of induced darkness cuts across Central and South America, Asia, Australia, the Middle East and of course Africa. And although it’s a bacterial disease which can be easily treated, blindness resulting from trachoma is irreversible. As you would imagine, the economic impact of trachoma is enormous, estimated at $2.9billion annually. It was at the Global Citizen Concert in Johannesburg on December 2, an event that celebrated the life and legacy of the great Nelson Mandela that the announcement was made by Sir Richard Branson. The concert which featured stars like Beyoncé and Ed Sheeran also had Nigerian music stars like Whizkid, Tiwa Savage and D’Banj wowing the crowd. However, Branson’s announcement via recorded video link really shined the light for many despairing folks in different parts of the world. According to Sightsavers, (a

The Late Sen. Ahmed Aruwa

group that’s working its vision of a world where no one is blind from avoidable causes), “Branson represents a collaboration of funders who are launching the Accelerate Trachoma Elimination Programme, which is led by Sightsavers and supported by the Bill & Melinda Gates

Foundation, Children’s Investment Fund Foundation (CIFF), the ELMA Foundation UK, and Virgin Unite”. Sightsavers CEO, Caroline Harper said “It is now within our grasp to be part of history and stop trachoma in its tracks”. So may it be!

Femi Otedola lends a hand for Olaotan’s legs

emi Otedola needs no introduction, really. He is not just a billionaire, he’s also regularly seen with Aliko Dangote, the richest man in Africa. Deep calls unto deep, isn’t that what the scriptures say? Femi also happens to be the Chairman of Forte Oil (formerly African Petroleum, AP), and with a redoubtable presence in corporate corridors as well as corridors of power. The other actor in this storied story is Victor Olaotan, highly regarded for his acting craftsmanship. He’s done it all, on stage as well as on screen. He’s the lead actor (as Fred Ade Williams) in Tinsel, the popular Nigerian soap opera. On screen, he is dapper, suave, articulate and the spitting image of effortless old money. But reality is quite different. So when he was involved in an accident two years ago, he managed on his own strength for a period of time to take care of things, pay the hospital bills and other allied costs. But the accident left him crippled financially, and was threatening to leave him without his legs. A few of his colleagues had pitched in, as well as other public spirited folks. But his condition was not improving.

The Winning Team being given a tour of the workshop

Just when he was close to giving up hope, Mr Otedola shows up with this grand gesture of taking care of the bill (estimated at $50,000, but likely to be higher). Richard Mofe Damijo tweeted the heartening news: “So, a few days ago, I reached out to my friend @femiotedola asking for help for my friend and brother, Victor and just this morning, Femi calls to tell me that he would take care of ALL of Victor’s bills”. “He told me that he’s already on it and that his people are talking to Victor’s wife. Is God not awesome??

I can’t even contain my joy and gratitude”. We at CSI really like the concluding part of the Instagram message: “Thank you, Femi @femiotedola you’re a man and half, and thank you to my young friend, @gbenroajibade for championing this cause”. Clearly, Otedola has a lot of money, but he still he could have looked the other way and left his long suffering colleagues to scrounge forever for the hospital bills. The prayer is that Mr Olaotan makes full recovery and comes back intact, legs and all.

BUSINESS DAY

Thursday 13 December 2018

Corporate Social Impact

Anthony Ajero launches volunteers for life (Vfl)

he things that drive a man or woman are rarely obvious. For the most part, they are layered underneath the exterior, gnawing without ceasing, at the individual’s core, setting him/her afire. Unfortunately, many go through life never getting lit. They are uncomfortable with their lack of movement in the direction of their passion. Whether seemingly successful or not, they know they have not arrived whatever may be the popular verdict on their efforts. That kind of life is what the Rev Canon Anthony Ajero is trying to dissuade humanity from leaving. A life without purpose, drifting like flotsam and jetsam, wandering with the waves wherever they go, and with nary a sense of direction. Canon Ajero took time out to expatiate on this at the dual launch on December 8, 2018 at the Nigeria Institute of International Affairs, Victoria Island, Lagos, of his book “Who be Thou?” which basically is a treatise on listening to your inner voice and doing the things you know you were always meant to do. Using himself as an example, he relived how at 51 he realized he had to stop procrastinating and to get on with an assignment he always knew he had been divinely assigned but which for all kinds of reasons he had been deferring. Did this mean no opposition? Of course, no. But there is a sense of accomplishment that comes with moving like a battering ram; swinging and swinging and never stopping hitting until the walls come down. What was even more interesting to us at Corporate Social Impact is that it was also the launch for Volunteer for Life Support Foundation (VFL), a mechanism designed for getting young people involved with something bigger than themselves. There are two critical appeals that the Foundation is spearheading: one, that we all endeavour to be of service to humanity, and two, that young people not be left to themselves but that they be guided by forerunners as they navigate life’s often treacherous terrains. The case study was made of a certain Mrs. Egbe who at 74 had retired to her village and

L-R: Abimbola Uzomah, Lecturer, Federal University of Technology, Owerri; Most Revd (rtd) Adebayo Akinde, Chairman of occasion; Rev. Canon Tony Ajero, author of the book, ‘Who Be Thou’ and his wife, Joy, during the public presentation of the Volunteers For Life initiative for Youths and the book, in Lagos on Friday, December 7, 2018

trying to live out her days in the company of her husband who used to be a produce buyer. What she quickly observed was that the village women, predominantly cassava farmers, were being cheated by buyers who employed underhand tactics including collective bargaining to rip the women off while they made thrice the profit whenever they resold in the state capital. Mrs. Egbe had either of two options: get involved in the fight, by enlisting the expertise and experience of her husband, or just enjoy her retirement while regularly bemoaning the ‘wickedness of buyers with no conscience’. If you were Mrs Egbe, what would you do? In answering the question, Tony believes the answer would depend on the moral fibre of the individual posed with this situation. And life has such situations aplenty. We are always at those junctions where going right or going left is all up to us. But the decision we reach comes from well before that time. If we were always told to stand up for right, most probable we would do right. If we were told that everyone should bear their own burdens, we would ‘waka pass’, so to speak, and this with

Alakija gifts Uniosun 250-Bed Teaching Hospital

t a time when doctors and nurses are leaving the country in droves, Mrs. Folorunsho Alakija, Vice Chairman and CEO of Famfa Oil is donating a 250-bed teaching hospital to the Osun State University, of which she is Chancellor. The donation, made on behalf of herself and her husband, Mr Modupe Alakija, who is Chairman of Famfa Oil, is in view of her ‘love for children, women and humanity in general and for the advancement of medical education’. According to her, the hospital, when completed, will consist of a world class community health unit, maternity and neo-natal Medicare, research and diagnostic laboratories, state-of-the-art operating theatres, CT Scan facilities, X-ray and Radiotherapy suites, among others. These heartfelt words were spoken at the foundation laying ceremony of the project which was well attended by past and present

Osun State government officials as well as students. Mrs. Alakija therefore seized on the opportunity to encourage the students to not relent in their pursuit until they hit their goals. ‘If you are to be relevant in your generation’, she said, you must be ready to acquire more skills and potentials and be prepared to develop such skills’. Elucidating further, she admonished them to ‘figure out your purpose and passion because passion will lead you right. Others can inspire you, but ultimately, the only thing that empowers you is what lies within you and learning how to better utilize what you have been given”. Mrs. Alakija is becoming a staple on the motivational, inspirational and leadership seminar circuit, so she delivered this quite eloquently and with aplomb. We shall endeavour to follow the progress of the project until completion. But it is laudable and worthy of emulation.

hardly a twinge of conscience. Canon Tony’s thesis is quite clear. People should be there for one another. Feel your neighbour’s pain, wear his shoes, bear her burden. Quoting from the Collins Dictionary of English, that defines Volunteerism as ‘the principle of donating time and energy for the benefit of other people in the community as a social responsibility rather than for any financial reward’, Canon Ajero is of the opinion that if we must forge ahead as a nation, ‘we need to build positive narratives amongst our youth and rebuild our communal spirit and sense of selfless service’. REWARDS OF VOLUNTEERISM However, selfless is not always selfless, at least as far as rewards for volunteerism are concerned. He goes on to list the benefits of volunteerism as: • Acquisition of first-hand life skills • Growth in spirit, mind and body • Deep sense of self confidence and fulfillment • Preference among peers at job recruitment and career development

Preparation for higher leadership • Divine and societal approval It’s in view of all of these benefits that VFL is determined to make volunteers for life of Nigerian youths. In a well laid out and properly sequenced strategy, the team plans to build a corps of volunteers in their undergraduate years who would go on to be the backbone for a Nigeria where young people think more about how they can contribute and less about how Nigeria is not treating them right. We believe that’s a good idea even though we insist that Nigeria must treat its young people right in order to get the best results from them. The idea that young Nigerians must leave with privations all their lives just means that a lot more of them will vote with their feet and leave our shores for those places where they believe they can live better. No one reaps from where they do not sow. Nigeria cannot get the best from its young people unless it deliberately invests in them. Initiatives like VFL are important because older Nigerians have an opportunity to be the Nigeria that young Nigerians do not always encounter. And with that encounter will come a life of selfless contribution that enriches humanity and especially for our country, one that cements the bonds that politicians have been having a field day tearing apart. The author is eminently qualified to write on the matter having been involved with the Boys Brigade for most of his life. He grew through the ranks till he became the Captain of the Brigade in his local church. And he’s gone at it with the kind of infectious enthusiasm that makes kids want to be like him. Today, he is a non- stipendiary priest of the Anglican Communion. That basically means he is a pastor who does not collect salary. Not something many would want to countenance especially in these tough times. But we reckon that having done it in church, he now wants to do it outside the four walls of a church setting. The hope is that VFL will be able to get the kind of support it requires from corporate organisations that buy into its vision.

Sen Mukhtar Ahmed Aruwa takes a bow

e was the man in the cowboy hat, ever flamboyant, ever colourful. But Mukhtar Aruwa was not just all cash and flash. He was also fully about spreading happiness. One way he did this and for which Kaduna people will stay forever grateful to him was his buying over the football club then known as DIC Bees and renaming it Ranchers Bees. The name was in honour of his ranching business: he had this sprawling ranch in Kaduna where he groomed purebred Italian and German horses, amongst other animals. His ownership of the club led to a resuscitation of Kaduna’s sporting fortunes, with the team becoming the predominant team in the North and producing notable national stars like Dahiru Sadi, Daniel Amokachi, Yakubu Adamu, Tajudeen Oyekanmi, etc. Aside his love for football, he was also mindful of the privations of the ordinary

man. One way he addressed this was to build overhead bridges in the Tudun Wada area of Kaduna to avert incessant cases of vehicles knocking down pedestrians on a daily basis. He had other interests, of course, the search for power usually coming after the acquisition of wealth. He joined the All People’s Party and won the seat as senator representing the Kaduna Central Senatorial Zone. This was in 1999 at the return of democracy. Four years after, he won the same seat, but this time as a candidate of the All Nigeria People’s Party (ANPP). Not to be forgotten is the fact that he was also a publisher of note at a time when Kaduna flourished with newspaper titles like the New Nigerian, Today Newspaper, The Reporter (owned by Shehu Musa Yar’Adua), etc. Aruwa’s was known as The New Democrat. His was a meaningful life well lived. May his soul rest in peace.

Thursday 13 December 2018

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FINANCIAL TIMES Credit Suisse buyback plan falls flat with investors

China: foreign asset managers eye a vast savings pot Page 48

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World Business Newspaper

Theresa May defiant in battle against Brexit critics to save job Prime minister expected to announce she will stand down before next election if she wins George Parker, Henry Mance and Laura Hughes

heresa May is facing a vote of confidence in her leadership on Wednesday evening after Eurosceptic MPs launched a coup attempt against the prime minister to try to seize control of the final stages of Brexit. Tory rebels have secured the 48 names needed to trigger a confidence vote and Graham Brady, chairman of the influential backbench 1922 committee, has announced it will take place between 6pm and 8pm, with results due by 9pm. Mrs May announced she would fight for her job, but support has been draining away from the prime minister since Monday when she abandoned a planned vote in the House of Commons on her Brexit plan. In a move intended to rally the support of prospective leadership rivals, the prime minister is expected to tell Tory MPs she will stand down as Tory leader before the next election. “This vote tonight isn’t about who leads the party into the next election,” Mrs May’s spokesman said. “It’s about whether it makes sense to change leader at this stage in Brexit negotiations.” Her spokesman declined to say if Mrs May had a departure date in mind. “She has said she will serve as long as the party wants her to,” he said. If Mrs May fails to secure 158 votes — a majority of Tory MPs —

she will be forced to stand down and a full Tory leadership contest would take place, plunging the Brexit process into even more uncertainty. But by early afternoon, 165 Conservative MPs had made public statements of support for Mrs May, according to a Financial Times tally. But the prime minister could be severely weakened if she fails to win by a significant majority. “I will contest that vote with everything that I’ve got,” she told reporters outside 10 Downing Street in the morning. “A change of leadership in the Conservative party now will put our country’s future at risk and create uncertainty when we can least afford it.” Mrs May argued that any new Tory leader would not be in place until late January at the earliest and that he or she would have no choice but to extend the Article 50 exit process to delay Brexit until after March 29 2019. “Weeks spent tearing ourselves apart will only create more division just as we should be pulling together to serve our country,” she said. Mrs May will address Tory MPs at Westminster at 5pm ahead of the vote to plead for her job and her Brexit deal in what will be seen as the most important speech of her political career. The pound reclaimed the $1.25 mark after Mrs May pledged to fight to remain in office. After a sharp fall in late trade on Tuesday — when speculation about the move against her by backbenchers grew — sterling hit a new 20-month

Eskom’s debt is draining South African growth Faced with tough choices, the government will kick the problem further down the road

Pavel Mamai

mid rising fears that the South African economy is stuck with low growth, major financial institutions along with the South African National Treasury have cut their 2018 growth forecasts for Africa’s most industrialised economy. One of numerous issues the government is facing is the financial health of Eskom, South Africa’s state-owned monopoly power utility company. The company’s semi-annual results announced on November 28 highlight just how daunting this issue is. The company’s debt has grown to nearly 15 times its Ebitda (earnings before interest, tax, depreciation and amortisation). Interest payments on this debt consume around 90 per cent of Ebitda. Debt servicing requirements (interest and debt repayment) exceed Ebitda by nearly two times, meaning that servicing existing debt requires taking on yet more debt. All capex and other cash outlays

also need to be debt-financed. Cash levels have fallen from 17bn rand ($1.2bn) at the end of September to 11bn rand now. At this burn rate, Eskom would run out of cash by the end of March, unless it manages to borrow more, further increasing its debt. Any private company with financial results such as this would inevitably end up in bankruptcy proceedings. Eskom’s auditors have reportedly requested a fresh letter of support from the National Treasury to sign off its accounts on a “going concern” basis. How did Eskom come to be in this situation? Much attention has been paid this year to various corruption scandals. Indeed, corruption in the past is responsible for some operational issues today, and is probably one of the major reasons the National Energy Regulator of South Africa was always reluctant to give Eskom the tariff increases that were required. However, the roots of Eskom’s problems run much deeper. They lie in Eskom’s parastatal nature and Continues on page 46

low of $1.2475, before bouncing up to $1.2535, up 0.4 per cent for Wednesday’s session. Sir Graham said he told Mrs May on Tuesday night that at least 48 MPs had demanded a confidence vote. He said Mrs May wanted the issue settled before she attended the EU summit in Brussels on Thursday. Cabinet ministers rushed to issue declarations of support for Mrs May on social media, with Philip Hammond, Michael Gove, Penny Mordaunt, Greg Clark, Sajid Javid and Jeremy Hunt among them. Alan Duncan, a junior minister in the Foreign Office, said of the Tory MPs who had triggered the confidence vote: “This is an act of

irresponsibility, foolishness and national vandalism.” “Any attempt to replace the prime minister in the middle of all this is utterly reckless and brainless. Anyone who has done this should be ashamed of themselves. They are not acting in the national interest.” If Mrs May lost a vote of confidence or decided to resign, it would plunge the party into a formal leadership contest; there is no clear frontrunner to replace her and any contest would be highly divisive and could take weeks to play out. In an indication of the problems still facing Mrs May even she overcomes the confidence vote, Liam Fox, UK international development

secretary, warned that the cabinet is unlikely to let her deal go to parliament for a vote if there are no further reassurances on the backstop. “It is very difficult to support the deal if we don’t get changes to the backstop — I don’t think it will get through [parliament]. I am not even sure the cabinet will agree for it to be put to the House of Commons,” Mr Fox told the BBC’s Politics Live programme. Mrs May postponed a crunch Commons vote on her deal on Monday at the last minute in the face of an impending defeat; at that moment the mood among Tory MPs towards the prime minister darkened considerably.

