BusinessDay 13 Feb 2020

Buhari booed, Dickson jeered as Nigerians vent anger Solomon Ayado (Abuja), Iniobong Iwok (Lagos) & Samuel Ese (Yenagoa)

G

rowing public anger, bitterness and animosity against the poor handling of security matters by President

Muhammadu Buhari’s administration took a turn for the worse on Wednesday with display of open hostility and booing of the

president by residents of Maiduguri, Borno State in Nigeria’s insurgency-ravaged north-east.

Buhari, who had been in Ethiopia since Friday for the African Union Summit, headed

straight to Borno to condole with the people over the latest Boko Haram attack in the state.

The attack at Auno near Maiduguri, the state capital, on Sunday left more than 30 people

dead.

Just as the president’s convoy made its way into Maiduguri, residents of the metropolis, who came out on the streets Continues on page 38

businessday market monitor

Biggest Gainer CILeasing N4.95

Foreign Exchange

Biggest Loser

Guinness +9.09 pc N30 27,878.43

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE Foreign Reserve - $37.5bn Cross Rates GBP-$:1.29 YUANY - 52.16

Commodities -7.28 pc Cocoa US$2,876.00

Gold $1,566.21

news you can trust I ** thursDAY 13 february 2020 I vol. 19, no 498

₦3,706,741.26 +3.37

N300

Sell

$-N 357.00 360.00 £-N 468.00 475.00 €-N 390.00 396.00

Crude Oil $ 56.09

I

Buy

g

www.

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

364.85 306.90

P

assengers travelling through the Murtala Muhammed International Airport (MMIA) in Lagos have been stranded as domestic airlines cancel flights and foreign airlines continue to divert their Lagos-bound flights to Ghana and Cotonou as a result of low visibility at the airport.

For the past three days, British Airways, Air France, Delta Airlines and Emirates have been diverting their Lagos-bound flights to neighbouring countries because of the inability of pilots to view clearly to land.

Experts say the Nigerian Airspace Management Agency (NAMA) has failed the country

6M

5Y

0.00 3.82

-0.07

10 Y 0.00

30 Y -0.02

9.83

10.90

12.28

NGUS jul 29 2020 363.55

On non functional ILS, poor visibility Experts say NAMA has failed the country

NGUS feb 24 2021 365.71

@

g

g

BPE to raise N266.8bn privatisation proceeds to fund 2020 budget …Nigeria Reinsurance, Tafawa Balewa Square Complex, NIPP, others for sale …Says resale of power assets not best option Onyinye Nwachukwu, Abuja

T

he Bureau of Public Enterprises (BPE) is hopeful of raising some N266.852bn privatisation proceeds across 20 transactions this year to partly fund the N10.5 trillion 2020 national budget signed into law last December by President MuhamContinues on page 2

Coming out on Friday

Continues on page 38

Inside

Death of a seminarian and the pain of Bishop Kukah See back page

3M 1.33 3.95

NGUS apr 29 2020 362.62

Passengers stranded as Delta, BA, Emirates divert Lagos flights to Ghana, Cotonou IFEOMA OKEKE

fgn bonds

Treasury bills

L-R: Emmanuel Agu, group marketing director, Jotna Nigeria Limited; Kanu Nwankwo, Nigerian football legend; Chinedum Okereke, MD, The LaCasera Company plc, and Vishal Kaveti, commercial director, The LaCasera Company plc, at the unveiling of new Bold Brands at The La Casera Company’s 2020 Partners Conference/Awards.

2

Thursday 13 February 2020

BUSINESS DAY

news BPE to raise N266.8bn privatisation proceeds...

Continued from page 1

madu Buhari.

This optimism was raised

by Alex Okoh, director-general of BPE, on Wednesday in Abuja after years of difficulty encountered by government to effectively sell some of its assets.

In 2018 and 2019, N350bn was projected from sale of some assets but that did not happen.

“We have push-back from the MDAs over sale of some of the assets. Now we have assessed all the risks and we will mitigate that with stakeholders’ meeting,” Okoh said.

According to him, the N266.8bn is to be realised from conclusion of sale of Yola Electricity Distribution Company, Afam Power Limited and Afam three fast power; sale of Nigeria Integrated Power Project (NIPP); sale of additional shares of Geregu to Amperion Power; NMC houses – mineral house located in Ikeja, Lagos; sale of 11 remaining non-core assets of Nigeria Mining Company (NMC houses); Tafawa Balewa Square Complex; NIPOST, and sale of remaining shares (IPO) of Nigeria Reinsurance, among others.

Okoh put total expected privatisation proceeds at N270.7 billion, but expenditure will take some N3.9 billion, leaving net balance of N266.8 billion to be paid into consolidated revenue account.

The 20 transactions are categorised into five divisions – energy (9) transactions with target revenue of N268.3 billion and expenditure of N2.1 billion; development institutions & natural resources (5) transactions with expected revenue sum of N440 million and an expected expenditure of N942.3 million; infrastructure & public private partnership (I&PPP) with 3 transactions with nil revenue but N626.2 million expenditure; 2 industries communication transactions with total expenditure of N220.1 million and post transaction management (1) transcription with revenue projection sum of N1.9 billion and expenditure sum of N45 million.

“We have concluded Afam transaction with a bid of N105 billion for which was won by the Transcorp consortium, so we are negotiating transaction document especially the purchasing agreement. Once that is signed hopefully before the end of this month, that will kick in 25 percent payment and then they have 180 days within which they will have to pay the 75 percent.

“We are also close to closing YOLA. The winning bid is N90 billion, won by Quest Electricity Company. We are also negotiating the transaction document, so this will

Continues on page 38

Nigeria’s current capacity to contain Coronavirus inadequate, says WHO GODSGIFT ONYEDINEFU, Abuja

C

urrent laboratory and diagnostic tools put in place by the Federal Government in collaboration with development partners to detect and contain the novel coronavirus which is fast spreading across the world are not sufficient, the World Health Organisation says.

The WHO says it is important for countries to put in place strong surveillance and strengthen preparedness for rapid detection and containment of the Coronavirus. This mainly includes identifying isolation points and treatment facilities, having laboratories with diagnostic capacities and developing critical stockpile for response as well as the needed manpower.

This comes amidst concerns that Nigeria has been listed among 13 African countries with high risk of Coronavirus importation due to the high level of travel between Nigeria and China. WHO said the FCT, Lagos, Kano, Cross River, Akwa Ibom, Port Harcourt, Enugu, Delta and Bayelsa States were at high risk.

The Federal Government had earlier announced its readiness to combat Coronavirus which has already killed over 1,000 and infected over 42,000 persons. The minister

of health, Osagie Ehanire, said recently that Nigeria has acquired in-country capacity to test for Coronavirus.

Chikwe Ihekweazu, director-general, Nigeria Centre for Disease (NCDC), had also said the centre has validated capacity to test for the virus at its National Reference Laboratory (NRL) in Gaduwa, Abuja.

This, according to the NCDC, means that Nigeria now has the capacity to diagnose any suspected case of Coronavirus.

Emeka Oguanuo, spokesperson of the Centre, told BusinessDay that the NCDC has always had testing capacity for highly infectious diseases like the Ebola at the NRL, but said because the Coronavirus is new, what wasn’t available anywhere in the world was the reagents for testing, which Nigeria now has with the support of WHO. According to him, Nigeria now has more capacity than it had during the Ebola virus disease outbreak.

“We now have them and it was recently validated. So now anyone suspected to have coronavirus can be confirmed in-country,” Oguanuo said.

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

Anthony Elis, GM, contracting & procurement, Shell (m), presenting the Oil and Gas Banker of the Year 2019 award won

by First Bank of Nigeria Limited to Bashirat Odunewu (r), group executive, energy & infrastructure, CBG, accompanied by Oluwatoyin Aina, group head, corporate banking group (Energy), FirstBank, at the Nigeria International Petroleum Summit in Abuja.

Exposure to institutional investors earns Rencap, CSL, Stanbic, others top NSE brokers ENDURANCE OKAFOR

R

encap Securities (NIG) Ltd, CSL Stockbrokers Ltd, and Stanbic IBTC Stockbrokers Ltd topped the Nigerian Stock Exchange (NSE) list of best stockbrokers by the value of transactions for the week ended February 7, 2020.

The three brokers leveraged their exposure to institutional investors to outperform the other 123 registered brokers to post a combined trade value of N16.56 billion, which accounted for 40.67 percent of the entire N28.94 billion (71.03 percent) reported by the top 10 brokers.

“For brokers in the top 10, we basically deal with institutional clients more, that’s the main driver,” Ayorinde Akinloye, equity research analyst at CSL Stockbrokers, said.

Analysis of the NSE data shows that Rencap Securities (NIG) Ltd raked the highest share of the transac-

tions. With a trade value of N7.9 billion between February 3 and 7, the brokers at Rencap attracted a trade that accounted for 19.4 percent out of the total 71.03 percent value reported by the top 10 brokers, leaving the other brokers to struggle for the remaining 51.63 percent (N21.04 billion).

A brokerage company buys and sells orders submitted by investors. Its main duty is to act as a middleman that connects buyers and sellers to facilitate a transaction. Brokerage companies typically receive compensation by means of commission (either a flat fee or a percentage of the amount of the transaction) once the transaction has successfully completed.

Other stockbrokers that were top gainers on the NSE list of top 10 brokers by the value of transaction included Tellimer Capital Ltd, Cardinalstone Securities Ltd, and Meristem Stockbrokers Ltd as they recorded a trade value of N2.73 billion, N245

billion and N2.13 billion, respectively.

Commenting on the drivers of the brokers’ transactions, Henry Ogbuaku of Asset Management, Growth and Development Asset Mgt Ltd said it was the intrinsic company shares that they traded.

“For example, if a stockbroker traded 1million units of Dangote at N190 per share, the value will be higher compared to another that has done 20 million units of, say, Lasaco Insurance,” Ogbuaku said.

It depends on the shares that the brokers traded, he said.

Further analysis of the NSE data shows that Chapel Hill Denham Securities Ltd, EFG Hermes NIG Ltd, Nigerian International Securities Ltd, and FBN Quest Securities Ltd were the other brokers that completed the list of the NSE top 10.

Eight of the brokers on the top 10 list by the value of transactions also made it to the list of top 10 brokers by volume. Other brokers that made the volume list even

though they did not appear on the list of top 10 by value included Readings Investments Limited and Morgan Capital Securities Limited.

“The brokers that topped by volume and are not in the top by value evidently are more retail-focused. Given the characteristics of domestic investors, they tend to buy lots of lower-priced stocks compared to highly-priced ones,” a broker at one of the top 10 by volume who asked not to be identified said.

According to the data by NSE, a total of 1.77 billion units of shares were traded by the top 10 brokers accounting for 59.96 percent of the entire shares traded between February 3 and 7, 2020.

The equities market closed on Wednesday on a positive note, up by 0.02 percent as investors traded shares from across the board. The NSE All-Share Index and market capitalisation increased on Wednesday. The NSE ASI appreciated by 6.53 basis points, data by NSE analysed

by BusinessDay show.

Supreme Court re-opens Kashamu’s extradition suit Feb. 27 Felix Omohomhion, Abuja

F

ormer Senator Buruji Kashamu’s bid to stop his extradition to the United States of America for alleged drugsrelated offences will be heard at the Supreme Court on February 27, 2020.

Kashamu filed the two appeals before the apex court praying it to void the request of the American government that he be extradited to USA to answer criminal charges against him in respect of an alleged heroine drug importation into the country.

The Attorney General of the Federation (AGF) and the National Drug Law Enforce-

ment Agency (NDLEA) are the major respondents in the appeals in which the former senator is asking the Supreme Court to stop government from executing two judgments of the Court of Appeal granted against him.

The fresh hearing date has been communicated to parties involved in the longdrawn legal tussle through hearing notice.

Hearing in the two sets of appeal by the businessman and politician along with others had earlier been put on hold to enable the court clear the backlog of political cases that arose from last year’s general elections which were time-bound.

The apex court is to review

https://www.facebook.com/businessdayng

the two judgments delivered in favour of the Federal GovernmentbytheLagosdivisionofthe Court of Appeal on May 4, 2018.

Kashamu had in his notices of appeal to Supreme Court complained that the Court of Appeal erred in law by voiding and setting aside the two judgments of the Federal High Court which barred Federal Government from extraditing him to America.

The ex-senator is praying the apex court to set aside the decisions of the Court of Appeal as they affected him.

But government through the Attorney General of the Federation AGF has responded with a counter prayer that the Supreme Court should @Businessdayng

uphold the judgments of the Court of Appeal which cleared coast for his extradition.

The AGF claimed that the AppealCourtwasrightinsetting aside the two judgments of the High Court because they were based on hearsay evidence of Kashamu before the court.

TheAGFurgedtheSupreme Court to allow the judgments of theCourtofAppealtoenablethe Federal Government extradite Kashamu to USA to prove his innocence or otherwise in the hard drug trafficking criminal charge filed against him by the American government since 2015 when he was alleged to have escaped to Nigeria.

•Continues online at www.businessday.ng

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

3

4

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

5

news

Covid-19 official name for Why NPA transferred LADOL’s land to Huawei launches digital oilfield coronavirus disease - WHO Samsung in fresh lease agreement IOT solution in Nigeria ANTHONIA OBOKOH

T

he World Health Organisation says “COVID-19” will now be the official name of the deadly coronavirus. The virus has killed 1,016 on mainland China, the National Health Commission said on Tuesday, while 42,638 infections have been reported.

At least 25 countries have confirmed cases and several nations have evacuated their citizens from Hubei, the epicentre of a new coronavirus outbreak.

Tedros Adhanom Ghebreyesus, director-general of WHO on announcing the new name of the virus on Tuesday, explained that the name had been chosen to avoid references to a specific geographical location, animal species or group of people in line with international recommendations for naming aimed at preventing stigmatisation.

Ghebreyesus said, “First of all, we now have a name for the disease: COVID-19. I’ll spell it: C-O-V-I-D hyphen one nine – COVID-19.

“The “Co” and “Vi” indicate that it’s a coronavirus, the “d” signifies its status as a disease, while the “19” refers to the fact that the infection emerged in

2019,” he said.

The WHO’s director also said there was a concern by the agency bringing the world together to coordinate the response. According to Ghebreyesus, “That’s the essence of multilateralism, which is very important for the world.”

He further said that the development of vaccines and therapeutics is one important part of the research agenda – but stressed that it is only one part. “They will take time to develop, but in the meantime, we are not defenceless. There are many basic public health interventions that are available to us now, and which can prevent infections now.”

According to Ghebreyesus, the first vaccine could be ready in 18 months.

“We have to do everything today using the available weapons to fight this virus, while preparing for the longterm. We’ve sent supplies to countries to diagnose and treat patients and protect health workers,” he said.

However, the director said the agency was keeping the public informed about what everyone could do to protect their own health and that of others.

KELECHI EWUZIE

T

he Nigerian Ports Authority (NPA) said it took the decision to revoke the land lease agreement signed with the Lagos Deep Offshore Logistics Base (LADOL), after it discovered that LADOL allegedly shortchanged the Federal Government and also violated the terms of the lease.

The NPA revoked the lease of the land at Tarkwa Bay, near Light House Beach in Lagos via a letter dated November 14, 2019, and addressed to the managing director of Messrs Global Resources Management Limited (GRML), the parent company of LADOL. The letter, signed by Yusuf Ahmed, general manager in charge of Land and Asset Administration in NPA, reminded LADOL that “Clause 4.5 (a) of the agreement prohibits the lessee (LADOL) from subletting any part of the premises without written approval of the Lessor (NPA) and stipulates that any contravention shall result in the automatic cancellation of this lease.”

NPA’s letter further stated that its investigation revealed

www.businessday.ng

that LADOL executed a sublease dated September 13, 2013, with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) without the required approval or recourse to the Lessor.

It read: “Your actions in that regard led to the current impasse with resultant negative attention within and outside the country. Consequently, the authority has reviewed the events and decided to exercise its rights under the lease and hereby revokes it with immediate effect.

“LADOL collected about $45 million (N16.2billion) from Samsung Heavy Industries Nigeria Limited (SHIN) for the 11.2426 hectares of land for which it paid only $524,105 (N37.73 million) to NPA,” NPA claimed.

It would be recall that in a letter dated November 22, 2013, “GRML applied to NPA to sublease the 11.246 hectares to MCI-SHI FZE for the “purpose of expanding facilities at LADOL offshore support facility in readiness to handle the integration of the Egina FPSO onshore in Nigeria for the Nigerian National Petroleum Corporation (NNPC) and Total Upstream Nigeria.”

https://www.facebook.com/businessdayng

H

uawei has launched its fully digital oilfield IOT solution at the Nigeria International Petroleum Summit 2020. Huawei, during its workshop presentation to customers and partners at the NIPS2020, says this solution, which uses 4G eLTE broadband and Artificial Intelligence technology, provides full wireless network coverage that can enhance the operational transparency and safety of the oil and gas sector in Nigeria, covering the oil fields, depots and pipelines.

Tank Li, Huawei Nigeria Enterprise managing director (Abuja office), explains that with this solution, stakeholders can recognise issues of Health, Safety and Environment as well as prevent vandalism before it happens.

“Operationally, there are a lot of activities which take place at the depot locations. With the Huawei Digital IoT Solution, all stakeholders will be able to monitor activities by installing our Artificial Intelligence surveillance cameras which can detect unusual movements around the premises. This AI technology which records video uses surveillance cameras that communicate with

@Businessdayng

each other and then passes the information to the operational team. For example, the AI surveillance can prevent unauthorized entrance into the premises,” Li says.

The solution is also expected to take real-time data of daily oil production in the country which will enable full transparency for the sector.

“Another advantage of this solution using the 4G eLTE is their capacities to enable stakeholders monitor the daily oil production in real time.

This has been an issue for the industry in terms of not being able to take adequate account of daily production. This solution will help create transparency, help take full records and improve efficiency for the oil and gas industry in Nigeria,” he adds.

The digital oilfield IOT solution is said to have also been launched in other parts of the world and has a proven reputation among global industry leaders to help oil and gas companies achieve 2% to 7% more yields, 5% to 9% higher recovery rate, and 5% to 20% less costs. It is expected that this solution will bring growth to the Nigerian oil and gas industry.

6

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

7

8

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

9

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

NNPC finds oil in new territories with huge potentials Olusola Bello

T

he Nigerian National Petroleum Corporation (NNPC) has stated that Nigeria had found oil in new territories with huge potentials, adding that it was expanding the Escravos-Lagos Pipeline System 2 (ELPS) and building the Ajaokuta-Kaduna-Kano pipeline as part of efforts to expand domestic gas utilization for the benefit of the Nigerian economy.

The corporation also stated that it would expand its operational footprints across the globe, saying the move would enable the it boost its global profile.

Mele Kyari , group managing director of the NNPC, disclosed this at the 3rd edition of the Nigeria International Petroleum Summit (N.I.P.S.) 2020 in Abuja.

He stated that though the primary focus of the corporation was to ensure energy

security for Nigeria, it had capacity to meet the energy needs of the entire West African sub-region.

But some oil and gas industry observers are not convinced with the pronouncement of NNPC boss as they said until is proven physically they would not believe the statement of Mele Kyari on finding oil in new territories.

The NNPC helmsman said corporation was working with its technical partners to restore its three refineries to be able to operate at optimal levels.

He added that already the Phase 1 of the rehabilitation work on the Port Harcourt Refinery had begun with Phase 2 work in the offing.

“We will continue to support the Dangote refinery and the other modular refinery projects in the country to guarantee energy security for Africa. Nigeria welcomes foreign investors to invest in the Oil and Gas Industry.

2020 is year of gas. Nigeria will deepen domestic gas use and monetization of our huge gas

Mele Kyari

resources,” Mele Kyari said.

The NNPC helmsman stated that Nigeria was ready and accessible for investments from all interested countries, individuals and partners, assuring that their investments were secured with high returns in the country.

Speaking further at the summit, he noted that NNPC would sustain its business

culture of transparency, accountability and performance excellence (TAPE), even as the corporation remains the only entity in the world that publishes its financial and operations monthly.

He assured that NNPC was more than ever committed to improving transparency to win the trust of all its stakeholders as the largest oil

corporation in Africa.

Mele Kyari also informed that Nigeria had found oil in new territories with huge potentials, adding that NNPC was expanding the Escravos-Lagos Pipeline System 2 (ELPS) and building the Ajaokuta-Kaduna-Kano pipeline as part of efforts to expand domestic gas utilization for the benefit of the Nigerian economy.

Speaking in a similar vein, the Minister of State for Petroleum Resources, Timipre Sylva, who launched the Nigeria Gas Network Code, said that the Nigerian Gas Sector had the potential to lift over one 100million Nigerians out of poverty in line with the aspiration of the President Muhammadu Buhari Administration.

President Muhammadu Buhari, who was represented by the Secretary to the Government of the Federation, Boss Mustapha, said the Federal Government was determined to entrench transparency and reduce cost in the nation’s oil and gas value chain.

He assured that the Federal Government would continue to ensure that investments were well secured in Nigeria, assuring that it would put in place policies to promote conducive business environment in the interest of all investors.

Senate President, Ahmed Lawan, who was represented by the Senate Committee Chairman, Upstream, Senator Bassey Akpan, reassured players in the nation’s Oil and Gas Industry of the commitment of the 9th National Assembly to enact legislations that would promote the growth of the nation’s petroleum sector.

The summit with theme: “Widening the Integration Circle: Technology, Knowledge, Sustainability, Partnership”, attracted goodwill messages from the African Petroleum Producers Organization (APPO), Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and other local and international players in the Oil and Gas Industry.

Not releasing ALSCON to rightful winner is a disservice to economy - Jaja Reuben Maitamuno Jaja, is the president and chief executive officer of the BFI Group, he is licensed by the State of California Bureau of Securities & Investment Services, and also founder of the Africa-USA International Chamber of Commerce and Industry. In this interview with Olusola Bello, he opened up extensively for the first time on his protracted battle on behalf of his group with the Bureau of Public Enterprise, BPE over ALSCON. He expressed very deep concerns on why the agency disobeys court judgment the way it has done. Excerpts: It’s been about 16 years of intensive litigations over the ownership of the Aluminum Smelter Company of Nigeria, ALSCON. Can you let us know how it all began ? t all began in 1996.

When I came to the country from the United States. At that time there was a serious upheaval in the state due to the killing of Ken Saro-Wiwa.

So I led a group of investigators to come and investigate the matter and to appeal to the international community not to sanction Nigeria. During that time we looked at the source and causes of all these issues, and we realised that there were lack of corporate and manufacturing entities and industries that will support employment of people, particularly the youths.

ALSCON was one of those that were brought up, and particularly for ALSCON, Aluminum Smelter Company of Nigeria that company was built in the Niger-Delta to help alleviate the issues of environmental pollution because it was supposed to take the gas that was being flared, harness it to support the production of aluminum. But, the factory was

I

Olusola Bello, Team lead,

not moving well, nothing was happening, hence I became fully aware of that and pleaded with government to ensure that entity was well completed and activated to serve the needs of the NigerDelta people. This was also contained in the recommendations that I made to the government then under the late Gen. SaniAbacha.

So what happened afterwards?

In the year 2000, I realised that a civilian administration has been elected to government. The civilian administration at the time was trying to make the economy work, and I had interest to see that the place works because I am from the Niger-Delta, I have lived in the United States, I’ve worked there, I’ve worked with the US federal reserve bank, the state of California banking commission, and I’ve participated as a delegate to several countries in an effort to support their development, including Russia, while I was on the employment of the United states government and the state of California banking Commission.

I was very much interested to see that the issue of the Niger-Delta is being addressed using that company

Graphics: Joel Samson.

Reuben Maitamuno Jaja

because of its capacity.

I then realised that the place was dormant, abandoned with people laid off, and I decided to find out what was the issue, and they told me its listed to be privatised.

This was in year 2000?

Yes it was. So I said okay, the moment the process commences and they’re asking for international investors, I will like to be involved.

In 2003 they started calling for international investors, so I immediately deployed resources to mobilise investors in the US. I brought in some of the best including those who manufactured the

www.businessday.ng

plant. Experts from several countries were brought together including Germany, the United States and even Ghana.

The best team that the country could ever think of pulling together was assembled. This included people who actually developed the plant including the chief technology officer of that plant. Lots of money was involved, but we succeeded in bringing everyone together and applied, and when we applied, we won.

However, after we won the bid, another company from Russia called UC Rusal, (then it was just Rusal) also bided but we won the bid, and thought that was the end of it. I received a lot of congratulatory messages from my Niger-Delta people who informed me that it was the first time a son of the NigerDelta will be winning a bid for one of the major national companies that the federal government privatised. After this, members of my group of American investors and I now decided to proceed and implement the bid, but we didn’t know that there was already a plan to give it to the Russians.

When was this?

This was now in 2004 and

it was at that point we realised that they have already planned to give it to the Russians. So we questioned the government. Why will you publish an advert inviting international government to come and bid, whereas you have made up your mind to give it to one person, that is absolutely fraudulent and this are part of the decisions that damages the country’s image in the investors circle.

We however moved forward to complete our acquisition, but all of a sudden we discovered we’ve been disqualified, and this was still in 2004.

What was the reason given for your disqualification?

The basis of disqualification was that we did not pay before signing the agreement, but we told them we were not suppose to pay before signing an agreement, nobody does that. We bided US$410 million;this is a plant that was built at the cost of US$3.6 billion then, so we won it at US$410 million in 2004.

We met with the government before opening our bid and they agreed to the conditions of the bid, stating that if any investor should win the bid, here are the pre-conditions agreed to by all parties, and one of them

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

https://www.facebook.com/businessdayng

@Businessdayng

was that whichever company emerges the winner, will have to pay 10 percent within 15 working days of executing the share purchase agreement, SPA. This was agreed to and I was asked to affirm it and we signed accordingly.

Affirmation is a statement of oath. So we signed and we agreed. But after we won and it turned out we weren’t the group expected to win, they now say we should pay first before executing the SPA, but we said no, as we have all agreed in writing, signed by us and agreed by you as well on your letter head which you sent to us all, and it carried all the terms and conditions.

This is important because we had already told our bankers that immediately we win, we will require 15 working days to pay and the share purchase agreement is the instrument that will activate payment. So the trick they use to drag us behind and cause confusion was that we must pay before signing the SPA, we said no, that’s not going to happen and they went ahead and disqualified us.

We proceeded immediately to the lower court in that 2004 and by the following year 2005 the court gave its judgment ruling against us.

10

Thursday 13 February 2020

BUSINESS DAY

comment is free

comment

Send 800word comments to comment@businessday.ng

Abaribe; Na you BIKO! … And between proletarian solidarity & criminality

ik MUO

J

anuary 2020, beyond the singsong nature of 2020, was like every other January: Harmattan, dry winds, dust and cold; acute “pocketities” as people have “finished” themselves financially during the Christmas holidays, (especially my people who spend in 11 days, December 20 to January 1, what they had accumulated in 11 months); students reluctantly returning to school and people gradually readjusting to the world of work, business and politics (the most lucrative industry in Nigeria), from which they took a break in the previous weeks.

In Nigeria however, beyond the signs and wonders (judicial mathemagic) in Imo State, the ferocious war between the falcon and falconer in Edo state, the revenue at all cost strategy of the federal government, our “improved” rankings on the Transparency International and Global Terrorism Index and fire disasters everywhere, especially that of Balogun Market, Lagos, January 2020 was a month in which security issues and concerns forced themselves into the centre stage of national discourse. It was the month of Amotekun! A lot had happened on the security front in the South West and with the certainty that more would happen; (with about 1200 herdsmen cells allegedly camped in the western forests) the people and government of SouthWest established Amotekun “Western Regional Force”(Remember the West African Frontier Force?). The federal government declared it illegal, surrendered to public and popular opinion, called for a reconciliatory meeting and negotiation (yes; everything is negotiable) and let

Amotekun be!

It was the month in which Orthom, the weeping governor of this generation was attacked by herdsmen in his own farm, when the decimated Boko Haram rejected N50 million ransom and brutally murdered Rev Andimi Chairman of the Christian Association of Nigeria in Michika LGA of Adamawa state, when their cousins, (the bandits) murdered Mike Nnadi, (a young-orphan seminarian) and Ataga (after Dr Ataga had donated a police station to the community). It was a month in which the “operation finish them” in the Plateau continued unabated, when our President, expressed shock at the rising insecurity and when Femi Adesina told us to rejoice because BokoHaram bombings have reduced and that his principal (PMB or GMB??) had transformed the North-East into HEAVEN, unlike the HELL it was under GEJ. It was also a month in which our Senate President declared pointedly that our centralised security system had failed. It was also a month in which BokoHaram terrorists attacked our troops in Damasak and carried out an “extremely violent” attack on a vital aid facility housing United Nations workers in Borno State. It was also under this serious and worrisome state of affairs one of our legislators felt that the most important matter was to introduce his 4 wives and 27 children...

“And still counting”!

It was in the midst of all this that security, the central matter of the day, came up for discussion at the sleeping chamber of NASS and it was the day that Senator Abaribe delivered two quotable missiles, which in addition to his previous interventions, will keep his name among those who know what they had gone to do at Abuja. The whole world knows what he said but let me repeat it for emphasis. Nigeria did not elect the IGP; we did not elect the chief of staff, we did not elect the joint-chiefs or national security adviser, we elected the government of APC because they continued to tell us that they had the key to security.

“When you want to deal with a mat-

ter, you go to the head. So, we will go to government and ask this government to resign. The clincher, to me as an Organisational Behaviour Scholar and management consultant is: when you want to deal with a matter, you go to the head. I thought that Abaribe was just a lawyer and politician; I did not know he was/is also a management guru because he brought in John C Maxwell into the discourse. Maxwell had said that ‘Everything rises and falls on leadership’. His second quote on that day has nothing to do with management but I have everything to do with our current realities, especially when compared to promises and pretentions of the pre-2015 years. It is that those who live by propaganda will die by propaganda. If you have not been following the activities of Abaribe in the NASS, try and check some of them online and do not forget the question he asked our honourable Chief Justice during his anointing session, sorry screening, at the senate. (To be concluded).

Other matters: Proletarian solidarity and criminality, drawing the line!

Marx is long dead and most of his followers have joined him on the other side. Marxism has suffered a what one of my friends called “loss of currency” ( declining popularity) to the extent that, whoever says he is a Marxist or exhibits Marxian paradigm today will be looked at with a left eye; as if he/she is wearing a DIRTY cloth. That is how concepts rise and then “fall and die”. One of the key words associated with Marx is the “proletariat”. It is even worse when he speaks of “lumpenproletariat”! It refers to those who are just POOR; those who are poor, who are defined by poverty and who have naturalised into their poor habitat and digging deeper rather than making efforts to escape. They are also unorganised, ignorant and not interested in understanding the why and how of their wretchedness. The only similarity to that is the current World bank/UNDP phrase: Multidimensional Poverty. Marx’s greatest grouse against the poor was their failure to unite and deal decisively with their traducers; the bourgeoisie who oppress,

‘

So, where do we go from here? Is this proletarian solidarity or criminality? So, every car-okada accident caused by the car driver and the okada drivers must meet out instant justice? Where are these okada drivers from and how are they licensed and controlled? Are they above the law? Are we safe?

suppress and repress them.

However, even in his grave, Marx will be happy with the proletarian solidarity shown by Lagos Okada Riders, most of who are said to be from Niger et al. It is about how they pounce on anybody (except soldiers) who oppresses them on the road. It doesn’t matter whether they are wrong and in 90 percent of the cases, they are at fault. I am a living witness to this but an “unknown soldier” has so documented it that there is no need to reinvent the wheel. Read on “Last week, a motorist in Festac Town hit an okada rider, an accident which damaged both car and motorcycle, and injured both rider and passenger... about fifty okada riders appeared out of nowhere and descended on the driver, screaming for his blood and chanting Islamic slogans, beat the driver, senseless, damaged his vehicle and forced him to part with N35,000. In December 2019, a woman was making a turn into her compound, when a crazed okada rider came out of nowhere and rammed into her car… a mob of okada riders attacked her and tore her clothes. By the time help came from people in the area, her purse and phone had been stolen and her children watched in horror as their mother was beaten and fondled by okada hooligans. Before my very eyes a policeman at Mile 2 tried to impound a motorcycle for parking on the expressway, and a dozen of them drew daggers and threatened to stab him and his colleagues. This happened on Monday at Mile 2!”

So, where do we go from here? Is this proletarian solidarity or criminality? So, every car-okada accident caused by the car driver and the okada drivers must meet out instant justice? Where are these okada drivers from and how are they licensed and controlled? Are they above the law? Are we safe? And even then how does this trend play out with the recent Lagos onslaught against okadas and their younger brothers, the ‘kekes’? Questions, questions and more questions.

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Of insurance policyholders, companies and premium payments in Nigeria: Is the law truly an ass? (2) The account thus far n my first publication, I set out to examine how and why, under Nigerian law, an insurance policyholder may sometimes, be deprived of getting compensation that should ordinarily flow from the insurance policy taken. I came up with the hypothetical situation of Mr. A who decided to purchase an insurance cover or policy for his car and then entered into an agreement with the insurance company (insurer) to pay the premium for the policy on a monthly basis spread over a number of months. I then formulated two questions for determination.

Last week, I answered the first question of whether Mr. A would be able to enforce an insurance contract upon the happening of event (risk) insured against where Mr. A failed to pay the premium for the insurance policies in full and in advance or such contract. I argued that a combined reading of Section 50(1) of the Insurance Act and Paragraph 4 of the NAICOM Guidelines 2013 would reveal that Nigerian law does not recognise an insurance contract where the premium has not been paid in full in advance of the commencement of such insurance contract. Thereafter, I submitted that it is questionable whether Mr. A had a valid contract of insurance, having failed to pay the insurance premium in full and in advance of the insurance contract.

This week, however, I shall be considering whether the insurer can effectively deny Mr. A, the compensation he is supposedly entitled

I

to, further to the “policy” taken, on the ground that Mr. A did not pay the premium due on such policy in full and in advance as required

by Section 50(1) of the Insurance Act. Making recourse to relevant judicial decisions, I shall be providing a befitting response to this lingering question.

Market practice on premium collection versus legal position on payment of premium Some insurance practitioners have argued that what Section 50(1) of the Insurance Act requires is that the quoted premium, whether annual or for a short period, must be paid in advance but not necessarily that such payment be made in full before the commencement of the insurance policy (contract).

Other commentators like Josephine Nneoma Ejiamaizu have opined that what is actually obtainable in practice is that Mr. A is told that the premium for a policy is for a certain amount per annum and if Mr. A is unable to pay the stipulated sum for the premium at once, “he is informed that he has an option of paying monthly.” Ejiamaizu further noted that “Mr. A is meant to be informed that if he pays monthly (say he has paid for January now) and the insured peril occurs in February, that peril is not covered in so far as he has not paid for February.”

Interestingly, Ejiamaizu conceded that this arrangement is caught by the ‘no premium no cover rule’ alluded to in my article published last week. Explaining further, how the market

www.businessday.ng

practice on insurance premium collection works, she noted that “…there is this intrinsic idea that insurance should be yearly, but that is not the case, especially with regards to some policies…policies can even be given to run on a daily or weekly basis.”

