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ANALYSIS

Six things we learnt from Nigeria’s Q4 GDP data LOLADE AKINMURELE

igeria’s Gross Domestic Product (GDP) climbed 1.93 percent in 2018 compared to 0.8 percent in 2017, state-funded data agency, the National Bureau of Statistics (NBS) said Tuesday. Stocks gained for the second consecutive session (+2.14 percent) as investors digested the better-than-expected numbers while the naira gained marginally to N361 per US dollar Tuesday at the market-reflective Investors and Exporters window. Bond yields were mixed. The 10-year Federal Government benchmark bond rose marginally by 0.08 percentage points to Continues on page 38

Inside Nigerian economy in 2018: The good, bad and ugly P. A4 Buhari ‘saddened’ by Supreme Court final seal on P. 35 Rivers’ APC fate Understanding the economy of Nigeria’s 36 states – Enugu & Imo

The mammoth crowd at the People’s Democratic Party (PDP) Presidential campaign rally held at Tafawa Balewa Square, Lagos, yesterday. Inset: Uche Secondus, national chairman, and Atiku Abubakar, presidential candidate, PDP, addressing the crowd. Pic by Pius Okeosisi

Buhari vs. Atiku: It’s still the economy, stupid W ODINAKA ANUDU & GBEMI FAMINU

hether it is a worsening misery index, sluggish growth and poorer economic conditions compared to 2015, Nigerians are going into Saturday’s presidential elections

with one of the world’s most dismal records for an incumbent in human capital, measured by income, health and education. In societies where performance determines election outcomes, many of Nigeria’s today’s political leaders won’t get close to political offices again. Following Operation Desert

Storm in the spring of 1991, American President George H.W. Bush looked unstoppable as his approval rating hit 89 percent, the highest ever recorded by Gallup. Yet, that wasn’t enough. What did Bush in, as Clinton adviser James Carville famously quipped, was “the economy,

stupid”. Team Clinton wagered that the sluggish recovery from the 1990-1991 recession would loom largest in the minds of voters. They were right. The same scenario may be set to play out in Nigeria as an Continues on page 38

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Property value in Apapa crashes as commuting nightmare intensifies

…Utomi sees solution in railway, intermodal transport system AMAKA ANAGOR-EWUZIE

roperty values in Apapa, one of the Nigeria’s prime areas, have kissed the dust owing to the trauma and nightmare that define daily movement of motorists, residents and commuters in and out of the port city occasioned by persistent gridlock caused by inefficient transport system. Over 40 percent of the entire buildings in Apapa GRA are currently unoccupied and, on the average, not less than 10 houses are empty on any given street, BusinessDay findings show. Propertyvalueinthisprimeareahas come down to a point where a buyer can easily get 2,500 square metres of land for as ‘low’ as N150 million, when same size of land in an equally prime locationlikeIkejaGRAgoesforbetween N300 million and N400 million. House rents are also down. They have dropped significantly from N5 million per annum two years ago to between N3 million and N2.5 million per annum. “Today, property values have collapsed in Apapa because it has become a nightmare to come to the port city. It is tragic that we have one of the nation’s prime property areas in near collapse because we have not come up with ideas to address its problem,” Pat Utomi, founder, Centre for Values in Leadership, said in Lagos on Tuesday. Utomi said places and cities like Apapa have fallen from grace to grass because the economic managers allowed the nation’s transport infrastructure like railway to decay. He noted that Nigeria’s economy

has underperformed due to the inability to develop an effective transport system and lack of sustainable intermodal transport infrastructure, adding that distribution of petroleum products has become the bane of Nigerian roads. “Tank farms’ existence in Apapa is part of the reasons people cannot enter Apapa. We have destroyed the roads in Nigeria with the distribution of petroleumusingtankersrunningfromLagos to other parts of the country,” Utomi said at the investiture of Bashir Yusuf Jamoh, the newly-elected president of the Chartered Institute of Transport Administration of Nigeria (CIoTA). “In the 60s, petroleum products were moved by rail to tank farms but today we have allowed our rail system to decay that we are now celebrating Lagos-Ibadan rail line,” he said. Bashir Yusuf Jamoh, national president of CIoTA, assured stakeholders that the Institute, in the short term, would train National Youth Service Corps (NYSC) members to join other security operatives in the management of traffic in Apapa. In the long term, he said the Institute plans to present a position paper on the effective ways of using intermodal transportation system, especially railway, in cargo movement from the port to the hinterland. Adebayo Sarumi, former managing director, Nigerian Ports Authority (NPA), said it took him over two hours to commute from Ikoyi to Apapa, saying that it was beautiful in the 1980s and 1990s to live and work in Apapa which today has become a nightmare. Speaking further, Utomi recalled

Continues on page 38

Emerging markets attract $30bn in ETF despite big banks’ unease STEPHEN ONYEKWELU

ig banks say 2019 emerging-markets equity traded funds’ rally may have gone too far but traders are putting money right in there anyway. Inflows to US-listed exchangetraded funds in developing nations totalled $3.68 billion in the week ended Feb. 8, bringing the current stretch to $30.3 billion, according to data compiled by Bloomberg. Meantime, Societe Generale, Bank of America and Wells Fargo have all questioned how much value is still left for the asset class after a strong start to 2019. However, the outlook for a more dovish Federal Reserve policy sparked resurgence into riskier assets this year, boosting emergingmarket currencies and stocks. Yet the host of threats that sent global equities into a tailspin at the end of 2018 bubbled back to the surface. An emerging market economy is an economy that is progressing toward becoming advanced, as shown by some liquidity in local debt and equity markets and the existence of some form of market exchange and regulatory body. They are also called developing markets. The 10 big emerging market (BEM) economies are Argentina, Brazil, China, India, Indonesia, Mexico, Poland, South Africa, South Korea and Turkey. Other major emerging markets are Egypt, Iran,

Nigeria, Pakistan, Russia, Saudi Arabia, Taiwan, and Thailand. There is concern that the US and China won’t reach a trade deal before the March 1 deadline for higher tariffs, while warnings mount that the dispute is hurting global growth and corporate profits. The rally may continue, “but definitely at a more moderate pace as macro fundamentals are not improving”, Guillaume Tresca, a senior emerging-market strategist at Credit Agricole in Paris, told Bloomberg. Some analysts, however, say there is still value for the asset class. This year’s gain in developing-nation stocks sent valuations back above their five-year average. Still, after posting the best month since 2016 in January, the MSCI gauge of emerging-market shares has slid 1.4 percent so far in February – underperforming a measure of developed-country equities. The asset class looks “attractive technically”, according to Christian Fromhertz, chief executive officer, Tribeca Trade Group in New York. “Most of the bad news is baked in,” said Fromhertz. The $61 billion Vanguard FTSE Emerging Markets ETF, the biggest exchange-traded fund for developing-nation stocks, received the biggest inflow since September 2011. Meantime, the $2.5 billion SPDR Portfolio S&P Emerging Markets ETF, which tracks the S&P Emerging BMI Index, saw inflows equivalent to 10.7 percent of its market capitalisation.

L-R: Ikokide Zebulon, member, board of trustees, The Chartered Institute of Transport Administration of Nigeria (CIoTA); Adebayo Sarumi, former managing director, Nigerian Port Authority (NPA); Bashir Yusuf Jamoh, newly elected president, CIoTA, and Pat Utomi, founder, Centre for Values in Leadership (CVL), at the investiture of the newly elected CIoTA president and inauguration of the national executive council/governing council in Lagos, yesterday. Pic by Olawale Amoo

Hospitality, aviation sectors foresee lull beyond election week

...as hotel occupancy, flight bookings fall below 60% OBINNA EMELIKE & IFEOMA OKEKE

ost sectors of the Nigerian economy are witnessing a lull in business due to fears and uncertainties over Saturday’s presidential election and a consequent high level of inactivity among corporate organisations, investors and the public. The worst hit are the hospitality and airline sectors, which rely on corporate activities and public movements to boost patronage. Players in these sectors are concerned that post-election crisis may further deepen their woes. At present, the Nigerian hospitality sector, which is still struggling to recover from the traditional January lull in business, is witnessing another slowdown as most guests, especially foreigners, stay away from the country and corporate organisations postpone their event until after the elections. The development is resulting in a dwindling occupancy rate that hovers around 40-50 percent and huge

revenue loss. Comparing this time with same period in 2018, Ephraim Onah, a Lagos hotel manager, said business, which had started recovering from the normal new year lull at this time last year, is not in good shape now and may go worse if the election is not peaceful. “Average occupancy by this time last year was around 60 percent, but we are not sure of 50 percent now and if the Saturday election is not peaceful, then the rooms will be empty for long and that means huge revenue loss,” Onah said. Ubong Nseobot, sales manager, Southern Sun Ikoyi Hotel, thinks the election may affect sales for the Valentine’s Day, which falls two days before the election, as most people would ordinarily prefer weekend packages but are pulling back because the weekend is election and movement is restricted. Boudiry Emry, a three-hotel manager in Abuja, said his hotel has recorded the worst sales for the Valentine’s Day packages because of the election which falls on Valentine’s weekend.

“By this time last year, we were already fully booked by guests who took advantage of our Valentine’s package, but the reverse is the case now as most of our usual guests complain of the election. We have less than 30 percent booking for our Valentine package despite the huge discount,” Emry said. The hotel manager further explained that the poor sales would affect their revenue target for the first quarter of the year, which is usually small because of the January business lull. His prayer is that the election should be peaceful so that businesses will resume. Otherwise, Emry said, any form of crisis will impact the sector more negatively, close to the sad experience of the 2016 recession. The airlines are also beginning to complain as load factor goes down to 60 percent. Kingsley Ezenwa, media and communications manager, Dana Airlines, told BusinessDay that people are going to various parts of the country but the election uncertainty

Continues on page 38

Nigeria’s plan to sell flared gas attracts over 700 investors …needs $3.5bn inward investments to achieve commercialisation targets by 2020 ISAAC ANYAOGU

he Nigerian Gas Flare Commercialisation Programme (NGFCP) has attracted over 700 applications, Justice Derefaka, programme manager, has said. The NGFCP is an ambitious plan to sell over 700 million standard cubic feet of gas a day flared at 178 different sites in the country, roughly the same amount of gas used in generating grid power. Approved in 2016 by the Federal Government, the NGFCP seeks to achievegovernment’stargetofeliminatinggasflaringintheNigerDeltaby2020. The Petroleum Act of 1969 and the Flare Gas(PreventionofWasteandPollution) Regulations 2018, signed in July 2018, provide the basis for the NGFCP. Based on the right of the Federal Government under the Petroleum Act to take gas at the flare free of cost, the NGFCP was launched by the Ministry of Petroleum Resources. It

is designed to offer a series of auction rounds, wherein the Federal Government takes the flare gas at the site and auctions it to third parties for sale. Derefaka also said that the first bid round will be concluded on February 28 after which all the applications would be evaluated to prequalify competent investors in March. Preferred bidders would be unveiled in August this year. In a note sent to journalists, Derefaka also said that Rabiu Suleiman has been appointed as the new NGFCP chairman. Rabiu is also the group executive director, NNPC/ senior technical adviser, Refineries, Gas, Power and Downstream Infrastructure in the office of the minister of state for Petroleum Resources. Interested applicants start with a Request For Qualification (RFQ). Those who submit Statements of Qualification (SOQs) and are deemed qualified by the programme are then

invited to respond to the Request for Proposals (RFP) that will be subsequently issued by the government. Applicants who are invited to respond to a Request for Proposals will pay $2,000 to the Department of Petroleum Resources (DPR), the upstream regulator, to gain access to gas flare data and an additional $1,000 as data leasing fee before they can download details of any flare site. According to the NGFCP, Nigeria loses approximately $1 billion of revenue through gas flaring due to its inability to capture and sell flared gas in the country. So, the programme seeks to stop this waste while creating value to the local economy by creating new 300,000 jobs, producing600,000MTofliquefiedpetroleum gas (LPG) per year and generating 2.5GW of power from new and existing Independent Power Plants (IPPs).

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`Buhari, Atiku and poverty in between’ Small Business handbook

Emeka Osuji

igerians will return to the polls this weekend for the general elections – that quadrennial ritual that ought to bring joy to the people, especially those voting for the first time, but has sadly become a nightmare to many. The elections have become so important to all Nigerians that almost everything else halts for it; not for its important role in their social welfare but for the nuisance that often surrounds it to pass. We will be voting for a new president on the 16thand governors at the following weekend of this month of February, as the present administration rounds off its rancorous first term of four year in offices. This column has, for the past five years, consistently advocated, in the most apolitical style, the good of the SME sector and the important role, which microfinance could play in poverty reduction in particular and economic development in general. However, we realize that our efforts will come to naught if the political leaders continue in their woefully misguided self-seeking approach to governance. Without committed and competent men at the steering, nations surely fail, and our research and ideas for improving the public policy space in our country run aground. Accordingly, we dedicate this week’s work to the elections and urge every Nigerian to put away hate, tribe and self,in order to help elect leaders that will promote our collective good and not those of a few, based on

primordial grounds. Although the past few years have produced some performance realities that are as mixed as they are controversial, many Nigerians are still excited at the prospect of exercising their franchise at the coming elections, more for reasons of civic responsibility than the expectation of concrete national development. Nigerians have become aware, unhappily though, that concrete development because they have been sorely disappointed not just by any particular administration but the quality of leadership we have received. Development, which is a generic term used to designate progress in every segment of human life, does not simply come from left or right. It is also not something that can be raked in with brooms, even giant brooms; nor is development a thing to be protected against rainwater by large roomy umbrellas. This is why some people strongly believe this election should not be fought on cult or party loyalty basis but on ideas, records and other attributes of the particular individuals flying the flags, despite the absence of independent candidates. The truth is that the almost 100 political parties in the country run on a common ideology – grab the treasury; however you can and sooner than later every other party will cross over to us. This is the so called Stomach Infrastructure Ideology. Development, particularly of the sustainable variety, happens when men of sound character and great intellect pool their thinking capital together to deliver advances in the lives of their people. For starters, thinking men of great intellect are not usually afflicted by the disease of clan, tribe and primitive acquisition, which have sadly tended to characterise almost every member of the Nigerian ruling class. Thinking and committed men dedicate their lives, not to the advancement of their private estates and clans but to the national good. They see a picture bigger than the small river of extreme discretion, wealth and lack of accountability that has come to define

leadership and public office in Nigeria. In terms of accountability for election promises, Nigerians, once again, have the chance to punish politicians that have taken them for ride, over the past four years. Unfortunately most Nigerians are too illiterate to understand what the issues at stake are. They are also so poor and hungry that five hundred naira could mark,for them, the dividing line between life and death. And the politicians know this and have cashed in on it. Accordingly, politicians seeking public office tend to appear every four years with wads of notes to buy the conscience of the weak and poor people of the land. Some people actually saw some of the change that was promised during the election that brought in the current administration. Such people feel included while others that have not seen any change feel excluded. That is the nature of politics and its many complications. Naturally, it is expected that there will be winners and losers, when elections hold. However, for a young country like ours, politics need not produce winners and losers. We all ought to win. A country of winners and losers cannot be a united country. Victory at the comingpolls should be victory for all Nigerians and not just a few. That way, the current and growing feeling of “we and them” will be doused. Whoever wins this election to the highest office must listen to Nigerians. They are saying that he should veer off the current track that is widening the gap between Nigerians through divisive policies. Today, we are dealing with a new vocabulary in our lexicon known as hate speech. Hate speech in Nigeria, in my assessment, while it remains intolerable among civilized people, is the product of hate policies. Why do we suddenly hate ourselves; not on individual basis but along tribal lines? Government is busy warning those who might indulge in hate speeches as though it is a natural phenomenon that has come upon us like global warming. It is not. I believe it is poor government thinking and inequity

‘

In terms of accountability for election promises, Nigerians, once again, have the chance to punish politicians that have taken them for ride, over the past four years

that is pitching Nigerian tribes against one another. A family devoid of justice and equity is bound to raise the tempo of sibling rivalry. man who favours some of his children while disregarding others opens the favoured ones to jealousy and hate. Impunity and selective application of the federal character principle is also tonic for mutual hatred. Poverty is rife in Nigeria but everybody knows that we have no business with poverty if we run our country well. Why do we say that poverty is scourge? It scorches the farm of every victim in the same manner, be they in Zamfara, Imo, Bayelsa or Ondo. Nigerians want an end to poverty and the fraudulent educational system that ensures that the larger part of our population remains illiterate. One politician onTV last week was so glad that most Nigerians cannot read and write, and as such cannot validly participate in an opinion poll. He therefore insisted that opinion polls in Nigeria are useless because only the urban dwellers that are a minuscule of the population take part. He showed no regret for the fact that many of our people have no telephones and internet as he gladly asserted. Shame on the leader who advances the ignorance of his followers to perpetuate himself. This election is sadly between two parties and two people – Buhari and Atiku – two Fulani men. So the idea that one tribe hates the other and did not vote for their person does not arise. It therefore follows that all votes in this election should be cast on grounds other than tribe. That is good. The SME constituency is voting for end to unwarranted mass poverty. Between Buhari and Atiku is massive poverty claiming Nigerian lives. Nigerian will judge the winner and his party in four years’ time on how they handle the fact that Nigeria is the now the poverty capital of humanity. We must vote to end poverty at its current level in Nigeria. It is inhuman. Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

NIRSAL microfinance bank: A timely, necessary national asset for MSMES Cletus A. Adole

n spite of the visibility of microfinance banks in some parts of the country, the reality is that there still exists a large untapped gap in the Nigerian economy for finance institutions serving small and medium enterprises (SMEs) especially in rural, under banked and unbanked communities. Despite the existence of over one thousand microfinance banks (MFBs) that aim to provide these services, over 80% are not adequately capitalized. These banks have been unable to provide easier access to credit and other financial services for SMEs, with many facing liquidity and operational challenges. The recently licensed NIRSAL Microfinance Bank (NMFB), an institution midwifed by the Bankers Committee of Nigeria, the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Nigerian Postal Service (NIPOST) is set to transform the nation’s development finance sector and make a measurable difference in small businesses across the country and in the lives of the millions of Nigerians dependent on them. The bank will leave significant positive impact on the nation’s overall economy. It is positioned to be a game changer in the microfinance banking subsector and MSME financing in Nigeria. It will offer from inception, transformative financial and non-financial services across the country.

It will provide access to more affordable funds for small business owners than currently exists in the banking sector, thereby improving wealth creation, enhancing employment, and reducing poverty and ultimately contributing to the growth of the economy. In line with its mandate, The MFB’s capabilities to finance MSMEs will be greatly supported as it will leverage on NIRSAL’s credit de-risking facility. The shareholding of the MFB which reflects the foundational tripartite role of the three institutions is a source of confidence. The Bankers Committee has 50% ownership, NIRSAL 40% and NIPOST whose widespread network of offices will provide the necessary infrastructure for reaching far flung areas in the 774 Local Government Areas of the country has 10%. The MFB will benefit from a professional and institutional synergy of the investing institutions. All the institutions are represented on the board of the bank, to provide the needed strategic and institutional guidance. Given the proposed spread of the MFB in all the 774 LGAs. it will be well suited as a wheel for the disbursement of the various CBN’s intervention funds for lending to MSMEs. SMEs remain a critical component of the Nigerian economy and creating deliberate ventures to support their growth has been at the core of NIRSAL’s existence. There are currently around 37million MSMEs scattered across the country which account for 84% of its labour force. The agricultural sector in particular has the largest propensity for growth, projected at 8.37% in real terms by 2020.Agriculture remains the most significant economic sector in Nigeria,

employing about 36.55% of the population, and making it the principal employer of labour. In 2017, the sector grew by 3.45% at a real value of N17.2 trillion, contributing 25% to real GDP. Agribusiness MSMEs span across segments of various agricultural value chains, and account for around 97% of the agricultural GDP of Nigeria. Despite their important contributions and potential for growth, MSMEs continue to face an array of momentous challenges. These include poor infrastructure; limited access to markets; technology constraints; unskilled workforce; multiple taxation and an arduous regulatory environment. These challenges have led this large segment of the economy to contribute just 7% of export earnings, with low propensity for development. As numerous as these constraints are, inadequate access to finance remains the most critical for entrepreneurs and the biggest constraint to their economic growth. The NIRSAL MFB will fill this gap by providing MSMEs with easy access to finance. The MFB will soften the various impediments that militate against access to finance by MSMEs. With an average adult population of 99 million, out of which 63.3% work in the rural areas and 20% have no formal education, this population has an enormous unmet financial need. In these underserved communities, 68.9% of people have access to a mobile phone, and 56% are under the age of 35, creating enormous opportunities for the provision of digital financial solutions. The addition of these services to the financial system will set the country forward in meeting the United Nations Sustainable De-

velopment Goals (SDGs) and improving other macroeconomic indicators, making the MFB a timely and well thought out solution in the development finance sector. Recent findings have highlighted an intense national need to drive financial inclusion for the unbanked and under banked communities. The newly released State of the Market Report on Digital Financial Services published by the Lagos Business School revealed that the current financial inclusion rate stands at 49% after eight years of interventions, which means the country still has a steep journey to attaining the 80% goal by 2020.The report also showed that poverty levels are higher in under-banked and unbanked households, making it imperative to link micro-credit and financial services to the poorest regions. With a mission to efficiently provide affordable products and services to the rural and urban populations using technology and professionalism, the MFB will be well positioned to drive financial inclusion as a national imperative. The NMFB will provide stability, reliability and trust for people who do not otherwise have access to institutions that prioritise their financial needs. NIRSAL’s Managing Director Aliyu Abbati Abdulhameed, has been instrumental in enhancing a robust risk management framework which has significantly improved the loan performance rate that will be built upon in the management of the MFB. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Adole is a policy analyst writing from Abuja

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Mindset always makes the difference... Part 2 Character Matters with Daps

Dapo Akande

aking a jog the other day I saw this middle aged man also dressed in exercise gear walking briskly towards me, talking loudly and gesticulating apparently to no-one. Suddenly I thought, “wait up Daps. Is this guy okay? Are you sure all his screws are firmly tightened? It certainly appears like there might be a couple loose.” As if he knew what I was thinking he would dart me intermittent looks. “Ah! E ma gba mi ….who told me to jog the streets this early o?!” Just as I was about to instinctively give him a very obvious wide berth I suddenly came to my senses. Kindly excuse the pun. At that moment I remembered we were no longer in the 1970s or even early 2000s. This man must be speaking on the phone. Of course, this is 2019 when phone ear pieces are barely visible, especially from a fair distance.

Wow! Did I feel foolish! Maybe it was my senses that needed checking after all. Truly, nothing is surer to lead man to perish than lack of knowledge or ignorance. I’m proud of my fellow Nigerians though we still have a way to go. Seven or eight years ago Nigerians knew next to nothing about Autism and most who did know, often displayed great ignorance due to a very limited understanding. Now, though some progress is being made, it’s incremental at best while awareness remains unimpressive. The most difficult thing to change in people is their mindset so even this nominal increase in understanding and acceptance deserves some celebration. In my estimation though, it comes down to love. Love beats all. With love comes the effort and desire to understand the plight of others (Neighbourly love). My cousin’s wife’s school for Autistic children struggled for the first one or two years because of this same mindset we Nigerians seem so prone to have; living in denial and refusing to see or accept the obvious. You know, what will people say? It took a robust media campaign thankfully supported by one of the leading banks to get Nigerians to step out of denial and accept that Autism isn’t a death sentence and neither is it some-

thing to be ashamed of. These are simply people who need special attention. Many of them, depending on the spectrum get to enjoy very normal lives. You’d be surprised to know the number of people out there who are autistic. Many, I’m certain you’re not aware of. In the past we had the likes of Wolfgang Mozart(famous composer), Albert Einstein and Isaac Newton(both renowned scientists), Lewis Carroll(author of Alice In Wonderland) and it’s even recorded that Thomas Jefferson(3rd President of the USA) displayed signs of Autism. In these present times we have the likes of Darryl Hannah (Hollywood actress), Dan Aykroyd (Hollywood actor) and wait for it….. Lionel Messi! This football genius needs no introduction. Yes, Messi was diagnosed with Asperger’s syndrome, a mild form of Autism at the age of eight but look at him now. My cousin’s wife and her school, Patrick Speech and Language Centre are now without doubt the leading authorities in the field of Autism in the country and it all began when she found her purpose. She had a promising career as a banker but that wasn’t God’s purpose for her life. It wasn’t her God ordained path to Good Success. “And we know that for those who love God all things work together for good,

‘

It took a robust media campaign thankfully supported by one of the leading banks to get Nigerians to step out of denial and accept that Autism isn’t a death sentence and neither is it something to be ashamed of

for those who are called according to His purpose” – Romans 8:28 One fateful day she and her husband discovered their beloved child was autistic and there began their journey. It may interest you to know this same child got a full scholarship, yes, a full scholarship to a top US university after scoring straight As in his “A” Levels! If his parents hadn’t discovered early enough, enabling them to provide him with the appropriate attention or if they had chosen to ignore the tell tale signs, would all this have been possible? Your guess is as good as mine. My cousin’s wife has since gone on to win countless awards both nationally and internationally for the sterling work she’s been doing in this field. As the good book says, never should anyone despise small beginnings. On that note, I end with these assuring words of God who has promised to always lead us in the way to go when we look to Him: “Your path led through the sea, your pathway through the mighty waters; a pathway no-one knew was there.” Changing the nation...one mind at a time. Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

In year of elections, will African countries get the investor vote? LAURIE HAMMOND & THIBAUT HOLLANDERS

he world, including investors, will keep a close eye on the various national elections to be held in Africa this year. The lead up and aftermath of national polls usually comes with uncertainty, something which investors tend to avoid if possible. National elections have recently been completed in the Democratic Republic of the Congo (DRC) and there are upcoming elections in South Africa (May) and Nigeria (16 February).Other African nations heading for national elections include Senegal (24 February), Malawi (May), while citizens of Botswana, Mozambique and Namibia will head to the polls in October. For investors who have been active in the mining sector in many of these countries, after the elections it will be a matter of assured continuity and stability, both from a political and legal perspective, for them to keep investing. In a number of African countries, the mining sector has been hampered

by significant challenges and change and uncertainty has been prevalent, as seen in new regulatory requirements and policies in countries such as the DRC and South Africa. Commodity price volatility has added to these challenges. As a result, corporates and investors have increasingly looked to alternative funding solutions to plug the liquidity gap and provide an attractive yield. In the DRC, alternative funding options, such as credit facilities from debt funds, and private placements (such as issuance of bonds by a limited number of investors or issuance of high yield bonds) are already frequently used across the mining sector. In Rwanda, because of the economic situation, mining companies will inevitably be looking for alternative financing and the government is encouraging nationals to invest in the mining sector. In the DRC a new Mining Code was promulgated on 9 March 2018 and provides for material amendments, including reinforcement of local content requirements and an increase in the royalty rate due to the state when selling minerals. There is also a reduction of the tax regime attractiveness with the introduction of two new taxes: the “50% super profit tax” and the “capital gains tax”, which is due when shares are transferred. Existing mining projects will directly and immediately be subject to the new provisions. In this respect, major mining companies have threatened to bring

proceedings over the New Mining Code before the International Centre for Settlement of Investment Disputes. In DRC, the new president, although from the former “hard opposition”, will have very limited actions, as the parliament remains within the control of the former president amidst widespread allegations of electoral fraud. Should the situation remain as such, the mining environment should not be fundamentally different over the next years. Rwanda is interesting as the mining sector is one of the top priorities of the Government. The new Rwandan Law of 13 August 2018 on mining and quarry operations has the objective of stabilising the mining sector and attracting more investors. In addition, the mineral reserves have been underestimated. Mining in Rwanda is the second largest exporter and was last year one of the main contributors of the country’s gross domestic product (GDP). It is expected that it will at least remain the same for this year. Rwanda has liberalised its economy, allowing the private sector to be the engine of growth and wealth creation. In South Africa political and regulatory uncertainty will continue in the lead-up to local elections and will impact on long term investment decisions in the mining industry. The land debate will also continue and create a level of policy uncertainty, as it impacts significantly on the mines. However, the finalisation and gazet-

ting of Mining Charter 3 and the withdrawal of the Minerals and Petroleum Resources Development Act Amendment Bill have had a positive impact on market sentiment and have provided a level of stability for the industry. The publishing of the Charter took longer than was promised, but the outcome was positive, as there were proper consultations and consideration of the comments received. Investing inmining projects in Africa requires a deep understanding of both the regulatory and political climate in that country and the potential impact of the global economy on that industry and country. At a country level, investors are looking for stability, certainty and how elections may impact thisand their ability to exit. At a global level, investors looks at how financial market volatility, trade tensions and geopolitical factors could affect any investment. Investment opportunities lie not only in mining itself but in the related infrastructure, energy and technology needs of this sector in each country and investors are increasingly looking at investing for impact. Governments, corporates and investors working together with a long term, holistic view could open up investment opportunities that have far-reaching positive impacts across the continent. Laurie Hammond is of Hogan Lovells while Thibaut Hollanders is of Liedekerke Africa

A Par

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Wednesday 13 February 2019

Living in the past

ate last year, the Nigerian Senate passed a bill to provide for the withdrawal of $1 billion from the Excess crude Account (ECA) for the completion of the Ajaokuta Steel Company. The bill titled: An Act to Provide for the Ajaokuta Steel Company Completion Fund for the Speedy Completion of the Project also puts a stop to government’s planned concession of the steel plant. The bill, which had earlier been passed by the House of Representatives, also makes provision that additional appropriation can be made from the budget, and also loans and grants can be taken by the federal government to complete the Ajaokuta Steel mill. Effectively, the federal government is being given almost a blank check to get Ajaokuta working again. This does not make sense. Since its inception in 1979, the Nigerian government has spent $8 billion on the plant and it is yet to produce an ingot of steel. It was built to be the nation’s

turning point for industrialisation but has become a sinking hole of government spending. It is grandiose dream that has become a nightmare. Sadly, the Nigerian government is failing to wake up from the nightmare. For most private businesses, when they make a bad investment, the first advice is to cut your losses and run. In the Nigerian government case, it is obvious that there is no cap on the losses that the government can make on an investment before deciding when to cut and run. It is difficult to understand the rationale behind the National Assembly’s decision to pass a special purpose bill to complete Ajaokuta. Why do you need a bill to complete a plant? When the plant is completed, what happens to the bill? Even more concerning in the bill is the provision that the federal government must complete the repairs of the plant and make sure it starts ‘production at a very significant stage’ before it can be concessioned. In this case, the National Assembly is assuming that, the purchase price of the Steel Mill would be enough

to cover whatever cost of repairs are incurred. This is a very faulty assumption because a buyer would pay a market price for the plant, which would be based on projections of potential returns on the plant and not based on what the government has spent getting the plant into shape, if it ever gets into shape. This means that, even where the US$1 billion plus is sunk into repairing the plant, there is no guarantee that the government would be able to recover the money at the point of sale or even the US$8 billion that has been sunk into the plant from construction to date. Why this insistence on throwing good money after a bad investment? Sadly, this attitude of holding onto a bad investment is not totally strange. It is the same rationale that has inspired the federal government holding onto the refineries despite the fact that they have been making losses for more than two decades now. For more than two decades, the federal government has consistently shown that it has no capacity to make the country’s

refineries work. This is despite several commissioned turnaround maintenance that ends up swallowing billions of naira but fails to deliver refined products from the country’s three refineries located in Port Harcourt, Warri and Kaduna with a combined capacity to refine 445,000 b/d. It must come to a point when the government must accept that it has no capacity to run some of these assets that it keeps holding on to. What is the benefit to the government and the people of Nigeria that the government is holding on to assets that are consuming money that could be used to provide other social needs like healthcare and education, when it could easily dispose of those assets and allow the private sector to turn it into a money making venture that creates lucrative jobs for Nigerians and boost revenues going to the government? The government has no business in running a business. It is not suited to doing so and the sooner the government realises that fact, the better for us all as a country.

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Wednesday 13 February 2019

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Citi bank analysts say Nigeria stocks to rally if Buhari loses

Pg. 14

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

OIL & GAS

Lekoil expects court ruling on OPL 310 by March-end DIPO OLADEHINDE

he uncer tainty surrounding the Oil Prospecting Lease (OPL) 310 acquisition by Lekoil Limited is nearing an end, as the Africa-focused oil and gas exploration and Production Company has said a High Court ruling on its application for a statement of ministerial consent will be delivered at the end of March 2019. Lekoil holds an unconditional 17.14 percent interest and an additional 22.86 percent interest, subject to Ministerial consent, in the OPL 310 in a case currently pending at the Federal High Court in Lagos. Lekoil said in a statement that “due to the impending expiration of the OPL 310 license”, it applied to the Federal High Court to hold the unexpired term pending the delivery of the ruling which was granted, meaning the license will not expire before the judgment is given. OPL 310 holds the Ogo oil and gas discovery found in 2013. With interests in Nigeria and Namibia, Lekoil had previously requested that the Ministry of Petroleum

Resources grant an extension of the license beyond February 2019 in order to recover over 3 years lost due to regulatory delays beyond the Company’s control. The Company understands that the Department of Petroleum Resources (DPR) has made its recommendation for an extension to the Minister of Petroleum Resources and is currently awaiting a response to the recommendation for a potential extension from President Muhammadu Buhari. Recall, Lekoil was informed by DPR that due diligence for the interest transfer was meant to have taken place in March 2016. However, this did not occur and has not been rescheduled. In response, Lekoil applied to the high court to expedite the government approval process. The court granted the extension, meaning the license will not expire before the judgement is given. How it all started In February 2013, Mayfair Assets and Trust Limited, a subsidiary of Lekoil, farmed into Afren Investments Oil and Gas Nigeria Limited’s (AIOGNL) interest in OPL 310 for a 17.14 percent par-

L-R: Tolu Adewole, executive directior, operations, SYNLAB Nigeria; Chidinma Aaron, 42nd Miss Nigeria; Pamela Ajayi, MD, SYNLAB Nigeria; Shuaib Belgore, representative of minister of state for health; Bola Oyeyemi, wife of corps marshall, Federal Road Safety Corps; Joyce Barbar, president of MWAN; and Bode Olawunmi, CFO, SYNLAB Nigeria as SYNLAB Nigeria opens a new medical diagnostics centre in Abuja.

ticipating interest and 30 percent economic interest. Ministerial Consent was granted for the interest on June 9, 2017. Afren, the parent company of Afren Oil & Gas that held interests in the OPL 310 license, was put into administration and its assets put up for sale on July 31, 2015. Lekoil agreed with the administrator of Afren to acquire the shares of AIOGNL, which held a 22.86 percent

participating interest in OPL 310 on December 1, 2015. This interest was also subject to Ministerial Consent from the Minister for Petroleum Resources. The acquisition meant that Lekoil would hold a consolidated participating interest of 40 percent and an economic interest of 70 percent in OPL310 and would become the technical and financial partner of Optimum Petroleum De-

velopment Company, the operator and local partner in OPL310 which retained a 60 percent participating interest. An application for the transfer of the 22.86 percent interest was duly made by Afren Nigeria in January 2016. In March 2016, Lekoil was notified by the Ministry of Petroleum Resources that the necessary due diligence exercise would be conducted that month.

The due diligence exercise did not take place and has not been rescheduled by the Department of Petroleum Resources since then. As a result, Lekoil applied to the Federal High Court last month for a declaration that was expected to expedite the consent process, and preserve the unexpired tenure in the license. It is expected that a hearing will be held on Thursday, November 29.

TELECOMS

9mobile meets brick-wall as court warns parties from concluding sale OLUFIKAYO OWOEYE

he last may not have been heard on the sale of Telecoms firm, 9mobile, as an Abuja Division of the Federal High Court has directed the Central Bank of Nigeria, CBN; Nigerian Telecommunication Commission, NCC, and others involved in the transaction for the sale of the debtridden telecommunications firm, Etisalat (now 9mobile), to suspend further actions on the deal pending the determination of legal issues raised by aggrieved shareholders of the company. This warning was contained in a notice of disobedience form (Form 48), signed by trial Justice Binta Nyako, who is presiding over a suit filed by dissatisfied shareholders of the defunct Etisalat. It would be recalled that Justice Nyako had on October 10, 2018, ordered all the parties to maintain the status quo, pending hear-

ing and determination of the suit marked FHC/ABJ/ CR/288/2018. The plaintiffs—Afdin Ventures Limited and Dirbia Nigeria Limited — who claimed to be major investors in Etisalat, told the court that they were left out in the firm’s decisionmaking process, even as they demanded a refund of their invested funds estimated at $43,330,950. Cited as defendants in the suit are Karlington Telecommunications Ltd, Premium Telecommunications Holdings NV, First Bank of Nigeria Plc, CBN, Etisalat International Nigeria Ltd, and NCC. Justice Nyako had after she had listened to an ex-parte motion the plaintiffs filed through their lawyer, Mr. Mahmud Magaji, SAN, for interim injunctions, held that the “defendants ought to be heard.” The court, therefore, ordered the service of all the processes on the defendants, including the 3rd and 5th (First Bank and Etisalat), whose addresses were out-

side jurisdiction. However, despite the pendency of the suit, the plaintiffs re-approached the court, alleging that the defendants had concluded the deal to transfer assets of the distressed firm to new owners, in defiance to the subsisting restraining order. They applied for a form 48 to be issued against the defendant, as a precursor to the initiation of a contempt proceeding. The request which was granted by the court, read: “Take notice that unless you obey the directions contained in the order of the Federal High Court number three, Abuja, made on the 10th of October 2018 ordering parties to maintain status-quo, with regard to the sale of Etisalat Nigeria Limited (rebranded 9mobile), you will be guilty of contempt of court and will be liable to be committed to prison.” The plaintiffs are praying the court to among others reliefs, declare

that the planned sale of Etisalat without paying them the money with which they bought their shares, is unlawful. They also urged the court to order the 1st, 2nd, 3rd, and 5th defendants to refund to them the total sum of $43,330,950 with which they bought their 4303395 shares at $10 per share. The plaintiffs equally prayed the court to award N1billion in general damages against the defendants and in their favour. In a statement of claim they filed before the court, the plaintiffs said they bought shares in Etisalat from the 1st and 2nd defendants (Karlington Ltd and Premium Holdings) through “a private placement memorandum in which the 3rd defendant (First Bank) served as a custodian of the plaintiffs’ share certificate.” They said while the 1st plaintiff (Afdin Ventures) “bought 1,300,391 Class A Shares at $13,003,910,”

which it paid for on August 14, 2009, the 2nd plaintiff (Dirbia Ltd) acquired 3,300,004 Class A shares at $30,030,040, for which it made payment on September 3, 2009. The plaintiffs said they paid for the shares through the 1st and 2nd defendants’ First Bank accounts. In their supporting affidavit deposed to by the General Manager of the 1st plaintiff and a director in the 2nd plaintiff, Sani Ibrahim, he told the court that the problem with Etisalat resulted from the mismanagement of its funds. He said the plaintiffs’ grouse arose from not only the firm’s mismanagement but also its inability to declare dividends from 2009 till date and the move by the defendants to conduct a clandestine sale of the company at the detriment of the plaintiffs. According to him, “in 2015, the 1st, 2nd, and 5th defendants took several loans from 13 Nigerian banks

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

with a view to expanding and boosting their telecommunication business, but that the money was not properly utilised, leading to heavy indebtedness on the 1st, 2nd, and 5th defendants.” He added that owing to the resultant heavy indebtedness, the 1st and 2nd defendants “rebranded the 5th defendant (Etisalat) and changed its name to 9Mobile with a view to selling it off and obtaining money to pay its numerous debts. “The 1st, 2nd, 3rd, and 5th defendants have failed to declare dividends on the shares of the plaintiffs since 2009 till date. “The 1st, 2nd, 3rd, and 5th defendants have completed arrangement to sell the rebranded 9Mobile to Smile.Com and Glo Network without the knowledge of the plaintiffs, who are its major investors. “If not restrained, the 1st, 2nd, 3rd, and 5th defendants will sell Etisalat International (also known as 9Mobile) and disappear with the plaintiffs’ investment,” Ibrahim noted.