US considers China travel warning after Canadian ex-diplomat held Michael Kovrig detained in Beijing after Huawei CFO arrested in Vancouver Tom Mitchell and Lucy Hornby

he US is considering warning its citizens about increased risks when travelling to China, as calls grow for the release of a Canadian former diplomat detained following the arrest of a senior executive of telecoms group Huawei. Two people with knowledge of the situation said that the travel advisory was “being debated” after Michael Kovrig, an adviser to the International Crisis Group, a non-profit policy research organisation, was detained on Monday in Beijing. The move came as China turned up the heat on Canada to prevent the extradition of Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s founder. By contrast, Beijing has been publicly cordial towards the US, as it tries to reach a detente after months of trade friction. Ms Meng was arrested last month in Vancouver and released on bail on Tuesday. She is still fighting a US extradition order on charges that Huawei sold American equipment to Iran in

violation of US sanctions — a battle that could last for months. “Crisis Group has received no information about Michael since his detention and is concerned for his health and safety,” said the ICG in a statement. “We are making every effort to learn more and to secure consular access to Michael from the Chinese authorities.” It called for the “immediate release” of Mr Kovrig — a Mandarin speaker who worked on security issues in north-east Asia — who CICG said had been “detained on Monday night in Beijing by the Beijing Bureau of Chinese State Security”. It added that it would “continue to seek information on Michael’s case and wellbeing”. A spokesman for the Chinese foreign ministry spokesman said that Mr Kovrig’s employer ICG was not licensed to operate in China. “If it has not filed, then this person has already violated the Foreign NGO law as promulgated in 2016,” he said. It was not clear if Mr Kovrig had entered China on a work or tourist visa. His detention came just days after the Chinese government threatened

Canada with “serious consequences” after Ms Meng’s arrest on December 1. Beijing has been adamant that she should return to China. Mr Kovrig’s detention comes four years after China held two Canadian missionaries following the arrest of a Chinese citizen in Canada for extradition to the US on charges of stealing military secrets. “Acting on impulse is not in China’s best interest,” said James Zimmerman, a partner with Perkins Cole, a law firm in Beijing, who represented the Canadian missionaries in 2014. “But if China is bent on upping the ante for leverage, such a move will neither improve Meng Wanzhou’s legal position nor will it help Beijing in maintaining its political capital with Ottawa.” Chrystia Freeland, Canada’s foreign minister, declined to comment on any potential connection between the cases of Ms Meng and Mr Kovrig. “This is a situation where there has been no political interference at all. This has been purely a case of abiding by treaty obligations,” she said. “I appreciate the geopolitical complexity potentially radiating from all of this.”

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NATIONAL NEWS

Eskom’s debt is draining South African growth...

Saudi prince’s flagship plan beset by doubts after Khashoggi death

Continued from page 45

its use by the South African government, within its development state mindset, as a means of distributing subsidies. Because it is part of the country’s core infrastructure, it provides the government with a means of supporting household incomes via low electricity tariffs. Eskom is the country’s largest employer and pays wages to 48,000 employees, which is 20-25 per cent more than it actually needs (compared with international peers). It is also used to subsidise some of South Africa’s poorest municipalities, such as Soweto, which pay no more than 10 per cent of their electricity bills without the risk of being cut off. And because the majority of South African electricity production comes from coal fired power plants, which are owned and operated by Eskom, the price paid by the public utility for the coal it requires has significant knock-on effects across multiple industries, most notably mining. Eskom has for years served as a conduit for subsidies bound for black economic empowerment coal producers and the renewable energy sector. Performing such a significant social function comes at a cost, with completely inadequate revenues that cannot support high operating costs and capital expenditures funded by ever-increasing borrowing. This borrowing is enabled by the South African state guaranteeing more than 60 per cent of Eskom’s debt. Still, Eskom’s cost on government-guaranteed debt is 2-3 percentage points higher than the government pays on its own debt. In other words, the government would save 2-3 per cent by borrowing directly and lending on to Eskom instead of being liable for its debt. Instead, it chooses to pay for the privilege not to have Eskom’s debt included in its own debt metrics. A dubious privilege, in my view, since rating agencies largely see through this and add back Eskom’s debt when assessing the government’s overall debt levels. So what would a turnround of the largest energy producer on the African continent look like? While there are a number of options available, all seem to involve someone footing the bill. The company could increase tariffs and/or reduce its bloated payroll, in which case the public is made to take the hit. Alternatively, it could abandon its role as a conduit for government subsidies for various economic sectors, most notably coal and renewable energy. Most likely, such changes in the operating model will be necessary within the framework of a social compact in the long run. However, the more immediate focus of both Eskom and the government should be on the fact that it is doubtful any of the above will prevent the company from running out of cash in the short run. In the immediate future, there really are only two options that I see: Eskom has to partially write down its debt and/or significantly decrease interest, in which case its creditors are made to bear the brunt of the company’s turnround, or the government foots the bill. I believe that numerous hurdles to an efficient debt restructuring mean that the government will ultimately have to opt for some form of bailout.

Thursday 13 December 2018

Investors get cold feet about Mohammed bin Salman’s futuristic city project Simeon Kerr and Anjli Raval

The ‘clear pattern’ to Deutsche Bank’s mounting legal woes

Christian Sewing’s ‘new era’ hamstrung by repeated emergence of lender’s past problems Olaf Storbeck

hen Christian Sewing was appointed Deutsche Bank’s chief executive in April, his mandate was to lead Germany’s largest lender “into a new era” — but the 48-year-old increasingly looks like a prisoner of its chequered past. Since September, the Frankfurtbased bank has been rocked by legal strife in four areas, most of them linked to potential money laundering, that has helped drag the share price to an all-time low. From a legal point of view, the problems are unrelated to each other, anchored in the past and in many cases addressed internally before they attracted public attention. “However, we are not talking about isolated cases but about a multitude of issues that habitually pop up in different business areas all across the bank,” said a former member of the supervisory board. “The problem is that there’s a clear pattern.” Deutsche’s rough patch started in late September when Bafin, the German banking supervisor, publicly criticised Deutsche’s anti-moneylaundering processes. The watchdog installed an external monitor for three years to supervise improvements. This move was triggered by delays in the roll-out of new, standardised know-your-client procedures across Deutsche’s corporate and investment bank. “You reach a point where enough is enough,” said a person familiar

with Bafin’s thinking, while a senior Deutsche employee conceded that “we have not progressed as swiftly as initially targeted”. For Jan Bayer, a Frankfurt-based lawyer and long-term critic of Deutsche Bank, Bafin’s harsh decision “indicates that it has lost confidence in management’s willingness or ability to resolve these control deficiencies on its own”. Deutsche is also facing questions from regulators on its role in the world’s biggest money laundering scandal around Danske Bank Estonia. From 2007 to 2015, the German lender acted as correspondent bank and processed more than €160bn in potentially suspicious payments. “We terminated our relationship in 2015 after observing payment patterns which raised flags in our surveillance system,” said a person familiar with the matter, adding that, as a correspondent bank, Deutsche neither had the access to Danske’s client data nor the responsibility for it. “As far as we can tell, we acted appropriately in respect of our surveillance and diligence responsibilities,” the person said, adding that the bank was not the target of an investigation and not aware “of any instances in which a correspondent bank has been held responsible for the know-yourcustomer failings of an originating bank”. A London-based analyst said that he had “sympathy for this view”, adding that the bigger question probably was the viability of the correspondent banking model, in which global banks

like Deutsche provide international payment services such as the clearing of US dollar transactions for smaller regional lenders. “It generates little revenues but, once in a while, you will be hit by horrible headlines.” Deutsche insists that correspondent banking is one of its core businesses but in 2016 started to cut back its reach, ditching 40 per cent of its customers and leaving Estonia and Latvia. A two-day raid by more than 170 police officers last month caught the senior management by surprise as much as investors. The investigation is linked to the Panama Papers, a trove of documents on the workings of the offshore tax haven leaked in 2016. Prosecutors suspect that Deutsche’s wealth management unit helped clients to transfer funds linked to illegal activities into offshore tax havens without flagging potentially suspicious activity to law enforcement authorities. The investigation focuses on a former subsidiary of Deutsche dubbed Regula, which is based in the British Virgin Islands. The division was earmarked for sale by Deutsche in March 2016 and hived off to Butterfield, a Bermuda-based lender, two years later. The divestment was part of a deeprunning shake-up of Deutsche’s wealth management that was kicked off after Mr Sewing started to oversee the division in 2015. In that process, Deutsche stopped doing business with about 5,000 potentially questionable cross-border clients, losing around €15bn in assets under management.

US inflation cools in November helped by falling energy Prices excluding energy edge higher, adding to quandary facing Federal Reserve Pan Kwan Yuk

S inflation rose at its slowest pace in nine months in November as fuel and energy costs fell, in the latest sign of easing price pressures following a surge this summer. Headline consumer price growth slowed to 2.2 per cent from a year earlier, figures from the US labour department showed. That is down from the 2.5 per cent recorded in October and in line with economists’ forecasts. Month-on-month, the CPI was flat, also matching expectations. Lower energy costs — thanks to a 22 per cent slump in global crude prices — helped keep a lid on price

gains last month. The energy price index fell 2.2 per cent month-onmonth. Within this, gasoline index was down by 4.2 per cent in November compared to the prior month. Core inflation, which strips out volatile food and energy prices and is of greater interest to the Fed, edged up to 2.2 per cent yearon-year in November from 2.1 per cent the previous month. While the US central bank is still widely expected to raise interest rates for a fourth time this year when it meets later this month, the outlook for further rate rises next year has become murkier amid trade worries, market turmoil and dovish comments from Federal Reserve chair Jay Powell

last month. Fed funds futures are pricing in a 34 per cent chance that the central bank does not touch interest rates again next year. The latest CPI data, coming after a tepid wholesale inflation reading yesterday and last week’s mixed jobs report, could further bolster the argument for policymakers to take a more cautious stance. “The fears earlier this year about rising inflation haven’t become reality,” said Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management. “The underlying trend has remained relatively unchanged . . . There’s little evidence that the Fed will have to deviate from its take-it-slow approach to hiking.”

hen a business delegation met Crown Prince Mohammed bin Salman recently, they were surprised to hear a candid admission about Neom, his $500bn mega plan to turn virgin Saudi shoreline into a futuristic business hub. “No one will invest [in the project] for years,” the de facto Saudi ruler said, according to a colleague of those in the meeting. His comments were a recognition that the crisis triggered by the killing of Jamal Khashoggi threatens to undermine his bold plans to modernise the conservative kingdom with the backing of foreign capital and expertise. Neom — the largest and most ambitious project announced by Prince Mohammed — was always considered high risk, a start-up city founded on cutting-edge technologies from robotics to artificial intelligence. But it is now being pushed on to the backburner as the crisis caused by Khashoggi’s murder jeopardises the kingdom’s ability to attract the financing and high-tech skills needed for it and other developments. “Neom is in doubt for sure,” said one private sector consultant. “Certainly, our [government] clients are not outward facing at the moment.” Since the Saudi journalist’s killing, advisers to Neom including the architect Norman Foster have distanced themselves from the project, underscoring the political and reputational risk attached to being associated with the crown prince. Prince Mohammed promised the businessmen he met that the oil-dependent kingdom would invest more heavily in the traditional economy to compensate — a humbling about face for a ruler who had put weaning Saudi Arabia off crude at the heart of his reforms. “Saudi Arabia is going back to what has been tried and tested,” said Steffen Hertog, a Gulf expert at the London School of Economics. “They are going back to meat and potatoes.” Neom and the government did not respond to requests for comment. The economy was already struggling before Khashoggi’s killing in October sparked the kingdom’s biggest diplomatic crisis with the west since the September 2001 attacks in the US. But the resulting scrutiny of Prince Mohammed has forced him to turn to hobbled local businesses as overseas appetite evaporates and he seeks to shore up domestic support. In recent weeks, corporate leaders have been brought into private sessions with the crown prince to relay the challenges they face as they struggle with sluggish economic growth and depressed sentiment. “The big [Saudi] families are hurting, and they are telling the crown prince how,” said one banker briefed on the meetings. Such conversations are testament to how the fortunes of Prince Mohammed have changed.

Thursday 13 December 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Credit Suisse buyback plan falls flat with investors Swiss bank pledges to buy back as much as SFr3bn of its shares over two years Stephen Morris and Ralph Atkins

redit Suisse’s plans to buy back as much as SFr3bn of shares and modestly increase its dividend received a lukewarm reception from analysts and investors, who were pushing for more capital to be returned after a sharp fall in the stock. The Swiss bank said it expected to repurchase SFr1bn ($1bn) in each of the next two years and would attempt to buy back a further SFr1bn if market conditions allow, while increasing the dividend by 5 per cent a year. Executives also reiterated their aspiration to make at least a 10 per cent return on tangible equity in 2019, which was at the low end of its expected profitability range, at an investor event in London on Wednesday. “We hoped for more. Overall we see the targets as unambitious,” said Citigroup analyst Andrew Coombs, who had forecast at least SFr5bn in buybacks through 2020 and a bigger rise to the “very low” dividend. Chief executive Tidjane Thiam has transformed the 162-year-old lender since joining in July 2015, slashing the volatile and capital-intensive trading operations to expand the higher returning and more predictable wealth management and private banking units, particularly in Asia. The CEO has received little credit from investors thus far with shares down about a quarter in the past six months — the fifth-worst performance among major European banks and a larger decline than struggling rivals Deutsche Bank and UniCredit. After the announcement on Wednesday morning, the shares rose 1.8 per cent. Mr Thiam, the 56-year-old former head of UK-listed insurer Prudential, had been counting on Wednesday’s event to draw a line under his turbulent first three years in charge and rally support from investors for the next phase of his strategy. He and other executives moved to

head off disappointment with their modest capital return plans, emphasising they were erring on the side of caution in the face of heightened geopolitical tensions and a gloomier outlook for the global economy, especially in Asia, the region where it is growing fastest. “We have clearly chosen to have a low but growing dividend, rather than something spectacular,” Mr Thiam said at the event in London. He stressed the 10 percentreturntargetwasachievablewithout any additional revenue growth, and would improve if the bank earned more. His chief adviser Adam Gishen added the bank would not “hoard surplus capital” and that if an “Armageddon scenario” in global markets meant there was no way to profitably reinvest earnings, more would be returned to shareholders. MrThiamalsosaidfundingcostswere falling after the bank retired expensive debt raised from Saudi Arabia and Qatar at the peak of the financial crisis and completedthewind-downofitsbadbank ahead of schedule. Analysts were disappointed the struggling trading operations weren’t addressedinmoredetail,aftertheydrovethe investmentbanktoanunexpectedpre-tax loss of SFr96m in the third quarter when fixed-income revenues plunged 20 per cent. That shock overshadowed an otherwise improving set of results in which overall pre-tax profit surged 70 per cent. Executives said the fourth quarter had once again been “tricky” as client volume slowed and admitted the Asian trading unit may end up making a loss in 2018. “It’s very tough out there — clearly, we have seen a very significant correction in markets, but especially in APAC,” Mr Gishen said on a call with reporters. “That is reflected in the revenue . . . [which is] roughly between 8 and 10 per cent down.” Credit Suisse said it expected to report overall pre-tax income of between SFr3.2bn and SFr3.4bn this year — up from SFr1.8bn in 2017. The forecast demonstrates some green shoots for Mr Thiam’s restructuring, which has come at a steep cost.