In attempting to proffer suggestion on the way forward out of this seemly unfortunate situation created by the law, Ejiamaizu underscored the need for ‘public enlightenment/ advocacy” by all different stakeholders in the insurance sector and also emphasized the need for insurance marketers to always “take out time to explain to customers and prospective customers the implications of the policies they are taking and the forms of payment being adopted.”

While it is conceded that parties are generally free to stipulate the terms of an insurance contract, it is my considered view, having carefully researched the law on this point that such must be done within the confines of the law. Consequently, it is my submission that issues of premium and insurance cover, which are expressly regulated by a statute (in this case, the Insurance Act) can no longer operate in the realm of common principles that have been overtaken by clear statutory provisions. This is because it is a trite principle of Nigerian law that a statutory provision overrides any common law principle. As a matter of fact, it is well-settled that where a statutory provision is in conflict or differs from common law, the common law gives way to the

https://www.facebook.com/businessdayng

Joseph Onele

statute. This much has equally been alluded to by the Supreme Court of Nigeria in Patkun Industries Ltd v. Niger Shoes Ltd (1988) NWLR (Pt. 93) 138; (1988) LPELR-2906(SC), Per Nnamani JSC. Flowing from the foregoing, it is, therefore, my position that what the law envisages is not part or installmental payment but full payment of the premium well in advance of such policy and in respect of each cover period no matter the length of the cover.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Joseph cut his teeth in legal practice, at one of the top tier law firms in Africa, where he routinely advised development finance institutions (DFIs), multinationals, commercial banks, startup firms, and international corporations/ organizations on different areas of law. thejosephonele@ gmail.com

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

comment

11

comment is free

Send 800word comments to comment@businessday.ng

If all politicians are corrupt, why do other countries grow and Africa is trapped in a vortex of corruption and poverty

CHRISTOPHER AKOR

T

he image of Africa most popular in the world is that of a continent riddled by corruption, bad governance, poverty, wars and diseases.

And to a large extent, that is true. So there is a tendency for many Africans to also point to cases of corruption and misdemeanour among politicians in developed countries of the world to claim that corruption is not exclusive to Africa. For instance, many Nigerians have pointed to the recently ended impeachment saga of Donald Trump for corruption and abuse of power and the disgraceful conduct of members of congress as a case in point, wondering how different politicians of the West are from theirs.

The truth, like I have always argued, is that politicians all over act in similar ways. The motivation for going into politics remains the same: to capture political power and share the spoils of power. All other motivations are secondary. The only difference between politicians in Africa and the so-called righteous countries is the presence of strong institutions of restraints (in the West and now in parts of Asia) to check the excesses of politicians and to ensure that their excesses do not impede the growth and progress of their societies.

But make no mistake about it, all politicians have shown desperation

and acted dirty not only to capture and retain power, but also to enrich themselves, their family members and cronies through their access to power. Whereas African politicians are renowned for corruption because of their tendencies to crudely embezzle public funds and stash them in foreign banks with little or no repercussions, politicians in Western countries are unable to steal public funds directly because of the restraints imposed on them, but engage in several corrupt practices that will benefit them directly, sustain their political careers and ensure that after public service, they retire to a life of comfort and opulence.

The entire business of lobbying in the West is every inch as corrupt and devastating as public officials’ directly stealing money from the public till in Africa. Lobbying in the US, for instance, is why regulations are weak or even nonexistent and businesses are allowed to exploit Americans in terms of pricing.

It is the reason why, despite the great advancements made, healthcare in the US remains the most expensive in the world and the leading cause of bankruptcies and deaths in the US with or without insurance. It is the reason why diabetic patients are dying from their inability to access insulin and many people even with health insurance coverage, in the words of Todd Boudreaux, Managing Editor of Type 1, are forced to make “difficult decisions, cutting back on or “rationing” their insulin, taking extra jobs, crowdfunding, or forgoing paying bills in order to afford life-saving medication.”

Readers may also recall the 2010 cash for influence scandal in the United Kingdom in which a journalistic sting operation recorded and revealed Members of Parliament and the Lords offering

to work for a fictitious political lobbying firm for fees of £3,000 to £5,000 per day.

In the US Congress and British Parliament, it is all about which lobbying firm or corporate is paying which bill or sponsoring which elections. That is the only meaningful way to successfully get any legislation passed or blocked.

Although corruption indices always indicate that African countries are the most corrupt in the world, the reality, like Ola Orekunrin argued in a Huffington post opinion editorial in 2013, is that corruption indices are developed by the West and applied to Africa. As she argued, “If Africa had a hand in designing global benchmarks for good economic management, the sub-prime mortgage scandal that not only destabilised Western financial markets but financial markets worldwide, would earn America the lowest possible grades.”

But I digress. Given that politicians tend to act in similar ways, the only plausible explanation for the different outcomes is in the institutions of restraints.

Whereas in the West and in some Asian countries, strong institutions of restraints have been put in place to check the excesses of politicians and limit the damage they can do, in Africa, or to be precise, in most part of Africa, it is one of three things: there are no institutions in place, the institutions are weak and unable to check the excesses of politicians, or there is what is called isomorphic mimicry - the creation of institutions that act in ways to make themselves “look like institutions in other places that are perceived as legitimate,” but which in reality are not.

That is why, for instance, Donald Trump would spend three years of his presidency fighting to clear himself from an investigation ordered by his

‘ Given that

politicians tend to act in similar ways, the only plausible explanation for the different outcomes is in the institutions of restraints

own justice department that he sought or received help from Russia during the elections and later be impeached for attempting to use a congress-approved aid to Ukraine for his political benefits whereas a Mugabe can order the Zimbabwean Central Bank to print trillions of Zimbabwean dollars to repay IMF loan and nobody can challenge him or point out to him the repercussion on the economy. It is also the reason why a Clinton can be impeached for lying under oath about a relationship he had and MPs in the UK would be forced to resign for inappropriately claiming benefits from the public till whereas an Abacha in Nigeria would confidently send trucks to the Central Bank to cart away billions of dollars and nobody would do or say anything until he is safely out of the way.

As James Comey, former FBI Director argued recently, “since the beginning, the United States has built a system with bad and incompetent leaders in mind,” and as Frederick Douglass opined, “Our government may be in the hands of a bad man...We ought to have our government so shaped that even when in the hands of a bad man we shall be safe.”

The major task therefore facing Africa is the urgent need to begin to build and strengthen strong institutions of restraints to rein in the worst instincts of its politicians and leaders. For too long, Africa has relied upon strongmen and personalities and in all cases, they have failed to build a capable state, which, in the words of Ricardo Hausmann, “can protect the country and its people, keep the peace, enforce rules and contracts, provide infrastructure and social services, regulate economic activity, credibly enter into inter-temporal obligations, and tax society to pay for it all”.

The hunchback in Chido Nwakanma’s piece

O

n Thursday, February 6, 2020, Chido Benedict Nwakanma, one of Nigeria’s very active communications strategist and marketer with extensive media experience, set out on a voyage to deliberately undermine the person of the governor of Imo State, His Excellency, Senator Hope Uzodinma.

When I read Chido Nwakanma’s “The hunchback on Hope Uzodinma” in his column in BussinessDay, the first thing that raced to my mind was that the political desporadoes in my beloved Imo have also got him, nay influenced him.

Nwakanma wrote like someone who was counseled to foist a hunchback on the Imo State Governor for the fun of it, even when he knows too well that Senator Hope Uzodinma does not have one and will never have one.

Many people who read the piece written

by Nwakanma, like yours sincerely, are still wondering whether Chido, the person I have known for many years for his strong character, has not joined the band of cheer leaders and hired writers who dot the country’s landscape, crying more than the bereaved in matters that political exposed persons are providing the environment.

I will return to this shortly, but first, let us get the records right.

Distinguished Senator Hope Uzodinma was returned as the duly elected Governor of Imo State on January 14, 2020 following a Supreme Court ruling that jolted many persons. Going

by Nwakanma’s write up, he appears to have also been jolted by the apex court’s judgement.

Shortly after the March 9, 2019 governorship election in Imo State, Uzodinma who ran on the ticket of the All Progressive Congress (APC) felt short-changed and decided to take his case to the court, starting with the Imo State Governorship Election Tribunal.

At the tribunal, his political traducers in the other political parties, particularly those who

belong to the sacked People’s Political Party (PDP) administration worked hard to ensure Senator Uzodinma was not given fair hearing.

Imo people watched as they rejoiced and celebrated their short-lived victory at the tribunal.

Senator Uzodinma remained undaunted and proceeded to the Court of Appeal where, again, majority of the Justices who sat on his appeal ruled against him except one that saw the merit in his prayers and gave a dissenting ruling. Again, his traducers rejoiced and thought the end had come for the astute politician and tested senator.

It was that lone voice from the Justice who gave the dissenting ruling at the Court of Appeal that spurred Senator Uzodinma up to proceed to the apex court.

All through the journey from the tribunal to the Supreme Court, there was pressure on Uzodinma to let go but being a man of destiny and an experienced political leader in the country, he chose to remain focused and to pursue his matter to a local conclusion, even if he would lose at the end of the day. And as Uthman Dan Fodio once said, ”conscience is an open wound, only truth can heel it.”

Senator Uzodinma was goaded not to give the court the chance to test its potency which has always been the desire of well-meaning democrats.

The Supreme Court ruling of January 14, 2020 was therefore the highpoint of Senator Uzodinma’s trust and confidence in our judicial system as the last hope of the common man and the pillar upon which democratic culture revolves.

Seven Justices of the Supreme Court who sat to hear Senator Uzodinma’s case were all in agreement that he was wrongly treated and cheated during the governorship election that brought Rt. Hon. Emeka Ihedioha into office ab initio.

The apex court saw the reason in ensuring that the results from the 388 poling units which the Independent National Electoral Commis-

www.businessday.ng

sion (INEC) did not capture were an attempt to rig Senator Uzodinma out of the contest, and decided to redress the electoral robbery targeted at him.

The result was his being declared the rightfully elected Governor in the March 9, 2019 Governorship election in Imo State when the Apex Court added the results that were initially carefully excluded from the 388 poling units to the earlier votes Senator Uzodinma got.

Ever since the Supreme Court pronounced Senator Uzodinma Governor of Imo State, there have been persons who have taken it upon themselves to undermine the integrity of the apex court, howbeit, shamelessly.

They have sponsored protests upon protests against the Justices of the Apex Court and have also behaved in ways that suggest our Supreme Court is useless knowing full well they were being economical with the truth.

They have given the Supreme Court judgement different interpretations to suit their selfish desires and ambitions as well as those of their masters. Many of them have gone as far as insulting the Justices of the Supreme Court, calling them unprintable names and demanding that they be sacked.

We understand the sentiment. Failure is nothing but an orphan.

The ruling that was in favour of Senator Hope Uzodinma did not go their way. Had the judgement been in their favour, the Justices of the Supreme Court would have been heroes and deserving of being their role models. They would have been the best thing to happen to Nigeria, while the institution itself would have been described as the best in the country.

That Nwakanma is trying to foist a hunch on Governor Uzodinma’s back is not surprising because it is part of the narrative to suit the intension of his masters who think they have been yanked off from office.

Nwakanma shares the same sentiments with the organisers of the protests, otherwise,

https://www.facebook.com/businessdayng

Oguwike Nwachuku he would have been a little more circumspect in his hasty characterisation of a man who approached the court and got justice that was denied him for standing in for an election he was clearly primed to win but for manipulative fingers of his political traducers and enemies of democracy.

I do not know how much thought Nwakanma has spared evaluating the circumstances that brought his pay masters into office in the first place vis a vis Uzodinma that the apex court said rightfully won the Imo governorship election.

As media and brand expert, Nwakanma knows that perception, more often than not, does not mean reality. But, because he was writing from where he appeared, he painted the picture of an Uzodinma he alone claims to know what image he cuts. How not to be biased as a media strategist!

In recent times, I have not read a piece laced with such venom and written by one who ought to be an expert.

Hear Nwakanma: “Uzodinma carries a huge hunchback of negative perceptions into his occupation of the Governor’s Office in Imo State.

As the days go by, and the reality of his residency of Douglas House sinks in, citizens and watchers of Imo State wonder what he will or will not do. It is essential to understand why.”

I need not dwell on Nwakanma’s biased assessment of Governor Uzodinma’s inaugural speech which only him conceives and has tried woefully to market as “full of sound and fury.”

Note: The rest of this article continues in the online edition of BusinessDay @https://businessday.ng Oguwike Nwachuku is the Chief Press Secretary/ Media Adviser to Governor Hope Uzodinma of Imo State.

@Businessdayng

12

BUSINESS DAY

Thursday 13 February 2020

Editorial Frank Aigbogun

On the Nigerian Gas Network Code: Off to a good start

editor Patrick Atuanya

The FG must recognise gas as a fuel in its own right

Publisher/Editor-in-chief

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

W

ith the launch of the Nigerian Gas Transportation Network Code at the opening ceremony of the 3rd edition of Nigeria International Petroleum Summit (NIPS 2020) in Abuja on February 10, the Nigerian Government has signaled a commitment to see through its proclamation that 2020 is the year of gas.

We commend the Federal Government for this important breakthrough. The Nigerian Gas Transportation Network Code will ensure that only the right quality of gas goes through the pipeline network, guarantee pipeline integrity, open access and common understanding of metering.

This Network Code is both critical to growing the domestic gas market and promoting export.

The code will also provide a uniform platform in terms of guidelines for agreements between buyers and sellers which will ensure transparency and eliminate existing bottlenecks according to Timipre Sylva, minister of state for Petroleum Resources.

The absence of this framework has hindered local gas use. The natural gas reserves volume of the operated deep-water acreages in Nigeria is about 21 percent of the country’s total reserves of liquid hydrocarbons according to the DPR. Yet the acreages accounted for about 36.08 percent of Nigeria’s total production in 2018. The absence of a uniform code for gas transport hinders investments.

Now investors would be assured of best practice in gas transportation and could encourage them to actively look at the domestic gas market. The bulk of Nigeria’s gas production is for exports, this will need to change if Nigeria must become industrialised. This policy is a step in that direction.

The Network Code could help harmonize gas balancing arrangements to support the completion and the functioning of the Nigerian gas market, the security of supply and appropriate access to the relevant information, in order to facilitate trade and to move forward towards greater market integration.

As far as intentions go, this is a fine policy that is long overdue.

A lack of transparency in the industry has led to unfair and often

discriminatory access to gas transportation network and has deterred investments.

However we must warn that this Network Code is not the solution to all of Nigeria’s gas policy problems.

Policy formation in the gas sector has been inconsistent, inadequate and often dated.

Nigeria lacks a comprehensive legal and fiscal regime for its natural gas. Despite having over 200 trillion-cubic feet (TCF) of gas, Nigeria treats its gas as an irritant on the way to finding oil. The Nigerian Petroleum Sector is too oil-focused and gas is largely subordinated to oil for legislative and regulatory purposes. The current dip in oil prices should wake us up to the reality that oil will not save us.

In 2008, Nigerian created a Gas Master Plan, a framework for gas infrastructure development but it is now not only obsolete but retrogressive. This realisation led to the formation of the 2017 National Gas Policy but this too continues to suffer the fate of the earlier policy – it lacks legal teeth to operationalise it. This has to change if we are serious about attracting gas investments.

Therefore, to make this year

truly our year of gas as the minister said, the government will need to recognise gas as a commodity in its own right. This involves creating a petroleum law and regulations designed for gas and inclusion of downstream gas in legislations and streamlining current laws that are overlapping.

The legal and regulatory framework of the industry does not contemplate the midstream and downstream gas sectors as such it does not address the licensing, regulations and the fiscal regime which would govern the activities in the sector. This has to be the priority of the government if it is serious about developing gas.

We call on the Federal Government to begin to recognise gas as a fuel in its own right. It should start by separating the terms – no more oil/gas but simply gas and oil. The gas upstream sector should be separated from the midstream. Regulation must engender competition, pricing should be liberalised, the fiscal regime created, and ownership of gas infrastructure separated from ownership and operations of gas trading. This is when the Federal Government can truly say it serious about gas.

HEAD, HUMAN RESOURCES Adeola Obisesan

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

Enquiries NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799110 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria.

01-2799100 Legal Advisers The Law Union

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

OUR Core Values

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven.

• The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests.

• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Thursday 13 February 2020

comment

comment is free

13

Send 800word comments to comment@businessday.ng

The Orji’s and the ugliness in Abia State The Public Sphere

CHIDO NWAKANMA

T

wo reactions have greeted the well-timed release of information on the massive heist in Abia State by the Father and Son Theodore Orji tag team. Graveyard silence pervades Government House and government offices. Anger and bewilderment walk the streets of Umuahia.

Diasporans are apoplectic with anger. Over the eight years in office, citizens of Abia State suspected that Theodore Ahaemefula Orji was following the footsteps of his godfather and predecessor Orji Uzor Kalu. He was stealing the state’s resources, never mind niceties such as corruption, misappropriation and misallocation. He and his cohorts were entering the barn and carting away goods meant for the collective.

The Orji Family was brazen about their looting of Abia State. The wife and sons of the Senator marched through Umuahia as imperials. They built malls and other businesses. They demolished things on their path. They owned the city and everybody. He even attempted to put the wife in the House of Representatives!

The current Speaker of the House

was particularly offensive in his displays and utterances. He was our Louis X1V and by actions proclaimed “L’Etat, c’est Moi”. Louis X1V, born Louis Dieudonne, was known as Louis the Great (Louis le Grand) or the Sun King and was King of France for 72 years.

The disclosures by the EFCC concerning the despoliation of Abia state

by Father Theodore Orji and Son Engr Chinedum Orji is not news in the sense of something fresh. What is troubling is the scale and depth of the unbridled rape and looting of Abia State under this family. It is benumbing.

EFCC at the weekend 6 February 2020 in Abuja disclosed the details of the petition by Fight Corruption: Save Nigeria Group against the former Governor. The group said Theodore Orji the Elder diverted N521billion from Abia State to his personal use. Orji withdrew N500m monthly as Security Vote and secured it in his account. He followed a tradition established in his days as Chief of Staff to convicted former Governor Orji Uzor Kalu. He withdrew N500m every month for eight years.

That alone translates to N24b.

The petitioners accused Orji, the Elder of “diverting N383 billion revenue from the Federation Account, N55 billion Excess Crude revenue, N2.3 billion Sure-P revenue, N1.8 billion ecological funds, N10.5 billion loan, N12 billion Paris Club refund, N2 billion agricultural loan, and N55 billion ASOPADEC money while in office.” Remove the hints of exaggeration here, and sleaze of humongous proportions still stares you in the face.

The petitioner noted in particular that N500m monthly so-called security vote was distinct from other security funds spent on the Nigerian Police, the Nigerian Army, Department of State Security, Navy anti-kidnapping squad, anti-robbery squad, purchase of security equipment and vehicles for the security agencies. It was a Security Vote, spent in secrecy and with no accountability. Never mind the 419 promise of a governor of a sister state who said he would forego his security vote. These fellows must imagine that citizens are dotards.

Then there are the bank accounts.

Chinedum Orji runs about 100 bank accounts, the EFCC alleges. Only persons in shady businesses run many accounts, but certainly not up to such huge numbers. Even players of the game Monopoly® do not parade such a large number of accounts.

Note, dear reader, that Senator Theodore Orji represents me in the National Assembly. My community is part of his catchment area. The revelations sadden and annoy me.

I commented here on the first Orji now in the Evil Forest of Alaigbo. The undressing of Theodore Orji follows the same pattern. There have been a few feeble attempts to mount a defence for him on social media. They are welcome.

Every Abian and every citizen of Nigeria must pray fervently that the EFCC case does not take the 12 years of Orji Uzor Kalu. This case should receive an accelerated hearing. It speaks to so many narratives and would enable some measure of closure.

The EFCC disclosure on Orji the El-

‘

I commented here on the first Orji now in the Evil Forest of Alaigbo. The undressing of Theodore Orji follows the same pattern.

There have been a few feeble attempts to mount a defence for him on social media. They are welcome

der and Orji the Son confirms the firmly held view that the problem in the South East is the political class and those who represent us. The bad governance of the first and second Orjis left Abia State in such a shape that the latter-day Ebonyi State is mocking it and encouraging it to get up and run the race. Defenders of those who deny Ndigbo a rightful place in the sun now cite them as a backhand justification for their wrong policies.

This second unveiling is a direct challenge to South-East governors, past and present. Citizens are watching. They will provide the dossier for the petitions against you. They will gleefully welcome your entry into the Evil Forest of ruined reputations. Soon, citizens may do more as in the traditions of yore.

The humiliation of Theodore Orji before the formal trial is typical EFCC. It throws a challenge to the incumbent.

Government House is deliberately mute, as it should be. But what should the godson do when the enemy breaks the godfather in the battlefield?

Okezie Ikpeazu stands on the horn of a dilemma. He has to make the right choices at this crossroad. Let me suggest a guiding philosophy: what would serve the best interest of Ndi Abia? He has ample time to ensure that we do not continue the story of ugliness and shame around Government House, Umuahia and its occupants. Tufia!

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

Towards a cost-reflective tariff in the Nigerian electricity supply industry (NESI)

B

y Section 32 of the Electric Power Sector Reforms Act 2015 (“EPSRA”), one of the major responsibilities of the Nigerian Electricity Regulatory Commission (“NERC” or the “Commission”) is to ensure that the tariff charged by the licensees are fair and sufficient to finance their operations while still making reasonable profits from running efficient operations.

To achieve the above, the EPSRA further requires the tariff to be regulated according to one or more methodologies adopted by the Commission. In line with this, the NERC developed a methodology to be used via a Tariff Order known as the Multi-Year Tariff Order. The MYTO is a tool for setting costreflective tariffs which will enable improved funding and functioning of the power sector by providing a tariff path with minor reviews two (2) times within a year on parameters that include generation capacity, inflation, gas prices, and exchange rates. In the event that the minor review reveals a change of +/5% (in any of these parameters) from values initially projected in the tariff setting, then a corresponding adjustment to tariffs will be applied.

MYTO is required to be cost-reflective, meaning, expected to cover costs arising through all the power value chain from generation transmission and through to distribution. Examples of these costs include the cost of investing in the capacity to generate electricity, cost of using the transmission system, NERC’s cost of regulating the Industry, the Market Operator’s cost of administering the Market, costs incurred by the Distribution Company (DisCo) in upgrading its network etc.

The MYTO is also expected to undergo major reviews once every five (5) years The MYTO 2015 used in setting industry tariffs was based on assumptions that were far from reality and has become more unrealistic as generation levels drop. The macro-economic

indices have significantly risen from what used to be, but no review has been done which has made the allowable revenue of DisCos fall far short of what it should be in reality thereby creating a huge Tariff shortfall. Tariff Shortfall is the deficit arising from what DisCos should have ordinarily charged to cover their costs and what they are mandated to charge.

The above notwithstanding, the wholesale cost of power which the Generation Companies (GenCo)charge the DisCos has increased and have been reflecting in the monthly bills forwarded to DisCos while the DisCos retail tariff remains the same. This has made it difficult for DisCos to pay the Nigerian Bulk Electricity Trading Company (NBET) and the GenCos their bill in full as DisCos’ collections do not cover the increased cost thereby occasioning what is referred to as Market shortfall.

The above had since made it difficult for DisCos to fulfil so many of their obligations towards the improvement of the Industry including upgrading their network (whether by rehabilitating, repairing or replacing dilapidated assets), providing Meters to customers for accurate reading of their electricity consumption, procuring additional generation capacity off-grid, etc.

Addressing the anomaly- market reset In 2017, the federal government of Nigeria, through the Ministry of Budget and National Planning, launched the Economic Recovery and Growth Plan 2017-2020 (ERGP) to set out medium-term reforms to diversify the Nigerian economy. Following the ERGP, the Federal Government in collaboration with the World Bank Group created and launched the Power Sector Recovery Program (PSRP) to restore the financial viability of Nigeria’s power sector, improve the sector’s institutional framework, increase transparency, encourage investor confidence in the sector and generally reset the NESI for future growth.

A component of the PSRP provides for a market reset including tariff review process

www.businessday.ng

which entails two (2) phases comprising a Minor review of the MYTO to reflect changes in the economy and extraordinary tariff review.

2016-2018 minor review of the MYTO 2015 and Minimum Remittance Order for the year 2019 Pursuant to the above, on 19 August 2019, NERC came up with the Minor Review of the MYTO 2015 and Minimum Remittance Order for the Year 2019 for the 11 DisCos in Nigeria (2016-2018 Order).

The major goals of the 2016-2018 Order are, succinctly, to address the past revenue shortfall and develop a framework to manage and prevent future shortfalls.

This specific Order determined the tariff shortfall and market shortfall by taking into consideration the actual changes in the macroeconomic variables and available generation capacities from 1 January 2016 to 31 December 2018. The Order further made projections for 2019 and beyond with a commitment to adjust same to reflect actual values at the time of the review which will take effect on 1 January 2020.

The 2016-2018 Order obtained data from relevant Government Websites and reflected the following values: Further, the Aggregate Technical Commercial and Collection (ATC&C) Loss reduction trajectory are to be considered in the computation of the tariff, however, the Commission decided to leave this component out of the computation of tariff for years 2017 and 2018 because in its view, parties to the Performance Agreement (which sets out Loss Reduction targets) have all defaulted. Therefore, the years 2017 and 2018 were declared years of mutual non-performance to account for uncertainties on cost-reflective tariffs and revenue recovery.

The above indices were used to calculate the tariff shortfall during the extant years and the following summarises the Order: The Tariff shortfall was used to determine

https://www.facebook.com/businessdayng

Kofo OlokunOlawoyin how much of the NBET and Market Operator’s bills can be paid by the DisCo. Consequently, each DisCo was mandated to pay MO bill in full and given a percentage of the NBET’s invoice that should be paid based on consideration of parameters peculiar to each.

The remainder of the NBET’s bill caused by the tariff shortfall is expected to be moved off DisCo’s financial books and settled by the Federal Government in line with the financing plans stated in the PSRP. All such interest that has accrued on the remainder shall also be moved from the balance sheet of the DisCos. According to the PSRP, the Government has included in the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper approved by the National Assembly in December 2017, an estimated funding requirement for a total of N1,934 billion/$6.34 billion for the period of 2017-2021 to cover the revenue shortfall for 2017-2021, clear historic revenue deficit in the Power Sector, and service the debt payments from the CBN Payment Assurance Facility during the period.

The funds are to be from (i) a short term bridge financing from the CBN known as the Payment Assurance Facility to help NBET meet its financial obligations towards GenCos by covering the cost for energy produced and received; (ii) World Bank Performance-Based Loan and (iii) Federal Government Budgetary contribution to the Power Sector.

Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Kofo is the Author of the fast selling book “The Nigerian Electricity Supply Industry- Post Privatisation Realities, Trends and Challenges”. She can be reached on ko@ kofoolawoyin.com or kofo.olokunolawoyin@gmail.com

@Businessdayng

14

Thursday 13 February 2020

BUSINESS DAY

cityfile A’Ibom unveils new MoU template for IOCs ANIEFIOK UDONQUAK, Uyo

A

Teaching and non-teaching applicants at the Secretariat of Oyo State Teaching Service Commission to collect free employment form in Ibadan.

Concern mounts in Cowrie Creek Estate, Lekki over Lagos’ planned regional road …occupants want Sanwo-Olu to spare multi-billion naira investments in estate …we don’t take arbitrary actions, says govt JOSHUA BASSEY

C

oncern is mounting in Cowrie Creek Estate (CCE), along the LekkEpe corridor, Lagos, over alleged plans by the Lagos State government to align a proposed regional along the estate, in what may lead to the loss of over N10 billion investments by the occupants of the estate.

The estate which sits on about 45 hectares of land is said to have been acquired from the Elegushi Royal Family by the Nigeria Liquefied Natural Gas (NLNG) Cooperative Society, some years ago. The land at the time of the acquisition, according to the occupants of the state, was waterlogged, but had to be sand-filled and left for some years before the development began over 13 years ago.

Tony Molade, president of the estate residents association, described as the ‘height of injustice,’ the move by the Lagos State government to divert the proposed regional road through the estate rather than confront persons who, over the years, acquired and built on the original alignment of the regional road.

According to Molade, residents of the state had been law-abiding, as every bit of the development un-

dertaken; from land acquisition by NLNG Cooperative, to sand-filing, electricity, underground sewage system, road infrastructure and erection of buildings were with the approval of the state government at a huge cost to the residents.

“Cowrie Creek Estate was conceived in 2007 by Nigeria Liquidified Natural Gas (NLNG) Cooperative Society as a private sector-led investment in the real estate sector of Lagos State. CCE is a residential estate with one of the best infrastructure along the Lekki corridor. To make the project a reality, NLNG Cooperative invested in the following: Grade A access road from Palm Spring Estate to the estate. This has brought a lot of development to the neighbourhood.

They also invested in the provision of power supply to the neighbourhood. They spent huge sums of money on sand filling the swamp leading to the estate and the lagoon. As a law-abiding corporate citizen, CCE diligently processed all our development approvals which took over 10 years to obtain including several alteration of the design and development. These alterations, at the instance of the Lagos State government, cost the estate hundreds of millions of naira.

“Some of the alterations include estate entrance www.businessday.ng

moved previously due to the regional road alignment at a significant cost to the CCE. Sewage plant built based on the Lagos State government requirements.

Also, in securing development approval for the estate, CCE sought and got a clearance that the estate is not on the Right of Way (ROW) for the proposed regional road.

Information reaching us, however, suggests that the state government is considering diverting the proposed regional road into CCE to avoid demolishing the properties deliberately built on the right of way.

Please note that CCE plots belong to people who are not only law-abiding but have taken pains to do the right thing even at a very huge cost. It may interest you to know that the development in the estate is slow because the developers (NLNG Coop) insisted that no subscriber can develop any plot without the required approval and payment of all statutory fees.

The supposed bare lands are owned by individuals and are not bare as significant fund have been expanded to service the plots with underground power cables, water, sewage, drainage and other infrastructure including fence, CCTV e.tc.

The regional road does not pass through CCE and

so attempt to now move it is an injustice for being law abiding. CCE has done nothing wrong and should not be punished,” said Molade.

Another resident of the estate, who spoke anonymously, described as ‘cruel’ government’s shifting of focus to the estate. The resident claimed knowledge of how Lagos State civil servants gave illegal approvals to land grabbers to build on the regional road ROW after being bribed. How do you then leave people who broke the law to punish law-abiding residents of CC Estate? The resident called on the state governor, Babajide Sanwo-Olu to spare the over N10 billion investment in the state.

However, reacting to the CCE residents’ allegations, the director of public affairs in the state ministry of physical planning and urban development, Mukaila Sanusi, said the state government does take arbitrary decisions.

“Anybody claiming that the government is diverting from ROW of the regional road is making unfounded allegation. The ROW of the regional road had been established with the involvement of the office of the Surveyor General of Lagos State, and the government has warned those who encroached to move,” said Sanusi.

https://www.facebook.com/businessdayng

kwa Ibom government has unveiled a draft template of Memorandum of Understanding (MoU) for multi-national oil companies and service concerns operating in the state.

Ekong Sampson, commissioner for environment and petroleum resources said the move was to look at gaps that had strained the relationship between the oil companies and servicefirmsononepartandthe host communities on the other.

He stressed that for good turnovers to be recorded, the oil companies and their service counterparts need a peaceful environment through a harmonious relationship with host communities and the state government while in their operations.

He noted that peace is key concern to the state government at all times, adding that “regular engagement of this kind, bringing stakeholders to a roundtable are critical avenue towards building and sustaining a very healthy relationship among major players in the industry.”

Sampson further explained that the state government seeks to achieve fair play for all parties, comprising government, oil companies, their service firms, and members of the host communities through a standardised MoU template, while expressing satisfaction with the oil companies’ facilities at their operational bases.

“As we live in a very tense moment in the life of our country, we need a standardised MoU which content should address all issues of equity for all,” Sampson said, frowning at IOCs and service companies for only having dealings with the host communities devoid of state government participation, saying “it’s totally unacceptable”.

He called on all oil service companies in Akwa Ibom to emulate the operational modalities of the multi-nationals in the state.

The commissioner, however, chided the operational activities of Total in the state, saying its flouting of fundamental standards regarding its relationship with state government and the host communities tantamount to “playing with the sensibility of the people.”

“As it is right now, the state government will not hesitate to go global in order to let the world know what they are doing to our people.”

The director of petroleum resources in the ministry, Emmanuel Inyang, hinted that with the standardised document, which he informed has a lifespan of three years, oil and gas firms will no longer unilaterally negotiate dealings with local chiefs of concerned communities, but that such negotiations would be carried out by the state government, and that paramount rulers, community chiefs, council chairmen, and the state commissioner that has the portfolio would henceforth be signatories to the MoU. While calling on oil and gas concerns to submit list of service companies to the ministry to enable it obtain accurate data, Inyang called on the IOCs to comply with relevant laws of the state.

In their various contributions and comments, the representatives of the seven oil and gas institutions and service companies that were present at the meeting, after sounding their appreciation to the for the lofty initiative of a standardised MoU. They corroborated on the opinion that the outcome of the meeting has bolstered the hope of stepping higher in their working relationship with the state ministry of environment and petroleum resources.

FCT gives operators of Nyanya Park 7 days to fix facility JAMES KWEN, Abuja

T

he Federal Capital Territory (FCT) Special Ministerial Taskforce Team on Traffic Management has issued a 7-day ultimatum to operators of the popular Nyanya Transport Terminal to fix several alleged anomalies in the facility or risk severe enforcement.

The taskforce in a letter dated 6th February, 2020, signed by its chairman, Ikharo Attah and addressed to the manager, Henz Nigeria Limited, managers of the Nyanya terminal, warned that failure to comply with the ultimatum will attract severe disciplinary sanctions.

The letter said the ultimatum followed five months of intensive operations, which revealed acute poor manage-

@Businessdayng

ment of the park facility.

The taskforce is sad that the park and its environs is dirty, thereby causing pollution to the surroundings and not secured as there are no CCTV cameras installed in and around the park to record movement.

It stated that there is no visible presence of security team at the entry and exit points to check vehicles coming in and going out, thereby making the facility a safe haven for hawkers who make entry and exit difficult.

“The park is poorly lit as there is no electricity supply in and around the park, leaving the park in a dark state at night. This is unlike the other parks around (New Nyanya Motor Park, Baba Nagode Park) which are well lit at night.

14

Thursday 13 February 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

Flour Mills of Nigeria’s Q3 profit jumps 3.4% set to raise N20bn debt OLUFIKAYO OWOEYE

F

lour Mills of Nigeria’s revenue for the nine months ended 31st December 2019 increased 7.9percent to N432.47billlion from N400.64 billion. Cost of Sales increased 6percent to N375.64 billion from N354.04 billion in the same period in 2018, leaving gross profit at N47.82billion from N46.59billion in the same period in 2018.

Selling and distribution expenses jumped 7.9percent to N6.4billion from N5.93billion in the same period in 2018, with administrative expenses surging to N17.26 billion from N14.93billion in 2018. Net profit increased 3.4percent to N8.16 billion from N7.89 billion.

