BusinessDay 13 Jun 2019 by BusinessDay

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APAPA GRIDLOCK

45 Governor Babajide Sanwo-Olu’s promise: “I will rid Apapa of gridlock in the first 60 days of my government.”

Purposeful leadership can lift 100m Nigerians out of poverty in 10 years – Buhari TONY AILEMEN, Abuja

How NERC derailed Nigeria’s power sector reforms A dequate, cost-reflective electricity supply has long been seen as the backbone of industrialisation, but the Nigerian Electricity Regulatory Commission (NERC), the

L-R: Aissata Mahamadou, First Lady of Niger Republic; Tony Elumelu, founder, Tony Elumelu Foundation/chairman, UBA plc; Aisha Buhari, wife of President of Nigeria/founder, Aisha Buhari Foundation (ABF), and Hinda Deby Itno, First Lady of Chad, at the opening of the ABF Maternity Complex constructed by Aisha Buhari Foundation and commissioned by Elumelu, at the Federal Medical Centre in Yola on Tuesday.

STEPHEN ONYEKWELU & DIPO OLADEHINDE

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industry regulator, lost a historic opportunity of achieving stable power supply in the country thanks to internal rancour at the Commission and misplaced political patronage, BusinessDay has gathered. When the Federal Government handed over the unbun-

dled assets of the defunct Power Holding Company of Nigeria (PHCN) to private investors in November 2013, many Nigerians heaved a sigh of relief, with hopes for a brighter lit-up future. It was believed that a dramatic turnaround in the fortunes of the troubled power sector was in

the offing. However, the country has struggled to maintain stable and efficient power sector despite an array of technocrats that the nation parades. The series of meetings between stakeholders and regulatory interferences

Continues on page 38

resident Muhammadu Buhari on Wednesday said with leadership and a sense of purpose, 100 million Nigerians can be lifted out of poverty in 10 years. Speaking during the Democracy Day celebration at the Eagle Square in Abuja, Buhari said Nigerians should see better prospects in the economy going forward. This optimism is buoyed by eight quarters of consistent positive economic growth as well as projections of 2.7 percent Gross Domestic Product (GDP) growth Continues on page 38

Inside CBN says no change in exchange rate P. 2 structure

Thursday 13 June 2019

BUSINESS DAY

news CBN says no change in exchange rate structure

…denies stoppage of official rate publication on website ...injects $210m into forex market Hope Moses-Ashike & Endurance Okafor

he Central Bank of Nigeria (CBN) on Wednesday denied stopping the publication of official exchange rate on its website, saying there’s no change in Nigeria’s exchange rate structure. “There has been NO change in Nigeria’s exchange rate structure,” CBN announced on its twitter handle at 12:15am, June 12, 2019. The apex bank was responding to its earlier signal

of exchange rate convergence as it declared its official rate “market determined”. The move, if implemented, will allow the naira to weaken past its official rate as it gradually unwinds its regime of multiple exchange rates. Naira traded and closed at the rate of N360.63 per dollar at the investors and exporters foreign exchange window and N360/$ at the Bureau De Change (BDC)/ parallel market. The regulator usually publishes on its website

L-R: Femi Gbajabiamila, speaker, House of Representatives; Ahmed Lawan, Senate president; Vice President Yemi Osinbajo, and President Muhammadu Buhari, during the 2019 National Democracy Day celebration (June 12), at the Eagle Square in Abuja, yesterday.

Nigerians fall back on pension savings for Cancelled AGM: Minority shareholders survival amid biting unemployment, job losses Continues on page 38