Opec forecasts fall in demand for cartel’s crude next year Rising US shale output to weigh on global demand for Opec’s oil Anjli Raval

pec estimates the world will need 31.4m barrels a day of the cartel’s crude next year, 2.1m b/d less than demand from 2017, as production from US shale fields continues to swell. The figure underscores the dilemma facing big producer countries which have ramped up output in recent months, but seen oil prices fall by 30 per cent since October. Not only have Saudi Arabia, Russia and others kept production high, US shale oil companies have also been increasing their output - creating a situation somewhat resembling the 2014 downturn. But this time Opec and its allies are not willing to let the market balance itself because of the economic pain faced by their countries, even if other nations such as the US can benefit at their expense. Opec and producers outside of the cartel led by Russia agreed last

week to curb production in 2019 by 1.2m b/d to balance the market, in defiance of US President Donald Trump. He has called on producers to maintain output at elevated levels, to compensate for losses from Iran, after the reimposition of sanctions, and to keep prices low. If oil prices remain in check, the group - whose production hit almost 33m b/d in November - will have to confront swelling US supplies. NonOpec production, led by the US, is estimated to grow by 2.16m b/d in 2019, an upward revision of 60,000 b/d from July. “The forecast for the next year is subject to considerable uncertainties, particularly with regard to continued improvements in the productivity of US shale,” said Opec. In 2019, world oil demand is anticipated to rise by 1.29m b/d - which is lower than the 1.45m b/d it forecast in July - taking total consumption to 100.1m b/d.

Norwegian oil group DNO starts clock on Faroe takeover bid Myles McCormick

orwegian oil producer DNO has started the clock on its bid to take over Faroe Petroleum, giving shareholders three weeks to accept its offer of 152p per share. DNO on Wednesday published an offer document confirming the price it offered shareholders last month and setting 2 January as its first closing date, as it pushes forward with a hostile takeover attempt of its rival North Sea producer. “This full and fair offer provides Faroe shareholders a rare opportunity to exit their relatively illiquid Aim-listed positions at an attractive price in a volatile and uncertain market for oil and equities,” said Bijan MossavarRahmani, executive chairman of DNO. The offer values Faroe at £610m on a fully diluted basis — a level which Faroe’s board has said undervalues the

company. DNO already owns a 28.2 per cent stake in Faroe — or 26.2 per cent on a fully diluted basis. If the offer lapses, DNO cannot make a new offer for another 12 months and said “there can be no assurances” as to its long-term ambitions. DNO accused Faroe of failing to deliver consistent shareholder returns since its listing 15 years ago. It also criticised a recent asset swap with Equinor, which saw Faroe trade a number of development stage assets for producing assets, saying the company had “jettisoned a crown jewel asset for mature production”. Faroe said DNO’s criticisms were “unfounded” and “purely a tactic to distract from the simple fact that its offer substantially undervalues the company.” It said DNO was trying to exploit the recent fall in the price of oil to acquire it “on the cheap” and urged

shareholders to take no action. “DNO’s highly opportunistic offer is not only at a substantial discount to the value of the company but also at a substantial discount to comparable portfolio transactions and a substantial discount to the average of all UK takeovers in the last 10 years,” said John Bentley, non-executive chairman of Faroe. “Faroe shareholders should receive an appropriate premium which is not currently reflected in DNO’s offer.” “Ultimately I think this deal is going to get done. I think there’s a possibility of a slight premium on 152p but I think the [more substantial] premium hopes of October and November are gone now,” said Al Stanton, an analyst at RBC. “If DNO cant get deal approval they’ll sit there with their stake and frustrate management and push for seats on the board and probably come back in 12 months time,” he added.

SoftBank’s Vision Fund helps Indonesia’s Tokopedia raise $1.1bn Ecommerce site valued at ‘more than $7bn’ after funding round led by Japanese group Louise Lucas and Nian Liu

oftBank’s Vision Fund has led a $1.1bn funding round for Indonesian ecommerce site Tokopedia in a move that underscores the Japanese group’s growing presence in Asia’s tech scene. The deal comes just months after SoftBank took a leading role in the $3bn raised by ByteDance, valuing the Chinese news feed and video company at $75bn. The $100bn Vision Fund, which is backed by Saudi Arabia’s sovereign wealth fund, is also in the process of setting up an investment team in China. The moves are seen as a boost of confidence in Asia’s tech sector, especially after multiple Chinese tech companies, such as Xiaomi and

Meituan, have disappointed investors following their initial public offerings earlier this year. Investment in start-ups in China, and increasingly in south-east Asia, has long been dominated by Chinese tech titans Alibaba and Tencent. SoftBank has a 29 per cent stake in Alibaba, and the two have co-invested in a number of companies, including China’s ridesharing company Didi Chuxing and Paytm, the Indian ecommerce group. In the case of Tokopedia, the Vision Fund joined Alibaba to lead the $1.1bn funding round, which reportedly valued the company at more than $7bn. Like Alibaba, Tokopedia has expanded beyond ecommerce to offer other services such as online payments.

“We see our mission — to make it easy to do business anywhere — reflected in Tokopedia’s journey,” said Kenny Ho, head of investment in south-east Asia and India at Alibaba. ByteDance has also rapidly expanded in recent months. It acquired lip-syncing app Musical.ly for $800m last year, and has taken steps into messaging, a move that pits it against Tencent. Unlike other Chinese start-ups, it has taken no funding from Tencent or Alibaba to date. “For someone like [ByteDance, taking funds from SoftBank] makes sense because it keeps them relatively neutral while raising money at a high valuation,” said Ben Harburg, managing partner of venture capital firm MSA Capital.

Vatebra up-skills 100 youths on blockchain at tech meet-up

atebra Limited has provided a platform for over 100 tech enthusiasts to learn the basics of high-level blockchain programming at the second edition of its Codify Tech Meet-up held in Lagos recently. The tech meet-up is aimed at helping young coders collaborate, network and code; while highlighting the increasing importance of coding as the building block of today and tomorrow’s technological advancements. Blockchain technology is an avenue for untrusted parties to agree on a common digital history in this era when digital assets and transactions are easily faked or duplicated. It achieves this through an intermediary mutually trusted by

all parties. At this year’s Vatebra tech meet-up tagged ‘the Anatomy of Code’, participants included university and high school graduates, young coders as well at tech enthusiasts. Reputed speakers with solid technological backgrounds shared their insights on a variety of topics, among them Evans Okosodo, Sai Kumar of Belfrics, Mike Aigbe and Nnene Adaora. “For us, Codify 2.0 was conceived to bridge the technology skill gap we have observed in Nigeria,” said Mike Aigbe, deputy managing director, Vatebra Limited. “We foresee that with initiatives like this, we will not only help broaden the horizons of our budding technology experts, but also rank them

among the best in the industry in the months and years to come.” Participants were also treated to related cutting-edge topics such as test-driven developments of android applications, relevance of research design in the development of quality software and live development of a sample membership portal using c#, among others. The Vatebra Innovation Hub, like the Vatebra Academy which offers tech-incubation and co-sharing opportunities, has been strategically positioned to revolutionise the information technology industry by training and providing competent professionals with relevant knowledge in the tech ecosystem.

BUSINESS DAY

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Thursday 13 December 2018

ANALYSIS How Verizon’s $9bn media bet became virtually worthless Ill-fated acquisitions highlight failure of telecoms company moves into content Anna Nicolaou and James Fontanella-Khan

China: foreign asset managers eye a vast savings pot Beijing is opening the door to overseas investment managers but it is unlikely to let the world’s biggest firms dominate its market Gabriel Wildau and Robin Wigglesworth

hen Chinese markets are in a slump, propaganda authorities often instruct official media to buck up investor sentiment. So it was in August, when the influential Securities Times trumpeted that international investors were “bargain hunting” in China’s stock market. The front page story was a backhand compliment that reflected the respect many Chinese investors pay foreign fund managers. This air of expertise and prestige is perhaps foreign fund managers’ greatest asset as they seek to win a slice of what is forecast to become the world’s second-largest investment market — behind only the US — within two years. With the global investment management industry suffering a near existential bout of anxiety from the rise of cheap passive funds, some now see China as their possible balm. At a time when Washington and Beijing appear locked in a trade war, the potential opening of the Chinese investment market to American and other investment managers is one of the few areas where the world’s two biggest economies are building closer ties. China’s rapidly expanding middle class is prodigious at saving. The meagre social safety net makes it imperative to stash money for old age, education or healthcare. As a result, the value of overall bank deposits, investments or insurance products has doubled over the past five years to $19tn at the end of 2017, and will grow to $23.8tn at the end of next year, says Morgan Stanley. To the frustration of Wall Street, the Chinese government has long restricted foreign access to this huge pool of money, with foreign groups limited to minority stakes in local mutual fund managers. Meanwhile, capital controls prevented both retail and institutional investors’ ability to place money with overseas asset managers. However, after several small steps, Beijing announced in November 2017 that foreign groups could own majority stakes in domestic mutual fund companies — just as US threats about imposing tariffs on Chinese exports were heating up. China also promised to allow full foreign ownership within three years. Given the potential of managing mutual funds for Chinese investors, this has triggered a frisson of excitement across the asset management industry. “China has only newly opened up, and only a tiny fraction of its potential has been utilised,” says Bob Prince, co-chief investment officer at Bridgewater, a hedge fund that recently launched an onshore fund in China. “If global investors aren’t thinking about it today, then they’ll quickly be behind the curve.” UBS forecasts that annual fees for running Chinese mutual funds will expand fivefold to $42bn by 2025 — an enticing prospect for invest-

ment groups facing intensifying fee pressures and rising costs elsewhere. A $42bn fee pot amounts to nearly two-thirds of the total 2017 revenues of listed US asset managers — or more than Fidelity and BlackRock’s total revenues combined. In his annual letter to investors this year, BlackRock chief executive Larry Fink identified China as one of the asset manager’s biggest long-term prospects. “There’s no safety net, so they are probably saving more than any other country in the world,” says Mr Fink. According to other asset management executives, many industry heavyweights are now scrambling to come up with a more ambitious China strategy. However, they stress that cracking China will be a long, arduous process. There is also the risk it could end up a sinkhole for foreign groups that pour in time and resources but have little to show for their troubles. That danger is aggravated by China’s ongoing trade dispute with the US. Beijing, after all, is opening the door to foreigners for its own reasons: it wants to tame its wild markets and help develop domestic asset management. But the government is unlikely to countenance foreign firms dominating the market. The history of foreign business in China is littered with companies whose high expectations were never close to being realised. “Non-Chinese participants in a lot of industries thought that the Chinese domestic market would be like the Klondike [gold rush] for them, only to see domestic Chinese companies dominate,” says Jean Raby, chief executive of Natixis Investment Managers. This summer, UBS began trimming more than 100 jobs from its asset management arm, which has $800bn under management, including 30 roles in the US — historically the industry’s biggest market. But in a sign of the times, the Swiss bank’s Chinese business was untouched. The US remains the biggest investment market, accounting for about half of the $50tn or so of global assets under management, according to the international arm of the Investment Company Institute, a trade body. But the fees fund managers can charge have come under pressure as investors have shifted hundreds of billions of dollars into cheap index-tracking funds. At the same time, the cost of necessary investments in compliance, security and new technology has kept climbing. In this environment, the potential for tapping China’s vast savings is causing palpable excitement. René Buehlmann, head of Asia-Pacific operations at UBS Asset Management, declined to comment on the job losses but says China is a priority. “There is an enormous domestic market developing,” he says. “Progress has been remarkable, given the size of the market.” Oliver Wyman estimates that assets under management at Chinese

fund companies will grow 10 per cent a year, from about $7.4tn today to about $14tn by 2023, when they will account for 15 per cent of the global asset management industry. At the same time, the structure of the domestic sector is likely to change radically. Currently, about two-thirds of the industry consists of low-margin money market funds — Yu’E Bao, the online fund run by Alibaba’s finance affiliate Ant Financial, is the world’s largest money fund — and wealth management products distributed by local banks and trust companies. These wealth products account for well over half of the $19tn under management in fund companies, banks, insurers and trust companies. But they are risky structured-finance products masquerading as high-yield deposits. Investors get a quasi-guaranteed return from the bank, which in turn uses the money to make risky, off-the-books loans to circumvent capital adequacy requirements. But last November regulators unveiled new rules that — once fully implemented by the end of 2020 — will ban these quasi-guarantees amid concerns over the expectation that state-owned banks would always shield investors from losses. Instead, wealth management products will have to be structured like mutual funds that are marked to market daily based on changes in the value of their underlying assets, thus ending the illusion of assured profits. The withdrawal of guaranteed returns on commercial banks’ wealth management products will reduce their allure, allowing fund managers to compete with lenders on a more equal footing. Oliver Wyman therefore expects “traditional” asset management products to account for half of the $14tn domestic investment industry by 2023. “The wealth management products are a controlled mess,” says one asset management executive. “But the authorities know what is going on, it’s not a secret, and the regulators want to wean people off them.” Though years of complaints about barriers to entry helped prompt the recent measures, Beijing also wants foreign investment groups to help tame its retail-dominated, momentum-driven financial markets and nurture a more mature institutional asset management industry. In January 2017, Fidelity International became the first wholly foreign-owned group to register with China’s statecontrolled industry association as a “private fund manager”, allowing Fidelity to begin selling funds to qualified investors. Jackson Lee, Fidelity’s China country head, says the company’s commitment to China— especially its 500-strong back-office operation in Dalian — probably contributed to the regulator’s choice of Fidelity as the first foreign group to win a private fund licence. Yet, unlike many competitors, Fidelity decided against a mutual fund joint venture.

hen Verizon bought AOL in 2015 and a year later Yahoo, many observers questioned why America’s largest phone company wouldwanttobuytwointernetdinosaurs. Two years later those sceptics have been proven correct, as the move turned out to be a $9bn mistake. Verizon has now written off $4.6bn for its ill-timed foray into digital media. In an SEC filing on Tuesday, Verizon admitted its flagship media brand, Oath— which AOL pioneer Tim Armstrong had predicted would become “the best consumer media company” — is nearly worthless. Lowell McAdam, the Verizon chief executive who had overseen these big bets, left at the end of July this year. Two years ago Mr Armstrong had sold Mr McAdam on the idea of combining Yahoo and AOL, two stalwarts of the 1990s, into a contemporary online media empire. Betting that Yahoo and AOL, which had been among the biggest victims of the blistering pace of digital change, could together stop

snatched customers away from Verizon and AT&T with cheap phone plans, was quick to claim that he had “been telling Verizon for years” the deal was a mistake. “In fact, I told them the day they bought those 90s relics,” he crowed on Twitter. Verizon was advised by LionTree and Guggenheim when it acquired AOL and Yahoo. A rival New York-based investment banker said Verizon’s advisers should have stopped the telecoms company from buying the two assets. However, another adviser said it was unfair to criticise the bankers as Verizon failed to execute on a deal that on paper could have helped create new revenue streams for Verizon. Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said bankers could not stop a determined chief executive from doing a poor deal. “The days of bankers being powerful enough to dissuade a CEO from doing what the CEO wants to do are a historical footnote,” said Mr Gordon. Verizon executives believed that

Google’s rise was always going to be “challenging”, said Brian Wieser, analyst at Pivotal Research. “To think otherwise you would have to be woefully optimistic,” he said. Mr Armstrong’s timing could not have been worse. At that red-hot moment, digital media companies such as BuzzFeed were attracting billions in investments at lofty valuations. A boom in online advertising had led many to herald a new era for technology and media companies, drawing the eye of traditional giants such as Disney and Verizon. That enthusiasm was soon to cool. By late 2017 BuzzFeed, the darling of online media, was missing its revenue targets. Pain has only spread across the sector as the steady dominance of Google and Facebook makes life difficult for companies that rely on advertising. The results have been clear: lay-offs and slashed valuations for brands including Mic, Vox, Vice and Mashable, and the outright shutdown of sites such as Rookie. To offset the stalled advertising sales, BuzzFeed is selling cookware to Walmart and opening a toy store in New York. “The peak was two years ago,” said Ken Doctor, analyst at Newsonomics. “Verizon showed poor judgment in buying Yahoo when it did. If Mic was a whimper, the Oath announcement is the bang.” The admission of failure on Tuesday prompted finger-pointing as to who had produced a deal that many thought was doomed from the start. John Legere, the outspoken chief executive of T-Mobile, which has

the advertising world was desperate for a third player to counter the heft of Google and Facebook. They also believed that the company could become that third force, arguing that Verizon could use the data it had on more than 100m Americans to better target ads at consumers. But Mr Armstrong was never able to execute on these ambitions, and Verizon’s management remained focused on the much larger subscription phone business over the Oath business, which has made up only about 5 per cent of Verizon’s sales. Google and Facebook’s grip on the advertising market has remained strong. In 2018, the two companies accounted for 57.7 per cent of all digital ad spending in the US, compared with 57.2 per cent in 2016, according to eMarketer. In that same timeframe, Oath’s share of online advertising grew from 1.7 per cent to just 3.3 per cent. Along with Oath, former chief executive Lowell McAdam made other attempts at pushing into Hollywood and the media business. In 2015 he unveiled go90, a mobile video platform that aimed to become Verizon’s own YouTube. After a splashy launch hosted by Kanye West, Verizon financed short films for the service, such as Kobe Bryant’s Dear Basketball, which won an Oscar. But go90 never caught on, amid a sea of online videos available on YouTube, Facebook, Instagram, Snapchat and Netflix. Mr McAdam eventually admitted that go90 had been “overhyped”, and new chief executive Hans Vestberg this year scrapped the business.