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Wednesday 13 February 2019

Business Event

MARKETS

Citi bank analysts say Nigeria stocks to rally if Buhari loses BLOOMBERG

or Nigeria’s stock market which has earned the dubious reputation as the worst performing in the world, a rally could be in the offing if President Muhammadu Buhari loses this weekend’s election, according to analysts at Citigroup. A rally on the back of an election loss of the current leader could end a miserable

run that’s seen stocks fall more than any other in the world in dollar terms since the 76-yearold former general came to office in May 2015. A report by Bloomberg says some foreign investors would prefer a government led by Buhari’s main challenger, businessman and ex-Vice President Atiku Abubakar. But while the 72-year-old Atiku has pledged to privatize state assets and float the naira, many are skeptical and point

to allegations of corruption against the man who once served as vice president for eight years. In 2017, CNN Money ranked the Nigeria stock exchange as the best performing in Africa and the third best in the world. But the situation changed dramatically in 2018 when the Nigerian bourse lost N2.3 trillion with foreign investors pulling out over N600bn in the same period.

L-R; Stefan Traumann, consulate general of the Federal Republic of Germany in Nigeria; Marc Lucassen, delegation of Germany Industry and Commerce in Nigeria; Ijeoma Nwankwo, director, drug evaluation and research, National Agency for Food and Drug Administration and Control(NAFDAC); Jean -Marc Ricca, MD, BASF West Africa , and Moji Kehinde, representative of directorgeneral, Standard Organization of Nigeria, at the commissioning of BASF personal care application technology laboratory in Lagos. Pic by Pius Okeosisi

MARITIME

Maersk eyes new smart technologies for seamless cargo delivery AMAKA ANAGOR-EWUZIE

.P. Moller–Maersk, an integrated container logistics company, has introduced new smart technologies and seamless solutions that are aimed at changing the shipping industry in 2019 by enhancing service delivery to cargo owners. In 2019, Maersk will enhance its Remote Container Management (RCM) platform by a virtual assistant, named “Captain Peter” and it will assist customers along the journey of their cargo, a statement by Janina von Spalding, press officer of Maersk, which was sent to BusinessDay on Wednesday, stated. According to statement, a group of select customers are currently being testing the new technology as technical improvements are being put in place to simplify the processes integrated into the Remote Container Management (RCM) platform. It further said that Maersk will release the new platform

with a revamped design and new product features, which will be enhanced by a virtual assistant named Captain Peter. “There is still a lot of paper work and difficult processes in global trade. Captain Peter will help take care of some of this complexity, by seamlessly engaging with the customer from end to end in the supply chain. Our goal is for the RCM product to look and feel like your favourite Smartphone app,” said Anne-Sophie Zerlang Karlsen, head of Global Reefer Management at Maersk. “In the beginning, Captain Peter will follow some simple rules, sending up-to-date information via customers’ preferred channel, for example, SMS or e-mail, on container temperature and atmosphere conditions, as well as a timeline on its end-to-end journey. Should any deviations be observed, or the shipment be delayed, Captain Peter will notify the customer. “Once the container has arrived at its destination, Captain Peter will also check on its state and send an update to the cus-

tomer. In time, customers will receive information configured to their specific needs. “The RCM technology makes a reefer’s location, temperature, humidity and power status easily available to the customer. Should any issues be detected, the customer can alert his supplier or have the shipment checked by local surveyors, potentially saving the customer millions of dollars in lost cargo. “With the number of active users of the RCM platform constantly growing, the aspiration is for Captain Peter to gather enough information to be able to predict potential cargo damage and provide configuration suggestions before containers are shipped,” Karlsen added. Maersk launched RCM for customers in September 2017. It provides transparency on information from 270,000 Maersk refrigerated containers equipped with machine to machine technology. Today, over 2,300 customers have signed up for the RCM solution, translating to more than 70 percent of Maersk’s reefer volume.

HEALTH

Synlab opens ultramodern medical diagnostics centre in Abuja OSA VICTOR

ynlab Nigeria (formerly Pathcare Laboratories), a Pathology laboratory services provider, has formally opened an ultramodern facility at Gwarinpa, Abuja. The facility, which is a first of its kind in the location, has state-of-the-art diagnostics equipment and world-class pathologists to deliver accurate test results as well as exceptional services to customers. The new diagnostics centre is designed to expand its operations in Abuja and deliver services to private healthcare providers, national and regional public institutions in record time. Because of its location, it will meet the diagnostics needs of patients in Abuja and states across northern Nigeria.

Speaking at the opening ceremony,ToluAdewole,executivedirector of Synlab Nigeria, said, “This diagnostics centre is a testament to Synlab’s commitment to bringing world class services to the Nigerian people. With the equipment we have on ground and our network ofmedicalprofessionals,weareable to support doctors and patients in ways not previously possible.” According to Efosa Uwagboe, regional account manager, the facility is a solution to the yearnings of the Abuja people for a bigger facility than our current operations at Wuse II, which will be undergoing an upgrade very soon. Our other facilities within Abuja environs include Asokoro and Gwagalanda. The new facility, located at 10, First Avenue, Gwarinpa, joins Synlab’s Lagos reference laboratory. The colourful opening cere-

mony, which was held at Gwarinpa was attended by the Federal Ministry of Health, Central Bank, the Nigerian National Petroleum Corporation (NNPC), the National Hospital Abuja, the American Embassy, among others. Guests at the event include Ade Shonubi, deputy governor of the Central Bank of Nigeria, representative of the Minister of State for Health, Osagie Ehanire; Jaf Momoh, chief medical director, National Hospital, Abuja; Bola Oyeyemi, president of the FRSC Officers Wives Association, Auwa Shehu Musa Yar’dua, Felix Ogedegbe, MD Cedarcrest Hospitals, Chidinma Aaron, current Miss Nigeria. The facility was formally declared open by Ade Shonubi, deputy governor of the CBN, in company of Tolu Adewole, executive director, operations, Synlab.

L-R: Lynda Alphaeus, deputy director persecution, Nigerian Copyright Commission (NCC); Nosa Omusi, community manager, Mest Incubator Nigeria; Sandra Oyewole and Ibrahim Waziri, participant of EVCL at the first edition of The Expo Series organized by Olajide Oyewole LLP and Mest Incubator Nigeria for creative and innovators in Lagos Nigeria.

L-R: Kolawole Osinowo, senior business manager, HMD Global; Laila Ijeoma, blogger, Lailas News; Amaechi Okobi, head corporate communications and external affairs, Access Bank, and Uche Ajene, managing consultant, Quadrant MSL, after discussing about “Fake News: how new media is changing the course of history” at the Social Media Week Lagos.

L-R: Kayode Osasona, sales executive, NB Plc; M.I, artiste, brand manager - Legend NB Plc; Maria Shadeko, regional trade marketing manager, Ibadan/Abeokuta NB Plc; Owolabi Shokoya and Martins Airekholo, area sales manager - Ibadan North NB Plc, at the recently concluded CBN tour in Ibadan.

BUSINESS DAY

Wednesday 30 January 2019

CITYFile

Oyo pays N204m to 88 pensioners AKINREMI FEYISIPO, Ibadan

yo State government has released N204 million for payment to another batch of 88 pensioners in the state. The state head of service, Olawumi Ogunesan whilepresentingthechequestothebeneficiariesat theoldministryofestablishmentandtraining,secretariat, Ibadan, on Friday, said that the payment covers 2012 gratuities for another set of retired civil servants and teachers across all grade levels. Ogunesan, who was represented by the acting permanent secretary, office of the head of service, Adejoke Eyitayo, said the state government would continue to offset outstanding gratuities to its retired workers. She added that the government would pay to pensioners based on merit without any influence or favour. The HoS stated that the disbursement of their entitlement was done to make life easier for the senior citizens, who had served the state meritoriously for thirty five years, promising that the state government will not relent in its efforts at ensuring quality post retirement lives for pensioners in the state. She appealed to those that are yet to receive theirs not to lose hope as the government is making spirited efforts at paying their gratuity upon availability of funds. Speaking on behalf of the beneficiaries, Ladokun Abiodun and Sulaiman Adedokun appreciated the government for releasing the money, pointing out that the procedures adopted in the disbursement of the money was based on merit as nobody collected anything from them before getting the money.

Borno: NEMA distributes food items to IDPs

he National Emergency Management Agency (NEMA) has distributed food items to more than 35, 000 Internally Displaced Persons (IDPs) in Maiduguri. The affected persons are among the new arrivals displaced by the resurging Boko Haram attacks at Baga, Kruss Kawwa and adjourning communities in Kukawa local government area of Borno. Manga Danjuma, the head of the NEMA emergency food distribution programme, made the disclosure during the inauguration of the exercise at IDPs’ Teachers’ Village Camp, Maiduguri on Monday. Danjuma disclosed that the items were distributed to the IDPs under a special intervention programme initiated by the Federal Government, to enhance quick response to humanitarian emergencies in Borno. He said that relief items were distributed to 23,000 newly registered IDPs and 12,000 existing ones at the camp. Manga explained that over 6,000 households would benefit from the February exercise at the Teachers Village Camp, adding that similar exercises would be conducted in 23 other camps and host communities in the state. He noted that the special intervention was in continuation of the government’s efforts to alleviate their plight. “It is a special emergency intervention to address humanitarian crisis caused by the recent conflict in northern Borno. “Each of the households received 59.8 kilogramme of food items to sustain it for a period of one month. “The IDPs were captured in the regular food distribution exercise being implemented monthly by NEMA. “The agency had distributed food items to over 19,000 new arrival of IDPs in January at Teachers’ Village and Gubio IDPs camps.” According to him, the agency, in collaboration with UN agencies and other humanitarian actors, was providing nutritional supplement to children and other vulnerable people in the camps. Yessa Waziri, a beneficiary, said she had received food and non-food items from the agency to enable her to take care of the needs of her children. NAN

Work in progress at Trailer Park, Apapa in Lagos on Monday.

How bandits killed Uber driver, took victim’s car JOSHUA BASSEY

wo suspected armed bandits who killed an Uber driver in Lagos and stole the victim’s car have been rounded up and are helping the police in their investigation into the heinous crime. The suspects were arrested by the operatives of Rapid Response Squad (RRS); a unit of the Lagos police command, while trying to dismember the Hyundai Elantra car with registration number EPE 676 EC, in order to sell its parts to a scrap metal dealer. The arrest of the suspects was said to have been effected after the Commissioner of Police (CP) in charge of Lagos, Zubairu Muazu, directed the commander of the RRS, Olatunji Disu to go after the criminals. The two suspects: Humble Peter-Robert, 33, and Gideon Achibong, 36, were arrested on Monday 4, February 2019 at about noon in Aboki Estate, Lekki, Lagos, while removing the car parts.

According to the police, Peter-Robert, an ex-convict and a bus conductor, in company of three others, now at large, had three days before his arrest conspired to hijack an Uber car and sell it off. On the said day, the quartet: Emma, David, Dolapo and Peter-Robert at around 11:00 pm waved down the deceased, Sunday Obasi in Lekki. They told him they were going to Ikate and he charged them N1,000. Before getting to their destination, the suspects requested the driver to park by the roadside to enable them ease themselves. It was at this point they descended on the driver. After killing the driver, they pushed him off before driving the car to Beach Road, Lekki, where they hid the car for two days while looking for a buyer. According to Peter-Robert in his confession to the police investigators; “I was sitting in front of the car with the driver. We hit him with stones several times. He complained that he was sick. We pushed him off to the road and went away with the car, a wine colour Hyundai Elantra.

On the Beach Road, Lekki, where we parked the car, we swapped the number plate of the car with a Volkswagen Passat car (FKJ 708 CA) close by. We left it for two days hoping to contact buyers for the car.” He continued; “Emma, also a Uber driver, is our ring leader. He noticed that the driver was operating offline before deciding that we hijack the car from him. The following day when one of us visited where we hijacked the car. He noticed the guy’s remains were already in police body bag.” “We contacted Archibong to assist us in disposing off the car. The buyers we invited indicated that they can only buy the car parts. It was in the process of dismantling the car that RRS patrol vehicle spotted us and arrested two of us. Emma, Dolapo and David are on the run.” Commenting on the development, the CP, Muazu stated that investigations were continuing on the case. He assured that the command would leave no stone unturned towards ensuring that the fleeing suspects are made to face justice.

Navy destroys 637 illegal refineries in N/Delta ... as 104 speed boats impounded

he Nigerian Navy (NN) says it destroyed about 637 illegal refineries in the Niger Delta in 2018, through “Operation River Sweep’’. The Chief of Naval Staff (CNS), Ibok-Ete Ibas, a vice admiral, disclosed this on Monday in Abuja, while briefing newsmen on the scorecard of the navy in 2018. Ibas, represented by Belgory Ibe-Enwo, a rear admiral and chief of policy and plans, naval headquarters, Abuja, further disclosed that 104 speed boats and 340 suspects were also arrested in connection with illegal bunkering or smuggling during the period. The operation involves air surveillance, insertion of special forces by gunboats, pulling down of located illegal refining sites with the use of swamp buggies and arrest/ destruction of boats and barges found in

such locations. The naval chief said that the quantity of crude oil lost to illegal oil refining activities during the period was about 277, 040 barrels. He added that about 23.1 million litres of Automated Gas Oil (AGO) or diesel, 212, 610 litres of Premium Motor Spirit (PMS) and 1.2 million litres of Domestic Producing Kerosene (DPK) were also lost. He said that records indicated that the navy through its “Operation Tsare Teku” recorded a total of 34 pirates’ attacks during the period. “A total of 34 pirates’ attacks on ships were reported, with nine successful and 25 unsuccessful. “Furthermore, a total of 20 sea robbery attacks were reported in 2018, with six successful and 14 unsuccessful.

“Additionally, a total of 46 vessels and barges were arrested for involvement in maritime crimes during the period,” Ibas said. On maritime domain awareness, he said that the navy carried out round-the-clock surveillance of Nigeria’s maritime space, using the Regional Awareness Capability (RMAC) and Falcon Eye facilities. The navy chief said that in addition to the use of vessels and helicopters, the force had 24 Maritime Domain Awareness (MDA) centres located across the Nigerian coastlines. “These centres ensure effective surveillance of all vessels in our territorial waters were fitted with Automatic Identification System (AIS) or not,” he said. He explained that using the MDA facilities and prompt reporting of attacks of vessels at sea led to foiling of several piracy incidents.

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Transforming financial services through BDCs’ Live Run Automation Portal Hope Moses-Ashike

he financial services sector last week received a boost, following the digitisation of Bureaux de Change (BDC) operations which took off with the official launching of the Association of Bureaux De Change Operators of Nigeria (ABCON) Live Run Automation Portal in Lagos. The project, which has the backing of the Central Bank of Nigeria (CBN) ended decades of manual filling of regulatory reports by BDCs, enhances global competitiveness of operators and raises hopes of higher transaction margins. ABCON insists that the full digitisation of BDCs operations is a boost for financial system and the economy ahead of the Financial Action Task Force (FATF) assessment for Nigeria this year. For decades, Bureau De Change (BDC) operators were filing their weekly regulatory reports manually to the CBN and Nigerian Financial Intelligence Unit (NFIU). The operators also lacked the technology to test the genuineness of documents presented to them by foreign exchange end-users and this had severally led to sanctions, loss of revenues and damaged the reputation of Nigerian BDCs in the eyes of international community. But that changed on Tuesday, February 5, 2019 when ABCON Live Run Automation Portal was unveiled to over 4,500 BDCs in Lagos. The portal is the final phase of automating all BDCs’ operations and integrating them with the operations of the CBN, NFIU and Nigeria InterBank Settlement System (NIBSS) for improved compliance with regulation and seamless operations. Aminu Gwadabe, ABCON president, who unveiled the platform at the event attended by over 4,000 BDCs, regulatory agencies and players in the financial sector, described it as a game changer in the Nigeria BDC industry. Gwadabe who spoke on the theme: ‘Digitising BDC Operations for Efficiency, Transparency and Regulatory Compliance’, said the project would enhance BDCs compliance with set regulations, restore their lost glory and promote market integrity.

Godwin Emefiele. CBN, governor

Aminu Gwadabe, ABCON president

The platform, Gwadabe explained, allows BDCs send their reports online real time, thereby removing the challenge of manual rendition of reports that has been confronting operators for decades. The ABCON president said, “the objective of this launching is firstly, to change the negative perception towards BDCs in Nigeria. We have a very negative perception from the public and regulators. This is due to the nature of our operations which has been manually-driven for decades. Today, we are by this ABCON Live Run Automation Portal project, automating BDCs operations nationwide. This will not only bring efficiency to our business, but change the local and global perception of our operations for good”. According to Gwadabe, even foreign investors look at the perception of every country before deciding to do business with such country. “So, this is our own way of improving the image of Nigeria in the eyes of international community. Remember that this year will witness the visit of Financial Action Task Force (FATF) to Nigeria for the assessment of the country. The FATF views BDCs as one of the weakest links in the Nigerian financial services value-chain. So, because of that, we want to improve the entire perception of BDCs in Nigeria more importantly by putting tested IT infrastructure for our members to utilize,” he said. He further explained that the

automation integrates three of Nigeria’s regulatory agencies. First, it addresses the CBN, NIFU and the NIBSS platforms. “We send our Suspicious Transactions Reports (STRs) daily utilisations and purchases filings to the CBN. To the NFIU, we conduct our Cash Transfer Report, STR. The NIBSS platform will capture Know Your Customers (KYC) validation and Bank Verification Number (BVN) validation of our clients. So, you can see, it is robust and all encompassing in addressing anti-money laundering and terrorism financing. The anti-money laundering and terrorism financing is fast damaging the image of financial institutions, and BDCs are no exceptions. That is why we are putting this automation for our members to be empowered to compete globally, and comply with regulations with ease,” Gwadabe stated. He further observed that the world is going digital, and BDC operators under his leadership are committed to staying ahead of the competition by deploying timetested technology to deliver effective services to forex end-users. According to him, the portal will sustain transparent transactions in the BDC corridor, boost the morale of its members and ensure sustained operations. On how the portal works Gwadabe explained that the project came with three layers and stag-

es. First layer is on online real time registration of our members with a success rate of over 4,500 BDCs registered nationwide. This layer is to enable our members conduct their membership registration from any of their location without coming physically to ABCON Secretariat. The second layer borders on automation of ABCON’s operational process, book keeping, issuance of receipt, preparation of accounts, balance sheets, ledgers and sales/ purchase registers. The most important of this layer is the online real time rendition of returns to regulatory agencies. Another important feature of this layer is the BDCs on boarding and integration of the BVN platform on the NIBSS portal for verifications and validation of clients’ BVNs, which is a most vital requirement forex sale. Gwadabe said the group is still discussing with the CBN on making BDCs International Money Transfer Operators (IMTOs) direct agents after the regulator approved additional agents for the country. “Partly, the complaint of the CBN is whether the BDCs have the right infrastructure in place. The IMTOs look at that criteria too. They want to know if BDCs have internet, computers, and scanners to capture their transactions. And all our members here today have put those structures in place. And there is about $24 billion that come into Nigeria annually from the Diaspora”. Continuing, he said, “the CBN only captures six per cent of this Diaspora remittances and the rest goes under the counter without any tracing. And the BDCs with our number of 4,500, (only China that has 1,500 in the world), we are actually the best to utilize the inflow of IMTOs. They are about 60 now, and we are still pushing to the CBN, letting them know that we can do it and the full automation of BDCs’ operations launched today is another milestone and proof that we are ready to play that role in the interest of the economy,” he stated. Gwadabe said that forex business is a live business that has direct impact on the economy and livelihood of every family. According to Gwadabe, the BDCs have unified the street rate and the official BDC rate. “We are talking of N358 to dollar official rate

and even N360 to dollar, which is the benchmark of the CBN. So, I congratulate our members and we are celebrating ourselves and that’s why we are coming with IT to ensure we record more successes”. He said that with this development, the NFIU, EFCC and CBN supervision officials do not need to physically visit BDC offices to look at their books and ascertain the level of compliance adding that the technology driving the project is cloudbased. He said the scheme will enable the BDCs to save cost and make more money from their operations. “If you remove compliance, we become enemies of NFIU, CBN and even EFCC. So, operators have to give priority to compliance and following due process in their work. Remember, the ABCON members are the key drivers of the forex market and their contributions to exchange rate stability are being acknowledged by the regulators, hence the level of quality representation we have seen at today’s event”, Gwadabe advised. He explained that once a BDC operator violates set regulations due to non-compliance, it will adversely affect such operator and could even lead to outright withdrawal of operating licenses. At the event, the CBN was represented by Adebola Ayedun, assistant director, trade and exchange department, Samuel Oluyemi represented Niyi Ajao, NIBSS acting managing director, and NFIU was represented by Adangbe Williams while Tony Ewerem represented Travelex Nigeria. Higher transaction margin for BDCs Gwadabe also called on the CBN to review the transaction margin for BDCs upwards to five per cent, adding that the current one per cent that operators take is not sufficient and falls below global standards. He said 10 per cent transaction margin is the common global practice. He said the automation of BDCs’ operations is a good step needed to get the regulators consider raising the transaction margin for Nigerian BDCs. Also speaking on the transaction margin, Tony Enwereji, general manager, Travelex Nigeria, said that in other countries where the company operates, transaction margin is always around six per cent.

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How Agric Ministry’s tardiness costs Nigeria N576m …as US ban on catfish export persists Josephine Okojie

he delay of the Department of Fisheries, Fe d e ra l Mi n i s t r y o f Agriculture, to summit the Self Reporting Tool (SRT) before the due date to the US-Food Safety Inspection Service (FSIS) is responsible for the loss of about N576million revenue the country would have earned in 2018 if there were no ban enforced on Nigerian fish export. The ban which has since been enforced in March 2018 by the US is as a result of the Agric Ministry’s failure to submit the SRT document before the stipulated deadline. According to the United States Department for Agriculture (USDA), the SRT is a prerequisite for trade and it is the process of determining whether a country’s food safety inspection system meets the standards applied domestically in the US. Nigeria is yet to fully provide these answers after submitting the SRT document for the second time, the US Food Safety says. “Nigeria has failed to fully address information requested in the Self Reporting Tool (SRT) and FSIS’ review of its May 2018 submission showed that equivalence requirements had still not been met,” said Veronika Pfaeffle, public affairs specialist, FSIS – USDA in a statement. “FSIS will continue to work with Nigeria if they want to continue to pursue the process to be deemed

equivalent. Until that time, Nigeria will not be eligible to export these products to the US,” Pfaeffle said. Nigeria exports about 100 metric tonnes of catfish yearly to the US, Canada and Europe out of its 316,727MT annual aquaculture production, the Nigeria Catfish Association says. Catfish exported to the United States is sold for $16 per kg. 1,000KG is equivalent to a ton; therefore, 1,000KG multiplied by 100tons gives 100,000KG. To get the value in monetary terms, multiply $16 by 100,000KG, this is equal to $1.6 million (N576m).

The N576 million revenue losses is being recorded at a time the Federal Government is mouthing support for agriculture and says it is serious about making the sector the largest foreign exchange earner. “The development has affected catfish production and the country has been losing a lot of revenue since the ban was enforced,” Oloye Rotimi Olibale, president, Catfish and Allied Fish Farmers Association of Nigeria (CAFFAN) said from his Ibadan farm in a telephone response to BusinessDay questions. “Lots of fish farmers took loans from deposit money banks to invest

Ekiti vaccinates livestock against trans-border diseases

Bello pledges support for 2,000 youths, women rice farmers Victoria Nnakiaike, Lokoja

he Kogi state government has promised support to over 2,000 youths and women rice farmers in the state, under an out-growers initiative. Rashida Bello, Wife of the Governor, made this known recently at the Ejiba Rice Mill while meeting with women and youths who participated in the Omi Dam Rice Farming Out-Growers programme. Bello expressed excitement at the level of involvement of women in the scheme which was launched last year in conjunction with the Kogi State Ministry of Agriculture and Agri Integrated Service Africa Limited. “Based on the reception and the willingness I have seen in our people to go back to farming, our program

will be enrolling 2,000 women and youth out-growers for the next wet season farming, come April. So please make sure you enrol for the program and fully participate in order to get all the benefits that will come after,” she said. “I have received a lot of positive feedback and I am happy that our women and youths are gradually embracing farming and are benefiting immensely from the Rice Mill project being established in Ejiba,” she added. “My husband, Governor Yahaya Bello, saw the potential of the Omi Dam and the huge farming opportunities and job creation that can be derived from the farmland if fully developed. As such, he made a promise not to allow the place to lie fallow and now we have a 50-ton per day rice milling plant that can process over 2,500 tons of paddy rice per month in Ejiba.

in processing in order to take up opportunities in export but now with the ban since a year ago, most of them have been unable to meet their loan obligations,” Oildale said. He stated that the ban is killing the fish industry in the country and is a big threat to the Federal Government diversification drive through the sector. He blamed the government for not taking prompt action to address the issue and ensuring that the ban is lifted within the shortest possible time. The development has made catfish farmers to start counting

their losses as their profit margins are fast declining on account of the cancellation of future contracts to supply the African diaspora in the US, Canada and Europe. “It has been difficult for us catfish farmers since the ban. Most farmers have now shifted to other businesses because export is where the market is for catfish production,” Richard Agetu co-founder Richsi Nigeria Limited, makers of Ejazuki smoked fish, told BusinessDay. “Our profit margins have shrunk tremendously because we generate it from mainly from our export sales. A fish we sell for about N1,000 here is being sold for between $14 and $18 in the US,”Agetu said. He stated that some farmers have now resorted to smuggling the smoked catfish into the US, Canada and Europe. Speaking on behalf of the Ministry of Agriculture, Bisi Adepegba, former director of the Federal Department of Fisheries, who has been hired as a consultant by the ministry to address the issue, said the US government is yet to contact the country on the outcome of the second SRT document sent. “We never knew the US had upgraded its SRT document and when we sent in the initial one, it was rejected because it lacked some information and that was when the ban was enforced,” Adepegba said. “We have made a new submission to provide the additional information but up till now we have not gotten any feedback from them. Without the feedback, we would not know the next step to take,” she said.

“My office did not hesitate to utilise the opportunities the rice mill has brought to the people of Ejiba by empowering our women and youths to continuously grow paddy rice that will be processed at the mill. “I believe with this intervention, Ejibaland will be a rice-farming hub, and the women and youths of Ejiba will go to all other local governments in Kogi State to train our women and youths on the best practice in rice farming,” she added. Bello stated that only 75 people enrolled for the project last year because of the past experiences of empowerment programs, saying that things are now different, as the governor had delivered on his promises. She urged women and youths in the community to join hands with the government in pushing its vision in making Ejiba land, the home of rice farmers.

Akinremi Feyisipo, Ado-Ekiti

he Ekiti State government has vaccinated all livestock in the state against transborder diseases which usually attack them. Oludare Abegunde, permanent secretary, Ministry of Agriculture and Rural Development, stated this while flagging-off of this year’s ‘Pestes des Petits Ruminant’ (PPR) otherwise called “kata” vaccination for sheep and goats in Ado-Ekiti. Abegunde, who stressed the economic importance of the vaccination for livestock, observed that the vaccine was meant to immunise sheep and goats against trans-boundary animal diseases (TADS) which are capable of wiping out a very large number of animals within a short period of time. He enjoined all sheep and goat farmers across the state to bring forward their livestock for free vaccination against these killer diseases.

Abegunde described prevention as the best approach to checkmate the outbreak of diseases among livestock, while urging sheep and goat farmers to take the opportunity seriously. The per manent secretar y called on farmers in the state to register with farmers’ enumerators covering their areas. He however warned that any farmer not registering and not having his or her BVN would henceforth be disallowed from partaking in government intervention programmes. Earlier, Femi Ajibua, director -veterinary department in the ministry, who lauded the efforts of the state government in partnering with the Federal Government to provide free vaccines against contagious diseases that can ravage livestock, promised to extend the immunisation to rural areas across the state. He urged all sheep and goas owners to bring their animals out for free vaccination.

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4-Habitat Solution to begin ‘Smart Eco Rice’ farming in Anambra Emmanuel Ndukuba, Awka

-Habitat Solutions Limited, a Thailand-based agricultural firm is to commence `Smart Eco Rice’ farming in Anambra state. The ‘Smart Eco Rice’ farming makes use of Bio Char System to introduce necessary microbes into the soil as this increases soil fertility ratio. Fran kg o l d E kw u em, who led a delegation from the firm, made this known during a courtesy call to Afam Mbanefo, commissioner for Agriculture in Anambra state in his ADP office complex in Awka. “We decided to kick start the Smart Eco Farming in Anambra because after due diligence, the state has been found to have the

best enabling environment for such sustainable agric project in the country.’’ Ekwuem said.

Ekwuem commended G ov. Willie O biano of Anambra for his friendly disposition toward

Ekiti earmarks N2.8bn for agriculture, rural development Akinremi Feyisipo, Ado-Ekiti

he Kayode Fayemiled administration in Ekiti State has earmarked about N2.8 billion for various agricultural and rural development projects in the 2019 fiscal year. Giving the breakdown of the 2019 budget in AdoEkiti, Oladapo Kolawole, the state commissioner for Finance and Economic Development, explained that out of the proposed amount dedicated to the sector, a sum of N242million had been allocated for Land

Bank development in the agricultural sector. The commissioner also said that about N40million would be spent for the establishment of Cocoa Clonal Garden and rehabilitation centre. He explained that N500million would be used to complete the College of Agriculture in Isan-Ekiti, while N604million would be for land clearing. Kolawole, who maintained that about N80million was f o r re n ov a t i o n o f f a r m settlements and other facilities, however explained that N300million would be expended to purchase tractors

and other farm implement in the financial year. According to him, the sum of N50million was allocated for renovation and construction of farm offices, houses and labour lines for YCAD. He added that pastoral and grazing lands development would take N300million. Kolawole however assured t hat w i t h t h e i nt e nt i o n and plan of government to harness the potential in the agriculture sector with the budget provision, the living conditions of Ekiti people would improve tremendously.

BMA Act is strong for a robust biosafety system– Ebegba

ufus Ebegba, director general and CEO, National Biosafety Management Agency (NBMA), has said that the NBMA Act 2015 is strong enough to ensure a robust biosafety system for Nigeria. Ebegba said at an i n t e ra c t i o n w i t h c l e rk s of relevant committees of the National Assembly in Abuja recently that the act establishing the agency was not cast in stone, adding that it is a living document that needs to be tested. The meeting was organized to give Clerks, who are the

engine room of the Assembly an opportunity to understand the role of NBMA in national development as well as enhance their capacity and understanding on biosafety. According to him, the sensitization meeting for the clerks is a very important session which will help to educate them on issues of Biosafety because they are permanent staff of National Assembly that advice the legislators. “This interaction will help them to understand the Laws of Biosafety as well as to help the Agency to initiate amendment of the NBMA Act

when necessary.” Th e d i re c to r g e n e ra l appealed to the clerks to continue to exact expedient action on the need to rid the country of unapproved GMOs and ensure that the agency is properly positioned to police any attempt to turn the country into a dumping ground for unregulated GMOs. In a presentation, Eric Makwe, clerk, House of Representatives Committee on environment and habitat, narrated the processes of lawmaking in Nigeria and how Acts and other laws of the federation can be amended.

sustainable agriculture in the state. “ T h e g o v e r n o r ’s untiring effort will

ensure that Ndi Anambra farmers are not lacking necessary information and developmental projects from foreign donors,’’ he added. Speaking also, Mbanefo stressed that the Obiano administration had always been open to new ideas, concepts and technology that would ensure smart and precision farming in the state. The commissioner also noted that it was the governor’s vision to make the state one of the world’s food baskets. “The state is ever ready to partner investors once the proposed projects are feasible and viable. ``The governor tries to encourage capacity building and staff training abroad. He also taps into the latest technology in the agriculture sector,” he said. The commissioner

announced that Ifeanyi Ezechukwu, a staff of the ministry was being currently sponsored by the state government to Thailand to study their technological prowess in rice farming. ``This move he says is already yielding dividends,” Mbanefo said. He assured the delegation that government would continue to collaborate with the organisation on Smart Eco Rice farming in the state. Ibiam Orji, head of the engineering department, 4-High Habitat, noted that the Smart Eco Rice Farming technology is being used in Thailand already, to increase soil fertility ratio. “Rice farming is thriving today in Thailand because of this technology,” he said. He praised the Anambra state government for its agricultural policies in the state.

1,195 farmers get water pumps in Gombe to boost rice, maize production James Kwen, Abuja

o fewer than 1,195 farmers in Gombe State have gotten about 2,170 petrol water pumps from the IncentiveBased Risk-Sharing System for Agricultural Lending (NIRSAL Plc) to irrigate their farms and mitigate the impact of climate change experienced in the region. NIRSAL also distributed 123 tonnes of seeds, 6,152 Litres of agro chemicals, 769 tonnes of fertilisers and 3,076 units of knapsack sprayers to rice and maize farmers of HABUCOM and Rice Resources Cooperative in Gombe. Beneficiaries were farmers drawn from Kupto, Funakaye, and Yamaltu Deba Local Government Areas (LGA) of Gombe State who have been empowered to cultivate rice and maize d u r i ng t h i s d r y s e a s o n under the Anchor Borrowers Programme (ABP). Rabiu Haruna, representative of HABUCOM Farmers Group made this known at the flag-off of the distribution of agricultural inputs to 1,729 rice and

maize farmers in the state under the Central Bank of Nigeria’s ABP program for the 2018/2019 dry season farming. Haruna said the inputs would go a long way in boosting rice and maize production as farmers will now have access to water pumps for their farmlands while lauding NIRSAL for their support. “We farm maize on 2,170 hectares of land and with NIRSAL’s assistance, we now have 2,170 water pumps, which means that we have one water pump for each hectare. “Before now, we did not have enough water pumps to irrigate our farms, we used to hire, and many times the ones we had would breakdown because of over usage, he said. Ahmed Shehu ,while speaking on behalf of the Rice Resource Cooperative Group’s President said, “with the certified improved seeds given to farmers by NIRSAL, we are expecting a bumper harvest of about 120 bags of rice from every two hectares cultivated.” Shehu stated that their dreams would soon become

a reality with the newly received water pumps which they would use for farm irrigation, enabling them to cultivate rice during the dry and wet seasons of 2019. He called for additional government suppor t to enable the group continue the expansion of their farm operations, adding that members of the group had acquired new methods for dry season rice production f r o m N I R S A L’s P r o j e c t Monitoring Reporting and Remediation Officers (PMRO). Shehu however said, they would need further government assistance to expand their cooperative into larger clusters and e x p re s s e d g ra t i t u d e t o NIRSAL, the CBN and the Federal Government for improving the capacity of the group. N I R S A L i s c u r re n t l y completing ABP input distribution in four states of the North-East, including Gombe, Borno, Taraba, and Adamawa and the programme seeks to address the pre-upstream challenges associated with the rice and maize value chains in the region.

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Benoit Claveranne CEO, International and New Markets at AXA

Interview with Private Sector Leaders

‘If you want to be relevant in the African market, you need to have presence in Nigeria’ Benoit Claveranne, CEO, International and New Markets at AXA, was in Nigeria for the first time to have a feel of its local subsidiary AXA Mansard Plc, which the group acquired some five years ago. In this interview with Patrick Atuanya, editor BusinessDay; Modestus Anaesoronye, and Michael Ani, he shares his thoughts on the vision of the group, African market expansion, and interest in the Nigerian market. Excerpts:

ow can you describe your first time in Nigeria Like? Yes, you can say it is my first time in Nigeria, but it is definitely not my first time in Africa as I have worked several years in West Africa and Central Africa but mostly in the French African countries. I have never had the opportunity of coming to Nigeria, but the first time coming here for me has been interesting. Being in charge of international market has given me much exposure to all the biggest megacities in the world and so far, I will say Lagos is the easiest city I have been to as it took us only 40 minutes to get in here from the airport, making me think businesses were on strike due to my expectation of bigger traffic jam. However, my trip down here has so far been interesting. You just transitioned from being the chief transmission officer to being the CEO of the International and Emerging Markets. How can you best describe this transition process? Indeed, I was in charge of the transformation of Axa before, mostly through the use of technology and data and changing the way we serve our clients. When we were transmitting the group 18 months ago, we made very bold rules to give the power to the local entities. It was our conviction that the closer you are to the clients, the better you make the right decision. In the same token, when I was in charge of the transformation process, we saw the way the world was changing especially on the technology side. We had this strong conviction that the emerging markets have the ability to leapfrog on many of the existing technologies that we have in the developed markets and if we know how to leverage them, we would go much faster and much further. For me, I will say that I am trying to bring in the knowledge and the expertise that I have in my job as a transformation, seeing the key strategic decisions that we have to make, combine it with using global best practices, including first for growth, first for innovation, first for being known in emerging markets. I have the idea that if we combine these strategies well, we will have a bright future in those markets, including Nigeria. Having been in nine countries under your group, how does Axa navigate the cultures in these markets to sell its product and still grow its footprint without stumbling?

First of all, I must say that we are not starting from scratch. In Axa, there is a conviction that to be relevant in the 20th and the 21st centuries, you have to be a global peer. We were a very small regional French company more than 20 years ago but now we have become one of the global leaders because our founder and predecessor had a strong conviction that we have to go global. Secondly, we may be successful in being a global leader, but the truth is that we have made several mistakes in the past. The way we have adopted to manage these local markets was that we made a conscious choice that we needed people who have experience in these markets because it is one thing to be bright but it is another thing to know and understand the feelings of the local markets. Two things, a leadership teammate of people who have worked in emerging markets, while the other, as much as we can, we favour local CEOs. Last year, we appointed an Egyptian to lead our Egypt market; we appointed a Turkish to lead our Turkey business because we know that the quality of the leader that makes the decision because we know for a fact that a person that knows the market, that understands the terrain and that speaks the language is much better than others. The Third point is on how we can make sure that every day, the local way of doing things has the same with our global process because we are very keen on knowing what the Nigerian specifics are so that we can sign them in with the global practices that we have in Axa. What are your thoughts on your investments in the Nigerian business? How are they performing? First of all, the decision was made five years ago that if you want to be a relevant player in the African market, you need to have a presence in Nigeria. Nigeria is a country on the map that if you want to do well globally, you have to be in. Secondly, we are very happy with the investment that we did in Axa Mansard as it has so far brought in very good numbers, innovations and a very high level of customer services. We know that we are not the only one that believes in Nigeria but we believe that we have a very good asset on which we can build to go further. We believe in the fundamentals of the Nigerian market because it is a long-term business and not a short-term business and when you look at the fundamentals of the Ni-

gerian economy, like a large population, strong GDP, strong growth in the middle class that requires more and more protection. Hence, if you want to be relevant in Africa, you need to have a presence in the largest country of the continent and that is why the company is collaborating with other stakeholders in the insurance market to improve insurance adoption or uptake of insurance product through public enlightenment as it is important that we enlighten the public. We believe it is the first market in Africa, and we are making sure we invest in the development of local technical capacity. We believe also that if we are able to focus on these two things, we stand a chance of benefiting from the opportunities that we see in the market. You recall that about nine years ago, we started a public enlightenment campaign in Nigeria with a few players in the market. There is also an on-going campaign that involves the whole market including NAICOM as it is clear that everyone recognises the fact that there is need for public enlightenment. You mentioned your company bringing some innovations into the local markets. Can you talk about some of these innovations? It’s a two-way thing. On one hand, we are exposed to the global environment because we are in 62 markets. We are constantly exposed to innovations of the competition, new needs of clients and new technology that we have to constantly unveil. For instance, our team in Nigeria, we took their ideas last year and discussed it. We went to Indonesia, discussed with our teams there because we know that the changes you have in Indonesia might not be the same as what you have in the Nigerian market. We had a session on health just before this interview and came up with a very distinctive value proposal for our Nigerian clients. If you want to have an extremely customercentric offer we have a utilisation ratio of more than 80 percent. Hence I can say that the value for money for the Nigerian client is very high and we offer that with a modern fully digitised and fully automated services. With this we give away all the hassle of the usual infant processes to the client in the country or for him or her with value-added services with medical opinion and we could have similar examples of what we do in Egypt, Mexico, France. Constantly we try to crossfertilise all these things and that

is the interest of being part of the global players because it gives opportunity for the Nigerian team to have access for all this package and I must say have a taste of what it looks like today. What Nigeria is doing is part of what we share abroad to say, look at what they do and the efficiency on how they do it and the cost-effectiveness in how they do it, and it will be used by others around the globe. How do you tackle some of the challenges you encounter in the Nigerian market? I think the Nigerian market is not different from the challenges that we will face tomorrow in Indonesia, Egypt, Mexico, Brazil because they are all emerging economies, which over the long term is going to grow but is going to have volatility around that trend that is higher than what you will have in a mature economy. The challenge for us is on how to navigate through such volatility. Sometimes it is macroeconomic volatility, sometimes it

is political volatility, financial volatility, however, it is our responsibility to steer with a view of the mid-term to long term horizon, help and support the team to capture all the opportunities. One risk you might have in that kind of situation is if you don’t master volatility, if you don’t go for the volatility and not to allow it disturb your plans hence, you must face a risk that is sure. Another challenge is sometimes having too many battles to fight without being strict enough in picking the right one because there is so much potential money going in the streets that you might want to do it in their own way. And if you decide to do it in their own way, you might not do it well. Another major challenge is on the need for people who have experience in the market, but it is not much as we see in the past. So the challenges are somewhat the same; however they could be specific as we have got upcoming elections in the country. In every country in the world, when elections are coming, the level of uncertainties rises and most people post fear but this is where our expertise as a global player comes in as we will

look beyond the elections because we believe in the future of Nigeria and we keep it straight and carry on. Are you not worried about competitions? In Axa, we love competition. We believe in the free market economy and competition. We like the challenge as there are some markets that we are leaders and some market that we have challenges and we love to challenge the leaders. We are very happy that some market players are now seeing the prospect that we saw five years ago as being the potential of Nigeria as so many persons questioned what we were doing but now they are coming. We are very happy they are joining us we know it will be good for them in the Nigerian economy and again our proposition on a daily basis is to grow the cake for the benefit of the Nigerian people, hence we are very happy that other people now see the benefit that we saw several years ago. How do you intend to sustain the growth in this market trying to get new customers on board?