Revenue from its Food segment increased 2.9percent to N262.09 billion from N254.57 billion, Agro-allied segment ballooned 19.6percent to N81.31bn

from N67.96billion. Sugar value chain increased to N67.61bilion from N59.96billion, sadly revenue from support services plummeted to N12.45 billion from N18.53 billion.

During the period, the group’s expense on advertisement surged to N1.48billion from N1.39billion.

Flour Mills in a notice to the Nigerian Stock Exchange dated January 16 announced the opening of a new N20bn bond offer under its N70bn Bond issuance programme, the first since November 2018, when the company raised a total of N20.1bn through N10.1bn 3-year bond at 15.50percent and N10.0bn 5-year bond at 16.00percent. The bookbuild process for this offer closed on Friday, 7 February 2020 The choice of bonds by Flour Mills is to lengthen the maturity profile of its debt in a low-interest-rate environment, and also reduce refi-

nancing risk of short-dated securities.

According to the management, proceeds would

be used refinance existing short-term debts increase efficiency of its balance sheet. Analyst at Chapel Hill

Denham estimate FMN’s total debt at N133bn.

“This will lead to a debtto-equity of 86percent and

net debt-to-EBITDA of 2.14x, from 73% and 1.77x respectively prior to the issuance,” the company said.

L – R: Razia Khan, chief economist, Africa & Middle East, Standard Chartered Bank; Oguche Agudah, CEO, Pension Fund Operators Association of Nigeria; Gbenga Adetoro, partner, African Capital Alliance; Danladi Verheijen, co-founder and CEO of Verod Capital Management; Ijeoma Agboti-Obatoyinbo, MD/CEO, FBN Quest Funds Ltd, and Kemi Owonubi, corporate finance head, RMB Nigeria.

BANKING

Ecobank signs cross border remittance partnership with Alipay …users to benefit from Ecobank cross-border remittance solution OLUFIKAYO OWOEYE

E

cobank has announced the signing of a cross-border remittance agreement with Alipay, the world’s leading payment and lifestyle platform, that aims to bring more inclusive financial services by providing a fast, safe, affordable and convenient way for workers to transfer money back home.

According to Ecobank, the partnership would facilitate instant t transfer from Rapidtransfer, Ecobank’s remittance solution to users of Alipay, which serves more than 1.2billion globally together with its local e-wallet partners. This would provide additional channel options which will increase options available to users, help lower transaction cost and enhance the quality of service in the market.

Nana Abban, group consumer banking Head said the cross-border remittance solution, Rapidtransfer, has over

the years delivered transparent, convenient and affordable services to the African diaspora and their African-based dependents.

“Through our partner-

ship with Alipay we are further leveraging the scale and capacity of our unified payment ecosystem on the global stage,” According to a PwC report, Nigeria accounts

for over a third of migrant remittance flows to SubSaharan Africa.

The report estimated that these flows amounted to US$23.63 billion

(2017: US$22 billion) in 2018, and represented 6.1percent of Nigeria’s GDP. The 2018 migrant remittances translate to 83percent of the Federal Government budget in

L-R: Bimbo Akintola; Desmond Eliot; Femi Gbajabiamila, speaker, house of representatives; Fred Amata, president, Directors Guild of Nigeria (DGN); Segun Arinze, and Francis Duru, at a courtesy visit to the speaker by the members of the movies Directors Guild of Nigeria, at the National Assembly

2018 and 11 times the FDI flows in the same period.

Nigeria’s remittance inflows was also 7.4 times larger than the net official development assistance (foreign aid) received in 2017 of US$3.4 billion.

PwC estimates that migrant remittances to Nigeria could grow to US$25.5bn, US$29.8bn and US$34.8bn in 2019, 2021 and 2023 respectively.

Over a 15-year period, PwC expects total remittance flows to Nigeria to grow by almost double in size from US$18.37 billion in 2009 to US$34.89 billion in 2023. The growth in remittances is subject to global economic forces, which could spur or hinder growth of remittance flows, Other factors that will drive remittance flows include growth in emigration rate, economic conditions of the resident countries and the economic fundamentals in the Nigerian economy. The World Bank forecasts global growth to slow to 2.6% in 2019.

Thursday 13 February 2020

BUSINESS DAY

COMPANIES&MARKETS

15

Business Event

TELECOMMUNICATIONS

Nigerian fines to weigh on MTN Group’s 2019 profit growth SEGUN ADAMS

S

outh African-based MTN Group on Tuesday said interest payments on regulatory fines in Nigeria will be among the factors that would slow its profit growth expected to be up to 50 percent in 2019.

MTN ahead of the full-year result disclosure in March said its headline earnings per share (HEPS) will fall between 438 cents to 506 cents based on the IFRS 16 accounting standard it recently implemented.

This would be slower than 85 percent growth year-onyear in 2018 as items outside its regular business, including interest on the Nigerian fines, foreign exchange losses and hyperinflation adjustments are expected to drag growth, MTN group told Reuters.

In Nigeria, a significant market for MTN, the Telco has faced a series of regulatory

bumps over the years.

L a s t y e a r, M T N p a i d the last and final part of an N300bn (less than $1 billion) fine for failure to disconnect unregistered lines from its network by the deadline stated by Nigerian Communications Commission (NCC) in 2015.

The initial fine was N1.04 trillion but was reduced after negotiations between MTN and Nigeria.

In 2018, MTN agreed to pay $53 million after Central Bank of Nigeria accused the Telco of not using the right channels to repatriate funds to South Africa.

The latest dispute for MTN has been a face-off with the Attorney General of Nigeria who demanded the Telco paid a back tax of N2bn.

Earlier in January the attorney general and MTN Group announced that the AGF had withdrawn its $2 billion tax demand against MTN Nigeria and referred the matter to

the Federal Inland Revenue Service and Nigeria Customs Service.

Following the settlement with the AGF, MTN Group in a visit to President Buhari in Abuja committed to investing the sum of $1.6 billion in its operations Nigeria to strengthen its network and systems.

The Telco later said it is also preparing a Future Public Offering (FPO) which will see it raise up to N340 billion from domestic investors as it seeks to sell down its Nigerian stake.

Nigerian investors currently own about 19.4 percent of MTN Nigeria, while 78.8 percent is owned by South Africa’s MTN Group.

MTN Group announced the sale down of about 14 percent of its stake in MTN Nigeria which would reduce its ownership to around 65 percent Nigerian amid a wider $4bn asset-sale plan to focus its business on key growth regions.

L-R: Adekunle Oyinloye, GMD, SIFAX Group; John Jenkins, MD, Ports & Cargo Handling Services Limited, a subsidiary of SIFAX Group; Ibraheem Olugbade, executive director, SIFAX Off Dock, and Tunji Olusinde, executive director, legal services/company secretary, at the 2020 SIFAX Group management retreat in Lagos.

POWER

Cummins inaugurates $35m Lagos facility to service its Nigerian market ENDURANCE OKAFOR

C

ummins West Africa Ltd. (CWAL), a branch of Cummins Inc., a diesel and natural gas engine manufacturer has inaugurated a N35 million worth of facility in Lagos aimed at providing quality service to its Nigerian market.

Located in the prominent business district between Mobolaji Johnson Avenue and the Lagos-Ibadan Expressway, the new facility will give the 100 years company easy access to its target market.

Serving the market which includes: Automotive, construction, financial institutions, telecommunications & technology, mining, marine, oil & gas, and power generation, Cummins West Africa Ltd is optimistic that the new facility will increase service satisfaction.

“We are confident the facility will increase service satisfaction from where it is today, we’re sure it will improve better quality products leaving this facility because most things are done with the use of automated system; less human error,” Mark oniOkeke, Commercial Manager, Cummins West Africa said during the recent inauguration, assuring that the efficiency of the workforce will get better because of the conducive environment.

For the West Africa arm of the New York-listed group company, the move sends a strong signal that Nigeria is

critical to its regional operations.

According to Kwame Gyan-Tawiah, Director Cummins Distribution, the recently launched facility in Lagos is one of the company’s biggest in the world.

“Apart from our factories, this facility is the biggest in the world, so for Cummins, Africa is part of their agenda; if you look around because the company believes in local talents every member of the leadership teams is a Nigerian except for one and even that one is a West African,” Tawiah assured saying that Cummins believes Africa is for Africans.

Explaining the importance of Nigeria to the Company, Okeke said Africa’s largest economy has the biggest market for Cummins in Africa and even in the Africa/ middle east region; Nigeria remains the country that is getting a lot of attention. “We see all the opportunities and with such investments we want customers to know that we are here for a long time.”

The investment is the company’s strategy to not only provide service for their Nigerian market but also targeted at increasing Africa’s contribution to its bottom as the US currently accounts for 55 percent of its revenue.

“If you look at our revenue, about 55 percent comes from the US, but practically Africa is not going to start contributing as much as the US anytime soon, however, it is a good scope that Africa contributes more and so as

Nigeria’s economy, for example, grows it will be good for a company like ours,” Ade Obatoyinbo, Managing Director, CWAL said.According to the Company, Nigeria has a lot to benefit from the new facility as it has the potential to create employment. Currently, 99 percent of the workforce in CWAL are Nigerians.

“The investment we have made in this facility is our biggest in Nigeria. When one of our colleagues who have visited most our factories around the world said some Uk locations are not as advanced as what we have deployed here in Nigeria,” Obatoyinbo said.

With several building clusters in the new facility, the 25,300 m2 brownfield development has three-floor administrative building, training centre, which also houses the staff canteen, clinic, nursing mothers’ room, and meditation room; warehouse comprising a separate genset and parts storage areas, as well as parts-sales offices to serve walk-in customers, climatecontrolled workshop with a mezzanine office floor for technical staff.

The workshop is fitted with a dynamometer for testing lose rebuilt or repaired engines, amongst other modern equipment.

“If we have to succeed in Nigeria we have to provide world-class facilities not just for our employees but also for customers to have confidence in the quality of services that we’re pushing out, so it was worth the investment,” Okeke said.

L-R: Tolu ‘Toolz’ Oniru, media personality and co-host OffAir, Talk Show, Ebuka Obi-Uchendu, media personality, Gbemi Olateru Olagbegi, media personality and co-host, OffAir Talk Show and FalzTheBahdGuy, rapper and actor at the Exclusive Premiere Of Off-Air With Gbemi & Toolz- Season 2.

L-R: Godwin Abonyi, former chairman, Udenu LGA Enugu State; Nnia Nwodo, president general, Ohaneze Ndigbo Worlwide; Ike Abonyi, member, board of trustees Ichakporoko Foundation (ICF); Ifeanyi Ugwuanyi, governor of Enugu State, and Peter Obi, former governor of Anambra State, at the launch of Ichakporoko foundation in Udenu LGA of Enugu State

Sadique Abubakar (3rd r), chief of the air staff; Kayode Feyemi (m), governor of Ekiti State, and principal staff officers and members of the entourage of the governor, at the visit of the governor to the Air Force Headquarters in Abuja

Thursday 13 February 2020

BUSINESS DAY

Investor

17

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

1,274.95 1,239.05

373.79

132.00

558.55

251.55

2,019.73

1,230.37

1,088.90

368.14

132.31

546.10

243.89

1,952.68

1,180.26

1,055.85

-1.51

0.23

-2.23

Week open (31– 1–20)

28,843.53

14.857trillion

2,444.04

1,147.72

734.99

Week close (31 1–20)

28,067.09

14.618 trillion

2,352.39

1,129.57

734.99

Percentage change (WoW) Percentage change (YTD)

-2.69 4.56

-3.75 11.16

-1.58 -1.93

0.00 0.00

-2.82 5.20

3.17

5.16

5.16

NSE Lotus II

-3.05

-3.32

-7.10

6.43

NSE Ind. Goods Index

-4.07 9.73

NSE Pension Index

-3.04 0.17

Earnings reports fail to sway stock investors Iheanyi Nwachukwu

T

he Nigeria stock market is gradually eroding earlier gains which made it reign as best performing stock market in January 2020.

Despite the full year earnings season, investor sentiments remain weak as profit-taking activities continue to dominate equities market. Analysts had expected investors to take positions in value counters especially those known for dividend payment.

The stock market had opened this week on a negative note as large cap stocks hemorrhaged. Amid Tuesday’s gain, analysts expect a mixed trading session this week, with profit taking in some counters and bargain hunting in others.

Some stocks still yield positive returns year-to-date Despite the recent decline, some stocks till date have put money in investors’ pockets.

Some of them include Africa Prudential (+15percent), AIICO (+18.1percent), CAP (+2.5percent), Champion Breweries (+2.1percent), Cornerstone (+20percent), Dangote Cement (+19.7percent), Ekocorp (+22.4percent), ETI (+6.9percent), FCMB (+2.7percent), Fidelity (+4.9percent), and Flourmills (+15.7percent).

Other stocks that have recorded positive returns till date are: Forte Oil (+2.5percent), Honeywell (10.1percent), Jaiz (+6.5percent), Julius Berger (+13.1percent), Law Union (+140percent), Livestock Fe e d s (+ 2 2 p e rc e nt ), May & Baker (4.7percent), and MTNN (+14.3percent).

Furthermore, NAHCO has advanced by +14.2percent this year;

NPF Microfinance Bank (+7percent), Okomu Oil (+22.3percent), Presco (+4.9percent), UACN (+8.1percent), and UBA (+7.7percent), Union Bank (+15.8percent), United Capital (+8.7percent), Vitafoam (+14.3percent) and Zenith (+7.5percent).

Analysts’ comments January started so well: February is another matter. Nigeria’s stock market was world’s best-performing in January…”, Coronation Research said in their recently weekly titled “February tougher than January”.

Market watchers at FSDH Research believe that going forward the equity market could reap from stable oil price as well as improved economic growth figures capable of instilling confidence in the market in 2020.

In their view, Cordros Research

www.businessday.ng

analysts noted that the trend witnessed last week will likely persist this week, “as the dual impacts of the weakening sentiment and mixed earnings performances during earnings season are expected to pressure market returns.”

“Nonetheless, we advise investors to take positions in fundamentally justified stocks”, the analysts said in their February 7 note.

“With significantly lower turnover in the session and negative market breadth, we believe the current global macroeconomic situation will continue to determine market movement, while discerning investors will cherry-pick on fundamentally sound names.

“Barring any loss in high-cap stocks as seen today (Monday) in Nestle, we expect the market to trade sideways in the next session”,

https://www.facebook.com/businessdayng

according to equity research analysts at Vetiva Securities.

Market review The domestic bourse had sustained its bearish trend last week, trading down on four of the five trading days of the review week.

The Nigerian Stock Exchange (NSE) All-Share Index (ASI) and market capitalisation depreciated by 2.69 percent and 1.61percent respectively to close the week ended February 7, 2020 at 28,067.09 points and N14.618trillion respectively.

In the preceding week ended January 31, the ASI closed at 28,843.53 points, while the value of listed stocks stood at N14.857trillion. In the review week, investors lost about N239billion.

All other indices finished lower with the exception of NSE Insurance index which appreciated by 0.23

@Businessdayng

percent while NSE ASeM Index closed flat. Fifteen (15) equities appreciated in price during the review week, lower than seventeen (17) equities in the preceding week.

Fo r t y - n i n e ( 4 9 ) e q u i t i e s depreciated in price, higher than 44 equities in the preceding week, while 99 equities remained unchanged, lower than 102 equities recorded in the preceding week.

The market recorded total turnover of 1.478billion shares worth N20.295billion in 23,263 deals in contrast to a total of 1.561billion shares valued at N26.073billion that exchanged hands in the preceding trading week in 21,444 deals.

The Financial Services industry (measured by volume) led the activity chart with 1.199billion shares valued at N13.728billion traded in 15,183 deals; thus contributing 81.14percent and 67.64percent to the total equity turnover volume and value respectively.

The Consumer Goods followed with 68.225million shares worth N2.444billion in 2,312deals, and Conglomerates industry with a t u r n ove r o f 6 0 . 0 9 5 m i l l i o n shares worth N242.213million in 922deals.

Trading in the top three equities – Zenith Bank Plc, FBN Holdings Plc and Guaranty Trust Bank Plc (measured by volume) accounted for 621.150 million shares worth N11.275billion in 6,718deals, contributing 42.03percent and 55.56 percent to the total equity turnover volume and value respectively.

In January 2020, the stock market was bullish recording 10.10percent return. The market rose on the back of restriction of non-bank corporates and individuals from OMO primary and secondary activities.

18

Thursday 13 February 2020

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Equities Market: Bearish sentiments dominated last week

T

he domestic bourse sustained its bearish trend, trading down on four of the five trading days of last week. Thus, the Nigerian Stock Exchange (NSE) All Share Index (ASI) tumbled 2.7percent weekon-week (w/w) with year-todate (YtD) return moderating to +4.6percent as the index closed the week at 28,067 points. In terms of activities, the value and volume traded decreased by 7percent and 19percent to N4.2billion and 290.1million units respectively.

The bearish sentiment d o m i nat e d m o s t o f t h e industries under our coverage.

Specifically, the Industrial Goods (-4.1percent) index shed the most as BUA Cement (-4.3percent) and Dangote Cement (-5.5percent) dragged the sector index.

The Oil and Gas (-3percent) and Consumer Goods (-2.2percent) sector followed, driven by price declines in Forte Oil (-10percent), Mobil (-9.9percent), and Cadbury (-16.28percent).

The Banking (-1.5percent) sector index also ended the week in the red territory amid

of heavy inflows (excess of N1trillion) In the preceding week, in terms of naira fund flows, inflows from OMO maturities (N311.5billion) outweighed outflows from OMO sales (N128.2billion). As a result, tight liquidity pressures eased, causing average interbank funding rates (OBB and Overnight) to drop from 14.6percent levels to 5.9percent.

At the primary market, the Central Bank of Nigeria went shopping for funds, by floating an OMO auction. Out of the N150billion offered, N128.2billion was subscribed and sold, across the 180-day and 362-day bills.

Demand waned at the long end (362-day: bid to cover at 0.8x), while staying strong at the mid-end (180-day: bid to cover at 2.0x). Also, stop rates declined, with the 180-day at 11.60percent and 362-day at 13.05percent.

At the secondary market for NTBs and OMOs, a bearish outcome was observed, as average yields increased by 12basis points (bps) and 33bps, to 3.8percent and 13.5percent respectively (as at Thursday).

w/w losses in Access (-1percent) and FBN Holding (-8.4percent).

O n the other hand, the Insurance (+0.2percent) sector index ended the week in the green territory on the back of price appreciation in AIICO (+2.5percent) and Linkage Assurance (+8.7percent).

Market sentiment deteriorated, as market breadth remained underwhelming at 0.4x (previously 0.3x).

Specifically, 14 stocks gained against 43 decliners.

This week, we expect the market to remain half-hearted as seen in the past few weeks as earnings reports failed to sway investors.

Money Market: A week

Also, the value of bonds traded at both markets, according to FMDQ, were N52.3billion and N942.4billion, down 53.8percent w/w and 30.2percent w/w respectively.

This week, we expect interbank funding rates to crash significantly amid sizable liquidity inflows from Bond maturities (N606.4billion), Bond Coupon Payments (N47.1billion) and OMO maturities (N440.9billion).

A l s o, N T B mat u r i t i e s (N147.4billion) are expected to be completely rolled over at the NTB auction at relatively lower rates, as local participants sidelined from the OMO market look to reinvest maturing OMO

www.businessday.ng

funds.

Bond Market: A bearish outcome at the local bond market T h e n a r ra t i v e a t t h e secondary bond market was similar to that of the money market, as participants sold off positions in bonds to free up liquidity. As such, average yield edged upwards by 15bps, to 10percent. Also, the value of bonds traded declined by 37.2percent, to N385.3billion.

Elsewhere, the Federal Government opened a subscription for the FGN Savings bond, offering a 2-Year tenor at 5.91percent per annum and a 3-Year tenor at 6.91percent per annum.

For sovereign Eurobonds, speculations from OPEC’s emergency meeting on considering further production cuts as well as a potential drug for Coronavirus, supported crude oil prices, increasing the demand for Nigeria’s instruments.

As a result, the average yield declined by 8bps to 5.97percent.

For corporate Eurobonds, the reverse was the case, as average yield declined by 5bps, to 5.11percent.

This week, we expect sentiments in the bond market to follow a bullish run, with N606.4bn expected to mature from the 13-Feb-2020 bond.

Also, the outcome of OPEC’s emergency meeting is a key factor to watch, in determining the performance of sovereign Eurobonds.

FX : CBN continues to support the naira despite apparent pressures Overall FX market performance across the major windows we track was mixed in the prior week.

At the I&E window, the rate of exchanging the naira for a dollar depreciated by 5bps w/w, closing the week at N364.17/$1.

The parallel market rate closed the week flat at midrate of N359/$1, while the CBN’s official rate depreciated by 2bps w/w to N306.95/$1.

Notably, activity level was underwhelming at the I&E window, as average daily turnover declined by 16percent w/w to $200.9million.

The CBN gross reserves continued its daily consecutive decline during the week, depleting further by 60bps w/w to settle at $37.8billion (as of February 5).

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

Economy & Markets

CSCS: Still prime toast for investors at OTC market for unquoted stocks Iheanyi Nwachukwu

A

m i d t w o consecutive years of bearish performance, the Nigerian equity market is recovering fast, with the Nigerian All Share Index rallying 3.47percent year-to-date.

The stellar performance of the market in January 2020 was attributed to a number of factors, including low valuation of stocks, high dividend yield expectations and increased allocation to equities by fund managers, who seek higher return on investment, following notable moderation in yields on fixed income instruments.

A number of banking stocks on the Nigerian Stock Exchange (NSE), such as Zenith Bank, UBA, GTBank have dividend yields in excess of 10percent, reinforcing the attraction for equities.

Interestingly, whilst most investors, local and foreign, focus solely on quoted equities on the Nigerian Stock Exchange, the Nigerian Association of Securities Dealers (NASD) Over-theCounter (OTC) also offer equity investment exposure

to leading companies across different sectors.

Notably, shares of WAMPCO the leading dairy company in the country is traded over the counter on the NASD. Also, one of the most actively traded stocks on the NASD has been the shares of Central Securities Clearing System (CSCS) Plc, the financial market infrastructure for the capital market.

CS CS, the Central Securities Depository (CSD) and settlement institution for the capital market provides share price of N12 as at the close of market on Friday February 7, 2020.

Beyond the steady

cashflow that the CSCS dividend provides to investors, the strong fundamentals of the company has been a compelling attraction to investors.

Posting N6.1 billion profit before tax in 2018 and poised for growth in 2019 financial year (FY) based on the quarterly performance; C S C S’s d i v e r s i f i c a t i o n strategy has proven effective.

Renowned for its strong governance, stable profitability and increasing earnings diversification, CSCS remains a prime toast of investors. Despite being unlisted, the stock attracts notable liquidity on the NASD Over-the-Counter.

FBNQuest acts as lead issuing house, book runner on Interswitch N23bn bonds listing

F

BNQuest, the investment banking and asset management subsidiar y of FBN Holdings Plc successfully led a consortium of five issuing houses on the recent listing of the Interswitch Limited’s bond on the Nigerian Stock Exchange.

Interswitch Limited in its bid for expansion has set the ball rolling for Fintechs in Nigeria through the issuance of bonds on the Nigerian Stock Exchange.

FBNQuest Merchant Bank in its role as lead issuing house assisted the client in arranging, structuring and issuing the Series 1 Bond out of the Bond Issuance Programme launched in May 2019. As Joint Lead Issuing house/book runner, FBNQuest advised

https://www.facebook.com/businessdayng

on the transaction structure and marketing strategy for the bonds including market timing, investor road show (in Lagos and Abuja) and crafting an appropriate credit story for the client.

The Bonds were successfully distributed to a diversified mix of investors which included Pension Fund Administrators (PFAs), Banks, Asset Managers and Others. The final order @Businessdayng

book was N51billion out of which a total of N23billion bids were accepted meaning the offer was 222percent subscribed. The success of the transaction with an order book of 222percent is a testament to the leading role of the company in the technology and payment processing space where they have consistently led innovation and product development. FBNQuest is proud to have led this milestone transaction.

The transaction adds to the organisations impressive portfolio of organisations it has supported, and once again highlights its capabilities in the successful execution of sizeable capital market and commercial debt transactions.

Thursday 13 February 2020

BUSINESS DAY

19

Investor Helping you to build wealth & make wise decisions

Vetiva Research

Flour Mills of Nigeria: Revenue remains on track • Q3 Revenue outperforms comparable quarters • Border closure, a positive for diversified brand portfolio • Finance costs decline 20% year-on-year • Earnings estimates revised, buy rating maintained Strong volumes support Revenue lourmill of Nigeria Plc in its unaudited 9M’19/20 results, posted a positive third quarter performance, with revenue growing 12percent quarter-on-quarter (q/q) to N152.72 billion.

While the Food segment (+4percent q/q) remains the biggest contributor to top line, we note that revenue from the agro-allied and the sugar businesses grew at a faster pace of 34percent and 9percent q/q respectively.

The revenue growth in these segments did not come as a surprise, as we had anticipated better volume supported performances from the edible oil and sugar segments, given the closure of the borders and the end of year festivities.

We acknowledge that t h e c ompa ny ha d b e en w ell positione d for the increased demand from

F

the closed borders, having expanded and regionalised their pasta and ball food product segments with the introduction of the Mai Kwabo and Dawavita brands in the North; this was in addition to their already diversified portfolio and expanded production capacity for the pasta and semovita brands.

Consequently, Q3’19/20

revenue grew 17percent y/y, translating to an 11percent y/y increase in gross profit, although gross margin declined marginally (-0.55ppt) y/y.

However, dragged by a 33percent jump in admin expenses, operating expenses advanced 26percent y/y to N8.66 billion (Opex to sales ratio - Q3’19: 5.7percent,

Q3’18: 5.3percent) in Q3’19/20, taking operating profit 2percent lower y/y. That said, in its bid to take advantage of the low yield environment, management took up an active debt restructuring strategy, refinancing its long-term borrowings through a N70 billion debt issuance programme. They

had also reduced short-term borrowings by N12 billion from N62 billion in Q3’19, translating to a 20percent y/y decline in net finance expenses and a 35percent q/q increase in PAT. Bouyed by the impressive Q3’19/20 Revenue, 9M’19/20 revenue advanced 6percent y /y to N 423. 48 bi l l io n.

Although Gross margin and operating margin declined 0.34ppts and 1ppt y/y, PBT rose 9percent y/y to N12.29 billion due to a significant reduction in Interest expense (-21percent y/y. 9M’18/19: N11.27 billion). Overall, ninemonths PAT grew 3percent y/y, with PAT margin rising 0.04ppts.

Expect border closure to drive revenue growth We e x p e c t t h e l a n d borders to remain closed for the first half of 2020 and see increased support for the food, sugar and edible oil segments in the period. Thus, we maintain a positive outlook

for FLOURMILL in the final quarter of FY’19/20. Although, we expect slightly lower sales in this period for the food (down 3percent q/q) and agro-allied business (down 1percent q/q) segments, due to the strong base experienced in the festive quarter. That said, we project full year revenue of N572.52 billion (+9percen y/y).

Furthermore, we expect a slight increase in operating expenses given our outlook for inflation in this first half of 2020. On a positive note, with the currently diminished interest rate levels in the fixed income space, we project an 18percent q/q decline in net finance expense and expect the line item to also decline 28percent y/y in FY’20. Finally, our PAT projection of N1.46 billion for Q4’19/20 translates to a 21percent q/q decline in PAT and a full-year PAT of N9.1billion (+121percent y/y) and we set a target price of N27.56 and maintain a BUY recommendation on the stock.

Unilever Nigeria: Topline to remain weak on receivables policy • Sustained decline in topline despite better operating terrain • Slow growth expectation amidst aggressive receivables policy • Weaker finance income to dampen bottom-line • Weaker revenue drags bottom-line

D

espite a relatively stronger operating environment in Q4, Unilever reported a dismal full year (FY) 2019 performance, with Loss after tax of N4.2 billion, a sharp decline from the N10 billion profit after tax (PAT) in FY’18.

This represents the company’s first annual loss in thirteen years. Notably, the FMCG giant also reported a N4.7 billion Loss after tax in Q4’19, down from a N2.1 billion PAT in the corresponding period in 2018. We note that while UNILEVER started off the year on a mildly weaker note (topline and bottom line were down 11percent y/y and 39percent y/y respectively in H1), losses began in the second half following a decision by management to “prioritize

tightening of credit terms and minimize exposures on trade receivables”. Simply put, management implemented aggressive measures to reduce its receivables balance.

C o n s e q u e n t l y , t ra d e receivables fell from N50.5 billion as at June 30 to N24.5billion as at December 31, even as impairment on receivables worsened to N0.7 billion from N0.2 billion.

The new receivables policy adversely impacted topline in FY’19, with revenue falling 35percent y/y to N60.75 billion, affecting both Food (28percent down) and HPC (40percent down) revenues.

Furthermore, despite the improved operating environment for domestic producers in Q4 vis-à-vis the border closure, topline still www.businessday.ng

dropped 56percent y/y in Q4’19 to N9.13 billion, with weaknesses in both food and HPC segments. While the weaker volumes also dragged Cost of sales lower, Gross profit declined at a faster pace to N6.7billion (FY’18: N27.4 billion) at a margin of 11percent (FY’18:30percent).

Although the results do not provide a breakdown of the costs, the weaker margins suggest a high fixed cost composition. After adjusting for largely static operating expenses, UNILEVER reported an operating loss of N10.4 billion, down from a N10billion operating profit.

https://www.facebook.com/businessdayng

Below the EBIT line, the company reported a 41percent y/y drop in Net finance income as cash balance moderated 38% from December 2018. Overall, for the first time in thirteen years, UNILEVER recognized a loss before tax of N8.3 billion, compared to a profit before tax of N13.6 billion in 2018.

However, supported by a tax credit of N4.1 billion, Unilever reported a Loss after tax of N4.2 billion.

Rocky road to recovery…

Still impacted by the tighter credit terms, we expect topline to remain pressured in the first half of the year before improving in H2’20. Overall, we forecast a 4.6percent y/y growth in Revenue to N63.5 billion in 2020. This is driven by expectation of a modest performance from @Businessdayng

the food segment - still rife with competition - and slightly better performance from the HPC segment especially for the first half of the year, as the borders remain closed.

Combined with a 9percent projected moderation in cost of sales, as sales volumes remain low, we expect gross margins to increase to 18percent in FY’20 from 11percent in FY’19.

Although we expect EBITDA margin to improve (+50 ppts) in FY’20, we foresee weaker Net Finance income (down 19percent y/y to N1.64 billion) dampening this improvement.

That said, we project a Loss after Tax of N0.14 billion in FY’20 still forecast that PAT will grow to N1.25 billion this year.

All in, we set a 12-month target price of N13.68 per share and issue a Sell.

20

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

21

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

22

Thursday 13 February 2020

BUSINESS DAY

LEGALINSIGT

BD

LegalBusiness

Competition Law: sustaining competitive markets in Nigeria’s evolving digital economy CHUKWUYERE EBERE IZUOGU

N

igeria, home to Africa’s largest internet subscribers had its President and Commander-in-Chief in 2019, give assent to the Federal Competition and Consumer Protection Bill 2018 (the Bill), which subsequently enacted the Federal Competition and Consumer Protection Act 2018 (the Act).

According to, the present Director General of the now repealed Consumer Protection Council this piece of legislation has had a tortious history and several false starts since 1999 when it was first presented to the National Assembly for their consideration. Indeed, from personal knowledge, this Bill is no stranger to been listed on the Order Paper of both chambers of legislature, in fact this Bill made its usual appearance under several sponsors in the last three legislative sessions (2007 – 2019) until its enactment in the present session.

The importance of the Act lies in the fact that previously, anticompetitive practices were rarely ever challenged by a regulator or, in court, hence the timeliness of enacting the Act. At a fundamental level the Act will ensure among other things that; consumers are protected in the market place; are not left at the bargaining mercy of undertakings that wield market power; that consumers get a good deal in terms of price and quality; and that businesses compete on the merits without resorting to anticompetitive practices that impedes effective market competition. In this regard, the Act seeks to protect consumers and businesses from anti-competitive practices.

The digital economy in Nigeria’ relies on access to the internet provided by internet service providers (ISPs) and thrives on the consumption of a wide range of online content provided across a spectrum of value chains. Prior to the enactment of the Act, the digital economy constituted a vast expanse of unregulated activities that could hardly be caught by any conduct modifying rules initiated by regulators or enacted by the legislature in Nigeria to checkmate anti-competitive practices. Even the Nigerian Communications Act enacted in 2003 to address regulatory issues in Nigeria’s telecommunications sector is unable to assert jurisdiction over services in the digital economy like over-thetop (OTT), social media networks, e-commerce, online advertising, etc, (which I collectively refer to as content and applications providers “CAPs”). It even becomes a jurisdictional nightmare to undertake enforcement activities if an undertaking acting as a CAP does not physically conduct its business from within Nigeria. The good news

is that the Act cures this defect by stating clearly in Section 2 (1) that its scope of application shall extend to “all undertakings and all commercial activities within, or having effect within Nigeria”. Black’s Law Dictionary defines a commercial activity as an activity, such as operating a business, conducted to make a profit. Thus, to the extent that a CAP’s profit can be attributed (whether directly or indirectly) to its activities within Nigeria’s digital economy, such activities would no doubt constitute commercial activities within or having effect within Nigeria as provided in the Act. This provision is irrespective of the physical location of the CAP. The observation of developments in enforcement activities by competition authorities in multiple jurisdictions in the last 3 years presents a reoccurring concern reflected in their reports, which seeks to understand how well are existing competition frameworks suited to protect consumers in the digital economy where disruptor CAPs, Big Data, blockchain and Artificial Intelligence (AI) are changing the dynamics of market competition. From a competition perspective, the Act is able to challenge the anti-competitive practice of undertakings within the digital economy in the following hypothetical scenarios.

Restrictive Agreements Directly applicable in this scenario, is the Act in Section 59 (1) which prohibits agreements that restricts market competition. These agreements could be horizontal, that is among direct competitors or vertiwww.businessday.ng

cal, that is among undertakings (or CAPs) operating at different parts of a value chain. It is interesting to note that the Act gives a wide connotation as to what constitutes an agreement, which includes a “concerted practice”, a type of practice that falls short of an actual agreement between the parties. The Act lists some of these restrictive agreements as price fixing, market allocation, limiting allocation and tying/bundling agreements. An example in the digital economy is the possibility of a concerted practice or collusion facilitated by the use of AI, for instance in a CAP’s pricing strategy where the real time collection of datasets online enables the frequent adjustment of price.

Because such price setting by AI is transparent, predictable and easily observable by other competing CAPs, the question arises as to how to distinguish CAPs’ unilateral use of AI in setting their prices from price setting resulting from a restrictive agreement or in this case, a concerted practice, which are in both instances anti-competitive.

The likely anti-competitive effect is the ability of CAPs utilising AI in their price setting strategy to excessively price the product/service to the detriment of consumer welfare.