Thursday 13 December 2018

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BUSINESS DAY

GARDEN CITY BUSINESS DIGEST PHHCIMA unveils 10-point thrust as Nabil Saleh mounts the throne ...To build cluster park ...Job creation is new focus...Former presidents rally ...Gov Wike waves hand of support IGNATIUS CHUKWU

nxiety grew high when a Lebanonborn but naturalised Nigerian, Nabil Saleh, a Nigerian chief, was about to mount the throne as chief of the organized private sector in the Garden City and 61st president of the famous Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA). Many were said to be jittery, whether it was going to be a step forward or backward for the business family especially after a medical doctor, former commissioner and a maritime investor, Emi Membre-Otaji, had presided over the place for some years. Worst were fears whether the main caucus of PHCCIMA would support him and if the Chambers would be shunned by the Rivers State Government led by Gov Nyesom Wike. These fears seemed to dissolve on the evening of November 29, 2018, when Saleh stood at the entrance of the L.A Kings in radiant attire to welcome an endless stream of VIPs and guests the topmost being Gov Wike’s direct representative, the deputy governor herself, Ipalibo Harry Banigo.

The perfect organization that seems to be Saleh’s brand identity showed from the red carpet to the last chair in the hall, and the synchrony that went with it. Deputy Governor, Ipalibo Harry Banigo (PhD) The biggest reassurances seemed to ooze from the state government as the deputy governor chose her words carefully, each word conveying both surface and deep meanings. “We congratulate Chief Nabil Saleh and Gov Wike was pleased to see him emerge as president. He is a friend and the government will help him to fulfill his blueprint. Your three years will be great; so work on your dreams. Lets see more jobs due to PHCCIMA activities. We look forward to working with you.” On what the administration is doing to bring back prosperity in the Port Harcourt business circle, she said: “Its our duty to promote growth of industries and businesses. Recently, Rivers State was recorded as destination of highest FDIs (Foreign Direct Investments). This is because Governor Nyesom Wike is always trying to make the state safe and secure for businesses to thrive.” She went on: “He has closed up multiple taxes and

Nabil Saleh paying taxes is now easier. Land certificates issue has been dealt with; so, no more delays. The Federal Allocation is dwindling but Rivers State continues to do projects; roads, night life restored, recreational life is back, cultural centre is back, schools and

hospitals are top class. Now, national and international conferences now hold in Port Harcourt every now and then.” Saleh speaks, confirms When it was time for him to unveil his agenda, Saleh in his characteristic self went straight to the point. He struck the

heart of his plan being to build a cluster park for businesses in the Garden City. He equally unveiled a 10-point agenda aimed at boosting the ability of companies and businesses in Port Harcourt to play deeper in a post-recession economy. Saleh is the CEO of two Port Harcourt-based companies; M-Saleh and Golden Sands. He said the new leadership would mount seminars to groom member-companies and make them adaptable to new trends in business and entrepreneurship. They would also begin membership drive and get fleeing members back. The new leadership plans to begin aggressive networking with both corporate organizations and government institutions in order to create awareness and opportunities for members. It would also pursue corporate relationship with federal, state and national bodies. The new team is also to build a permanent trade fair ground which has been on the card for years. Unveiling the new focus, Saleh reminded the business community that PHCCIMA was established in 1957 to articulate business interest for the transforming region. He said PHCCIMA is the second largest chamber of commerce

in Nigeria, developing business leaders through sharing of information. He promised that PHCCIMA would continue to act on behalf of businesses in the coming months and years. The business mogul mentioned accountability and transparency as key to the Chamber’s operations and promised to embark on upgrading PHCCIMA’s secretariat which has continued to move from location to location in the Garden City. Saleh’s first deputy is a grounded administrator (one time permanent secretary), industrialist and agric entrepreneur with large farms that employ expatriates. He is said to command huge respect in the governor’s circle. The second deputy president is a highly organised, globally travelled competent scholar, and business manager, Chinyere Nwoga (PhD). Past presidents solidarity This must be why past presidents seemed to rally round the new executive council and insisted on turning PHCCIMA around especially on foreign trade missions. On the night in question, they seemed to speak through Hyde Ochai who dispelled doubts and made it clear that the election that brought in the new team was flawless.

Collapsed 7-storey building in PH and the evil called civil service

Port Harcourt by Boat With

IGNATIUS CHUKWU

ll attention has been focused on the human misery and mangled bones crushed in the crashed 7-storey building in GRA 2 area of Port Harcourt. No single mention is being made of other tragedies of this tragedy involving over 100 lives. For starters, has anybody cared about the financing of the building and what happens to the investment and the investor? It was whispered the other day that the owner of the building has other buildings in the Garden City, one of them a popular hotel in Trans-Amadi by Odili Road. It was mentioned that he took huge loans to finance this crashed hotel project. It is obvious that he mortgaged the other buildings

and hotel to build this one in the widest sense of elasticity of money. Now, since the state government has announced seizure of the property (land), it means certificate of occupancy value has crashed to zero right in the hands of the financing bank. Also, the other houses and hotel which he must have mortgaged to raise funds would simply be claimed by the bank, and it may not even be enough. So, financial crisis must be brewing somewhere. The man is said to have been arrested as ordered by the state governor. By this alone, a prolonged lawsuit is about to start, though nobody has been prosecuted in PH ever since houses began to crash in the Peter Odili days. It is likely this one would go same way. People get mangled in these crashed buildings but the investors escape with financial bruises only, though this one seems to be a very bad case. Now to the main matter! Civil servants often want to go on strike especially for minimum wage, and they easily secure public support. The common man widely and wildly joins the strike and holler

everyone to join. Even when the masses help to secure the desired minimum wage, do the workers give minimum services to the masses? At one popular state government hospital in PH, you must sort at every desk to get attention, outside the official charges. At the court registry, ‘change of name’ affidavits of N500 each usually cost over N1000 to the same workers that were given minimum wage. Try drivers’ license, try international passport, try anything. You help the civil servants to fight the government, but the workers help the Govt to fight the masses. Head or tell the

masses lose. In the case of the collapsed building, hints indicate that the officials betrayed the masses by ensuring that no single regulation was obeyed. A probe panel would have to confirm Gov Wike’s assertion that the area was not allowed any house taller than four storey buildings. So, why did the officials who were to protect this rule sell out? The governor said no government official implicated in this will escape and the commissioner of urban has already resigned, so, why did the experts saddled with the task of ensuring that builders obeyed rules allow this investor

to start building seven storeys? The panel may eventually hear how the approval jumped from four to seven floors. So, why did a public servant change this? The panel may also hear that the file was missing at a point; so why did they hide it only for the approval to jump from four to seven floors? It was gathered that when the commissioner could not understand what happened in these matters, he stepped aside so the other layers would be exposed. Every man there would now go and answer for himself. Are these not the same civil servants the masses supported to win fat salaries and allow-

ances? So, how have the masses benefited one bit from these cruel civil servants? So, the reward for all the support for all the minimum and maximum wages is death from wrong storey buildings and lack of protection? The trend is; Those to stop flood will fail, those to stop killers will fail, those to stop diseases will fail, those to stop election rigging will fail, those to stop smuggling at the borders will fail, everyone will fail, yet they all of them get minimum wage. So, who is protecting the masses? Would it be better to crap the civil service and outsource all tasks to contractors and hold them responsible and save the N9Bn that Rivers State pays out every month to civil servants and the over N4 trillion that the FG pays out yearly to people who still allow all dangers to hit the masses? The day the Fruit Garden Market was burnt to ashes three months ago, the Fire Service refused to respond; why? They were on strike; but when they eventually called off the strike days later, they could not call off the fire because everything was gone. Yet, they collected their minimum and maximum salaries. Tragedy!

BUSINESS DAY

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Thursday 13 December 2018

Investing in Rivers State Nigeria’s Accounting eggheads pick PH as rock of a new era • Offer southern secretariat to PH Ignatius Chukwu & Innocent Eteng

ort Harcourt has been chosen as the new centre of the bedrock for a new push in Accounting education in Nigeria. To make this happen, an unprecedented high number of professors of Accounting and Fellows of the profession ensured physical presence in Port Harcourt last week where big decisions and change of guards took place. The highlight of the new push is the decision to choose Port Harcourt as the city to host the permanent secretariat of the Nigerian Accounting Association (NAA), which is a strong affiliate of te International Association of Accounting Education and Research (IAAER). NAA announced the offer to the Rivers State University of Education (now Ignatius Ajuru University of Education, IAUE), to host the permanent secretariat, seeing that the former minister of state for education, Nyesom Wike, whom they called a lover of education, is on seat as governor. Indications were that this would go down well with Gov Wike, especially as soon as the elections clear out. The NAA however bemoaned the non-availability of the subject in 56 Nigerian universities, saying the 45 professors of Accounting in 101 Nigerian universities have been over-worked. The fellow and outgoing president of the Nigerian Accounting Association, Suleiman Aruwa of the Nasarawa State University in Keffi, who pointed this out in a valedictory speech in Port Harcourt, Rivers State, on Monday, December 3, 2018, said there have been only 25 inaugural lectures in Accounting by the 45 professors. He said: “NAA is encouraging more scholarship and sponsorship of

professional chairs”. He announced that one of Nigeria’s young but enterprising Accounting professors, Clifford Ofurum of the University of Port Harcourt, has been confirmed by the board of the International Association for Accounting Education and Research (IAAER) as Vice President from 2018. He said Ofurum’s candidature attracted overwhelming support from all the professors of Accounting in Nigeria. He said his tenure ensured that NAA is now a force in IAAER. In his welcome remarks, Ofurum, also the chairman of the local organizing committee (LOC), said Port Harcourt prepared a lot to play host to the NAA members from across Nigeria and that the VC of IUOE was very supportive. In his own remarks, the VC, Ndimele, said the young university was happy to be associated with the NAA and the hosting, saying the AGM

would definitely rob off on the young university. In his major intervention, the past president of NAA, Prof Mainama, urged the Accounting lecturers and all academics to make sacrifice their watchword, saying those who stayed back to work as teachers with little salaries when others went into banking and oil sectors must be appreciated for the sacrifice. He mentioned confidence, humility, learning, service, hard work, and performance as key goals every scholar must aim at. The keynote lecture was on National Corporate Governance Code delivered by the Executive Secretary/ CEO of the Financial Reporting Council of Nigeria (FRCN), Daniel Asapokhai, who was represented by the director of technical, Iheanyi Anyahara. SDGs: accounting teachers redefine research approach

NAA has resolved that the old approach to accounting research is vastly below par in an era where the world’s focus is to achieve the Sustainable Development Goals (SDGs). It was to this end that NAA themed its 2018 annual conference as: “Accounting Education, Research and Sustainable Development.” This year was hosted by IAUOE. According to Aruwa, for accounting to meet the target of the (17) SDGs ,government spending, for example, should be subjected to potential multiplier effects like jobs creation factor, potentials to create wealth and lift citizens from poverty. “The greatest challenges accounting has world wide is how we can make accounting relevant to report issues, not of yesterday, but of today and of tomorrow. “It is not enough (for instance) to say we have spent one billion (naira) to achieve the Sustainable Development Goals, but it is good enough to say how much employment has been created, how much wealth has been generated, how many people have been lifted out of poverty. Accounting should be able to respond to all these things along with the figures that we churn out for development.” New Corporate Code unveiled Meanwhile, the Financial Reporting Council of Nigeria (FRC) has asked the accounting teachers to promote and carry out studies on the Nigerian Code of Corporate Governance (NCCG). This plea was conveyed at the conference by the Executive Secretary and CEO of FRC, Daniel Asapokhai, during his paper presentation on the NCCG. Recall that the National Code was suspended in 2016. The new one is the outcome of the review of the code by a 15-member committee this year. The new code tries to institutionalise corporate governance and

encourage utmost professional practices, especially among public and private companies which, though might be regulated, but whose documents or files do not end on the tables of either the Federal Inland Revenue Service or the Corporate Affairs Commission. Asapokhai, who was represented by Iheanyi Anyahara, who is a deputy director - Strategy, Organization, Research and Policy - at the FRC, said through the accounting lecturers, knowledge of the code can travel wide and research on it promoted. “The Code of Corporate Governance is meant for entities in public, private sector. The association (NAA), they disseminate information and knowledge. So we brought it (the Code) to them to be able to be abreast of latest development so that in their research and training, they would be able to bring same to their students and also create opportunity for a lot of wide research in that area. At the end, the council (FRC) would be better having a robust corporate governance in Nigeria,“ he said. He pleaded with the teachers to be patient with the FRC that earlier failed to unveil the reviewed code and make it available. He said once the executive arm of government gives a new date, the code would be unveiled and uploaded for all to access. Ofurum emerges new helmsman At the conference, the association got a new president as outgoing Aruwa handed over to Clifford Obiyo Ofurum. Ofurum is a professor at the University of Port Harcourt. He promised to build on the achievements of Aruwa, especially in working towards having the association chartered and helping members leverage on the opportunities and benefits provided by the IAAER, the global body NAA is a member of.

Do phone repairers actually repair phone?

How angry 16-year-old PH boy enlisted with an ICT academy to prove it can be done Ignatius Chukwu

ost telephone handset (phone) owners hardly bother to go repair their handsets because it is believed that phones are never repaired. So, when 16-year-old Isaac Mathew suffered same fate in the hands of a callous phone technician who rather created new issues, he swore against phone repairs. Now, little Isaac is about to open shop to repair phones. What went right? Thanks for the turn around must go to a non-profit organization, Keeping It Real (KIR), who just graduated the 2018 batch of skills acquisition scheme for 50 youths, mostly persons with disability. This is how Isaac’s story changed. He told BusinessDay’s ‘Investing in

Rivers State’ on the sideline of the graduation event at the Rivers ICT Centre opposite Pleasure Park on Aba Road, thus: “Yes, those who repair phones end up damaging them, rather. I lot of people simply buy new phones instead of seeking to repair them because of sad experience all over. Most persons hardly believe that phones can be repaired.” His own experience seems sad enough. “I once took a phone to one of these phone repairers for a mouse problem but it came back worse; casing broken, injuries here and there. Also, most of my friends and relations have the same experience and discuss these things and ended up believing that phone repairers are rather phone destroyers around here.” He went on: “Mine was a Blackberry but they spoilt it for me. Instead of the guy to tell me he can’t

do it, he went ahead to destroy it. It was one Lawrence in this KIR programme that whipped up my interest in phone repairs. I found an opportunity to solve a problem and to see why most others in this city do not show that phones can be repaired.” After training at the Rivers ICT

Centre, what could the kid have found out? “My training at Keep It Real (KIR) Foundation has revealed why these persons do not repair anything well. When they got the opportunity to learn, they paid more attention to getting the allowances instead of the intelligence. When they learn shabbily, they go and open a shop and begin to dabble into what they hardly knew about.” So, what difference is Isaac bringing to Port Harcourt phone community? “I paid a lot of attention and there are things I can do. I can now start the business. I can fix a mouthpiece problem, earpiece problem, booting issues, screen issue, etc. What I don’t know, I know how to go to Youtube and learn it. I can do many things”. Master Mathew hails from Inni local council area in Akwa Ibom State. He however lives in Port Har-

court with his parents (dad is into carpentry and mum is a trader). He did his secondary school at National High School, Amadi-ama and wrote his certificate exams at New Covenant Secondary School. He is waiting to write the 2019 JAMB (Joint Admission and Matriculation Board) exams, but while waiting, his passion for phones and gadgets took him to the Government ICT Centre. He said: “I got to know about the programme through a friend and the passion to learn new things and be idle got over me. It is not good to be idle in the Niger Delta. So, I registered in the programme”, the third child of his parents stated. He said it is not advisable for any youth in the Niger Delta to be idle. That is the new mindset of the 50 o anybody that passes through KIR run by a top professional and activist, the executive director, Bitebo Gogo.