Firstly, insurance, almost nowhere in the world comes as a natural instinct by people. The normal human hardly wakes up in the morning thinking of insurance but they can think of buying phones, clothes, etc. Also, in every of the markets we know about either in those markets where insurance penetration rate is high, or the rate is low, what is important to note is that it takes time to educate people; it takes time to understand what the risk is and how they can manage such risk. There are so many cultural aspects to it. In some countries, people don’t necessarily buy the concept of protecting their staff against hazard as they feel they don’t need an insurance company. Secondly, we have also seen many countries in which people get the concept but don’t really want to pay cash but they want the service. So, all these put together, you cannot do it alone. At some point it has to be an industry commitment and I will say a government or public authority commitment. It takes a whole society to share the conviction that the safer the people are, the more they will invest, the more they will take care of the success of their children, and the more they will prepare for their own retirement. Hence, our strategy is that we will sustain those big corporations that take care of their employees and offer those kinds of product solutions. The next challenge will be for the population who are not prepared for that: individual person, SMEs who will believe that the need for these services is high, however, when you have your own firm and have one or two employees, you don’t believe it is necessary to save some monthly to take care of your company and your employee. That is why there is a need for the regulators and every other player to come in and convince people and this should cover all forms of insurance. There are really two ways why you have high insurance penetration. In most advanced countries, you have about 150 mandatory insurance; in Nigeria, you can count about 5 or 6 with others not enforced by law. For somebody working in a company site, it should not be by choice that they are protected; it should be by law that they should be protected against an accident when they are at a construction site. So, for a higher penetration of insurance, it cannot be achieved by employers doing it their own way, but by enforcing the law on protecting people against the risk that they cannot manage.

The second part is that we are in a market that we are trying to define the product in a way that really meets the people’s needs so that it won’t be something that they are forced to do, but because they really need it. If you ask any Nigerian today if they care about their health, they will tell you yes. But truly, do they really have a lot of solutions to their health? This is because provision and infrastructure need a lot of development. So the major task for us is on how we unlock the potentials that we see in the market and for us it is by creating the right productsproducts that stand the chance in ensuring that the problems of an average man are solved and it is only when we do that coupled with other legally enforced insurance products that we can confidently unlock the potentials in the market. The regulators recently suspended tier-based capitalisation which a lot of people thought is the way to go for the industry and we heard that a lot of the bigger insurance firms are beginning to respond to the regulation. What are your views as regards the tier based recapitalisation and how are you responding to it? I think the regulators are going in the right direction. I think it is very

The major task for us is on how we unlock the potentials that we see in the market and for us it is by creating the right products

clear that companies need to have the right capital to underwrite the kind of businesses. For example if you are underwriting an energy business you need to have sufficient capital. You need to have sufficient capital in case there is a huge loss so you will be able to take care of it, so definitely it is a step in the right direction. I think some of the concerns that the insurance industry had as at the time the regulation came up with it was the fact that there wasn’t enough time to raise enough capital and meet up with the requirement and it seems as if that it wasn’t cut out with enough time before it was suspended, but it was a wake-up call. For us, we have enough capital. It was just for us to meet up with the intermediate deadline that the regulator has set up. So, for us, it is more to consolidate on the position that we reached at the end of August and to ensure that we consistently have more capital even much more than what is required. Tell us more about your target customer campaign, “Know you can.” Indeed, we announced a new tag line for our brand two days ago and it is a direct conviction of the strategy that we have pushed for the last couple of years. We really believe that insurance is one of the tools to unleash

the desire of people to create the kind of business that they want and take care of their kids to live a better life, which has led us to think differently on what we can do for our clients. And that is why we want to partner with them and to permanently find needs that are not covered today or new ways of giving them services around that. In Axa, we are convinced that we have the capacity to make people believe in themselves. We believe that if we strengthen their selfbelief, we will make them have a better life and that is where the need for the motto “Know you can” comes in which means that AXA is here to help you strengthen your belief to have a better life. The Knowledge you can tag line is a tag line that every member of our staff is willing to bring to life and we have three sets of principles that are put together in order to facilitate this and they are personal, proactive and progressive. Personal: we need to know our customers a lot better because it is only when you know a customer very well that you can seek to partner and intervene in their life. Proactive: to pre-empt and anticipates the customer’s need because if you can’t do this, then you will be reactive which might not be too good. Progressive: to ensure that we are with the customers all through their journey as they progress in life.

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Wednesday 13 February 2019

Maritime e-Commerce

Nigerian ports handle 85% of import trade value at over $15bn annually

…As Usman lists Buhari’s achievements in maritime sector amaka Anagor-Ewuzie

s the major economic gateway, Nigerian seaports now handle over 85 percent of all the goods and services’, coming into the country with aggregate value exceeding the $15 billion mark annually, the Nigerian Ports Authority (NPA), has said. Nigerian Ports Statistics released by the National Bureau of Statistics (NBS) show that cargo traffic in the ports stood at a total of 71,903,266 metric tonnes in 2017 as against 70,819,092 metric tonnes recorded in 2016. Speaking at the public presentation of the book ‘Footprints of President Muhammadu Buhari in the Maritime Sector,’ written by the Shipping Correspondents Association of Nigeria (SCAN), Hadiza Bala Usman, managing director of the NPA, who described the maritime sector as a major contributor to the economy, said that the oil and gas sector, which is the nation’s economic mainstay, depends on the sector for shipment. According to her, ports desiring increase in market share must be open in their

practices to engender confidence, retain old patronage and gain more trust. “In Nigeria, the maritime sector is a significant contributor to national growth with yet untapped potential. For instance, Singapore’s maritime industry, contributes about 7 percent to its $300 billion Gross Domestic Product (GDP). This administration understood that Nigeria must aspire by ensuring integrity in practices,” she said. On maritime security, Usman said NIMASA and the Nigerian Navy work roundthe-clock to reduce the incidence of piracy and have formed partnerships with other countries in the Gulf of Guinea region to ensure the safety of ships and crews on Nigerian waters. “NIMASA has invested heavily in a satellite Monitoring and Surveillance System while the Navy has not only increased the frequency of patrols on the waters, but has also deployed 39 newly produced gunboats and the second indigenous Seaward Defence Boat for surveillance purposes. “Another important factor deciding the competitiveness of the maritime sector is the efficiency with which cargoes are evacuated to and from the ports. This, without doubt, is

L-R: Bolaji Akinola, board chairman, SCAN; Sokonte Davies, representative of the managing director, NPA and the executive director, Marine and Operations; Yusuf Babalola, president SCAN and Adams Jatto, general manager, Corporate and Strategic Communications of NPA, at the unveiling of the Book titled “Footprints of President Muhammadu Buhari in the Maritime Sector in Lagos recently.

an area in which the maritime sector in Nigeria has suffered but this administration has taken giant steps to tackle the problem.” Usman said. Pointing at other achievements as mirrored in the book, Usman said that the government recently commissioned reconstructed Wharf Road, which the NPA spearheaded with the contribution of N1.8 billion. “Last year, the Federal Government awarded the contract for the reconstruction of the ApapaOshodi Expressway up to the Toll gate at the cost of N72 billion.

“The administration realises that the maritime sector cannot attain its potential without the deployment of multimodal transportation, so it has initiated stimulation activities on our inland waterways championed by the Nigerian Inland Waterways Agency (NIWA). Major inland river channels are being dredged with adequate channel markings for ease of navigation, all the way through the Eastern and Northern parts of the country to encourage the movement of cargo by barges. “The Buhari administra-

tion’s revolution in the railway sector is evident in the expansion of infrastructure. There have been a modernisation of the rail lines such that Mr. President has given a standing instruction that every port must have the complement of rail infrastructure with projections that by the end of 2021, there will be standard gauge railway across the main NorthSouth trading route. She listed others to include provision of a level playing field for operators in the sector, as well as the facilitation of ease of do-

ing business and successful berthing of the Egina FPSO, vessel in 2018. In his welcome address, Bolaji Akinola, chairman, board of SCAN, who noted that the maritime sector has been beset with several developmental and management challenges since independence in 1960, said that the present administration has shown the political will to tackle these challenges. He however said that the administration has not been given enough credit for its achievements in the sector, adding that this was the yawning gap, which SCAN intends to fill by writing this book. “The present administration has recorded enviable milestones in the general transportation sector, especially in railway development and in issues relating to the shipping sector. To Akinola, “The administration must be given credit for bringing decorum and instilling discipline in the sector, as well as plugging revenue loopholes. It is on record that the NPA, NIMASA, Nigerian Shippers’ Council and some other agencies in the sector now record little or no leakages in their systems, unlike in the past.

WACT to acquire $2.5m equipment to handle increasing volume at Onne Port amaka Anagor-Ewuzie

etermined to cope with the increasing volume of cargo at its terminal, the West African Container Terminal (WACT), Onne Port in Rivers State, has placed order for 10 new terminal trucks, two reach stackers and one empty container handler worth US$2.5 million, approximately N900 million. Aamir Mirza, managing director of WACT, disclosed this on Friday during the commissioning of four new terminal trucks, acquired to enhance service delivery to its customers. Mirza said the increase in cargo volume at the terminal necessitated the need to up the number of the cargo handling equipment and truck fleet. The four new trucks ar-

rive in Nigeria on Wednesday, having been flown in on one of the world’s largest cargo airplanes, the Antonov An-124. According to Mir za, congestion on the roads to Apapa, Lagos has led to an increase in container volumes at Onne, as more customers find WACT attractive to handle their goods. “The traffic situation at Apapa is one of the reasons for our unprecedented growth. In 2016 and 2017, WACT recorded a growth of about 17 percent. This is because of the stability of the naira and government’s encouragement of agriculturalbased exports. “In 2018, we ended up with a 22 percent growth as against our projections of 8 percent growth in container traffic. A sizable portion of this volume was due to traffic

at Apapa, as more shippers divert their cargo to Onne,” he said. Continuing, Mirza said: “The equipment we ordered were made to our specifications, based on the

environment and weather conditions. Our equipment is not like cars that can be produced and kept in showrooms. It takes about four to six months for the equipment to be manufactured

L-R: Godwin Ololuka, chairman of Ports Consultative Council, Eastern Ports; Aamir Mirza, managing director, West African Container Terminal (WACT), Onne Port; Michael Ebeatu, chairman, ANLCA, Onne Free Zone Chapter and Atiku Alhaji Buhari, deputy comptroller representing the Customs Area Controller, Onne at the commissioning of new terminal trucks acquired by WACT at the Onne Port, recently.

and shipped to us.” He said the remaining six trucks and other equipment are expected to arrive in the terminal before April. “Going by the growth of the Nigerian market, in about one and half years, our truck fleet will increase by 100 percent, reach stackers by 50 percent, and the empty handler fleet by 100 percent,” he added. Michael Ebeatu, chapter chairman of the Association of Nigeria Licensed Customs Agents (ANLCA), Onne Free Zone, described the addition to the truck fleet as commendable, and will go a long way to help with the huge volume of containers coming here. Godwin Onyekazi, president of the Nigerian Importers Integrity Association (NIIA), commended WACT for impacting on trade and

economic activities in the South-East and South-South regions. He said WACT has enhanced the competitiveness of Onne Port and made the port more attractive for importers and shipping lines. “Onne Port is about the only port outside Lagos that is really competitive and we commend WACT for ensuring that containers shipped through the port are handled professionally and delivered in good time,” he said. WACT, which started commercial operations in 2007, is reputed to be one of the most customer friendly port facilities in Nigeria. With a capacity of 314,000 TEUs, 325 reefer plugs and berths with depth of up to 12 meters, it is the most efficient gateway to most markets outside the Lagos area.

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Atiku rolls out plans to revive seaports in Niger-Delta, decongest Lagos Stories by amaka Anagor-Ewuzie

tiku Abubakar, the presidential candidate of the Peoples Demo c r a t i c Pa r t y (PDP), has promised to revive and put into effective use all seaports located in the Niger-Delta, and also complete all Federal Government projects in the region, if voted into power. Atiku made the promise on Thursday while addressing a crowd of PDP supporters at the Stephen Keshi Stadium, Asaba, where the PDP presidential campaign rally was held. Statistics has shown that despite the nearness of Eastern ports to markets in the North and the East, importers in these locations, have continued to make ports in Lagos, their preferred destination for taking delivery of their consignments. “I will renovate all the seaports in Delta state. I will

also complete all abandoned infrastructure projects. I promise I will deliver on these promises,” he said. Also, apparently moved by the plight of commuters, motorists and port users, who come to Apapa metropolis on daily basis for business, Atiku Abubakar, earlier assured Nigerians that efforts would be made by his administration to decongest the roads leading to the two major seaports in Lagos, Apapa and Tin-Can Island Ports, if voted into power. This was part of the content of the Atiku’s policy document titled: ‘Get Nigeria Working Again’, which was launched on social media platforms before the end of 2018. Atiku’s plans has become crucial at this time importers and their agents are paying dearly on demurrage to shipping companies and rent to terminal operators for the failure in the system, largely caused by dilapidated and congested port access roads

Atiku Abubakar

as well as over dependent on Lagos ports. According to the document, Atiku’s administration hopes to improve efficiency operations in the existing port and accelerate the development of alternative container ports especially inland dry ports. Atiku stated that his administration will define timelines for completion of

concessions granted from inland and dry port development. He said that if voted into power, his administration will also sort Public Private Partnerships (PPP) and community efforts toward the development of transport infrastructure. “Partner with states and local governments to develop and rehabilitate the connecting road networks

Atiku further vowed to use alternative means of transportation by developing a new National Transport Policy that will addresses issues relevant to promoting inter-modalism including institutional fragmentation, intermodal regulation, intermodal connectors and measuring transport system performance. “ We w i l l e n c o u ra g e transportation development around the nation’s agricultural and industrial clusters. Enhance linkages to agricultural zones and develop agricultural collection and distribution hubs in Jebba, Lafia, Makurdi, Lokoja, Pategi/Baro, Shendam and Jalingo,” he assured. Atiku further said that he will develop the Lagos – Abuja rail network on the standard gauge system to revive Nigeria’s rail system. Commenting on this, Emma Nwabunwanne, a Lagos based importer, who commended the plans to decongest Lagos Port, said that port users would be relieved

if Atiku’s administration will deliver on the promise. Apart from developing inland ports, Nwabunwanne urged Atiku to ensure that other seaports in the Eastern part of the country become fully utilised. He however noted that there was need to effectively revive the rail lines by concessioning the rail system for effective use. “The environment around Apapa port city is no longer conducive for seamless port operation. The man-hour lost on the roads leading Lagos ports by port users, container carrying trucks and operators, has been quiet disheartening,” said Nwabunwanne. Listing the operational challenges facing Eastern ports, he urged Atiku to deal with issues around insecurity on the water channels, widening infrastructural gap and shallow draught of the water channels leading to some of the ports in the East, which limits bigger vessels with higher capacity from berthing in those ports.

NIMASA moves against foreign vessels violating Cabotage rules on waiver

he Nigerian Maritime Administration and Safety Agency (NIMASA) has commenced clampdown on vessels that do not comply with the provisions of the Cabotage Compliance Strategy (CCS) introduced by the agency in 2018 to ease the implementation of the Cabotage Act 2003 in Nigeria. Dakuku Peterside, directorgeneral of NIMASA, said the agency will no longer encourage the application of any form of waiver under the Cabotage

Act, particularly from the oil firms operations because such does not help the growth of the Nigerian maritime sector and economy at large. “Our laws forbid foreign vessels operating in our territorial waters that do not comply with the Cabotage Act. There shall be no sacred cows when we commence clampdown on erring vessels. We want to increase the number of Nigerians participating in the marine business. We are working closely with the Nigerian Content Develop-

ment and Monitoring Board (NCDMB) to have a joint categorisation of vessels operating under the Cabotage Act,” Peterside said. A statement by Isichei Osamgbi, head, Corporate Communications, NIMASA, said that a detention order for a motor tanker, MT Navigator Capricorn, which is a Liquefied Petroleum Gas (LPG) carrier, has been approved for contravening sections of the Act. “The statement said that the vessel was first boarded in October 2018 and all in-

fractions of Cabotage noncompliance were noted and communicated accordingly to the charterer/owners with a 90-day grace period to comply. The 90 days expired on the 31st January 2019. It is noteworthy that owners made undertaking to remedy the notable infractions when the vessel was issued a detention warning in October 2018,” Osamgbi said. According to him, MT Navigator Capricorn has been moved to Lagos Anchorage to allow space for

other LPG vessels to discharge at the NOJ Jetty. Recall that the NIMASA DG had led members of his team to meet with the Oil Producers Trade Sector (OPTS) in Lagos, where he urged industry players to draw up a 5-year strategic plan for the cessation of application for Cabotage waiver and also pursue the utilisation of Nigerian-owned vessels for marine contracts. The essence was to ensure that Nigerians are not deprived of the jobs due

them on showing requisite qualifications for the job. The Agency via a Marine Notice suspended considerations for applications of waiver on manning for some categories of officers in vessels engaged in Cabotage trade. The Agency no longer considers application for grant of waiver on manning requirements for vessels engaged in coastal trade with regards to second officer, second engineer, second mate, down to able seamen, ratings and stewards.

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Wednesday 13 February 2019

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NSIA Insurance set to boost healthcare with launch of health insurance plan

L-R: Front roll: PR Du Toit, head Technical, Hollard Health; Gilles Nyssens, business development director, Africa, Cigna Global Health Benefits; Ebelechukwu Nwachukwu, managing director/CEO, NSIA Insurance; Harish Damodaran, head, Alternative Distribution, NSIA; and Lee-Ann Dobrescu, general manager, Operations, Hollard Health. Back roll- Lead: Binta Eta, lead, Corporate Marketing, NSIA; Sunny Uwagboi, executive director, Marketing and Relationship Management, NSIA; Abideen Musa, executive director, Technical, NSIA; and Titi Shodeinde, product development Consultant, NSIA during a visit by Cigna Hollard team to NSIA in Lagos.

2019 Elections: Industry awaits the ‘Mr President’ that understands role of insurance in economy Stories by Modestus Anaesoronye

s elections kickoff on Saturday to produce the next Nigerian president, players in the insurance industry wish to have a ‘Mr. President’ that understands the economy and the role of insurance as a catalyst for economic growth. The reason is that no advanced economy anywhere in the world has developed without a strong insurance industry. It remains the major mobiliser of long term funds for infrastructure development as well as an effective means of risk management that enables other businesses to survive. And for Nigeria, given available potential, the insurance industry has been a major source of foreign direct investment, having

received global insurance investors like Old Mutual, Sanlam, AXA, Allianz, SUNU, among others. A president that understand these roles will give the insurance industry a priority by not only ensuring that all government assets are insured and premiums are adequately paid, they will also create a conducive environment that will enable the industry to grow. There is need for policies that will drive insurance uptake like the compulsory insurance which are not unique to Nigeria. Enforcement of compulsory insurance has not happened and this is where government has a critical role to play. A situation where government and its agencies fail to insure their assets adequately, fail to pay premium on employees group life insurance spanning several months, is not only a

sign of negligence, it shows lack of commitment. On the environment, the insurance industry had expected commitment of the incumbent government to give its Drafted Consolidated Insurance Bill a priority to enable the sector achieve speedy growth, but this did not happen, thus leaving the sector to grapple with issues that are curable. Kemi Adeosun, former minister of Finance had constituted a Committee to review the Draft Insurance (Consolidated) Bill, with a view to making it a framework or principlebased legislation; a comparative review of the bill to align it with the powers of other financial regulators in the country, as well as a thorough examination of current market problems and recommendations of appropriate regulatory powers to allow the insurance

regulatory authority act appropriately. All of these unfortunately ended without meaningful outcome to date. Paul Odah, an insurance practitioner explained that the role of insurance in any economy, particularly in mobilisation of long-term funds cannot be taken for granted in the pursuit for economic growth and development in any nation. Odah who made the remark in a presentation, said insurance has enhanced the confidence of businesses to become adventurous, knowing there is a back-up plan in the event of any mishap –be it corporate or individual. The confidence of secure savings will reduce the possibility of corruption in preparation for retirement or associated anxiety, the expert stated.

he nation’s healthcare industry is set to receive a boost with the launch of a new International Health Insurance product by NSIA Insurance to the Nigerian market. The company, in order to deliver on all that is expected from an international health insurance offering is partnering with Cigna and Hollard. Cigna is a Fortune 500 company in the USA and one of the world’s leading providers of health benefits enabled through its 41,000 employees serving over 90 million customers all over the world. Hollard is South Africa’s largest independent insurance company, with an ever-growing African footprint making it known throughout the continent for its innovative approach and customer-centric brand. NSIA Health Insurance provides a robust health plan to local companies who want to provide their staff with access to quality healthcare in Nigeria and beyond, as well as multinationals operating in Nigeria, who desire to harmonise their health insurance plan across Africa. The staff of these companies once enrolled, are able to access the finest quality health care available all over Africa and the rest of the world, whenever they need such services. Ebelechukwu Nwachukwu, managing director of NSIA Insurance, said NSIA Health Insurance is one of a kind. Companies that purchase the product are rest assured that their staff will easily access the best medical services, wherever they are in the world when the need arises. This is a promise that is already being fulfilled by our technical partners in Nigeria and other parts of the world where they operate. Already, a number of leading Multinationals in Nigeria have signed on to NSIA Health Insurance with

many other prospects in the pipeline. NSIA Health Insurance will take into consideration the different health insurance needs of organisations, whether they operate in one African country or many, or whether they are looking to cover key local staff or expatriates or both. The product offers a combination of health plans that provide optimised coverage that can be aligned to a company’s budget. NSIA Insurance is excited about this addition to its portfolio of products, which affords it the opportunity to meet more of the insurance needs of its increasing customer base. The company is one of the most progressive composite insurance companies in Nigeria, with its head office located in Lagos, a strong regional presence in Abuja and large network in every strategic state. NSIA offers a wide range of insurance services to meet the changing financial, investment and lifestyle risk needs of corporate, commercial and individual customers, at competitive price and with the best service infrastructure to ensure value to our clients. NSIA Insurance Limited was incorporated originally as African Development Insurance Company in April 18, 1989, as a Limited liability company domiciled in Nigeria and licensed to underwrite all classes and volumes of general and life businesses. It became ADIC Insurance Limited in October, 2006 after Diamond Bank Plc acquired 96% equity stake. In 2011, NSIA Participations successfully acquired ADIC Insurance Ltd (Now NSIA Insurance Limited). NSIA Participations has presence in 12 countries which include Cameroun, Congo, Gabon, Benin, Cote d’Ivoire, Ghana, Guinea Bissau, Mali, Nigeria, France, Togo and Senegal.

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Aisha Dahir-Umar, PenCom boss explains position on violation allegations of PRA 2014 at House of Reps Public Hearing

he acting director-general of the Na t i o n a l P e n sion Commission (PenCom) Aisha Dahir-Umar has defended herself and the Commission’s activities with regard to implementations of the Pension Reform Act 2014 under her watch. Dahir-Umar, making her position known during the House of Representatives AdHoc Committee Public Hearing to Investigate the Activities of PenCom and Violation of the Pension Reform Act (PRA) 2014 held at the National Assembly Complex, Abuja, said the allegations are completely incorrect and unfounded. In her response to the AdHoc Committee over listed allegation of infractions of the Pension Reform Act 2004 as amended in 2014, said the members of staff and management team of the commission has always operated in accordance with the Act like it is their bible. She said that it is the contention of the commission that the House of Representatives was misled by the motion moved in the House on 29 November, 2018. The Ad-Hoc Committee had alleged that the commission unduly created an impasse in the matter of appointment and resumption of duty of the members of the Board of the Commission; Illegal creation of additional directorates and appointment of more directors, thereby increasing the number from 10 to 17 directors; and illegal increase of commission’s Staff End of Service Benefits by 300 per cent among others. Speaking on the allegation of unduly creating impasse in the matter of appointment and resumption of duty of the members of the Board of the commission, she recalled that following the dissolution of the erstwhile management of PenCom on 13 April, 2017 along with the managements of 22 other agencies and parastatals, the Federal Government announced the names of a new management team, subject to confirmation by

L-R: Front roll: Sani Muhammad, secretary/legal adviser, National Pension Commission (PenCom); Aisha Dahir-Umar, acting director general; PenCom; Ekanem Aikhomu, head, Benefits & Insurance Department; Hadiza Wali-Oniyangi, deputy general manager, Human Capital Management Department; Alfred Abah, office of the Head of the Civil Service of the Federation; Ayuba Wabba, president of Nigeria Labour Congress, during the Public Hearing on Activities of PenCom and Violation of Pension Act by House of Representative Ad-Hoc Committee

the Senate. She said: “You will further recall that on 27 May, 2017, the Federal Government reconstituted the nominated team, subject to Senate confirmation. In the interim, however, the Federal Government directed the acting directorgeneral as the most senior career staff of the commission, to superintend the affairs of the commission in acting capacity, pending assumption of duty by the appointed members of the Executive Management. Consequently, we have in the commission since April 2017, only a transitional management run by career staff of the commission. “By virtue of Section 19(3) of the PRA 2014, the President has power to appoint the Chairman, the DirectorGeneral and Commissioners of the National Pension Commission, subject to confirmation by the Senate. The career staffs of the commission absolutely do not have any role or influence on decisions taken by either the executive or legislative arms of the Federal Government in the matter of appointment to the Board of the Commission.

It is, therefore, incorrect to allege that the current transitional management is stalling the appointment or assumption of duty of the new Board members. On illegal creation of additional directorates and appointment of more directors, thereby increasing the number from 10 to 17 directors. Section 30 of the PRA 2014 provides that the structure of PenCom shall comprise “Divisions, Departments and Units as may be approved by the Board from time to time”. The current organogram of the Commission was approved by the Board of the Commission at its 46th meeting held on 12 June, 2015, with a structure of 5 Divisions and 20 Departments. Please find attached as Appendix 1, a copy of the Organogram of the Commission for your review. This structure subsists to date and has not been altered. Consequently, it is incorrect to state that additional Directorates have been created by the Commission during the current transitional period. “Furthermore, the Commission has not recruited any additional General Manager (i.e. Director) since the begin-

RC634453

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

ning of the transitional period in April 2017 to date. What happened was a normal and duly approved promotion exercise for career staff of the Commission, where three Deputy General Managers were promoted to the grade of General Managers after duly satisfying the established criteria in accordance with the terms and conditions of their employment. The Ad-hoc Committee may wish to note that the Report of the Annual Staff Performance Appraisal exercise, containing recommendations for promotion to General Manager and other grades, was approved by the Secretary to the Government of the Federation (SGF) on 18 April, 2018, in the absence of a functional Board of the Commission. This is consistent with the provision of Section 17(5) of the PRA 2014 and Section 9 of the First Schedule to the PRA 2014, as well as Mr. President’s directive of 16 July, 2015 to all MDAs whose Boards were dissolved that issues requiring approval of Boards should be referred to him for decision through the respective supervising Ministries.” “Also note that since the

inception of the transitional management in April 2017, PenCom has not undertaken any staff recruitment. The recruitment undertaken by the erstwhile Executive Management on the eve of their departure was suspended by the House Committee on Federal Character due to issues associated with the process.” Illegal increase of Commission’s Staff End of Service Benefits by 300%: Pursuant to Section 4(4)(a) of the PRA 2014, an employer may undertake to pay to his employees upon retirement, additional benefits other than the pension contributions into the Retirement Savings Account. Consistent with this provision and following the implementation of the Federal Government policy on 8-year tenure for Directors, the Board of the Commission approved, at its 46thmeeting held on 12 June, 2015, an Endof-Service Benefits package for General Managers who have served for a minimum of 5 years on the grade. Furthermore, at its 235th meeting held on 4 August, 2016, the erstwhile EXCO extended on separate terms and conditions, the implementation of the End-of-Service package to cover all other staff of the Commission. The latter was not approved by the Board prior to its dissolution by the Federal Government. “The Federal Government subsequently in 2016, suspended the policy on 8-year tenure of Directors, which substantially formed the basis of the approved End-of-Service Benefits package for General Managers. In consequence of this policy suspension, the erstwhile Management of the Commission halted the implementation of the End-of-Service benefits for General Managers and commenced a review of same to standardize the benefits payable to all eligible staff on General Manager grade, align the benefits with the policy shift on tenure and ensure affordability and sustainability of the Scheme. Unfortunately, the review exercise embarked upon by the

erstwhile management could not be approved by the Board before its dissolution by the Federal Government. “Accordingly, and in the absence of a functional Board, the revised terms of the Endof-Service Benefits Scheme for both General Managers and other staff of the Commission were submitted to the Secretary to the Government of the Federation (SGF) for approval, which was graciously granted on 30 June, 2017.” She stressed based on the clarifications and information given, the allegations of infractions of the provisions of the Pension Reform Act 2014 against the Commission are both fallacious and unfounded. “The enormous achievements recorded by the Commission in the implementation of the pension reform from 2004 to date. Indeed, due to its consistent exemplary performance as a regulator in the financial services industry, PenCom gained unprecedented public confidence and acceptability. Thus, within the short period of its existence and operations, it was able to birth and successfully nurture the pension industry that boasts of accumulated pool of long term pension assets worth about N8.63 trillion as at December 2018. About 60 percent of the total pension assets belongs to the private sector. In addition, the industry has not recorded any case of fraud or mismanagement of pension fund assets; “Consistent with its track record of performance, the Commission was able to record many feats within the current period of transitional management that commenced from April 2017 to date. These include growing the asset base from N6.42 in March 2017 to N8.63 as at December 2018; increased contributor registration from 7.6 million to 8.41 million RA holders as at December 2018; introduction of the Multi-fund structure of pension fund investment; reduction of management fees; introduction of the Micro Pension Plan; and many other major feats.

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

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Expert sees people-friendly products drive acceptance of micro pension

Stories by Modestus Anaesoronye

head of the takeoff of the micro pension scheme in Nigeria, an expert has advocated the development of people-friendly products. This, the expert noted will drive interest and boost consumer appetite. The development of people-friendly products will help attract and accommodate individuals in the micro pension sector, Glory Etaduovie, managing director, IEI-Anchor pension Fund Managers Limited made the observation. He noted that this will be a major plank of the financial inclusion effort of the government to reach the unreached population. He stated this in a paper entitled, Micro Pension – A Further Tool of Financial Inclusion, adding that IEIAnchor Pension Fund Managers is working on products that will appeal to the people in the sector, adding that reaching out and educating them remain paramount importance to the firm. He maintained that the mode of achieving this is very important as well, as it has to be both creative and sensitive. “Like most, if not all of

AIICO Insurance empowers students with work tools

the PFAs, internal structures are largely in place already. These include closely monitoring the Regulator’s ‘dance’ steps and domiciling same in our company. Staffing and a robust ICT network is being enhanced. Remember that those in the micro pension sector constitute no less than 60 per cent of the population. There is also a growing tilt towards increasing entrepreneurial drive, as the direct jobs are decreasing. It is thus a larger untapped market,” he said. He applauded the National Pension Commission (PenCom) for the micro pension initiative which he said would help create a robust financial future for people

in the informal sector. According to him, “PenCom has done well so far. It is a new learning needing to be domiciled. They have had to wade through unstructured parts to create in-routes for industry path and public assimilation and integration. Change pioneering and buy-ins are amongst the most difficult things to achieve. This is through the Micro pension plans. It is for individual professionals, artisans, retail or individual entrepreneurs, farmers amongst others,” he added. Etaduovie said micro pension has become an invaluable tool to bridge the terrible deficit in financial

inclusion and its ripple effects, as there is no plan for the aging and retirement in the unstructured business circles – whether with official retirement age or not. Often, no retirement age in this sector but reduced business activities due to reducing energy and health issues, he said. He identified benefits from the plan to include, good feelings of not being left out of mainstream events, but a platform to be involved; a platform to be listened to and get structured regular information; a platform for the options of informed choices, a platform for positive relationships, and overall enhancements.

Court restrains NAICOM from stopping Guinea Insurance from taking fresh businesses

he Federal High Court sitting in Abuja has given an order restraining the National Insurance Commission (NAICOM) from suspending Guinea Insurance Plc from writing new businesses until certain conditions are met. The court, in a ruling by Hon. Justice I. E. Ekwo granted an order in a suit that was filed by Guinea Insurance Plc with suit No: FHC/ ABJ/CS/151/2019 against the Commission on February 6, 2019.

“An order of mandatory injunction restraining the defendant, whether by itself, or assigns, successor-in- title, personal representative, agents or privies or any other person or body of persons( however described) acting for it or at its instance or behest, from enforcing or taking any steps whatsoever, including, without limitation, writing letters, issuing directives and/ or instructions of the plaintiff or any other person or entity; or taking out publications or any other acts; with intent

, ( or, in respect of such acts having) the likelihood or potential, to halt, stop, disrupt, frustrate or defeat; or in any way other way whatsoever, undermine or negatively impact the operations and / or business of the plaintiff; for any reasons whatsoever arising from, connected to, based upon or touching or concerning the compliance with the directives contained in the defendant ‘a letter of 28th January, 2019 pending the hearing and determination of the motion on notice,” the

court said. It held that all the parties should maintain the status quo, pending the hearing and determination of the motion on notice before the court. The case was later adjourned to 18th February, 2019 for motion on notice. It was gathered that NAICOM on January 28, 2019 suspended the company from underwriting new businesses but maintain the existing businesses in its portfolio until some issues are resolved by the company.

Insurtech funding surges in 2018 as key players expand

nsurtech investment volumes increased by more than 60 percent between 2017 and 2018, while key players such as Lemonade and Amazon also expanded their operations over the year, according to analysts at Deutsche Bank. Deutsche Bank data shows that insurtech investments (across all stages) totalled $2.6 billion during the first three quarters of

Efekoha leads industry delegation to Delta, canvases insurance education across schools

2018, compared with $1.6 billion for the same period in the previous year. This equated to an average $14 million investment per deal for the 184 deals transacted in 2018, versus $10 million per deal for the 152 recorded in 2017. Q3 2018 also saw the second-biggest funding volume ever for insurtechs at $1.26 billion, which included a late-stage $375 million funding round for U.S-

based firm, Oscar Health. Analysts at Deutsche Bank believe the most important development during the second half of the year was the announcement of Lemonade’s intention to enter Europe. Lemonade is one of the most high-profile companies to emerge from the insurance technology wave, and is funded by a $120 million investment from Softbank’s SuperVision Fund.

Allianz and Axa via XL Ventures also hold undisclosed stakes in the company, while Munich Re and other top reinsurers are represented on the reinsurance panel. Deutsche Bank anticipates that the insurtech will target some of the larger European markets in the UK, Germany and France due to the presence of some of their larger investors in these regions.

delegation of the Chartered Insurance Institute of Nigeria (CIIN) and the Insurance Industry Consultative Council (IICC) led by Eddie Efekoha, have paid a courtesy visit to the office of the Governor of Delta State, Senator Ifeanyi Okowa, pushing for introduction of insurance across education levels in the state. The delegation which was received by the Secretary to the State Government Ovie Agas, solicited support from the state in helping to promote the insurance industry agenda. Efekoha informed the State Government that the insurance industry has a key role to play in contributing to the growth of the country. He urged the state government to facilitate for insurance to be included as a subject in secondary schools, while also soliciting for the creation of faculties of insurance in state owned tertiary institutions. Efekoha assured the Secretary to the State Government that CIIN and the IICC would equally play an active role in executing these projects. During the visit the delegation led by Efekoha, donated 500 textbooks entitled, “Insurance for Senior Secondary Schools” to the Delta State government for onward distribution to secondary schools in the state. Efekoha, whilst making the donation to the Delta State Government, stated that the donation of the books represents a major

stride and serves as a landmark in the institute’s quest to groom a new generation of industry leaders. He said copies of the textbooks have previously been presented by the Institute to the Lagos, Oyo, Ogun, Kwara, Edo, Ondo, Rivers, Imo, Osun, Enugu, Ekiti, Kaduna and Kano State Ministries of Education as well as the FCT, adding that similar presentations have equally been slated for other states in the Federation. “All of these are part of our articulated efforts at expanding the capacity of institutions offering Insurance programmes thereby guiding them to deliver superior and qualitative Insurance education. “The promotion of Insurance education is not only a key to unlocking the huge potentials of our industry but also a means of opening the doors to the younger generation who represent the Insurance practitioners of tomorrow,” he said. On receiving the books, Secretary to the State government, Ovie Agas who represented the State Governor, Ifeanyi Okowa expressed delight at the gesture from the Institute. He thanked the CIIN and the IICC for considering Delta State a worthy place to carry out its insurance awareness activities. He assured the delegation that the message would be taken back to the Governor and he was sure that the delegations requests would be given serious consideration.

AIICO empowers students with work tools

s part of efforts to ignite passion for science and technology innovation in Nigerian youths, AIICO Insurance Plc. has donated thousands of mathematical sets and calculators to pupils and students in over 30 primary and secondary schools across six states of the federation. This is in line with the organisation’s commitment to promote literacy and to aid the adoption of STEM in Nigerian schools. STEM is a curriculum based on the idea of educating students in four specific disciplines – Science, Technology, Engineering and Mathematics and this campaign is being championed across various climes, including Nigeria. AIICO identifies with this initiative and supports government’s drive to entrench STEM in our schools by encouraging young ones to

pursue STEM subjects. Babatunde Fajemirokun, executive director/ COO of the company said “AIICO has always had a culture of giving back to impact society. Our Corporate Social Responsibility program is centered on: promoting literacy and STEM education, skill acquisition and aiding in the delivery of quality, affordable healthcare. This initiative is aimed at igniting a spirit of innovation with the younger generation who will be our future leaders.” AIICO Insurance Plc., a leading composite insurer in Nigeria, commenced operations in 1963. AIICO provides life insurance, health insurance, general insurance, wealth management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.