The Act can intervene if it can be established that the use of AI is to monitor and enforce a price fixing agreement between competing CAPs, the fact that a computer software executed the agreement is irrelevant for a finding of an infringement.

Abuse of a dominant position The abusive practice by one or

https://www.facebook.com/businessdayng

more undertakings with market power is prohibited in Section 72 (1) of the Act. Market power exist where an undertaking is able to act without any regard to its competitors and/or consumers.

An abusive practice is said to exist where an undertaking with market power in a section of a defined market exercises such power with the intention of excluding competitors from the market and/or suppressing consumer choice. For instance in the context of CAP/ISP v. CAP/ISP relationship, issues like net-neutrality whereby an ISP’s discriminates through its traffic management practices online content provided by any CAP(s), raises important question of competition law under the Act because an act of discrimination in whatever circumstance constitutes an abuse if it can be established that the undertaking engaging in the discrimination has market power and that the anti-competitive effect of such practice outweighs any technological efficiency and other pro-competitive gains. In the same vein, the ability to access and process big data including the personal data of a living person has helped solidify the market power of the big four CAPs worldwide, Google, Amazon, Facebook and Apple (colloquially referred to as GAFA) which according to German and French competition authorities in a 2016 joint report “may result in entry barriers when new entrants are unable either to collect the data or to buy access to the same kind of data, in terms of volume and/or variety, as established companies”. Last year in February, the German competition authority determined that Facebook’s data collection practices constituted an abuse of its dominant position.

Although this decision was subsequently overturned by a German court, it nevertheless suggests that it is plausible that competition law standards may become applicable where a dominant CAP engages in the unlawful processing of personal data acquired from users of its service.

Mergers Competition concerns can also be addressed through the substantive analysis of mergers occurring in the digital economy. Under the Act, mergers that fall within the Federal Competition and Consumer Protection Commission (FCCPC) prescribed threshold are required to be notified to the FCCPC for approval and assessment to determine whether it is likely to substantially lessen competition.

Mergers not notifiable to FCCPC are considered “small mergers” as they do not reach the prescribed threshold in terms of annual turnover. Despite the status of small mergers, it is still notifiable within 6 months of implementation if in the opinion of the FCCPC the @Businessdayng

merger may substantially lessen competition.

Irrespective of whether or not a merger occurring in Nigeria’s digital economy is notifiable to the FCCPC in the first instance, it may nonetheless raise competition concerns if for instance such merger involves a party with access to an extensive trove of personal data and the FCCPC considers personal data as a key parameter of non-price competition in the same manner as EC, EU’s lead competition authority in the merger assessment of Facebook/WhatsApp and subsequently in Microsoft/LinkedIn. This reasoning is based on the argument that a failure to protect the personal data of individuals using a service indicates that the quality of the service is degraded which in turn retards innovation, one of the scourges competition law seeks to combat. This holds true especially in instances where according to the EC in Microsoft/ LinkedIn, the service is free and therefore quality becomes an essential element of non-price competition. This regulatory scrutiny of access to personal data in data-rich mergers occurring in the digital economy is gaining traction among competition authorities in the EU and US and appears to be in line with the recent statement of the Honourable Minister of Communications and Digital Economy that data [protection] is key to Nigeria’s digital economy.

Conclusion While this article has provided a glimpse of potential competition concerns that can arise in Nigeria’s digital economy, although most of the scenarios highlighted are hypothetical but not impossible and the arguments made will not readily lend itself to an easy resolution through existing precedents in Nigeria as the case may be, but rather should inform our thinking and analysis of the spectrum of anti-competitive practices that can occur in the digital economy and how competition law may be able to challenge or mitigate their effects.

Competition law is very fluid as is the dynamics of digital economies. Interestingly, the National Digital Economy Policy and Strategy paper recently released by the Federal Ministry of Communications and Digital Economy has as one of its policy objectives the review of existing legislation to enhance the development of Nigeria’s digital economy. This review in my view, would not doubt complement the Act in sustaining a thriving digital economy for Nigeria.

Chukwuyere, formerly a Tech Policy Fellow at Mozilla Foundation, presently a Research Fellow at the African Academy Network on Internet Policy and Senior Associate at Streamsowers & Köhn.

Thursday 13 February 2020

BUSINESS DAY

FINANCE

23

Capital lifeline to SMEs; Nigeria conforms with global trends PERCHSTONE & GRAEYS

order to create shareholder value and sustainable returns.

The NSE by its Growth Board initiative is capable of similarly positioning Nigerian family businesses on a global pedestal, providing them with access to long tenured capital and enhancing their visibility to investors and consumers.

S

mall and Medium sized businesses (SMEs) are immense contributors to any nation’s economic growth and development. It is now even more imperative for Nigeria to maximize the potential of SMEs to spur economic development; particularly with the country’s urgent need to diversify its economy.

There are about 41.5 million micro, small and medium enterprises which contribute about 47.8% to the nation’s Gross Domestic Product (GDP). SMEs will be further enabled to increase their contribution to economic development when the administrative, financial, legal and regulatory frameworks within which they operate are stable and efficient. An efficient financial framework is extremely important as it determines the level of access to finance for SMEs. Many SMEs have been put out of business due to inability to access funds, either for daily business operations or expansion. SMEs most commonly access finance through personal savings and donations from family and friends. The next most common routes are bank loans and venture capital.

Bank loans are often difficult to obtain as they usually require some collateral as security; which may not be readily available to most SMEs. Banks are also quite skeptical of the accounting practices and credit worthiness of small and medium scale businesses. Although venture capital companies (VC) provide a veritable source of financing for SMEs, the challenge here is that they usually only invest in SMEs with demonstrably high potential for profitability.

SMEs accessing the capital market A vitally important but perhaps less explored channel of finance for SMEs, especially those with the potential for high growth in other jurisdictions, is the public capital market. This financial market segment deals with financial instruments which are long term securities. Participants in the Nigerian financial market include: the Nigerian Stock Exchange (NSE), Discount Houses, Development Banks, Investment Banks, Building Societies, Stockbroking Firms, Insurance and Pension Organizations, Quoted Companies, the Government, Individuals, and the Nigerian Securities and Exchange Commission. The Nigerian Stock Exchange is the most prominent actor in the sale of securities through its Alternative Securities Market (ASem), Main Board and Premium Board.

On the 30th of April 1985, a Securities Market was established for SMEs to assist them in raising long term capital on the NSE.

Many indigenous companies were not listed due to, amongst other things, the rigorous regulatory requirements. Additionally, many SMEs lacked the desire to go public; being more often than not, family owned businesses under the dominant control of one individual.

Historically, the laborious and expensive listing process; especially with regard to capital requirements, has also acted as a disincentive to SMEs wishing to access capital market financing.

The Growth Board initiative of the Nigerian Stock Exchange In 2018, the Nigerian Stock Exchange made public its intention to launch a Growth Board which would enable SMEs with high growth potential get listed on the NSE. The Growth Board was also intended to serve a wider range of functions. It would provide an avenue to enhance access to finance/liquidity for smaller companies, increase the capitalization of the market, increase opportunities for investors to participate in start-ups with high growth potentials, create, broaden and diversify investor base, and serve as an exit option for private equity & core investors.

These functions were intended to further conform the operations of the NSE with global trends, thereby attracting international investors. At the centre of the Growth Board initiative is SMEs and assisting entrepreneurs to scale their businesses and enhance their corporate visibility.

On the 29th of January 2020, the NSE finally launched the

Growth Board at the Exchange.

As unveiled, a key feature is its Value-Added Services program.

The NSE has partnered with a number of professional advisors to offer value added services to SMEs who indicate an interest in being listed on the NSE. The function of the service providers is to support the SMEs in complying with the prelisting requirements for the purpose of being qualified for entry into the capital market.

Prelisting requirements for NSE’s Growth Board Any new company which seeks to be listed on the growth board must first convert into a public company limited by shares. The following conditions must also be met: presence of a core investor or technical partner with at least a 2 year operating track record, a high net worth Individual who is a majority shareholder (an individual whose aggregate networth of investment assets exceeds N100Million), a minimum of 25 shareholders, market capitalization of 50 million Naira, 10% of its shares must be available to be issued to the public/investors, and the Directors must retain a minimum of 50% of their shares in the company for a minimum period of 12 months from the date of listing.

These conditions seem to indicate an interest in applications from medium scale businesses with established operations and revenue base.

The Growth Board initiative is commendable and is likely to enable capital flow from areas of surplus to deficit, thus enhancing a sustainable economy. The reputation of the stock exchange

is founded and sustained by trust and credibility and such initiatives as the Growth Board initiative must demonstrate its continual efforts at deepening investor confidence in the capital market. This makes the successful implementation of the initiative of critical importance. The NSE in executing the Growth Board initiative must take into consideration the typical characteristics of SMEs in Nigeria in order to set in place appropriate mechanisms to mitigate the risk of SMEs negatively impacting, albeit inadvertently, or eroding investors’ confidence upon their listing.

It has been pointed out that many SMEs in Nigeria are family businesses. It is not uncommon for the continuity of such businesses to center around succession planning based on familiar relationships rather than skills and competence. According to research by the Family Firm Institute (a global professional association for professionals who serve family enterprises based in the USA), 30% of family businesses survive to the second generation, 12% make it to the third generation while only 3% survive to the fourth generation.

Though SMEs may be family centered, they would do well to focus on creating a sustainable succession plan that will ensure the business operates as a true institution. At the core of creating a sustainable family business is implementing proper corporate governance principles.

Many household names such as Walmart, Ford, Dell, Volkswagen, and many others, started out as family businesses but have operated differently in fundamental areas of corporate governance in

Corporate governance and boosting investors’ confidence in the capital market In qualifying new businesses for listing on the stock exchange, it is pertinent for the NSE to consider not just their potential for growth and profitability, but it must provide and enforce a structure that will guarantee their sustainability.

One of the ways to ensure this continuity is to institutionalize corporate governance principles. Investors place strong emphasis on corporate governance principles which ensure protection of minority shareholders, good financial management, risk management, transparency and disclosure.

The standard must therefore not only be that the businesses are by their accounting books or their disclosures assessed to be compliant with the prelisting or post listing requirements, there must be a mechanism that will forestall where possible, and check where necessary, any incidences of mismanagement of funds or corporate structural inefficiencies.

The listing requirements currently provide that every issuer shall comply with the commission’s code of corporate governance or such applicable codes of corporate governance in force.

There is also a post listing continuing obligation of obtaining an annual certification on adherence to corporate governance rules.

Whilst these are good corporate governance standards, there is a further need to include specific requirements which are directly in accordance with corporate governance principles.

For example - the appointment of independent non-executive directors; preferably of a strong professional background who can bring an objective and informed perspective to business decision making. Other key principles include the establishment of risk management and internal control policies, such as a whistle blowing structure.

Although the stakes are high, the road ahead need not be paved with stones. The NSE may simply need to merge its Growth Board initiative with its Corporate Governance Rating System (CGRS) in order to institutionalize corporate governance for SMEs. This will create a sustainable foundation for this all-important segment to drive and maintain the next stage of the nation’s economic growth.

Tomilola Tobun and Busola Pitan Perchstone & Graeys

24

Thursday 13 February 2020

BUSINESS DAY

YOUNG BUSINESSLAWYER

BD

LegalBusiness

Good is the enemy of Great!

“Please close your eyes, imagine for one second that you are child on the assembly line in your primary school, hear the drums, hear the shekere, hear the claps of the hands and the tambourines… Now scream three times!

“Good, better, best I shall never rest until my good is better and my better, best” Stop! Now Open your eyes and listen!

M

any of us encountered this saying as a vapid chant we were forced to make as children on assembly lines and classrooms and so we never really got the chance to give it thought or live it out.

Permit me to walk those lines with you yet again, albeit, this time, thinking about the words and the sense of responsibility that they should ordinarily bring. I believe that if you, like I, have thought through these words, you will not necessarily end up with an enchanted smirk as is the custom; instead,

a sense of sobriety and responsibility is at the very least the result of such meditation.

As you advance in your career and make strides towards improved performance and success, you begin to have a “good feeling” and grow into a “good place”. Your life is characterized by a seamless or maybe pseudo seamless transit to and fro the aisles of work and you are satisfied with the marginal increment in output and success. Conversely, it may

be that your experience is far from seamless but at the end of the day, you hack your way through, you can say that you have left trouble zone, things are shaping up and you are in a position to claim the coveted right to rest.

In either of these situations, progress is being made so there really is nothing to worry about.

Not True!

There is a positioning called “Plateauing” and a status called “Coasting”. In either case, stag-

nation looms but it is not obvious because the marginal progress made is distracting. A good number of us professionals are in this box.

We have past records that make us smile and invoke feelings of success, but we have no aspirations which mirror or supersede these records. We are distracted by the daily strides of ticking the same boxes over and again and we are not intentional or conscious enough to notice that we are running in circles without acquiring new skills or reinforcing old ones in innovative ways. In most cases, we are just doing the minimum to stay afloat. The famous Yoruba proverb “oga ta, oga o ta, owo alaru a pe” (In English, this means, “the labourer’s wages are complete irrespective of the output”) is our social security.

In a world that is remaking itself every two months, it only takes a short while before we become misfits. Many of us spend years begging for a seat at the table but when we are near the table or are given the seat, we acquire the “good place and good feeling” mindset and provided that there is no threat to the status quo, we do not pay attention to the movements around us which are beneficial to us and others.

In conversation with a senior professional whose track record I find adventurous to say the least, I asked what set her on the

path of innovation and she said that she is daily goaded by the quest to do what has never been done before. For most of us, it is a daunting task, but this is the magic wand that sets us apart.

We need to be uncomfortable with yesterday’s accolades and begin to build tomorrow now.

We need to forsake the distraction of survival and explore the adventure that is growth. There is more and it is each person’s quest to find it, at work and in life. That you are good is not enough; there is more.

Thank you for joining my meditation, please press repeat!

Oyeyemi

OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association.

Feedback – Oyeyemi.aderibigbe@templars-law. com; yemiimmanuel@ yahoo.com.

PHOTOFILE

L-R: DOA Managing Partner, Adeleke Alex-Adedipe with Rapa Thomson Ricky (Co-Founder/Director, @ SafeBoda) at the 2020 Africa Tech Summit in Kigali. www.businessday.ng

DOA team at the 2020 Africa Tech Summit in Kigali. L-R: Managing Partner, Adeleke Alex-Adedipe with Associates, Chika Oke and Simisolu Soyombo.

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

PERSPECTIVE

BD

25

LegalBusiness

Tony Tetuila & Wizkid: why local artists need copyright education CHUBA AGBU

W

hen I first got wind that Ghanaian artist Tic Tac and Tony Tetuila were suing Dj Tunez and Wizkid for alleged copyright infringement, I was instantly drawn to the Robin Thicke, Pharrell Williams and Marvin Gaye dispute over the mega-hit song, “blurred lines”. In this famous case, there was a dispute over the structural and tonal elements of the song. One could assume that in this day and age with copyright law becoming increasingly more mainstream, surely disputes could only arise from more “scientific” elements of musical works. One would be wrong.

The growth of our globally acclaimed music industry is a source of pride for Nigerians, perhaps the industry should look to concurrently enlighten itself on copyright law.

To give a bit of historical context, using past work has always been the essence of songwriting and composition. Entire genres have been spawned off appropriation, for example, Rock & roll has its roots in blues and Fela’s afrobeat style inspired the plethora of afro-pop artists currently active.

However, Decades of copyright

case law have shown us that there is a fine line between what could be seen as an inspiration and what constitutes outright intellectual property theft.

Copyright is contained in the sound recording in both the instrumentals and the lyrics. This reflected in both the U.K. and the U.S.; Thereby importing either will constitute immediate copyright infringement. That being said it is important to note that for infringement to take place a “substantial part” of a copyrighted work must have been used. The definition of substantial varies internationally. That is irrelevant here though because you’d be hard-pressed to find less contentious infringement than this one.

To grasp the principle of substantial similarity, the Unreported Hyperion case serves as a defining authority. In this case an application for summary judgment brought by Hyperion Records who owned the copyright in a sound recording of the medieval chant, “O Euchari”. The main principle this case established was that an artist didn’t have to copy the entire body of work to be guilty of infringement, small segments from the original work could be seen as forming a distinct copyright work in their own right. These segments also had to comply with the sanctity principle, i.e for a sample to be classed as a substantial part it needs to be one that has taken a

defining component of the original author’s work.

Going by this principle there appears to be a lot more than inspiration occurring here. In Tic Tac’s and Tony Tetuila’s song “Fe fe ne fe” The hook of the song goes “Fefe ne fe na the beauty of a woman”.

The lyrics and melody of this hook have transcended a generation and they serve as the reference point for anyone trying to describe the song as a whole. In DJ Tunez and Wizkid’s version aptly titled “Gbese” given the circumstances, this essence so to speak was imported into their track the only difference being that Wizkid was the one delivering the vocals.

This hook encompassing the catchy melody and lyrics is un-

GLOBALREPORT Freshfields retains 90% of spring qualifiers

F

reshfields Bruckhaus Deringer has retained 90 per cent of its qualifying trainees for spring 2020.

The firm made offers to 36 of its 39 qualifiers, with 35 accepting newly qualified job offers.

Training principal Craig Montgomery said: “We are delighted that we are retaining such a high proportion of our February 2020 qualifying intake. This is a real testament to the strength of the lawyers who have qualified with us in this round and we are incredibly proud of their achievements. It also reflects our ongoing commitment to recruiting, retaining and developing top talent for the future.”

The result betters fellow magic circle firm Clifford Chance’s retention result. That firm is keeping on 34 of 40 (85 per cent) this March. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

doubtedly a defining component of the original song and by this metric forms a substantial part of the song.

I hear people also making the argument that lyric “Fefe ne fe” was first used in a song by Fela which is correct, but in the inspiration vs theft context, the Tic Tac and Tony Tetuila version falls squarely in the former. Discerning this does not require technical musical expertise because even the layman can ascertain that the melody and compositional structure used in Tic Tac and Tony Tetuila’s version is significantly altered and there is no confusion as to which is which.

It is evident that if this version was put under forensic scrutiny, based on the aforementioned, it would fail the substantial similarity test.

Intellectual property is evolving rapidly in Nigeria. There was a time when virtually all copyright suits were initiated by the National Copyright Commission. These days we are beginning to see more of these suits being initiated by persons and all it takes is for an artist to get a big payday as a result for the flood gates to be opened. The principle discussed here should be common knowledge and one need not be a lawyer to be conversant with it.

26

Thursday 13 February 2020

BUSINESS DAY

THEBAR

BD

Court Opening: Akpata calls for modern reforms in the judicial system

L

ast week, distinguished members of the legal profession gathered in Asaba, the Delta state capital, to witness the opening of the 17th Division of the Court of Appeal by the President of the Court of Appeal Honourable Justice Zainab Bulkachuwa and Governor Ifeanyi Okowa of Delta State.

Honourable Justice Zainab Bulkachuwa, who is scheduled to retire on March 6, 2020 had led her team of learned Justices and other dignitaries to Awka, Anambra State to commission the 18th Division of the Court of Appeal, in the company of His Excellency, Willie Obiano, the Executive Governor of Anambra State.

Speaking about the impact of the

should not be lost on us that there is still more to be done in our judicial system in order to get us to the preferred destination. For instance, it is important to emphasize that we live in a digital age where information and communication technology is being deployed around the world as a tool to achieving efficiency in the delivery of justice. Therefore, the bench, the bar and all other stakeholders must embrace modern technology by ensuring that our courts are equipped with the full complement of ICT facilities, and our judges continuously trained on how to use these resources.

“We have not yet attained our quest for a society where justice is dispensed efficiently, but we are certainly on track to that destination and I hope that, together as stakeholders in this system, we can put in the right efforts and policies to consolidate the achievements that

new divisions of the Court of Appeal.

Olumide Akpata, Senior Partner at Templars, and former Chairman of the Nigerian Bar Association Section on Business Law, who was present at both events, expressed excitement at what he described as great milestones in the quest for achieving a speedy and efficient justice administration system in Nigeria. According to Mr. Akpata: “I wish to heartily congratulate members of the bench and the bar on the epic milestones that have been achieved this week in our justice delivery system. My sincere thanks also go to the amiable Governors of Delta State and Anambra State, for the very key roles that they played in ensuring the actualization of Asaba and Awka Divisions of the Court of Appeal. This is good news because it instills confidence and hope that disputes will be resolved more speedily than in the past”.

Before now, Delta State was under the coverage of the Benin Division of the Court of Appeal while Awka was under the coverage of the Enugu Dvision. Mr. Akpata remarked that this arrangement not only translated to a lot of work for Their Lordships in the Benin and Enugu Divisions of the Court, but also entailed huge expenses for legal practitioners as well as litigants outside Edo and Enugu States who had to embark on long and tortuous journeys in order to attend court. So “these new divisions of the Court of Appeal is a very welcome development, and I am certain that they will go a long way in decongesting the dockets of the Benin and Enugu Divisions of the appellate court and enhancing a speedy dispensation of justice”, Akpata said.

Continuing, Akpata said, “while we are celebrating these achievements, it

we have seen this week in Asaba and Awka” Akpata concluded.

Re: Police brutality…

In another development, Olumide Akpata has raised his voice in condemnation of police brutality across Nigeria.

Disheartened by the abuse of a lawyer, Ibangah Goodness, Esq. the bar leader described the continuing acts of abuse by the police as horrible and inhumane.

According a report made to the Nigerian Bar Association, the victim was rascally abused and beaten to a critical condition where she nearly lost consciousness. the report revealed that act was done to the victim while she was on official duty for WACOL, a Non-government Organization in Enugu, by men who are believed to be officers of the Nigerian Police Force.

In his words Akpata said, “I categorically condemn in entirety the actions of the Police officers and call on the Commissioner of Police, Enugu state Command and the Inspector General of Police to take expedient actions in bringing these culprits to book. I call all national and international organizations, civil societies and all lovers of human rights, specifically, women rights, to take stronger stand against this form of abuse and attack on Ibangah Goodness as a person and women in general.

“To my colleagues in the Bar, it is no longer time to keep quiet in the face of harsh treatments like the one meted against our colleague in Enugu. Today, it is in Enugu, today, it is against Ibangah Goodness, Esq, tomorrow, no one knows who it may be; it may be you or I. I would not wish this ill act to be done on anyone talk-less of it being done against a member of this noble profession. Justice for one is justice for all. I, Olumide Akpata stand against any form of violence against women, he said with a note of finality.

He wished the victim, Ibangah Goodness, a quick and healthier recovery.

O

LegalBusiness

LAW FIRM VACANCY

ur Client, a reputable Law Firm in Lagos, is currently in search of a lawyer with a minimum of 10 years post call experience in Company Secretarial Practice and Governance Consulting. Possession of LL.M and ICSAN certification is an added advantage. Law Firm experience also an added advantage.

Remuneration package is highly competitive.

JOB DESCRIPTION: • Maintaining the statutory books of client companies as may be necessary; • Filing returns at Corporate Affairs Commission on behalf of client companies, as may be necessary; • Filing from time to time, as may be necessary on behalf of client companies, all regulatory/statutory returns as may be required; • Arranging meetings of the directors and the shareholders of client companies, making necessary arrangements for the convening of such meeting, providing guidance in accordance with applicable laws and constitutional documents at such meetings and taking and producing minutes of the business transacted at such meetings.

• Advising client companies and their respective boards on company administrative and regulatory requirement; as well as contractual rights, significant changes in the company’s structure or management and obligations where applicable.

• Conducting Board inductions/Orientation and supervising the process of on-boarding new directors onto their respective Boards • Conducting Board evaluations • Facilitating Board Strategy Sessions • Preparation of Corporate Governance policies • Preparation of Governance documents • Developing Governance frameworks/structures for organizations • Advising clients on company law and corporate governance issues • Ensuring clients are kept abreast with new/relevant regulations, developments and trends. • Supporting supervising Partner on business relationship management by engaging in marketing and business development activities to improve the financial growth of the practice area.

• Resolving legal issues presented effectively and without guidance • Driving strategy development and implementation for the practice area. • Assisting with key external relationships including government and regulatory bodies etc.

• Assisting with the development of team and firm wide legal and risk strategy • Reviewing and supervising legal work within the team with primary focus on company secretarial services • Provision of other services as may be from time to time required of the Company Secretarial function of a company.

SKILLS • Excellent technical knowledge • Excellent communication skills and presentation skills • Good leadership and team building skills • Strong commercial acumen & negotiation skills • Have an awareness of business strategy • Able to transform legal issues into a workable solution within a business context • People management skill • Ability to work under and manage pressure • Ability to use Microsoft office suites APPLICATION: All qualified and interested candidates should forward CV to recruitmentbase@gmail.com on or before February 21, 2020.

Only shortlisted candidate will be contacted.

Thursday 13 February 2020

BUSINESS DAY

27

Garden City Business Digest How bubbling PH port may soon boost GDP of SS/SE states • Deep seaport is the way to go as the present river ports may fizzle out soon Ignatius Chukwu

I

nvestors and business owners in Rivers State seem to be excited and happy over the resurgence of the seaport in Port Harcourt in recent weeks.

This is as the investors have also explained the fears of the fate of river port system in Nigeria at a time the world is moving to deep seaport system that cuts down cost of shipping.

For years, the PH port has been neglected and under utilized but recent upsurge has caused huge activities and many ships now berth in Port Harcourt port and Onne. The claim that draught was the problem of the Rivers State port had been used to suppress the port while those in Lagos prospered. Now, big vessels are calling in Port Harcourt, it has been revealed. The port is expanding in activity daily, they said.

In an exclusive interview in Port Harcourt, an investor and president of the Rivers Entrepreneurs and Investors Forum (REIF), Ibifiri Bobmanuel, said the business community is excited by the resurgence at the port. Giving a background, he said; “Rivers State hosted the first river port way back in 1912 before Lagos ports. Port Harcourt is the only city that

was conceived with a sea port.

As far back as 1912 to 1960, we had railway lines from far north to seaport in PH streaming with containers of agric products to the port. It was a major economic stay in this part of the country and Nigeria.

“As economic watchers and investors (REIF), we were pained knowing that the seaport that should have anchored the economy was shut down. We are a research-based organisation and conduct researches to find out how best to solve this problem. When we did one on seaports, we found that the seaport in PH has absolutely no issue. It had been touted that the draught was not deep enough.

“We tried to engage the

government for many years ago but they were adamant.

It is now that a situation arose in Lagos that PH port got noticed. So, vessels that ordinarily would have been calling Nigeria for about 28-40 days were now calling the port in 120 days and it became unbearable. The FG was losing huge resources and it got to the point when they now had to look for alternative. Thank God that the NPA today is receptive to ideas. “ He said the state government tried to repair the port road as was contained in a submission by REIF after the governorship debate in 2015.

He said the presidency at a time said the draught was too low but that REIF insisted that

it was not so, based on valid research. “ But now, we have have different vessels calling the port in PH. This is the same issue with Onne Port. One of my companies took delivery of 20 units of containers from old PH port. I was overwhelmed with joy. We have two controllers there now. That will tell you the size of belief and trust the FG has in PH port now, a port that was almost lost. The port is running very well and fast. Going on information we have, in the next 12 months, if this trend continues without further sabotage, we believe that is going to change the face of the south-south and east. The GDP of Nigeria will change fast.’

He said the economy of the

south-south and south-east would soon expand as goods now get to the region faster and cheaper.

On the warning by the director of operations in the Nigerian Ports Authority (NPA), Rivers-born Sokonte Davies, that the port in PH may soon be suitable only as a fishing port due to low draught and unrepairable facilities, Bobmanuel said the director was not understood.

He explained: “Sokonte is an authority in the maritime today because of the office he holds and we commend him for some sincere efforts he has driven. What he must have meant is that in the country Nigeria, we have only river ports. There was no concept

around deep seaports. Now, rivers ports carry certain limited vessels. There are very few deep seaports in Africa, but the trend has gone away from river ports.

“We in REIF have seen this and taken some actions. Davies may mean that, look, in the next 10 years, shipping companies would shift to very big vessels that carry 10 times what the small vessels now carry. Ship owners want to cut cost and this by shifting to very large vessels of about three km stretch. They use the same tech and engine and diesel but carry many times over. That is the dynamics. The disadvantage here is that such vessels can’t call in river ports like the ones in Apapa, PH, Onne, because of navigational constraints.

“So, what he was saying is that river ports will soon go.

The FG has to get into deep seaports. Where 500 ships would go, only 50 very large vessels will do it with far less cost. We need to wake up and catch up with the trend. If not, smaller countries such as Benin Republic, Togo, Ghana, will take over the traffic. What is helping us is the huge market Nigeria still has and most goods heading to Africa are for Nigerian markets, up to 55 per cent. Futuristically, we need to have deep seaports.

It will mean that we will be competitive.

Is the predicted ‘Rise of the Caliphate’ here?

Port Harcourt

by Boat

IGNATIUS CHUKWU

S

ome 15 years ago, a research group in the US studied global trends and came up with two striking predictions; Rise of the Dragon; and Rise of the Caliphate. Rise of the Dragon is the prediction that the US and of course the entire world should expect a time in about 25 years from then that the Chinese economy would be the biggest; bigger than even the Us economy.

The study examined all aspects and growth rates of the Chinese economy and future prospects, all in relation to whatever any other country or the US was doing. They calculated all of this and found that China would overtake every country in 25 years from some 15 years ago.

Today, the truth is dawning on all nations. The study also suggested action lines for the US, one of which was to hang on to military supremacy through weapons research and development to create balance of power.

The second prediction, Rise of the Caliphate, is our focus for today. It foresaw a time when almost every country would have Islam-induced terror. It would become so wild-spread and pervasive that it would take huge attention and

budget of every country. For years, many cells existed in key Arab nations and huge amounts and estates have been bequeathed to the effort to Islamize the world.

Islam is said to operate on two major prongs or families that have grown into two global factions. One is the faction of the followers of the son of Prophet Mohammed and the other is about the followers of his brother. It was written that when the Holy Prophet died, the followers argued over who should be the rightful successor. This debate also happens in most one-man churches to this day, though many have used specific declarations and filings at the Corporate Affairs Commission to douse this phenomenon after the debacles of the death of Benson Idahosa.

Often, a brother, close relation, or colleague of the founder may so buy into the vision. He may labour so much and know so much about the operations of the church that he would appear to be the natural successor. On the other hand, the founder’s son, though far, may seen as the true heir to the estate or the church. Many followers may feel that he should take over his father’s inheritance. This creates division and fiasco may set in.

So it was that this argument in the house of the Holy Prophet allegedly caused a division or war; today, you have the two groups (Shiite and Sunni) fiercely opposed to each other globally.

Despite their disagreement, they are united in one objective as left behind by their mentor; the conquest of the entire world by Islam, no matter the means; at least this is how Christians understand it. Many rich Arab men are said to will away huge sums to such objective. The American researchers thus concluded that the use of terror as a weapon for this objective has become huge and that it would soon lead to a global challenge.

www.businessday.ng

When this prediction was made, nobody said Nigeria was exempted, or that Muhammadu Buhari was a factor. It amounts to wrong analogy if anybody limits this matter to one Buhari or one Fulani man or to Nigeria alone. ISIS is a global organization bent of creating Islamic states around the world as means of taking over world leadership; Buhari or not. The Nigerian elites know this but it seems to serves them better to encapsulate this understanding to suit a different objective; Buhari as an Islamist. I have no reason to believe that Buhari is not an Islamist, but whether he is Islamizing Nigeria from Aso Rock and with violence is beyond this writer’s understanding.

What is clear is that every Islamist would want to turn his enclave or country to Islam just as it is expected of every Christian to evangelise his area. The north seeks to Islamise the south, the sout seeks to evangelise the north. Doing this is no crime but using violence or breach of the 1999 constitution to do it is wrong. Sponsoring crusade is not bad, sponsoring house-to-house preaching is not bad, but sponsoring killers or injustice to win soul for your religion is a crime, both on earth and beyond.

The focus of this write up is one, to show that the prediction of the coming of Islamic terror was predicted far before Buhari came to the throne; two, that it is not just a Nigerian phenomenon, it is a global one; three, that no matter what Buhari or any president does, the terrorists will continue to press. The earlier we see it this way, the better.

Islamic terrorists use different strategies in different countries. In Nigeria and Africa where security is weak, they conquer territories and spring from there to seek spread. In the Western world where they cannot create a camp, they use the Lone Wolf system. This implies allowing the strikers to operate alone and use instructions to strike. That is why they kill more than twice in

https://www.facebook.com/businessdayng

the US than in Nigeria, if you add school shootings. In the US, they hide under the right to gun to operate but not in camps and territories. In Europe without gun rights, they use knifing and trucking. This way, they use killer-knives to strike at lonely places such as bridges. They drive trucks into crowds.

In Nigeria and Africa, the terrorists can easily create a territory. At a point in Nigeria, they had control of over 25 LGAs. Even if you drive them out, you can’t kill all of them because BH or religious radicalism is in the heart. You can only degrade them. It is headquartered in the heart, from there to a cell, from there to a camp, then to a territory, then region, nation and from there they attempt to conquer a group of countries from where they want to launch global attempt.

So, when actually do you say you have conquered BH or Islamic terrorism? All we do is to misunderstand and misjudge them, and turn round to pay for this. GEJ did, Buhari did. We all do.

Buhari will go, but will BH and other Islamic terrorists go? The trend is to accuse one another, vote out presidents as we did and as we are likely to do again, but after about four dethronements, we will surely realize that it is not about a president but our understanding of what is facing us.

It is about a terror that we all should unite to fight.

Politicians do not seek to solve problems, but to exploit it and replace the party in power. Buhari and APC did it, somebody will do it to them, but the problem will persist, until we arrive at the point of understanding that it is a war between us and them. It is defining who is the ‘us’ or ‘them’ that is the problem. For now, we think it is about Christians versus Muslims; North versus South; Igbo versus Hausa, rich versus the poor, etc. Far from it! Soon, when we are all tired of lying to ourselves, we will get the true definition, which is staring us right in the face, anyway.

@Businessdayng

28

Thursday 13 February 2020

BUSINESS DAY

Investing in Rivers State 20 years on, ABEC schools anchor on producing world beaters at cheapest fees with best morals for homes • Founder, Christie Toby, says profit is not basic motivation Ignatius Chukwu

O

ne of the household names in education in the Niger Delta, the Archdeacon Brown Education Centre, popularly, popularly called ABEC, named after a popular Anglican Bishop who died years ago, has been in the news in the oil region for marking 20 years. was established on the 10th of January, in the year 2000. Now, the owners of ABEC say their students are making Nigeria proud in most universities in the world and have impressed the highly specialized US Navy.

Background The executive director of ABEC grou, Ibim Semenitari, former commissioner of information in Rivers State and one time acting managing director of the Niger Delta Development Commission (NDDC), who addressed a press briefing to kick-start the anniversary, gave the background.

“From a humble beginning, that first seed that was planted 20 years ago, that leap of faith known as ABEC Nursery and Primary School beginning with two pupils, has like the proverbial mustard seed, grown into a phenomenon known as ABEC group of schools with a population of nearly a thousand students, across six schools.