BUSINESS DAY

Thursday 13 December 2018

Live @ The Exchanges Stock investors book N28bn loss as market fails to sustain gain

Standard Chartered helps to preserve the environment

…on continuing tussle between bulls, bears

s part of Standard Chartered Bank Nigeria Limited’s yearly Employee Volunteering (EV) activities in the community, the bank held a beach cleanup activity recently. Coordinated by Standard Chartered Bank property team, the activity was done in collaboration with the Lekki Urban Forest and Animal Sanctuary Initiative (LUFASI) an environment advocacy organization led by Nigeria’s renowned environmentalist, Desmond Majekodunmi. The event held at the Kids Beach Club in Lekki with 20 children in the community supporting

Stories by Iheanyi Nwachukwu

nvestors in the Nigerian equities market recorded loss of about N28billion at the sound of trading gong on Wednesday December 12 as the market failed to sustain preceding day’s gains. In what seems like a tussle between the bulls and the bears, the market closed in the red despite that 24 stocks advanced in price as against 20 losers. The Nigerian Stock Exchange (NSE) All Share Index (ASI) declined by 0.25percent to 30,642.35 points from preceding trading day’s high of 30,718.72 points. The stock market year-to-date (ytd) returns stood further negative at -19.88 percent. The value of listed stocks on the NSE decreased to N11.192trillion, from preceding day high of N11.220trillion, representing N28billion decline. “As the domestic bourse hovers in an oversold re-

gion, we reiterate our expectations of a Santa Claus rally this month as yearend portfolio repositioning and bargain hunting provide support. Yet, the possibility of an unprecedented rally could be capped by the overhang of jitters in the polity”, said Lagosbased research analysts at United Capital Plc in their December 10 note. At the Nigerian Bourse on Wednesday, the share price of Chemical and Allied Products Plc advanced most from by N3.15 or 10percent, from N31.5 to N34.65. Forte Oil Plc followed after rising from N20 to N21.95, up N1.95 or 9.75percent. GTBank Plc stock price increased from N34.4 to N35, adding 60kobo or 1.74percent. Dangote Cement Plc stock price increased from N185.5 to N186, adding 50kobo or 0.27percent. Flour Mills Nigeria Plc stock price rallied from N21 to N21.4, up by 40 or 1.90percent. Mobil Oil Nigeria Plc stock price declined from N160 to N151.2, losing N8.8 or 5.50percent. Nigerian

AXA Mansard announces board changes

XA Mansard Insurance Plc has notified the Nigerian Stock Exchange (NSE), esteemed shareholders, stakeholders and the general public of the resignation of Frederic Flejou, a Non-Executive from the Board of the Company with effect from Novem-

ber 30, 2018. The resignation has also been unanimously approved by the Board. The Board and Management of AXA Mansard Insurance Plc commended Frederic Flejou for his leadership and overall contributions to the growth of the Company during the period he served on the Board.

Zenith Bank announces retirement of Baba Tela from its board

enith Bank Plc has announced the retirement of Baba Tela (Independent Non-Executive

Director) from the board of the bank with effect from October 2, 2018. This follows the expiration of his tenure of office, having served the Group for almost twelve (12) years. The retirement has been approved by the Board of Directors at its meeting of November 15, 2018, according to Zenith Bank in a notice released at the Nigerian Stock Exchange (NSE)

Breweries Plc declined by N2.5 or 3.18percent, from N78.5 to N76. Conoil Plc lost N2.25, from N22.5 to N20.25, down by 10percent. Dangote Sugar Refinery Plc stock price lost 75kobo or 5.38percent, from N13.95 to N13.2; while ETI declined from N15.5 to N15, down 50kobo or 3.23percent. In 3,141 deals, stock dealers exchanged 246,134,051 units valued at N3.694billion. Zenith Bank Plc, FBN Holdings Plc, Access Bank Plc, Diamond Bank Plc, and GTBank Plc were actively traded stocks on the NSE.

the team. Speaking at the event, Anne Rinu, Head of Property, Standard Chartered Bank Nigeria Limited said. “If we are to make the world a healthier and safer place to live in, we must remember that we all have a role to play; whether through advocacy, actively driving behavioural change towards preserving the environment or leading by example through publicprivate partnerships or collaborations with industry experts as done today in. By reducing our own impact on the environment, we continue to protect our planet for the benefit of our communities. My colleagues and I

are thankful for the opportunity to give back to the community through our employee volunteering initiative.’’ Employee volunteering (EV) is a core component of Standard Chartered Bank’s community investment strategy. The Bank encourages employees to utilise their skills, knowledge and expertise to deliver development programmes around education, health, environment protection and financial literacy. Employees are given 3 fully paid leave days to volunteer to support causes that reiterate the Bank’s commitment to supporting communities where it operates around the globe.

BUSINESS DAY

C002D5556

Thursday 13 December 2018

Live @ the Stock exchange Prices for Securities Traded as of Wednesday 12 December 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 215,513.39 7.45 -0.67 98 21,013,713 UNITED BANK FOR AFRICA PLC 256,495.66 7.50 -3.85 142 15,083,815 ZENITH BANK PLC 723,689.18 23.05 -0.43 247 55,340,501 487 91,438,029 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 260,240.87 7.25 -3.33 296 54,014,612 296 54,014,612 783 145,452,641 BUILDING MATERIALS DANGOTE CEMENT PLC 3,169,534.38 186.00 0.27 48 753,669 LAFARGE AFRICA PLC. 108,417.85 12.50 2.40 80 757,582 128 1,511,251 128 1,511,251 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 352,419.45 598.90 - 42 57,036 42 57,036 42 57,036 953 147,020,928 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 69,635.43 73.00 - 38 330,360 PRESCO PLC 62,150.00 62.15 - 27 122,869 65 453,229 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,410.00 0.47 - 5 293,786 5 293,786 70 747,015 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 661.82 0.25 -7.41 7 347,124 JOHN HOLT PLC. 155.66 0.40 - 6 21,125 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 46,745.19 1.15 0.88 53 6,799,518 U A C N PLC. 28,812.97 10.00 1.01 49 2,606,397 115 9,774,164 115 9,774,164 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 27,720.00 21.00 - 8 52,750 ROADS NIG PLC. 165.00 6.60 - 0 0 8 52,750 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,845.63 1.48 - 3 9,660 3 9,660 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 21,612.98 8.10 - 0 0 0 0 11 62,410 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,623.32 1.74 9.43 7 187,001 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 159,897.95 73.00 - 21 25,203 INTERNATIONAL BREWERIES PLC. 253,148.13 29.45 - 10 15,696 NIGERIAN BREW. PLC. 607,764.56 76.00 -3.18 172 6,137,772 210 6,365,672 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 31,750.00 6.35 -0.79 39 626,173 DANGOTE SUGAR REFINERY PLC 158,400.00 13.20 -5.38 37 174,824 FLOUR MILLS NIG. PLC. 87,748.12 21.40 1.90 56 879,336 HONEYWELL FLOUR MILL PLC 8,564.61 1.08 -0.92 23 918,530 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 855.36 4.80 - 3 4,908 NASCON ALLIED INDUSTRIES PLC 47,424.95 17.90 - 20 98,401 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 178 2,702,172 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,688.11 9.95 - 32 245,996 NESTLE NIGERIA PLC. 1,177,094.53 1,485.00 - 38 62,404 70 308,400 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 2 21,153 VITAFOAM NIG PLC. 3,585.75 3.44 - 14 90,451 16 111,604 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 45,660.49 11.50 - 37 184,267 UNILEVER NIGERIA PLC. 223,480.71 38.90 - 43 480,695 80 664,962 554 10,152,810 BANKING DIAMOND BANK PLC 21,075.95 0.91 -4.21 116 18,454,382 ECOBANK TRANSNATIONAL INCORPORATED 275,243.27 15.00 -3.23 57 2,658,374 FIDELITY BANK PLC 56,211.11 1.94 2.11 58 1,911,729 GUARANTY TRUST BANK PLC. 1,030,091.27 35.00 1.74 217 17,747,550 JAIZ BANK PLC 13,258.91 0.45 2.27 4 231,500 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 53,262.27 1.85 2.78 33 2,807,055 UNION BANK NIG.PLC. 157,252.07 5.40 0.93 68 1,275,143 UNITY BANK PLC 8,065.64 0.69 - 1 3,500 WEMA BANK PLC. 22,758.93 0.59 3.51 29 1,017,657 583 46,106,890 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,781.84 0.69 6.15 24 2,083,700 AXAMANSARD INSURANCE PLC 18,900.00 1.80 -10.00 6 954,008 CONSOLIDATED HALLMARK INSURANCE PLC 2,660.00 0.38 - 0 0 CONTINENTAL REINSURANCE PLC 18,152.30 1.75 -2.78 9 615,800 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 3 5,140 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,535.00 0.25 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 - 12 784,000 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 2 38,320 LINKAGE ASSURANCE PLC 4,800.00 0.60 -1.64 2 110,100 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 - 3 55,000 NEM INSURANCE PLC 12,409.18 2.35 4.44 19 465,285 NIGER INSURANCE PLC 1,547.90 0.20 - 3 41,343 PRESTIGE ASSURANCE PLC 2,529.80 0.47 9.30 18 714,711 REGENCY ASSURANCE PLC 1,333.75 0.20 -4.76 4 550,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 2 1,000 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 3,333 VERITAS KAPITAL ASSURANCE PLC 3,189.33 0.23 - 1 90,000 WAPIC INSURANCE PLC 5,353.10 0.40 -2.44 29 1,571,269 138 8,083,009 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,315.62 1.45 - 8 16,146

8 16,146 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,452.00 1.06 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,440.00 3.72 0.81 53 475,485 CUSTODIAN INVESTMENT PLC 29,997.51 5.10 - 7 25,989 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 30,694.20 1.55 3.33 84 6,218,826 NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 4 727,442 STANBIC IBTC HOLDINGS PLC 471,065.44 46.00 - 13 89,947 UNITED CAPITAL PLC 17,040.00 2.84 -0.35 55 615,601 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 216 8,153,290 945 62,359,335 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 1,809 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 888.28 0.25 4.17 4 170,275 5 172,084 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,350.00 4.90 - 12 12,903 GLAXO SMITHKLINE CONSUMER NIG. PLC. 17,340.21 14.50 - 22 76,754 MAY & BAKER NIGERIA PLC. 2,401.00 2.45 2.08 24 349,211 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 984.11 0.57 - 6 91,400 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 -1.32 1 947,190 65 1,477,458 70 1,649,542 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 1 1,532 TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 1 1,257 2 2,789 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 -9.09 2 100,100 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 2 100,100 4 102,889 BUILDING MATERIALS BERGER PAINTS PLC 1,883.85 6.50 - 7 14,685 CAP PLC 24,255.00 34.65 10.00 32 171,025 CEMENT CO. OF NORTH.NIG. PLC 20,106.84 16.00 - 22 313,813 FIRST ALUMINIUM NIGERIA PLC 633.11 0.30 - 0 0 MEYER PLC. 313.43 0.59 - 2 1,105 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 1 50 64 500,678 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,469.80 1.97 - 7 25,855 7 25,855 PACKAGING/CONTAINERS BETA GLASS PLC. 34,148.09 68.30 - 5 24,873 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 24,873 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 76 551,406 CHEMICALS 1,752.39 4.21 - 4 11,329 B.O.C. GASES PLC. 4 11,329 METALS 1,803.64 8.20 - 0 0 ALUMINIUM EXTRUSION IND. PLC. 0 0 MINING SERVICES 852.39 0.20 - 2 58,950 MULTIVERSE MINING AND EXPLORATION PLC 2 58,950 PAPER/FOREST PRODUCTS 50.60 0.23 - 0 0 THOMAS WYATT NIG. PLC. 0 0 6 70,279 ENERGY EQUIPMENT AND SERVICES 1,440.42 0.23 9.52 31 2,911,254 JAPAUL OIL & MARITIME SERVICES PLC 31 2,911,254 INTEGRATED OIL AND GAS SERVICES 62,157.06 5.00 1.01 38 481,026 OANDO PLC 38 481,026 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 54,522.00 151.20 -5.50 60 269,657 11 PLC 14,052.53 20.25 -10.00 17 216,348 CONOIL PLC 5,933.86 4.55 8.33 16 7,385,195 ETERNA PLC. 28,589.46 21.95 9.75 45 286,974 FORTE OIL PLC. 7,833.01 25.70 - 6 5,319 MRS OIL NIGERIA PLC. 67,225.32 198.00 - 19 9,893 TOTAL NIGERIA PLC. 163 8,173,386 232 11,565,666 ADVERTISING 2,219.52 0.50 - 0 0 AFROMEDIA PLC 0 0 AIRLINES 18,818.75 1.93 - 1 150 MEDVIEW AIRLINE PLC 1 150 AUTOMOBILE/AUTO PART RETAILERS 447.02 0.38 - 0 0 R T BRISCOE PLC. 0 0 COURIER/FREIGHT/DELIVERY 2,593.79 4.40 - 4 12,386 RED STAR EXPRESS PLC 300.06 0.64 - 2 10,000 TRANS-NATIONWIDE EXPRESS PLC. 6 22,386 HOSPITALITY 674.44 0.21 - 0 0 TANTALIZERS PLC 0 0 HOTELS/LODGING 4,801.22 3.10 - 0 0 CAPITAL HOTEL PLC 3,887.35 1.87 - 3 1,100 IKEJA HOTEL PLC 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 46,362.46 6.10 - 2 410 TRANSCORP HOTELS PLC 5 1,510 MEDIA/ENTERTAINMENT 5,280.00 0.44 - 0 0 DAAR COMMUNICATIONS PLC 0 0 PRINTING/PUBLISHING 302.40 0.50 - 3 1,150 ACADEMY PRESS PLC. 972.03 1.26 - 3 33,752 LEARN AFRICA PLC 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. 914.59 2.12 - 4 19,962

Thursday 13 December 2018

BUSINESS DAY

C002D5556

Thursday 13 December 2018

Despite dumping party, Ladoja remains my leader, father - Lanlehin Akinremi Feyisipo, Ibadan

ubernatorial candidate of the African Democratic Congress (ADC), in the 2019 general elections in Oyo State, Olufemi Lanlehin has said that former governor Rashidi Ladoja remains his leader, father and someone whom he owed in high esteem despite dumping the ADC for Zenith Labour Party. “Former Governor Ladoja today remains my leader, he remains my father and leader and a person I have a lot of respect for. We were together in the NADECO. He was in the Senate while I was in the House of Representatives representing Ikeja Federal Constituency. But for one thing or the other, he is no more in ADC”. Ladoja officially announced his defection from African Democratic Congress (ADC), to Zenith Labour Party on Thursday last week. Ladoja who instructed his loyalists to dump the ADC and join Zenith Labour Party said he thinks the ADC could not be able to win

L-R: Rev. Fr. Atta Barkindo, director, Kukah Centre; Gen. Abdulsalami Abubakar, former head of state and chairman, National Peace Committee; Atiku Abubakar, presidential candidate of the People’s Democratic Party (PDP) and former vice president and Prince Uche Secondus, national chairman of PDP, at the signing of the 2019 Elections Peace Accord at the Kukah Centre in Abuja, Wednesday.

the gubernatorial election in 2019. “The fact that most of the decision makers in ADC ‘were invisible’ made him to leave ADC and join Zenith Labour Party,” he added.