Wednesday 13 February 2019

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Law and entertainment T

his section is meant to discuss aspect of the law that applies to the entertainment world- be it music, films etc. Some of the important aspect that are very relevant are discussed below. 1. Copyright This is a legal right conferred on the owner of an original work to have exclusive right to its use and circulation. The owner of a work is usually referred to as author of the work. The body responsible for the registration and regulating issues relating to copyright in Nigeria is Nigerian Copyright Commission. Under section 1(1) of the Copyright Act, the following works are eligible for copyright protection- literary works, musical works, artistic works, cinematograph works, sound recording and broadcasts. It must be noted that under the Copyright Act the exclusive right of an author to a work is for a limited period. Section 2(2) of the Act provides that the author of a literary, artistic or musical work enjoys copyright throughout his lifetime and for 70 years after his death while section 24 addresses the case of films, sound recordings, performances etc- that the author enjoys copyright for 50 years from the time the work was first published. It must be noted that copyright in a work exists from the moment the author creates the work. It is not the registration with the Nigerian Copyright Commission that confers the right on the author. Why then do we still register our work with the commission. According to the commission, the reasons or advantages of registering are – “the record generated by the Commission provides an independent source of verifying data relating to a work or its author to the general public, the acknowledgement certificate issued to the author who notifies the Commission of his work provide prima facie evidence of the facts shown on it, [he scheme provides a depository for preserving original copies of works notified and the information and data contained in the notification database offers reliable rights management information to members of the public and prospective licensees to the work.” What are the rights of a copyright owner? Such a person can

allow or disallow the following“the reproduction of the work in various forms such as printed publication, photocopying or making a recording in any media, the public performance of work such as staging a play in a theatre, the recording of work in the form of compact disks, cassettes, videotapes etc, the broadcasting of the work by radio, cable or satellite, the translation of the work into other languages or its adaptation such as from a novel to a screenplay and the distribution of the work commercially by way of sales, hiring or rental.” Is the work I register here in Nigeria protected all over the world? The answer is no. The protection is limited to Nigeria. However, Nigeria has entered into agreement by way of treaty with other nations of the world with regards to issues bothering on copyright. Such work that is registered in Nigeria enjoys protection in other countries that are parties to the treaty signed by Nigeria. It must be noted that a work need not be published before it can be registered. Also, copyright mainly protects what has been written down or recorded

and not what is still in form of idea or imagination. The protection covers the author and any other person to whom the author may transfer the work to. Steps on how to register copyright in a work will be discussed next week. 2. Trademark This aspect is more related to record labels with special marks that are peculiar to them. This signs or marks can be registered to make it unique and exclusive to the particular record label. Trademark simply refers to a sign or design which is specially made for the identification of a product. It is meant to distinguish and identify the source of the product that carries the mark. Trademarks are often used by companies. The sign is always openly displayed on the product so as to quickly create an awareness of its source to the buyer. Trademarks are often registered so as to prevent any other person or company from using it. Its registration vests the person or company with the right to take legal actions against any form of infringement/use without permission. In essence, it is

an asset of the company. A symbol- ® is usually used to bring to the attention of the world that the trademark is registered. The law that regulates trademark in Nigeria is the Trade Marks Act. The agency that is in charge of trademark registration in Nigeria is Trademarks, Patents And Designs Registry, Commercial Law Department, Federal Ministry Of Industry, Trade And Investment, Abuja. Section 9(1) of the Trademark Act provides for registrability of trademark. It states that – “In order for a trade mark (other than a certification trade mark) to be registrable in Part A of the register it must contain or consist of at least one of the following essential particulars - (a) the name of a company, individual, or firm, represented in a special or particular manner; (b) the signature of the applicant for registration or some predecessor in his business; (c) an invented word or invented words; (d) a word or words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification a geographical name or a surname; (e) any other distinctive mark:”

Sections 3 and 4 of the Act makes it clear that a trademark must be registered in order to enjoy its exclusive use. The sections read “3. No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark; but nothing in this Act shall be taken to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof. 4. A trade mark must be registered in respect of particular goods or classes of goods, and any question arising as to the class within which any goods fall shall be determined by the Registrar, whose decision shall be final.” The procedure for the registration of trademark is stated below1. Search is conducted to ensure that the trademark presented does not infringe on an existing trademark. 2. If the above comes out positive, then the trademark is presented for filing. 3. An acknowledgement letter is then issued by the trademark registry after the filing. 4. The trademark Registry will shortly after the acknowledgement letter issue an acceptance letter. 5. The trademark is then published in a trademark journal. 6. A trademark certificate will also be issued. The requirements for the registration of trademark are listed below1. Logo 2. Applicant’s name 3. Applicant’s contact details 4. Power of Attorney appointing an agent to conduct the registration on behalf of the applicant. It must be noted that Section 23(1) of the Act states that “the registration of a trade mark shall be for a period of seven years, but may be renewed from time to time in accordance with the provisions of this section.” The foregoing shows that the initial or first registration is valid for seven years. However, the registration can be renewed after the seven years period. Section 23(2) of the Act further provides for the period of validity of the subsequent registration. The section states that such subsequent registration shall be valid for fourteen years.

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Shaping people into a team

Dear care and feeding: My Stepson is wonderful, but I just don’t love him

are and Feeding is Slate’s parenting advice column. Have a question for Care and Feeding? Email careandfeeding@slate.com or post it in the Slate Parenting Facebook group. Dear Care and Feeding, I have a 14-year-old stepson who I first met when he was a toddler. He spent weekends with his father and me until he was 7, when he moved in with us because his mom moved out of state and we were awarded physical custody. When we got married several years ago, I asked him what he wanted to call me, and he said “Mom.” He is smart, bright, funny, generous, and has a heart of gold. He deserves to have present, loving parents as much as every single kid out there does. And yet, I do not love him. I go through the motions of what I know a parent is supposed to provide her child. I do the things, buy the stuff, spend the time, ask the questions, try to engage. And I feel none of it. I know the difference because his father and I have our own biological children now, and what my heart feels for my own is everything that I don’t feel for my stepson. It’s difficult enough for me to struggle through parenting without feeling the parental love (oh man, managing the resentment and guilt that builds up as a result is an active, constant process)—but I can’t even imagine what I’m doing to the poor kid. I know that even if he can’t consciously recognize my lack of maternal love, he feels it subconsciously and there’s no way that this isn’t fucking him up. Everyone has reassured me over the years that my love for him would come, not to push it or rush it. But I’ve tried so many different approaches—spend-

ing more time with him, less time with him, no time with him, one-on-one time with him, sharing my interests, sharing his interests … and still. I do not miss him when he’s not around. I do not wish to spend more time with him. He so deserves a mom who loves him unconditionally, which apparently I can’t be because I’m deficient? Evil? I dunno. Regardless, how can I give my stepson the unconditional maternal love that he deserves and needs? If I can’t, would it be best to break up with my husband so he can find a better mom for his son, or is that way too late at this point to be helpful? (I would be impacting our biological children, too.) What can I even do at this point to minimize the damage I’m doing to my stepson? —What’s Wrong With Me? Dear What’s Wrong With Me? Oh, my dear, there is so much self-loathing radiating from this letter. Your head is a tough place to be right now. I cannot possibly say with any assurance that your belief you are “fucking up” your stepson is coming from an accurate or objective place. You describe a happy, healthy, smart,

and generous young man, who is being raised by what I assume is a good and loving father, as well as a woman who is actively trying to be a good parent to him on a daily basis. In the history of humans ham-fistedly trying to raise the next generation, that’s a pretty good childhood, I have to tell you. You need one-on-one therapy immediately. I would ordinarily encourage you to first talk to your husband, but I am extremely uncertain that you are a reliable narrator of your own life at this moment, and you’re displaying some catastrophizing that a professional would handle best. (No, you should not leave your marriage!) Talking to your husband will be an important part of the process, but I’m genuinely concerned about your mental health right now and want you to start there. I don’t think you’re in a place to hear this right now, but let me remind you (and all my readers) that love is also an action, and by doing what you describe as “going through the motions” in asking the right questions, showing interest, showing up, you are, in fact, loving your stepson. It’s the truth. Please keep me posted.

Dear Care and Feeding, My husband and I are trying to decide when to start our daughter in preschool. She turns 2 in late August, and right now she is cared for by a loving nanny. We love the convenience and one-on-one care of a nanny, but I admit to feeling as though the children of my friends who are in day care have a better sense of daily structure. My daughter is great on her regular schedule—naps and sleeps well, is social and happy— so I am not worried about it now, but I wonder when we need to start instilling a more structured day. My husband feels that preschool at 2 is a waste of money that could be better invested in her college fund, and part of me agrees with him. That said, I am also concerned that our daughter will be starting from behind with regards to daily structure and the discipline of a school day if she waits to start until 3. We have talked about just having her attend 2–3 mornings a week, but it’s still over $8,000 a year and we are already paying for a nanny. Am I signing my daughter up for a miserable initial school experience if I wait to enroll her until she is 3? Am I flushing money down the toilet if she starts at 2? —Am I Overthinking This? Dear Overthinker, Having been asked for my opinion, I will gladly give it: If you have good quality in-home child care (with you or a nanny), a 2-yearold will thrive in that environment, and it would be premature to move them into preschool just because you feel you should. Three-year-olds are both a bit sturdier when it comes to hitting that first cold-and-flu season spent in constant contact with damp, sticky peers, and also more ready to benefit from the particular group socialization that pre-

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school provides than 2-year-olds. If your 2-year-old needed to be placed in preschool, for whatever reason, I wouldn’t worry about it at all, but since doing so is an added financial burden, I can cheerfully tell you that waiting until 3 is a good choice. If you want to add some structure to your child’s day, you can do that without dropping 10 grand. Best of luck, whatever you decide! *** • If you missed Friday’s Care and Feeding column, read it here. • Discuss this column in the Slate Parenting Facebook group! *** Dear Care and Feeding, My stepdaughter is 9 and is very attached to our old dog, “Rover.” The dog now has metastasized cancer and cannot be cured, so we are doing our best to make him comfortable in his final days or weeks with us. It’s unclear how long he will last before we have to put him down to end his suffering. Now he has good and bad days, and it’s not yet time for him to go. That could change very quickly, however. Although my stepdaughter understands that Rover has cancer, and that is it is serious and he cannot be “cured,” I don’t think she has internalized that the cancer is going to result in Rover’s death, and sooner than we all would like. My question is, how do we involve stepdaughter in putting the dog down, which seems inevitable? I don’t want her to feel like we decided to kill her dog and hold it against us. But it might have to happen even if she doesn’t want it to. Also, what do we do if she wants to attend the actual vet appointment when the drugs are administered? Is it better that she be there for closure and understanding of what happened? Or is it too traumatizing? —Saying Goodbye

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Mercedes posts 180,000 global deliveries January Pg 30

Toyota rising costs offset better mix ….As quarterly profit flatlines

MIKE OCHONMA mikeochonma@gmail.com

oyota’s operating profit flatlined in the latest quarter as cost increases and lackluster sales offset a more profitable product mix and foreign exchange windfalls. Operating profit advanced just 0.3 percent to 676.1 billion yen ($6.13 billion) in the automakers fiscal third quarter ended Dec. 31, the company said in its earnings report. Net income, by contrast, plunged 81 percent to 180.9 billion yen ($1.64 billion). The net result in the latest quarter tumbled for two reasons. Firstly, last year’s net income was inflated by a one-time gain from U.S. tax reform. Secondly, this year’s earnings were hit by a separate one-time expense of 395.4 billion yen ($3.59 billion) for unrealized gains and losses on equity securities. That charge resulted in a change in accounting methods, even as revenue advanced 2.6 percent to 7.80 trillion yen ($70.75 billion). Global retail sales increased 2.9 percent to 2.71 million vehicles in the October-December period, including results from its Daihatsu small-car subsidiary and truckmaking affiliate Hino. Worldwide wholesale volume dipped 0.3 percent to 2.28 million vehicles. In announcing the earnings results, Operating Officer Masayoshi Shirayanagi lifted the company’s sales outlook for the current fiscal year ending March 31. It now expects retail volume

to reach 10.55 million vehicles, thanks to improved sales in Japan and China. The profitability of Toyota’s model mix improved in the quarter, as the automaker shifted its lineup more toward higher-margin light trucks and clamped down on incentives. A tailwind of favourable foreign exchange rates also buoyed results. But increased costs, for labour, research and development and other outlays cut back the gains. Toyota is trying to refine its incentive strategy for a more tailored approach. In the October-December period, average spiff spending on Toyota and Lexus brand cars by Toyota Motor Sales U.S.A. dropped 7.1 percent and was about $1,200 below the industry average, ac-

cording to figures from Autodata. Average industry outlays declined 3.4 percent in the quarter. Incentives on passenger cars fell 15.3 percent in the OctoberDecember quarter, from a year earlier, to an average of $2,600 per vehicle. Average spending on light trucks increased 0.7 percent to $2,431, according to figures from Autodata. North American wholesale deliveries declined 7.5 percent to 680,00 in fiscal third quarter, while regional operating profit retreated 2.2 percent to 26.4 billion yen ($239.5 million). Wholesale volume fell 2.1 percent to 232,000 vehicles in the quarter. But European regional operating profit improved 7.3 percent to 25.1 billion yen ($227.7 million).

Mazda signals SUV expansion ahead Geneva debut

Japan was Toyota’s biggest profit center and second biggest market after North America. Citing the impact from the accounting change for handling equities and securities, Toyota cut its outlook for net income in the current fiscal year ending March 31, 2019. Toyota now expects net income to fall 25 percent to 1.87 trillion yen ($16.96 billion) in the current fiscal year, a much steeper drop than the 7.8 percent decline it had earlier forecast. Toyota kept is operating profit outlook unchanged. Toyota’s global retail volume expanded 2.0 percent to 10.59 million vehicles in calendar year 2018. It expects global sales to increase 1.6 percent to 10.76 million vehicles in 2019.

ith the Geneva Motorshow scheduled to hold between March7-17 gathering momentum, Mazda is planning to showcase for the first time, a coupestyled SUV at the Geneva auto show, signaling that the automaker will expand its lineup in the booming market for high-riding vehicles. The compact-sized model will fit between the CX-3 compact SUV and larger CX-5, a source close to the company said. The car features the automaker’s latest Kodo design language and is based on its new-generation Skyactiv Vehicle Architecture. Its powertrain line-up will include spark-controlled compression ignition technology that Mazda says combines the best traits of diesel and gasoline engines. Meanwhile, it has released a darkened teaser image of the SUV’s rear, showing round brake lights and a sculpted design. Although, the automaker did not say when the SUV will go on sales or release details ahead of its debut on March 5 in Geneva, but the SUV will be second model in the company’s new-generation line-up, after the Mazda 3 which had its debut at the Los Angeles auto show in November. Mazda Europe CEO Jeff Guyton has said that, the automaker is considering expanding its SUV lineup but only with models larger than its CX-3 that earn higher margins. “The only thing customers tell us about the CX-3 is that it’s too small,” he told Automotive News Europe in an interview last year. It would be recalled that Mazda’s CX-3 and CX-5 SUVs accounted for more than half of its European sales of 228,210 units last year. CX-5 sales increased 17 percent to 69,196, while CX-3 sales grew 4 percent to 55,192, according to JATO Dynamics market researchers.

Uber takes new Greenlight Hub to Abuja

ber over the weekend announced the official opening of its Greenlight Hub in Abuja, Nigeria as part of its continued commitment to driver-partners. Strategically located at the upscale Jabi Lake Mall in Abuja, the Uber Greenlight Hub will be open five days a week, and will serve as a resource centre where existing and potential driver-partners can receive support for app-related inquiries. According to O’Yoma Ukueku; Greenlight Operations Manager for West Africa, “Driver-partners remain a critical part of Uber operations in West Africa. Providing a functional, modern and technologically enabled support centre for them reinforces our commitmenttocontinuallyprovidingreal-time, on-site support to driver-partners’’. He promised that Uber’s team of dedicated, well-trained and professional Experts will ensure that their concerns and inquiries are addressed and resolved. The launch of the Uber Greenlight Hub also served as a driver-

L-R: Francesca Uriri; Head of Communications West Africa, Uber, Okeoghene Otuagomah; Longest Driving Partner in Abuja, Lola Kassim; General Manager West Africa, Uber and O’Yoma Ukueku; Greenlight Operations Manager, West Africa at the official launch of the new Uber Greenlight Hub in Abuja recently.

partner appreciation event, where driver-partners were feted with food and drinks. Notable driver-partners who had distinguished themselves by providing excellent and professional service were also rewarded with a variety of gifts including brand new generators, refrigerators, plasma televisions and microwaves. In the words of Lola Kassim, general manager West Africa, ‘’Uber “Driver-partner support is something that we take seriously at Uber, and that is why we have opened this location at the Jabi Lake Mall - centrally located to a wider number of driver-partners’’. She said that, the launch of the Greenlight Hub serves a dual purpose of providing a world-class support centre for Uber driver-partners and also provides the organisation with an avenue to celebrate and appreciate those who have ensured that Uber remains top of mind’’. Uber she maintained remain committed to creating economic

and business opportunities for those signed up to drive on the Uber app, adding that the group is available to help ensure they reach their goals. For Samson Yusuf who received a prize as the driver-partner with the most number of trips in Abuja: “Winning this prize and being recognized by Uber means a lot to me. I started off as a driver to a fleet partner, but as a result of commitment, consistency and the constant support of the experts at Uber, today I’m a proud owner of my own cars, all operational on Uber. It is something that a lot of people can achieve through hard work and being focused’’. He noted. Since inception, Uber’s mission is to help people get a ride at the push of a button - everywhere and for everyone. We started in 2009 to solve a simple problem - how do you get a ride at the touch of a button? Six years and over five billion trips later, we’ve started tackling an even greater challenge: reducing congestion and pollution in our cities by getting more people into fewer cars.

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GA3S wins NAJA’s ‘Outstanding Design’ Award

Mercedes posts 180,000 global deliveries January MIKE OCHONMA mikeochonma@gmail.com

ro m S t u t t g a r t , the homeland of Mercedes-Benz came a report that, the German automaker had delivered 180,539 vehicles to its customers all over the world in January (-6.7%). The second-best start to a year for sales was influenced by important model changes in the high-volume SUV and compact-car segments. In particular, the model change of the B-Class, CLA and GLE, each with a double-digit sales decrease, had a negative impact on total unit sales worldwide despite the ongoing high demand for the cars with the star. From the perspective, the company expects the model changes to affect deliveries in the first quarter. With a high degree of probability, the full year will be affected also by exogenous challenges and geopolitical risks. At the same time, Mercedes-Benz Cars assumes that the model offensive will lead to sales growth in the second half of the

year. The company with the three-pointed star therefore expects to slightly increase its worldwide unit sales overall, and to achieve another record in 2019. Last month, MercedesBenz defended its market leadership in the premium segment in markets including Germany, the United Kingdom, France, Switzerland, Portugal, Denmark, Finland, Czech Republic, South Korea, the United States, Canada and Brazil. Britta Seeger, Member of the Board of Management of Daimler AG responsible for Mercedes-Benz Cars Marketing and Sales had said that with more than 180,000 vehicles delivered, Mercedes-Benz has started 2019 with the second-best January ever. Last month was below the strong figure for the previous year; this was in line with our expectations, however, due to important model changes. With the B-Class, the CLA and the GLE, the automaker said it is looking forward in the coming months to the new generations of models very popular with our customers and expect the model

offensive in its high-volume segments to provide significant sales impetus”. “The 2019 will be a challenging year for the entire industry. But we expect to inspire our customers with new models – especially in the second half of the year – and therefore aim to achieve a slight increase in unit sales and a new record in the full year”. The company official said. In terms of unit sales by model, in January, the SUVs were well below the previous year’s high level, with sales of more than 60,000 units of the GLA, GLC, GLC Coupé, GLE, GLE Coupé, GLS and G-Class models (-15.9%). Above all, the GLE model change had a dampening effect on unit sales. The new C-Class Saloon and Estate have started the year 2019 with their bestever January. More than 36,000 customers were delighted to take delivery of their new C-Class Saloon or Estate last month, representing a worldwide increase of 2.8% in unit sales of those models. The C-Class Saloon was especially popular in January for example in Ger-

many, the United Kingdom and China, with double-digit sales growth in each of those markets. At the start of the big model-change year for the compact cars, more than 41,000 customers opted for an A- or B-Class, a CLA, CLA Shooting Brake or a GLA (-5.2%). Above all, the model changes for the B-Class and the CLA had an impact on sales of the high-volume compact models. The new CLA was unveiled at the beginning of the year at CES in Las Vegas. For the fifth month in a row, the new A-Class demonstrated the growth impetus that the new models provide for sales following the successful launch: Worldwide deliveries of the model rose by approximately 35% in January. In January, 8,297 vehicles of the smart brand were sold (-10.1%). In Germany, sales of the two- and four-door urban microcars reached a new January record with an increase of approximately 8%. The smart models were especially popular also in France, resulting in strong double-digit sales growth.

A3S, the signature sedan model developed by China’s best automaker GAC Motor, has recently been named “Outstanding Design for Sedan Vehicles “by leading automotive award body, Nigerian Auto Journalists Association (NAJA) on the 13th of December 2018. The car came out as the winner amongst several giant automobile brands including Kia and Hyundai. It is the first time that NAJA has honored the auto brand, demonstrating GAC Motor’s cutting-edge techniques and professional spirit in the modern manufac-

the GAC brand in 2008, GAC Motor designers have been shaping and positioning the GAC brand not only in keeping with the times but also for the future. The aim is to take the unmistakable GAC design philosophy of high standard, luxury, and aesthetics, and apply them to other areas of life. Reacting on the NAJA Awards, Daina Chen, chairman and chief executive, CIG International Limited, said, ‘’It is an honour to be recognised for this award in appreciation of the beauty and class which the GA3S exhibits to stand out of the crowd within a few years

turing industry. The NAJA awards reward corporate stakeholder organizations, automotive products, and ancillary products like tyre brands and individuals that have made exceptional contributions to the nation’s auto industry. The annual award is widely regarded as the most prestigious recognition to automakers that create products capturing attention and enthusiasm of vehicle buyers in Nigeria. NAJA is considered one of the most prestigious award bodies in the African automotive industry, representing the most rigorous assessment of car production techniques. The award recipients are determined based on strict data from a comprehensive study. Since the conception of

of its introductioninto the market as the most outstanding design for a sedan.’’ The CEO said that, the company management and its staff is excited that the GA3S has been recognized by NAJA awards. ‘’All our cars are developed with a focus on quality and uniqueness and the GA3S has been crafted into something new and impressive, letting people know at a single glance that it is manufactured by GAC Motor’’. The GA3S is a masterpiece of international standards that boasts quality well ahead of similar models. GAC Motor has become a signature brand in Nigeria, and we believe GAC Motor will take center stage in the world automobile market,” said GAC Motor representatives.

greatest export will continue to wax stronger. As part of our determination to put this marathon at the vanguard of sporting events in Africa, we now extend our partnership from

the previous 3 years to a five-year sponsorship as we look forward with anticipation to the next four years of competition and believe that the next edition will be the best event ever. As the most consistently successful marathon event in Nigeria reaching its 4th edition, we’re confident that our partnership with the organizers will foster fan engagement through the event.” said Jacky Hathiramani, MD/CEO, Kia Motors Nigeria. “The new five-year sponsorship of the Access Bank Lagos City Marathon is aimed at promoting sustainable sports development, spread the passion for running and encourage an active healthy lifestyle across the city of Lagos and Nigeria at large.

Kia, Access Bank sign 5-year Lagos Marathon deal

n a strategic move to to create a platform to inspire and engage athletes and sports lovers through an annual marathon, Kia Motors has signed a sponsorship deal with Access Bank and the Lagos state government on the most celebrated athletic event in Nigeria. Over the years, Kia has partnered with organizers of global sporting events, and the sponsorship of the Marathon is geared towards expanding the scale of the brand’s sports sponsorship in Nigeria. Kia has developed into a sporty brand, designed to appeal to younger drivers with an emphasis on excitement and versatility which resonates strongly with sports and car enthusiasts in the country. Sports sponsorship al-

lows the brand to connect with the people in a meaningful way and Kia through the sponsorship of the 2019 Access bank Lagos City marathon has demonstrated its believe in the power of sports in engaging and bringing people together, particularly the youth. The Access Bank Lagos City Marathon is one of the most renowned marathons in Africa with over 400 professional athletes across the globe running in the race. In recent years, it has become the best-known marathon in Nigeria and one of the fastest growing in the world. At the 4th edition of the marathon held this month, over 120,000 runners lined up at the start of the event in both the elite race, the 42Km, and the 10Km fun race. As the maiden year for Kia

being the automobile partner of the marathon, the 2019 Kia Sportage led the race as the clock cars and the project vehicles for the race while the all-new Rio models we presented to the winners of

the 10Km fun race. “It has been Kia’s honour to be a proud sponsor of one of the world’s fastest growing sporting events, and our commitment to making it the best in the world and Nigeria’s

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Tax Issues

Paying taxes: Expert wants government to earn trust of citizens Iheanyi Nwachukwu

mid efforts to enhance re ve nu e g e n e rat i o n through indirect taxation, government should not see the tax process as a-one way traffic, but that which requires it to earn the trust of the citizens. “The government and the tax payers must be on the same page. Thus, beyond direct tax, State Government must be creative, obtain the advice of tax professionals on the methodologies to generate revenue through indirect taxation while avoiding multiplicity of taxes”, according to Azeez Alatoye, a tax expert. Among others, he noted specifically that, “Public Trust and Confidence in government Institutions is one of the major challenges in generating revenue generally, including Indirect tax. There are certain schools of thoughts that are of the view that to encourage voluntary compliance to Indirect tax, government needs to build public trust by investing in public goods and infrastructures for economic growth”. In a paper he presented at the 2nd lap of the Chartered Institute of Taxation of Nigeria (CITN) MPTP held in Lagos on December 4, 2018 at the Tax Professionals House, Alatoye noted that many OECD countries have been shifting their tax base towards consumption tax

“using the proceeds to lower the taxes and capital income”. He no doubt said that the fast tracking of the implementation of tax policy would go a long way to enhance the tax administration. Taxation is the means by which the government of a nation generates revenue to finance their expenditure through the imposition of compulsory charges on citizens and corporate entities. The trend for governments to raise more revenues through indirect taxes and direct taxes seems set to continue. However, the International Mon-

etary Fund (IMF), the Organisation of Economic Cooperation and Development (OECD) and the European Commission are all promoting the shift from direct to indirect taxes to help solve the crisis globally, by reducing costs on business and make them more competitive. He said, “Thus in order to enhance a proper shift in tax base- direct to indirect tax, there would be need for adequate planning, for a structured tax system”, adding that it is necessary for an implementation of an automated tax system to capture transactions from its source.

The expert believes that the efforts to make Indirect taxes more progressive or less regressive result in increasing number of exemptions, multiplicity of rates of taxes in-turn harm the basic simple structure of the tax, making it complex leading to corruption, harassment of the assesses and evasion of taxes. Taxes are either direct or indirect. Direct taxes are taxes that governments impose directly on individuals and businesses. The payment of direct tax goes straight to agencies such as the Federal Inland Revenue Service or State Internal Revenue Service. One of the major features of Direct taxes is that it cannot be shifted to another entity. Examples of Direct Taxes are Personal Income Tax, Capital Gain Tax, Property Tax, Companies Income Tax and Tertiary Education Tax. Indirect Taxes are levied directly on a person who consumes the goods and services and indirectly paid to the government in such a way that the burden of tax can be easily shifted to another person. The tax is progressive in nature. It is levied on every person equally whether rich or poor. The administration of tax is done either by the Federal Government or State Government. Examples of Indirect Taxes are Value Added Tax, Stamp Duties, Custom Duties (taxes on imported and exported goods), and Excise Duties (taxes on locally manufactured goods). “It is pertinent to state that VAT happens to be the principal Indirect tax in Nigeria and globally.”

EY Global Insight

How VAT took over the tax world (2) Value Added Tax (VAT) and its cousin, the goods and services tax (GST), continue to evolve as they adapt to digital disruption and other forces

he Immediate Submission of Information [ISI] program gives us immediate information on the companies’ invoicing, providing a control system for the actual development of the transactions performed, which in turn will undoubtedly allow us to provide better service to businesses as well as reinforce control actions,” de la Rosa explains. De la Rosa says that despite initial concerns, all business sectors have shown a commitment to comply with the new rules, although some entities had some difficulty, such as nonestablished operators or international groups, in which decision-making takes place at the group level. Even in these cases, however, “companies have been able to meet the requirements and count on the support provided by the tax agency, both to clear any implementing doubts and facilitate the supply of information,” de la Rosa says. Going forward, de la Rosa mentions that the next milestone is allowing businesses to know what their customers and suppliers have

reported about their operations. “And in 2018, as a preliminary step to the eventual preparation of a draft VAT return, we are designing a taxpayer-friendly environment that will allow companies to see, in an aggregated manner, the information in the VAT register book that was submitted to the ISI.” Digital threats While digitalization is giving tax authorities faster and better information, it is also creating new challenges in the area of VAT and GST. For example, the gross turnover that a large business generates using its employees is subject to VAT. But in the so-called gig economy, many of the newly self-employed may have such low turnover that they will not meet the VAT threshold in most countries. This, in turn, causes revenue loss to governments, according to Heady. Cross-border trade is another challenge, especially when it comes to services. The rapid increase in digital services provided directly to consumers — from telecommunications to cloud services to online subscriptions — is challenging the fundamentals of how and where VAT and GST applies.

Since nonresidents generally fall outside a jurisdiction’s VAT and GST tax system and it is difficult to collect the tax from final consumers, many countries now view these new services as a significant threat to indirect tax revenues and domestic service providers. The OECD’s Task Force on the Digital Economy has been examining this issue of VAT and GST neutrality in the digital era. Moreover, the OECD’s Committee on Fiscal Affairs and its Working Party No. 9 on Consumption Taxes are working on the implementation of the guidelines for VAT and GST neutrality. “It is extremely important to ensure tax neutrality,” says Subromaniam Tholasy. “Otherwise, you are going to penalize local services.” Malaysia and other governments are already taking or considering action to clarify and change their VAT and GST legislation for digital services. In October 2017, the Royal Malaysian Customs Department proposed amendments to the GST regulations that would address digital economy and e-commerce transactions. And, Subromaniam Tholasy announced that the tax ad-

ministration is having discussions with foreign suppliers about the best way to tax cross-border services. There are more dramatic shifts in store for the VAT landscape in the coming years and businesses should prepare accordingly, predicts Gijsbert Bulk, EY Global Director of Indirect Tax. We believe that by embedding indirect tax issues early on in the planning process for a digital strategy, organizations can avoid unwanted surprises that could end up hurting their business and the bottom line,” Bulk says. Key action points Make certain that people, processes and systems are ready for digitalized and comprehensive nearreal-time VAT-related reporting Monitor the development of anticipated changes to VAT treatment of cross-border transactions, especially in the area of digital services Develop active communication and engagement between policymakers and taxpayers about the potential impact of VAT policy changes so that new policies are clear and consistent, and that policymakers understand the business implications of any changes.

CITN inaugurates governing board of Tax Academy

he Governing Board of the Chartered Institute of Taxation of Nigeria (CITN) Tax Academy has been inaugurated. This event took place on Wednesday, February 6, 2019 at the Chartered Institute of Taxation of Nigeria (CITN) Tax Professionals’ House, Alausa, Ikeja. This follows the official gazette of the CITN Tax Academy (Establishment) Regulations, 2018 and subsequent directive of the CITN Council to inaugurate the Board of the Academy pursuant to the provisions of the regulation. The Board is the governing authority of the Academy with the charge to maintain custody, control and disposition of all the property and finances of the Academy, manage and superintend the affairs of the Academy, generally, and act in such manner as appears to it best calculated to promote the interests, objects and purposes of the Academy, among others functions. While assuring members of the Board of support of the CITN Council, in the discharge of its functions, Cyril Ikemefuna Ede, 13th President and Chairman of Council of the CITN charged the Board to fulfill the mandate of the Academy to be the reference Academy for professional development and research on taxation in Africa and beyond. This is in line with the mission to raise the professional competency of the tax profession in Nigeria, through up-to-date tax education. The composition of the Governing Board was drawn from the public as well as the organized private sector. They include representatives of Ministries of Finance and Education, and Agencies such as the Federal Inland Revenue Service, Nigeria Customs Service, Tertiary Education Trust Fund as well as National Board for Technical Education, among others. The Board also has a representative of the Nigeria Employers Consultative Association. The Academia was not left behind as the Board includes Professors of Taxation, Accounting, Finance as well as Tax law drawn from tertiary institutions around the country. Responding at the event, the Board thanked the President and promised to do its utmost to deliver on its mandate. The inauguration witnessed a photograph session of all the constituted members of the Board present.

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CBN says it’s likely to roll out PSB in first quarter Endurance Okafor

new, innovative technology to deliver financial services to its people, the CBN analysed in some detail how to structure the guidelines and the regulatory environment to deliver the benefits on offer, without compromising the integrity of the financial system. Africa’s largest economy needed to see how the regulation of mobile money could evolve owning to the significant volumes of currency that could be circulating in mobile wallets, and might not be visible to the regulatory authorities. As such it was clear that a better balance between the market and the regulatory structures was required. Since then there has been an explosion in mobile money wallet usage in Kenya and other Africa peers, while the Nigeria’s CBN was rather focused on an independent bank-led model that would supplement and support the existing banking system. “When loans and credits are given to individuals who have basic bank accounts especially those in the informal sector, (as they contribute to the larger population of the country), they will be encouraged to operate formally in the financial circle other than their normal traditional way of carrying out financial transactions,” Wale Okunrinboye, a Lagos-based Investment Researcher, said. “The fundamental obstacle to the rapid expansion of financial inclusion in Nigeria is the failure of the private sector actor in the telecoms and financial services ecosystem to collaborate effectively,” an analyst said in a statement According to the World

Bank Findex database report, mobile money drove financial inclusion in SubSaharan Africa, as only eight countries in Africa which included Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe, recorded 20 percent or more adult using only a mobile money account. The World Bank however noted that there are immense opportunities in the region as about 95 million unbanked adults in the region receive cash payments for agricultural products, and roughly 65 million save using semiformal methods. Between 2014 and 2017, the World Bank noted that there was b a significant increase in the use of mobile phones and the Internet to conduct financial transactions which contributed to a rise in the share of account owners sending or receiving payments digitally from 67 per cent to 76 per cent globally, while developing countries recorded 57 percent to 70 per cent. Yewande Adewusi, a Lagos based financial inclusion consultant, said there are

‘

different schools of thought on how mobile money should work in Nigeria due to the country’s peculiar challenges but noted that if we are looking at how to maintain monetary system stability or still maintain financial inclusion with the right oversight, then the banks and telecoms should work together to drive it. “We don’t know what models work in Nigeria,” Adewusi told BusinessDay. “A lot of factors make mobile money difficult to work in Nigeria, for example there are some rural areas that don’t have telecoms network so even if telecoms drive mobile money, there will still be problem of availability.” Adewusi explained that Nigeria is a huge market and it is very obvious that what the country has been doing in the past has not been working. “However, moving forward, it should be a combination of telecoms working together with banks or we should allow the telecoms have their own licenses which will be regulated through Special Purpose Vehicle (SPV) by CBN.”

We don’t know what models work in Nigeria,” Adewusi told BusinessDay. “A lot of factors make mobile money difficult to work in Nigeria, for example there are some rural areas that don’t have telecoms network so even if telecoms drive mobile money, there will still be problem of availability

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ith the aim of increasing Nigeria’s financial inclusion rate, the Central Bank of Nigeria (CBN) has disclosed that the planned Payment Service Bank (PSBs) are likely to be granted license by the end of Q1 2019. The apex bank released an exposure draft guideline on of October 5, 2018, in which it proposed PSBs, a payment service initiative. The initiative is expected to allow Banking agents, Mobile Money Operators (MMOs), Retail chains (Supermarkets), Telecommunications companies (Telcos) who are able to present an initial capital of N5 billion to have license to operate under the structures and guideline specified by the apex bank. The programme is aimed at ensuring access to financial services for the unbanked rural segments of the society. About 36.6 percent of Nigeria’s population of about 198 million is said to be excluded from the financial market, according to the central bank. “Most probably by the end of this first quarter we’ll roll out PSBs,” Nurudeen Zauro, the Technical Adviser, Financial Inclusion Secretarial at Central Bank of Nigeria, said on a panel session at the BusinessDay Inclusion for All eventheld recently in Lagos. Meanwhile, no less than 30 business names are currently undergoing registration as payment service banks with the functions to maintain savings accounts and accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme; carry out payments and remittance (including cross-border personal remittance) services through various channels within Nigeria; issue debit and pre-paid cards; and operate electronic purse. “We did not want a situation whereby there is no proper regulation of the industry but I can tell you now that everything is in place,” Zauro said. As at the time Nigeria was considering the optimal approach needed to leverage

Globally, about 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services, the study noted. It concludes that digital technology could take advantage of existing cash transactions to bring people into the financial system. The report explained that paying government wages, pensions, and social benefits directly into accounts could bring formal financial services to up to 100 million more adults globally, including 95 million in developing economies. “Financial inclusion allows people to save for family needs, borrow to support a business, or build a cushion against an emergency. Having access to financial services is a critical step towards reducing both poverty and inequality,” the World Bank said. It said that new data on mobile phone ownership and Internet access show unprecedented opportunities to use technology to achieve universal financial inclusion. Meanwhile, the CBN has a target to ensure that by the year 2020, 80 percent of the country’s adult population is included into the financial market. Faced with barriers to attaining the set target of reducing the 36.6 percent of Nigerian adults who are excluded from the financial market to 20 percent by 2020, the country’s apex bank in January 2019 revised its National Financial Inclusion Strategy (NFIS). “The goal of this strategy therefore, is to promote a financial system that is accessible to all Nigerian adults, at an inclusion rate of 80percent,” the apex bank said. The central bank said “the review of the NFIS identified a range of barriers to increased financial inclusion.” Some of the key barriers as compiled from the revised strategy include: the fact that gent networks are insufficient to allow for expansion of financial services, especially in rural areas, and low cash in/cash out commission schedule weakens agent incentives. Speaking on other barriers that drag the country’s success in including more of its citizens into the financial

cycle, CBN said rules against exclusivity discourage Mobile Money Operators/bank investment in agents. “Mobile network operator cannot use agent networks for DFS (except via the super agents’ license). New super agents’ framework is not yet trusted or fully understood, causing key players to hesitate,” CBN mentioned. With less than 2 years the deadline, the Nigerian regulator said despite the fact that Africa’s most populous nation was yet to attain its financial inclusion goals, some recent developments according the bank may help drive inclusion over the next two years. It said that five priority actions were to be pursued in order to address the identified critical barriers, and they include: create an enabling environment for the expansion of DFS. “DFS has proven to be a low-cost approach to reaching unserved and underserved customers,” according to the bank. It also said that enabling the rapid growth of agent networks with nationwide reach, considering agents— particularly cash-in / cashout (CICO) agents—act as the entry point for financial inclusion and facilitate the crucial conversion between cash and digital money. Another strategy is harmonising Know Your Customer (KYC) requirements for opening and operating accounts/mobile wallets on all financial services platforms. “Create an enabling environment to serving the most excluded,” so that inclusion efforts do not focus solely on the ‘lowest hanging fruit’ (and thereby increase inequality), it said. Improving the adoption of cashless payment channels listed particularly in government-to person and person-to-government payments, in order to- establish trust by leading by example was another way to go in tackling barriers, as compiled from the new plan. “Provide a sufficient load volume to drive the business case for building and growing distribution networks and put in place a compelling mechanism to include large numbers of unserved and underserved people,” the apex bank explained.