…10,733 unemployed make withdrawals in Q1 2019

of Oando fault SEC’s action

…say not in their interest, want Presidency to intervene Iheanyi Nwachukwu

he minority shareholders of Oando plc have faulted the decision of the Securities and Exchange Commission (SEC) to cancel the earlier scheduled Annual General Meeting (AGM) of the company. While briefing journalists on Wednesday, the minority shareholders of Oando plc led by Hamza Ridhwan, secretary general, Association for Investors Liberation, said the actions of SEC were not in their interest. The recent suspension of Oando’s AGM is the second time in three years that SEC has tried to suspend an Oando AGM, the minority shareholders recalled. SEC had on Monday, June 10, suspended the 42nd AGM of Oando plc (a company listed on the Nigerian and Johannesburg Stock Exchanges). The AGM would have held last Tuesday, June 11, at the Zinnia Hall, Eko Hotels and Suites, Victoria Island Lagos. SEC in a statement said the decision was in adherence to the Ex-parte Order of the Federal High Court, Ikoyi Lagos in SUIT NO: FHC/L/CS/910/19 in Mr. Jubril Adewale Tinubu & Anor V Securities & Exchange Commission & Anor. Oando plc had in a statement at Nigerian Stock Exchange (NSE) dated June 11 and signed by Ayotola Jagun, company secretary, disagreed with SEC on its decision to cancel the AGM, adding that it had by a notice

to the public and its shareholders on May 10, 2019 validly convened its 42nd Annual General Meeting. “We the minority shareholders of Oando Plc categorically state our utmost displeasure and disappointment at the SEC current management of the investigation into Oando Plc. The actions over the last 2 years and specifically the last 10 days have shown that our voices as minority shareholders are not being listed to,” the minority shareholders said. “We fully support the regulator and applaud the Government for institutions such as SEC as we know the imperative role they play in regulating and protecting the capital market. However, in the case of Oando, we are not convinced that SEC has acted in our best interest or protected our investments. “We call on the Government and Presidency to intervene as it is not acceptable for SEC to attempt to take down a company the size of Oando that adds so much value to the Nigerian economy, which is an employer of labour and attracts significant Foreign Direct Investment (FDI) into the country,” they stated. They challenged the SEC to tell the minority shareholders how the last-minute suspension of the AGM is in their best interest. They noted that since SEC’s press release on May 31, “there has been erosion in the value of our shares from N4.20 on May 31 to N3.75 on June 11”.

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

MODESTUS ANAESORONYE

growing number of Nigerians who have lost their jobs in recent times are falling back on their pension savings for temporary survival. According to statistics made available by the National Pension Commission (PenCom), in the first quarter (Q1) of 2019, approval was granted for payment of N4.51 billion to 10,733 Retirement Savings Account (RSA) holders under the age of 50 years who were disengaged from work and were unable to secure another job within four months of disengagement. Another 13,609 RSA holders were granted approval for pay-

ment in the last quarter of 2018, taking away N5.14 billion. This is as unemployment, job losses and difficulties being faced by small to large businesses operating in the country have worsened the social welfare of many Nigerian households. Unemployment rate in Nigeria increased to 23.10 percent as at the end of third quarter 2018, from 22.70 percent in the second quarter of 2018. The cumulative number of RSA holders who have so far collected their benefits over temporary loss of job has reached 313,468, according to PenCom. The 313,468 RSA holders were paid a total of N107.93 billion, being 25 percent of the balances of

their RSAs as prescribed by the Pension Reform Act 2014. Section 16(5) of the Pension Reform Act 2014 says that any employee who disengages or is disengaged from employment before the age of 50 years and is unable to secure another employment within four months of such disengagement may make withdrawal from his RSA in accordance with the provision of section 7(2) and 3 of the Act. “Where a Retirement Savings Account (RSA) holder is temporarily unemployed before the retirement age (i.e. he/she is voluntarily/involuntarily disengaged, downsized, retrenched etc.) and has remained unemployed for a period of at least four

(4) months without securing another employment, such an individual may apply for 25 percent of his/her current RSA balance,” one of the PFAs explained in its website. A further analysis showed that the private sector accounted for 95.38 percent of those who benefitted from these payments, while the public sector accounted for 4.62 percent, underlining the difficulty being faced by businesses in that space. The businesses have been squeezed by high cost of electricity as they run on diesel generators to carry out operations, as well as high interest rates on loans and poor access to finance.

•Continues online at www.businessday.ng

Apapa: A litany of dying businesses, lost livelihoods CHUKA UROKO

ne thing that readily comes to mind whenever and wherever Apapa, the country’s premier port city, is mentioned is its notorious, intractable gridlock. This singular feature has made the port city a topical issue and, by default, placed it in the front burner of national discourse. But there is much more to this port city that elicits deeper concerns than the gridlock, depending, however, on which side of the divide one stands. When, unfortunately, federal and Lagos State governments and their agencies are looking at Apapa, what they see is the huge revenue they get from there, not the ruin, the rot and the despoliation that are turning the port city to a wasteland.