“Born out of the desire to provide a model as to what education should be, ABEC Group of Schools has continued to shine as a beacon of hope, excellence, quantitative and qualitative education, and a platform upon which tomorrow’s leaders strive and thrive for excellence.

“From its nursery, ABEC group of schools is steadily towering towards its apogee breaking new grounds every step of the way. It now has six schools: Archdeacon Brown Education Centre Nursery and Primary School; Archdeacon Brown Education Centre Secondary School (Boarding); Mary- Virginia Nursery and Primary School; Christie Toby Inclusive Education Centre; Archdeacon Brown Advanced Level Centre; and Archdeacon Brown Education Centre Secondary School (Day).

L-R: Ibim Semenitari (executive director of ABEC; her dad the chairman, GTB Toby, and her mom, Christie Toby, the managing director)

“The nursery school, regarded in the group as the mustard seed, has continued to evolve in leaps and bounds. It officially opened on the 10th of January 2000 and dedicated by the then bishop of the Niger Delta diocese, the reverend, G.H. Pepple, the school has been a perfect example in all ramifications. From the traditional school examination to various competitions, ABEC Nursery and Primary School has continued to be the same story of outstanding success.

“Some of the qualities which rank the school top among its contemporaries at both the national and international scenes are: Robust academic content which comprises the trio of Nigerian, British and American curricular; Adequate and modern learning facilities that aid the transfer of knowledge and learning; beautiful and conducive learning environment; qualified and highly trained and self motivated staff; good remuneration packages for staff; being compliant with statutory and regulatory standards for educational institutions; having optimal stakeholders participation, involvement and intervention; adoption of mod-

www.businessday.ng

ern technology in every facet of the organization; provision of opportunities for staff continuing education and career development; and rich and appropriate mix of programmes and activities which boost the holistic development of learners and staff alike.

“The school is known in the region for awards and championships especially in Mathematics. The secondary school is known for posting distinctions in Further Mathematics and other science subjects despite zero tolerance to exam malpractice. The school paints the world red with first class graduates.

“ABEC has produced students that beat their peers in the best universities around the world, including those now in the US Navy due to outstanding performances and those that are now on scholarship in the best universities due to high grades in their first and second degrees. She glorified the name of the lord for ABEC to clock 20 years with outstanding performances.”

Founder, Christie Toby He mother, the founder and managing director, Christy Toby said: “I am excited that this experiment is now 20 years old. We are actually celebrating God’s faithfulness because when we look back and see our kids now raising their own families, we feel good. There is still much to contribute to education because it is still the only way to eradicate poverty, to burn the excess energy in the youths towards better results.

“ABEC is a mini Nigeria because we have students, parents and staff members from all parts of Nigeria, Christians and Muslims. We have parents from all parts of the world; a blend of Nigeria, British, American.

It is a detribalized centre. Uniting Nigeria is doable, if government can team up with the private sector. Lets respect and appreciate each other.

ABEC is ready to give what it takes to deliver quality education.”

https://www.facebook.com/businessdayng

Problems of public service Speaking on why people with great initiatives like her usually ran away to the private sector, she said; “There is no continuity of work or initiative. There is redtapism that does not allow good ideas to be nurtured. I tried to introduce some ideas but was discouraged. They see everything as not doable.

“I left the public service to prove that my ideas were doable. They always press you down in the public service.’

Name of School On how she chose the name, her father’s name; “My father chose a profession for me (teaching) but not for any of his other children. So, at a point before he died, he asked me if I forgave him. I asked him for what?

He said for choosing a career for me. I said, oh no, that I was happy and that I had even bought a plot of land. He asked to do what, I said to start my own school one day. He said oh, what name would you call it? I said, your name of course. He shouted happily and blessed me. He said he saw I was a natural teacher.

“My father always saw my husband as and called him his son. He valued my husband and my husband supports the name of the school and is very happy with it.

How we handle cultism: “We monitor the children. If we notice strange behaviour, we investigate and if reasonable ground exists, we suspend the one, and on extreme cases, expulsion is applied. Also, we make our rules clear, but we take no exception. Cultism starts with traces.

You follow it that time. Of course, children will be children, but if they try, they find there is no way. There are hostel parents who live right with them. They observe them, do their assignments, etc.”

Welfare of teachers: “There is salary scheme and condition of service clear to anybody coming in. There is @Businessdayng

pension scheme too. Our teachers are happy and they put in their best. They can confirm this behind us. Good education is here, and that is the best for your children.”

Why blind students do well: “They have few distractions. That is why one wrote WAEC from SS2 and made outstanding results (As and Bs). There is an erroneous conception that studying with disabled students will soon disable you. Its not true at all. Rather, it helps both to develop better and fuller. It also helps normal students to understand sign language. In ABEC, every child must learn sign language as another additional language.”

Gabriel Toby We say no to academic robotics We have a very competent team who go beyond the call of duty. It is about adding the blocks. We are proud of what we have done. We produce self-confident scholars and we have zero-tolerance for exam fraud, yet, they record distinctions (A1s) easily. What we have are people with high grades and self-confidence.

They are at home with computers and digital works. They are the ones teaching their grandparents. We are farming humans.

Swimming: We ensure that a student cannot study in Rivers State without being a swimmer. Music is also important in the school. We say no to enclosement mentality; no to academic robotics. Its important to develop other talents in the children.

ABEC is a top school with moderate fees. Profit is not the basic motivation. So we charge the lowest fees for schools in our class.

Future Semenitari said digital classrooms and virtual classrooms to be linked to schools around the world are the next steps. “We produce students that graduate with first class in universities around the world. We build a culture of giving back.

“Discipline and moral strength are our core values. This place is centre for external examinations and scholarship examinations. With 250 computers at a time, there is steady light.”

Challenges; The MD, supported by the chairman, mentioned the major challenge facing the education sector or genuine education investors as the growing appetite for cheating, fraud and examination malpractice. She said most Nigerians these days would hardly trust any transaction that did not take care of fraud in the form of sorting, exam malpractice and cheating. She said the school’s insistence on zero-malpractice and zero-payment for sorting has scared away many schools, though she said it has brought good name to the school.

They mentioned other challenges as parents who prefer high fees to show class, funds to continue high quality education, proliferation of schools which has led to sub-standard schools that use ways and means to get high grades for students to the admiration of unsuspecting parents.

Thursday 13 February 2020

BUSINESS DAY

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

29

In association with briu@businessday.ng

08098710024

Tech and social media giants: the platforms for businesses to thrive ADEMOLA ASUNLOYE

M

any businesses in the world today, particularly in Nigeria, have been thriving on social media websites and applications.

This duo, typically called social media, has birthed businesses as well as increased consumers/clients base across the globe through network, messenger, chat app and voice over Internet Protocol (VoIP).

The likes of Facebook, Instagram, WhatsApp, Snapchat, Pinterest, Telegram, Messenger, and Twitter to mention but few, have saturated the social media space, even in Nigeria.

Technology—an agent of social change leveraged by social media, has enhanced the speed of communication, facilitated mass production and services, reduced dramatically physical labour and has entangled the world into a global market where geographical location is less becoming a barrier.

In Nigeria, social media has affected businesses across sectors and industries: transport, food and beverages, textiles, utilities, real estate, trade, education, business services, health, media, aviation, among others. The development of apps has made the use of social media even more irresistible.

Some giants have taken over the new idol—social media—as more and more people troop in daily.

According to Statcounter, and Social Media Trend report by Hootsuite, in terms of both the market share and number of users in the social media space worldwide in December 2019, Facebook stands out across the globe with 64.22 per cent share of the social media market and having over 2.1 billion users (active users, user accounts,or unique visitors), according to the December 2019 report.

Facebook figures reported here are not comparable to those in our previous reports, and any change to reported figures may not reflect an actual change in active Facebook user numbers. *These platforms have not published updated user figures in the past 12 months, so figures may be less reliable. ** These platforms do not publish MAU data.

Source: Hootsuite Twitter is another social media giant with a share of 12.96 percent of the total social media market.

However, according to the recently published social media report in December 2019 by Hootsuite, Twitter recorded a low number of users to the tune of 336 million.

Another giant by market share is Pinterest with a market share of

10.97 percent but a very low user base of 200 million. Next to it is Instagram and YouTube with 7.05 per cent and 3.79 per cent share of the market respectively.

YouTube is next to the giant master (Facebook) with 1.9 billion users, while Instagram recorded 1 billion users.

Among social messengers/ chat app/Voip only, worldwide, WhatsApp leads the pack with 1.5 billion users. Following closely is Facebook Messenger with 1.3 billion users and QQ with 806 million users; while others have less than 350 million active users in the same period.

In Africa, Facebook dominates by more than half of the total market share at 64.22 per cent. Twitter, Pinterest, Instagram, YouTube and

Messenger/Chat App/ VoIP Social network Source: 2018 Q3 Global Digital Statshot. Data correct to: 18 July 2018.

NOTE: We have revised the approach we use to report Facebook’s active user numbers since our previous report. As a result,

www.businessday.ng

https://www.facebook.com/businessdayng

Tumblr followed in terms of the market shares in that order about the same period.

In Nigeria, competitors are unwilling to give in as Facebook leads with 49.8 per cent of the social media market share. Twitter controls 24.38 per cent, Pinterest at 11.82 per cent, Instagram at 11.26 per cent, while YouTube and LinkedIn have a combined market share of less than 3 per cent, according to Statcounter. During the period of our analysis, Twitter overtook Tumblr in Nigeria.

Facebook is a social networking company registered under the name of ‘Facebook, Inc. In the United States and it which allows its users to communicate with other people. Founded by Mark Zuckerberg in 2004 with a vision of designing a media platform for college students; the progress graph of Facebook now sees it in 37 different languages. The social media giant launched three key public features: marketplace, groups and events.

The rise of social media stories has created a creative and engaging shift in visual storytelling.

From Instagram to Snapchat stories, Facebook stories and many more, social media has not just become a daily toolkit but it has transcended into an every-minute toolkit worldwide. On the top list is WhatsApp Status with 450 million daily active users

@Businessdayng

Source: Hootsuite, BRIU Although Snapchat started the story era with Snapchat stories, within a short space of time, other media platforms have adopted it as a key way of sharing content.

A working strategy of Facebook, which bought over WhatsApp and Instagram, is the pivoting from text-based platforms originally designed for desktop use to mobileonly networks that enable users to capture in-the-moment experiences and stories. As a result, 1 out of every 8 minutes online is spent on Facebook, making it overtake Google and Yahoo in total time spent online. The giant is becoming more recognizable as the number of active member increases.

As the top choice for social sign-in, 93 per cent of adult internet users in the US are on Facebook. Discounts and special offers drive users’ participation on Facebook and it is the top reason they “like” the brand. Also, surveys showed that Facebook users “like” a business or non-profit’s Facebook page because they want to show their support.

Businesses trying to achieve successful social media marketing on the giant social media platforms must overcome several common challenges to solidify branding, create quality leads, and drive sales.

Businesses need to adopt some key strategies in order to leverage social media marketing: First, identify your objectives using the SMART strategy. Second, it is very important to identify, research and learn about your audience.

Third, you need to select your preferred platform like Facebook, Pinterest, LinkedIn or Instagram among others. Fourth, to attract viewership, craft your social media content carefully. One strategy that should never be misspelled is consistency; be consistent! Video content is the in-thing in today’s world, so add that up too.

As there are no exhaustive lists of all that is needed to have a successful business on social media platforms; take time to surf the internet for information. Remember that, even though Facebook is the main social media giant, it may not be the best platform for your business—you will need to learn the various purposes and appropriateness of each of the social media platforms.

30

Thursday 13 February 2020

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

E-COMMERCE

Nigeria ranks low in e-commerce as consumer spent $44 on electronic purchases BALA AUGIE

N

igeria ranks low as an ecommerce nation, with average revenue per user (ARPU) going towards consumers sitting at around $44 a month, according to a report by Hootsuit.

The country lags behind South Africa’s $109, Egpty, ($96), and Ghana, ($59), as young Africans continue to leverage on the proliferation of the internet and mobile phones to make on line purchases.

The report stated that of the 44 countries it analysed, in the digital the six African countries featured all rank in the bottom 10, as European, Asian, and United States consumers have a higher disposable income as evidenced in synchronized economic growth.

In recent times, online shopping is increasingly becoming a culture in Ni-

geria because of its smooth transaction and delivery and discount offers that consumers do not ordinarily get from local store.

Experts say the proliferation of internet service and smartphones have help add impetus to the platform.

According to internet World Stats, Nigeria’s total internet users stood at 111.6 million as at the end

of March 2019, as the country’s internet users grew the highest by 55,716 percent in the last 19 years.

The reports stated that the country now ranks 7th in terms of countries with the highest number of internet users in the world.

Nigeria currently has over 172 million mobile subscribers according to the NCC figures, adding

that it may rises to over 201 million by 2025, according to a recent report by online giant, Jumia.

“There were over 5 billion unique mobile subscribers globally in 2018 adding that 60% of the connection was through smartphones.

Internet users peaked at 3.6 billion; that is, almost half of the world population had mobile internet access.

It is predicted that Nigeria will contribute 4 percent of the estimated 700 million new global mobile subscribers, making it the only country in Africa marked with a significant contribution to increasing mobile penetration in the world.

By this quota, it is expected that 28 million new mobile subscribers will emerge from Nigeria between 2019 and 2025, that is, an average of 7 million new mobile subscribers annually, if the country is to meet its quota.

However, the e-commerce industry is beset with challenges such as lack of skilled workers, building online trust, retaining customers, generating targeted traffic, product delivery, and quality control.

The harsh and unpredictable macroeconomic environment has deal a great blow on consumers whose purchasing power are increasingly being eroded by rising inflation.

Nigerians are getting poorer as over 50 percent of a population of 200 million

live on less than $1.98 dollars a day, which means they have little in their pockets to go shopping.

According to data from Fitch solutions, household income is estimated to have grown by 8.8 percent year on year to $4,252 in 2019 from US $3,908 2018. 2019’s 8.8 percent years on year growth comes comes in lower than the 10 .7 percent years on year (y/y) growth in 2018.

Inflationary pressures and the hike in fuel price continue to hurt consumers’ ability to increase expenditure which in turn continues to pressure consumer companies’ revenue.

Inflation for the month of December accelerated to 11.98 percent, the highest in 7 months as price of basic food stuffs skyrocketed on the back of border closure.

High level of unemployment at 23 .1 percent as at Sept 2018 and poor job creation continues to pressure expenditure levels. Only one out of five of a new labour force can get a job.

consumer spending

Guinness’ H1 sales hit N68.3bn, records double digit in Smirnoff Ice, Spirit segments OLUFIKAYO OWOEYE

G

uinness Nigeria Plc said its revenue and profit continued to face market headwinds in the first half of the year.

Diageo-owned reported a tepid rise in sales for the six months to the end of December. Sales rose by 1percent to N68.3bn from N67.8bn in the same period in 2019, driven by doubledigit expansion in brand Guinness and its spirits portfolio. Operating profit fell by 23percent to N3.6bn due in part to the marginal sales increase.

Net Finance cost surged

92percent in the first half to N1.6bn as a result of a 144percent increase in the first quarter. Net finance

cost in Q2 was 39percent.

Net profit fell by 49percent to N1.3bn from N2.6bn in the previous year.

www.businessday.ng

The company blamed the marginal sales rise on the effect of the excise duty increase on sales and the absence of pricing opportunities in the half.

Speaking at the company’s investors conference call, Baker Magunda, managing director/chief executive officer Guinness Nigeria said the Guinness brand and the spirits portfolio grew at strong doubledigit levels in H1, with solid performance in local malts reinforcing the increased revenue.

He said the company saw continued growth in its Smirnoff Ice, but had a bit of difficulty on Orijin RTD. Malta Guinness, which

https://www.facebook.com/businessdayng

is another big area in our business, had a very difficult quarter 1 but had significantly improved in quarter 2 as well.

“The Lager segment remains difficult, it’s an area that we are careful in how we invest and push because of the thin margins in that category. However, as we mention in our strategy, we will be innovating into premium lager. We’ve gone the craft innovation we’ve gone into, so our Gold, Guinness Gold, are still in one city, Lagos and doing very well,” he said.

C o n su m e r re sp o n s e is very good, the trade is endorsing the brand so we feel that we have got @Businessdayng

the right strategy on that as well, to slowly exit the value end of the market and innovate at the top end of the market, and in certainly Guinness Gold which has given us a real reason to believe.

We continue expanding our mainstream spirits portfolio range. Orijin Gin has gone in and that is going well. Baileys Delight, the version of Baileys we produce in Nigeria, that has also gone really well. It’s settling in very well. So, we are pleased to see that the innovations we are putting in are beginning to respond in the way that we wanted to do. So, that’s on the innovations.

Thursday 13 February 2020

Innovation

Apps

BUSINESS DAY

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

31

TECHTALK

Broadband Infrastructure

Bank IT Security

Nigeria’s manufacturers can make a fortune from machine vision

ery of certain products and services.

Integrating a machine vision system on a production line can enable companies to inspect hundreds, or even thousands, of parts per minute.

“Where the human vision is best for qualitative interpretation of a complex, unstructured scene, machine vision excels at quantitative measurement of a structured scene because of its speed, accuracy, and repeatability,” Moru said. “Without questioning, technology has advanced the service and communication sectors a great deal, in major cities in Nigeria. However, there is still a lot to be done. If you look into the industrial sectors, you would observe that there are already some levels of quality control inspection going on, even only at a small scale and manual. The benefits of machine vision inspections are limitless.”

While machine vision integration may require some hefty capital, but considering the loss of revenue manufacturing companies incurs due to poor quality services, companies will benefit more from an improvement in this area. However, not every machine vision application is capital intensive.

Already most companies are carrying out some level of inspection processes before products are dispatched for public utilization. The difference is in the degree of detail.

What a human eye will not easily see, a machine can spot. Moru suggests being open enough to consider and discuss what kind of quality control inspection that should be applied for every process.

“A machine vision system built around the right camera and optics can easily object details too small to be seen by the human eye,” Moru said. “These camera and software are affordable.”

For companies just starting the journey, Moru recommends taking small steps. In terms of sourcing local talents, Nigeria is one of the laggards.

However, the new School of Science and Technology of the Pan Atlantic University (PAU) is positioning itself to breach the gap between the academic world and the industrial sector. It will be the first school to groom such talents in West Africa.

Moru who is part of those championing that project says PAU plans to incorporate engineering students into the industrial streamline right from the start of their academic careers so that by the time they are graduating, they would be well prepared to face the challenges of the industry.

“I think that this form of education exposes both the academic institution and the industrial sector to a new world, and hence can wage possible ways for collaboration, research and investigation, which most times industries lack time for, even when they have the resources.

My experience doing research at the CEIT-IK4 research center at the University of Navarra Spain fills me with the conviction that things can improve in Nigeria. Machine vision applications in the industries imply low cost, accepted accuracy, high robustness and speed, high reliability and stability in comparison with manual industrial inspection processes,” he said.

refrain from cyber bullying, as well as what to do when encountering questionable content on the internet.

“Beyond our own products, we also want to help kids learn how to be safer, more confident explorers of the online world. We joined with the Public and Private Development Centre (PPDC) and the National Orientation Agency (NOA) to hold SID events in 36 States towards empowering teachers, parents and younger children to better understand and navigate the Web with confidence,” said Seember Nyager, Policy & Government Relations Manager, Google Nigeria.

Google also launched the Digital Parenting Initiative, a program aimed at educating guardians, teachers and families on online tools that bring families together to learn, have fun and be safe online.

Garba Abari, director general, National Orientation Agency (NOA),

represented by Mette Edekobi, director, special duties, NOC described the safer internet day as “a great opportunity to promote internet safety across a range of audiences and is an event which we strongly support.

We are really glad to be collaborating with Google and our reliable partners, PPDC, to launch these initiatives.”

On her part, Nkemdilim Ilo, CEO, PPDC said the “Safer Internet Day brings schools, parents, teachers and industry together to make sure children have the power, information and resilience they need to make safe and informed choices online, With the support of Google and the Government we have been able to infuse online safety courses into the Nigerian school curriculum.

This will teach children the practical and emotional skills they need as they navigate their way through the digital world.” Ilo added.

FRANK ELEANYA

A

growing global competitive landscape and evolving customers’ expectations are driving manufacturers to invest new capital in modern technology.

Along with artificial intelligence, deep learning, businesses are also embracing machine vision as the fourth industrial revolution takes firm hold in manufacturing processes.

Machine vision is literally the ability of a computer to see and process information about what it sees. It relates to all industrial and non-industrial applications in which a combination of hardware and software provides operational guidance to devices in the execution of their functions based on the capture and processing of images. It is similar in complexity to voice recognition - the ability of a machine or program to receive and interpret dictation or to understand.

It is important to make the distinction between machine vision and computer vision although they are overlapping technologies. A machine vision system requires a computer and specific software to operate while computer vision doesn’t need to be integrated with a machine. It is also different from machine learning in that the latter is an application of artificial intelligence that provides data the ability to automatically learn and improve from experience without being explicitly programmed. Machine learning can be used to program machine vision systems in some areas.

Desmond Moru, Computer Vision and Robotics Department, CEIT-1K4 Research Alliance, TECNUN SCHOOL of Engineering University of Spain, uses the example of a fill-level inspection system at a brewery to define machine vision.

“Each bottle of beer passes through an inspection sensor, which triggers a vision system to flash a

blinking light and take a picture of the bottle. After acquiring the image and storing it in memory, the vision software processes or analyzes it and issues a pass/fail response based on the fill level of the bottle. If the system detects an improperly filled bottle i.e. a fail, it signals a rejection of the bottle. An operator can view rejected bottles and ongoing process statistics on a display simultaneously.”

How it works By using one or more video cameras, analog-to-digital conversion (ADC), and digital signal processing (DSP), a machine vision system produces data that gets sent to a computer or robot controller. The data sent is based on the set-up process, whereby one “teaches” the machinevision system, defining what is good or bad, or outside of limits. The camera/computer visually looks at a part and is programmed to indicate whether the process should proceed, stop, or adjust. If it is outside of boundaries, the program is triggered to throw up a flag.

A few global manufacturing facilities have used machine vision systems since the 1950s, but it began to expand in the 1980s-1990s.

A BCC Research data gives an idea of how big the space is, by pegging the global market for machine vision system components at $19.0 billion for 2016 and an estimated $30.8 billion by 2021.

For Nigeria manufacturers’ spend on technology has often competed with the rising cost of production.

The bulk of the manufacturing establishment in Nigeria is located in the urban area with epileptic national power supply, whereas, the source of the raw materials which is the rural areas are devoid of essential facilities and poor road networks for the easy conveyance of raw materials to the urban centres. The result is the high cost of production.

However, recent technological advances in the country such as mobile phone and broadband penetration as well as increased spending on infrastructure development have seen manufacturers begin to inject more capital in improving their technology.

“I am sure machine vision is the next big thing,” Moru told BusinessDay. One major advantage of machine vision is quality control in the deliv-

Google’s $1M grant targets internet safety for children … Announces online safety initiatives, tools CALEB OJEWALE & GBEMI FAMINU

T

he safety and privacy of children while surfing the internet got a boost in Nigeria this week, when Google announced the launch of a $1 million grant to organizations in Africa that engage in ensuring safety, privacy and trust in the digital space.

There is no doubt that the Internet yields numerous opportunities and benefits for children in terms of its impact on their educational attainment and social inclusion. However, it has also exposed children to dangers that defy age, geographic location and other boundaries that are more clearly delineated in the real world.

This has resulted in risks to children and young people of having abusive images of them shared on the Internet; of being groomed or lured into sexual conversations or exploitation

by adult offenders; of being bullied or harassed online, noted a report by the Innocenti Research Centre (IRC), the dedicated research hub of the United Nations Children’s Fund (UNICEF).

“Google is committed to a safe internet for children, as well as the empowerment of organizations who share this commitment,” said Mojolaoluwa Aderemi-Makinde, head of brand & reputation at Google Africa, during an event to mark the 16th annual safer internet day in Abuja. The fund being set up, according to her, is to support innovative ideas around privacy, trust and the safety of families online across sub-Saharan Africa.

“The fund will be administered by a third-party partner on behalf of Google.org across Sub Saharan Africa (SSA), and details of how to apply, deadlines and criteria will be made available in due course.” AderemiMakinde said.

The Be Internet Awesome project was also launched in Africa, described as Google’s landmark child online safety program, which seeks to help minors explore the internet safely and confidently.

“We are excited to strengthen the work we have been doing with parents and children in the field of online safety in Nigeria,” said Aderemi-Makinde. “In addition to Family Link, which allows parents to help their families develop healthy digital habits, we also launched Password Checkup exactly one year ago to empower users to check and strengthen online security settings for their Google Accounts.”

Be Internet Awesome teaches kids important skills for surfing the internet, like how to recognise potential online scams, using the internet securely and safeguarding valuable information, how to identify and

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

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

Harvard Business Review

BUSINESS DAY

33

MANAGEMENTDIGEST

The downsides of trying to appear ethical SHOHAM CHOSHEN-HILLEL AND EUGENE M. CARUSO

R

WORK VS. LIFE eputation is one of the most valuable assets a firm can have. Leaders, managers and employees want to be seen as competent, generous, efficient, honest and fair. But an emerging body of research suggests that attempts to maintain the appearance of doing what’s morally right can lead decision-makers to engage in various wrongs.

Our research has found three ways in which concern with reputation can actually lead managers and employees to violate ethical standards they would have otherwise upheld.

Understanding the mechanisms at play is the first step toward acting like an ethical and equitable leader.

CONCERN WITH HONEST REPUTATION INCREASES LYING Imagine you’re a manager at a consulting firm that has a contract with a client for no more than 500 hours of billable work, and your team’s total hours winds up being exactly 500.

Would you report that number to the client? In seven studies, we found that up to 35% of

people will underreport such outcomes. In such instances people choose not only to lie, but also to receive less material reward for themselves — all in the service of protecting their honest reputation.

CONCERN WITH APPEARING IMPARTIAL LEADS TO BIAS AGAINST FRIENDS In eight experiments, we’ve shown that bosses normally award bonuses to the more deserving of two employees when neither employee is a friend.

However, bosses routinely de-

cline to award the bonus to the more deserving employee if that employee is a friend. In one study, only 27% of participants gave a bonus to their slightly more deserving friend, whereas 61% gave a bonus to a slightly more deserving stranger. This appears to be rooted in people’s desire to signal their impartiality to the entire office; when we changed the situation to ensure that no one in the office knew what the leader’s decision was, people showed a strong preference for awarding the more deserving candidate — even when

that candidate was a friend.

CONCERN WITH APPEARING UNFAIR LEADS TO WASTING RESOURCES In six experiments, we explored how concern with appearing partial or unfair might lead managers to waste resources. In one experiment, participants played the role of a manager deciding how to allocate a new computer to one of two equally deserving employees. Nearly half the participants chose to let the computer sit idle on a shelf rather than give it

to just one employee.

So, what can well-meaning managers do to overcome such pitfalls?

One intervention can help: handing these tricky decisions over to impartial parties. In our research we discovered that when you’re in a position of allocating desired rewards between yourself and another person and you abdicate this position of power — that is, you give away your right to decide to the other party — the other party frequently rewards you with the most desirable outcome. People are eager to provide these rewards because they view abdication itself as an act of generosity. Such a strategy can help people reap the reputational rewards of ethical behavior without having to engage in unethical action along the way.

Shoham Choshen-Hillel is a senior lecturer at the School of Business Administration and the Federmann Center for the Study of Rationality at the Hebrew University of Jerusalem.

Eugene M. Caruso is an associate professor at UCLA Anderson School of Management. Alex Shaw is an assistant professor of psychology at the University of Chicago.

Top boards do these 4 things differently RUSTY O’KELLEY III CONNECTING inancial statements reviews, audit activities and compliance activities are all part of the work required of board members to keep the company running on the right path. But the most successful boards do far more than this, focusing on more forward-looking, value-creating, strategic issues.

Earlier this year, Russell Reynolds Associates surveyed 750 board directors about where their board prioritized its time and energy in the preceding 12 months.

When we combined that data with insights from our work, and discussions with other directors and outside experts, what stood out was a group we call “Gold Medal” boards, those that rate themselves as operating in a highly effective manner and that oversee a high-performing company (one that has outperformed relevant total shareholder re-

F

turn benchmarks for two or more years consecutively).

The data around this group is clear: Gold Medal boards don’t spend any more time on their work than other boards, but they spend their time in vastly different ways. Four best practices for board leadership emerged: — REFOCUS THE BOARD’S AGENDA: Gold Medal boards look forward, not back. The full board needs to move beyond an agenda heavy on reviews of financial statements and audit reports and realize

that the big picture is unlikely to be found in the rearview mirror. The most important — and most effective — activities are forward-looking ones: strategic planning, CEO and management succession planning, and improved oversight of enterprise risk and mergers and acquisitions transactions. These activities help the company create its future.

— MAKE DEBATE A PRIORITY: On Gold Medal boards, board members and committee chairs acted as fa-

cilitators. They fostered highquality debate, built trust among the directors and with management, actively sought out different points of view and ensured that everyone was contributing their experience and expertise. These activities help ensure that the board gets maximum value out of its time together and reaches decisions that have been fully thought through.

— GIVE CLEAR FEEDBACK: Gold Medal boards make sure they are giving directors clear performance feedback. There should be an annual assessment of each director’s contribution, with the board chair (or another senior director) responsible for giving lucid and actionable feedback and coaching to each director. Additionally, boards need to move beyond surveydriven assessments that provide almost no qualitative insights into the board’s overall effectiveness. Strong feedback leads to strong performance.

— BE PRESENT AND READY TO SPEAK UP: When

individual directors are distracted, overall board performance drops. This isn’t just about ignoring their phones during meetings. Directors need to be present and help keep fellow members focused on the matters at hand. Actively listening, speaking up and encouraging others to do so are all important. Finally, a willingness to speak up and avoid groupthink is essential to making good board decisions.

Reviewing financial statements, audit activities and compliance activities are the responsibility of the board, not the mission of the board.

The most successful boards not only know this, but they craft their work and interactions to reflect it.

Rusty O’Kelley III is co-leader of Russell Reynolds Associates’ Board and CEO Advisory Partners. PJ Neal leads the Center for Leadership Insight at Russell Reynolds Associates.

34

Thursday 13 February 2020

BUSINESS DAY

BUSINESS TRAVEL Aero invests N200m on automation of MRO processes …partners RAMCO, carries out 20 C-checks in two years Stories by IFEOMA OKEKE

N

igeria’s oldest airline, Aero Contractors has strengthened its partnership with Ramco, a software company based in Chennai, India, to provide improved digital solutions on the airline’s Maintenance, Repair and Overhaul (MRO) services, costing the airline N200million.

The partnership with commenced in 2019, saw the MRO operations go life in December, 2019. The automation has since made every aspect of the airline’s MRO services accessed and tracked real time for enhanced efficiency.

Seven years ago, Aero Contactors got AMO approval from the Nigeria Civil Aviation Authority, (NCAA) to carry out skeletal services like wheels and brakes, NDT and BSI (Borescope Inspection). The airline later applied for the upgrade of AMO to provide heavy maintenance since the company already had the experience and manpower.

Speaking during a press conference to announce the partnership, Ado Sanusi, Chief Executive Officer, Aero, said Aero was proud of the partnership because it is the first of its kind in Africa.

According to him, “Our services increased in scope with

Ado Sanusi, CEO, Aero (left) and Menaka Sinha, general manager, Africa, Europe and Middle East, RAMCO Systems at the press briefing in Lagos.

more third-party equipment being brought to Aero’s facility for maintenance, there was need for improved streamlining of our operations through digitilisation.

“The management of Aero contractors therefore, contracted RAMCO, an aviation software solution that covers everything monitoring services from the time we enter into contract with a client all the way to the time the job is concluded.

“It includes the contract itself, costing, billing, logistics, manpower allocation and optimum manpower utilization, thereby saving Aero MRO huge costs especially in Man-

hours that are paid for but not utilised efficiently.”

He said the automation will provide efficiency in human resources management, purchasing, inventory, warranty, maintenance, financials Third party maintenance and Sales.

He further explained that its integrated business intelligence tools will allow Aero’s maintenance personnel to measure, monitor and manage equipment with the help of advanced analytics.

Sanusi added that Aero’s relationship with RAMCO is expected to be expanded to include the AOC RW operations in the near future, adding

that Aero remained a pacesetter in electronic products and services.

“We are confident that our partnership with RAMCO will yield improved digitalized services to our clients wherever they are located”.

Also speaking, James Ominyi, head of Approved Maintenance Organisation (AMO) at Aero said the system will help the airline to track effectively the optimum utilisation of manpower.

“If you are doing things manually, you can hire 100 people and you won’t know who is doing what. But with this solution, we will be able to capture the man power hours

effectively. You will know who is playing truancy and you will know those fooling around.

You will be able to capture a lot and that is why we have subscribed to the software.

“We don’t have to pay people for what they didn’t do. If you engage someone for eight hours, then he has to do the work for eight hours or else, we will be shooting ourselves on the legs. When we made this known to the management, they bought into the idea. We are fully live on the system,” Ominyi said.

He explained that RAMCO has very wide spectrum of activities and Aero is yet to subscribe to all, adding that as time goes on, other areas of the airline’s operation will be covered but it has to start from the MRO, which is where the major activities take place.

“Eventually, we will go into rotary wing operations, finance, HR, flight operations and other places. We have begun to see the benefits of RAMCO,” he said.

Menaka Shinha, the general manager, Africa, Europe and Middle East, RAMCO, disclosed that the company has over 70 years of experience in IT solutions, adding that apart from other benefits of the automation, it will also block leakages that may have may exist.

Shinha said the successful implementation of RAMCO Aviation Suite at Aero will

automate manual work execution process and enable organisation-wide visibility.

She added that, “with modules for planning, work execution, stores, procurement, MRO sales and billing process, RANMCO’S integrated Aviation M&E MRO solution automates and optimises Aero contractor’s MRO services. The solution would help the organization optimizes employee utilization and improve utilization and improve efficiency in billing processes”.

Meanwhile, Sanusi, who reeled out the achievements from the MRO since it started operation in the last two years, said it has performed C checks up to 6C ON Aero and other customers’ aircraft; performed landing gear replacements on numerous customers’ aircraft locally (Azman Air, Max Air) and internationally including Swift Air, Spain, Passion Air, Ghana, GOMAIR, DR Congo and PTY Indonesia; performed reactivation maintenance for many operators on aircraft that have been grounded for over five years and such aircraft flew to Canada and Indonesia without problem.

He said Aero MRO has performed uncountable number of engine replacements for numerous clients, adding that the MRO got Ghana Civil Aviation Authority (CAA) approval and became the technical partner of DAC International airlines of Accra in 2018.

Global airlines see slower but steady growth Lagos Aviation Academy announces plan in passenger demand in 2019 - IATA to commence online courses

T

he International Air Transport Association (IATA) announced full-year global passenger traffic results for 2019 showing that demand (revenue passenger kilometers or RPKs) rose by 4.2percent compared to the full year of 2018.