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Wednesday 13 February 2019

PDP presidential candidate blames Clinton’s cancelled visit to Nigeria on ‘body bag’ comment ..Restates fidelity to free, fair, peaceful elections Ibe, said Clinton had to shun Nigeria on recent “conversations” that have made the intended visit inexpedient. According to the statement, “We understand the reasons given by President Clinton and wish the situation on ground were more ideal as to make his visit more conducive. “We note that the candidate of the People’s Democratic Party, Atiku Abubakar, a man with a history and pattern of peaceful democratic activity, had looked forward to President Clinton’s visit. “We quite understand the reasons given by President Clinton, coming especially after the unfortunate “body bag” comment emanating from the All Progressives Congress.” The former Vice President however, reaffirmed to Nigerians and the world, his commitment to peace and democracy and urged all contestants and parties involved in the

Innocent Odoh, Abuja

ormer Vice President and the Presidential Candidate of the People’s Democratic Party (PDP) Atiku Abubakar, has blamed the ‘body bag’ comment by Kaduna State Governor, Nasir El-Rufai as the main reason former United States’ President, Bill Clinton decided to cancel his visit to Nigeria. Atiku expressed disappointment about the statement released by Clinton, expressing his inability to visit Nigeria to supervise the signing of peace accord among parties to the Presidential election in February 16, stressing that the reckless comments by the All Progressives Congress (APC)-led Federal Government is threatening Nigeria’s international allies. Atiku in a statement issued on Tuesday by his Media aide, Paul

Bill Clinton

Ahead Saturday elections: Rivers citizens prepare for post-election accountability activism Innocent Eteng

head of presidential and National Assembly elections on February 16, citizens in sections of Rivers State are preparing with requisite tools to hold leaders that would emerge from the process accountable. Their targets are soon-to-emerge representatives at the Senate and House of Representatives. They maintain that their elected representatives have not been accountable to their constituents over the decades; neither do they lead an inclusive representation - contributing to poor living conditions at the local levels. The tools lined up to hold lawmakers accountable include communication skills, advocacy and engagement skills, proposal writing skills and how to organise non-violent activism within constituted laws. In a dialogue meeting organised by a civil group working on building citizens’ capacity - Citizens Trust Advocacy and Development Centre (CITADEC) - with support from Trust Africa, the preparation for post-election accountability engagement came on Friday, February 8, 2019 at the Khana Local Government council in Bori, Ogoni. The dialogue was an introduction of a capacity building engagement scheduled to hold on three separate days. The requisite tools would be shared on February 12 and the third meeting would be on constituency dialogue meeting on

a later date, says Lawrence Dube, CITADEC’s director. He said the objective of the dialogue was to let participants - about three dozen of them present and mostly drawn from across Ogoni - “understand the basis of legislative governance and how they as citizens can engage their legislators because it is the legislators that (should) help them understand what is happening in government by making laws and proposals for good governance based on the resources and opportunities available.” He says the advocacy for accountability training is not an encouragement of lawlessness, nor chaos or disorder; but to work within what the system (law) permits “because we are the owners of the system”. “As the training goes on, people should be able to go into the polls with the mindset of evaluating whether their leaders are doing well. It would also dictate how they would relate with their leaders and that would also determine how they would take them to task. After the elections, we are going to write whoever emerges at the House of Representatives and Senate and say, ‘this is what we (the people) want,” Dube said. He said lack of accountability has amounted to untold economic effects in terms of: “loss of jobs and livelihood, high level of poverty, high level of unemployment and corruption.”

2019 Nigerian elections to publicly do the same. He also urged all Nigerians to peacefully troop out in their numbers to vote according to their conscience and dictates, adding that large voter turnout makes it even more difficult, and perhaps impossible, to rig elections. Atiku also noted the harassment of friends of Nigeria by the Buhari administration and its agents and privies, who have taken to releasing and uttering statements threatening diplomats and election observers. “We wish to make known to these individuals the fact that Nigeria has long-standing friends and it will be myopic to burn those bridges on the altar of desperation. “Finally, we urge President Muhammadu Buhari to place the interest of Nigeria above partisanship and call these antagonists to order,” the statement said.

Adelabu promises to construct Apete-Awotan roads in Ido local govt Akinremi Feyisipo, Ibadan

ubernatorial candidate of the ruling All Progressives Congress (APC) in Oyo State, Adebayo Adelabu has assured residents of Apete and Awotan and environs in Ido Local Government Area of the completion of the roads linking the area to the rest of the ancient city of Ibadan. The areas are densely populated in the local government area in the state and flood-proned. Adelabu, a former deputy governor of the Central Bank of Nigeria (CBN) however told leaders and youths in the community present at his campaign rally in Awotan that he will see to the availability of good road network for the residents

of the area. A statement made available to journalists on Tuesday in Ibadan by the spokesman of Friends of Bayo Adelabu (FOBA), Bayo Busari said that Adelabu gave this assurance when he took his campaign train to the area. His campaign train was received by a large crowd which was preceded by a road show from Apete, ending with the rally at Awotan community. The leading figures in the Oyo State election was accompanied by some Nollywood stars on the road show and at the rally to show their solidarity for Adelabu popularly called ‘Penkelemesi’. While addressing the rally, Adelabu promised to improve on the physical infrastructure of the area while also reminding the people

that he had previously showed his support by grading the roads for the people in the past. He told the people that his children attend high school in Awotan area and pledged that the development of the community will be part of his testimony within the first 100 days in office. He thereafter thanked the people for their invaluable support for him and his party, APC. He also used the opportunity to educate the voters on the best approach to vote on the ballot paper, as he advised them to use their index finger to vote, to avoid nullification of votes by INEC. The governorship candidate called on the voters to go all out and vote for the APC in the February 16 and March 2, 2019 general election.

Why Moghalu will emerge President after elections- YPP Innocent Odoh, Abuja

n an unprecedented level of optimism, the Young Progressive Party (YPP), has said its Presidential candidate in Saturday’s elections, Kingsley Moghalu, will beat other candidates including President Muhammadu Bihari and former Vice President Atiku Abubakar, to emerge President. This optimism was predicated on what the party calls “two years of strategic thinking and actions”, a statement issued on Tuesday by spokesman of the YPP, Jide Akintunde, said. He stressed that “Kingsley Moghalu, the presiden-

tial candidate of the Young Progressives Party (YPP), is set to become Nigeria’s President-Elect after the presidential election on Saturday” He noted that the strategies have been three-pronged. “One: media blizzard via terrestrial and satellite television, radio and social media. This overt strategy has catapulted Moghalu from a political-darkhorse a year ago to a real contender for president. “Two: ground game, “real voters” mobilisation. This has seen him organise town hall meetings in over 30 states, toured Nigerian university campuses and held street rallies, in an approach that

connects more with voters than the make-believe mega rallies of the yesterday’s men that are filled with rented crowds. “Three: real politick to secure bloc votes in several geographic, economic and social demographics,” the statement said. Moghalu also advised that Nigerians should not be intimated by the rented crowds, and urged fellow citizens to be part of history in the making by voting for YPP on Saturday. The YPP presidential candidate is closing his campaign with grassroots mobilisation in his home state of Anambra, the statement noted.

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Atiku in Lagos, vows to respect rule of law, rescue Nigerians from poverty ...We are aware of INEC’s plans to rig polls - Secondus ...APC is a failure - Saraki Iniobong Iwok

tiku Abubakar, presidential candidate of the main opposition People’s Democratic party (PDP), has urged Nigerians to elect him as the President of the country, promising to respect the rule of law and formulate people-centred policies that would rescue Nigerians from poverty. Atiku, who is a former vice president of the country under the Olusegun Obasanjo administration, is challenging incumbent President Muhammadu Buhari of the ruling All Progressives Congress (APC) in Saturday’s presidential election. Atiku stated this while campaigning at the Tafawa Balewa Square in Lagos, promising that his administration will restructure the country and take governance back to the citizenry. The former Vice President, berated incumbent administration for creating negative policies, which according to him, have created more unemployment and made Nigerians poorer since its assumed office in 2015. According to him, “I am not like APC, when I say I will do

Atiku Abubakar

something I will do it. I promise Nigerians that I will restructure the country; I will do it; I promise that I will create jobs, I will do it. APC promised that they would fight insecurity, today it is not like that. The northeast is more insecure, than before. They have failed. “Today, Nigerians are poorer;

Nigeria is today the poverty capital in the world. I will reverse that; I will respect the rule of law and democratic institutions.” He further charged residents of the state to vote all candidates of the PDP in the forth-coming general election, promising that only the PDP could rescue the state from total collapse.

“Today, I urge you to vote for all our candidates; Jimi Agbaje, is the man I know would create wonders in the state; I know him well,” Atiku added. Earlier, National Chairman of the PDP, Uche Secondus, lamented that Lagos State which was the commercial capital of the country had collapsed because of the bad policies of the APC, urging Lagosians to vote out the APC. Secondus said that the party was aware of plans by the Independent National Electoral Commission (INEC) to rig the Presidential election, warning that Nigerians will not allow their will to be subverted by the commission. According to him, “International and local polls have chosen Atiku as the winner of the election, but APC in their desperate last strategy went to post police officers to states because they want to rig. But we warn INEC that you cannot rig the election. “We have been told that INEC is printing the election results in Dubai but you cannot rig we warn.” Secondus further stated that Nigerians were poorer under the APC, stressing that the current

administration had created more unemployment and joblessness in the history of Nigeria. “Unemployment has increased; there has been increased in traffic gridlock in Lagos, hunger in the land and poverty has increased. Atiku is the man to save Nigeria and he is experienced and tested in the public sector,” Secondus added. Senate President, Bukola Saraki, urged Nigerians to reject the APC which according to him has failed the country, stressing that Atiku would reform the economy and offer purposeful leadership. “Don’t let APC lie to you, they have failed; today we know the value of Atiku; vote for Atiku, he will offer better economy. Their (APC) engine has knocked,” Saraki said. The rally was attended by Vice Presidential candidate of the party, Peter Obi, wife of PDP presidential candidate, Titi Abubakar, Toyin Saraki, wife of the Senate President. Others are top PDP leaders such as former Deputy National chairman of the party, Bode George, Doyin Okupe, Ben Obi, South West Vice chairman of PDP, Eddy Olafeso, among several others.

Buhari ‘saddened’ by Supreme Court’s final seal on Rivers APC fate …As Amaechi says Wike is lobbying for a deal …3 feared dead at APC rally Ignatius Chukwu

he Supreme Court seemed give President Muhammadu Buhari and his All Progressives Congress (APC) a knock-out on the day the party stormed Port Harcourt, headquarters of Rivers State and the Niger Delta by shutting out the last hope of the party from contesting for any seat in Rivers State from Saturday. This is as three persons were feared dead through stampede at the rally. The Supreme Court knocked out the remaining appeals from both the Tonye Cole faction and Magnus Abe side. The President who skipped Port Harcourt rally in the morning to visit nearby Bayelsa State and back at after 2pm, said at the APC presidential campaign rally held at the Adokiye Amesiemeka Sports Complex, Igwurita-Ali, Port Harcourt, that he was saddened by the knocks the party in the state received in series from the Supreme Court. No APC candidate is to feature on the ballot and there

would be no challenge to the sitting governor, Nyesom Wike of the rival People’s Democratic Party (PDP). Hopes were high even in the expansive stadium on Airport Road that Buhari and Amaechi would do something at the Supreme Court to make the rally a celebration rally. Some hinted at the grounds that the shifting of the rally from Monday must be to wrap up things at the apex court so that the party could make the new date a happy one. “I do not see how Buhari would not want to raise Tonye Cole’s hand”, an insider hinted at the rally grounds. Ovation tore through the air when news filtered from the Supreme Court without details; Groups jumped down and began to dance for hours. Soon, it was realised that it was a negative verdict that was delivered which made Magnus Abe’s camp jubilant. When Buhari and his entourage eventually came, he declared that his administration would ensure that the Rivers State chapter of the

APC gets justice despite the ruling of the Supreme Court. He also declared that if re-elected for a second term in office, his administration would be fair and just to all sections of the country. He appealed to Nigerians to be patient with his government. Buhari said: “I am really saddened by the ruling of the Supreme Court which barred APC from fielding candidates in Rivers State. The courts have barred us from participating in the general election in Rivers State. However, as we remain resolute in our effort to win the 2019 general election, I assure you that justice will be done.” The President, who declared that his administration would remain steadfast and consistent in its fight against corruption, said he will be accountable to God and Nigerians. “Our objectives are very clear. We will remain steadfast and consistent in our fight against corruption. We will continue in our effort to revolutionalise our agricultural sector. “Nigeria will remain one united

country and we will be fair and just to all sections of the country. We will remain accountable to God and you as we continue to serve you as President,” he said, adding: “Let all Nigerians have the faith we will be fair to all and we will not allow any constituency in this country to be intimidated.” Speaking earlier, former governor of the state and the sitting governor’s bitterest rival, Chibuike Rotimi Amaechi, who is the Director-General of Buhari Re-election Campaign Organisation, accused Governor Wike of lobbying the powers that be to be returned as governor for a second term. Amaechi said: “Whatever Nyesom Wike and the PDP want in Rivers State, we are equal to the task. Wike is lobbying us to give him governor and in return, he will support us for President.” Those claims seemed to shock the crowd. Speaking at the event, National Chairman of APC, Adams Oshiomhole, commended members of the

party in Rivers State for their fighting spirit despite efforts from certain quarters to demoralise them. Oshiomhole said the APC-led Federal Government is committed to justice, fairness and democracy, pointing out that there is a difference between justice and judgment. He said: “I want to appreciate APC members and supporters in Rivers State for their fighting spirit. I am impressed that despite the efforts to demoralise you, you still mobilised to welcome President Muhammadu Buhari. I salute your fighting spirit. There is a difference between justice and judgment. We are committed to justice; we are committed to fairness; we are committed to democracy and we are committed to intrusion.” Meanwhile, a man and two women, were said to have lost their lives at the end of the rally. Unconfirmed reports said stampede occurred immediately Buhari drove out of the stadium and a crowd followed.

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Live @ The Exchanges SMEs should be recognised for impacting on the economy, says EGM co-founder

bite Oduneye, co-founder of Eagle Global Markets (EGM) believes that it is essential for SMEs to be recognised for their reliability, excellence and honest impact on the economy considering how they help the country generate substantial income. EGM offers a trading platform to trade over 1,000’s of financial instruments in major markets globally and earn passive income daily. They provide: free trading accounts, free beginner training, free weekly webinar, free daily trading strategy and resources, free masterclass training, and free weekend

Nigeria, where companies like Max, Anakle, Farmcrowdy, Cantagali, Jumia, Ebonylife Tv, Eagle Global Markets etc were recognized and awarded as the fastest growing SME’s in Nigeria. They were awarded because of their extraordinary business performance and integrated systems in various areas and their impact”, he noted. “Interesting? Following the above merit, we would like to explore what makes these companies remarkable out of the 17 million SME’s in the country? You might want to grab a pen. Below are our findings: They demonstrate business excellence and have

of helping their employees thrive in a changing business environment. They are committed to developing new technologies that will be useful and serve people in their community; and they have been a great avenue for job creation and empowerment,” he stated. Oduneye stated “We are privileged to be recognized as one of the fastest growing SME’s in Nigeria with a mission to eradicate financial illiteracy and enable Nigerians have an additional means of income trading Global markets through an easy to use platform using our local currency (naira).” “Let us take a case study

Gbite Oduneye, co-founder of Eagle Global Markets (m) receiving the best “Digital Financial Platform of the Year” award by BusinessDay

training for working professionals. Oduneye in his recent note titled “The Fastest Growing SME’s in Nigeria, What Makes These Companies Remarkable,” said that over the years, SME’s have been an avenue for job creation and empowerment of Nigerians, providing about 50percent of all jobs the citizens can boast of. “A survey conducted in 2012 shows that there are 17 million small and medium scale enterprises in Nigeria, employing about 32.41million persons in the country.” “The annual Business Day’s Top 100 SME’s in

helped improve the image of the country in the local and international community, setting models for future enterprises to follow. They have direct impacts on the community and have seen to its growth in various ways. “They are committed to building working environments that encourage and nurture flexibility and innovation. They maintain a sharp focus on the market: this helps them stay grounded in an unfolding and ever-changing world. They provide training and up skilling facilities that enables staff empowerment: they offer a unique appeal

and look at EGM an innovative fin-Tech company that is dedicated to fighting financial illiteracy and creating wealth by providing a simplified platform for Nigerians to Trade Global financial markets using our local currency Naira and earning additional income; thereby eradicating the issue of living paycheck to pay-check which is the case for most working Nigerian. EGM offers free trainings, masterclasses, webinars, workshops and resources to new and experienced traders. EGM embodies every single feature mentioned above and more”, Oduneye stated.

Investors gain additional N253bn as stocks’ rally continues Iheanyi Nwachukwu

tock investors booked additional N253billion gain at the end of trading session on Tuesday February 12, 2019 following ongoing rally at the Nigerian Stock Exchange (NSE). The

Year-to-Date (YtD) returns stood at +3.28percent. At the sound of closing gong, 38 companies gained as against 14 losers. The NSE All Share Index (NSE) increased by 2.14percent from 31,781.87 points to 32,462.31 points while the Market Capitalisation advanced

from N11.852 trillion to N12.105trillion. Investors took positions in highly capitalised stocks. For instance, Nestle Nigeria Plc rallied most by N90, from N1500 to N1590, up 6percent; followed by Seplat Plc which increased from N565.5 to N600, after adding N34.5 or 6.10percent.

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38 BUSINESS DAY NEWS Buhari vs. Atiku: It’s still the economy... Continued from page 1 incumbent President Buhari,

with all the advantages that power at the centre conveys, looks increasingly vulnerable to charges that he has mishandled the economy during his tenure at the helm. “People are still worse off after four years in power,” said Charles Robertson, chief economist at Renaissance Capital. Nigeria’s GDP per capita has contracted every year since 2015 when it peaked at $2,693 per head. In 2016, it fell to $2,171 and $1,828 in 2017, according to Renaissance Capital and World Bank data. About 8,000 citizens are falling into extreme poverty on a daily basis, according to the Brookings Institution. With 87 million Nigerians living below the $1.90 poverty baseline, almost one out every two nationals (44 percent) lives in extreme poverty. Incidentally, India, which is second in the poverty scale, has 57 million people that are extremely poor, representing just 4.4 percent of its 1.3 billion population. Access to capital by entrepreneurs remains a problem. Only 23 percent of businesses can get needed financing, according to the Manufacturers Association of Nigeria (MAN). For those businesses that manage to get bank credit, it is often expensive, with the benchmark monetary policy rate sitting at 14 percent for

almost two years. The central bank’s lending rate to commercial banks in South Africa is 6.5 percent, while the prime lending rate (lending rate to customers) is 10 percent. Kenya’s determining and lending rates are 9.5 percent and 13.5 percent, respectively, while Ethiopia’s is 5 percent. Inflation has been in double digits for the last three years, rising to a seven-month high of 11.4 percent in December. Meanwhile, the unemployment rate has more than tripled to 23.1 percent, up from 6.7 percent in the third quarter of 2014. Nigeria’s economy expanded by 6.31 percent in 2014, slowed to 2.70 percent in 2015 (the year Buhari took over as president), turned negative at -1.6 percent in 2016, barely registered growth of 0.8 percent in 2017, and remained sluggish at 1.9 percent for 2018. “Nigeria has to grow at 10 percent or more and sustain it for 15 years to reduce poverty,” Akpan Ekpo, professor of Economics and Public Policy and immediate past director general, West African Institute for Financial and Economic Management, said at a breakfast meeting in Lagos. The unemployment rate is 7.4 percent in Kenya; 11.8 percent in Egypt; 5.2 percent in Ethiopia, and 2.4 percent in Ghana. Only South Africa is worse, with 26.6 percent. “The unemployment problem is a time bomb,” said Simeon Okolo, former national president, Nigerian Association of Chambers of Com-

C002D5556

merce, Industry, Mines and Agriculture (NACCIMA) in Aba. “Unless we move fast to curb it by promoting small businesses, we are in big trouble,” he added. Buhari’s main rival, businessman and former Vice President Atiku Abubakar, sensing an opening, has adopted an economic message. “Get Nigeria working again” is his campaign slogan. Atiku has vowed to double the size of the Nigerian economy to $900 billion by 2025, mainly by giving a larger role to the private sector. Social indices like health care and literacy levels, which Robertson of Renaissance Capital argues are vital for industrialisation, are also not much better under Buhari. In terms of education, the number of out-of-school children has risen from 10.5 million in 2010 to 13.2 million in 2015, according to Demographic Health Survey conducted by the United Nations Children Fund (UNICEF) and the Nigerian government. Seventy-five million Nigerians (38 percent) were illiterate in 2018, according to the National Commission for Mass Literacy, Adult and Non-Formal Education. This number was 35 million in 2013, the then minister of education had said that year. Only 39.4 percent of Nigerian children of primary school age are currently enrolled in school, according to a Multiple Indicator Cluster Survey (MICs) 5 of 2016 and 2017 conducted by NBS and UNICEF. The United Nations Educational, Scientific and Cultural Organisation

L-R: Heineken Lokpobri, representative of the Ekeremo West senatorial district; President Muhamadu Buhari, and Timipre Sylva, former governor, Bayelsa State, at the APC presidential campaign rally in Bayelsa, yesterday. NAN

Six things we learnt from Nigeria’s Q4 GDP... Continued from page 1

14.87 percent.

Here are six things we learnt from the NBS report. Q4 growth rises at fastest pace since 2015 Economic growth in the fourth quarter came in stronger than expected at 2.38 percent in real terms, the fastest expansion rate since the third quarter of 2015. The economy expanded 1.95 percent in the first quarter, 1.50 percent in Q2 and 1.81 percent in the third quarter. Another year of negative percapita GDP The economy continued to underperform birth rate in 2018 for the third straight year. Growth of 1.9 percent falls below the country’s annual population growth rate of about 2.6 percent. That implies that Nigerians are growing poorer. Average incomes have

now contracted every year since 2016. President Muhammadu Buhari, who assumed office in 2015 and seeks a re-election at the Feb. 16 polls, promised to fight poverty and create jobs, a fight he is losing in the world’s latest poverty capital. Not fast enough to deal with unemployment Nigeria’s GDP is slowly picking up since the oil price crash of 2014, but not fast enough to deal with rising unemployment, which the NBS reported hit a near decade-high of 23 percent in the third quarter of 2018. Policy choices crucial for next four years - Rencap “We think Nigeria will do better in the next four years, because oil prices won’t repeat the fall of 2014 – 2016,” said Charles Robertson, the chief economist at Renaissance Capital. “But policy choices will determine how much better Nigeria does,”

Robertson added. Bad year for agriculture 2018 was a bad year for agriculture overall, despite the current government’s effort to boost agriculture output and diversify the economy. Thesectorwasgrowingatbetween3 to 4.5 percent in 2016 and 2017, but was more like 1-2.5 percent in most of 2018. Full year agriculture slowed from 4.2 percent to 2.5 percent. Bright and not so bright spots The non-oil sector was the main driver of the economy’s growth in 2018. The sector expanded 2 percent in 2018 from 0.5 in 2017, in what some analysts describe as the first true sign of a broader economic recovery. Services drove half of growth, industry a fifth and agriculture a quarter. Within services, communication put in a good performance, as it has now been up 12 percent in the last three quarters. Finance and insurance was weak, dropping 4.8 percent in third quarter and 1.8 percent in the fourth quarter.

(UNESCO) estimates that the number of Nigerians studying abroad hovered around 75,000 per year in 2015 and 2016. “The Nigerian government’s Economic Recovery and Growth Plan identifies ‘investing in our people’ as one of three strategic objectives. But the ‘execution priorities’ don’t fully reflect people’s needs, prioritising physical capital over human capital,” Bill Gates, one of the world’s richest men, said at the expanded National Economic Council (NEC) meeting chaired by Vice President Yemi Osinbajo last year. “To anchor the economy over the long term, investments in infrastructure and competitiveness must go hand in hand with investments in people,” he added. In health, Nigeria has the worst life expectancy record in West Africa at 54.5 years, according to the latest World Health Organisation (WHO) data. The report shows that influenza and pneumonia kill 305,460 Nigerians each year, while diarrhoea sends 186,218 annually to their early graves. The country has seven chemotherapy machines for cancer patients, but only two are functioning. “Before you go to a Nigerian general hospital, write your will,” said a Nigerian-based foreign national. Over $1 billion is spent annually on foreign medical tourism by the few rich, including President Buhari, who regularly visits the United Kingdom for medical treatment and

Wednesday 13 February 2019

check-up. Private expenditure on health as a percentage of total health expenditure is 74.85 percent in Nigeria, 2.2 percent in Kenya, and 3.49 percent in Egypt. Federal Government records show only 3 million Nigerians have insurance cover, representing just 1.5 percent of the population. According to World Bank estimates, Nigeria’s maternal mortality rate is still as high as 821 per 100,000 live births as against Kenya’s 540. Poverty-stricken citizens cannot buy drugs again as they often resort to pastors and Imams for healing. “People also buy cheap brands because they do not have money,” said Chidi Okoro, founder of Drugs and Medicaments Nigeria Limited, with about 14 retail outlets across Nigeria. “Again, they are going to alternative medicines – herbal and to pastors,” he said. To get better long-term growth for Nigeria, Renaissance Capital’s chief economist Robertson says an adult literacy campaign is needed to pave the way for industrialisation and diversification post 2025. “A tripling of electricity consumption (not just generation, it has to be distributed too) is also essential for industrialisation and diversification, so is a doubling of investment to GDP, as well as a more competitive currency – the market rate today is overvalued by about 20 percent,” Robertson says.

Property value in Apapa crashes as... Continued from page 4

the days of Cement Amada in the 1970s, when government got involved in many infrastructural projects that involved bringing in a lot of cement into the country for construction purposes. This created congestion in the ports such that vessels waited on the sea for over nine months. “The situation became so scandalous that companies devised means where helicopters were used to lift cement from the port to their factories and bonded warehouses. If we could do those kinds of things in the 70s, surely, we can devise other technologies to handle the Apapa situation which is currently crippling the economy of Lagos,” Utomi said. There are several port facilities that can be reactivated in the country to reduce the pressure in Apapa, he said. “We have the deep ocean terminal in Onne, which is one of the best port facilities in the country, and we can move containers by rail to the Inland Container Depots (ICDs) at the hinterland to decongest Apapa,” he said. On the effective management of traffic last week when the All Progressive Congress (APC) held its rally in Lagos, Utomi argued that if

the truck owners could move their trucks for a mere political rally to take place, those same authorities could have leveraged on the opportunity to order the trucks to go back to wherever they parked during the rally days, and only come to the port using call-up system. It would be recalled that days to the APC rally which held at the Teslim Balogun Stadium, Surulere, the trucks which usually lined up the long stretch of Ikorodu Road, Eko Bridge, Ijora Olopa, Apapa-Iganmu Road, Eric More Road, Iganmu Bridge and part of Lagos-Badagry Expressway had all disappeared. But hours after President Muhammadu Buhari, his presidential campaign entourage and APC chieftains left Lagos, tankers and container-carrying trucks were again unleashed on Lagosians, exposing the hypocrisy of government which has shown reluctance to solve the Apapa gridlock. “Part of our problem is lack of institutional memory and we do not have structural knowledge management because during the days of Ojo Maduekwe as the transport minister, a study was conducted by Julius Berger on intermodal transport, which was not implemented,” Utomi said.

Hospitality, aviation sectors foresee lull... Continued from page 4

is alarming and has amounted to low seat factor. Ezenwa said the only operators benefitting now are the charter operators who are being booked for election campaigns. “Load factor, which used to be between 90-95 percent, has gone down to about 60 percent now, though slightly above 50 percent average except for certain days like weekends,” Ezenwa said. “Generally, sales have been down. Whenever elections draw close, people are usually sceptical, so investors are afraid to invest. This will impact on the frequency of travels across the country,” he said. Chris Iwarah, corporate communications manager, Air Peace

Limited, said the airline still has good numbers but the campaign movements are causing delays and cancellations. “We go to some of the places where people go to for campaigns because of our spread. The only challenge is that we may have delays because of the VIP movements. The election is a seasonal thing; it is just a sacrifice everyone makes for the country to take the right steps,” Iwarah said. On the other hand, there is an appreciable increase in the number of privatejetsandcharteraircraftcurrently operating in Nigeria as a result of ongoing election campaigns and depleting fleet size for commercial airlines.

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Covenant University’s CEPDeR canvasses for realistic budget assumptions

Tension builds as APC, PDP hold mega rally today

… as centre ready to provide disruptive solutions to policy making

JAMES KWEN, Abuja

OMOBOLA ADU

ovenant University’s Centre for Economic Policy and Development Research (CEPDeR) has canvassed for realistic budget assumptions in Nigeria following the realisation that the 2019 national budget may miss its targets due to wrong assumptions the national document is anchored. The observation was made at this year’s roundtable discussion on the sectoral impact of the proposed 2019 national budget, organised by the Covenant University’s CEPDeR. The key highlight of the panel discussion centred on the poor signals for businesses and investors and the development of the nation’s education sector. Ayoloola Olukanni, an ambassador and directorgeneral, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), who was

the keynote speaker, said the 2019 budget was founded on unrealistic assumptions of the macroeconomic environment in Nigeria for 2019. He further warned on the rising debt profiles of the federal and state governments across the federation. Discussing on the budget’s impact on business and investment, Frank Aigbogun, CEO/publisher of BusinessDay, said the budget failed to provide signals for business owners and investors, saying, “What investors want to see in the budget is the government’s expectation for the productive sectors in the economy, and also the provisions to be made for these sectors. “There is nothing in the 2019 budget that offers or inspires hope for investors.” According to Aigbogun, a key driver of the economy is the exchange rate, which is influenced by oil prices. Nigeria’s budget benchmark for oil is at $60 per barrel for 2019 in comparison with $55

per barrel forecast by international institutions. “We are at a very tight position as any little change is a challenge that can spiral throughout the whole spectrum of the economy,” he said. Francis Iyoha, a professor of accounting, while discussing the impact on education, noted that out of the N620 billion budgeted for education, about N572 billion was expected to fund personnel expenses and overhead costs, leaving just a mere N48 billion to drive the development of the entire Nigeria’s education sector. “The budget is neither adequate nor is the distribution of the allocations optimal to develop the educational sector,” Iyoha said, indicating that from 1995 to 1999, allocation to education averaged around 13 percent, however since then, provisions to education had averaged about 8 percent or less. “There is no economy that can rise beyond the quality of

its education,” he explained. Isaiah Olurinola, a professor of economics, while speaking on the implication for employment, noted that unemployment and underemployment had risen to about 43.3 percent in Nigeria, and “there is nothing in the current budget that directly seeks to address the issue.” He further said it had become imperative for the educational system in Nigeria to drive entrepreneurial development among students at all levels. On her part, Yemi Lawal, founder of Xeed Business Consulting, addressed issues relating to agriculture, and noted that despite the increasing call for agricultural investment, the provision to the agricultural sector in the 2019 budget at N138 billion was less than the budget allocation for 2018. Lawal stressed that for improvement to be made in the sector, there was the need for proper infrastructural development.

ension has already rented the air in the Federal Capital Territory, Abuja, as the ruling All Progressives Congress (APC) and the main opposition People’s Democratic Party (PDP) hold mega rallies today. While the APC rally is scheduled to take place at the Eagles Square, PDP rally will be at Old Parade Ground, both in Abuja. There are clear signs that the rallies by these major political parties scrambling for Nigeria’s seat of power and political leadership in Saturday’s Presidential and National Assembly elections will shut down Abuja as there would be heavy vehicular and human traffic. Tension is also mounting for the possible clash of supporters of the APC and PDP as both events are holding in the Central Area of Abuja with likelihood of supporters of the two parties meeting as they move to the venues expressing their support. Last Saturday, APC and PDP supporters violently clashed in Dei Dei market,

CHANGE OF NAME

I, formerly known and addressed as Miss Isah Blessing Ojochogu now wish to be known and addressed as Mrs. Odekina Blessing Ojochogu. All former documents remain valid. Kogi State Poly, WAEC & General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Makinde Olumosun Segun now wish to be known and addressed as Olumosun Segun Temitope. All former documents remain valid. General Public please take note. L-R: Evans Osabuohien, chair, CEPDeR; Isaiah Olurinola, professor of economics; Francis Iyoha, professor of accounting; Philip Alege, dean, College of Business and Social Science; Dominic Azuh, head, Department of Economics and Development Studies; Yemi Lawal, consultant/founder of Xeed Business Consulting; Frank Aigbogun, publisher/CEO, BusinessDay, and Obindah Gershon, co-chair, CEPDeR, at a roundtable discussion on sectoral impact of the proposed 2019 national budget organised by Covenant University’s CEPDeR, Ota, Ogun State.

Finally, Polytechnic lecturers suspend strike as FG approves N31.7bn salary shortfall, revitalisation fund KEHINDE AKINTOLA

he three-month old nationwide strike declared by Academic Staff Union of Polytechnics (ASUP) has been suspended. The resolution was passed at the end of the National Executive Council (NEC) meeting held at the ASUP headquarters in Abuja on Tuesday, sequel to the approval of N31.7 billion approved by Federal Government. Breakdown of the fund showed N15 billion was approved in lieu of the NEEDS assessment and additional N16.7 billion as salary shortfalls and promotion arrears. Usman Dutse, ASUP president, who read the communiqué, explained that the industrial action

was aimed at pressing for implementation of 2017 memorandum of understanding signed with government after the November 2017 strike. “The request for a revitalisation fund of N15 billion had been made by the Honourable Minister, FME in lieu of the NEEDS assessment. The government has equally made a public pronouncement on the issue conveying the government’s approval for the release of the sum as requested. “It is expected that the funds shall be available for disbursement to deserving institutions by April 2019. Equally, the approval of the NEEDS ASSESSMENT report shall be pursued with all diligence to ensure a sustained and effective intervention in the infrastructure

and other needs of our institutions. “Salary shortfall, promotion arrears and payment of allowances: The union was informed of the release of N16.7 billion covering agencies of government, including affected Polytechnics cleared by the Presidential Initiative for Continuous Audit for shortfalls and promotion arrears. A circular had also been released to all Rectors conveying increased personnel funding for 2019 and directing the payment of full salaries and allowances in Polytechnics. “A schedule from the office of the Federal Ministry of Finance containing institutions contained in the phase 1 of the shortfall refund payments has been released. Our union notes that 11 institutions from the sector are

cleared to receive funds from the approved tranche. Our union has been reassured that the next phase will contain more institutions.” On the payment of salaries in state owned institutions, he disclosed that: “The government reported moves to review the instruments for accreditation to include such requirements. The union was informed that NBTE had been directed to cease further regulatory activities in such institutions. “Document conveying the implementation of this resolution has been released vide letter ref: C/TEB.97/Vol. II/512 of 4thFebruary, 2019 from the NBTE conveying a review of the guidelines for programme accreditation to include the issue of regular payment of salaries and allowances in institutions.

CHANGE OF NAME

I, formerly known and addressed as Imisioluwa Abiodun Sulaiman now wish to be known and addressed as Imisioluwa Abiodun Oyegbesan. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Mr. Victor Kelvin Ekokotu now wish to be known and addressed as Mr.Victor Kelvin Onosadjohwo Remeti-Ekokotu. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Onyenyeonwu Obianuju Francess now wish to be known and addressed as Ndubuokwu Obianuju Francess. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Ogwum Ijeoma now wish to be known and addressed as Ude Ijeoma. All former documents remain valid. General Public please take note.

burning 10 vehicles, damaging many vehicles and injuring several persons when they ran into each other during campaign events. The tension and envisaged breakdown of law and order would have been averted only if PDP had held its campaign last Saturday as earlier scheduled. PDP rescheduled its Wednesday presidential mega rally after it was denied approval to use the Old Parade Ground as the Federal Capital Territory Administration (FCTA) said APC had also booked the same day and venue for a campaign rally. Kola Ologbondiyan, PDP national publicity secretary, had described the denial of access to the Old Parade Ground by the FCTA as a provocative action against the party after it had made payments to the authorities and obtained official approval.

CHANGE OF NAME

I, formerly known and addressed as Tunde Abraham now wish to be known and addressed as Abraham Enoch Tunde. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Ogene Felicia now wish to be known and addressed as Udoh Felicia Ifeyinwa. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Dupeola Olutoyin Adeyeye now wish to be known and addressed as Rhoda Dupeola Adeyeye. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Andeshi Mercy Andershiye now wish to be known and addressed as Monjol Mercy Andorshiye. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Isidore Uchenna Agbanero now wish to be known and addressed as Isidore Agbanero. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Samuel Amarachi Rosemary now wish to be known and addressed as Adidndu Amarachi Rosemary. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Basiru Zainab Ajoke now wish to be known and addressed as Adebisi Zainab Ajoke. All former documents remain valid. General Public please take note.

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KPMG Nigeria commits to health advancement with N2m donation

L-R: Iyayi Oludapo, head, sales; Oluwatobi Boshoro, CEO, and Khade Idogho, chief marketing officer, all of Renmoney, at the official launch of Renmoney’s Microbusiness Loan product in Lagos, yesterday. Pic by Pius Okeosisi

Shell clears commercial framework, ready to go ahead with development of $10bn Bonga Southwest OLUSOLA BELLO

hell Nigeria Exploration and Production Company (SNEPCo) has concluded negotiations with Nigerian National Petroleum Corporation (NNPC) on the $10 billion Bonga South West Aparo development. There is now a clear commercial framework, aligned with stakeholders and the confidence to move towards Final Investment Decision (FID). SNEPCo has consequently told the NNPC and its unit partners involved in Bonga South West Aparo (BSWA) development that it has reached agreement on the key commercial terms necessary to move the de-

velopment forward. Following the Oil Mining License (OML) 118 Head of Term agreement, the company has announced the release of BSWA Invitation to Tender, where Nigerian and international companies on the agreed bid list are requested to bid for the various contract packages that make up engineering procurement and construction of the BSWA projects. An industry source that discloses this development to BusinessDay says this an important step that will allow the companies, the government and the investing partners to understand the cost of the project and if within expectations, take the project to the Final Investment Decision. The agreement covers

related production sharing contract interpretation dispute. It also sets an incentive and fair framework for developing this world-class opportunity while opening further opportunities in the prolific Nigerian Deepwater oil and gas industry. The BSWA project includes the construction of a new Floating Production, Storage and Offloading (FPSO) unit with an expected peak production of 225,000 barrels of oil per day. The BSWA field straddles Oil Mining Leases (OMLs) 118, 132 and 140. However, the bulk of BSWA resources are located in OML 118, but it also extends into OMLs 132 and 140, operated by Chevron, where it is called Aparo.

Obaseki signs Violence Against Persons Bill into law

do State governor, Godwin Obaseki, has signed the Violence Against Persons (VAP) Bill into law, to address all forms of violence and protect vulnerable members of the society. Obaseki, who signed the bill in Government House, Benin City, on Tuesday, said he was aware that the bill touched on fundamental practices among the people, assuring that he was not only signing the bill as a formality, but would ensure it was implemented to the letter. “We will not stop here by just signing the bill into law, but will commence the much difficult work of implementing it to the letter. It must be noted that this bill has been in consideration for over six to eight years but the time has come for us to

have a law like this VAP Law, to protect the most vulnerable and weak in our society. “As a government, we have aligned with the Federation of Women Lawyer (FIDA)’s purpose and objective and therefore have no hesitation in signing the bill into law,” he said. Addressing protesters on violence against women, the governor commended them and stressed that the time to change the way society responds to violence against the weak has come. He added that his administration was not afraid of change and will embrace it to the fullest. “I want to appreciate FIDA for their doggedness, leadership and commitment to this cause. I am not sure many other states in the nation has such bills. This bill goes to the core of some of the most pressing issues in society particularly

violence against women and other persons.” Speaker, Edo State House of Assembly, Kabiru Adjoto, told the governor that the newly signed VAP law would eliminate violence in private and public life. “This bill prohibits violence against all persons and provides maximum protection and effective remedy for victims and punishment for offenders and other related matters,” he said. “This bill was sent to the EDHA in the fourth Assembly but suffered a setback. It also suffered a setback in the fifth Assembly but it was passed in the sixth Assembly.” Adjoto commended the wife of Edo State governor, Betsy Obaseki, for her doggedness, dedication, and commitment in ensuring that the bill was passed into law.