Analysis Unlike the governments and their agencies, however, what Apapa residents, business owners and sundry investors see in Apapa is not only the gradual killing of their businesses and investments, but also the destruction of their lives and livelihoods. In its saner days before the invasion of its environment by desperate and mindless fortune-seekers, Apapa was not only residential, but also investment and commercial destination, which explains why many people came to the port city and built houses for residence and rentals. Some others came and set up businesses – banks, schools, eateries, leisure centres, malls, ports and marine services firms, etc. For those who are familiar

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with this port city, Wharf and Commercial Roads were its ‘Central Business Districts’ where high net-worth firms and banks had their offices and branches, respectively. Today, these two locations are a sad story. A walk through them shows that most of the banks have either relocated or have had the number of their branches reduced. On Wharf Road alone, more than 10 banks and two eateries have shut down their branches due to the pain and difficulty in accessing these branches, leading to loss of substantial customers in the area. “You can’t compare the situation now and how it was before. No one has been to hell and heaven but we can liken the situation in Apapa to hell. Apapa used to be a place for good businesses,” said Ruwase Babatunde, president, @Businessdayng

Lagos Chamber of Commerce and Industry (LCCI). He said people used to come from all over Lagos to do business in Apapa due to the opportunities it offered, attributing the fate that has befallen the port city to governments’ neglect, especially in the area of infrastructure. Roads and bridges in the port city have almost collapsed. Eateries, such as Tetrazini, have shut down. Tantalizers, which used to have three outlets, has reduced to one, and the only Mr Biggs eatery in Apapa on Creek Road is now out of the market. Film House Cinema inside Apapa Mall has also shut down. Even the famous Apapa Amusement Park which used to be a major leisure spot is today a ghost of itself.

•Continues online at www.businessday.ng

Thursday 13 June 2019

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Thursday 13 June 2019

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NEWS

Risk managers engage members on leveraging tech innovation HOPE MOSES-ASHIKE

igerian risk managers are engaging members and other stakeholders on leveraging technological innovation for effective service delivery. The importance of risk management as a viable solution to the prevalent issues in the Nigerian economy has become more pronounced and the role of technological innovation is of paramount importance in this regard. It is on this premise that Risk Management Association of Nigeria (RIMAN) is organising her 19th Annual International Conference/Training with the theme: Economic Recovery and Development: Leveraging Technological Innovation. The event is scheduled to take place from June 13 - 14, 2019, in Lagos. It has become imperative to leverage technological innovation to improve the design and enforcement of public policies. With the evolution of modern technologies across the globe, the government and the private

sector must leverage new technologies to boost the Nigerian economy. Historically, the level of technological application has been identified as closely related to economic progress and development. Nigeria like most emerging economies is challenged with the task of sustainable development. Subject matter experts and professionals have been assembled to deliver expert discussions at this conference, with Doyin Salami as the keynote speaker. The conference is the largest gathering of risk professionals in Nigeria and it will also focus on how innovative technologies are reshaping the global economic landscape, by improving speed and ease of communication and interaction among the various economic sectors. “It is our expectation therefore that the output of this conference would not only benefit all participants but would assist both public and private sector operators make more informed decisions,” the organisation said in a statement.

NCC pledges to provide enabling environment for operators to deepen broadband penetration ... consults Egypt for 5G spectrum Jumoke Akiyode-Lawanson

he Nigerian Communications Commission (NCC) has promised to provide efficient regulations and support for mobile network operators in the industry to further deepen the penetration of broadband in Nigeria. Umar Danbatta, executive vice chairman, NCC, who was represented by Oluwatoyin Asaju, deputy director with the commission, made this known while speaking at the 10th edition of the eWorld annual forum held in Lagos recently. According to Asaju, broadband has been globally acknowledged as the foundation for transformation to knowledge-based economy. “The world bank has found that a 10 percent increase in broadband penetration in developing countries results in a commensurable increase of 1.38