Saraki urges voters’ vigilance as group canvasses support for Atiku CHUKA UROKO

igerian electorate have been told to vote and ensure that they guard against their votes to ensure that no person or group of persons tampers with the votes which is the power they have in their hands to make change in both their lives and in the polity. The Senate President, Bukola Saraki, who gave this advice, emphasized that there was no better time in Nigeria for the electorate to vote and protect their votes than now. Saraki spoke at the unveiling of a grassroots football tournament tagged 2018 Atiku Traders’ Cup being promoted by drum support for the PDP presidential candidate. The Atiku Traders’ Cup was unveiled in Lagos at the weekend. The Senate President who was represented at the event by Omaha Nnachi, described the Unit2Unit Initiative as a very good grassroots idea, noting that traders were great catalysts that could not be ignored in the nation’s economy. He urged the traders to use the power of their votes to vote massively for PDP at the upcoming 2019 elections at all levels. “We acknowledge the importance of traders in the economy, and the contribution you have made to the growth of the economy. The message we have for traders is that they should go and cast their vote on Election Day. Don’t stay in

your house and give excuses why you could not vote. “We are imploring you to come out en masse to vote and protect your vote. The biggest challenge we have in this country is the ability to protect our vote. It is obvious we know that we are going to win, but the next challenge we have is protecting our votes,” he said. Similarly, the PDP governorship candidate in Lagos, Jimi Agbaje, expressed happiness with the Unit2Unit Initiative’s grassroots approach, using traders and soccer platform to make a political statement. He urged the traders to vote against the ruling party in Lagos to protect their businesses, noting that his campaign is about freedom from bondage for Lagosians. Agbaje who stood in for PDP national chairman, Uche Secondus, at the event said, “no one overlooks the power of traders and market people. With your number, you can change things. For us in Lagos, our campaign is about winning Lagos back to the path of democracy. It is about freedom from bondage and getting Lagos back for Lagosians. I urge you traders to go cast your votes and ensure it counts on the election date”. Obukome Ibru, chairperson, 2018 Atiku Traders Cup Planning Committee and one of the Unit2Unit project drivers, has said that the group is committed to Youth empowerment as a way of building a greater future for Nigeria. This, she said, is similar to Atiku’s plan.

Addressing journalists in Ibadan, the state capital, Lanlehin said that despite the fact that Ladoja has left the ADC, he was confident that with the support of other political

bigwigs, the ADC remains the party to beat in the elections. “We have the likes of other political bigwigs in the state who are in our party. They are going to lead our

campaign. One of them is a former secretary to the state government, Michael Koleoso, another former SSG, Olayiwola Olakojo and another former SSG, Busari Adebisi”. He declared that the struggle to unseat the ruling All Progressives Congress (ADC), and defeat its candidate, Adebayo Adelabu in the next general elections by the ADC in the state is certain. While addressing journalists, Lanlehin, who represented Oyo South District in the National Assembly between 2011 and 2015, said it was certain that Ajimobi’s tenure ends on May 29, 2019 and anyone who wants to continue with his “legacy” will not be accepted by the people to the state. “The struggle to unseat this government is certain. That is the government that must be sent out. And by the grace of God, it will be achieved. “The government of Ajimobi ends on 29th May 2019, and anyone who wants to continue with his legacy will not be accepted by the people of the state. Like I said, all the projects are contracted.

Lagos ‘19: Group promises Sanwo-Olu one million votes

campaign group, ‘I want Sanwo-Olu Campaign Organisation’ has promised the governorship candidate of the All Progressives Congress (APC), Babajide Olusola Sanwo-Olu nothing less than one million votes in the coming election, disclosing that, “with our numerical strength across the state and beyond, we have the capacity to mobilise that volume of votes for the APC candidate.” The above promise is contained in a statement signed by their Director of Publicity, Adewale Oriade, where the organisation hinged its support for the APC standard bearer on his landmark achievement as Commissioner for Establishment and Training in the administration of Babatunde Fashola, enthusing that, “we have confidence that he

would build on that experience and step it up to take Lagos State to the next level that would be able to favourably compete with other Mega Cities of the world.” The statement further said that Sanwo-Olu’s tutelage under Fashola that took the baton of performance from the APC National Leader, Asiwaju Bola Tinubu would not deviate from the foundation laid by Tinubu and actualised by Fashola, expressing confidence that Lagos is back to another safe hand after Fashola. While urging the People’s Democratic Party (PDP) and other political parties to wake up from their dreams of wanting to occupy the Alausa Government House next year, the organisation warned them to keep off insisting that, “there is no vacancy for any other party in

that house beside the APC’s candidate, Babajide Olusola Sanwo-Olu.” According to the statement, “APC will run over other parties in 2019 election to usher in the new pair of tested and trusted SanwoOlu and his running mate, Femi Hamzat to build on the foundation laid by Asiwaju Bola Ahmed Tinubu and actualised by his worthy successor, Babatunde Raji Fashola (SAN).” The group further postulated that no Nigerian, either in Lagos or anywhere in the country would give his vote to the PDP because they know the atrocities the party committed during its16 years’ misrule during the period they drained the nation’s economy, boasting that, “as of today, APC is the only viable platform on which people can win elections.”

2019: Why we refused to adopt Atiku - ADP, KOWA Iniobong Iwok

s the 2019 elections approach, the Action Democratic Party (ADP) and the KOWA Party have said they refused to adopt former vice president and presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar, as the party’s presidential candidate because it believes Atiku does not have the solution to salvage the country out of its current problems, while the PDP was partly responsible for the nation’s woes. Last week, no fewer than 40 political parties in Nigeria adopted Atiku as their consensus candidate in next

year’s presidential election. The parties under the Coalition of United Political parties (CUPP) took the decision following a closed door meeting at the Yar’Adua Centre Abuja. Spokesman of the group, Ikenga Ugochinyere, had said the group decided to adopt Atiku because of his national acceptability, financial capacity, spread of his political party, leadership capacity, other qualities listed by the group includes; international acceptability, experience, capacity to rebuild the economy, secure the country and unite all Nigerians, among other factors. But speaking in separate interviews with BusinessDay, Wednesday, leaders of the two parties disso-

ciate themselves from the adoption of the PDP candidate, stressing that the decision was taken by faceless individuals who were fighting for their stomach. Lagos State chairman of the ADP and member of the National Executive Committee (NEC) of the party, Adewale Adebowale, said the party could not adopt Atiku because its belief that it was time the country was rescued from the grip of recycled politicians who had held the country captive for years, stressing that the ADP was the only alternative in the 2019 general election. “We were not part of that adoption; those that did that were fighting for themselves.

Thursday 13 December 2018

C002D5556

BUSINESS DAY

Why Buhari, Atiku’s job promises are unrealistic Christopher Akor

espite the massive shedding of jobs in the economy over the last three years, where a record nine million people lost their jobs – and despite the doubling of the unemployment figure from 8.9 percent in the second quarter of 2015 to 18.8 percent Q3 2017, the main challengers for the presidency, Muhammadu Buhari and Atiku Abubakar, have continued, like in the past, to make bogus promises of creating millions of jobs in their manifestoes and policy documents without going into specifics of exactly how those jobs are going to be provided and by whom. In the Buhari’s APC abridged manifesto entitled ‘Next Level: We are all going higher’, the president promised to scale up job creation by 19.5 million in the next four years. A breakdown of the promised jobs includes: employment of additional 1 million N-Power graduates, skill up 10 million Nigerians under a voucher system in partnership with the private sector, 1 million additional jobs through the Anchor Borrowers Scheme, 1.5 million jobs along dairy, beef, hide & skin, blood meal, crops, 5 million jobs through agriculture mechanisation policy with tractors and processors, 700, 000 jobs in the tech and creative sector through provision of $500 million innovation fund and the training of youth for outsourcing market in technology, services and entertainment, and another 300, 000 jobs through up scaling the school feeding programme. But the document is notoriously silent on the specific details of how the jobs are to be created. This new manifesto is a perfect replica of the 2015 manifesto where the president also promised to “make our economy one of the fastest growing emerging economies in the world with a real GDP growth averaging at

Buhari

least 10-12 percent annually”, and to create three million jobs annually, or as another policy document of the APC avers “to embark on vocational training, entrepreneurial and skills acquisition scheme for graduates along with the creation of Small Business Loan Guarantee Scheme to create at least 5 million new jobs by 2019”. The manifesto then was silent on specifics and strategies. However, since coming to power, the economy has not grown above 2.5 percent. Indeed, Nigerian witnessed its first recession in 25 years under the administration and even after exiting recession, has not grown beyond 1.7 percent, far below the population growth rate of 2.6 percent, which is a key factor in the endemic spread of poverty in the country. Indeed, some months ago, the Brookings Institution declared Nigeria the poverty capital of the world with a record 87 million people living in extreme poverty and another 8,000 people sliding into extreme poverty on a daily basis. Regardless, the government has been stubbornly trumpeting its own facts: that since coming to

Atiku

power in 2015, it has successfully lifted 10.073 million Nigerians out of poverty to prosperity (according to minister of budget and national planning Udoma Udo Udoma) and that it has created up to seven million jobs (according to Chris Ngige, minister of labour and productivity) with many of those jobs domiciled in the rice production sector where the presidency claimed the nation is almost becoming self-sufficient in its production. However, the United States Department of Agriculture busted the government’s bubble when it released figures showing that rather than reducing, Nigeria’s rice import has increased and is projected to jump next year to 3.4 million metric tons, making the country world’s second biggest rice importer after China. On his part, Atiku promised to “Target the creation of up to 3 million self-and wage-paying employment opportunities in the private sector annually, across all the economic sectors, including agriculture, manufacturing, MSMEs, ICT and Sports and Entertainment.” He also promised to create “oppor-

tunities for large corporates as well as for small farm holders and microenterprises to nurture entrepreneurs and create jobs.” Unlike Buhari, though, Abubakar got some fundamental principles right by promising to first stimulate the growth of the economy by firmly committing to promote a “private sector-driven, competitive and open economy supported by efficiently run public institutions.” Only this can unlock the economy and enhance its capacity to provide opportunities for the economically active population to participate in the economy through wage or self-employment. It is also heartening that he has committed to the religiously pursue the active participation of the private sector in the economy through public private partnerships since government does not have the needed resources to provide infrastructure, and only the private sector holds the key to providing the millions of jobs needed to absorb the over 35 million unemployed and under-employed Nigerians and also absorb the over two million Nigerians entering the job market annually.

Having said that, and although the policy document lists the steps the aspirant will take to bring this about, the steps are desperately short of clear-cut, workable plans and innovative strategies on how to unlock these jobs across the various sectors of the economy. For example, in his plan on ‘what we will do’, he talks about skills acquisition, creation of incubation centres, clusters and industrial hubs and using a four-pathway agenda to job creation. The plans says nothing about the current jobs various sectors create, the untapped job-creation potential of the sectors and specific plans on how to open up new sectors or expand existing ones and give numbers to the jobs that could be created from each of those sectors. In this, Buhari’s plan does better than Atiku’s. Besides, the plans of the frontrunners for the top job are so nebulous and difficult to pin down and track since they are mostly heavy on broad policies and not specific and detailed plans on how these jobs would be created. Like we have seen in the past, the government could easily claim to have fulfilled its promise by making some policy announcements or creating some agencies to implement the policies regardless of the number of real jobs that are created through those policies. “It is difficult to see the innovation, freshness or what is spectacular of the Atiku’s plan to create 3 million jobs annually,” says Franklyn Ngwu, a senior lecturer in Strategy, Finance and Risk Management at the Lagos Business School and member, Expert Network, World Economic Forum, in an article in BusinessDay. There is need for clarification in certain critical areas that are central to the success or failure of the plan, the don concluded. If Nigeria’s current experience is anything to go by, they need to quiz the frontline presidential candidates for specificity on their job creation plans.

Lagosians hungry for freedom as guber campaign gathers momentum ODINAKA ANUDU

he yearnings of the people of Lagos for freedom was reaffirmed last weekend when the venue of ‘Experience 13’ celebration organised by the House on the Rock Metropolitan Church in Lagos erupted in frenzy when Jimi Agbaje, the People’s Democratic Party (PDP) candidate for the 2019 gubernatorial election in Lagos State was introduced to the crowd at the event. The pharmacist turned politician had, at his campaign launch last week, reiterated that his mission in Alausa is to liberate the state and bring true freedom and democracy to the people. He maintained that after 20 years, Lagos yearns for freedom from god-

fatherism, dilapidated schools, hopelessness, poverty and terrible traffic. He said that where a state is under the control of one man can not augur well for democracy and charged Lagosians to use the instrumentality of the ballot to free themselves. Agbaje insisted that as a megacity, Lagos must rightly be compared with others around the world. He added that sadly, the comparisons shows Lagos has been and remains one of the worst cities to live in the world as it is presently ranked 138 of 140 global cities. “Twelve years after promising and commencing the construction of the light rail system in Lagos, the project remains uncompleted. The example of the Addis Ababa Light Rail is instructive of what diligent governance can deliver. They commenced

construction of the Addis Ababa Light Rail in 2011 – half-a-decade after Lagos,” he said. He disclosed that over the past two decades, the government of Lagos, managed by the same core of people, has collected nearly N5.0trn or $26bn in revenues and spent approximately N6.2trn or $35bn. “An important question to ask is whether the outcomes generated by this level of expenditure have sustainably improved our state.” The PDP candidate also promised to harness the entrepreneurial capacity of Lagosians to ensure that the economy of the state grows rapidly and competitively to ensure sustainable businesses are built to create and support the employment. Without this, the further descent of

Lagos into one huge urban slum will continue, he noted. “We must rebuild the industrial capacity that in recent years has been lost to our neighbouring states. Improving the quality of life of our citizens will remain unattained if their access, irrespective of their socio-economic status, to adequate healthcare continues to be unmet,” he said. The Universal Basic Health coverage, he said, will be run through a well- structured and financed health insurance scheme. This is a key priority for a PDP Administration, under his leadership, in Lagos, he stated. On waste management, Agbaje maintained that it remains a matter of great shame that after twenty years of governance, the ruling party and its various re-incarnations are still

unable to provide and implement a framework that ensures the continuous cleanliness of our state. He said failure of the state, despite huge expense, to discharge a responsibility as basic as waste management “belittles us at the same time as it endangers our collective health.” Agbaje charged that Lagos State must work for all her citizens – as a place where they can live, thrive and have a future. “This campaign is about a new future for Lagos built by the entire community of Lagosians. I am clear about the key imperatives towards a brighter future for Lagos and the role of government therein. The government must serve the safety and security of residents and visitors alike as they pursue their legitimate ambitions,” he noted.

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Thursday 13 December 2018

Cross River guber primary: ‘Etta is trying to use the back door with illegalities’ MIKE ABANG, Calabar

he Director-General of Usani campaign organisation, Ekpenyong Cobham has said that the National Vice Chairman South-South, Hillard Etta was trying to use the back door to place a seal on the illegality he allegedly perpetrated during the primaries. Ekpenyong, who was reacting to a statement by the National Vice Chairman South-South, Ntufam Hillard Etta, published by Daily Trust of Monday, December 10, 2018, that the Minister of Niger Delta should stop parading himself as governorship candidate of the All Progressives Congress (APC) in Cross River State. He said it was a known fact that the Constitution of Nigeria was superior to every other law in the country and guarantees the rights of every Nigerian to seek redress when

Atiku Abubakar, presidential candidate of the People’s Democratic Party (PDP) and former vice president, interacting with women at his Town Hall meeting with Nigerian women at the Chida Hotel on Wednesday, in Abuja.

his or her rights were impeded. “It is a known fact that Etta and his co-travelers are in contempt of subsisting court orders upon which they flagrantly went ahead to conduct the so-called primaries which produced their default candidates. “As we speak, we are in court to seek redress as constitutionally empowered, but Etta and NWC, National Working Committee members have tried to enthrone despotism in the party against all constitutional provisions which guarantee our rights,” he said. “It is a well-known fact that even the President himself has come out to affirm the rights of party faithful to seek redress where ever their rights are abused,” he further said. The DG said that Etta lacked the authority and power to threaten, insult and undermine the Minister of Niger Delta Affairs when he, Etta, is aware that the matter is in a court of law.