SNEPCo is the operator of the BSWA project in line with the agreement between the NNPC, Esso Exploration and Production Nigeria (Deepwater) Limited, Total E&P Nigeria, Nigerian Agip Exploration, Texaco Nigeria Outer Shelf, Star Ultra Deep Petroleum, Sasol Exploration and Production Nigeria and Oil and Gas Nigeria. Bayo Ojulari, managing director of SNEPCo, told Reuters last year that Shell and its partners would decide this year on whether to go ahead with the development of the oilfield. He said the project, one of the country’s largest with an expected production of 180,000 barrels of crude oil per day, would generate profit at crude oil price of below $50 per barrel.

PMG Professional Services, one of the ‘Big Four’ professional services firms in Nigeria, recently donated N2 million to National Orthopaedic Hospital Igbobi (NOHI), Lagos, to cater for patients’ surgeries and other medical expenses as part of its health initiatives. In addition, the firm also presented gifts and hosted a Christmas party for the patients at the children’s ward. Victor Onyenkpa, partner/chief operating officer, KPMG in Nigeria, said in a statement: “KPMG remains committed to ensuring a healthy population which is essential for the Nation’s economic growth, hence, nearly a decade ago, we developed and maintained strategic partnership with NOHI and have continually replicated same with some other local healthcare providers. “We are inspired, by the lives impacted so far and are thankful for the opportunity

to continue to make a difference; we are driven to do more.” Onyenkpa presented the cheque on behalf of KPMG Nigeria and R.O. Adedoyin, deputy director, admin, NOHI, received it in proxy of the medical director, NOHI, Mustapha Alimi. Indeed, it was a joyful celebration at the children’s ward, which involved children’s party and distribution of gifts, face painting and singing to the children. KPMG showed distinction as they inspired confidence and encouraged the children. Gloria Ibeziako, head, People, Performance and Culture, KPMG in Nigeria, said: “The KPMG Nigeria Health Initiative is absolutely amazing and being able to strengthen the hope of these patients proves that the initiative is fulfilling its intended purpose, and truly, KPMG through its citizenship, is impacting lives and improving communities.

NBA urges FG to discontinue Onnoghen’s CCT trial as trial resumes ODUNAYO OYASIJI

he Nigeria Bar Association (NBA) in a statement Tuesday urged the Federal Government to discontinue the matter against the suspended CJN, Walter Onnoghen at the Code of Conduct Tribunal (CCT). This advice is coming ahead of the resumption of trial at the CCT today. As stated in the statement signed by the NBA president, Paul Usoro, the reasons for this position are - “First, as widely reported, one of the two petitions against the CJN that is currently before the National

Judicial Council (NJC or Council) is an exact replica of the petition that motivated the CCT Charge. The second petition was reportedly presented by the Economic and Financial Crimes Commission (EFCC), an FGN agency. “We commend the FGN for adhering to due process by submitting the EFCC petition to the NJC for consideration. In like manner and in adherence to the law and due process, we urge the FGN to discontinue the CCT Charge and allow the NJC consider the initial petition, which, as widely reported, has already been responded to by the CJN.

Trending aircraft worn-out tyre pictures yet to be established - NCAA IFEOMA OKEKE

igerian Civil Aviation Authority (NCAA) says the trending online pictures of an aircraft with worn out tyre are yet to be established. The authority said in line with International Civil Aviation Organisation (ICAO) Standard and Recommended Practices (SARPs) and Nigeria Civil Aviation Regulations (Nig. CARs) no airline operator can embark on commercial air transportation for hire and reward without airworthy operating aircraft. According to the Nig. CARs Part 5.4.1.1(b), “the Authority shall issue a Certificate of Airworthiness for aircraft registered in Nigeria based on satisfactory evi-

dence that the aircraft complies with the design aspects of the appropriate airworthiness requirements (type certificate) and is in a condition for safe operation.” In a statement issued by Sam Adurogboye, general manager, public relations, NCAA, “NCAA’s Aviation Safety Inspectors (ASI) are well trained and well-motivated to carry out routine ramp inspection on all airlines operating in Nigeria. “It is the primary responsibility of the Authority Inspectors to ensure that all the parts of the aircraft complies with the applicable airworthiness requirements and remains in a condition for safe operation before every flight and throughout its operating life. “In addition to the Authority oversight roles,

NCAA has placed the onerous responsibility of the first line of safety on the operating airlines’ Pilot in Command of each flight and the assigned Engineer that authorised each flight.” He further explained that with all the various checks and counter checks put in place by NCAA combined with that of the operators, it was therefore improbable that any airline in Nigeria would operate a service with that kind of tyre. Adurogboye however advised the original author of the post or any other individuals with safety related issue, if any to furnish the Authority with the identity of the airline or any of such information to enable it establish the authenticity of the claim and ensure appropriate action.

Wednesday 13 February 2019

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Nigeria’s health sector in recession after brief exit ANTHONIA OBOKOH & MICHEAL ANI

... mandatory health insurance only remedy

igerian health sector has plunged back into recession after managing to exit with a 0.42 percent growth in the second quarter of 2018. In the last two quarters of 2018 (Q3, Q4), the sector recorded a negative growth at -0.68 and -0.64 percent, respectively, after recording a positive 0.42 percent growth in Q2, 2018, as poor government funding, weak demand and a lack of investment have crippled growth

in the sector. “The health sector has suffered from chronic underfunding for many years now. We are even behind South Sudan, Angola and Ethiopia,” Isaac Adewole, health minister, said. Since the second quarter of 2017 till date, the health sector has recorded a negative growth that has averaged -0.47 percent, alongside the educational sector being tipped as the major driver of human capital development. Despite this, many of

Nigeria’s key health interventions including on polio eradication, vaccination programmes, malaria, tuberculosis, HIV/AIDS, and maternal and child health remain almost completely dependent on foreign donors, with the government committing just $5 per citizen to health under its current budget. “The sector is suffering from weak consumer spending on the purchase of health services,” Gbolahan Ologunro, an equity research analyst at Lagos-

Labour charges FG, INEC on transparency, impartiality of elections JOSHUA BASSEY

head of the presidential/National Assembly and other elections slated for Saturday, February 16 and March 2, 2019, the organised labour has urged the Federal Government and Independent National Electoral Commission (INEC) to ensure that the polls are not only transparent but seen to be free and fair. Labour under the aegis of Trade Union Congress (TUC) of Nigeria, as part of the communiqué issued at the end of its National Executive Council Meeting (NEC) held in Lagos on Tuesday, also called on the government to avoid all forms of intimidation in

the conduct of the elections. According to the TUC in the communiqué signed by its president, Bobboi Kagaima and secretary general, Musa Lawal, called on the INEC in particular to be as impartial as possible and to ensure that the interest of all Nigerians is protected. It also called on the police, the military and other security agents to be professional in the discharge of their duties “since no position is worth the blood of innocent civilians. “We call on the INEC to be as impartial as possible, having the interest of all Nigerians at heart. We also call on the police, the military and other security agents to be professional in discharging their duties since no position

is worth the blood of innocent civilians.” On the national minimum wage, the NEC insession commended the House of Representatives for approving and passing N30,000 as against the N27,000 approved by the National Council of State and sent to the National Assembly by President Muhammadu Buahri. It called on the Senate to toe the path of the House of Representatives, without further delay. On the representation of TUC in tripartite bodies, “the NEC-in-session reiterated that the law establishing National Law Advisory Council (NLAC) should be reviewed to include major stakeholders, e.g TUC.

Overnight inter-bank rate rises by 47.5% as CBN mops up N78.3bn HOPE MOSES-ASHIKE

vernight interbank rate, the rate at which Deposit Money Banks (DMBs) borrow and lend to one another, rose to 47.5 percent on Monday from 19.42 percent on Friday last week. Also, the Open BuyBack (OBB), the money market instrument used to raise short-term capital, increased from 18.67 percent on Friday last week to 43.33 percent on Monday.The development was as a result of financial liquidity strain, according to analysts at Cowry Asset Management Limited. The Central Bank of Nigeria (CBN) has continued

to mop up liquidity in the system through Open Market Operation (OMO) instrument to curb inflation and maintain stability in the foreign exchange market. On Monday, the CBN moped up a total of N78.3 billion from the banking system through OMO auction, which were all fully subscribed by investors. A breakdown of the OMO result on Monday shows that N39.9 billion was offered for 119 days tenor to mature in June 19, 2019, at the rate of 11.9 percent. This was fully subscribed by N39.9 billion by investors. The CBN offered N34.9 billion on Monday for 360 days tenor at the rate of 15 percent. The offer, which would mature on February 6, 2020, was

bided at the range of 15 percent and was fully subscribed by N34.9 billion. For a short-term tenure of 94 days, a total of N2.4 billion was offered at the bid range and sale rate of 11.9 percent. The OMO security billed to mature by May 16, 2019 was also fully subscribed. In the same way, a total of N1.1 billion was offered by the CBN for 178 days tenor, which is expected to mature on August 8, 2019. It was bided and sold at the rate of 13. Percent and was fully subscribed. “We have seen increased interest in short term OMO maturity due to the lower rates in the secondary market,” Ayodeji Ebo, managing director, Afrinvest Securities Limited, said.

Anambra INEC office gutted by fire EMMANUEL NDUKUBA

ndependent National Electoral Commission (INEC) office in Awka, the Anambra State capital, on Tuesday was gutted by fire, four days to the general elections in the country. The fire, which was on for hours in the two containers housing some of the most sensitive equipment for the elections in the state, was yet

to be put out by the state fire fighters as at press time. The Resident Electoral Commissioner in the state, Nkwachukwu Orji, told newsmen that the content gutted by fire was mostly the smart card readers for the elections. “I don’t have the details of how it started, but all I can report is that there was a fire incident in our premises. And the fire involved

our storage facilities that are housing some of the most sensitive equipment that we are going to use for the elections. “The content is mostly the smart card readers. I don’t have the details of the incident, I just reported what I know, what I know is that there is a fire incident involving some of the sensitive equipment we are going to use for the elections.

based CSL, said. Real GDP growth in Africa’s largest economy expanded 1.93 percent in full-year 2018 from 0.83 percent and -1.58 percent in 2017 and 2016, respectively, thanks to the Federal Government diversification initiative that saw non-oil sector expand 2 percent in 2018 from 0.47 percent in 2017, at the time the country exited its worst recession in 27 years. While a rapid expansion might have been felt in the overall GDP growth,

this could not be said of the health sector as growth in real term stood at -0.32 percent in the full year 2018. About half of Nigerians population at 198 million live on less than $1.25 a day (‘Poverty Head-count’), making the country overtake India to be the poorest in the world, with six persons out of its entire population entering the poverty trap, according to recent report by Brookings Institution, a non-profit public policy organisation in the US. As of February 2018, the

country was ranked 187 out of 191 countries in the world in assessing the level of compliance with the Universal Health Coverage (UHC), as very few of the populace is health insured. Biodun Awosusi, a physician and health economist, on his twitter handle, said, “Without substantial increases in domestic investments in health, and a radical change in the way health is harmonised to domestic and continental priorities, we will soon lose any realistic chance of reaching these objectives of universal Health coverage.”

Edo signs tripartite agreement to benefit 455 cassava farmers

n a renewed drive to diversify the economic base of the state for expansion, the Edo State government has signed a tripartite agreement with the Elephant Group and Heritage Agro Allied Foods (H2AFoods) of United States of America (USA) to strengthen the cassava value chain, which would benefit not less than 445 farmers across the state. At the signing of the tripartite agreement, in Government House on Tuesday,

Special Adviser to the Governor on Agriculture, Forestry and Food Security, Joe Okojie, said the cassava project would span across the three senatorial districts of the state while financing of the project has been secured and disbursed to the farmers. According to Okojie, “238 hectares of land will be utilised in Edo North; 223 ha in Edo Central and 206 ha in Edo South. The farmers have been aggregated across the three districts and each farmer will get one and a half

hectares of farmland.” He said the state government would assist the farmers in land clearing, secure inputs while planting would commence at the end of April. “We are bringing all the players across the value chain together and we have secured the loan for each farmer under the Anchor Borrowers Programme. The state government will be helping to de-risk land clearing and provide off-takers for the cassava farmers.”

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ELECTRONICS How SIMS promotes Burj Khalifa inverter air conditioner in Nigerian market ODINAKA ANUDU

IMS Nigeria, a leading distributor in home appliances and electronics products, has introduced the newest home appliance—Burj Khalifa Smart Inverter Air Conditioner— into the Nigerian electronics market. It is named after a beautiful skyscraper, located in Dubai. The Burj Khalifa Smart Inverter AC, which speaks class and quality with its unique and stylish design, is multi-functional, serving as an ornamental masterpiece while providing extra fast cooling in less than 30 seconds. It is consumer- and energy bill-friendly as it reduces energy consumption by 70 percent. It can be powered with 130 volts, which is the first of its kind. Built with deep research and brilliant innovations, it is equipped with artificial intelligence. It is able to switch and adjust to the weather conditions of the environment and eventually maintains the most suitable temperature required.

It comes with a four-way swing, which allows long distance and equal airflow supply in a room while maintaining a constant suitable temperature. It likewise operates with an extremely low noise. Built with a copper condenser, it is maintenance-friendly, and its spectacular cover and gold fin design with dual filter make it able to prevent contact with dust particles

or dirt from the environment. More importantly, it has self-cleaning capability. The Royal Burj Khalifa Smart Inverter AC is a combination of quality and affordability, as it is manufactured with the R410A ecofriendly gas, available to the middle and high income earners and comes with a warranty of 10 years. SIMS Nigeria distributes innovative electronic brands and provides quality and affordable products for consumer satisfaction for everyone regardless of their economic condition, which it has been able to keep up since its establishment in 2006. Ernest Ebhohime, e-commerce officer at SIMS Nigeria Limited, said his firm has already brought a large quantity of the Royal Burj Khalifa AC into Nigeria. He explained that the air conditioner has been well received by Nigerians, as it has the desired quality and meets consumer specifications. “This is one-of-its-kind in the Nigerian market presently,” he said. He explained that the air conditioner is designed to give discerning Nigerians the opportunity of enjoying the latest in AC technology and aesthetics available in the developed parts of the world. It cools in less than 30 seconds, runs on the lowest energy level for ACs (130V), reduces energy consumption by 70 percent and operates with Artificial Intelligence (AI). It likewise has an ultra -low noise, with dual filter for superior purification, he said. The product is also affordable for various classes of consumers. “The Royal brand as a policy has been positioned in the market as the best combination of quality and price,” he said. “The Royal Burj Khalifa AC is, therefore, offered on that same positioning of affordable luxury.” He further explained that costand aesthetics-conscious organ-

isations and individuals who go for class and high-quality and are concerned with the preservation of the green environment are in need of the product. He stated that quality, aesthetics, durability, cost savings and unmatched pure-air delivery are features that will woo consumers to the product. On why the manufacturers decided to give a 10-year warranty, Ebhohime said the manufacturer is confident that the product is durable and reliable. “The compressor is the life wire of all cooling systems and the

manufacturers want to let all their customers to know that when they buy a Royal inverter ACs they can comfortably go to sleep for virtually the entire life-span of the product,” he said. He explained that this should be very important to every consumer, especially Nigerians with unstable power supply and high cost of living. The product is already on display at all SIMS Digital Centres across the country and will soon be available at all leading electronics and home appliances stores nationwide.

On the cutting-edge technologies the product is bringing to the market, he said the brand is basically providing innovation, something unique, to the Nigerian market. On competition, he said, “Competition will always be there. But what the Royal brand offers in the Royal ‘Burj Khalifa’ AC is completely outstanding and the manufacturers will continue to build on that innovation.” Speaking further on the product’s features, he said the brand saves energy significantly and cools very fast. “It cuts energy by up to 70 percent, which means a lot in the current power situation in the country, especially for heavy users.” It also cools fast, having been rated as the fastest cooling AC, while also being eco-friendly, he added. The AC is noted for running on R410 gas, which is regarded the world over as one of the most ecofriendly and efficient refrigeration gases available. It is equally powered by the latest inverter technology and runs on the lowest power dip in the entire industry. SIMS says the product will still be functioning properly when most electronics in the house would have tripped off. It is presently the only AC that can run on as low as 130v and is self-cleaning, which further reduces maintenance cost. It is also easy to install. SIMS Nigeria has partnered Royal for about five years. It has been the most dominant, long lasting, and most successful wholly Nigerian-owned electronics and home appliances company with over 30 years existence and with pan-Nigeria operation. It is also the official representatives of Samsung, Panasonic and Royal in Nigeria. On how SIMS handles various competing brands, he said all of them do well in their designated markets. “All our brands cater for different classes, tastes and income groups and as such, they all do well along their designated market tracks,” Ebhohime said. He explained that Royal brand offers a full range of home appliances such as televisions, gas cookers, fridges and freezers, rechargeable and non-rechargeable fans, microwave ovens, and kettles, among others. He believes that Nigeria’s electronics market is still in its growth stage How much does SIMS expect to make from the sale of this product? “Though we are a profit-making organisation, our focus is fundamentally on customer satisfaction,” he responded. “Ultimately, we are happy when our customers are happy,” Ebhohime answered.

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Wednesday 13 February 2019

CrossBoundary Energy Access raises $16m to finance 190 solar mini-grids in Nigeria, others MICHEAL ANI

ro s s B o u n d a r y Energy Access f u n d i ng c o m mitments from The Rockefeller Foundation and Ceniarth is investing an initial $16 million of capital to finance about 190 solar minigrids, that will power rural households and businesses across sub-Saharan regions. The investment will help serving 170,000 people, providing first-time power to homes and businesses- who lack energy access, the firm said in a statement on its website. The focus will be on markets with supportive minigrid regulatory frameworks, such as Tanzania, Nigeria, and Zambia, according to The Rockefeller Foundation, which provided $5 million in mezzanine debt financing to help launch the fund. “Mini-grids are critical to achieving universal electrification in Africa at the least cost. We believe long-term project finance structures will allow mini-grids to scale. We’re building investment portfolios that will attract the long-term, infrastructure-type capital the sector needs from institutional investors”, Gabriel Davies, Head of Energy Access at CrossBoundary, said Ashvin Dayal, Managing Director, Power, The Rockefeller Foundation, says, “We’re proud and excited to be an early investor in the CBEA facility because it represents an ambitious, concrete effort to realize the comparative advantage mini grids have to serve over 100 million people in Africa. The opportunity cost of energy poverty is huge, both in terms of suppressed human wellbeing and lost economic development. We believe that CBEA brings a muchneeded sense of urgency, and provides a platform for more effective public and private sector coordination that can transform the pace of last-mile electrification.” CrossBoundary Energy

L-R: Past President, Chartered Institute of Stockbrokers ( CIS), Mr Olutola Mobolurin, Acting Director General, Securities and Exchange Commission, Ms Mary Uduk, President, Chartered Institute of Stockbrokers (CIS), Mr Adedapo Adekoje, Representative of the Vice President, Prof. Yemi Osinbajo and Minister, Trade, Industry and Investment, Dr Okechuku, Enelamah, Executive Secretary, Nigerian Investment Promotion Commission, Ms Yewande Sadiku at Chartered Institute of Stockbrokers’ interactive forum with Vice President in Lagos recently.

Access has an innovative blended finance structure that demonstrates a pathway to unlocking more than $11 billion dollars for mini-grids needed from investors to connect at least 100 million people. Over 600 million people in Sub-Saharan Africa still lack access to electricity. At least 100 million of these people can be most cost effectively served by mini-grids today, and that using private sector development and investment could accelerate the buildout of those grids, according to CrossBoundary estimate However, so far, private sector mini-grids have not attracted the needed funding. Like all energy infrastructure projects, mini-grids require a significant upfront investment while delivering predictable returns over a 10–15 year period. To scale, the capital provided must be long-term, affordable and accept lower yield returns. Operating in an emerging asset class with smaller balance sheets, mini-grid companies have so far struggled to raise that kind of financing. CrossBoundary Energy

Access said it is bridging the gap to commercial scale, allowing private capital to invest today by blending it with patient equity from impact-first investors such as Ceniarth and developmentfocused debt from institutions such as The Rockefeller Foundation. The facility also allows private investors to invest in the projects themselves, similar to how most of the world’s 1,000 gigawatts of wind and solar projects have been financed. “We believe CrossBoundary Energy Access has developed a thoughtful, blended approach to the challenge of unlocking capital for the mini-grid sector. We hope that as more data emerges to support the economics of the model, additional capital will flow into the sector at terms that allow us to gain increased leverage on our subordinate investment.” Diane Isenberg, Director, Ceniarth, says, The CrossBoundary Energy Access Fund’s roots stretch back to the launch of the Mini-Grid Innovation Lab in partnership with The Rockefeller Foundation last May. The lab has since de-

veloped seven prototypes to test the minigrid investment model, the goal being to catalyze investment and deployment of solar minigrids that can stimulate productive, downstream use and sustainable development. Matt Tilleard, Co-managing Partner, CrossBoundary, says, “This first close for CrossBoundary Energy Access is a first step towards unlocking the private and public capital needed to scale the mini-grid sector. At CrossBoundary we believe that distributed renewables will be crucial to powering African homes, businesses, and industries. Our role is to mobilize the financing to make it happen.” Private sector capital and private sector mini-grids have an essential role to play in achieving Sustainable Development Goal 7 (SDG7): Ensure access to affordable, reliable, sustainable and modern energy for all. CrossBoundary Energy Access is seeking additional equity investment to expand this blended finance vehicle that provides both social and financial returns. Shell Foundation and

UK aid, through the Transf o r m i n g E n e r g y Ac c e s s programme, provided support to design and launch CrossBoundary Energy Access. Sam Parker, Director, Shell Foundation, says, “Shell Foundation has been a strong supporter of minigrids for almost a decade. We believe the sector is now ready for the larger scale infrastructure finance that will enable it to scale. We are supporting CrossBoundary Energy Access because we believe that its aggregation approach will catalyze the hundreds of millions of dollars of private capital that is needed, alongside public finance, to grow the sector.” CrossBoundary was advised by Norton Rose Fulbright, and Rockefeller Foundation was advised by Simpson Thacher & Bartlett. Prototype minigrids are now live at more than 30 sites in Kenya, Nigeria and Tanzania, and the lab recently began working with developers in Zambia, bringing the lab’s reach to 17 developers in four countries. A lack of debt and commercial bank financing is hampering distributed renewable energy minigrid and microgrid systems in Sub-Saharan Africa despite rapid expansion of systems like mobile pay-go. Given their small balance sheets, minigrids have so far struggled to raise the kind of financing they need — longterm, affordable capital from funders that accept lower yield returns. Sebastian Deschler, General Counsel, CrossBoundary, says, “This facility is a template that can benefit the whole sector. CrossBoundary Energy Access will not invest in individual developers. Instead, it will acquire portfolios of mini-grid assets using low-cost, long-term project finance structures. This provides the sector with a repeatable model for accessing the project finance market that is needed for mini-grids to scale.”

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: OGAR DAVID ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

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SpecialGDP Report

13 February 2019

Wednesday 13 February 2019

in the real sector. We also envisage increased growth in the ICT sector, particularly after the elections, as more investors continue to invest in start-ups and mid-market businesses. The services sector should also be supported by the CBN’s growth agenda in 2019, which may necessitate increased collaboration with Fintechs. This, alongside our outlook on agriculture sector, should further sustain the non-oil sector’s growth in 2019, albeit moderately. In line with our outlook on the equities market, bargain hunting activities are dominant in the bourse due to relatively low valuations. Consequently, the equities market has recorded two consecutive weeks in the green to peg the YtD return in positive territory (+1.12%). We expect the negative sentiment towards the equities market to moderate as political risks ease off and investors take advantage of cheap stocks with strong potential for capital appreciation. In the fixed income space, we expect the sustained growth in the economy to strengthen investors’ optimism and confidence in the economy, hence, improving participation in the debt market.

t wasn’t all gloom and doom for the Nigerian economy in 2018, but much is still left to be desired. While the economy expanded at the fastest rate since 2015, it marked the third straight year of negative per capita GDPwhich implies that Nigerians are growing poorer. In addition, despite slowly picking up since the oil price crash in 2014 and showing the first true signs of a recovering economy in the fourth quarter of 2018, the two percent full-year growth is however not fast enough to deal with rising unemployment. The NBS reported last year that unemployment rate hit a near decade-high of 23 percent in the third quarter of 2018. The labour-intensive sectors, agriculture, construction and real estate underperformed, with real estate the worst of the pack, having contracted 4.74 percent in 2018. That’s worse than the -4.27 percent contraction recorded the previous year, meaning the fortunes of the sector are growing worse. Real estate joins Trade, Health and social services and administrative support services to rank among the worst performing sectors. The contrasting economic realities of Africa’s most populous nation don’t stop there. While the ICT sector shrugged off a costly regulatory collusion between the local unit of South-African Telecommunications Company, MTN and the Central Bank of Nigeria, to expand by the most since 2014, agriculture had a bad year. The ICT sector expanded 9 percent in 2018 while the agricultural sector slowed from 4.2 percent to 2.5 percent. Agriculture was growing at between 3 to 4.5 percent in 2016 and 2017, but was more like between 1-2.5 percent in most of 2018. That’s despite the current government’s effort to boost agricultural output and diversify the economy. The herder-farmer clashes in Northern Nigeria are taking their toll, it would seem. It gets even worse. The oil sector contracted by 1.62 percent year-on-year in the fourth quarter of 2018, a worrying performance for an economy that continues to rely heavily on the oil sector. The annual growth rate for the sector stood at 1.14 percent, much less than the 4.69 percent growth recorded in 2017. The growth rate in 2018 was lower than the previous year despite higher oil prices and production. Oil prices averaged USD71.62 per barrel in 2018, a 30 percent jump from 2017’s average price of USD54.67pb, thanks to the movement in US crude inventories, sanctions on Iran, supply outages in Venezuela, Libya and Angola, as well as increased demand supported price levels. Also, oil production improved slightly due to relative stability in

Source: NBS

the Niger Delta region and that’s despite shortfalls across key pipelines in the sector the force majeure on SPDC Bonny Light Export Terminal. As a result, oil production volume averaged 1.93 million barrels daily in 2018, from 1.88 mbpd in 2017. Nigeria’s fortunes are still closely linked to oil markets and growth could be threatened this year if oil prices continue to depreciate the way they have done in 2019 so far. Brent crude traded at $62 per barrel Tuesday, and has largely hovered around that price for nearly two months now. Another reason for gloom is the performance of the health sector. The health sector plunged back into recession in 2018, after contracting two straight quarters. It contracted by 0.68 and 0.64 percent in the third and fourth quarter respectively. Poor government funding and a lack of investment have crippled growth in the sector, which ranks alongside the Education sector as the major drivers of human capital development. Education contracted -0.03 percent in 2018 albeit it was an improvement from a contraction of -0.72 percent in 2017. Analysts have their say: Lukman Otunuga, FXTM Research “It will be a monumental week for the Nigerian markets as presidential elections loom. Although the Naira was stable against the Dollar yesterday in the parallel markets, there could be some volatility this week due to election uncertainty.” Gbolahan Ologunro, an equity research analyst at Lagos-based CSL stockbrokers “Our current economic growth can’t solve our challenges as unemployment and inflation are still

Source: NBS

at double digits while poverty is increasing. Ologunro explained that the critical sectors in the economy are still struggling to record improvement. “The Trade and Real Estate sectors, which are used as a gauge to measure consumption level in the economy, are still under performing. Therefore, much work still needs to be done in terms of lifting the real sectors and putting them on the path of sustainable growth path.” “Insecurity, high interest rate, unstable power are some of the major constraints to full recovery in the real sector. The absence of strong reforms to address these issues suggests they may remain in 2019, making us maintain our

forecast for real GDP of 1.5 - 2.0% in 2019.” Charles Robertson, Chief economist at Rencap “We think Nigeria will do better in the next four years, because oil prices won’t repeat the fall of 2014 – 2016. But policy choices will determine how much better Nigeria does. Nigeria is probably no longer the biggest economy in Africa – if we use the market exchange rate which averaged 362/$. Note however, we can’t be sure as we don’t have SA 2018 GDP figures so it’s possible the IMF forecasts for SA in 2018 are too high (we used the correct ZAR average rate).

Adetola Adelu, Financial Analyst at Fides Capital Partners “The GDP performance is impressive, especially in the non-oil sector while the significant drop in oil GDP can be attributed to the global drop in price of crude oil caused by oversupply. Adelu attributed the festivities season as the reason behind the Q4 performance of non-oil sector thanks to key performing activities like Transport (enhanced by Yuletide), Information & Communication, Agriculture (festivity and harvest period) and Entertainment (festivity). Meristem “Given our outlook on oil prices, we expect the CBN to continue its intervention in the FX market, thereby sustaining liquidity and attracting more investment

Going forward With the Q4 2018 expansion, the Nigerian economy booked its seventh consecutive positive GDP growth since 2016 to beat the International Monetary Fund (IMF) and World Bank’s forecast of an annual growth rate of 1.9 percent for the year. Four years ago markets hoping for a quick pivot to reforms cheered the new President Muhammadu Buhari administration amid a wave of optimism. Nigerians had very high hopes that their economic situation would improve with his election but four years after, the personal living circumstances of many Nigerians have deteriorated as rising inflation and unemployment have weakened their purchasing power and forced many to readjust their lifestyle downwards. Four years later, the tables have turned and Buhari is employing all the weapons in his arsenal to fight off the challenge from Atiku Abubakar, a former vice president, who swears the nation could be doing so much better under his leadership.

Construction sector slows despite claims of increased government spending OLUFIKAYO OWOEYE

nfrastructure is a strategic economic growth driver for any country; it serves as the foundation for public development. Governments around the world budget huge spending on capital expenditure, this expenditure trickles down to every segment of the economy. This is so because it affects most human endeavours in various fields of life such as production, construction, technology, and procurements. The National Bureau of Statistics NBS in its Q4 2018 GDP report showed the construction sector grew by 2.05percent in Q4 2018 from 0.54percent in Q3 2018 and 4.14percent in Q4 2017. In full year 2018, the construction sector grew by 2.33percent from 1.0percent in 2017 and -5.95 percent in 2016 compared to growth of 4.4percent recorded in 2015. According to Engr. Folusho Adewale, an Engineer and a project

manager in one of the construction firms based in Lagos, the lack of political will of various governments has led to the unimpressive growth in the sector. “We have seen cases where only few amount are eventually released for capital expenditure in a year despite huge projections in the budget” Adewale told BusinessDay. In an emerging, market such as Nigeria, the construction sector plays a very crucial role and Government at various levels have continued to restate their commitments toward bridging the infrastructural gap bedevilling the nation. In the 2018 budget, the Federal Government allocated N2.37 trillion representing 31.5percent of the nation’s total budget to capital expenditure, 22percent higher to N2.36 trillion allocated to it in 2017, out of this less than N1 trillion has been released so far. Also in 2016, a total of 1.58 trillion was allocated for capital expenditure, while in 2015, it was a

paltry N557 billion. Despite the huge amount the government claimed to have spent on capital expenditure, vis-à-vis construction, growth in the sector has not been impressive. Last year, the Debt Management Office (DMO), buoyed by the overwhelming subscription for the first N100 billion Sukuk Bond in 2017 which was over-subscribed by 5.8 percent, unveiled the second N100 billion sovereign Sukuk bond to fund 28 projects spread across the country, such projects include the notorious Lagos-Ibadan Expressway, and the Second Niger Bridge Construction just to mention few. Sadly, the slow passage of the nation’s budget by the legislative arm of government, in some instances when the budget is passed, funds are delayed due to bottlenecks, delay in payment of contractors are factors that have contributed to the sluggish growth witnessed in this sector over time. The lacklustre performance in the construction sector has also impacted negatively on the bottom-line of some construction companies, industrial goods companies listed on the Nigerian Stock exchange-Dangote

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SpecialGDP Report

Nigeria’s economy in 2018: The Good, Bad and Ugly LOLADE AKINMURELE & DIPO OLADEHINDE

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Cement Plc, CCNN, Julius Berger Plc. Julius Berger Plc has had a rough two to three years, especially since President Muhammadu Buhari came into power. The company has been at the receiving end of the crushing economic recession, seeing margins evaporate within one year. First was the 43percent drop in profits recorded in 2015 compared to 2014. From a profit after tax of N2.43 billion in 2015, the company closed 2016 with a ghastly loss of N2.39 billion. They essentially lost everything that they earned in 2015 in one year. While Dangote Cement in its Q3 2018 saw amixed performanceinturnover which was down by 0.74percent quarter-on-quarter and up by 17.51 percent compared to Q3 2017. According to Engr. Folusho Adewale, an Engineer and a project manager in one of the construction firms based in Lagos, the lack of political will of various governments has led to the unimpressive growth in the sector. “We have seen cases where only few amount are eventually released for capital expenditure in a year despite huge projections in the budget” he said.

Health sector returns to recession after exit …weak demand, lack of investment, poor funding crippling growth …mandatory health insurance seen as remedy ANTHONIA OBOKOH & MICHEAL ANI

he Nigerian health sector has plunged back into recession after managing to exit with a 0.42 per cent growth in the second quarter of 2018. While a relative growth might have been felt in the overall GDP, this could not be said of the health sector as growth in real term stood at -0.32 per cent in the full year 2018. In the last two quarters of 2018 (Q3, Q4), the sector recorded a negative growth at -0.68 and -0.64 per cent, respectively after recording a positive 0.42 per cent growth in Q2, 2018, as poor government funding, weak demand and a lack of investment have crippled growth in the sector. “The sector is suffering from weak consumer spending on the purchase of health services”, said Gbolahan Ologunro, an equity research analyst at Lagos-based CSL. Since the second quarter of 2017 till date, the health sector has recorded a negative devastating growth that has averaged -0.47 per cent, despite the sector alongside the educational sector being tipped as the major driver of human capital development. Real GDP growth in Africa’s largest economy expanded 1.93 percent in full-year 2018 from 0.83 percent and -1.58 percent in 2017 and 2016 respectively thanks to the federal government diversification initiative that saw non-oil sector expand 2 per cent 2018 from 0.47 per cent in 2017, at the time the country exited from its worst reces-

Source: NBS

sion in 27 years. About half of Nigerians population at 198 million live on less than $1.25 a day (‘Poverty Head-count’), making the country overtake India to be the poorest in the world, with six persons out of its entire population entering the poverty trap, according to a recent report by Brookings Institution, a non-profit public policy organisation in the United States. As at February 2018, the country was ranked 187 out of 191 countries in the world in assessing the level of compliance with the Universal Health Coverage (UHC), as very few of the populace is health insured. Not even the pharmaceutical sector has been spared from a frail economy, where a high inflation rate alongside increasing unemployment have taken a hard bite on consumers’ purchasing power, making them seek after traditional

Education sector escapes recession in Q4 2018 GbemiFaminu & OmobolaAdu

usinessDay analysis Nigeria’s Education sector reveals the sector came out of a recession in Q4 2018 after experienced a positive growth of about 0.35 percent although in full year 2018 the sector recorded a negative growth of -0.03 percent compare to -0.72 percent in 2017. Data from the National Bureau of Statistics (NBS) revealed Education sector entered into a technical recession in Q3 2018 having contracted by 0.42 percent and 0.67 percent in the previous quarter. Examining the contribution to GDP, Education contributed 2.51 percent in Q4 as against the 2.14 percent recorded in Q3. In real values, Education’s contribution to GDP in Q4 rose to N478,161.40 from N386,568.22 in Q3 2018. While there was an improvement in the contribution to GDP in the last quarter of the year, full year 2018 contribution to GDP

amounted to 2.16 percent which was less than the 2.20 percent recorded in 2017. The contribution and growth of the Education sector reflects the challenges that are going on in the sector which arises from the lack of adequate attention being paid to the sector by policymakers. Maju Eldad, a lecturer at Federal University of Kashere noted that the constant strike witnessed in the educational sector in Nigeria just like the recently concluded ASUU strike is an impediment to the growth and development of the sector. Commenting on the 2019 budget, Francis Iyoha, a professor of accounting at Covenant University noted that just N620 billion has been allocated to education amounting to about 7 percent of the national budget. He further stated that from the N620 billion, only N48 billion is expected to drive the development of the entire Nigeria’s education sector as the remainder goes to covering personnel expenses and overhead costs.

health care treatments. Drug makers have complained about drop in sales as high as 55 per cent, with many closing or divesting operations as consumers cut down on spending. Out-of-pocket payments for health are causing households to incur catastrophic expenditure, which in turn can push them into poverty. Private expenditure on health as a percentage of total health expenditure is 74.85 per cent. The implication of this is that government expenditure for Health is only 25.15 per cent of all the money spent on health all across the nation. Of the percentage spent on health by the citizens (74.85 per cent), about seventy per cent is spent as out-of- pocket expenditure to pay for access to health services in government and private facilities. Most of the remaining

money spent by citizens on their health is spent in procuring ‘alternative’ remedies of dubious value. “The sector has also been faced with poor private sector investment alongside poor budgetary allocation which has averaged about 4 per cent since president Buhari came on board,” Ologunro said on phone. A private sector-driven investment climate and mandatory health insurance appear to be the solution to Nigeria’s weak health sector as the government appears incapable of providing an environment for quality healthcare delivery in the country. BusinessDay findings show that the National Health Insurance Scheme has since 2014 barely captured four million Nigerians (working in the civil service), with private-sector insurers having about 4.5 million enrollees. Industry sources, however, opine that when health insurance is made compulsory, market-driven, and properly regulated, the resulting competitiveness will be the making of a new health sector in Nigeria. Nigeria’s incumbent president Muhammad Buhari, who is seeking a re-election in the most populous black nation and has promised in his policy document a health Insurance for the citizenry using co-payments to share the cost between individuals. His main challenger, Atiku Abubakar, on his part, has pledged to commit 15 per cent of the National budget to health and also open up the economy to attract foreign direct investment

Trade sector records 3 year-on-year negative growth BUNMI BAILEY

rowth in the trade sector recorded a three year growth to -0.63 percent in 2018 from -0.24 in 2016, as shown by data from the National Bureau of Statistics (NBS) which was compiled by BusinessDay. From the NBS data, the trade sector recorded a negative growth of -0.24 percent which further performed poorly to a negative growth of -1.05 in 2017 and 0.63 percent in 2018. Johnson Chukwu, CEO, Cowry Asset Management Limited attributed the three years negative growth to the low purchasing power of consumers in the economy, lack of increment in the wages and salaries of workers and the bottlenecks in the importation of goods and services. “Over the past three years the value of currency has been displaced by more than 50 percent and there have not been any increment increase in the wages and salaries of workers,” “Low purchasing power from consumers has impacted negatively on the trade sector and the bottlenecks in the importation processes has made it difficult for people to

get foreign currency on time and this has constrained the volume of goods and services that comes in,” Chukwu concluded. Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers said, “This shows that consumer spending is weak .The growth in the real sectors of the economy has been below historical tread levels. And what you will find out is that those sectors that should be the real engine of the economy have not been able to increase the level of unemployment opportunities so that has also affected consumer spending.” Consumer spending which is driven by growth in these sectors is not strong enough to give rise to higher employment opportunities that will give rise to consumption. Trade GDP growth rate stood at 1.02 percent, which is –1.05 percent points lower than the rate recorded one year prior, but 0.04 percent points higher than recorded in the preceding quarter. Quarter on quarter growth stood at 9.93 percent. Though slightly better than 2017, growth rate of real trade GDP in 2018 remained negative at –0.63 percent.