The 2019 result is a slowdown compared to 2018’s annual growth of 7.3 percent and marked the first year since the global financial crisis in 2009 with passenger demand below the long-term trend of around 5.5 percent annual growth. Full-year 2019 capacity climbed 3.4 percent, and the load factor rose 0.7 percentage point to a record high of 82.6 percent.

The previous high was 81.9 percent set in 2018.

December 2019 RPKs increased 4.5 percent against the same month in 2018. That was an improvement over the 3.3 percent annual growth recorded in November, primarily due to solid demand in North America.

“Airlines did well to maintain steady growth last year in

the face of a number of challenges. A softer economic backdrop, weak global trade activity, and political and geopolitical tensions took their toll on demand. Astute capacity management, and the effects of the 737 MAX grounding, contributed to another record load factor, helping the industry to manage through weaker demand and improving environmental performance,” Alexandre de Juniac, IATA’s Director General and CEO said.

International passenger markets 2019 international passenger traffic climbed 4.1 percent compared to 2018, down from 7.1 percent annual growth the year before. Capacity rose 3.0 percent and load factor edged up 0.8 percentage point to 82.0 percent.

Asia-Pacific airlines’ fullyear traffic increased 4.5 percent in 2019, which was a large decline compared to 8.5 percent growth in 2018. This reflected the impact of the US-China trade war as well as weakening business confidence and economic activwww.businessday.ng

ity. Capacity rose 4.1 percent, and load factor ticked up 0.3 percentage point to 80.9 percent.

European carriers saw a 4.4 percent traffic rise in 2019, which was down from 7.5 percent annual growth in 2018.

Capacity rose 3.7 percent and load factor increased 0.6 percentage point to 85.6 percent, which was the highest for any region.

The lowered results are attributable to generally slowing economic activity; declining business confidence, compounded by industrial disputes (strikes); Brexit uncertainty and the collapse of a number of airlines.

African airlines led all regions with a 5.0 percent demand increase, down from 6.3 percent growth recorded for 2018. Capacity rose 4.5 percent, and load factor edged up 0.3 percentage point to 71.3 percent. Airlines in the region benefitted from a generally supportive economic backdrop in 2019 as well as increases in air transport connectivity.

L

agos Aviation Academy (LAA), Nigeria’s top Aviation, Travel and Tourism school has announced that it would start offering self-study courses before midyear 2020.

Chinasa Mbene, the general manager, disclosed that this development is aimed at making study easier for its students who might not be physically available to take the courses.

“With a mission to impart relevant knowledge through innovative training solutions designed to progressively build leaders and inspire excellence, Lagos Aviation Academy is set to introduce online courses.

“To drive this, we are in partnerships with recognized aviation bodies, using relevant technology. We have also developed a curriculum to make the learning process seamless for our students,” Mbene said.

Also noting that there is a need to prepare the upcoming generation to take over from the aging experts in the next ten to fifteen years, she men-

https://www.facebook.com/businessdayng

tioned that the academy would focus on the younger generation and incoming workforce to ensure continuity and improvement of professionalism in the Nigerian Aviation industry.

“In the next 10 to 15 years, we are going to see many skilled professionals in the aviation industry age and retire from their jobs. To ensure the transfer of knowledge to the next generation and to also ensure that there is continuity, we are actively focused on training the next generation. In line with this vision, we recently awarded scholarships to two students who wanted to pursue a career in the aviation industry,” Mbene says.

“This year, we would be focusing on enlightening the younger generation on the numerous career paths in the industry. Lagos Aviation Academy looks forward to demystifying the general ideology that the only jobs in the industry are the pilots and cabin crew officers,” she added. @Businessdayng

In a related manner, Lagos Aviation Academy currently offers a 39percent discount on the Basic Ticketing and Reservation course to National Youth Service Corp members.

The Academy Director, who is also the President of the National Association of Nigerian Travel Agencies (NANTA) says, the essence of this is to engage the NYSC members during and after their service.

“Having realized that at the end of their service year most Corp Members still have to seat at home for a while before they get employed somewhere, we decided to create this opportunity to keep Corp members engaged.”

Lagos Aviation Academy is in partnerships with top Travel Management Companies (TMC’s) and Airlines in Nigeria and has facilitated the employment of some of its best students in these companies.

This is one of the many contributions the school has made towards improving the downstream sector in the Nigerian aviation industry.

Thursday 13 February 2020

BUSINESS DAY

35

POLITICS & POLICY Edo 2020: Group urges Buhari to intervene in APC governorship primary election IDRIS UMAR MOMOH, Benin

A

group under the aegis of Obaseki/ Sha i bu Mov e ment (OSM) has urged President Muhammadu Buhari to display his political leadership in the conduct of the All Progressives Congress (APC) forthcoming gubernatorial primary elections in Edo State.

The group, in a six-point communiqué, also appealed to the President to ensure that the same leadership style is applied in the conduct of the gubernatorial election in Edo and in other states.

The Edo State Commissioner for Youth and Special Duties, Damian Lawani read

the group’s communiqué at an enlarged meeting of leaders across the 18 local government areas of the state in Benin City.

Lawani, who is also the convener of the meeting, commended President Buhari for setting up the reconciliation committee.

While also passing a vote of confidence in the state Governor, Godwin Obaseki and his Deputy, Phillip Shaibu, he noted that their second term in office is not negotiable.

He prays that the reconciliation committee set up by the President will bring peace in its quest to the party in Edo State and Nigeria in general.

“OSM as a body has therefore, passed a vote of absolute confidence in the governor and his deputy with the aim

Muhammadu Buhari

Don’t politicise Okada, tricycle restriction in Lagos, Razak cautions critics

A

n elder statesman and chieftain of the All Pro gressives Congress (APC) in Lagos, Lanre Razak has cautioned those opposing the restrictions placed on commercial motorcycles and tricycles from certain major highways and bridges in Lagos, to desist from reading political meanings into the policy, saying that it is a welcome development.

In a media chat in Lagos, Razak urged understanding for the good intention of Governor Babajide Sanwo-Olu on the issue that is of greater benefit for the wellbeing of the people, saying, “Agreed that the two means of transportation affected have their advantages, the hazard inherent in their operations is greater than their usefulness.”

As a former Public Transportation Commissioner in Lagos, the elder statesman said: “I should be in the best position to know that both cycles are not the appropriate

means of transportation in a civilised society like Lagos.”

He lamented that the number of avoidable deaths they have caused has been very alarming.

According to him, nobody would visit the orthopaedic hospital at Igbobi and see the section where the victims of the cycles are treated and be happy, regretting that, besides outright deaths, loss of limps, broken skulls and damage to spinal cords that confines victims to wheel chairs are also tear-inducing.

Another worrisome aspect of the whole issue, Razak pointed out is the rate of criminal activities being perpetrated by some unscrupulous operators who engage in kidnapping, robbery, car-snatching, burglary and other forms of banditry, saying, Sanwo-Olu deserves support, commendation and not condemnation.

The party stalwart from Epe division of the state, however, praised the understanding and cooperation of the operators and the people over their com-

and purpose of securing and supporting their second term in office come 2020.

“OSM believes strongly in the leadership of Godwin Obaseki and his deputy Philip Shaibu in Edo State and because they have performed creditably, their second term is not negotiable.

“The leadership also commended Mr. President Muhammadu Buhari for his fatherly role in repositioning APC by way of fostering peace and unity among states, and this has led to the appointment of Chief Bisi Akande, a seasoned politician, elder statesman, a man with impeccable character to head the long-awaited APC reconciliation committee,” he said.

“It is hoped that this com-

pliance, describing it as patriotic, just as he also gave the security personnel a pat at the back for handling the situation with maturity and high sense of professionalism. He urged them to keep up the good job and shun over-zealousness in their duties over the matter.

While reminding that the restriction was neither punitive nor an act of wickedness, Razak stressed that it was a good development to safeguard the wellbeing of the citizenry and their property, assuring that the step would drastically reduce avoidable deaths and unnecessary injuries on the highways.

The restriction law, Razak reminded, is not a new one but revival of an old and existing law which still subsists in the state, stating that, Governor Sanwo-Olu was just enforcing the law for safety of lives, property and to curb acts of criminality that can hinder progress and development desired for a Mega City like Lagos.

mittee will bring peace in its great quest to our party, APC in Edo State and Nigeria in general.

“Furthermore, it is hoped that the wisdom and leadership style which President Muhammadu Buhari has displayed in setting up the APC reconciliation committee will be applied in all areas of APC in the conduct of the forthcoming general elections in Edo State, the gubernatorial primaries election and other states affected in the areas of elections”, he added.

He however, commended the state governor for his good governance, repositioning of the state and infrastructural development, education, job creation, security, health care, human capacity development among others.

Senate seeks LGs’ autonomy, as restructuring tops Nigeria’s Constitution Amendment agenda Solomon Ayado, Abuja

T

he Senate has resolved to consider the grant of fiscal autonomy to the local governments and ensure restructuring of the country.

This is coming as the Senate has inaugurated a committee to review the Nigerian Constitution, which will make it the sixth review of the nation’s constitution.

The constitution review committee which is chaired by the Deputy Senate President, Ovie Omo-Agege, has 57 members. The committee was inaugurated by Senate President, Ahmad Lawan.

Also, the Senate said it would consider the recommendations of the 2014 Constitutional Conference and that of the Governor Nasir el-Rufai-led committee on restructuring.

Some of the new items to be considered in the review are: the establishment of National and State Houses of As-

sembly, pre-election Matters Tribunal, Governorship Preelection Matters Tribunals and Presidential Pre-election Matters Tribunal, including time limits for the disposal of all pre-election matters before the conduct of the general elections.

In his address, Omo-Agege said in carrying out the assignment, the committee would consider the alteration of the Sixth schedule of the constitution to make provision for new items.

“We will also consider the need for devolution of power, full Local Government fiscal autonomy, full autonomy of the judiciary in the area of administration of justice, youth inclusiveness in governance, gender parity or affirmative action.

“This is by no means an exhaustive list. The Committee will also consider inputs from stakeholders and different interest groups across the country.

“In addition, this commit-

tee will consider the recommendations of the 2014 Constitutional Conference and the Governor Nasir el-Rufai-led Committee on restructuring.

“We would also liaise with our counterparts in the House of Representatives, the State Houses of Assembly and collaborate and build consensus with all stakeholders to ensure synergy.

“Development Partners will also play pivotal roles through counsel, workshops, conferences and interactions.

The partnership roles of the Executive and Judiciary and their invaluable contributions cannot be over looked as it will enhance efficient and successful outcomes,” OmoAgege stated.

The DSP stated that over the years, the people appear to have been polarised along different fault lines which often make it impossible to reach the much-needed consensus in some critical areas where fundamental changes in the constitution are required.

Oyo LG crisis: ALGON frustrating out-of-court settlement- Oyo Special Counsel …Alleges sacked chairmen planning to ground council administration REMI FEYISIPO, Ibadan

O

yo State Government says members of the Association of Local Government of Nigeria (ALGON) were deliberately frustrating the planned out-of-court settlement concerning the crisis rocking local government administration in the state.

Special Counsel to the State Governor, Bolaji Ayorinde (SAN), who spoke on the

stance of ALGON members in a statement, said that the sacked chairmen wrongly latched onto a script by the Attorney-General of the Federation, which he said lacks foundation in state.

The counsel to the Governor of Oyo State said the ALGON members came to the negotiation table with absolute terms, saying: “Information available to me indicated that the ALGON members went to the meeting meant to www.businessday.ng

resolve the matter with absolute terms. No party desirous of solutions go to negotiation table with absolute terms.

“Basically, it is in the interest of the entire state to have the matter sorted out and I must say that the government of Oyo State remains committed to observing the rule of law.”

Ayorinde, who stated that the case being held on to by the sacked ALGON members was based on a faulty step

taken by the Attorney-General of the Federation, averred that the state government did not in any way frustrate the negotiation.

He said: “The AttorneyGeneral of the Federation sought to enforce a Supreme Court judgment that the Oyo State Government was not a party to. He issued a directive that was not grounded in law and in the spirit of federalism, that was resisted, because federalism does not allow the

https://www.facebook.com/businessdayng

AGF, whose duties are with the Federal Government and at best the Federal Capital Territory to interfere with the legal process in any of the constituent parts of the federation.

“And as everybody may know, local governments are under the state government.

So, at any point, in time, the Oyo State Government did not walk out on any discussion towards resolving the matter.

“The last meeting they held, the government was @Businessdayng

well represented by the AG, Oyelowo Oyewo, a professor and counsel to the state, Akin Onigbinde (SAN), who is also a former Speaker of the State House of Assembly. But the sacked ALGON chairmen came with absolute terms, which could be seen as a way of trying to thwart the peace moves. It will be in the interest of all parties to reconvene under a very amiable atmosphere and come to the conclusion on how to move forward.”

36

Thursday 13 February 2020

BUSINESS DAY

news

Samsung Heavy honoured at NIPS for Egina FPSO technological feat ISAAC ANYAOGU

S

amsung Heavy Industries Nigeria (SHIN) has won the “Award for Technological Breakthrough” at the Nigeria International Petroleum Summit (NIPS) in Abuja for innovations introduced during the construction of the Egina Floating Production Storage and Offloading (FPSO) system built for the deepest offshore oil field in Nigeria.

SHIN was also nominated for awards in other categories like “Award for Excellence in Corporate Social Responsibility” and “Award for Project of the Year”. The NIPS took place from February 9 to 12 in Abuja.

The summit brought together key Nigerian political decision-makers, government officials and experts from the Federal Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) and other relevant governmental bodies along with representatives from national and international companies operating in the oil and gas sector, multinational and multilateral organisations, academia and other relevant stakeholders.

The Egina FPSO is the world’s largest built for the Egina oil field with a capacity to produce over 200,000 barrels per day. SHIN was awarded for technological

innovations it brought to bear in the construction of the project.

During the construction of the Egina FPSO, 3D scanner technology and software were used, which simulated how the modules could be integrated in advance. These innovations improved quality, optimised planning and significantly reduced construction time as well as enhancing safety.

“Winning the technological breakthrough award is important not only to Samsung Heavy Industries Nigeria but for the nation of Nigeria. I thank you, and I accept this award with honour and pride,” Jaebeom Kim, CEO of SHI-MCI, said while collecting the award on behalf of SHIN and their partners.

“We seize every opportunity to deliver worldclass marine services, fabrication and integration, ship maintenance and repair and manufacturing to the regional maritime industry,” Kim said.

At the event, Kim delivered a keynote speech titled ‘Shaping the future of Offshore and Marine Energy together’ at the Offshore and Marine energy session, where he drew attention to Africa’s growing demand for energy, as outlined by the recently published African Energy Outlook Report 2020.

NNPC GMD urges African countries to prioritise energy security for citizens OLUSOLA BELLO & HARRISON EDEH

G

roup managing director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has called on African countries to focus on providing structures that will ensure energy security for their citizens.

Kyari made the call in Abuja during the ongoing third edition of the Nigerian International Petroleum Summit (NIPS), and told the gathering that the NNPC had a framework that worked towards ensuring energy security in Nigeria.

“African countries must know that each must focus on building structures that ensure energy security for the citizens. NNPC is committed to that and has a framework to make sure that the needed energy is available for the needs of the country,” he stated.

The national oil company

boss acknowledged the global clamour for energy transition from fossil fuels to renewable sources but, however, noted that hydrocarbons would continue to form the larger part of the energy mix in the foreseeable future.

“Several researches continue to confirm that by 2040, renewables will be contributing about 20 percent of the global energy mix. This implies that fossil fuels will still contribute at least 70 percent,” he said.

He, therefore, urged African countries, which are still mostly underdeveloped, to continue to utilise the hydrocarbon resources available to them to develop energy sources for their populace.

“The focus must be in making sure that the energy is clean. We have to use what we have. Today, oil is being found in unexpected places.

This contributes to the growth of middle class consumers.

And so demand of fuel will continue with increase with population and prosperity.

Global demands will remain over 100 million barrels per day,” he said, adding that African countries should focus, not solely on the glamour for renewables but largely on the need to deliver energy for the development of their people.

“On our own part, we as the national oil company must continuously strive to deliver the best for Nigerians in the oil and gas sector; and as a corporation with over $30 billion worth of assets, cannot afford to fail Nigerians.

“We would continuously strive for reforms that advance the positive cause of 200 mill Nigerians who are the shareholders in the sector. We would continuously drive reforms that give us answers to a transparent oil and gas sector that attracts investment,” he said.

Also speaking at the event, Chikezie Nwosu, managing

director of Waltersmith Petroman, agreed that African countries had huge resource deposits, but were very low on resource consumption and consequently, low Gross Domestic Product (GDP) growth.

He called on African countries to focus more on consumption against export.

“The key thing to do is to decarbonize fossil fuels. Africans must not focus on selling commodities but on converting the hydrocarbons into consumable products,” Nwosu stated.

Nwosu used the forum to announce that his company is building the needed infrastructure that will convert fossil fuels’ feed stock into consumable products.

Also speaking on the development of the gas sector for national economic growth, Audrey Joe-Ezigbo, president, Nigerian Gas Association, noted that the power sector was the largest consumer of gas in the country.

Reps tell FG to declare state of emergency on security ... as minority reiterates call for sack of Service Chiefs James Kwen, Abuja

H

ouse of Representatives has urged the Federal Government to declare state of emergency on security in order to tame the rising tide of insecurity across Nigeria.

It directed the military authorities to henceforth stop the keeping of commuters overnight at a particular period on the DamaturuMaiduguri Road.

The House also directed the military authorities to allow commuters to proceed on their journeys even after 6pm and establish super camps in Auno.

It mandated the Committees on Defence and Army to ensure compliance and investigate while the military personnel have left the checkpoints.

These resolutions were adopted following a motion of urgent public importance on: “Recent Attack by the Boko Haram Insurgents at Auno Village, Borno State,” sponsored the Chief Whip, Mohammed Monguno.

Monguno while pre-

senting the motion said the House noted that Auno Village is situated on the Damaturu-Maiduguri Road, Bomo State.

According to him, the House also noted that because of the security challenges in the North-East Zone of the country, commuters on the DamaturuMaiduguri Road are compelled to suspend their journeys once it is 6:00pm: Monguno further said the House was “aware the Auno Village is one of the spots where the Nigeria Army forces instruct the commuters on the Damaturu-Maiduguri road to spend the night before proceeding their journeys the next morning.

“Again aware that on Sunday 9 February, 2020, while commuters in their hundreds were waiting in the Auno Village the Military men left them to their fate or at best abandoned them.

“Disturbed while the commuters were waiting to spend the night, Boko Haram insurgents attacked, kidnapped and burnt some of their Vehicles: www.businessday.ng

L-R: Kemi Owonubi, head corporate finance, RMB Nigeria; Danladi Verheijen, co-founder/CEO, Verod Capital; Razia Khan, chief economist, Africa & Middle East, Standard Chartered Bank; Oguche Agudah, CEO, Pension Fund Operators Association of Nigeria, and Gbenga Adetoro, partner, Alliance Capital Alliance, panellists, at the Private Equity & Venture Capital Association of Nigeria Quarterly Breakfast forum sponsored by RMB Nigeria in Lagos.

Nigeria, Ethiopia deepen cooperation with Visa waiver, others Tony Ailemen, Abuja

N

igeria and Ethiopia have signed a visa waiver agreement and a memorandum of understanding (MoU) on cooperation in the field of Defence.

This is as both countries also agree to swiftly conclude negotiations on the revised Bilateral Air Services Agreement and the MoU on cultural cooperation.

The consummation of these two agreements will provide veritable platforms for deepening existing air transport services, tourism and cultural exchanges between the two countries.

The Visa waiver, which is however restricted to diplomats and holders of official passports, signals move for deeper economic cooperation that is also expected to dovetail into

exploring other areas of collaboration to further enhance and expand Nigeria-Ethiopia bilateral cooperation for the mutual benefits of the two countries.

President Muhammadu Buhari and Prime Minister Abiy Ahmed witnessed the signing of the agreement Tuesday in Addis Ababa by their ministers of Foreign Affairs, Geoffrey Onyeama and Gedu Andargachew, during the state visit of the Nigerian leader.

The visa waiver agreement is expected to ease travels by officials and contribute to further strengthening of bilateral relations.

The MoU on Defence Cooperation is important to both countries in the coordination of efforts in the fight against terrorism and securing peace and stability in their respective sub-regions

https://www.facebook.com/businessdayng

as well as on the continent of Africa.

Other gains include enhanced bilateral military cooperation in the areas of training and education, technical assistance, exchange of visits and defence technology transfer, cooperation in peace support operation issues within the framework of the respective laws of the Parties and on a reciprocal basis.

President Buhari said a robust cooperation between Nigeria and Ethiopia would provide a strong pillar for Africa integration, noting that this would give concrete effect to the African Continental Free Trade Area (AfCFTA) agreement.

Speaking at a State Dinner in his honour Tuesday in Addis Ababa, Ethiopia, the President said as the two most populous @Businessdayng

countries on the continent, Nigeria and Ethiopia shared similar challenges, stressing that it had become imperative for both countries to strengthen and expand cooperation at all levels and in all areas.

The Nigerian leader said his State Visit to Ethiopia, fondly called The Cradle of Humanity, focused on how to further boost relations and explore new areas of cooperation between the two countries. ‘’Relations between Nigeria and Ethiopia have been warm and cordial since the establishment of diplomatic ties in 1964. ‘’Currently, a Ministerial joint Commission meeting is taking place between Nigeria and Ethiopia to finalise documents for our consideration. ‘’I am confident that the meeting will produce a fruitful outcome which will elevate relations to a higher level,’’ he said.

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

37

38

Thursday 13 February 2020

BUSINESS DAY

news BPE to raise N266.8bn privatisation proceeds...

Continued from page 2

New York but would look for a way to get to Lagos because he had an important meeting he needed to attend on Thursday.

Kola Olayinka, British Airways’ country manager, Nigeria, told BusinessDay that since the foggy weather started, BA has diverted three flights to Ghana.

Olayinka said the development is costing the airlines so much as they have to book hotels for the passengers.

“If passengers’ flights are diverted and not cancelled, we put people in hotels. For few who opt to go to their homes, they do. It is very expensive for us. We put people in hotels both in Lagos and in Ghana,” Olayinka said.

“There are Nigerians on the plane coming home; we put them in the hotel until the fog clears. The flight is scheduled to leave Accra on Wednesday evening. Once they can confirm that the weather is okay, then they will leave Accra. It is more stressful for customers because people who come from as far as America just want to get home. It is better to be safe than compromise safety,” he said.

Domestic airlines are also not left out of the sad development as they have had to delay, cancel and reschedule flights for passengers.

However, NAMA in a reaction to the trend noted the inability of some international

flights to land at the Lagos airport is largely due to issues of inclement weather and company minimas of affected airlines.

Khalid Emele, general manager public affairs, NAMA, in a statement said the ILS on the two runways of the Lagos airport are serviceable.

“The facts on record, however, are as follows: Lagos has two runways – 18 Right and 18 Left. The Doppler Very High Omni-Directional Radio Range (DVOR) and the Distance Measuring Equipment (DME) at the airport have successfully been calibrated and passed 100 percent.

“The localiser (a component of the Instrument Landing System) responsible for horizontal guidance at runway 18 Left has also passed 100 percent calibration while the glide slope (which is another component of the Instrument Landing System that provides vertical guidance) is undergoing routine maintenance and by tomorrow (12/02/2020), the maintenance will be concluded and the equipment shall be fully on air.

“On Runway 18 Right, there is Category 3 ILS which is still undergoing installation.

Presently, Selex Systems, the contractors are working on the realignment of its parameters, preparatory to the calibration and commissioning of the equipment in the shortest possible time,” Emele stated.

happen within this fiscal year,” he said.

Reacting to heightened calls on government to hand over power assets, particularly the distribution companies, to new investors for effective management, Okoh said the best option will not be the re-sale of Nigeria’s power assets, saying it will amount to a fundamental error.

Okoh reckons that DisCos are failing because the market dynamics of maintaining power is faulty and that there is need to adjust the price structure.

His position comes contrary to opinions, particularly the National Economic Council (NEC) which last month announced move to reverse the 2014 power privatisation following recommendations being proposed by the Governor Nasir el- Rufai-led committee.

But Okoh said the problem of Nigeria’s power sector is not about the privatisation but the design of the sector reform programmes and implementation.

“I do not support the re-nationalisation of power assets because it will be a fundamental error to resale,” he told reporters.

“Implementation has been the problem and there has to be a concerted approach to the implementation of the power reform programme. This is not the time trade blames. The World Bank Power Sector Recovery Programmes is a good one we need to ensure to implement effectively,” Odoh added.

He said already there are various government initiatives to address this issue.

“The presidential power initiative which we refer to as the Siemens project actually provides a credible way to address the challenge same in the infrastructure, the transmission and distribution.

“What this promises is that by the end of 2021, end to end availability of power would be 7,000 megawatts.

Part of the challenge in the power sector is that there is excess capacity in generation, low capacity in distribution and the transmission is

cation that there is more to the protests which ran into a second day on Wednesday.

The protesters also barricaded the Onopa Junction and the Treasury Building which resulted in traffic congestion that lasted for several hours before normalcy could return.

It would be recalled that against the advice of many bigwigs in the PDP, Dickson singlehandedly chose a successor that caused disaffection within the party in the state.

His choice, Douye Diri, lost the governorship election and the PDP has been in a meltdown ever since, for which Dickson has not been forgiven though he had boasted that he

is finishing strong.

In a reaction to the booing of Buhari in Maiduguri, the People’s Democratic Party said it was a clear indication that Nigerians have lost confidence in his administration for the escalating insecurity in the country.

Specifically, the PDP said the Buhari presidency and the ruling All Progressives Congress (APC) have failed.

Consequently, the party has charged President Buhari to go beyond his sympathy visit to Borno State and take decisive steps to end the killings in the country.

The opposition party, through its national publicity secretary, Kola Ologbondiyan, said in a statement that

Mr. President should not limit his visit to Borno State but also visit other parts of the country, including Kaduna, Kano, Benue, Plateau, Yobe, Adamawa, Zamfara, Kogi, Niger, Taraba and other states.

The visit, PDP said, would enable Buhari to face the feelings of Nigerians as well as view the national devastation his poor handling of security and infrastructure has caused the country.

But Buhari has promised that more proactive and decisive measures would be taken by the Federal Government to put an end to the Boko Haram menace in the country once and for all, according to a statement by Garba Shehu,

Adetokunbo Kayode (r), president, Abuja Chamber of Commerce and Industry welcoming Edith Aguele, chairman of the Institute of Directors, Abuja Zone, during her courtesy visit to ACCI.

Passengers stranded as Delta...

Continued from page 1

in its inability to provide functional Instrument Landing Systems (ILS) at the country’s airports.

“With category 3 ILS, you can be brought down to landing in near zero visibility with precision approach plan indicator (PAPI). Foreign airlines divert because there is no assurance or Notice to Airmen (NOTAMS) to indicate the installed cat 3 ILS are calibrated at an airport that is glorified as certified by the Nigeria Civil Aviation Authority (NCAA),” John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART), said.

Ojikutu, who is also chief executive of Centurion Securities, wondered what makes MMIA certified if it has no functional ILS and one of the major runways has no lighting, adding that thousands of dollars was spent on the installation of CAT3 ILS at Lagos airport but sadly, the ILS has not been calibrated.

BusinessDay’s checks show that apart from money paid by the airlines on a monthly basis to NAMA, the agency gets 23 percent of the 5 percent collection on air tickets paid per passenger.

In 2018, airlines made N505 billion in ticket sales.

This implies that the agency made over N5.8 billion on ticket sales alone in 2018.

Experts say this amount is enough to fix the epileptic ILS at the airport.

However, the situation is going worse by the day as Accra airport authorities have begun to complain of congestion at the airport as a result of the diversion.

As at Wednesday evening, BusinessDay learnt that two of Emirates diverted aircraft were parked in Ghana. British Airways also had a diverted aircraft parked in Accra. Air France and Delta are also facing similar situation.

“Delta Airlines flight from New York that was scheduled to land in Lagos on Tuesday could not land because of bad weather. The airline was told that the ILS is not working. So, it had to land in Accra. Delta’s Atlanta flight scheduled to land at MMIA on Wednesday was diverted to Dakar,” a source at Delta told BusinessDay. “Delta Airline is currently contemplating taking the affected passengers back to New York because the airline cannot continue to pay for hotel accommodations for the several affected passengers,” the source said.

One of the affected passengers on the Delta flight said he was not going back to

Buhari booed, Dickson jeered as...

Continued from page 1

to welcome him, openly

expressed their anger, booing the president and members of his entourage.

Hundreds of youths were heard shouting in Hausa, “Ba ma so!”, “Ba ma iyi!”, which translate to “We don’t want!”, “We’re not interested!” They were apparently referring to his visit.

Borno is a stronghold of the president. During his previous visits to the state, crowds lined up on the streets chanting “Sai baba!”

In Bayelsa State in the oilrich Niger Delta, protests were staged in front of Government House in Yenagoa, the state

capital with the access barricaded by angry civil servants amongst others who were protesting non-payment of their December salaries.

Just two days to the formal handover to David Lyon of the All Progressives Congress (APC), angry workers, staff of the 24 rural development authorities, were heard shouting invectives at outgoing Governor Henry Seriake Dickson as his convoy attempted to drive out of Government House for an official engagement.

Some of the aggrieved workers accused him of “killing our party when we dey manage”, which is an indiwww.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

a serious constrain at the end.

He said the country’s current power pool is about 13,500mega watts but transmission can only will not more than 5,000mw. “This continues to lead to frequent system collapse while the capacity to distribute is also seriously constrained.”

He said the mismatch in capacity in the general value chain is being resolved and that by the end of 2021, 7,000mw of the generation capacity should hopefully flow to end users without transmission and distribution constraints.

“By 2023, we would scale that up to 11,000 mw, and post 2023, we want to scale that up to 25,000 mw.”

According to him, “that’s the plan and it has to be a strategy concerted effort by all stakeholders in the power chain.

On status of the protracted sale of Bank of Agriculture (BOA), he said the delay is a result of the complexity of the transaction and that BPE had underestimated the enormity of the challenge.

He however noted that BPE was in talks with the Central Bank of Nigeria ( CBN) with an understanding to write off part of its huge Non Performing Loan (NPL) put at about N97 billion. The bank’s shareholders fund is put at negative N35 billion.

“BOA is a complex transaction due to poor management over the years. We under estimated enormity of the challenge. We have taken a decision to keep BOA, so hopefully we can concluded the recapitalization this year “,Okoh assured.

Responding to specific issues on poor performances of privatised enterprises conducted by BPE, Okoh admitted cases of glaring failure in some enterprises with particular reference to Nicon insurance and Nicon Luxury hotel which he blamed on the selection of the core investor.

He admitted that BPE could fail in sufficient diligence on prospective core investors bidding for government assets, but that the privatization process is being worked on. senior special assistant to the president on media and publicity.

The statement said Buhari at the palace of the Shehu of Borno, Abubakar Ibn Umar Gabai, appealed for more intelligence sharing and synergy between law enforcement agencies and the civil populace, saying these are critical towards achieving the objectives.

“I assure you that improvement in security will be pursued vigorously. The military will work harder and strategise with tactics to deal with the insurgents. This is however not possible without good intelligence and cooperation with local community leaders,” he said.

Thursday 13 February 2020

BUSINESS DAY

39

Thebigread Death of a seminarian and the pain of Bishop Kukah Continued from Back page This President has displayed the greatest degree of insensitivity in managing our country’s rich diversity. He has subordinated the larger interests of the country to the hegemonic interests of his co-religionists and clansmen and women. The impression created now is that, to hold a key and strategic position in Nigeria today, it is more important to be a northern Muslim than a Nigerian.

Today, in Nigeria, the noble religion of Islam has convulsed. It has become associated with some of worst fears among our people. Muslim scholars, traditional rulers and intellectuals have continued to cry out helplessly, asking for their religion and region to be freed from this chokehold. This is because, in all of this, neither Islam nor the north can identify any real benefits from these years that have been consumed by the locusts that this government has unleashed on our country. The Fulani, his innocent kinsmen, have become the subject of opprobrium, ridicule, defamation, calumny and obloquy.

His north has become one large grave yard, a valley of dry bones, the nastiest and the most brutish part of our dear country.

Why have the gods rejected this offering?

Despite running the most nepotistic and narcissistic government in known history, there are no answers to the millions of young children on the streets in northern Nigeria, the north still has the worst indices of poverty, insecurity, stunting, squalor and destitution. His Eminence, the Sultan of Sokoto, and the Emir of Kano are the two most powerful traditional and moral leaders in Islam today. None of them is happy and they have said so loud and clear. The Sultan recently lamented the tragic consequences of power being in the wrong hands. Every day, Muslim clerics are posting tales of lamentation about their fate. Now, the Northern Elders, who in 2015 believed that General Buhari had come to redeem the north have now turned against the President.

We are being told that this situation has nothing to do with Religion.

Really? It is what happens when politicians use religion to extend the frontiers of their ambition and power.

Are we to believe that simply because Boko Haram kills Muslims too, they wear no religious garb? Are we to deny the evidence before us, of kidnappers separating Muslims from infidels or compelling Christians to convert or die? If your son steals from me, do you solve the problem by saying he also steals from you? Again, the Sultan got it right: let the northern political elite who have surrendered the space claim it back immediately.

The persecution of Christians in northern Nigeria is as old as the modern Nigerian state. Their experiences and fears of northern, Islamic domination are documented in the Willinks Commission Report way back in 1956. It was also the reason why they formed a political platform called, the Non-Muslim League. All of us must confess in all honesty that in the years that have passed, the northern Muslim elite has not developed a moral basis for adequate power sharing with their Christian co- regionalists. We deny at our own expense. By denying Christians lands for places of worship across most of the northern states, ignoring the systematic destruction of churches

Bishop Kukah

Late Michael Nnadi all these years, denying Christians adequate recruitment, representation and promotions in the State civil services, denying their indigenous children scholarships, marrying Christian women or converting Christians while threatening Muslim women and prospective converts with death, they make building a harmonious community impossible. Nation building cannot happen without adequate representation and a deliberate effort at creating for all members a sense, a feeling, of belonging, and freedom to make their contributions. This is the window that the killers of Boko Haram have exploited and turned into a door to death. It is why killing Christians and destroying Christianity is seen as one of their key missions.

On our part, I believe that this is a defining moment for Christians and Christianity in Nigeria. We Christians must be honest enough to accept that we have taken so much for granted and made so much sacrifice in the name of nation building. We accepted President Buhari when he came with General Idiagbon, two Muslims and two northerners. We accepted Abiola and Kingibe, thinking that we had crossed the path of religion, but we were grossly mistaken. When Jonathan became President, and Senator David Mark remained Senate President while Patricia Ette was chosen by the South West became a Speaker. The Muslim members revolted and forced her resignation with lies and forgery.

The same House would shamelessly say that they had no records of her indictment. Today, we are living with a Senate whose entire leadership is in the hands of Muslims. Christians have continued to support them. For how long shall we continue on this road with different ambitions? Christians must rise up and defend their faith with all the moral weapons they have.

We must become more robust in presenting the values of Christianity especially our message of love and non-violence to a violent society.