Shittu accuses Oshiomhole of betrayal

Defection: Kogi Assembly withholds members’ salaries for 7 months

...Set to inaugurate coalition for Buhari/Osinbajo campaign in Oyo

Victoria Nnakaike, Lokoja

James Kwen, Abuja

he Minister of Communications Adebayo Shittu has accused Adams Oshiomhole, National Chairman of the All Progressives Congress (APC) of betrayal despite his contributions to chairman’s political ascension. Shittu revealed that he was the first to recommend Oshiomhole to President Muhammadu Buhari for appointment and later National Chairman of APC but was later stabbed by him. The Minister of Communications in an interaction with journalists in his office on Wednesday in Abuja said: “Oshiomhole was my friend; I am the first to speak to President Buhari on making him his Special Political Adviser; if anybody tries to play god, that’s a different issue, if Justice is not done, there will be no peace”. Shittu aspired to be Governor of Oyo State under APC but was disqualified by the party during the party’s screening for not having the mandatory National Youth Service Corps (NYSC) certificate. He announced that a coalition for Buhari/Osinbajo campaign for the re-election of President Muhammadu Buhari in the 2019 Presidential Election will be inaugurated in Oyo State on 5 January 2019, adding that democracy in Nigeria is 19 years from1999, but the country has not got the best of it which makes him not to stop campaigning for President Buhari. Shittu stated that the state has no problem with President Buhari, as-

suring that the state must produce 2 million votes for his re-election. “To say I will stop campaigning for Buhari is nonsensical as my interactions started with him long before now. We shall inaugurate a coalition for Buhari/Osinbajo campaign on 5 January, 2019 in Oyo State as we have no problem with President Buhari and we know, we shall get 2 million votes for his re-election. Remember, President Muhammadu Buhari is the first President in this country to reduce his monthly salary by half after the late Gen. Murtala Mohammed. He noted that the former President, Olusegun Obasanjo was a dictator in the People’s Democratic Party (PDP), forgetting that President Buhari has supporters in all the registered political parties in the country and so, will never vote them to power anymore realising the monies that have been recovered from looters who were mainly PDP members. “Nigerians will not allow PDP have access to the recovered loot from them again. Former President Goodluck Jonathan claimed he recovered about N20 billion during his period while Buhari recovered more than N400 billion; this election will be a walkover for President Buhari and the APC”. On his differences with the State Governor, Abiola Ajimobi, he stated that the governor is not comfortable with him, believing that there is a Buhari at the Federal level and another at the state, in the Minister, Shittu.

fresh crisis appears to be looming in the Kogi State House of Assembly following the declaration of the seat of Eneche Linus, member representing Olamaboro state constituency, vacant by the leadership of the Assembly. This is coming at the heels of the defection of Eneche Linus from the All Progressives Congress (APC) to the People’s Democratic Party (PDP) where he won the ticket of PDP to contest again come 2019. The seat was declared vacant following the adoption of a motion moved by Majority Leader, Bello Abdullahi, calling on the

House to declare his seat vacant. He said based on his investigation and a letter to the House by Kogi State Chairman of APC, Linus had contravened section 109-1(g) of the 1999 constitution as amended. The motion was seconded by Hon. Ahmed Mohammed which resulted in the heated argument from PDP members in the House who argued that there was no evidence to prove his defection by APC and the matter is already in court. However, the Speaker, Matthew Kolawole, overruled the PDP members and put the motion into voice vote. But Linus has described the action as lawless coming from the lawmakers who ought to know

the law, adding that the lawmakers’ action was null and void, as he was already in court seeking an interpretation of section 109 wanting to know if the speaker could declare his seat vacant. Eneche, also stated that it was wrong for the State APC Chairman, Abdullahi Bello to have written the house to declare his seat vacant when the House was served the court papers on Monday. He also disclosed that it was wrong to have deliberated on a matter when it is in court, as he described the action of the speaker as reckless, adding that the assembly had refused to pay him for seven months now and all efforts to get the Speaker proved abortive.

Ogah promises to make Abia industrial, investment destination UDOKA AGWU, Umuahia

kechukwu Uche Ogah, governorship candidate of the All Progressives Congress (APC) in Abia Sate, has promised to turn Abia into industrial and investment hub if elected as the governor of the state in 2019 general election. Ogah, who made the promise in his campaign office in Umuahia during the inauguration of his campaign team, said he would place premium on power, education and energy would be encompassing

during his administration to grow the economy of the state. He said that he would go back to Agriculture to replicate what the late Michael Okpara did in the old Eastern Region that made the region the envy of others. The APC governorship candidate said apart from other crops, more emphasis would be paid to cash crops which according to him would create jobs for teeming unemployed youths in the state. “I will create enabling environment that will attract investors. Why Abia is not moving is because there is no infrastructure that will

attract investors. I will create Ministry of Employment,” Ogah said. He promised to go back to Technical Education so that if anybody learns carpentry and joinery he would be comparable to the best in the world. Ogah also vowed to resuscitate all the government’s moribund firms so that people would be employed. “I hereby enter into covenant with the people of Abia. We are coming to recreate the pride of being great in Abia. Those who hitherto preferred private schools to public will come back to public schools,” he promised.

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Dogara tasks Public Complaints Commission on speedy justice delivery KEHINDE AKINTOLA, Abuja

peaker of the House of Representatives, Yakubu Dogara, has charged the Public Complaints Commission (PCC) to ensure that Nigerians who cannot afford the high cost and long process of the Nigerian judicial system for resolving disputes get speedy and effective justice services. Dogara, who gave the charge during an interactive session with Chille Igbawua, PCC chief commissioner, observed that the role of the commission as the ombudsman of Nigerians is an important one that must be discharged effectively, especially with the high cost of litigation in the nation’s courts. “Most of us will attest to the fact that litigation these days are very, very expensive. They are painfully ex-

pensive and that the culture of ombudsman is a culture that is rooted in democracy, that virtually all known democracies practiced, and even though some have exited it, it is still a very dominant feature of some advanced democracies out there and we cannot run away from it. “In view of the fact that we have quite a humongous population in this country, we have to ensure that we improve on the speed of justice delivery. As it is said, justice delayed is justice denied. In most cases, justice is indivisible; once it is justice to A, it will be justice to B and if you follow through litigations, apart from the fact that they are expensive, once you kick start the case within the Nigeria judicial system, only God knows when you are going to exit from the case. “If citizens had other alternatives and avenues

through which they can send their grievances to be looked into, we will be able to short circuit this route to justice which is painfully expensive and very long and I am happy you are stepping into this responsibility.” Acknowledging that the commission is facing challenges that are related to funding, he noted with displeasure that funding is a general challenge being faced in the country because of total reliance on the public purse for income without any value to show for the funds disbursed and lack of wealth generation. While urging the commission to synergise with the House Committee on Public Petitions so that some petitions that are referred to the House that could be properly handled by the commission would easily be transmitted and vice versa, the Speaker also assured the commissioners

that the National Assembly will continue to push for higher funding for the agency in view of the huge responsibility it has to dispense justice. Speaking earlier, Chile Igbawua explained that the commission had been able to resolve some problems that had been lingering and impeding the success of the agency. He disclosed that all commissioners are now operating fully from their states unlike when they used to operate from Abuja, sensitisation across the states to make the people more aware of the functions of the agency have been intensified, leading to more complaints that are being resolved free and justice dispensed, strategy plans designed and put into immediate operation and welfare policy to boost morale of the staff and increase productivity undergoing implementation.

Thursday 13 December 2018

NNPC to grow LPG consumption, targets 10% global LNG market share HARRISON EDEH, Abuja

igerian National Petroleum Corporation (NNPC) has expressed commitment to aggressively grow local consumption of Liquefied Petroleum Gas (LPG), popularly known as cooking gas, even as it targets 10% market share of the global Liquefied Natural Gas (LNG) market. Group managing director of the NNPC, Maikanti Baru, disclosed this at the opening ceremony of the eighth Annual Conference and Exhibition in Abuja. The GMD, who was represented by the chief operating officer, Downstream, Henry Obih, said in a statement that the Corporation was determined to invest in making LPG available to Nigerians to discourage the current trend of using firewood and other unsafe means for cooking, stressing that it was time to bring LPG closer to the people and at affordable price. In a presentation entitled: “Strategic Direction – Driving Nigeria’s LPG Future,” the GMD said significant investment has been

made by the Corporation to address the challenges of products deficit. He listed some of the projects aimed at deepening LPG consumption in the country to include: expansion of NNPC LPG storage facility at Apapa from 4,000mt to 8,000mt in the first phase; construction of pipelines to deliver LPG to plants in the hinterland; and development of coastal supply facilities. “We have also purchased two LPG vessels for export operations through the West African Gas Ltd (WAGL), a joint venture firm, and we have developed a growth strategy plan and gradually providing LPG skids across NNPC Retail outlets,” he said. On the global scene, Baru declared that NNPC was doing everything to leverage on the nation’s enormous gas reserve to secure about 10% of the global market share of traded LNG. Ahmed Joda, a representative of the NLNG at the event, called on the Federal Government to incentivise the sector as a way of growing interest of investment in the sector.

NEXIER Power lists ‘tough choice’ decisions aspirants must make to revive ailing economy HARRISON EDEH, Abuja

N L – R: shows Boma Ukwunna, Executive Director, SAHCO Plc; Oscar N. Onyema, OON, Chief Executive Officer, The Nigerian Stock Exchange (NSE) and Olaniyi Adigun, Executive Director Sales & Marketing Skyway Aviation Handling Company Plc during presentation of the replica of the closing gong to both ED’s at the Facts Behind the Offer presentation to capital market stakeholders at the Exchange today in Lagos.

Yuletide: Obaseki celebrates Edo market women

he Edo State governor, Godwin Obaseki, has celebrated with market women in Edo State in the spirit of the Yuletide, thanking them for their support for the state government and his policies. The governor expressed his appreciation during an endof-the-year party organised by the Edo State Market Women Association in Benin City, on Wednesday, December 12, 2018. He said, “I don’t know where to start because our mothers, our aunts, all of you have been my backbone. You are our greatest supporters. You are the ones on the streets and in markets who come to tell us daily what is going on. You are the ones who come to advise us in government on

what to do. Without you, we will not succeed. “We are here to thank you all. From Aduwawa Market in Benin to markets in AkokoEdo, Esan land and Orhionmwon, thank you for supporting our government. We appreciate all of you. We know your challenges. “You cried to us about the activities of touts, which was not good for our state, and asked us to assist you. That was what made us ban the activities of touts from our roads and in markets. By God’s grace, touts will not return to Edo State again.” He continued, “You told us how teachers don’t attend classes and how our children don’t learn in schools, that we should assist you. That is why we implemented the Edo Ba-

sic Education Transformation (EdoBEST) programme. “Thank God, one of you is on the State Universal Education Board (SUBEB), Mrs. Ighodalo. Help me express my appreciation to her. Do you know what SUBEB is doing? They are in all our schools, training our teachers to teach our children. All of you who have children in primary schools should go to the schools and see what we are trying to do for the children to learn.” Obaseki noted, “It is you who told us that roads are not good and the quality of roads we need to construct, that made us reconstruct the roads in Uselu in Benin. Moving from Ugbor to Ugbowo now doesn’t take you more than 30 minutes. We still have many

projects to carry out in Edo State. We are just starting. We know that some things are still hard but by God’s grace and with the help of the Federal Government, we are investing in agriculture.” He said, “From 2019, when we will be preparing for Christmas, the Food and Agric Fair will have food everywhere because we are assisting farmers with funds to grow crops. Noting that the state government has intensified efforts at road construction, he said, “We know we don’t have enough roads, we will construct more roads. Today, during our EXCO meeting, we awarded the largest road contract in the history of Edo State, from Upper Sokponba to Abraka has been awarded, totalling 106km of road.

EXTIER Power, a public sector advisory body, has called on political aspirants in Nigeria to make tough economic choices in Nigeria’s key sectors, mostly in the oil and gas and the power sectors to address concerns of weak impact of government’s economic decisions on the economy. NEXIER Power gave the directive at the 2018 Political Party Workshop for political parties in Nigeria held on Wednesday in Abuja. Patrick Okigbo, the founder and the principal partner of NEXIER Power, told BusinessDay at the workshop that specific tough choices that had to re-direct the economy had to be made, while insisting that politicians had to be knowledgeable about the choices to make, whether popular or unpopular, in order to keep the nation moving. Speaking on the specific choices, he said, “We are subsiding power in Nigeria by choice. Everyone in government knows. What we are paying for power today is far less what it costs to produce the power. The thinking is that we can find a way to scrub that subsidy, so that the government can in the first few years when

power increases, gradually you can wipe out that subsidy and people would pay the cost reflective tariff.” Citing example with France, he said, “If you look at what is happening in France today, Macron is trying to make that tough choices and they are not popular choices. The same thing happen in Nigeria when Jonathan tried to remove the fuel subsidy in 2012-the right economic decision to make, but the politics of it, he got it wrong. Not even the sensitisation of Nigerians was done that this was done, hence he did not win the support of Nigerians before pulling the trigger.” On the reason for the workshop, he said, “We think that going into the 2019 elections, it is important for the political parties to understand and know what the fundamental issues are, why proffering on the solutions. Some of these challenges are even more significant more than they think.” On the tough choices in the Oil and Gas sector he called for the quick assent of the Petroleum Industry and Governance Bill by the President to address concerns of lost of huge investments to neighbouring countries discovering the oil and Gas in Africa.

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2019: Stakeholders validate framework for voting by IDPs JAMES KWEN, Abuja

Electoral Systems (IFES), Security Agencies, among others, validated the framework at a conference in Abuja. According to the framework, intrastate IDPs shall participate in all election categories where and when applicable, while interstate shall only participate in presidential election in order to limit the challenges associated with political perception and suspicion over transmission of results across state borders as well as constituency boundaries. The framework, which approved E - collation of results from IDPs camps, specified that results from partially displaced intrastate IDP will be merged at the Registration Area, level using IDP special result sheets and for interstate

IDPs, results merging shall be at the state level for the presidential election while the location of RA and Local Government Area collation centres in affected areas shall be determined by the safety of location. It stated that collaboration between Resident Electoral Commissioners (RECs) of affected states with shared IDP populations was required for the synergy of information and electoral resources required for a successful interstate IDP voting, while they should make adequate special arrangements to distribute Permanent Voter Cards (PVCs) at IDP camps in consultation with stakeholders. Under the framework, results sheets for voting at the

IDP camps or voting centres will be reconfigured to RA level with a special form EC8, Smart Card Readers to be utilized for IDP voting will be reconfigured to RA level and all polling units in a particular RA are to use one Card Reader for the authentication procedure. Also, direct communication through the production of specific audio and visual messages such as jingles of 30 - 60 seconds duration, docudrama for radio, short documentaries of between 15 - 30 minutes on thematic areas such as the right to vote and voting procedure, air messages, use of INEC publicity materials, conduct of sensitisation fora and voter education in local languages shall be done in IDP camps.