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Wednesday 13 February 2019

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Saudi Arabia goes on the hunt for global oil and gas

‘The world is going to be Saudi Aramco’s playground,’ says energy minister Khalid al Falih Anjli Raval and David Sheppard

audi Arabia plans to develop an international energy exploration and production business for the first time, doubling down on oil and gas even as the kingdom seeks to curb its reliance on hydrocarbons. Khalid al Falih, Saudi Arabia’s energy minister and chairman of state oil company Saudi Aramco, told the Financial Times that overseas expansion would be a critical part of the company’s future. “We are no longer going to be inward-looking and focused only on monetising the kingdom’s resources,” Mr Falih said. “Going forward the world is going to be Saudi Aramco’s playground.” While Saudi Aramco is the world’s largest oil producing company, it has never meaningfully ventured overseas to extract resources, relying on its vast domestic reserves. When asked if Saudi Arabia plans to become an international energy player like Royal Dutch Shell or Exxon Mobil, pumping oil as well as gas overseas, Mr Falih said: “Correct”. Despite ambitious reforms driven by Mohammed bin Salman, the crown prince, to wean the kingdom off what he has called its “dangerous addiction to oil”, Mr Falih mapped out Saudi Arabia’s plans to invest more in the sector that has underpinned its traditional economy. The move underscores how Saudi Arabia is likely to remain dependent on its oil and gas prowess for raising revenues, as it struggles to diversify into new sectors such as technology, tourism, healthcare and mining. Mr Falih said oil and gas, which has dominated its economy for de-

cades, would ultimately still make up at least 40-50 per cent of the kingdom’s revenues even if ambitious reforms took hold. While the kingdom has invested abroad in refineries and petrochemicals, Mr Falih’s remarks are the clearest sign yet of its ambitions to develop oil and gas extraction projects overseas, in a move that could see it compete with international rivals. The minister indicated that efforts would initially be focused on creating a “global gas” business. Many of the world’s energy majors are increasingly investing in gas, as the growth of demand outpaces that for oil. Saudi Arabia has eyed investments in Russia’s liquefied natural gas sector and is in talks about taking a stake in export facilities in the US. But Mr Falih also mentioned Australia as a possible investment destination. He compared Saudi Aramco’s exploration and production capabilities favourably with its global peers, saying: “We can stand shoulder to shoulder with anyone and outdo them.” Saudi Aramco caught the attention of the international financial community when Prince Mohammed revealed plans to sell shares in the state energy company through a stock market listing. People familiar with the plans for the flotation have said it has been indefinitely postponed. But Mr Falih was adamant that its expansion plans reflected a need to please potential outside shareholders. “If I have investors from New York or London or Tokyo that are investing in Saudi Aramco they want Saudi Aramco to be competing with the world’s best international oil companies,” he said.

Doubts grow over Mexico’s rescue plan for Pemex Bailout of state oil company will have to be substantial to reverse its decline Jude Webber

ndrés Manuel López Obrador is under pressure to deliver a significant bailout to Pemex, the state oil champion, which is being strangled by huge taxes and debt — but it is unclear where Mexico’s president will find the cash to turn Pemex around while keeping his fiscal pledges. Mr López Obrador is promising aid within days to revitalise the strapped state company at the heart of his nationalist energy policy. “ We h a v e t h e r e s o u r c es . . . We’re going to lighten Pemex’s tax burden like never before,” he said, adding that unspecified “savings” would fund the cuts. However, Mexico’s economy is slowing and investors already expect the government will miss its 2 per cent growth goal this year. “I don’t think Pemex can cling to investment grade much longer unless the government takes drastic action — and the government thinks it is taking drastic action, that is what is concerning,” said Shamaila Khan, head of emerging market debt at investment manager AllianceBernstein.

Created in 1938 when Mexico nationalised its oil industry, Pemex is a national icon. But it is hobbled by a legacy as the government’s piggy bank, required to hand most of its earnings to the state in the form of taxes and royalties, and has had to take on ever higher debt. “Pemex was never designed to be a company. It was conceived as the executive arm of Mexico’s oil policy,” said Gonzalo Monroy, an energy consultant. Mr López Obrador has put a close ally, Octavio Romero, in charge of Pemex — but he is an agronomist with no experience in energy and no clout with investors. At the same time, Pemex’s production is in freefall and its debt has just been downgraded to within a whisker of junk. Mr López Obrador says Pemex is in the best shape for 30 years because the government is pumping in $1.25bn this year to boost crude production. But analysts say the target of 2.4m barrels per day by 2024, compared with 1.73 mbpd in December, is unrealistic. They question the wisdom of building a costly refinery to sever reliance on US fuel imports when refining is less profitable than exporting crude.

Khalid al Falih, Saudi Arabia’s energy minister, says overseas expansion efforts will first focus on natural gas © Reuters

Hurdles for what would have been the world’s largest initial public offering included an inability to achieve the $2tn valuation Prince Mohammed had sought, regulatory concerns and worries about legal exposure. The kingdom’s powerful sovereign wealth fund was due to be the main recipient of the $100bn that Riyadh expected to raise from the flotation. In its absence, Saudi Aramco has been instructed to acquire the fund’s 70 per cent stake in Saudi petrochemicals maker Sabic. Saudi Aramco will issue a bond to partly pay for the $70bn Sabic deal, with an investor roadshow due to start imminently, Mr Falih said. The move enables the PIF to raise cash quickly at a time when finance ministry handouts have shrunk. The Saudi economy has reeled from the aftermath of the 2014 oil price crash,

which ushered in years of austerity measures. As the kingdom struggled with a slowdown, the killing of journalist Jamal Khashoggi last year sparked its biggest diplomatic crisis with the west since the September 11 2001 attacks in the US. “Obviously there is something of a cloud that was created by this tragic and unfortunate incident,” said Mr Falih. “[But] nobody is shying away . . . I would dispel that notion that people are avoiding investing in Saudi Arabia.” His comments come despite signs officials are concerned about the ability of Saudi Arabia to attract foreign capital and expertise to drive forward reforms. The kingdom faces shorter term challenges, including its relation-

ship with the US, its oldest and most important ally. President Donald Trump has backed Saudi Arabia through the Khashoggi affair, but has long harboured animosity towards the Saudi-led Opec oil producers group. Legislation that would make it possible for the US government to prosecute Opec member countries for manipulating oil prices is moving forward in Congress and is thought to have one of the best chances yet of becoming law. Mr Falih said he trusted the US to “do the right thing” and warned that the legislation could be “harmful” for the global economy. The world would suffer “irreparably” from the loss of Saudi Arabia’s ability to quickly raise or cut oil production to balance the market.

US lawmakers announce tentative deal to avoid another shutdown Bipartisan move provides funding for fencing but less than originally sought by Trump

Courtney Weaver and Demetri Sevastopulo

S lawmakers have reached a tentative deal to avert another government shutdown, raising hopes that Congress can pass a spending bill before the Friday deadline if President Donald Trump signs the measure. Congressional aides said the deal would provide $1.4bn to build 55 miles of fencing along the border with Mexico. But that was far less than the $5.7bn originally sought by Mr Trump to build a wall that he promised during his 2016 election campaign. The agreed funding would pay for the construction of a barrier only onequarter of the length the White House had previously demanded. The tentative deal was struck shortly before Mr Trump spoke to supporters at a rally in El Paso, a Texas city on the US-Mexico border, that was designed to both boost support for the wall and to highlight his differences with Democrats, who view the barrier as nothing more than a political gimmick. “As I was walking up to the stage, they said that progress is

being made with this committee. Just so you know, we are building the wall anyway,” Mr Trump said in a reference to the negotiators who have been trying to hammer out a deal for days to avoid a repeat of the previous 35-day partial shutdown. Congressional representatives on Monday night were continuing to flesh out the tentative agreement. In a sign of discord, however, some Republicans began criticising the deal as the details started to emerge. Sean Hannity, a Fox News host who is popular with the conservative base, said the deal was a “garbage compromise”. Jim Jordan, an Ohio Republican who heads the House Freedom Caucus, one of the most conservative republican groups, also attacked the plan. “While the president was giving a great speech in El Paso, Congress was putting together a bad deal on immigration,” he wrote on Twitter. For weeks, House and Senate negotiators have been working to strike an agreement that would satisfy Mr Trump’s demands for

funding for the border wall and mollify Democrats who have insisted that they would not give the president any money for it. Lawmakers suggested that the deal would also resolve a dispute about the number of detention beds allocated to Immigration and Customs Enforcement, the agency that detains people who cross into the US without papers Democrats had been pushing to significantly reduce the number to cut the level of detentions. ICE currently uses 49,000 beds, breaching a congressionally mandated cap of 40,500. The tentative deal would cut the number of beds to the existing cap by the end of the 2019 fiscal year. Negotiators were cautiously optimistic that the “agreement in principle” would satisfy both Mr Trump and Democrats, with some Republicans seeing the deal as a compromise that would allow both sides to claim victory. One congressional aide said the agreement provided an additional $750m that could be spent flexibly, potentially funding another 13,000 detention beds.

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NATIONAL NEWS

FT Exchange giants take their rivalry to Texas as shale oil booms

Donald Trump ally Tom Barrack examines shake-up of real estate firm

Battle of the contracts reflects Houston’s growing status as an energy trading hotspot

Activist investor demanded tycoon take action after Colony Capital halved in value

Gregory Meyer and David Sheppard

Mark Vandevelde

he world’s two biggest energy exchanges have taken their fierce rivalry to Houston, Texas in pursuit of business linked to the millions of barrels of shale oil arriving in the city every day. Last last year, exchange operators CME Group and Intercontinental Exchange introduced duelling futures contracts that track the price of West Texas Intermediate crude as delivered at the coastal city. The battle between the contracts — dubbed WTI Houston and Permian WTI — is a reflection of Houston’s growing status as an energy trading hotspot, as US oil production breaks records, Texas refineries add capacity and exports of crude soar. At the moment, oil markets in the Gulf coast region lack widely traded derivatives contracts, which is a potential problem for companies trying to hedge risks. Contracts culminating in physical delivery at Houston would be a purpose-built tool which reflect the city’s emergence as a gateway between domestic and international markets, exchange executives say. At stake is the chance to own the next major oil contract that some believe could be a major money-spinner for the two exchanges. CME of Chicago and ICE of Atlanta have earned billions of dollars in revenues since establishing the world’s two main oil benchmarks — WTI and North Sea Brent, respectively — three decades ago. “This is not our average contract launch,” says Jeff Barbuto, global head of oil marketing at ICE. “US barrels are going to become more and more relevant to global oil flows.” Exchanges owned by ICE and CME have competed in crude oil futures since the 1980s. ICE’s Brent crude benchmark is based on North Sea supply. CME’s light, sweet WTI benchmark is delivered to the storage hub of Cushing, Oklahoma — a small town about 500 miles north of Houston. At times, the price of oil at Houston disconnects from prices in the North Sea, Cushing or both, suggesting the new contracts could be useful to companies selling oil there. Volumes have picked up in recent weeks. “We are following the lead of the commercial customers that are telling us both with their investments and with their marketing where they need risk management,” says Peter Keavey, CME’s global head of energy. The contracts present somewhat different opportunities for each exchange group. At CME, Houston trading complements its flagship oil contract. “The key benchmark is still WTI-Cushing,” Mr Keavey says.

Wednesday 13 February 2019

Mark Carney: ‘There is a risk that countries turn inwards, undercutting growth and prosperity for all’ © Charlie Bibby/FT

Carney says Brexit offers global warning on risk of trade conflicts BoE governor believes UK exit from EU is ‘indicator’ of pressure to reorder globalisation Kate Allen

he economic impact of Brexit is a warning to the rest of the world of the risks of global trade uncertainty, the Bank of England governor has said. Speaking to an audience of senior City figures in London, Mark Carney said the threat posed by conflicts over trade were greater than a financial crisis or a turn in the business cycle. “With fundamental uncertainty about future market access, UK investment hasn’t grown since the referendum was called and has dramatically underperformed both history and peers,” he said at the event, which was hosted by the Financial Times. The world risked going down the same route, Mr Carney added. “Similarly, a prolongation of global trade uncertainty could undermine the global expansion,” he said. “Contrary to what you might have heard, it is not easy to win a

trade war.” Britain’s bid to leave the EU was a “leading indicator” of the fundamental pressure to reorder globalisation, he added. “It is possible that new rules of the road will be developed for a more inclusive and resilient global economy,” the governor said. “At the same time, there is a risk that countries turn inwards, undercutting growth and prosperity for all. Concerns over this possibility are already impairing investment, jobs and growth, creating a dynamic that could become self-fulfilling.” Brexit was fundamentally about whether a compromise could be found between democratic accountability and economic co-operation, Mr Carney said, telling politicians that it was “imperative” to find an outcome that balanced sovereignty and openness. Although he has to date taken a relatively low-key approach to setting out his views on Brexit, the speech marks a turning point for the BoE governor. As the UK enters its final weeks of EU membership, he has

begun to spell out more clearly the economic implications of leaving with no transition deal. Economic data published on Monday highlighted the dramatic impact that Brexit is having on the UK economy: output has slumped and growth in 2018 was at its lowest level since the financial crisis. The BoE put future rate rises on hold last week, citing the uncertainties around Brexit as well as the slowing global growth picture. The “fog of Brexit” was creating tensions in the financial markets which the Bank needed to monitor, Mr Carney said last week, as the BoE downgraded its outlook for Britain’s economy to its weakest level for a decade. The BoE last week estimated a one in four chance of a recession in the first half of 2019 and that was without knowledge of the latest data, which were significantly worse than expected. Mr Carney’s remarks came as UK prime minister Theresa May told MPs that “we now all need to hold our nerve” on Brexit.

Shell partners with Alphabet to develop electricity-generating kites Google parent’s wind power venture takes outside investment from oil group Richard Waters

akani Power, an experimental wind power venture at Alphabet, has taken outside investment from oil group Royal Dutch Shell as part of a move to set it up as a freestanding subsidiary inside the tech holding company. The investment comes 13 years after Makani began work on developing electricity-generating kites, and six years after it was acquired by Alphabet, Google’s parent company. Separating Makani from X, Alphabet’s experimental projects lab, echoes the path taken by other “moonshot” projects, including driverless car unit Waymo and Loon, which uses high-altitude balloons to deliver wireless signals. Alphabet turns new projects into freestanding business units when it believes they are ready to move beyond the prototyping stage and start developing a commercial product, though full commercialisation could still be years away. However, the Makani transition marks a rare decision by Alphabet to stick with a renewable energy project beyond its initial science phase. Two other ventures — Malta, an energy

storage system using molten salt, and Dandelion, a geothermal energy project — were spun out of Alphabet entirely, reflecting their distance from Alphabet’s core interests as well as the capital needed to turn them into largescale businesses. The size of Shell’s minority investment was not disclosed, but Alphabet said the arrangement was made to establish a partnership between the businesses, rather than out of a need to attract outside capital. Until now, Makani has been developing a prototype kite that is tethered to land, floating at about 1,000ft above the ground where the prevailing winds turn rotors to keep it aloft and generate power. Taking advantage of Shell’s long history of offshore development, Alphabet said it would now turn its attention to coastal waters at depths of more than 50 metres, where the winds are stronger. The companies hope that the light weight of Makani’s kites will give them an advantage in offshore development, making it possible to attach the kites to floating buoys that are weighted down with anchors, rather than requiring full ocean platforms secured to the ocean bed. The Shell investment is not the first time Alphabet has brought in

outside backers for its side projects. Verily, which began its existence as Google Life Sciences, has taken in $1.8bn in outside capital, including a $1bn cash injection from private equity group Silver Lake at the start of this year. The scale of the investment — and the fact that private equity groups generally look for an exit in a relatively short timeframe — appeared to point towards an eventual spin-off or separate stock market listing. The venture’s chief executive said at the time that the investment was to “increase flexibility and optionality” at the healthcare business. Makani’s new status as a standalone subsidiary means that it will now be able to reward its workers with equity tied to the future performance of the business — an important remuneration tool when it comes to competing for talent with standalone tech startups. Similar arrangements at other Alphabet subsidiaries have been a significant factor in a recent jump in the group’s costs. Revaluing the equity at the “other bets” businesses was one of the main reasons that Alphabet’s research and development costs jumped 40 per cent in the latest quarter, according to the group’s most recent earnings call with Wall Street.

om Barrack, the real estate tycoon who helped his ally Donald Trump win the White House, has agreed to explore a reorganisation of his Colony Capital business after pressure from a little-known activist investor. Colony, which has lost more than half of its value since a disastrous merger with rival Northstar at about the same time that Mr Trump took office in January 2017, said it had reached agreement with Blackwells Capital to appoint two new directors to its board. Both will sit on a special committee “tasked with reviewing . . . issues related to the company’s assets and business configuration”. The announcement marks a striking victory for Blackwells in what is only its second public campaign. Founded in 2016, the fund has no outside investors and is run by Jason Aintabi, a member of a wealthy Canadian family with real estate interests throughout the world. Mr Aintabi has told colleagues he found common ground with Mr Barrack over their shared Lebanese ancestry. Colony owns properties across the healthcare, industrial and hospitality sectors. It also manages assets held in private equity funds backed by outside investors. Talks between the two sides began in September, people familiar with the situation said, about two months before Colony ousted chief executive Richard Saltzman. That move saw Mr Barrack return to the top job, where he began cutting 15 per cent of the company’s workforce in an effort to stem larger-than-expected losses. Mr Barrack played a high-profile and at times controversial role in Mr Trump’s ascent to power. He attended the 2016 Republican national convention to deliver a primetime address in support of his longtime friend. Earlier he had introduced the future president to Paul Manafort, who became the Trump campaign chairman and who is now in prison awaiting sentencing on counts of fraud, obstruction and conspiracy against the US. Mr Barrack’s firm also hired Manafort’s former deputy, Rick Gates, as a consultant after the election, but they parted ways after Mr Gates pleaded guilty to financial fraud and lying to investigators in the Mueller investigation into Russia’s interference in the 2016 election. Mr Trump’s inaugural committee, which Mr Barrack chaired, has been subpoenaed by federal prosecutors in New York seeking information on its donors and spending.

Tuesday 12 February 2019

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France calls for biggest shake-up of EU merger rules in 30 years Le Maire proposes changes that would give national leaders right to overturn decisions Jim Brunsden and Rochelle Toplensky

aris has called for the biggest shake-up of EU merger rules in 30 years, as it responded to last week’s decision by Brussels to block the partnership between German and French train manufacturers Siemens and Alstom. French economy minister Bruno Le Maire, who has expressed anger at the decision by the European Commission to veto the merger, on Tuesday called for the creation of “European industrial champions”. While Brussels warned that the combined company Siemens and Alstom would have been overly dominant in signalling and highspeed trains on the European market, Paris has slammed the rules as a relic of the 20th century that risks handing technological supremacy to China. Speaking alongside German finance minister Olaf Scholz in Brussels on Tuesday, Mr Le Maire put forward a three-point plan of rule changes, saying he would discuss it further with Berlin in the coming days. The proposals include giving EU national leaders the right to overturn the commission’s merger decisions, and equipping Brussels with the ability to approve a merger but

subsequently to force the combined company to make divestments if competitive problems emerged. “Instead of blocking the creation of an industrial champion up front, we would make a dynamic, rather than a static analysis,” Mr Le Maire said. “If there is a problem, the decision can evolve.” Another proposal is for Brussels to be “more systematic” in evaluating competition risks based on companies’ market share at global level. Under the current rules, Brussels decides case-by-case on the “market definition”— from national to worldwide — that should be used to assess the threats posed by mergers. However, competition lawyers say the ramifications of the proposed rule changes should not be underestimated. Nicholas Levy, a competition partner at Cleary Gottlieb, said the proposals would “fundamentally change the architecture of European merger control, replacing expert analysis conducted within a welldefined legal framework with political decision-making”. “The Commission’s role would be relegated and the transparency and consistency that has characterised EU merger control for 30 years would be upended,” he said. “It is difficult to see how this would lead to better decision-making and more competitive markets.”

Molson Coors reports accounting errors and quarterly sales drop Mamta Badkar

eer giant Molson Coors on Tuesday said it would restate its financial statements for fiscal 2016 and 2017 and reported a drop in quarterly sales driven by weaker demand in the US and Canada. The company behind brands like Coors Light and Miller Lite said the errors could be traced back to its acquisition of the remaining 58 per cent stake in MillerCoors in 2016. Molson Coors said the errors resulted in an understatement of its deferred tax liability and income tax expense, and an overstatement of its net income by $399.1m for the year ended December 2016. For the following fiscal year, the revaluation of the deferred tax liability, along with other errors, resulted in an overstatement of income tax expense and understatement of net income by $151.4m. These adjustments resulted in a cumulative increase in its deferred tax liability of $247.7m. News of the accounting error and restatement accompanied the company’s fourth-quarter results. The beer maker said net sales fell 6.2 per cent from a year ago to $2.42bn, missing analysts’ estimates for $2.5bn, according to a Refinitiv survey. That reflected a 7 per cent drop in US sales, an 8.8 per cent drop in Canada and a 1.9 per cent decline in Europe. Meanwhile, net income fell

sharply to $76m from $716.9m in the year-ago quarter, when profits were boosted by the US tax overhaul. That translated to earnings of 35 cents a share, down from $3.31 a share in the year-ago quarter. Adjusting for onetime items the company reported earnings of 84 cents a share, ahead of analysts’ expectations for 79 cents. “Through the year we further scaled our cost saving program which insulated us in part from the effects of weaker industry demand in North America, higher than anticipated input inflationary pressures and challenges associated with the implementation of our US brewery supply chain system,” said chief executive Mark Hunter. The company stuck to its plan for cost savings guidance of $700m for 2017 to 2019, and aims to achieve $200m in cost savings this year. Mass market beer makers have faced stiff competition from craft brewers in recent years and seen softer demand as more consumers opt for wine or liquor. Like others in its industry, Molson Coors has sought to expand its portfolio and last year Molson Coors Canada announced a joint venture with The Hydropothecary Corp to “pursue opportunities to develop non-alcoholic, cannabis-infused beverages for the Canadian market”. For fiscal 2019, Molson Coors expects to report underlying cash flow of $1.4bn, give or take 10 per cent, and capital spending of about $700m, with the same margin of error.

Stocks to watch: Plus500, Michelin, Omnicom, Coty, Spire, Britvic European miners still look good value, says Goldman Sachs Bryce Elder

lus500 slumped on a profit warning, which was due to its clients not losing enough. The contracts-for-difference bookmaker said the effect of European leverage regulations in combination with maintained marketing spend was “likely to result in 2019 profit being materially lower than current market expectations”. Full-year results from Plus500 showed revenue up 65 per cent to $720m on a 20 per cent higher cost base, resulting in profit nearly doubling to $503m. But analysts highlighted that the average user acquisition cost rose more than 400 per cent year on year in the fourth quarter to $1,489 each. “The reason for the warning is that Plus500 considers its revenue run-rate to be currently around $100m, having disclosed that revenue from client losses in the fourth quarter was $56m and was achieved primarily given the bearish — but volatile — market, where clients are generally long. This has never been disclosed and to some extent makes more visible the inherent uncertainty in forecasting.” Peel Hunt Michelin led the Stoxx 600 gainers after its fourth-quarter results beat consensus forecasts,

which had been lowered in response to a third-quarter profit warning. The tyremaker’s US volumes and pricing were ahead of forecast, while 2019 guidance for demand and raw materials costs was as expected. “Michelin is able to sustain premium price points, while concurrently gaining market share — this is the perfect recipe for earnings growth . . . Given the combination of a lowly valuation and robust earnings outlook, we expect the company will relaunch its share-buyback at the upcoming capital markets day.” Citigroup Coty, which was last year’s worst performing S&P 500 member, surged after JAB Holdings, which owns a 39 per cent stake in the cosmetics maker, launched a tender offer to increase its shareholding to up to 59 per cent. Omnicom gained after the US advertising agency reported its best US organic growth in the past 10 quarters. Group fourthquarter earnings per share were $1.77 compared with a $1.66 consensus, though the beat was powered largely by non-operating items such as interest, tax and investment income. Sellside stories Goldman Sachs upgraded Rio Tinto to “buy” and cut BHP to “neutral” in a mining sector review.

The outlook for mining equities remains positive in spite of lowered expectations for global demand growth as there remains a lack of meaningful supply growth, either now or in the medium term, said Goldman. The big-four European miners are generating significant free cash flow and have few capital expenditure commitments, suggesting the majority will be returned to shareholders, it said. Goldman’s advised switching from BHP to Rio was on the back of the disaster at Vale’s iron ore dam in Brazil, and the uncertainty it creates in the market. Rio will be looked upon more favourably by investors as iron ore will provide more than 70 per cent of its 2019 operating earnings, said the broker. As part of the same research, G oldman downgraded First Quantum to “neutral” on valuation grounds. Anglo American was its top pick in the sector as it “is one of only a few high-quality companies for which we expect positive earnings momentum this year, benefiting from the return of Minas Rio to operation”. Credit Suisse downgraded Spire Healthcare, the UK private hospital operator, to “underperform” from “neutral” with an 85p target price. It predicted that Spire would this month scrap its 2022 target of £200m in operating earnings.

China bulks up on gold reserves for a second consecutive month Central banks hoard the most of the precious metal in almost half a century Neil Hume

hina has added to its gold reserves again. At the end of January its holdings stood at 59.94m ounces, up from 59.56m a month earlier, according to figures released by the People’s Bank of China on Tuesday. It marks the second month in a row that China, the world’s biggest consumer and producer of gold, has added to its hoard of the precious metal. Before its purchase in December, the last time China bought gold was in 2016. Over the past year, central banks emerged as big buyers of gold, with purchases up almost

75 per cent. They acquired $27bn worth of bullion — the most in almost half a century — in 2018 as countries including Russia, Turkey and Kazakhstan shifted reserves away from the US dollar. Analysts reckon 2019 could be another big year for central bank gold purchases. “We expect elevated geopolitical tensions and less pressure on emerging market currencies to keep gold purchases at 650 tonnes in 2019,” Goldman Sachs said in a recent report. “Between 2009 and 2015 China has bought on average 100 tonnes of gold per annum. Tensions between the US and China could remain high in the coming years.

In the experience of Turkey and Russia, both countries increased their gold purchases following rising tensions with the US.” Gold was trading at $1,313 on Tuesday, up 7.5 per cent year to date. News of China’s gold buying came as Matteo Salvini, Italy’s deputy prime minister and leader of the League party, raised the possibility of wresting control of Italy’s sizeable gold reserves away from the country’s central bank. The Bank of Italy has the thirdlargest central bank holding of gold reserves in the world after the US and Germany, owning 2,452 tonnes at the end of the third quarter of last year, according to the World Gold Council.

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Tuesday 12 February 2019

ANALYSIS

Brexit: no-deal fears fuel Irish business anxiety Ireland stands to lose out from Brexit with some predicting recession if there is no EU-UK agreement

Virgin plans American adventure in trains, ships, banks and hotels Chief executive Josh Bayliss plots US expansion with a dizzying wish list of ventures Andrew Edgecliffe-Johnson

Arthur Beesley

t takes three years for the whiskey produced at the Great Northern Distillery to mature. So when the company began work on the bottles that came on to the market late last year, the first it had produced, there was little concern over Brexit and no mention of a “backstop”. Now it’s difficult to think of anything else. From a standing start in 2015, the €12m distillery in the Irish border town of Dundalk has made rapid progress. Demand has outstripped forecasts and the business is on track to produce 10m litres of the spirit this year, becoming a major supplier in the industry. Yet despite the optimism, the possibility of the UK tumbling out of the EU without a deal — and its likely impact on Ireland — is difficult to escape. “Our whiskey is beginning to mature,” says Alan Martin, the company accountant. “[But] there’s an awful lot of uncertainty. We just don’t know what’s going to happen.” Many businesses across Ireland are in a similar situation. Steep World Trade Organization tariffs on valuable UK trade; voluminous new customs paperwork; and the risk of long delays on goods shipments to and from the European mainland that usually transit via Britain mean that Ireland has as much, if not more, to lose from a no-deal Brexit than any other nation, bar the UK. The growth markets for Great Northern’s whiskey are in the US, China and South Africa, so its sights are set on places far away from the drama in Westminster and Brussels. But the distillery is located just 10 minutes from the border with Northern Ireland — the single most divisive issue remaining in the fight over how the UK will leave the EU. London, Dublin and Brussels have all resolved that Brexit should not create new checks or a hard border to replace what is now frictionless trade across an invisible frontier that divides Northern Ireland from its southern neighbour, but they cannot agree how. The schism has taken talks to the brink of collapse, with UK prime minister Theresa May forced by Eurosceptics in her own party and Northern Ireland’s Democratic Unionist party — on which her minority government depends at Westminster — to seek concessions that Leo Varadkar’s Irish government and his EU allies will not countenance. Companies like Great Northern are caught in the middle of this political brinkmanship. The distillery is adjusting supply chains and stockpiling raw materials to avoid disruption. It also faces stiff new tariffs that will mean the price of some specialist ingredients from the UK will rise by more than 20 per cent if the country crashes out of the EU next month. “It’s a big wallop,” says Mr Martin. The company’s investment in Dundalk was a vote of confidence in the booming market for premium Irish whiskey and the revival of an Irish economy that had been devastated by the financial crisis. Mr Varadkar’s government is now facing the prospect of that progress being slammed into reverse, with some

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economists suggesting Ireland could slide into recession within 18 months of Britain crashing out of the EU on March 29. The UK is Ireland’s biggest import partner and its second-largest export market after the US. The dispute over the “backstop” — effectively an insurance policy to keep open the Northern Irish border, pending a new UK-EU trade deal — has also soured relations between London and Dublin that had warmed ever since the 1998 Good Friday peace pact ended decades of sectarian violence in Northern Ireland. Tony Blair, the former UK premier who signed the 1998 deal, has warned that a no-deal Brexit could be “devastating” for the peace process if a hard border were to become a target for dissident republican paramilitaries opposed to the Good Friday deal. Mrs May is scheduled to address MPs on Tuesday to update them on her talks in Brussels and Dublin. But her abrupt decision two weeks ago to seek “alternative measures” to the backstop to win parliamentary support from the Eurosceptic wing of the Conservative party and the DUP has stirred anger in Mr Varadkar’s administration. Like Mrs May, he leads a minority government that faces severe domestic constraints, limiting his room for manoeuvre in any talks. He rejects her demands for a time-limit on the backstop and risks a political backlash at home should he make any compromise. Brussels, Berlin and Paris have been steadfast in their support for the taoiseach. But escalating Brexit risks have sharpened Mr Varadkar’s dependence on senior European leaders like Jean-Claude Juncker, Donald Tusk, Angela Merkel and Michel Barnier, the EU’s lead Brexit negotiator. European officials insist they will stand by Mr Varadkar but there remains concern in Dublin that he could yet come under pressure to change tack at the last minute to avert a no-deal. “He’s bolstering European support by going to Brussels,” says a senior Irish official. “But nobody’s being complacent.” That attitude extends to many of the country’s largest companies that have set in train expensive contingency plans for a no-deal exit that they hope they will never have to use, instead praying for a late UK deal, or a deferral of the Article 50 process. Already Mr Varadkar and Ireland’s powerful farm lobby are seeking emergency aid from Brussels to compensate for the sudden loss of beef and dairy food sales in the UK market if tariffs are imposed. The Irish leader also wants EU state aid waivers to enable his administration to rescue

stricken companies. The uncertainty has already led business to pullback. AIB, Ireland’s largest bank, said on Monday that one-third of companies have cancelled or postponed investments due to Brexit. A decade after a devastating banking crash and a humiliating international bailout, strong growth has returned. Irish gross domestic product grew 5.2 per cent in 2016 and 7.2 per cent in 2017. Government forecasts point to 7.5 per cent growth in 2018. But the country still bears the scars of the crisis that triggered years of gruelling austerity, rampant unemployment and huge taxpayer-funded bank bailouts, all of which have made Ireland more vulnerable to Brexit. Its national debt of €212.8bn at the end of January, up from €43.7bn before the crash, weighs heavily. At 255 per cent of government revenue, it ranks among the largest in the eurozone. Conor O’Kelly is responsible for managing that burden. The chief of the state debt office, the National Treasury Management Agency, insisted in a recent speech that he does not need a Brexit plan, because he has no choice but to work to a “permanent” contingency plan. “Ireland is one of the most open economies in the world,” Mr O’Kelly told a business event. “We are one of the most indebted countries in the world. We rely on foreign capital for 80 to 90 per cent of our borrowing.” With a funding requirement this year of between €14bn and €18bn, the country’s ability to service its debts depends on maintaining market confidence in the economy. Dublin does, however, enter the Brexit endgame after recording its first budget surplus for a decade, albeit a small one. Yet dire warnings of a big economic hit in a no-deal scenario are coming with increasing regularity. The finance ministry is anxious about a “substantial” slowdown in growth and rising unemployment, saying the Irish economy could be 4.25 per cent smaller than the current projections over the medium term. The central bank worries about financial market turmoil, lower consumer spending and exports and transport disruption. Davy and Goodbody, the two biggest Dublin-based stockbrokers, have warned a no-deal exit could push Ireland into recession. Séamus Coffey, chairman of the Irish Fiscal Advisory Council, a statutory budget watchdog, says it is too early to say whether recession is a foregone conclusion but he believes an economic slowdown is inevitable. “The Irish economy has performed so strongly over the past four or five years that it can’t be expected to continue to grow at the same rate,” he says.

he first tickets go on sale this week for Virgin Voyages, a Miami-based cruise operator aiming to launch the first of the four ships it is building early next year. Within days, a group of New York banks are expected to price a potential $3bn initial public offering of Virgin Trains, a new passenger rail service in Florida. By the end of February a Virgin Hotel will open in San Francisco and a Virgin Galactic space aircraft hopes to make its second test flight from California’s Mojave desert to the edge of space. The Long Beach-headquartered Virgin Orbit plans to celebrate the launch of its first commercial satellite by the

consumer market, has obvious appeal. But it took an apparent retreat to fund its current advance: in 2016 Alaska Air paid $2.6bn for Virgin America, the domestic airline the UK group had launched in an earlier bid for bigger US revenues. Sir Richard, with just over 30 per cent of what was then a public company, lamented that he was powerless to stop the sale and later implied that Alaska had “castrated” the carrier by dropping the Virgin name. But the transaction provided Mr Bayliss with capital to explore other opportunities for the brand in the US, and the pending £220m sale of a 31 per cent stake in Virgin Atlantic to Air France-KLM will add further resources. Virgin has invested $2.3bn since

Josh Bayliss says he has tried to bring focus to a private group that still spans 68 companies in 34 countries

summer. As it prepares to mark the 50th anniversary of Sir Richard Branson founding Virgin as a mail order records business in 1970, the executive who now runs the company is laying out ambitious plans to push into a US market where the brand has been far less well-known — and lucrative — than in the UK. Josh Bayliss, a Slaughter and May-trained New Zealander who stepped up from general counsel to chief executive in 2011, says he has tried to bring focus to a private group that still spans 68 companies in 34 countries. At times in Virgin’s first 49 years, it has seemed unclear what held its portfolio together other than the whims of its founder. Mr Bayliss says Virgin is now “more deliberate” about where it applies its brand than in the days when Sir Richard was launching cola, vodka, cosmetics and bridal wear under the motto “screw it, let’s do it”. “There’s a misconception of Richard as someone who [just] slaps the brand on things,” he adds, contrasting Virgin with another brand-focused multinational that was fronted for years by a stuntloving billionaire: “It’s very different from the way the Trump Organization works.” Virgin has also become more focused on finding financial partners with longer-term investment horizons, such as sovereign wealth funds and pension funds, and on picking industries where it sees the potential to build multibilliondollar businesses by offering a better experience for “underserved” consumers. The US, as the world’s largest

2008 in the US, Mr Bayliss says — most of it in Virgin America. The recent ramp-up of investments means Virgin is losing money in the US, but it expects a substantial payback over the next five years. Virgin Voyages, the cruise business backed by Bain Capital and GIC, Singapore’s sovereign wealth fund, has required $150m-$200m. It has also put $75m-$100m into Virgin Hotels, which so far has only one property opened in Chicago but plans to open nine in the next three years, from Nashville to Las Vegas. Listing documents for the Fortress-backed Virgin Trains, in which Virgin will have no more than a 2 per cent stake, suggest its investment there could be $50m$60m. And then there are the much delayed space launches, into which Sir Richard said last year he had poured about $1bn of his own money and which Mr Bayliss says could still require “significantly more capital”. It is difficult to confirm such sums from the published accounts of offshoots of Virgin Group Holdings, the private parent company which is registered in the tax efficient British Virgin Islands where Sir Richard resides. However, they offer a picture of a group that is still heavily dependent on the UK, 35 years after the first Virgin flight across the Atlantic. In the latest accounts for Virgin Enterprises Limited, for example, the subsidiary that oversees the high-margin licensing of the Virgin brand made £40m of its £73m turnover from the UK in 2017 and only £7.3m from North America — less than the sum it generated in Australia and New Zealand.

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Wednesday 13 February 2019

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BUSINESS DAY

OIL

West Africa: Port power failure pushes Nigeria differentials down Page 52 GAS

L-R: Ibe Kachikwu, honorable Minister of State for Petroleum; Maikanti Baru, GMD, NNPC; & Obi Uzu, CEO, Global Process and Pipeline Services Limited (GPPSL) during the ministerial visit to the GPPSL exhibition stand at the Nigerian International Petroleum Summit (NIPS) held in Abuja recently.

South Africa: PetroSA eyes gas from new Total find Page 53 Market Insight

Debrief

Nigeria should watch her oil, gas potential. South Africa just got on front foot FRANK UZUEGBUNAM

Oil prices fall as US rig count rise, trade concerns Page 57 OPEC weekly basket price DAY

PRICE

1/2/19

60.93

31/1/19

61.19

30/1/19

60.93

29/1/19

59.71

28/1/19

59.57 Source: OPEC

s of 2011, Nigeria’s proven oil reserves stood at 37.2 billion barrels, putting the country as the biggest oil producer in Africa and 11th largest in the world. Rather than hit the 40 billion barrels of crude oil reserves target set by Federal Government in 2010, the country’s reserves declined to 31.27 barrels by 2016 according to data from the Department of Petroleum Resources (DPR). For Nigeria’s gas resource, Maikanti Baru, Group Managing Director of NNPC, during the recent Nigerian Gas Association (NGA) international conference in Abuja said the country’s current proven gas

reserve has gone up to 202 trillion cubic feet (tcf ) from the initial figure of 199tcf. Meanwhile, there is still the issue of the unproven gas reserves of about 600tcf. The gross underutilisation of Nigeria’s gas resource and the decline in the country’s oil reserves can be traced to regulatory uncertainty, low investment in exploration and absence of licensing bid round. Despite the lack of momentum over the years, Nigeria remained number one in Africa. However, if the country remains static, all that may change in coming years as South Africa just got on front foot. The Brulpadda find, estimated at about 1 billion barrels, may prompt a rush of activity offshore and help open up a new hydrocarbons province in

South Africa. “It is gas condensate and light oil. Mainly gas. There are four other prospects on the licence that we have to drill; it could be around 1 billion barrels of total resources of gas and condensate,” said Patrick Pouyanne, Total Chief Executive. The discovery by French oil major Total SA, speaks to South Africa’s hidden oil and gas potential. The field was discovered about 175 kilometers off the country’s southern coast in the Outeniqua Basin. “The find is potentially a major boost for the economy. We welcome it as we continue to seek investment,” Gwede Mantashe, South Africa’s Minerals Minister said. Kevin McLachlan, Total’s senior vice president for exploration, said in a statement said

that “with the discovery, Total has opened a new world-class gas and oil play and is well positioned to test several follow-on prospects on the same block,” Brulpadda is one of several high-profile exploration prospects for Total and it is projected that the field could hold between 500 million to more than 1 billion barrels of oil equivalent. “We believe South Africa holds the potential for many more such discoveries, and the time has come to have a meaningful conversation on local content development so the development of the industry benefits all South African workers and contractors across the value-chain and creates jobs for the communities,” said NJ Ayuk, Executive Chairman African Energy Chamber (AEC).