Among the wolves of the world, we must become more politically alert, wise as the serpent and humble as the dove (Mt. 10:16).

Every Religion has the seeds of its own redemption or destruction.

It is a choice between Caesar and God. We cannot borrow the crown of www.businessday.ng

‘‘

...through violence, you can kill the liar, but you cannot kill lies or install truth.

Through violence, you can murder the terrorist, but you cannot end Terrorism. Through violence, you can murder the violent, but you cannot end violence...

Caesar without consequences. The boundaries between faith and reason are delicate but they are fundamental to how a society builds a moral code.

Faith without reason breeds the fanatic, the demagogue who genuinely but wrongly believes that he has heard the voice of a god ordering him to kill another. Reason without faith produces the ideologues who will also kill because the ideology of the state orders him to do so. Societies can only survive when a Constitutional basis has been established to create a balance between both extremes and to place our common humanity at the centre of every pursuit.

My dear brothers and sisters, Anger, the quest for Vengeance, are a legitimate inheritance of the condition of unredeemed human being. Both have appeal. Through Violence, you can murder the murderer, but you cannot murder Murder. Through violence, you can kill the Liar, but you cannot kill Lies or install truth. Through Violence, you can murder the Terrorist, but you cannot end Terrorism.

Through Violence, you can murder the Violent, but you cannot end Violence.

Through Violence, you can murder the Hater, but you cannot end Hatred.

Unredeemed man sees vengeance as power, strength and the best means to teach the offender a lesson. These are the ways of the flesh.

Christianity parts ways with other

https://www.facebook.com/businessdayng

Religions when it comes to what to do with the enemy. Here, we must admit, Christianity stands alone. This is the challenge for us as Christians. Others believe in an eye for an eye, a tooth for a tooth, or that one can take either blood money or make some form of reparation one way or the other. However, for us Christians, Jesus stands right in the middle with a message that is the opposite of all that is sensible to us as human beings. Put back your sword (Mt. 26: 52). Turn the other cheek (Mt. 5:38).

Pray for your enemy (Mt. 5: 44). Give the thief your cloak (Lk. 6:29). None of these makes sense to the human mind without faith. This is why Jesus said the only solution is for us to be born again (Jn. 3:3). The challenge before us is to behold the face of Jesus and ask the question, Are we Born against hatred, anger, violence and vengeance?

There is hope, my dear friends. Are we angry? Yes, we are. Are we sad?

Of course, we are. Are we tempted to vengeance? Indeed, we are. Do we feel betrayed? You bet. Do we know what to do? Definitely. Do we know when to do it? Why not? Do we know how?

Absolutely. Are we in a war? Yes. But what would Christ have us do? The only way He has pointed out to us is the non-violent way. It is the road less travelled, but it is the only way.

How and why does God choose these young persons as our models?

Leah Sharibu and now Michael, all teenagers when they confronted evil and became martyrs. In a recent report in Daily Trust on February 2, 2020, I read the story of one of the Dapchi girls and their incredible show of bravery in the face of fire. They were asked by their ferocious captors to point out the Christians among them or they would all face death. In response, they said in unison that they were all Muslims.

Then, she continued, “when they intensified their threat to kill us, Leah stood up and said that she was a Christian. She said they could go ahead and kill her instead of killing all of us. So, they separated her from us...before we were rescued, they told us that if Leah would convert to Islam, they would free us, so we tried as much as possible to convince her but she refused saying she would never renounce her religion for fear of death.”

We have no evidence of what transpired between Michael and his @Businessdayng

killers. However, for us Christians, this death is a metaphor for the fate of all Christians in Nigeria but especially northern Nigeria. For us Christians, it would seem safe to say that we are all marked men and women today. Yet, we must be ready to be washed in the blood of the lamb. The testimony of the Dapchi girl above suggests that our country has a future, a future based on the innocence of our youth who have seen beyond religion. Leah Sharibu is a martyr for the faith and so is Michael.

St Paul has already said it well: We carry this treasure in vessels of clay so that all this surpassing power may not be seen as ours, but as God’s. Trials of every sort come our way, but we are not discouraged. We are left without answers but we do not despair, persecuted but not abandoned, knocked down but not crushed. At any moment, we carry in our person, the death of Jesus, so that in life, Jesus may also be manifested in us (2 Cor. 4: 7-10).

Finally, we praise and thank God that Pius, Peter and Stephen are alive and will continue to bear earthly testimony of this horror. May God help them to all heal. We join the family of Michael in their act of forgiveness while calling on God give these killers their own road to Damascus experience deep in the forests and highways.

For now, we in Sokoto are at peace and feel mightily honoured that we have been chosen for this task of being called upon to walk the footsteps of the passion of Jesus Christ. We know that the Lord’s burden is never heavy. We are humbled but not bowed. Although we are only a little flock, we are pleased to offer from the little we have to the Master. Like the owner of the donkey on which Jesus rode to Jerusalem, we are asking no question because the Master has asked for Michael (Lk. 19:31). Like the Galileans (Lk. 13:1), we surrender the blood of Michael to the vicious Herods of today but we know we will one day rise to a new life. The choice of our son Michael as a Simon of Cyrene is a remarkable gift that we must embrace with both hands. We feel as if our son has been chosen to represent us in the national team of martyrs. Without fear, we will complete the journey he started because his memory will give us strength.

We know that Michael’s strength will inspire an army of young people to follow in his steps. We will march on with the cross of Christ entrusted to us, not in agony or pain, because our salvation lies in your cross. We have no vengeance or bitterness in our hearts. We have no drop of sorrow inside us. We are honoured that our son has been summoned to receive the crown of martyrdom at the infancy of his journey to the priesthood. We are grateful that even before he could ascend the earthly altar, Jesus the high priest, called Him to stand by His angels. He was a priest by desire but he is concelebrating the fullness of the priesthood beside His Master. He was lifted up even before his hands could lift up the sacred chalice. May the Lord place him beside His bosom and may he intercede for us. If his blood can bring healing to our nation, then his murderers will never have the final say. May God give him eternal peace. *Being the Homily of His Lordship Bishop Matthew Hassan Kukah at the Funeral Mass of Seminarian Michael Nnadi at Good Shepherd Seminary Kaduna on 11th February 2020.

40

Thursday 13 February 2020

BUSINESS DAY

news

Southwest states intensify moves to legalise Amotekun bill … as Ondo approves ‘Operation Amotekun’ Bill Iniobong Iwok, Lagos, Remi Feyisipo, Ibadan & Razak Ayinla, Abeokuta

S

outhwest states have intensified moves to legalise the planned regional security corps, also known as Amotekun, in their respective states.

Governors of the region were served the document during the week after the bill was harmonised by the Attorneys-General of the states in Ibadan last Saturday.

However, the Ondo State government has approved the draft bill for the South-West security outfit code-named “Operation Amotekun.”

Donald Ojogo, commissioner for information and orientation, disclosed this in a statement on Wednesday.

He said the bill was approved during the State Executive Council meeting, noting that the bill would be transmitted to the Ondo State House of Assembly for legislative scrutiny after which it would be passed into law.

Meanwhile, on Wednesday, the Ogun State government agreed to unbundle the security network from being regional to a state by state security corps, as the State Executive Council on Tuesday approved the bill and proposal for the creation of Ogun State

Security Network Agency out of the regional status - Western Security Network.

Addressing journalists at the end of the Executive Council meeting held at Oke-Mosan Governor’s Office in Abeokuta, the Attorney General and Commissioner for Justice in the state, Adegbolahan Adeniran, said the presentation of the bill before the state council followed the earlier approval by the Attorneys- Generals and Commissioners of Justice of the six Southwest states.

There is also an indication that the security trust fund dedicated by state government to fund and beef up security in the state, Adeniran assured that the State Amotekun Corps would be headed by a State Commandant, saying that the bill also allowed for collaborative efforts between the six Southwest states should the need arise.

He expressed optimism that the bill would get speedy attention from the state lawmakers so that the governor could also give the required assent in no long time.

According to Adeniran, “We presented the bill for the creation of the Ogun State Security Network Agency or

what many call the Amotekun Corp Bill of 2020.

“Today, the Executive Council of Ogun State met and adopted a draft as amended of a bill for a law to establish the Ogun State Security Network Agency. This agency is the agency that will comprise the Amotekun Corps and this bill will be transmitted to the House of Assembly before the end of this week.”

He expressed optimism that the bill would get speedy attention from the state lawmakers so that the governor could also give the required assent in no long time.

“The Amotekun Security outfit had already been launched by the governors of the South-western states.

However, it became very clear that there was a need for a legal backing for that operation.

“This made all the Attorneys- General of the Southwest zone including Oyo, Ogun, Osun, Ekiti, Ondo and Lagos states to come together with the intervention of DAWN commission that has been piloting the process, and we are able to have a draft model bill to be adopted by each of the state in accordance with their local circumstances and situations as the need arises,” he said.

Bomb attack orchestrated to undermine investment on security sector - Edo govt … attacks represent brutal affront on security of life, property - Odubu IDRIS UMAR MOMOH & CHURCHILL OKORO

R

eactions on Wednesday continue to trail the bomb explosion at the residence of Lawrence Okah, the factional All Progressives Congress (APC) secretary in Edo State.

Recall that suspected assailants early hour of Tuesday attacked the residence of the state factional secretary, with improvised explosive device. The attack shattered window glasses, cooking gas, among others.

The bomb attack on the APC scribe residence came few days similar attack was launched at the Benin City residence of Francis Inegbeniki, a chieftain of the party.

Those who condemned the bomb attacks Wednesday were the state commissioner for information and orientation, Paul Ohon-

bamu, and the immediate past deputy governor, Pius Odubu.

Ohonbamu at a press conference said the attacks were orchestrated to undermine the state government investment in security sector, and alleged that the attacks were geared towards embarrassing the state government that it was not doing enough in term of security.

He however noted that the incidents were unexpected due to the inordinate ambition of some politicians to paint the governor black ahead of the forthcoming governorship election in the state.

According to Ohonbamu, the purported defection of some politicians to APC in the state was an ominous signs of disaster. “I don’t think that what is happen-

ing now is unexpected. This is exactly the kind of result you get when all sorts of persons associate with genuine people.

“The tendencies are to embarrass the state, smear its image to make people believe that Governor Godwin Obaseki is not doing well in terms of security but this is not the situation. It is necessary for you to know that everything in terms of security architect is in place.

‘When you create tension when there is no tension, and give the impression to the president and the whole world that law and order have broken down in the state it is unfortunate,” he said.

He however noted that the state government was not perturbed by the antics of the enemies, whose stock in trade was violent.

Glo delights Nigerians with Glo Cloud

I

n its bid to continue to avail Glo subscribers of pleasant experiences on its network, Globacom has unveiled Glo Cloud, a personal full quality storage application which enables subscribers to easily back up their digital life or activities.

In a statement in Lagos, Globacom said the new app will assist Glo data users to safely and privately store their photos, videos, music

and documents, back them up automatically, retrieve and share them digitally from their cloud account.

“We are in a digital age where people develop loads and loads of personal, social and business content which they wish to store and retrieve whenever they want. Glo Cloud provides a safe and secure place to store such content. Apart from the problem of having enough storage space on www.businessday.ng

phones or laptops, the Glo Cloud customer is assured of the safety of his documents or contents if he loses his phone or computer,” Globacom explained It also added that the size of digital contents to be stored by Glo Cloud users will be commensurate with size of their subscriptions.

“For instance, if a customer subscribe for 50GB, he or she will be able to store up to 50GB of content.” https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

BUSINESS DAY

41

news

L-R: Musa Sa’eed Talle, director, planning, Research & Statistics Department (PRSD); Bitrus Bako Nabasu, permanent secretary, Ministry of Petroleum Resources; Eason Dongyisong, deputy MD, Nigeria Enterprise Marketing and Sales, and Leo Zhang, director, energy business unit, South Africa Region, at the Huawei Digital Oilfield IOT Solution launch, in Nigeria

FEC approves consultants for NDDC audit, others Tony Ailemen, Abuja

... approves Lagos, Abuja, Irrua as centres for coronavirus

e deral E xe cutive Council (FEC) on Wednesday approved the appointment of Olumuyiwa & Bashir & Co. as the lead consultants for the forensic audit of the Niger Delta Development Commission (NDDC) at the cost of N318 million.

This is as Osagie Ehanire, health minister, announced that Nigeria now has three laboratories located at Lagos, Abuja and Irrua to test for coronavirus.

Minister of Niger Delta Affairs, Godswill Akpabio, who disclosed this while briefing State House correspondents after the weekly FEC meeting presided over by Vice President Yemi Osinbajo, said the lead consultants “will appoint other forensic auditors for the NDDC.” Federal Government had approved the forensic audit

of NDDC from 2001 to 2014.

Akpabio, who briefed alongside Ehanire, works minister, Babatunde Fashola, and minister of state for transportation, Gbemisola Saraki, said the lead consultants would now appoint other nine consultants to carry out the forensic audit.

Akpabio, while providing update of Ministerial Mandate Implementation plans for his ministry, disclosed that 1600 citizens in the region had been empowered, while six skill acquisition centres in each of the state were currently under construction.

He also said the Ministry would soon commence the construction of nine housing estates in the states covered by the Commission, saying, “We have secured the Certificate of No Objection from the Bureau of Public Procurement (BPP), and we are trying to bring in

F

Protests rock Yenagoa as Dickson faces torrid time less than 72hrs to exit Samuel Eze, Yenagoa

O

utgoing governor of Bayelsa State, Henry Seriake Dickson, is having some of the most difficult days of his eight years in power as his administration winds down.

With just two days to the formal handover to David Lyon of the All Progressives Congress (APC), there have been protests in front of Government House in Yenagoa with the access barricaded by angry civil servants among others who are protesting non-payment of their December salaries.

The angry workers, staff of the 24 rural development authorities, could be heard shouting invectives at the governor as his convoy attempted to drive out of Government House for an official engagement.

Some of the aggrieved workers accused him of “killing our party when we dey manage,” which is an indication that there is more to the protests that ran into a second

day on Wednesday.

The protesters also barricaded the Onopa Junction and the Treasury Building, which resulted in traffic congestion that lasted for several hours before normalcy could return.

It would be recalled that against the advice of many bigwigs in the People’s Democratic Party (PDP), Dickson singlehandedly chose a successor that caused disaffection within the party in the state.

His choice, Douye Diri lost the governorship election and the PDP has been in a meltdown ever since, for which Dickson has not been forgiven though he had boasted that he is finishing strong.

The protesters seem to have little or no challenge as they chase the outgoing governor anywhere he went to perform official functions, booing him and calling him names. No damage has been caused so far, but it is not clear how long more it would take before violence may erupt. www.businessday.ng

the forensic auditors who will carry out the audits.

“We have designated 10 centres for the collation of information where NDDC projects are cited. We have also concluded plans to complete the over 9000 NDDC projects abandoned by the previous administration in various parts of the NDDC states.”

The audit, BusinessDay gathers, will last for nine months, has already commenced with collation of evidence from NDDC contract sites by members of the NDDC interim management committee.

“We already have a team going around the NDDC contract sites collecting evidence, which will be analysed by the forensic auditors,” he said, but noted that part of the responsibilities of the interim management committee put in place by the government

would be to collaborate with the consultants.

“We have already ordered the compilation of documents, award letters and other evidence needed by the forensic auditors,” he said.

The health minister disclosed that the Federal Government had equipped the three laboratories in Lagos, Abuja’s National Centre for Disease Control (NCDC), and the Irruah Specialist Hospital for Disease Control as designated centres to test for the virus.

Speaking further on Lassa fever and coronavirus, Ehanire dispelled fears that the country lacked capacity to detect the virus, adding, “We have mechanisms in place at the airports to test and screen all passengers coming into the country. They are given forms to fill and asked to contact us within two weeks.”

Senate considers N346bn NDDC budget, recognises sacked interim committee Solomon Ayado, Abuja

T

he Senate on We d n e s d ay c o n sidered the N346 billion 2019 budget p r o p o s a l o f t h e Ni g e r Delta Development Commission (NDD C).

This is as the Senate Committee on Niger D elta Affairs officially recognised the Interim Ma nag e m e nt C o m m i ttee (IMC) it had rejected. The committee is heade d by Joy Yimeb e Nunieh.

Also, the Senate said it had backed the ongoing forensic auditing being carried out on accounts of the agenc y by the Federal G overnment.

President Muhammadu Buhari had stopped the 15 member board of the commission and ordered a

forensic audit into the affairs of the commission.

O n We d n e s d a y , t h e Senate Committee on NDD C chaired by Peter Nwaoboshi (PDP Delta No r t h ) , g r a n t e d a u d i ence to the IMC members when it came to defend the 2019 budget proposal of the agenc y.

Nwaoboshi in his remarks at the budget defence session said: “The Senate supports the ongoing forensic auditing going on in NDDC and by extension not against the IMC running the agenc y now.

“We are here to consider and approve the a g e n c y ’s b u d g e t p r o posals for 2019 as forwarded to the Senate by President Muhamnadu Buhari in December last year.”

https://www.facebook.com/businessdayng

Debt from 19 states delays NECO remittances to FG James Kwen, Abuja

T

he National Examination Council (NECO) Wednesday disclosed that the debt owed it by 19 states had affected its prompt remittances into the Consolidated Revenue Fund.

Jacob Ekele, NECO director of Finance and Administration, made this known at an investigative hearing before the House of Representatives Committee on Finance in Abuja.

Ekele said the body conducted examinations for students in 19 states where their governors declared free registration but had not paid as expected, stressing that Zamfara topped the list of over N1 billion debt.

“Our major problem as at today is that, about 19 states are owing NECO, the exam was done for them on credit especially, Zamfara. Some states,

the government pay for the students and they still owe us,” he said.

In his remarks, chairman of the Committee on Finance, James Faleke (APC-Lagos) Faleke recommended that status enquiry be placed on NECO for a comprehensive investigation into the institution’s finances.

Faleke ordered NECO to provide all relevant documents to show its income, expenditure and remittance as well as its financial statements, number of enrollees and examination fees paid since 2011 to 2019.

He said the Auditor General of the Federation report indicated that NECO was owing the Consolidated Revenue Fund the sum of N6 billion and asked the Council to provide its budget since 2011 and documents showing reconciliation made with the office of the Accountant General of the Federation.

Lassa fever: 70 killed as cases increase Godsgift Onyedinefu, Abuja

D

eath toll from Lassa fever has risen to 70, while confirmed number of cases ‘significantly’ increased across 26 states in Nigeria.

According to the Lassa Fever weekly situation report released by the Nigeria Centre for Disease Control (NCDC), a total of 109 cases were confirmed out of 482 suspected cases from February 3rd to 9th (week 06).

This brings the total number of confirmed cases to 472 in 2020.

“The number of suspected cases has significantly increased compared to that re-

ported for the same period in 2019,” the report read.

In the reporting week, eight deaths were recorded and the confirmed cases were reported from 19 states to include Ondo, Edo, Ebonyi, Kano, Kogi, Kaduna, Delta, Taraba, Plateau, Bauchi, Enugu, Kebbi, Nasarawa, Rivers, Katsina, Benue, Adamawa, Sokoto, and Oyo states.

In total for 2020, 26 states have recorded at least one confirmed case across 92 local government areas. Of all confirmed cases, 74 percent are from three states; 35 percent from Edo, 33 percent from Ondo, and 6 percent from Ebonyi.

ARM commences 2.0 Accelerator programme to drive Fintech growth BUNMI BAILEY

T

he Asset and Resource Management Holding Company Limited (ARM), a leading Nigerian diversified and integrated asset management firm, has commenced the second edition of its Accelerator programme, LABS

by ARM. The programme in partnership with Ventures Platform, a Pan-African early-stage fund, kicked off on February 10, 2020.

For 12 weeks, business support and funding will be provided to compelling Fintech start-ups solving key problems in innovative ways around the financial industry, unlocking verticals and markets thereby changing how users access and consume financial services.

“This is part of our innovation programme. It allows us the opportunity to actually begin to scan the market much faster for fresh new ideas and companies that are developing meaningful technology solutions that we can tap into,” Henrietta Bankole-Olusina, MD, Financial Advisors, said.

“It also allows us to support the Fintech ecosystem to drive growth and build as much as we can within that system. We believe that companies that are building great technology to solve real-life problems will change the way we consume financial services,” she said.

Applications for the programme ran from December 1-31, 2019. A total of 191 pitches were @Businessdayng

submitted which were reduced to 33 and further down to 11 companies after tedious rounds of evaluation.

After a third evaluation where the 11 companies were invited to a chat with seasoned professionals and technology entrepreneurs, five companies eventually made it into the programme.“We looked for companies that are solving critical problems with huge market potential. We also graded for the quality of founder and the team, their ability to create a viable product, sell it, and provide the technology and ability to distribute it,” Kayode Oyewole, the programme manager, said.

The five companies that make up the LABS by ARM 2.0 cohort are Truesaver, a company that provides access to zero-interest loans by leveraging rotational savings; Owoafara, which provides tools and platforms to curate, verify and match small and mediumsized businesses with financial institutions for loans; Rise Capital helps Nigerians grow wealth by connecting customers with the best investment opportunities around the world, cheaply and seamlessly; Kwaba is a property rental financing platform that is solving bulk rental payment problems for low-to-middle income earning Nigerians, and Quantis Finance, a company that leverages technology to automate trading and investments in order to make financial markets and instruments more accessible to local investors.

42

Thursday 13 February 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 12 February 2020 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 0.00 9.80 2.08 70 1,264,942 0.00 7.85 1.95 125 6,647,949 UNITED BANK FOR AFRICA PLC ZENITH BANK PLC 0.00 19.90 -0.50 384 17,497,085 579 25,409,976 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 0.00 5.95 0.85 184 5,784,268 184 5,784,268 763 31,194,244 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 0.00 120.00 - 60 452,110 60 452,110 60 452,110 BUILDING MATERIALS DANGOTE CEMENT PLC 0.00 170.00 - 67 38,836 LAFARGE AFRICA PLC. 0.00 15.50 - 27 209,791 94 248,627 94 248,627 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 0.00 605.00 - 1 1,500 1 1,500 1 1,500 918 31,896,481 REAL ESTATE INVESTMENT TRUSTS (REITS) SFS REAL ESTATE INVESTMENT TRUST 0.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 0.00 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0.00 3.50 - 6 276,299 6 276,299 6 276,299 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 0.00 552.20 - 0 0 VALUEALLIANCE VALUE FUND 0.00 103.20 - 0 0 0 0 0 0 6 276,299 CROP PRODUCTION FTN COCOA PROCESSORS PLC 0.00 0.20 - 0 0 0.00 68.00 - 4 1,956 OKOMU OIL PALM PLC. PRESCO PLC 0.00 49.85 - 7 1,562 11 3,518 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 0.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 0.00 0.60 -1.64 15 749,568 15 749,568 26 753,086 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 0.00 0.56 - 0 0 S C O A NIG. PLC. 0.00 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 0.00 0.96 -1.03 37 2,803,159 U A C N PLC. 0.00 9.50 2.15 90 1,713,593 127 4,516,752 127 4,516,752 BUILDING CONSTRUCTION ARBICO PLC. 0.00 3.16 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 0.00 22.50 - 19 300,139 ROADS NIG PLC. 0.00 6.60 - 0 0 19 300,139 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 0.00 0.90 - 6 68,993 6 68,993 25 369,132 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 0.00 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 0.00 0.97 - 0 0 GOLDEN GUINEA BREW. PLC. 0.00 0.81 - 0 0 GUINNESS NIG PLC 0.00 28.00 -7.28 46 754,217 INTERNATIONAL BREWERIES PLC. 0.00 7.75 - 6 103,050 NIGERIAN BREW. PLC. 0.00 51.50 - 24 102,880 76 960,147 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 0.00 12.85 0.39 119 1,211,659 FLOUR MILLS NIG. PLC. 0.00 22.50 -1.32 37 383,576 HONEYWELL FLOUR MILL PLC 0.00 1.09 - 3 10,876 MULTI-TREX INTEGRATED FOODS PLC 0.00 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 0.00 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 0.00 13.00 - 28 259,551 UNION DICON SALT PLC. 0.00 10.95 - 0 0 187 1,865,662 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 0.00 9.10 -3.19 18 284,083 NESTLE NIGERIA PLC. 0.00 1,242.00 - 26 6,313 44 290,396 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 0.00 22.10 - 0 0 VITAFOAM NIG PLC. 0.00 4.53 -9.94 25 756,734 25 756,734 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 0.00 5.00 - 17 116,725 UNILEVER NIGERIA PLC. 0.00 15.00 - 31 207,847 48 324,572 380 4,197,511 BANKING ECOBANK TRANSNATIONAL INCORPORATED 0.00 7.00 0.72 63 1,095,284 FIDELITY BANK PLC 0.00 2.16 0.47 43 3,110,309 GUARANTY TRUST BANK PLC. 0.00 29.00 0.17 198 13,434,672 JAIZ BANK PLC 0.00 0.66 - 9 148,415 STERLING BANK PLC. 0.00 1.67 - 54 2,722,353 UNION BANK NIG.PLC. 0.00 6.95 - 27 520,555 UNITY BANK PLC 0.00 0.57 - 3 55,000 WEMA BANK PLC. 0.00 0.67 -2.90 18 631,775 415 21,718,363 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 0.00 0.20 - 1 5,000 AIICO INSURANCE PLC. 0.00 0.85 - 13 128,496 AXAMANSARD INSURANCE PLC 0.00 2.00 - 12 200,667 CONSOLIDATED HALLMARK INSURANCE PLC 0.00 0.35 - 3 46,250 CORNERSTONE INSURANCE PLC 0.00 0.54 - 3 98,111 0.00 0.20 - 0 0 GOLDLINK INSURANCE PLC GUINEA INSURANCE PLC. 0.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 0.00 0.38 - 0 0 LASACO ASSURANCE PLC. 0.00 0.24 - 3 11,800 LAW UNION AND ROCK INS. PLC. 0.00 1.20 - 19 1,802,088 LINKAGE ASSURANCE PLC 0.00 0.51 - 3 200,000 MUTUAL BENEFITS ASSURANCE PLC. 0.00 0.20 - 3 159,000 NEM INSURANCE PLC 0.00 2.20 - 4 22,099 NIGER INSURANCE PLC 0.00 0.20 - 0 0 PRESTIGE ASSURANCE PLC 0.00 0.59 - 1 21,898 REGENCY ASSURANCE PLC 0.00 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 0.00 0.20 - 2 200,000 STACO INSURANCE PLC 0.00 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 0.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 0.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 0.00 0.20 - 0 0 UNIVERSAL INSURANCE PLC 0.00 0.20 - 1 50,000 VERITAS KAPITAL ASSURANCE PLC 0.00 0.20 - 0 0 WAPIC INSURANCE PLC 0.00 0.33 -5.71 18 594,982 86 3,540,391 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 0.00 1.23 - 1 655 1 655

www.businessday.ng

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 0.00 1.05 - 0 0 ASO SAVINGS AND LOANS PLC 0.00 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 0.00 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 0.00 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0.00 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 0.00 4.70 2.17 16 216,392 CUSTODIAN INVESTMENT PLC 0.00 6.00 - 5 56,314 DEAP CAPITAL MANAGEMENT & TRUST PLC 0.00 0.36 - 0 0 FCMB GROUP PLC. 0.00 1.88 -1.05 37 1,419,430 ROYAL EXCHANGE PLC. 0.00 0.23 -8.00 1 245,230 STANBIC IBTC HOLDINGS PLC 0.00 38.00 - 8 27,999 UNITED CAPITAL PLC 0.00 2.60 -0.38 43 2,200,609 110 4,165,974 612 29,425,383 HEALTHCARE PROVIDERS EKOCORP PLC. 0.00 5.20 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 0.00 0.20 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 0.00 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 0.00 0.50 - 0 0 FIDSON HEALTHCARE PLC 0.00 2.55 - 5 3,131 GLAXO SMITHKLINE CONSUMER NIG. PLC. 0.00 5.00 - 11 118,943 MAY & BAKER NIGERIA PLC. 0.00 2.02 - 16 76,675 0.00 0.50 - 5 18,140 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 0.00 3.62 - 0 0 PHARMA-DEKO PLC. 0.00 1.50 - 0 0 37 216,889 37 216,889 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 0.00 0.22 - 1 833 1 833 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 0.00 0.41 - 0 0 0 0 IT SERVICES CWG PLC 0.00 2.54 - 0 0 NCR (NIGERIA) PLC. 0.00 2.98 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0.00 0.58 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 0.00 0.31 -6.06 4 177,819 E-TRANZACT INTERNATIONAL PLC 0.00 2.61 - 0 0 4 177,819 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 0.00 298.90 - 2 90 2 90 7 178,742

BUILDING MATERIALS BERGER PAINTS PLC 0.00 6.75 - 0 0 BUA CEMENT PLC 0.00 35.30 - 9 47,098 CAP PLC 0.00 24.60 - 4 1,317 MEYER PLC. 0.00 0.46 - 0 0 0.00 2.23 - 1 1,111 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 0.00 9.40 - 0 0 14 49,526 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 0.00 2.03 - 0 0 CUTIX PLC. 0.00 1.35 - 4 26,470 4 26,470 PACKAGING/CONTAINERS BETA GLASS PLC. 0.00 70.00 - 2 404 GREIF NIGERIA PLC 0.00 9.10 - 0 0 2 404 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 0.00 62.50 - 2 150 2 150 22 76,550 CHEMICALS B.O.C. GASES PLC. 0.00 4.50 - 1 1,000 1 1,000 METALS ALUMINIUM EXTRUSION IND. PLC. 0.00 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 0.00 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 0.00 0.35 - 0 0 0 0 1 1,000 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 0.00 0.24 -7.69 21 5,427,057 21 5,427,057 INTEGRATED OIL AND GAS SERVICES OANDO PLC 0.00 3.50 - 19 192,506 19 192,506 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 0.00 133.20 - 6 905 CONOIL PLC 0.00 18.00 - 10 11,580 ETERNA PLC. 0.00 2.10 - 14 264,654 FORTE OIL PLC. 0.00 18.55 - 60 234,797 MRS OIL NIGERIA PLC. 0.00 13.80 - 6 9,870 TOTAL NIGERIA PLC. 0.00 107.00 - 17 11,283 113 533,089 153 6,152,652

ADVERTISING AFROMEDIA PLC 0.00 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 0.00 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 0.00 0.20 - 1 20,000 1 20,000 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 0.00 4.45 - 0 0 TRANS-NATIONWIDE EXPRESS PLC. 0.00 0.89 - 0 0 0 0 HOSPITALITY TANTALIZERS PLC 0.00 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 0.00 2.75 - 0 0 0.00 1.12 - 2 12,000 IKEJA HOTEL PLC TOURIST COMPANY OF NIGERIA PLC. 0.00 3.15 - 0 0 TRANSCORP HOTELS PLC 0.00 4.05 - 1 455 3 12,455 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 0.00 0.33 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 0.00 0.37 - 0 0 LEARN AFRICA PLC 0.00 1.13 - 1 1,000 0.00 1.99 - 1 100 STUDIO PRESS (NIG) PLC. UNIVERSITY PRESS PLC. 0.00 1.20 - 1 2,000 3 3,100 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 0.00 0.34 - 3 7,163 3 7,163

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 13 February 2020

FT

BUSINESS DAY

43

FINANCIAL TIMES

World Business Newspaper

Sanders secures narrow victory in New Hampshire primary Moderate Buttigieg finishes second and Klobuchar vaults to third place as Warren and Biden trail LAUREN FEDOR, COURTNEY WEAVER AND DEMETRI SEVASTOPULO

B

ernie Sanders, the selfdeclared democratic socialist, secured a narrow victory in the New Hampshire Democratic presidential primary, fending off a strong challenge from moderate Pete Buttigieg, while Amy Klobuchar vaulted to a surprise thirdplace finish.

The Vermont senator won 25.9 per cent, followed closely by Mr Buttigieg, the former mayor of South Bend, Indiana on 24.4 per cent, with 96 per cent of the votes counted. Minnesota Senator Klobuchar had 19.8 per cent of the votes.

Two former front-runners suffered crushing setbacks, as Massachusetts senator Elizabeth Warren won 9.3 per cent and former vice-president Joe Biden only took 8.4 per cent.

“What we have done together here is nothing short of the beginning of a political revolution,” Mr Sanders said.

At this point in the campaign we are taking on billionaires and we are taking on candidates funded by billionaires Bernie Sanders, Senator for Vermont At a rally in Manchester, Mr Sanders claimed victory not just in New Hampshire, but in last week’s Iowa presidential caucuses, where he won the popular vote while Mr Buttigieg walked away with the most delegates.

“We are taking on billionaires and we are taking on candidates

funded by billionaires, but we are going to win because we have the agenda that speaks to the needs of working people of this country,” Mr Sanders said.

It was an apparent reference to former New York mayor Mike Bloomberg and Mr Buttigieg, a prolific fundraiser who has also raised money from wealthy donors.

Supporters of Mr Sanders had earlier booed Mr Buttigieg, chanting “Wall Street Pete!” But Mr Sanders made a call for party unity, saying all the candidates and their supporters would back whoever was chosen to face Mr Trump.

“No matter who wins — and we certainly hope it’s going to be us — we are going to unite together and

defeat the most dangerous president in the modern history of this country,” Mr Sanders said.

Mr Buttigieg addressed fans in Nashua to celebrate a result for the 38-year-old that was seen as impressive given that Mr Sanders is from the neighbouring state of Vermont and had beaten Hillary Clinton by 22 points in the New Hampshire primary in 2016.

“Here in a state that goes by the motto ‘Live Free or Die’ you made up your own minds,” Mr Buttigieg said. “And thanks to you, a campaign some said shouldn’t be here at all, has shown that we are here to stay.”

He also took aim at Mr Sanders and Mr Biden — but not by name

— as he stressed that he was an outsider with fresh ideas. “So many of you chose to meet a new era of challenge with a new generation of leadership,” he said.

Ms Klobuchar, who used a strong performance in last Friday’s televised debate to sprint past Mr Biden and Ms Warren, credited her “happy, scrappy campaign” for her rise.

“Hello America. I’m Amy Klobuchar and I will beat Donald Trump,” she said. “We have beaten the odds every step of the way. We have done it on the merits, we have done it with ideas, and we have done it with hard work.”

Capitalising on her move into the top tier, Ms Klobuchar announced a “seven-figure ad buy” in Nevada, the

next Democratic contest in nearly two weeks. The ads were due to run in the Las Vegas and Reno markets beginning on Wednesday.

The Democratic field also narrowed on Tuesday as entrepreneur Andrew Yang and Michael Bennet, a Colorado senator, dropped out of the race.

Ms Warren and Mr Biden both put a positive spin on their defeats, saying the primary campaign was a long race and that only two states had cast their votes so far.

“We still have 98 per cent of our delegates . . . up for grabs,” Ms Warren said, before congratulating Ms Klobuchar “for showing just how wrong the pundits can be when they count a woman out.”