percent in GDP. It has also been proven that for every 10 percent increase in broadband penetration, a commensurate increase in employment of about two to 3 percent is achieved. Productivity also increases to between 5 to 10 percent with a 10 percent increase in broadband penetration,” Asaju said. “This informs the doggedness of the commission in ensuring that the lacuna between existing and planned fibre infrastructure in Nigeria is narrowed. The commission has therefore set a strategic imperative to ensure access to pervasive broadband through an Open Access Model in line with the National Broadband Plan (NBP),” he said. Having achieved 33.08 percent of broadband penetration as of the first quarter of this year, industry stakeholders have described Nigeria’s broadband target achievement as a great feat, considering the rapid growth

from 8.5 percent penetration in 2015. The telecoms regulator is making moves to further deepen penetration levels to the hinterlands with its plans to deploy Optic Fibre transmission network in the Open Access Model. As part of efforts to drive the broadband infrastructure licensing and deployment on behalf of the Federal Government, NCC has concluded the licensing and output based subsidy negotiations of six Open Access Model Infrastructural Companies (InfraCos) for the country. Asaju said, “The six Infraco licensees are to cover Lagos, South-West, South-South, South-East, North-West and North-East regions while the process leading to the licensing of an Infraco for North-Central is on going. The Infraco licensees are to provide IP fiber Optic capacity to all the 774 LGAs of the federation on an open access,

Lagos assures of support, improved welfare for NYSC CHUKA UROKO

agos State government has assured the National Youth Service Corps (NYSC) of its support and improved welfare to ensure full utilisation of corps members, saying the support will come in form of increase in their welfare and infrastructure provision. Babajide Sanwwo-Olu, the state governor, gave this assurance when the NYSC management, led by the director-general of the scheme,ShuaibuIbrahim,abrigadier-general,paidacourtesyvisitto hisoffice,assuringthatgovernment would do all within its power to support the scheme. Sanwo-Olu,representedbyhis deputy, Obafemi Hamzat, said the support became imperative given that the future of Nigeria lies partly in the contribution of the corps

members. “The contributions of these corps members are of great significance, especially during the general elections and other national engagements. Apart from utilising their skills, Lagos will also support the scheme by giving the corps members entrepreneurial experience,coupledwithengaging them in public service as occasion would demand,” he said. Hamzat also gave the assurance that Sandwo-Olu’s administration would partner the NYSC in all their necessary endeavours. On the request for the new orientation camp made by NYSC director-general, the deputy governortaskedhimtoengageprofessionalsamongthecorpsmembers, especially those with engineering and architectural training to come upwiththedesignfortheproposed orientation camp.

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price regulated basis, with a 10 Gbps Point of Access (PoA) capacity in each local government of the federation.” Already, MainOne, the InfraCo licensed for Lagos, has unveiled its plans to build over 2,000 kilometres of fibre optic infrastructure to enable broadband connectivity across the state. Other licensees have also drawn out plans for broadband projects, which the NCC says it expects to run for a period of four years. According to the commission, negotiated subsidies will be paid to the Infraco licensees at the attainment of agreed and verified milestones. The commission says it has also continued to make available wireless spectrum resources to the operators as well as creating enabling environment and a level playing field through various regulatory instruments for the growth of the industry.

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How to keep MKO Abiola’s memory alive - Sanwo-Olu JOSHUA BASSEY

overnor of Lagos State Babajide Sanwo-Olu says to keep the memory of Moshood Kashimawo Abiola, presumed winner of the annulled June 12, 1993 presidential election alive, Nigeria must embrace the virtues and beliefs he (Abiola) stood for. Sanwo-Olu, represent-

ed by his deputy, Obafemi Hamzat, stated this Wednesday, on the occasion of the 2019 Democracy Day, in honour of Abiola who died in detention in July 1998 while still struggling to reclaim his presidential mandate. The event, organised by the Lagos State government, held at the LTV premises, Agidingbi, Ikeja. Recall that President Muhammadu Buhari had shifted Nigeria’s Democracy Day from May 29, to June 12,

in honour of the memory of Abiola and the presidential election annulment. Earlier in the day, Hamzat had laid a wreath at Abiola’s grave at his (Abiola’s) house, on Toyin Street, off Allen, Ikeja. According to the governor, making Nigeria a better country, which was the wish of Abiola required the collective effort of both the government and the people. “Today is about the wish, legacy and the good that

MKO Abiola had done. And may the wish of MKO continue to be in our memories. If we all as a people in our different lanes and capacities do the right thing, Nigeria will be great. That is what we owe Abiola.” The governor commended President Muhammadu Buhari for declaring June 12 as Nigeria’s Democracy Day, adding that the Lagos State government would always uphold the ideals of June 12 by ensuring the

expansion of the frontiers of democratic governance and social justice. Pat Utomi, a professor of political economics, who delivered a lecture, “Hope 93: democratic prosperity and political stability”, urged the ruling class to work to create wealth to avert anarchy in the country. “We need to reflect if we are where we are supposed to be as a people. Does our democracy work for us as a people?”