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Ogun increases C of O distribution to 3,000 monthly

of the people in the state with many laudable projects, just as we are presenting C of O to successful applicants every month. This programme will not end until those who meet up with the requirements and pay for assessment gets their land title documents,” he said. In his remarks, Biyi Ismail, special adviser and directorgeneral, Bureau of Lands and Survey, said qualified applicants would have their documents processed, while the status of the unqualified would be reviewed for possible consideration, adding that government would try its best to sustain the distribution of 3,000 C of O on monthly basis. In his welcome address, Muyiwa Ojo, director, administration and supplies, Ministry of Finance, said the concerned Ministries, Agencies and political office holders meet regularly to ensure that the title documents were distributed to beneficiaries, after they must have passed through the laid down processes. Speaking on behalf of the beneficiaries, Philip Adika, from Unity Estate, Ibafo in Obafemi Owode Local Government Area, thanked the state government for the opportunity given them to have the legal documents.

Universal Health Coverage Day: Delta assures of effective healthcare coverage FRANCIS SADHERE, Warri

L-R: Kolawole Oyeyemi, general manager, Customer Experience, MTN Nigeria; Onyinye Ikenna-Emeka, general manager, Enterprise Marketing, MTN Nigeria; Lanre Fasakin, managing director, CMRG Limited, and Elo Umeh, CEO, Terragon Group, at the launch of MTN Smart Survey, an effective tool for customer insight.

Reps halt privatisation of Afam Power Plant as dilapidated asset KEHINDE AKINTOLA, Abuja

igeria’s House of Representatives on Wednesday directed National Council on Privatisation (NCP) to immediately suspend the process of privatising Afam Power plc on a fast-track transaction basis to allow for completion of the repairs of Phases 4 & 5 machines, pending the conclusion of its investigation. The resolution was passed sequel to the adoption of a motion on the ‘Need to investigate the planned privatization of the Afam Power by the Bureau of Public Enterprises (BPE) as a dilapidated asset,’ sponsored by Ayodele Oladimeji (PDP-Ekiti). Some of the lawmakers who spoke in favour of the motion, namely: Yussuff

Lasun, Deputy Speaker; Femi Gbajabiamila, Majority Leader; Mohammed Monguno (APC-Borno); Sergius Ogun (PDP-Edo), and Nkiruka Onyejeocha (APC-Abia), frowned at the state of previously privatised public assets. In his lead debate, Oladimeji observed that the planned privatisation of Afam Power plant might suffer the same fate that the previous ones suffered in the privatisation process. He however called for the repair of the faulty components of the plant so that good money for the value of the plant could be realised and the plant would be functional even after its sale, so it could be useful to Nigerians. On his part, Yussuff Lasun (APC-Osun) stated that the privatisation process in Nigeria was awkward and skewed towards personal, not nation-

al interest. He queried the practice of selling off assets that were in critical sectors such as power, mines and steel, educational or technological development. Lasun, who called for review of the entire process, argued that most assets privatised have not met up to the aims for which they were privatised, querying why a nation looking to provide steady power to its citizenry would be selling off its power assets and not ensuring they function better than when they were in government control. In his contribution, Femi Gbajabiamila (APC-Lagos) urged the Committee overseeing BPE and the agency to be cognizant of the budget structure to ascertain which part of the budget would be supposedly financed by the proposed sale of the power

plant. Gbajabiamila, who harped on the need to put national interest at the front burner, queried the plan to sell off the plant as scrap. In the same vein, Mohammed Monguno (APC-Borno), who narrated his experience during the visit to Afam Power plant, argued that it would be a waste to sell the power plant as being proposed. While noting the assets previously sold off are not functioning optimally, Monguno called for reinvestment by Government into the sector to boost power supply to Nigerians. In his view, Sergius Ogun (PDP-Edo) observed that the power plant was a critical asset that should not be sold off without due diligence, stating that as a believer in privatisation, proper procedures should be followed before the process is implemented.

s the world celebrates Universal Health Coverage Day, Delta State government on Wednesday restated its commitment to the provision of effective and affordable healthcare for its citizens. Briefing the press as part of the programme to mark the day, Issac Akpoveta, chairman, Delta State Contributory Health Commission and the director-general Ben Nkechika, said that Deltans including the poor and the vulnerable were adequately covered by the contributory health scheme. Akpoveta explained that the commission is ensuring that all persons living within the state receive good healthcare without financial crisis. Nkechika on his part explained that the state contributory health scheme as at today has over 350,000 enrollees with over 255 public and private primary and secondary healthcare facilities providing services under the scheme in the state. He said, “The scheme commenced service on the 1st of January 2017 in 62 government healthcare facilities, it now has over 350,000

enrollees comprising members of the public sector, the formal sector, informal sector and equity groups whose premium are paid by the state government. ‘’The commission inspected and accredited 255 public private secondary healthcare facilities and private healthcare facilities to provide service under the scheme, it also has a 24-hour call centre for enquiries, complaints, feedback and other communication requirements’ he added. Nkechika further disclosed that the commission is partnering with some drug manufacturers for the provision of generic drugs and also Interswitch and eClat Health to deploy an ICT platform for the scheme while the commission has embarked on the revitalization of over 25 defunct healthcare facilities in the rural areas in partnership with the Bank of Industry and Pharmaccess Foundation. While explaining that the commission was currently supporting other states to set up their health insurance schemes, the DG urged persons living within the state who have not enrolled in the scheme to do so immediately as it is beneficial to the wellbeing of Deltans.

BUSINESS DAY

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news you can trust I thursday 13 december 2018

Opinion Opposition fragmentation and likelihood of defeat Christopher Akor Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

here is a widespread acceptance that president Buhari has failed in his duties as president and instead of providing growth, renewal and change that he promised, he’s rather presided over Nigeria’s rapid economic decline, massive de-industrialisation and job losses – up to nine million according to some statistics. The widespread dissatisfaction with the president and his decision to seek another term of four years in office has motivated about 78 other aspirants to join the race also, claiming Nigerian may not survive another four years of a Buhari presidency. However, if examples from other African countries and even Nigeria are anything to go by, these 78 other contenders for the office of the president may actually be working for the

emergence of Buhari as president in 2019. Studies of election in developing societies have shown that opposition fragmentation and disunity most times helps the incumbent win elections as the fragmented opposition just divide the votes and end up fighting one another rather than fighting together to end the rein of the incumbent. The opposition in Kenya learnt that lesson the hard way. In the 1992 and 1997 elections, they cumulatively garnered over 60 percent of the votes cast but still lost the election to the incumbent. In 2002, they came together under the National Rainbow Coalition (NARC) to defeat the Kenyan African National Union (KANU) that had ruled the country since independence in 1963. Since then, opposition parties have mastered the art of preelectoral coalition and unity to confront entrenched and often dominant parties. This strategy has successfully changed governments in Senegal, Liberia, Malawi, Madgascar, Mali, Mauritius, The Gambia and even Nigeria. Faced with the prospect of a long rule by the governing Peoples Democratic Party (PDP) since the return to democratic rule in 1999 and a weakened and fragmented opposition, the Nigerian opposition parties

came together to form the All Progressives Congress (APC) that successfully ended the rein

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I struggle to make sense of the motivation of this motley crowd, who with one side of the mouth, profess that Buhari has failed and does not deserve another term, but with the other, are working directly to hand him a second term in office

of the PDP that had previously vowed to govern Nigeria for 60 uninterrupted years. Disoriented by its defeat in 2015, the PDP almost tipped over, leaving the ruling APC as the predominant party in Nigeria. In 2017, as disenchantment

with the Buhari regime gained momentum, over 39 political parties came together to form a coalition – Coalition of United Political Parties (CUPP) - to wrestle power from the APC. They also agreed to present just one presidential candidate. However, by 2018 when they were expected to act as a united front, the coalition has gone awry and everyone is going at it alone. The recent rally of the CUPP and the adoption of the PDP candidates is a late attempt at reviving a dead coalition. First, it is clear president Buhari has lost the support of the southern youths – majority of whom, devoid of the knowledge of history, actively promoted his candidacy and voted for him in 2015. Secondly, virtually all the 78 aspirants jostling to replace president Buhari are from the south and north central -areas or regions where the 75 yearold former military general has lost support. What this means is that while Buhari remains virtually unchallenged in the regions where his support is strongest, the votes in the regions where he lacks support will be decimated and shared among 78 candidates. Third, some of these candidates that now excite southern youths all supported and mobilised for president Buhari in 2015. I was shocked recently to

discover that even paid agents of the Buhari administration on social media were busy promoting the candidacy of some of these fringe candidates. It appears the strategy is: If Buhari cannot have the votes of Southern youth like he did in 2015, the votes should be dispersed across these fringe candidates who stand no chance in the election. I may not go far as accusing those candidates of selling out and deception, but I also do not believe they are naive to think they stand any chance in the election or that Buhari can be defeated in such a crowded field that clearly hands an advantage to the incumbent, except if perchance the elections isn’t decided by the first ballot and a rerun is needed. This then questions their motivation for entering the race in the first place at such late a time and with no clear cut strategy to build political structures and mobilise citizens to vote for them. At a period when INEC gives financial subventions to political parties, I could easily have assumed the race is witnessing many parties and candidates strictly for financial purposes. But now, I struggle to make sense of the motivation of this motley crowd, who with one side of the mouth, profess that Buhari has failed and does not deserve another term, but with the other, are working directly to hand him a second term in office

Fourth, none of these other candidates, save that of the PDP, Atiku Abubakar, has any formidable political structure across the country. Ditto the political parties. Elections are not conducted and won on social media. It is expected that for someone or persons without adequate political structure and or brand awareness but is desirous of contesting for the presidency of a diverse country like Nigeria, s/he is expected to have begun the process of mobilisation and building of grassroots support long before the time of elections. None of the candidates did that. They were all ensconced in the cities of Lagos and Abuja and only woke up to via for the presidency via obscure parties only at the eleventh hour. To my mind, Nigerians are about making the same mistake they made in 2015. We’re always in search of the Nigerian messiah, in the mould of Singapore’s Lee Kuan Yew, to, with a strong of the pen, end corruption, revamp its economy and modernise the country. We forget that although it is possible to have a messiah, in most cases, growth and progress are a long, tortuous and incremental journey. It is clear the presidency is using the desire for a youthful and competent leader by a majority of southern youth to distabilise the opposition and snatches a second term in office.

Certificatemania, universitymania & quantity illusion 2

Ik Muo Ik Muo, PhD. Department of Business administration, OOU, Ago_Iwoye 08033026625, muoigbo@yahoo. com, muo.ik@oouagoiweye. edu.ng

e are all aware of the disheartening statistics from our educational sector but let me highlight some of them. The Minister of Education just stated (World Literacy Day, Kano, 5/12/18) that Nigeria has about 60 million illiterate youths and adults out of which 60% are female. He further stated that the worrisome scenario is worsened by the increasing low level of literacy skills of people who completed some formal school education. Of course we are all aware that Nigeria has the largest number of out-of-school children in the world (in addition to being the poverty capital of the world). Nigeria stands at number 41 out of 41 in terms of spending on education, healthcare and social security. Budgetary allocation to education in 2017 was 7.3%, a shortfall of N1.1trn. Educational budget as a percentage of GDP fell from 2% in 2013 to 0.6% in 2017 while budget per student has plummeted from N2100 in 2013 to N344 in 2017( PWC/

BusinessDay, 6/12/18,p7). It is in this kind of statistical environment that we have just created 10 institutions and are planning to create 70 more! But it did not start today; it is just that the proposed quantum leap is such that gets every reasonable fellow asking whats gwan! worried. In 2010, we had 27 Federal, 36 state and 41 private universities (as against the 165 we have today) but when the Federal government created 6 universities (for the 6 geopolitical zones) in one fell swoop and later added another two, the preponderance of public opinion was against it. It is worthy of note that while the first 6 universities received N10bn take-off grant apiece, the later two received N1.5bn each! With the recent development, it appeared that we complained too early then because we aint seen nothing yet! The Government justified the new universities on the grounds that they would increase access to university education (about 84% of applicants could not be admitted), that the new universities would have specific research focus and were intended to run on cost-effective models, emphasize research, and minimize the concentration of tertiary institutions in certain areas. These were public reactions to the creation of those 6 universities. The All Nigerian Peoples Party complained that most of the existing universities lacked basic infrastructure to ensure proper learning and that the FG had not been able to rebuild the universities to maintain needed standards let alone venturing into the establishment of new ones ( Thisday,

20/1/11). You know those who were in ANPP then! Levi Obijiofor described the decision as astonishing and unjustifiable in light of the impoverished state of existing ones and prioritization of federal politics over quality. He reviewed the federal funding of education over the years, which fell from 11.2% in 1999 to 6.4 in 2010 and concluded that ‘The quality of teaching, learning and research will not be enhanced by inflating the number of universities. Nowhere in the world is excellence in University education measured by physical number of universities….Rather than set up more universities that will devalue the quality of higher education, the FG should be exploring ways to improve quality and encourage retention of high standards of scholarship in teaching and research (Guardian, 26/11/10,p52). Professor Okebukola suggested that we should build new universities and strengthen old ones by giving them N2b grant each annually to enhance facilities, enhance carrying capacities to at least 2000 students yearly in the next 10 years so that by 2020, 500000 additional spaces would have been added to Federal universities. He also suggested N1bn annual grant for recruitment and staff development, the slanting of the new universities to respond to 21st century challenges and in favour local and regional problems, not run-of-the-mill courses (Speech at the 2nd convocation ceremony, Crawford University, where he was the Pro-Chancellor & Chairman of Council) Jideofor Adibe was more worried about the indecent haste with which the new universities were

established, remarking that ‘it took about one week for the committee to present the modalities and we have been assured that the universities will be up and running by September, 2011, built from the scratch… Less than a year to conceptualise, construct, equip and staff the universities which are all evidence of undue haste’. He also noted that two of the universities would be cited in the home state of president and minister of education and queried the rationality of expanding access while lowering quality. He concluded that the problems of our education system were multifarious and access was just one, that quality of university education cannot be fixed independent of quality of secondary education and that the challenge was to provide access to many deserving access without diluting

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The permanent way out of strike is to have fundamental improvements in the system, an improvement which addresses both conditions of work and conditions of service

quality so that those who truly deserve it were admitted (Jideofor Adibe: Assessing our Universities; Thisday,2/12/10,p18). Farouk Lawan, then Chairman, House Committee on Education wondered why should we establish new universities while the existing ones were underfunded and underequipped. He also highlighted some pertinent funding issues. For instance, NOUN had N2.4bn as capital vote in 2010 but as at 8/12/10, only 25% had been released and that while the 27 Federal universities received 20bn for capital allocation in 2010, N60bn to 6 new ones, wondering ‘were will they obtain the funding?’(during a visit to NOUN Kaduna Study Center, Guardian, Thursday, 9/12/10. Professor Ibidapo Obe opined that the creation of new universities was wrongly and politically done and that the government should have concentrated more on equipping and ensuring standards in existing ones and create research policies and priorities for achieving vision 202020. He concluded that ‘Of more pertinence should be the quality of these institutions to eliminate mushrooming and ensure minimum academic, employability and other standards’(Research Policies, Priorities and Challenges of realizing vision 202020, @ 2ndconvocation ceremony of African University of Science and Technology, December, 2010 I will conclude with the views of ASUU, the voice that has always been crying in the wilderness about educational matters. ‘The level of liquidation of infrastructure at these schools demands a huge infusion of funds to bring

them to acceptable international standards. If the funding of existing universities is not substantially improved and sustained, the creation of new ones will further worsen the condition of the university system’ These strident criticisms are as valid today as when they were made and our macroeconomic and governance circumstances are all on a downward slope. So, how come our educational priority now is to have more universities, rather than better ones?( to be concluded) Other matters ‘The permanent way out of strike is to have fundamental improvements in the system, an improvement which addresses both conditions of work and conditions of service: conditions of service deals with salaries and allowances, conditions of work deals with spaces, classrooms, laboratories, research etc. In the Nigerian University system, both conditions of work and conditions of service are very poor compared to even our neighbours in Africa.. Unless you have substantial improvements in these areas, we may continue to have crises but if we are lucky we have a government that can listen and appreciate the problems and take the trouble to do its best, the problem would be tackled. That is all we are asking for. We are not asking the government to do impossible things. But other countries are doing the right things; our governments should also do the right things. That right thing is to invest appropriately in educationProfessor Atahiru, ex this, ex that, Guardian, 20/6/10,p31. Those who have ears, let then hear!

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