America’s splintered, fickle Democrats Socialist from Vermont is the narrow favourite unless party can unite around alternative EDWARD LUCE

B

y this stage of a primary, there is usually a frontrunner. But the Democratic party is in a resolutely indecisive mood. Its top four presidential hopefuls this time last year were Joe Biden, Elizabeth Warren, Kamala Harris and Beto O’Rourke. The first two campaigns are on life support and the other two have long since folded.

Following the contests in Iowa and New Hampshire, today’s leading four are Bernie Sanders, Pete Buttigieg, Amy Klobuchar and Mike Bloomberg. The latter two were not even in the frame two months ago.

To judge by the party’s increasingly ideological split, the contest

could eventually boil down to a fight between Mr Bloomberg and Mr Sanders — the plutocrat versus the socialist. But the mood remains fluid. The real constant is that most Democrats cannot figure out what they want.

The party faces two related headaches. The first is a lack of enthusiasm. Turnout in Iowa was lower than in 2016 and considerably below where it was in 2008. It was higher in New Hampshire this year but undershot 2008.

Three years into Donald Trump’s administration, most would have forecast the opposite. America’s left is driven by deep anger against a president who has smashed every convention in the book and threatens far worse in a second term. Yet apathy appears to be a stronger force www.businessday.ng

than anger.

To judge by the anaemic turnout, America’s so-called “exhausted majority” is a far more significant force than the left’s anti-Trump “resistance”. The lack of passion also stems from the absence of a high calibre figure in the mould of Barack Obama or Bill Clinton. There is no messiah on the horizon. The party’s indifference is also a testament to Mr Trump’s political skills. He knows how to stoke fatalism among his opponents.

The second problem is the almost theological split between Mr Sanders and most of the rest of the party. Mr Sanders’ supporters are an exception to the party’s shifting affiliations. Their loyalty is fierce and non-fungible.

The rest of the party is up for

https://www.facebook.com/businessdayng

grabs. It is possible that Ms Klobuchar or Mr Buttigieg could consolidate the centrist vote and gain a lead on Super Tuesday in three weeks.

But it is unlikely. They are not only competing against each other but with Mr Bloomberg’s unlimited financial spigot. Ms Klobuchar celebrated raising $3m last weekend after a strong debate performance in New Hampshire. Mr Bloomberg spends more than that every day.

In the last few weeks, his national poll numbers have jumped from negligible to around 10 per cent.

They will surely keep growing. Mr Sanders, meanwhile, seems to have an unending line of credit from his small donor base.

The upshot is a Balkanised field with no historical precedent. In a CNN exit poll in New Hampshire, @Businessdayng

six out of 10 Democratic voters said they wanted a nominee “who could beat Trump”. It is unclear what was motivating the other 40 per cent.

Mr Sanders’s voters believe he could win a general election — “Bernie beats Trump” is a ubiquitous slogan. Most of the rest of the party clearly thinks otherwise. They continue to search restlessly for the person who can beat both Mr Sanders and Mr Trump. That may be a tall order. Mr Sanders, after all, got the most votes in both Iowa and New Hampshire. Moreover, he has a fighting chance of pulling off wins in Nevada and South Carolina later this month.

Unless the rest of the party can unite around an alternative, the socialist from Vermont must be counted as the narrow favourite.

44

Thursday 13 February 2020

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED HUDSON LOCKETT, JOHN REED AND STEFANIA PALMA

C

urrencies across the A s i a - Pa c i f i c re g i o n swept higher at the end of last year, boosted by the thaw in trade tensions between the US and China.

Then the coronavirus outbreak hit, obliterating the gains.

After an almost 4 per cent rally in December, the Australian dollar stumbled last week to its weakest point in almost a decade. The currencies of Thailand and Singapore have also swooned after the central banks there flagged risks to their economies from disrupted supply chains and weakened Chinese tourism.

Christy Tan, Asia head of markets strategy and research at Melbournebased banking group NAB, said “essentially everyone” had expected markets to stabilise and economic activity to improve after the US and China signed a trade war truce in December. Now, markets are pointing to sharply slower growth.

“From a trade war to a war against a virus,” she said. “It’s a shock to financial markets, to the global growth situation.”

The Chinese central bank’s efforts during the trade war to fend off bets against the renminbi made traders more inclined to target other currencies in the region when the outbreak became more serious, Ms Tan added.

Australia has the worst performing major currency in the region, despite the central bank playing down the virus’s impact. “It’s been a pretty poor run”, said Daniel Been, head of forex strategy at ANZ, another Melbourne-based lender. The currency has sunk 4.3 per cent against its US counterpart in 2020.

Mr Been said that despite an improving outlook for the country’s labour market, the Australian dollar has “become the easy proxy” for expressing fears about the growth outlook in Asia, particularly China.

The drop came at a painful time

Asia-Pacific currencies tumble under the weight of coronavirus Australia and Thailand worst hit on concern over Chinese demand for minerals and tourism

The impact of the coronavirus has spread outside China to economies heavily reliant on the country, from Australia and Thailand to South Korea and Singapore © FT montage; Shutterstock

for investors and traders, who had been warming to the currency.

Negative bets in the futures market targeting the Australian dollar halved between December 17 and January 21, reaching the lowest level in 20 months, according to reports from the US Commodity Futures Trading Commission.

Mansoor Mohi-uddin, senior macro strategist at NatWest Markets, said both the hit to activity and the immediate reaction from some central banks were cause for concern, as they reflected how vulnerable economies in the region might prove to be.

The Bank of Thailand unexpect-

edly cut interest rates last week, sharpening a sell-off for the Thai baht, which is now down 4 per cent this year, after a 10 per cent rise in 2019. Chinese tourists accounted for more than a quarter of the 38m people who visited Thailand last year, and arrivals at the kingdom’s main airports have tumbled since travel restrictions were tightened.

“A weak baht is a boon for the economy,” said Prakash Sakpal, an economist with ING Bank. “But what’s driving it is the adverse impact of the virus on tourism, and that’s not a good source of weakness.”

Analysts said they expected

the coronavirus to disrupt the leisure and travel sector for several months, as the Sars outbreak did in 2003. “If we take the Sars impact as guidance, we will take a hit over one to two quarters,” said Suchart Techaposal, head of research for Thailand at brokerage CLSA Securities.

A similar pattern is emerging elsewhere. South Korea’s currency, the won, is down 2 per cent this year, while Singapore’s dollar has fallen 2.8 per cent against the greenback. Most of those losses came following the surge of coronavirus cases in China that began in mid-January.

4.3% The Australian dollar’s decline against the greenback in 2020 The sell-off sharpened last week after the Monetary Authority of Singapore said there was “sufficient room within the policy band to accommodate an easing” of Singapore’s main policy tool, the exchange rate, to reflect the economic weakening caused by the coronavirus.

DBS, Singapore’s biggest bank, has lowered its 2020 gross domestic product growth forecast for Singapore to 0.9 per cent, from 1.4 per cent previously, citing a drop of 1m tourist arrivals for every three months Singapore’s travel ban on Chinese passport holders is upheld.

Margaret Yang, an analyst at CMC Markets, said the MAS statement had accelerated the currency’s fall, adding it remains under pressure because “the downward economic pressure is obvious”.

Despite this burst of currency weakness across the region, the tightly regulated onshore rate for China’s renminbi has weakened just 0.4 per cent this year. Analysts said moves by the People’s Bank of China to support the country’s economy, including a cash injection into short-term borrowing markets, had helped prevent a steeper fall.

That has limited the pressure on other exporters in the region, whose currencies would be forced lower by a weaker renminbi in order to remain competitive. But Ms Tan warned that traders would continue placing bets against the renminbi’s peers in the region until the situation in China improves.

Retail landlords go shopping for bankrupt chains Property companies coming to the rescue of struggling tenants sounds latest warning for retail ALISTAIR GRAY

P

roperty executives are unlikely stewards of youthful clothing brands. But Forever 21 is to be subsumed by two of its largest landlords after retail specialists balked at the prospect of reviving the fortunes of the distressed fastfashion company.

A Delaware bankruptcy judge this week gave the go-ahead to a rescue bid from Simon Property Group and Brookfield Property Partners, a highly unconventional transaction that shows how turmoil in retail is upending long-standing business practices.

The shopping centre owners have teamed up with BlackRockcontrolled Authentic Brands, a licensing specialist that owns Sports Illustrated magazine, to buy the chain out of bankruptcy for about $80m and an agreement to assume some of its liabilities.

Jon Goulding, Forever 21’s chief restructuring officer, told the court that the alternative was an outright liquidation of the business, which

before its bankruptcy filing in September employed about 32,800 people and operated almost 800 stores worldwide.

As of this week, the retailer had only $5m of cash left — nothing like enough to cover the $24m it owed in rental payments for February.

For critics, the landlords’ decision to prop up a struggling tenant sounds the latest alarm bell about bricks and mortar retail. “It shows how weak the sector is,” said David Tawil, president of the hedge fund Maglan Capital.

Forever 21’s struggles threaten to exacerbate a developing crisis in US shopping malls, which have been particularly hard-hit by a wave of store closures and bankruptcies of household names including Sears and Toys R Us. By the end of last year shopping centre vacancies reached the highest level in at least two decades, according to Reis Moody’s Analytics.

Some of the best professionals in the retail and merchandising businesses are struggling. How is it that real-estate investors are going to do any better?

David Tawil, president of Maglan

Capital hedge fund In a sign that investors are increasingly concerned about the fallout, it emerged this week that a UBS real-estate investment fund exposed to US retail is facing billions of dollars in redemption requests.

Simon and Brookfield have more on the line in the Forever 21 bankruptcy than other landlords.

Together they were owed $13.4m in unpaid rent at the time of the filing.

Yet the risks of an outright collapse go well beyond the stores themselves.

Founded in 1984 by husband and wife Do Won and Jin Sook Chang, Forever 21 became a shopping centre stalwart after an aggressive expansion in the 2000s during which it moved into unusually large spaces.

“It’s a big hole to have in a mall,” said Craig Silvers, chief executive of Bricks & Mortar Capital. “If Forever 21 leaves, it could harm the business of other tenants.”

The departure of such a key tenant could encourage other retailers in the same centre to demand the landlord lower their rent or al-

low them out of leases altogether, threatening to trigger a downward spiral.

The landlords’ plan would save about 25,000 jobs, Tyler Cowan, an investment banker at Lazard who has been running the sale, told the bankruptcy court this week.

However, Mr Tawil said he was sceptical about the consortium’s longer term chances of success.

“Some of the best professionals in the retail and merchandising businesses are struggling. How is it that real-estate investors are going to do any better?” he asked.

During the bankruptcy several “strategic buyers” expressed an interest in snapping up Forever 21, once a hit among fashion-conscious young women thanks to its mix of affordable prices and rapidly changing styles.

None, however, made a firm offer for the company, whose financial health deteriorated after it lost ground to competitors such as H&M and Primark and it embarked on an ill-fated push into Asia and Europe.

Other prospective bidders said

variously that they could not secure the necessary financing or deemed that Forever 21 was “not the right fit”, according to Mr Cowan.

The deal is small relative to the might of Simon and Brookfield, two of America’s biggest property companies.

Still, Mr Silvers said: “My concern isn’t the $80m — that’s a rounding error for Simon and Brookfield. My concern is whether it distracts management from their core business.”

It was not clear on Tuesday how many stores Forever 21’s new owners planned to keep open, although David Simon, chairman and chief executive of Simon, said last week that the deal could help save “many” of them.

He denied that they were saving the company simply to ensure the doors at his properties stayed open and the rent was paid.

“That’s obviously beneficial, and I don’t want to understate that, but that’s not why we do it,” he told analysts last week, claiming the realestate investment trust had spotted a business opportunity where others had not.

Thursday 13 February 2020

FT

BUSINESS DAY

45

ANALYSIS

Surge in plastics production defies environmental backlash

Cheap shale gas has fed an investment boom in products that often end up as waste. Has the petrochemicals industry miscalculated?

MICHAEL POOLER

A

long the banks of the Ohio River in Beaver County, Pennsylvania, giant cranes whir overhead as thousands of construction workers toil away at what will be one of the largest plastic factories in the world.

Once complete, the citadel of smokestacks and pipeworks will churn out 1.6m tonnes a year of pellets for manufacturers in a wide range of industries. They will then make things such as shrink wrap, shampoo bottles and garden furniture which remain popular products in spite of an environmental backlash against plastic.

The multibillion dollar Royal Dutch Shell plant, on the site of an old zinc smelter in the American rust-belt, is the biggest investment in the state since the second world war and further evidence of a manufacturing revival in the US. “We’re taking shale gas from the Marcellus and Utica fields [in north-east US],” says Hilary Mercer, the executive in charge of the development. “Then we’re converting it, first from ethane into ethylene, then into polyethylene.”

The Ohio River complex is one of many hotspots in a 21st century plastics boom, even as consumers across the western world turn against the material.

Over the past decade, an unprecedented wave of expenditure — at least $200bn, according to the American Chemistry Council — has been pledged by companies including ExxonMobil, Dow and BP for new chemical production facilities like Shell’s to take advantage of the shale rush in North America. These rock formations have gifted not just cheap natural gas, but also the raw materials for petrochemicals: the basic building blocks of products like paints, adhesives, dyes, detergents, fertilisers and, of course, plastics.

At a time when the oil industry is gripped by fears that demand for petrol will collapse in an era of electric vehicles, many hydrocarbon producers are betting on petrochemicals — and in particular, plastics — to fill the gap.

But doubts are emerging about the wisdom of a huge expansion in capacity that will leave the world awash in products that can take hundreds of years to decay.

Images of oceans and rivers clogged up with discarded singleuse plastic have raised public awareness about the impact on the environment and human health.

This poses a conundrum for producers chasing maximum sales of a versatile substance for which the main ingredient is cheap and abundant.

Unless it is seen to respond to these concerns, the industry risks falling foul of public opinion, changes in investor strategy or government clampdowns. Authorities from Brussels to Beijing are already imposing bans on disposable plastic items.

“Plastics is the most egregious example of a gap between what

the industry is expecting and what society demands,” says Kingsmill Bond, energy strategist at Carbon Tracker, a think-tank. “The risk to investors is that [plastics companies] are building for demand that may not come.”

At the same time as the supply splurge, trade tensions and a weak global economy have contributed to a slump in prices for many plastic grades, squeezing profits at petrochemical producers. Campaigners fear this could hold back industry efforts to take greater responsibility for plastic waste and develop eco-friendly substitutes.

Prices for high-density polyethylene, one of the biggest selling plastics, recently fell to their lowest levels in a decade in the US and China and for five years in Europe, according to ICIS, a market information service.

“You have lower than expected growth, this big capacity increase and trade wars. On top of that you have the drip-drip of the plastic rubbish crisis. That’s hitting polyethylene, because most of it goes for single-use throwaway applications like plastic film, bottles and pouches,” says John Richardson, a senior consultant for Asia at ICIS. When the shale revolution took off in North America more than a decade ago, it promised a plentiful and cheap source of oil and gas that would rival Middle Eastern producers and put the US on a course towards energy independence.

Just as profound was its impact on the country’s petrochemicals industry. The shale extraction method of hydraulic fracturing, or fracking, generates byproducts known as natural gas liquids, among them ethane and propane.

Around the US Gulf Coast new crackers, facilities where ethane

and propane are broken down into smaller molecules, have sprung up. The resulting ethylene and propylene are joined up inside reactors into long-chain polymers that form the two most important commodity plastics.

Polyethylene (PE) is the most common, used in everything from shopping bags to bottles, tubes and laminates. Polypropylene (PP) is found in car interiors, carpets and crisp packets. And with more output than the domestic market can absorb, US producers have turned to China and other growth economies for buyers.

“Historically, North America had not been a major exporter of polyethylene for a long time, or an exporter of petrochemicals in general,” says Mark Lashier, chief executive of Chevron Phillips Chemical. “But the ability to access feedstocks like the gases coming out of the Permian [basin in south-west US] creates economics that allow North American assets to compete with anywhere in the world.”

The effects have stretched as far as Europe. With North Sea oil supplies dwindling, Ineos in 2016 became the first chemicals company to ship shale-origin ethane across the Atlantic to feed its plants and is now spending €3bn on new facilities, including the continent’s first new cracker in 20 years.

Yet shale is not the only factor.

For oil majors, the petrochemicals business many wanted to walk away from a generation ago is now seen as a way to offset volatile oil markets.

With fuel consumption in transport forecast to peak towards the end of the 2020s, it also offers the industry a hedge against the impact of electric vehicles. And as living standards rise in developing countries, plastics demand is ex-

pected to outpace wider growthin the global economy.

“Petrochemicals are rapidly becoming the largest driver of global oil consumption,” said a report published by the International Energy Agency in 2018. “They are set to account for more than a third of the growth in oil demand to 2030, and nearly half to 2050.”

Giant complexes costing billions of dollars are under way in Russia, India, the Middle East and China, as many integrated energy groups prioritise chemicals. South Africa’s Sasol, for instance, has declared it will not invest in any new refineries or gas-to-liquid plants because of what chief executive Fleetwood Grobler described as the “sunset of the energy industry”.

“The whole megatrend with respect to urbanisation, population growth and expansion of the middle class really points to growth in chemicals, rather than the energy sector,” he says.

For a period, everything came together and petrochemicals producers enjoyed record profits.

But the good times are now over. ExxonMobil’s chemical business sank into a loss in the fourth quarter of last year, weaker chemicals margins contributed to a drop in earnings at Shell, and BP reported a fall in profits at its petrochemicals division.

The trade war hit the plastics market just as a number of new facilities were cranking up. Chinese tariffs on certain key grades of US-made PE, imposed in August 2018, had the intended effect.

American exports of the plastic to China fell in the first nine months of last year, forcing US producers to find other buyers.

The surplus of material spewing on to global markets fuelled what was already a downwards trajectory in prices. Even more

significant for producers is the difference between input costs and selling prices that are a proxy for profitability. Producers’ margins have almost halved in the US for high-density PE, since touching peaks in 2017. At European facilities, using naphtha as their feedstock, margins fell by more than three-quarters by the end of 2019; and were in negative territory in Asia, according to ICIS. “The outlook broadly for the chemicals market at the moment isn’t great,” says Alan Gelder of Wood Mackenzie, a consultancy.

“Now we’re on a steep downward slope. We think margins will continue to compress for the next few years.”

Hurting the most are producers in Asia which rely on more expensive, oil-derived naphtha feedstock, though even US facilities fed with ethane have seen profits contract.

“Asian prices across the board for all grades of polyethylene have come down tremendously,” says Hassan Ahmed, an investment analyst at Alembic Global Advisors. “They’re sitting at break-even to negative margin levels. If those margins continue for a couple more months you will start seeing capacity curtailment and shutdowns.”

Many observers see the downturn as cyclical. Demand for plastics has grown faster than for any other bulk material such as steel, aluminium or cement over the past 50 years, nearly doubling since the millennium alone, the IEA says.

Yet a regulatory backlash, coupled with moves by consumer brands to increase the recycled content in their packaging, or switch into different materials

Continues on page 46

46

Thursday 13 February 2020

BUSINESS DAY

FT

NATIONAL NEWS

Argentina seeks support from IMF and congress for debt plan

Government looks at pragmatic solution to avoid crisis without losing political backing BENEDICT MANDER

A

rgentina’s new leftist government faces a delicate balancing act as it seeks support from both the IMF and congress for its strategy to restructure about $100bn of debt in hopes of averting another looming crisis.

A week of formal talks with IMF officials in Buenos Aires begin on Wednesday. At the same time economy minister Martín Guzmán is due to present his debt restructuring strategy to congress to drum up support among the diverse ruling coalition for its approach.

“President Alberto Fernández needs to ensure a careful balance between a pragmatic resolution with the IMF and maintaining the political support of key allies,” said Jimena Blanco, head of Latin America at Verisk Maplecroft, a risk consultancy.

Growing tensions in the ruling Peronist coalition were laid bare after Cristina Fernández de Kirchner, the country’s vicepresident, called for a “substantial” haircut to Argentina’s $44bn debt with the IMF over the weekend. Just days earlier Mr Guzmán held “constructive” informal talks in Rome sponsored by Pope Francis, an Argentine, with the IMF’s new managing director, Kristalina Georgieva, with no mention of

a possible haircut.

The president has also been lobbying for support from major shareholders of the IMF, including leaders from Germany, France and Spain, as part of the efforts to avoid what would be Argentina’s ninth sovereign debt default.

The pragmatic Argentine leader has insisted he will keep promises made during the Argentine presidential elections last year to end unpopular austerity measures and repay creditors only after the country exits a recession, which is now entering its third year.

“If the lack of policy cohesion continues to grow within the

coalition, or if large bondholders dig in their heels to force Guzmán’s hand — as they did in the Buenos Aires province debt negotiation in early February — the risk of a default will increase,” said Ms Blanco.

The IMF is facing a difficult decision as well. Acquiescing to Argentina’s arguments that its debt is unsustainable would effectively endorse giving a haircut on the country’s bonds that would anger private creditors.

Bondholders are already growing increasingly exasperated with the government’s refusal to present a detailed economic plan that would explain convincingly how it plans

to repay them and justify a haircut. Mr Guzmán is not expected to provide much fresh detail on economic targets in congress on Wednesday, especially for the fiscal deficit.

One of Argentina’s largest creditors, Fidelity, refused to accept an offer by the province of Buenos Aires to postpone a $277m debt payment due last week. The country’s largest province narrowly avoided default by agreeing to make the payment at the last minute.

“Bondholders are in no mood to be bullied into a deal,” said Walter Stoeppelwerth, chief investment officer at Portfolio Personal Inversiones, an

investment bank in Buenos Aires. The province of Buenos Aires “made a major negotiating faux pas”, he added, explaining that its attempt to strong-arm investors had flopped.

While talks over the restructuring of Argentina’s foreign debt are yet to start in earnest, the government has fuelled more investor concern this week by delaying payment due on a local peso-denominated bond until September, after about 90 per cent of bondholders declined to participate in a debt swap last week. Franklin Templeton is said to hold 23 per cent of that debt, according to Portfolio Personal Inversiones.

“This government will not allow the Argentine society to be hostage to international financial markets, nor will it favour speculation over the wellbeing of the people,” Argentina’s economy ministry said in a statement on Tuesday.

Analysts said the government was concerned that it might have to resort to printing money at the central bank to cover the debt payments, pouring more fuel on what is already one of the highest inflation rates in the world.

On Thursday the statistics agency is due to publish inflation figures for January, which officials hope will be below the December figure of 3.7 per cent, leaving inflation in 2019 at 53.8 per cent — the highest in almost three decades.

Surge in plastics production defies environmental backlash Continued from page 45 like cardboard or glass, threatens to eat into demand for virgin plastic resins.

China last month unveiled curbs on products like disposable and non-degradable carrier bags, plastic straws and wrapping for deliveries of online purchases.

ICIS says the move could hit 9.4 per cent of what is the biggest polyethylene market. It followed an EU decision to ban single-use items such as cutlery, straws and cotton buds by 2021.

With Alembic Advisors estimating that only 14 to 16 per cent of global waste plastic is recycled, there is reason to believe the overall impact of these measures and moves towards reuse will be muted. If that rate jumped to one-third, it would still only make a tiny dent in demand, leaving annual growth at 3.5 per cent and equivalent to 10m to 11m tonnes a year, says Mr Ahmed.

“I think it’s much more a PR battle for the chemicals companies than it is an actual demand

threat,” he says.

In a region like Europe, packaging accounts for almost two-fifths of resin consumption. Even if demand for such products falls, the use of plastics for more durable applications — like cars, household goods and medical devices — is only set to continue rising.

Critics argue that chemical companies’ spending on more sustainable materials and waste reduction programmes is a drop in the ocean, accusing the sector of a “greenwashing” campaign. The scope of state action against plastic waste is only likely to broaden, with implications for businesses in the supply chain.

“We’ve only just scratched the surface of what can be done,” says Carbon Tracker’s Mr Bond. “We think [the plastics industry] is deeply vulnerable to these wider changes.”

The question is whether the industry will be willing to adapt to commercially unproven chemistry after investing billions on plants that meet proven demand for conventional plastics. www.businessday.ng

For Rob Buurman at Recycling Netwerk, a Dutch NGO, as long as hydrocarbon-based production continues to rise, alternative materials such as bioplastics will struggle to compete. “We have so many single-use plastics because it costs basically nothing to produce; that will make it extremely difficult to develop other types of economy that for example rely on reuse,” he says.

However, there are encouraging signs. “What we’ve seen latterly is the cost of bio-based material coming down, but also the willingness of the customer to pay more because consumer demand is increasing,” says Tom Crotty, a director at Ineos. “They are willing to pay a premium, or brand owners are willing to take a hit to protect their brand image.

We’re starting to see the equation work as those two things meet in the middle.”

Ultimately, the goal for some companies of a closed loop from production to waste will rely on making chemical recycling a commercial reality. Unlike mechanical

https://www.facebook.com/businessdayng

methods, which chop up plastic waste for melting, this breaks down polymers into their constituent molecules, and by eliminating quality issues it promises pellets of the same standard as virgin resin.

Industry figures say that rather than facilities becoming redundant as a result, the more modern assets could be adapted in order to become compatible with this recycled feedstock.

“That’s the goal,” says Nigel Davis of ICIS. “Taking the plastic back to the monomer to achieve sustainable production.”

Can producers bring down the cost of bioplastics?

The chemicals industry is renewing efforts to develop sustainable alternatives to traditional plastics. First developed in the 19th century, bioplastics have once again captured the imagination of chemical engineers and start-ups. But despite the appealing sound of the name, they are not a panacea.

Bio-based polymers made from renewable sources, such as sugar @Businessdayng

cane or starch, have a smaller carbon footprint than hydrocarbonbased varieties. Biodegradable plastics, meanwhile, sometimes require specific conditions to decompose. If buried deep in landfill without oxygen, some may emit methane — a powerful greenhouse gas.

A key challenge is in replicating the strength and versatility of conventional plastics. But perhaps the greatest obstacle to widespread adoption of “green” plastics is not technical but economic. Their higher cost is the main reason they account for only a fraction of overall plastics production: price is the determining factor for resin buyers.

Even cheaper recycled plastics are rising in price due to tight supply, which could either dampen uptake or mean greater expense for brands or the consumer. For the first time in 10 years, recycled polyethylene terephthalate (PET) used for drinks bottles became more expensive in Europe than regular PET in 2019, according to S&P Global Platts.

Thursday 13 February 2020

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

47

Thebigread

BUSINESS DAY Thursday 13 February 2020 www.businessday.ng

Death of a seminarian and the pain of Bishop Kukah Hassan Kukah

W

e have gathered around the remains of Michael in supplication but also as solemn witnesses to the penetrating darkness that hovers over our country. I have the rare honour of being considered the principal mourner in this ugly tragedy.

It is not an honour that I am worthy of receiving. The honour belongs to God Almighty who created Michael and marked out this moment and pathway for him. The greater honour goes to his immediate family whose devotion as Catholics laid the foundation for his faith and vocation. To his grandmother, Mrs. Eunice Nwokocha, a most simple, beautiful and devout Catholic woman whose devotion and dedication saw Michael and his siblings, Chukwuebuka, Francis, Augustine and Raphael brought up in all the fine principles and disciplines of the Catholic faith.

2. The way that Mama and her grandchildren handled this family tragedy has shown clearly the depth of their faith. I got to know Mama only after the sudden death of her daughter, Caroline, who had been a devoted Lector in our Cathedral. On the day we learnt that Michael and the other Seminarians were kidnapped, breaking the news to Mama and the children was not an easy task. She took the news with equanimity and we focused on praying for their release. She and the grandchildren lived through the torments of the brutal, harsh and senseless haranguing of the kidnappers who are totally empty of any show of human emotions.

When the worst finally happened, breaking the news to her and the grandchildren proved to be one of the most emotionally challenging moments for me. She had called me three days earlier to say that the kidnappers had told her that they had killed Michael. I dismissed it by telling her that first, I had discouraged her from taking their calls, and secondly that this was part of the psychological warfare by these evil men. On Wednesday 29th, Peter Paul, the brave young man who had served as the main negotiator with the kidnappers, had already told us that they had gone to the village where the kidnappers said they had dumped the bodies of both Michael and Mrs. Ataga but found no corpses. This was

‘‘

This is a solemn moment for the body of Christ.

This is for us the moment of decision. This is the moment that separates darkness from light, good from evil

the thread of consolation we held on to as a means of solace that Michael was still alive.

When we concluded the negotiations with the kidnappers on Thursday evening, I was in the Seminary to receive the three Seminarians and, although we received only two, I was still confident that Michael was still alive.

We were simply going to sit and wait out for the next call and the agonizing round of negotiations again. I left for Abuja that same evening to continue my trip to Sokoto the next day. It was on my way to the airport to catch a flight back to Sokoto on that Saturday morning that Fr Daboh called to tell me that the corpse of Mrs. Ataga had been found and that there was a second unidentified corpse which they were being asked to come and identify if it was Michael. My heart sank.

After the call, I switched off my phone in denial, but hoping for some reprieve to enable me board my flight with some sanity. I arrived Sokoto and refused to switch on my phone for some time. When I finally did, I refused to read the text messages, but then, Fr Habila’s call came through at about 1pm with the news that, sadly, they had identified the corpse as that of Michael. I did not know where to start and how to break the news to Mama.

Happily, two of our senior Parishioners Sir Julius Dike and Matthews Otalike were on hand and I summoned them to my house. It took us the better part of seven hours to negotiate how to break the news because, first, Mama was in the market and I felt she should at least finish the day’s business in peace.

Finally breaking the news opened a different chapter in this ugly, painful but memorable tragedy. Like the death of Lazarus, it would become clear to me that Michael’s death would bring glory to God. Later that evening as I sat down to try and console Mama, she looked up at me and said tearfully, “My Lord, you said Michael was still alive. Is he really dead?” Before I could say anything, she provided a moving answer: “My Lord, but Michael entered Seminary with all his heart and body, all”, she said with finality. From that evening, I watched her regain her composure and right up to Saturday, the evening before I left Sokoto, she had become a consoler and an inspiration to others.

The depth and impact of this tragedy belongs first, to the three surviving colleagues of Michael, the entire Seminary community led by the Rector, Fr. Habila Daboh, his team of formators and entire family of Good Shepherd Seminary. All have lived through almost two months of trauma, agony, pain and despair. They have been held together by the glue of deep faith, hope and family solidarity. I commend all the Formators for standing together and guiding the Seminarians through this dark tunnel of emotional pain in the days that turned to weeks, and weeks that turned to months. The entire Catholic community in the Province, led by our Metropolitan, Archbishop Matthew Ndagoso, all shared in this burden. His Grace and the Rector will both speak to us at the end of the Mass.

The third layer of pain has been borne by the entire country and the Catholic world. The national and international reactions to the death of this

Late Michael Nnadi

‘‘

Our nation is like a ship stranded on the high seas, rudderless and with broken navigational aids. Today, our years of hypocrisy, duplicity, fabricated integrity, false piety, empty morality, fraud and Pharisaism have caught up with us.

Nigeria is on the crossroads and its future hangs precariously in a balance young man have made me step back and ask what message God has for our country. Michael is the first Seminarian to carry the mark of this brutality and wickedness. Priests have died in the hands of these wicked human beings. Michael was only a Seminarian in his first year of training. I had seen him in his cassock which he wore in my presence, not with pride but with dignity. Why would the tragic death of a young man such as him elicit such an unprecedented level of emotions here and around the world?

Maria Lozano, a staff of the Aid to the Church In Need, an organisation dedicated to the cause of the persecution of Christians around the world, called me frantically immediately after the news of the kidnapping of the Seminarians went out. The next day, she sent me an emotional voice message to say that she heard that Michael was an orphan and that since the kidnappers will be looking for money might his life be in danger if they realise that he is an orphan? Could she mobilise especially mothers to become parents for him, to keep him and others in their hearts and to continue to pray for him?

Maria remained with us emotionally and requested for information about

the burial.

When the Archbishop approved the date of the burial, I passed the information to her immediately. By the next day, February 5th, she sent me a message to say that when she asked people around the world to light a candle for Michael on the date of his burial, 2, 436 persons from Afghanistan, Pakistan, United States of America, Mexico, Venezuela, Colombia, Madagascar, South Africa, Congo, Mali, Spain, Turkey, Saudi Arabia responded. Germany alone had a total of 3,305 persons in a matter of hours.

In the light of this, I wondered, who are we to mourn? Who are we to refuse this crown of honour and glory? We ceased to mourn for Michael thereon.

Your Grace, my brother Bishops, Rev Fathers, Rev. Sisters, and all the good people of God, I therefore bring you only greetings and praise to God from all of us in Sokoto Diocese. This is a solemn moment for the body of Christ. This is for us the moment of decision. This is the moment that separates darkness from light, good from evil. Our nation is like a ship stranded on the high seas, rudderless and with broken navigational aids. Today, our years of hypocrisy, duplicity, fabricated

integrity, false piety, empty morality, fraud and Pharisaism have caught up with us. Nigeria is on the crossroads and its future hangs precariously in a balance. This is a wakeup call for us. As St. Paul reminds us; The night is far spent, and the day is at hand.

Therefore, let us cast away the works of darkness and put on the armour of light (Rom. 13:12). It is time to confront and dispel the clouds of evil that hover over us.

Nigeria is at a point where we must call for a verdict. There must be something that a man, nay, a nation should be ready to die for. Sadly, or even tragically, today, Nigeria, does not possess that set of goals or values for which any sane citizen is prepared to die for her. Perhaps, I should correct myself and say that the average office holder is ready to die to protect his office but not for the nation that has given him or her that office. The Yorubas say that if it takes you 25 years to practice madness, how much time would you have to put it into real life? We have practiced madness for too long. Our attempt to build a nation has become like the agony of Sisyphus who angered the gods and had to endure the frustration of rolling a stone up the mountain. Each time he got near the top, the gods would tip the stone back and he would go back to start all over again. What has befallen our nation?

Nigeria needs to pause for a moment and think. No one more than the President of Nigeria, Major General Muhammadu Buhari who was voted for in 2015 on the grounds of his own promises to rout Boko Haram and place the country on an even keel. In an address at the prestigious Policy Think Tank, Chatham House in London, just before the elections, Major General Buhari told his audience: “I as a retired General and a former Head of State have always known about our soldiers. They are capable and they are well trained, patriotic, brave and always ready to do their duty. If am elected President, the world will have no reason to worry about Nigeria.

Nigeria will return to its stabilizing role in West Africa. We will pay sufficient attention to the welfare of our soldiers in and out of service. We will develop adequate and modern arms and ammunition. We will improve intelligence gathering and border patrols to choke Boko Haram’s financial and equipment channels. We will be tough on terrorism and tough on its root causes by initiating a comprehensive economic development and promoting infrastructural development...we will always act on time and not allow problems to irresponsibly fester. And I, Muhammadu Buhari, will always lead from the front.”

There is no need to make any further comments on this claim. No one in that hall or anywhere in Nigeria doubted the President who ran his campaign on a tank supposedly full of the fuel of integrity and moral probity. No one could have imagined that in winning the Presidency, General Buhari would bring nepotism and clannishness into the military and the ancillary Security Agencies, that his government would be marked by supremacist and divisive policies that would push our country to the brink.

Continues on page 39

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.