Tech firms dominate top 100 brands ranking on account of rapidly changing world Daniel Obi

echnology companies have for the umpteenth time led BrandZ’s top 100 most valuable global brands ranking for 2019. In the top 2 is Apple with $309.5 billion brand value, Google is in number 3 with $309 billion. Microsoft retained its 2018 position of number 4, while Visa climbed from 7 position in 2018 to the 5th with brand value of $177.9 billion.Facebookwithbrandvalue of $159 billion was in number 6. Tencent and AT& T were the other telecoms firms that made the first 10. However, Amazon, a retail companyclimbedfrom3position to number one in 2019 with brand valueof$316billion.Amazon’srise to first position ends the technology giants’ 12-year dominance of first position. Alibaba and McDonald were in number 7 and 9 positions with brand values of $131.2 billion and $130.3 billion, respectively. Technology companies have led BrandZ’s Top 100 ever since its first global brand value ranking in 2006. The report said consumer technology brands pass the $1 trillion brand value mark. The dominance of technology companies in BrandZ top 100 ranking reflects the rapidly changing, technology-driven world in which consumers are placing more value on richer brand experiences. As other social media platforms face challenges in terms of trust and desirability, Instagram (No.44, $28.2bn), now with over 1 billion users worldwide, emerged as this year’s fastest riser climbing 47 places with a massive +95% growth in brand value The report further said that despite the economic uncertainty surrounding the US and China trade tariffs, almost a third of a trillion dollars ($328 billion) of value was added to the BrandZ Top 100 Global ranking over the last year, givingitacombinedbrandvalueof $4.7trillion–roughlythecombined GDP of Spain, Korea and Russia. David Roth, CEO of The Store WPP EMEA and Asia and Chairman of BrandZ, says: “The growth in value of this year’s top 100 brands to an all-time high proves the power of investing inbrandsto deliver superior shareholder value. Behind this headline growth figureliesthesuccesscomingfrom anewphenomenonofecosystem brand building.

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He said there were many challenges confronting the country, like unemployment, which the political office holders must address. “If we are to do the memory of MKO any good, we must build economic justice, ensure peace, stability and prosperity for all,” Utomi said. Bisi Abiola, wife of the late MKO Abiola, thanked the Lagos State government and civil society organisations for keeping hope alive.

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Nigeria’s tech scene: Innovating or just writing code?

David Hundeyin

n 2016, after leaving my fulltime job to start a creative agency in a spectacularly ill-timed move, I found myself briefly working as an Uber driver to pay my bills. I met a few people who were also ownerdrivers on the platform and we developed a loose network, sharing tips about bad roads, routes with traffic and fare surges. Just before I quit driving in November after scoring my first client, the others told me that they were planning to leave Uber and join this great new platform called Taxify. Competition was lower, fares were higher and the qualification requirements were not as onerous as Uber. They were going to be rich! Over the next couple of years, I kept in touch with some of the guys, and they soon moved on to another ride-hailing app called Oga Taxi. Oga Taxi was great, unlike Uber and Taxify, they were rubbish! Soon Oga Taxi became rubbish too, and many end up using all three apps. Last week by pure coincidence, I booked an Uber that turned out to be one of my old ride-hailing brethren, and he excitedly informed me that he was moving on from those yeye Uber and Taxify to this exciting new app allegedly owned by Davido called Gidicab. With no irony whatsoever, he proceeded to describe why Gidicab would make him rich where Uber and Taxify did not.