52 BUSINESS DAY WEST AFRICA Outlook

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Wednesday 13 February 2019

oil

Brief South Sudan: South Sudan to return to pre-war oil production levels by mid-2020

West Africa: Port power failure pushes Nigeria differentials down

igerian differentials fell due to a power failure at the Qua Iboe export facility earlier in the week, two traders said, sending prices to their lowest level in three weeks. The power outage prompted operators to load crude onto supertankers at around 25,000 barrels an hour, slower than normal rates around 30,000 barrels an hour. An overhang

of unsold cargoes also helped bring down prices of Bonny Light and Qua Iboe, which had been indicated at more than $2 a barrel above dated Brent throughout February Qua Iboe for March loading was offered at a premium of between $1.80 and $1.90 a barrel above dated Brent, down from around $1.95 and from around $2.15 at the start of this week. Vitol sold a cargo of Qua Iboe,

though the identity of the buyer was not immediately clear. Spanish oil major Cepsa was heard to have bought a cargo of Usan from Chevron, according to one trader, but that could not be immediately confirmed. Traders said there were at least 20 unsold Nigerian cargoes from the March programme. The overhang has started to bring down prices of Bonny Light and Qua

Iboe, which had been indicated at more than $2 a barrel above dated Brent so far in February. No Nigerian cargoes were scheduled for Europe amid low refining margins there and the high differentials Meanwhile, demand for Angolan crude from Chinese refiners drained supplies of March-loading cargoes while exports to Mediterranean refiners also helped clear stocks.

outh Sudan will return to producing more than 350,000 barrels of crude per day by the middle of 2020, up from current levels of just over 140,000 barrels per day (bpd) currently, Ezekiel Lul Gatkuoth, the country’s oil minister said. Production is expected to rise to 270,000 bpd by the end of 2019, according to Gatkuoth. He was speaking on the sidelines of the Petrotech conference in Greater Noida, a satellite city of India’s capital New Delhi. The world’s youngest country, which split from Sudan in 2011, has one of the largest reserves of crude in sub-Saharan Africa, only a third of which have been explored so far. The country lost many of its oilfields to a civil war that broke out two years after its independence. A September peace agreement is largely holding. “By the end of the year, block 3 and 7 will be hitting 180,000 bpd, blocks 1, 2 and 4 will be producing 70,000 bpd, and block 5A will be producing 20,000 bpd,” Gatkuoth said. “We used to produce 350,000 to 400,000 bpd.

We expect to go back to those levels by the middle of next year,” he said. South Sudan has signed a preliminary agreement with Russia’s Zarubezhneft for exploring some of the blocks, Gatkuoth said. “They are interested in block B1, B2, E1 and E2. We will be working to see where they are likely to be interested in the most,” he said. South Africa, which

has committed to investing $1 billion in the country, would collaborate with South Sudan on the construction of pipelines and a new refinery along the border with Ethiopia, the minister said.

Ghana: $799m upstream petroleum contracts awarded to local companies in 2018

total of $799 million worth of contracts in the upstream petroleum industry was awarded to indigenous Ghanaian companies and joint ventures in 2018 in accordance with the Local Content and Local Participation law. Out of the amount, $453 million worth of contracts were awarded to Ghanaian firms whilst $346 million awarded to joint venture companies. Additionally, Aker Energy has awarded contracts valued at $40.3 million to Joint Venture companies in accordance with its local content obligations.

John Peter Amewu, Ghana’s energy minister, said over 75 per cent of people currently working in the upstream petroleum industry were Ghanaians adding that with government’s aggressive implementation of the Petroleum Local Content and Local Participation Regulation, 2013 (L.I 2204), a significant number of Ghanaian companies had registered with the Petroleum Commission to participate in the upstream petroleum industry. Amewu said the rigorous promotion of joint ventures in accordance with Regulation 43(1) of L.I 2204 had also enhanced the participation

of indigenous companies in the industry. “As at the end of September 2018, about 600 indigenous Ghanaian companies had registered with the Petroleum Commission providing goods and services to companies in the oil and gas industry,” he said. The energy minister noted that in the quest to boost the competitiveness of indigenous companies and provide education, training, research and development in the oil and gas activities, the Petroleum Commission had opened the Local Content Fund Account in accordance with Section 64 of the Petroleum

Act, 2016, (Act 919). Additionally, a Secretariat had been established to manage the Fund’s implementation this year, whilst modalities for managing and administering the Fund and its guidelines had been developed and awaiting approval. The fund would provide financial resources to indigenous Ghanaian small and medium scale enterprises to aid their participation in oil and gas activities. The Petroleum Commission had been tasked to develop an electronic portal system (e-portal) to bridge the information asymmetry bias against Ghanaian companies.

Wednesday 13 February 2019

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gas

BUSINESS DAY

ENERGY intelligence South Africa: PetroSA eyes gas from new Total find

Mozambique: Final investment decision for Mozambique gas block seen by March-April

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Brief

final investment decision (FID) for a massive offshore natural gas block in Mozambique is expected to be ready by March or April, Omar Mitha, chairman of Mozambique’s national oil company ENH said in New Delhi. This is the first time any of the seven partners in the block has given a specific timeline regarding an investment plan for the block, located east of Mozambique’s Rovuma

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of Mozambique Empresa Nacional de Hydrocarbonetos (ENH) holds 15 percent and Anadarko Mozambique Area, a subsidiary of US-based explorer Anadarko Petroleum , holds 26.5 percent and is operator of the block. “One of the Indian companies has already signed a share and purchase agreement for the gas. The first molecules will come to India by 2024,” Mitha said. The location of Mo-

outh Africa’s national oil and gas company PetroSA says it has reached out to Total for possible feedstock supplies to its underperforming Mossel Bay gas-to-liquid (GTL) plant, Bongani Sayidini, the company’s acting CEO said. Sayidini said the GTL plant was currently running at less than half its design capacity and a major gas discovery offshore South Africa announced by Total could be a “game changer” for the ailing plant. Meanwhile, the gas discovery by Total South Africa, in the offshore Outeniqua Basin gives an opportunity for a meaningful dialogue on attractive legislation and local content development. The South African government released last year a new Integrated Resource Plan (IRP 2018) with ambitions to install an additional 8,100MW of gas-to-power capacity in South Africa by 2030. It

further echoes increased engagement of the South African government with the African and global oil industry. The African Energy Chamber has welcomed the recent gas conden-

sate discovery by Total in Block 11B/12B, 175km off the southern coast of South Africa. This is a great first step for the country, which still relies on imports of oil and gas despite the great

reserves believed to be in its soil and waters. The discovery, which will help open a new hydrocarbons province in South Africa, could prove the presence of billions of barrels of oil equivalent in South African waters, which will undoubtedly change the course of the country’s economy and help reduce dependency on imports. “The oil industry hopes this will be a catalyst and encouragement for all policy makers to work on an enabling business environment for exploration and drilling activities in South Africa,” declared NJ Ayuk, executive chairman at the Chamber. “We believe South Africa holds the potential for many more such discoveries, and the time has come to have a meaningful conversation on local content development so the development of the industry benefits all South African workers and contractors across the valuechain and creates jobs for the communities.”

Egypt: Zohr gas field output rises to 2.1 bcf feet per day

gypt’s giant Zohr offshore gas field has raised output to 2.1 billion cubic feet per day (bcf/d) and partners in the project will invest $1.2 billion in fiscal year 2019/2020 to

basin and called Area 1. An FID for the block could unlock value in one of the world’s biggest recent gas discoveries, estimated at 75 trillion cubic feet. Indian companies, state-owned explorer Oil and Natural Gas Corp Ltd through its overseas arm ONGC Videsh Ltd, Oil India Ltd and Bharat Petroleum Corp Ltd together hold the highest share in the block with a 30 percent stake. National oil company

zambique is strategic for Indian imports of natural gas and it does not have the geopolitical challenges of the Middle East, Mitha said. Area 4, an adjoining gas discovery operated by Italian major Eni, will see its FID by July, the chairman added. The investment decision for the 75-trillion-cubic-feet natural gas reserves involves setting up two liquefied natural gas (LNG) plants of 12.88 million tonnes per annum in total.

“intensify development activities in the Zohr area”, the petroleum ministry said. The largest gas field in the Mediterranean, Zohr was discovered in 2015 by Italy’s Eni and began

output in late 2017. It contains an estimated 30 trillion cubic feet of gas. Zohr development costs in fiscal 2018/2019 (to end-June) are seen at $3.2 billion, the ministry said.

In September 2018, production at Zohr increased to 2 billion cubic feet per day (bcfd) from 350 million bcfd when it began commercial production in January 2018. Italy’s oil and gas major Eni, which discovered the field in 2015 said they aim to reach plateau production in excess of 2.7 bcfd in 2019, the Italian company says. Following the start-up of the giant Zohr field, Egypt became an important player in the Mediterranean. Zohr plays a key role in helping Egypt to avoid the need to import liquefied natural gas (LNG), according to the Italian energy major. Egypt has received the backing of the World Bank in its efforts to be a regional oil and gas trading hub, as several new gas projects started up recently in the Mediterranean country.

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Wednesday 13 February 2019

power

South Africa: South Africa to unbundle Eskom in a rescue plan

outh Africa will divide struggling state power firm Eskom into three separate entities and government will support its balance sheet as part of a turnaround plan, President Cyril Ramaphosa said. “Eskom is in crisis and the risks it poses to South Africa are great,” Ramaphosa said in his annual state of the nation (SONA) address. “We need to take bold decisions and decisive action.” Ramaphosa confirmed that government will start a process of splitting the power utility into three units namely: generation, transmission and distribution. These three separate entities will still fall under Eskom Holdings, he said. The Organisation Undoing Tax Abuse (OUTA) has welcomed the announcement “but calls on the financelending houses to play their part in restructur-

ing the loans and finding solutions to Eskom’s predicament.” In a quick reaction, ratings agency Moody’s said that splitting Eskom into three entities may make the utility’s cost structure more transparent, but the split does little to address the debt-laden power utility’s financial challenges. The agency published a research note in reac-

tion to President Cyril Ramaphosa’s State of the Nation Address where he announced that Eskom would be split into 3 entities. “Aside from very broad proposals to reduce financial stress at Eskom, the speech offered few concrete measures to overcome these structural challenges in the face of entrenched vested interests,” said Lucie Villa, a

Moody’s Vice President and senior credit officer and lead sovereign analyst for SA. Moody’s, she said, will be watching to see how the government supports the power utility, what increase in electricity tariffs it is awarded by regulator NERSA, how and whether cost cutting goes ahead, and whether the state will be taking over any of Eskom’s debt.

Europe: Offshore wind capacity up 18 percent

urope installed 2.6 GW of new offshore wind energy capacity in 2018, according to statistics released by the European Wind Energy Association, WindEurope. That translates to a-18 percent increase in Europe’s offshore wind capacity. According to WindEurope, 15 new offshore wind farms came on line. The UK and Germany accounted for 85 percent of the new capacity: 1.3 GW and 969 MW respectively. Europe now has 105 offshore wind farms across 11 countries with a total capacity of 18.5 GW. This is around 10 percent of the total installed wind

energy capacity in Europe, the rest is onshore. The size and scale of offshore wind continues to rise. The average size of the new turbines installed last year was 6.8 MW, 15 percent up on 2017. The UK installed the world’s biggest offshore turbines, 8.8 MW, and opened the world’s largest offshore wind farm, Walney 3 extension, 657 MW. Belgium and Germany also opened their largest wind farms to date. A further six offshore wind farms are currently under construction in Europe, including the world’s first +1 GW offshore wind farm, Hornsea 1 in the UK.

Global: EV car sales surge 63 percent in 2018 to top 2m vehicles

lobal sales of passenger car electric vehicles (EVs) jumped by 63 percent last year to top 2 million units for the first time, helped by surging sales of plug-in EVs in the US, according to data provided by EV-Volumes. A total of 2.08 million plug-in EVs were delivered to customers in 2018, or 2.2 percent of total car sales, EV-volumes data shows. Of the total, 1.45 million were pure electric EVs and the rest were plug-in hybrid models, it said. While China continued to dominate the outright number of EV sales last year, in the US Tesla’s new Model-3 became the world’s best-selling EV of all time, boosting total US EV sales by 81 percent year-on-year, the data

shows. China remains the engine of growth for passenger EVs, and thus the location of most displaced oil demand. EV sales in China rose 76 percent on the year in 2018, to make up just over half of global EV total, with 1.17 million vehicles sold. In November, the International Energy Agency raised its estimate for the number of electric cars on the roads in 2040, predicting that the expected 300 million EVs on the roads globally in 2040 will displace 3.3 million b/d of oil demand growth. Despite surging EV sales, the combined market share of plug-in EVs still remains a fraction of the global passenger vehicle market, the EV-Volumes figures show. At the end of 2018,

some 5.3 million plugin EVs were on the road making up just 0.5 percent of world’s total light vehicle fleet, according to EV-Volumes.

Norway continues to enjoy the highest EV penetration level by far with more than 40 percent of light vehicle sales last year. Iceland, Sweden,

and the Netherlands follow with EV sales penetration rates of 17.1 percent, 7.2 percent and 5.2 percent respectively, the

data shows. Regionally, plug-in vehicle sales in Europe reached 408,000 units in 2018, 33 percent higher than in 2017. A number of oil market watchers believe the uptake of EV will outpace many of the more established estimates from forecasters such as the IEA. Bank of America Merrill Lynch believes global oil demand growth will peak by 2030 due largely to the proliferation of EVs. Bloomberg New Energy Finance expects cost parity between EVs and conventional cars could be reached around 2025, spurring sales further. As a result, the world’s switch from internal combustion engines to EVs will displace 7.3 million b/d of transport fuel by 2040, according to BNEF’s latest annual outlook.

Wednesday 13 February 2019

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BUSINESS DAY

POLICY

WEST AFRICA

ENERGY intelligence

Are we seeing the end of OPEC anytime soon? FRANK UZUEGBUNAM

he House Judiciary Committee, now led by Democrats, recently advanced the “No Oil Producing and Exporting Cartels Act”. That sets the bipartisan “NOPEC” bill, which would subject the cartel to possible antitrust action by the Department of Justice, up for a possible House vote. A similar bill targeting OPEC was also introduced in the Senate by Senators Chuck Grassley, a Republican backer of the corn-based motor fuel ethanol, and Amy Klobuchar, a Democrat who is expected to announce soon whether she is running for president in 2020. The bill has appeared in Congress in various forms over the last 20 years. The Organization of Petroleum Exporting Countries’ members “deliberately collude to limit crude oil production as a means of fixing prices, unfairly driving up the price of crude oil,” Jerrold Nadler, House Judiciary Committee Chairman said before voting in favor of the legislation. The law would amend the Sherman Antitrust Act of 1890, the law used more than a

Snapshot

We are not in the business of manipulating or fixing prices, therefore it would be a misjudgment to accuse us of such

century ago to break up the oil empire of John Rockefeller. But the Vienna-based OPEC which includes the world’s top crude exporter Saudi Arabia, says it is not a cartel but rather a production group. Mohammad Barkindo, OPEC Secretary-General said the exporting group was not in the business of manipulating or fixing oil prices. “We are not in the business of manipulating or fixing prices, therefore it would be a misjudgment to accuse us of such,” Barkindo said on the sidelines

of an energy forum in Cairo. Various iterations of the bill have been proposed in the past, and former presidents have threatened to use their veto power to scupper the legislation. But President Donald Trump could be more amenable, given his frequent attacks accusing the cartel of keeping oil prices artificially high. Trump supported NOPEC in his book “Time to Get Tough” published in 2011 before he became president, but he has not publicly commented on the bill while in office.

“I am not going to predict if it will get passed and enacted into law, but I think its prospects are pretty good,” said Seth Bloom, former general counsel of the Senate Antitrust Subcommittee. “OPEC does not have too many friends right now and the legislation may likely have a friend in the White House given Trump has written favorably about it in the past.” Makan Delrahim, US Assistant Attorney General told members of a House subcommittee in December the administration “continues to study” the legislation. “If OPEC members conducted the same manipulation in the United States that they practice in Vienna, they could be prosecuted,” said Robbie Diamond, who heads up Securing America’s Future Energy. “Their actions have a profound impact on US consumers, businesses and our military, and our government can no longer allow that.” But the American Petroleum Institute, the top lobbying group for US oil and gas drilling, has opposed the NOPEC bill, saying it could expose diplomatic, business and military interests to retaliation. Mike Sommers, API President and Chief Executive said

the bill was “populist” and the group would work with the House and Senate leadership to tell them that the US shale oil revolution, which has helped make the country the world’s top oil producer, has helped combat OPEC. “We are no longer held hostage by the oil cartel in Vienna,” Sommers said. Michael Cohen, Barclays analyst said in a research note that the appetite for advancing the bill was likely subdued while oil prices were low. But if it did pass, the legislation would threaten the sustainability of coordinated supply actions by OPEC, and OPEC plus Russia, and add more volatility to the market. OPEC had resorted to coopting other oil producers to maintain its firm hold on oil, putting in place a deal since 2017, aimed at reining in a global supply overhang. It has been extended several times and, under the latest deal, participants are cutting output by 1.2 million bpd until the end of June 2019. OPEC and its allies will meet on April 17 and 18 in Vienna to review the pact. Alexander Novak, Russian Energy Minister, said they could discuss a charter outlining open-ended cooperation during the meeting.

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Wednesday 13 February 2019

finance people appointments

Engina, Kaombo, Ichthys to push Total production output by 9 percent this year

Brief

Gunvor appoints new global co-heads of LNG trading

nergy trader Gunvor Group has appointed two new global co-heads of its liquefied natural gas (LNG) trading division. The moves are the latest personnel changes at Gunvor, which became the biggest independent LNG trader last year after delivering about 11 million tonnes. Kalpesh Patel, based in Singapore, and Ksenia Alleyne, based in Geneva, will jointly run the LNG trading desk for the Swiss firm. Stephane Caudron, who has been the global head of LNG since 2009, will take on the role of global head of LNG busi-

ness development out of Singapore. Gunvor went through major restructuring last year which included the expansion of its executive board, job losses across the company and a new natural gas trading desk in London. It had also flagged plans to close its Bahamas crude trading office in favour of its Houston base, but a company spokesman said on Friday that Gunvor no longer intends to close the Bahamas operation. The restructuring was also aimed at promoting a new generation at the Geneva-based firm which was founded in 2000.

otal expects to see production growth of 9 percent of this year after reaching record levels in 2018. The French oil and gas major expects rampedup output from Egina in Nigeria, Kaombo North in Angola, and the Ichthys field off northwest Australia to boost its production by a further 9percent this year. The company also highlighted the start-up of Iara 1 in Brazil, Kaombo South in Angola, Culzean in the UK and Johan Sverdrup in Norway as supporting production growth in 2019. “Determined to take advantage of the favorable cost environment, the group plans to launch projects in 2019, notably including Mero 2 in Brazil, Tilgenga and Kingfisher in Uganda and Arctic LNG 2 in Russia,” Total said. The company followed other oil majors in announcing a strong set of results for the fourth quarter of 2018. Overall oil and gas production for the whole of 2018 climbed by 8.1 percent from a year earlier to 2.775 million b/d of oil equivalent, a record high, Total said. The statement makes no mention of the Preowei discovery in Nigeria, with 200 million barrels in reserves, the develop-

ment of which Total had previously said it was expecting to approve this year. The company previously said its intention is to keep annual production growth above 5 percent for the years 20172022. Overall hydrocarbon

production reached 2.876 million boe/d in Q4, up by 10 percent from the same period a year earlier. Oil production climbed by 13 percent to 1.371 million b/d, while gas rose by 7 percent to 1.505 million boe/d. Refinery throughput advanced by 2 percent to

1.886 million b/d in Q4 from a year earlier, with a decline in French refinery throughput offset by moderate growth in the rest of Europe and a sharper climb in the rest of the world. Total reported a 28 percent rise in fullyear profit to $13.6 billion in 2018.

Seadrill signs new JV with Sonangol, Angola

eadrill Limited has announced that it has entered into a 50:50 joint venture with Empresa de Serviços e Sondagens de Angola Ltda, an affiliate of Sonangol E.P. The new joint venture, Sonadrill, will operate four drillships, focusing on opportunities in Angolan waters. Each of the joint venture parties will bareboat two drillships into Sonadrill. The Seadrill drillships will be from our existing owned or managed fleet. The Sonangol drillships, Libongos and Quenguela,

both 7th generation high spec ultra deepwater drillships, are currently under construction at DSME shipyard in Korea and expected to be delivered in the first half of 2019. Seadrill will manage the delivery and mobilization to Angolan waters under a separate Commissioning and Mobilization Agreement with Sonangol. Seadrill will manage and operate the four drillships on behalf of Sonadrill which will have an initial term of 5 years. “We are excited to have been selected by So-

nangol to manage their newbuild drillships and to partner with them in pursuing opportunities in this important deepwater basin. Sonadrill will give us the opportunity to gain incremental access to a market that is expected to show significant growth over the next years, further strengthen our relationship with key customers and provides an attractive opportunity to continue expanding our fleet of premium ultradeepwater rigs,” Anton Dibowitz, Seadrill CEO said.

Wednesday 13 February 2019

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OPEC Flakes Barkindo says OPEC does not fix oil prices

to the Russian President Vladimir Putin saying Moscow’s deal with the Organization of the Petroleum Exporting Countries (OPEC) to withhold output is a strategic threat and plays into the hands of the United States. The so-called OPEC+ deal has been in place since 2017, aimed at reining in a global

supply overhang. It has been extended several times and, under the latest deal, participants are cutting output by 1.2 million bpd until the end of June. OPEC and its allies will meet on April 17 and 18 in Vienna to review the pact. Analysts said economic concerns were also weighing on crude oil futures.

Trade talks between the Washington and Beijing resume this week with a delegation of US officials travelling to China for the next round of negotiations. The United States has threatened to increase tariffs already imposed on goods from China on March 1 if the trade talks do not produce an agreement.

Venezuelan sanctions could squeeze European fuel oil market

ENERGY intelligence

S sanctions imposed on Venezuela’s state-owned PDVSA could further support an already tight high sulfur fuel oil market in Europe. The European fuel oil market has seen unusual strength this winter, and could feel a further pinch as

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Oil prices fall as US rig count rise, trade concerns il prices fell by around 1 percent as drilling activity in the United States, the world’s largest oil producer, picked up and financial markets were pulled down by trade concerns. A refinery fire in the US state of Illinois, which resulted in the shutdown of a large crude distillation unit, which could cause crude demand to fall also weighed on prices, traders said. US West Texas Intermediate (WTI) crude futures were at $52.09 per barrel, down 63 cents, or 1.2 percent, from their last settlement. International Brent crude oil futures were down 49 cents, or 0.8 percent, at $61.61 a barrel. In the United States, energy firms last week increased the number of oil rigs operating for the second time in three weeks, a weekly report by Baker Hughes said. Companies added seven oil rigs in the week to February 8, bringing the total count to 854, pointing to a further rise in U.S. crude production, which already stands at a record 11.9 million bpd. Elsewhere, the head of Russian oil giant Rosneft, Igor Sechin, has written

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traders eye shipments to the US to compensate for the loss of Venezuelan supplies. US Gulf Coast refineries, geared to run heavy sour crude such as that from Venezuela, are seeking alternative heavy feedstocks, including high-sulfur straight-run fuel oil for sec-

ondary units. Venezuela is a major fuel oil exporter to the US. The South American country exported 6.325 million barrels of fuel oil to the US Atlantic Coast in 2018, according to EIA data, and this loss from the market has already lent support to USGC HSFO

prices. At the end of January, the USGC HSFO discount to Brent crude reached its narrowest since September 2009, reaching $3.01/b. Only 260,000 barrels of fuel oil were exported from Russia to the US Atlantic Coast in 2018, compared with 2.65 million barrels in 2017, US Energy Information Administration data showed, as higher Russian fuel oil prices discouraged flows to the US. Russian refinery upgrades have dramatically reduced fuel oil production in recent years. The fuel oil market in Europe has been unusually strong this winter. Demand from Singapore and Saudi Arabia has increased on profitable arbitrages, exacerbating falling supply as a result of lower Russian exports and refinery upgrades in Northwest Europe in preparation for the International Maritime Organization’s tighter marine fuel sulfur cap in 2020.

PEC SecretaryGeneral Mohammad Barkindo said the exporting group was not in the business of manipulating or fixing oil prices, when asked to comment on a US House committee passing a bill targeting OPEC oil supply cuts. “We are not in the business of manipulating or fixing prices, therefore it would be a misjudgment to accuse us of such,” Barkindo said on the sidelines of an energy forum in Cairo. A US House of Representatives committee approved a bill that would open up the Organization of the Petroleum Exporting Countries to antitrust lawsuits, but it was uncertain if the measure would be considered by the full chamber. The House of Representatives’ Judiciary Committee unanimously passed the No Oil Producing and Exporting Cartels, or NOPEC, bill. House Majority Leader Steny Hoyer, who has supported NOPEC in the past, was reviewing the bill, an aide said, but there was no indication whether a vote in the full House would be scheduled.

The legislation would change American antitrust law to revoke the sovereign immunity that has long protected OPEC members from US lawsuits. It allows the US attorney general to sue the oil producers group, any of its members, and countries it works with, on grounds of collusion. A senior US administration official said the country’s national security depends on affordable energy, and slammed cartels when asked if President Donald Trump would support a bill targeting the OPEC production group’s oil supply cuts. “The United States is firmly committed to open, fair and competitive markets for global energy trade,” said the official, who spoke on condition of anonymity. “We do not support market-

Oil tanker market to ignore OPEC cuts

he Organization of the Petroleum Exporting Countries (OPEC) quest to avert a glut may not necessarily result in the collapse in oil tanker charter rates rather the shipping industry’s prospects are actually turning a little more bullish. The analysts’ optimism stems from a conviction that the world’s refineries will have to process more crude to supply ships with new kinds of fuel under rules set out by the International Maritime Organization (IMO). On top of that, historic trade flows are at risk of disruption as OPEC and allied producers curb output of one type of crude at a time when US drillers boost supplies of another. “Despite the latest meltdown, we remain bullish about the tanker market mainly because we believe IMO 2020 requirements will push for oil production growth,

which will support freight rates” from the second half of this year, said Espen Fjermestad, an analyst at Fearnley Securities AS in Oslo, Norway. “Refineries will need to increase runs to meet increased demand.” The Baltic Dirty Tanker Index, a wide measure of charter rates mostly

for moving crude, has plunged almost 30 percent in the past three months. OPEC and allied producers late last year agreed to cut more than 200 million barrels of total output through June.

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Wednesday 13 February 2019

talking points

ENERGY intelligence

Lessons African countries can learn from Mexico’s successful Licensing round and energy reform SUNNY OPUTA

f transparency, ease of doing business and lessened corruption is the collective name of the game towards wooing investors and increasing their confidence to invest in a country, Mexico played it well in their recently successful oil licensing round this January. The round helped the Latin American country to secure a whooping sum of almost $100 billion investment. Despite security quagmire that challenges the civil and business environment of Mexico, mega oil companies must have passed vote of confidence on Mexico’s energy reform which proved to be fair, friendly and transparent as a de-risking tool that emasculated and reduced the prevailing security risks in the country to nothing. The energy reform; the modus operandi that ensued in Mexico’s successful oil tender which greased the appetite of big international oil companies such as Royal Dutch Shell, Qatar Petroleum, Repsol and others should be a strategic lesson for African countries that seriously needs to attract huge foreign investment to grow its oil industry and stimulate local economies. For decades, Mexico blocked foreign companies from investing and operating in its oil industry. A massive decline in revenue and production triggered a well-constructed and delivered energy reform when Pemex, the Mexican national oil company

Snapshot

Almost all the licensing rounds in Africa are shrouded with colossal corruption, transparency is farfetched and it will easy for a camel to pass through the eye of a needle than ensuring ease in doing business with most African countries

production was at a monumental four year low. The reform and cultural change which opened Mexico’s door to allow foreign operations has become a big testimony on free and fair market economy.

Almost all the licensing rounds in Africa are shrouded with colossal corruption, transparency is far-fetched and it will easy for a camel to pass through the eye of a needle than ensuring ease in doing business with most African countries. This is why majority of blocks won in such tenders end up in courts and drastic cases of foreign corrupt practices manifests. This disjointed business mechanism drives away real international players that would want to invest and play by the book in accordance to global best practices. The licensing round among other attributes justified that the Royal Dutch Shell which won about nine contracts out of the 19 deep water blocks offered in the round to position itself as the biggest deep water player in Mexico and also in Brazil is a serious global player in deep water exploration and production, and would heavily invest wherever risks of corruption, ease of doing business, transparency are low, thereby giving them leverage in de-risking security issues. Same could also be said of other players that won significant blocks in the round such as Petronas , Eni, Chevron, Pemex Repsol, Ophir, PInpex, PTTEP, Sierra Nevada E & P The emergence of new players such as Qatar Petroleum in Mexico’s bid round also testifies that where investment environment is good, that there are new investors willing to take major calculable and bankable risks. Although BP, Total, Statoil, CNOOC,

ONGC, and BHP Billiton did not acquire acreage in this round, however, it still undoubtedly showcases high investor confidence in Mexico’s reform and the political environment. According to Aldo Flores, the undersecretary of hydrocarbons in Mexico, almost $100billion secured in the round was almost one and half times the total investment in the nine previous tender in the country since the prominent reform of 201 which enabled Mexico to open its doors for international companies to do oil business after the ban 80 years ago. Compared to total oil/gas revenue for Nigeria, Africa’s 1 producer for 2016 which was barely $26 billion, falling from $37 billion in 2015 due to falling oil price and production disruptions. In furtherance to the great expectations, Juan Carlos Zepeda, head of the National Hydrocarbon Agency of Mexico stated that if all the blocks awarded become successful that would double the current 1.9m barrels of oil per day. This would be a tremendous revenue jump, if the oil market maintains its current growth and stability. As many African countries prepare to come out with new petroleum laws, energy reforms and usher in new licensing for acreages, which other school to acquire knowledge will be better than the one that Mexico has become exemplary as psychoanalysis for understanding the minds of big investors and what attract humongous foreign investments.

Wednesday 13 February 2019

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Opinion

Atiku Abubakar wins a fair contest Opeyemi Agbaje

here are large incumbency advantages in Nigeria’s politics stemming from control of the electoral agency (inspite of it been nominally designed to be an “Independent” National Electoral Commission INEC), police, armed forces, Department of State Security (DSS) and NNPC! More than any of its predecessors, the Buhari Presidency (or more accurately the unelected clique led by Mamman Daura which has seized control of it!) has shown a willingness to pervert the institutions of state, including or especially security services to maintain an otherwise tenuous hold on power. In spite of these incumbency advantages, which are supplemented by the propensity of our elite to support (Any Government in Power) “AGIP”, our analysis suggests it is virtually impossible for incumbent President Muhammadu Buhari of the APC to win a free and fair elections against his main opponent, Alhaji Abubakar Atiku of the PDP! Our analytical model starts from the numbers of registered voters provided by INEC-13,366,070; 11,289,293; and 20,158,100 from the North-Central, North-East and North-West regions respectively and 10,057,130; 12,841,279; and 16,292,212 from the South-East, South-South and South-West respec-

tively. In the absence of data on numbers of collected Permanent Voter Cards (PVCs) from INEC, we proceed to make projections for voter turnout in each of the regions ranging from 60% in the South-East; 55% in the North-East; 50% in both the North-West and SouthSouth; and 35% in the North-Central and South-West. These projections reflect historical trends and produce a national voter turnout of 46.6% which compares favourably with 2015 in which INEC recorded a voter turnout of 43.65%. These projections of voter turn-out also take into account our estimates and analysis of potential PVC collection, voter enthusiasm, voter roll inflation and socio-political conditions in each of the regions. We then estimate voting trends across the country based on a multiplicity of local, regional and national factors including party popularity, candidate popularity, ethnic/regional/religious affiliation, voter sentiments and behaviour, political trends, campaigns and campaign feedbacks and our analysis. Based on these factors, we make very conservative assumptions about the performance of the two dominant candidates, marginal third-party candidates and undecided voters. In our model, the undecided portion has shrunk dramatically over the last 60 days from as high as 15% of the electorate to about 2.5% of voters. Third-party candidates perform poorly in the framework, scoring not more than 1% of overall national ballots cast, confirming that this 2019 election is a straight Buhari (APC) versus Atiku (PDP) affair. Votes for third-party candidates are negligible and they fare best in the South-East and South-West with

1.5% and 2.5% of votes cast. We project Atiku Abubakar to win in the North Central by 51% of votes cast to Buhari’s 47%. Buhari has lost the MiddleBelt of Nigeria, who have been the victims of the horrendous murders and pillage attributed to herdsmen. Buhari’s performance in the region should infact be weaker than we projected but for lower turnout by traumatised residents and pro-Buhari votes in some of the nonChristian parts of the North-Central. Overall Atiku scores 2,385,844 votes in the North-Central to Buhari’s 2,198,719. In the North-East, we award victory to Buhari by a margin of 52% to Atiku’s 46% translating into 3,228,738 votes for Buhari to Atiku’s 2,856,191 votes. We expect Buhari to win in Borno and Yobe, while Atiku is strong in Adamawa, Taraba and Gombe. We also award the North-West to Buhari even though we expect Atiku to also perform strongly in that region. Indeed recent campaigns especially in Kano (which were conducted after we completed our analysis suggests we may have underrated Atiku’s strength in the region and the impact of the Kwankansiya-Atiku affiliation. We project Buhari winning 55% of the votes (5,543,478) to Atiku’s 44% (4,434,782). Even though the total number of votes in the South-East and South-South are lower relative to other regions and particularly the North-West and North-East, they will be significant in this election because one candidate, Atiku Abubakar will have an overwhelming proportion of those votes. In the South-East we expect Atiku to get 83% of votes cast, and 80% in the South-South to Buhari’s 15% and 17.5% respectively. In terms of numbers these amount to

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Overall our analyses suggest victory for Atiku Abubakar of the PDP by 56.5% of the votes to Buhari’s 40.2% representing a healthy victory for the opposition candidate

over 10 million votes to Atiku in the two regions compared with just over 2 million votes for Buhari. The net differential from those two regions is large enough to offset Buhari’s modest advantage from the North-West and North-East in which votes are essentially shared. In the South-West, the percentage of undecided voters is the highest in the country, with 10% of South-West voters still undecided (as at January 31st 2019) with the region also giving the highest votes (2.5%) to third-party candidates such as Fela Durotoye, Kingsley Muoghalu and Omoyele Sowore. We project Buhari to win with the South-West with 47.5% (2,708,580) of the votes, but Atiku recording a strong 40% (2,280,910) of votes cast. It also seems the momentum is in favour of Atiku and he may secure a greater proportion of undecided voters. Overall our analyses suggest victory for Atiku Abubakar of the PDP by 56.5% of the votes to Buhari’s 40.2% representing a healthy victory for the opposition candidate. Our analysis is based on the assumption that the election, though not perfect, will be reasonably free and fair, and will reflect the will of the voters in each of the Nigeria’s regions. Our analyses will, of course, be irrelevant in the context of a blatantly rigged process! *This article is based on research and analyses conducted by Opeyemi Agbaje and Kehinde Ayanbadejo both of RTC Advisory Services Ltd based in Lagos, Nigeria.

opeyemiagbaje@rtcadvisory.com

PMB or AA: Let us make the right choice please!

FRANKLIN NNAEMEKA NGWU (PHD)

n three days’ time, we will have the unique opportunity to make a choice, a very important choice! It is not a choice between APC and PDP or really between PMB and AA as individuals. It is a choice for ourselves, for our children, for our unborn children and generations to come. It is a choice for Nigeria! A serious choice that will determine the continued survival and existence of about 200 million people! It should be a genuine choice, a right one that will be liked by majority of Nigerians and non- Nigerians for its ability to effectively galvanize the private sector and create the appropriate business environment to attract most needed investment to create jobs for our 21 million unemployed brethren! That will help lift over 80 million Nigerians out of extreme poverty and provide the urgently needed infrastructure, electricity, improved health and educational system for all and sundry. We need to appreciate that the choice we are required to make on Saturday February 16th 2019 is a privileged one! An honor and right to elect the frontrunner that will unite our most divided nation, a leader that will lead us in peace and prosperity ensuring that every Nigerian irrespective of religion, sex, culture and tribe is able and supported to live and achieve his full potential for personal and national

growth. It is a choice to elect a leader that will rekindle national spirit and lasting patriotism. To meet our individual and national aspirations as identified above, we need a leader who genuinely understands that a key prerequisite for success is the need for deep appreciation of our multi-varied differences and peculiarities- cultural, religious, economic and geographical. And that as a very plural society which we are, that these differences and peculiarities can effectively limit or enhance our national/individual growth and development depending on the way they are understood and utilized. As our national progress and success as a nation should expectedly be our leader’s main intrinsic and instrumental priority, the task before us therefore is to elect that leader with good understanding of effective multi-stakeholders management and strategies to govern and harness the inherent potentials and capabilities of a plural society. With a realistic assessment of our socio-economic, cultural and political trajectories, the options we have at the moment are PMB and AA. They are neither the best candidates that Northern Nigeria can offer, nor the messiahs that other regions of Nigeria are waiting for but they are the options we have and we need to elect one of them. As they have offered themselves with a presumed genuine disposition and desire for a better Nigeria, it is then left for us who are privileged to vote to passionately and patriotically examine their respective advocated salvific strategies for a better and prosperous plural Nigeria. PMB from statements, actions and inactions has consistently demonstrated his preference for a united and prosperous Nigeria under a strong federal government. Using this approach for about 4 years now and focusing on

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With a realistic assessment of our socio-economic, cultural and political trajectories, the options we have at the moment are PMB and AA

three key areas- corruption, insecurity and economy, it is difficult to be convinced that the strategy is widely working or the best for the sustainable and inclusive development of a plural society as Nigeria. While corruption at the federal level seems to have gone down, it remains pervasive across other tiers of government and the wider Nigerian society. On insecurity, the key challenge Boko Haram has been significantly tackled but other forms of insecurity including ones even similar to damages and savages of Boko Haram seem to be spreading. Of the three focus areas, PMB has performed worst in the effective management of the economy. Of all the key economic variables, none seems to have improved beyond the 2015 levels. Not only have they not improved, majority have significantly worsened. These include GDP, FDI, unemployment, capital market, poverty index, inequality, banks credit to the private sector as a percentage of the GDP and HDI. In assessing PMB government, his greatest undoing is the inflexibility of the government to listen to alternative views especially on how our plurality impedes our sustainable economic growth and development. This relates to the overwhelmingconcern, demand and agreement that key to our socioeconomic, cultural and political progress is the urgent need to restructure Nigeria. Not only has PMB rejected the wise counsel, he has through some of his policies and actions demonstrated lamentable insensitivity to our plurality. With his assumed integrity and incorruptibility, all that would have been required to make PMB a very easy sell to all regions and segments of Nigeria is a little flexibility and acceptance of alternative but wise views on our socio-cultural and economic peculiarities and then minor remorse on some of his flawed actions and decisions.

AA on the other hand seems more amenable to advice and alternative views. Assessing his actions and inactions since 1999 to date shows a man who is flexible and somehow remorseful for past misdeeds and willing to make amends. This is the reason why consistent accusations of being corrupt has had little effect on his acceptance and popularity. Further affirming his flexibility and willingness to change is his recent consistent advocacy and support for restructuring of Nigeria. Whether it is a strategy to enhance his acceptance or not, his open acceptance and support for it has placed him at a vantage position of a man who is more cosmopolitan, engaging and sensitive to our peculiarities and plurality. In addition, with his private enterprises and discussion of economic issues, he comes across as a man who understands what it takes to galvanize the private sector and attract FDI to create jobs, reduce poverty rate and enhance our growth and development. Fortunately, as democracy gives us the power to periodically elect that leader who will deeply understand our multi-varied differences and peculiarities to formulate and execute appropriate strategies to lead us to sustainable and inclusive growth and development, I most passionately implore my fellow Nigerians to be guided by love and utmost patriotism as they vote on Saturday! Our future and that of our children and unborn generations is our hands.

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

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