Duplication Instead of Disruption I did not have the heart to tell him that six, half a dozen and 18 divided by 3 are inevitably the same thing, regardless of the marketing budget and hype surrounding them, so I let him enjoy the euphoria. In any case, I reasoned that what he is doing and what the ride hailing apps in question along with lot of Nigeria’s tech sector are doing are not so different. They both hop onto waves hoping to extract value instead of actually coming up with a solid new idea to create value. First there was Uber, now there are god knows how many ride hailing apps competing for a market that is not as big as everyone seems to think it is. There was GOkada, now there is ORide, MAX and an indeterminate number of copycats coming up shortly. There was Interswitch and Paystack, now every other person seems to have created a payment processing system, doing exactly the same thing as each other, only competing on price or marketing spend. First Jumia and Konga had a proper crack at ecommerce in Nigeria, then everybody tried to open an online store. It does not seem there is actually tech innovation going on, so much as merely tech business expansion. If Nigerian tech entrepreneurs are not cloning an existing app, they are taking an existing offline business and slapping a sometimes ill-fitting app on it – Tech! That is not to say that reproducing an existing business model and finding a space in the market is not good business practice (I myself run a copywriting agency, which is not a disruptive business model by any stretch of the imagination). What it does mean though, is that there is very little change of an African Tencent or Rocket Internet Group developing out of Nigeria’s tech space.

Not just because of a funding and infrastructure deficit, but because the thinking within our community is restricted to reproducing what has already been done, with the bulk of our creative thought going into marketing. It also means that tech firms in Nigeria are not ‘startups’ in the true sense of the word because they are not creating their own market demand. They are merely competing on price and visibility with a plethora of exact substitutes within a market that is smaller in both absolute and proportional terms than Kenya and South Africa, the other two African powerhouses. Ecommerce giant Konga had just 184,000 active users in 2016, and still has less than half a million total registered users from genesis. In 2017, Uber had just 267,000 active riders in Nigeria, compared to 363,000 in Kenya (population 50 million), and 969,000 in South Africa (population 57 million). These figures show that a business model based solely on the “Nigeria has x hundred million people and Africa’s largest economy,” statistical hope soup, is a doomed model. Motion Without Movement Back in 2016 after exchanging a steering wheel for a laptop, I consulted for a client who wanted to create an ecommerce marketplace. It was not within my remit, but I asked why he thought that yet another ecommerce site would succeed where the two big fish were struggling. His answer was that consumers adopt new apps and platforms based on fads, word of mouth and marketing. Using the evolution of mobile instant messaging from Yahoo Messenger to Blackberry Messenger to Whatsapp as the case in point, he argued that they all did exactly the same thing, but consumers migrated en-masse from one to the next purely because

‘

It does not seem there is actually tech innovation going on, so much as merely tech business expansion. If Nigerian tech entrepreneurs are not cloning an existing app, they are taking an existing offline business and slapping a sometimes illfitting app on it – Tech!

it was cool. By spending enough marketing budget and hiring the right celebrities and influencers, he hoped to make this site cool. Let us pick through that for a moment. On the surface, the instant messaging migration was indeed driven by viral adoption but that does not tell the full story. Around 2009 when Blackberry Messenger became the world’s biggest mobile IM platform, Blackberry devices were also among the world’s top-selling smartphones. Prior to Blackberry Messenger, Yahoo Messenger was popular because it was available on the Symbian smartphone OS used by Nokia, Samsung and others. Post-2010 when Google’s Android OS became prominent in Nigeria, WhatsApp – which provided cross – OS connectivity across Blackberry, iOS and Android – became popular. In other words, what actually drove consumer adoption of these apps was an underlying disruptive technology that was cheap and accessible. iMessenger, which had been around all along never achieved that sort of popularity in Nigeria because iPhones were and still remain too expensive for most consumers. The lesson here is that marketing is not as important as Nigerian tech businesses seem to think. Utility, innovation and pricing exert far more influence over adoption numbers. You might be able to spend N100 million on marketing, but if your offering does not significantly disrupt what is currently available, you will end up with slow adoption, sky-high running costs and dissatisfied investors. Nigeria might be a ‘big’ market, but perhaps it is time to think like an innovator before looking at the numbers. David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

There is a new economics of oil ! Accept it

Uyiosa Omoregie

he oil industry has changed. There was a time when the oil price could be forecast with some precision. These days, trying to forecast the oil price with precision is a mug’s game: a futile activity, mainly guess work. When, in 2016, investors asked the CEO of Exxon Mobil, Rex Tillerson, what his view of the future of the oil market was, he replied: “We’ve never been good at predicting those (price) cycles, neither when they occur nor their duration. We don’t spend a lot of time trying…How the future is going to look, we take no particular view on it, other than to recognize that whatever it is today it will be different sometime in the future, and after that

it will be different again.” Two developments are mainly responsible for the changes in the long-term outlook for oil markets: The rise of U.S. tight oil production (shale revolution) and concern about the oil industry’s contribution to climate change. These two developments have had the most profound impact on the economics of the oil industry. The industry has witnessed a switch from a focus on ‘peak oil supply’ about a decade ago, to ‘peak oil demand’ currently. For most of the past 50 years, oil industry analysts generally believed that recoverable oil would become harder to find and thus scarce, leading to ever-increasing oil price. This assumption was the textbook assumption, the Hotelling model (named after the economist Harold Hotelling). The Hotelling model basically states that oil in the ground is an exhaustible resource and its value would continue to rise over time. The major global policy intervention since the oil price crash of 2014, relevant to the oil and gas industry, is the United Nations Paris Agreement. To limit the risks and effects of global climate change, in 2015, an international agreement was reached to prevent global average temperate rise from exceeding 2 °C above pre-industrial levels and limit any increase to 1.5 °C. Known as the ‘Paris Agreement’, it op-

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erates within the United Nations Framework Convention on Climate Change (UNFCCC) and will commence in 2020 aimed at greenhousegas-emissions mitigation, adaptation, and finance. Representatives of 196 countries (including Nigeria) adopted the agreement on 12 December 2015 and each country must determine, plan and report (regularly) on its global warming mitigation efforts. A climate accord such as the Paris Agreement will surely impact oil and gas production, if producer and consumer countries take the agreement seriously. Oil reserves may become ‘stranded’ or ‘un-burnable’ when there is a commitment to limit global temperature rise to 2 °C or less. This is the concept of a ‘remaining global carbon budget’ in order to limit the global temperature rise. Researchers at University College London revealed that a third of global oil reserves must remain unused between 2010 to 2050 if the Paris Agreement target will be achieved. Spenser Dale, Chief Economist of the international oil company BP, articulated a ‘new economics of oil’ in a thoughtful 2015 paper. Traditionally, four core principles guided economists’ thinking about the oil industry: 1. Oil is an exhaustible resource. 2. Oil demand and supply curves are steep. 3. Oil flows from East to West. 4. OPEC stabilizes the oil market. But,

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according to Spenser Dale, “The oil market has changed very significantly over the last 10 or 15 years. The principles and beliefs that served us well in the past are no longer as useful for analysing the oil market. We need an updated set of principles reflecting the New Economics of Oil.” So, he revisited the four principles: 1. Oil is NOT an exhaustible resource. Some oil reserves may remain stranded deliberately because of carbon emissions policy. 2. Oil demand and supply curves are NOT steep. Shale oil supply is very responsive to price movements, unlike traditional conventional oil supply. 3. Oil flows NOT only from East to West. Traditionally, oil is generally moved globally from the Middle East to Europe and then to America. But now America is a major exporter of oil (ban on export of oil lifted a few years ago). Oil demand from the West has generally decreased and demand from the East (China, Japan and others) has increased. 4. OPEC does NOT always stabilise the market. Traditionally OPEC was the cartel with responsibility for dampening volatility in the oil market. The rise of shale oil in America has weakened OPEC’s influence in stabilizing the oil market. Dr Omoregie is a petroleum economist and management analyst. He can be contacted at uyiosaomoregie@yahoo.co.uk

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Abacha brought out the best in Nigerians Remi Adekoya

ext to the civil war, the five-year rule of Sani Abacha ushered in some of the bleakest moments in Nigeria’s history. But sometimes, a nation rises to its finest heights in its darkest hours. The Abacha-years brought a lot of pain and suffering, but they also brought out the best in Nigerian society, a time when many risked their lives for a cause greater than themselves: the future of their country. Most of those who fought the fight were not famous; we don’t know their names. Only their families know their sacrifice. While Abiola’s place as the face of the pro-democratic struggle is obvious, I bow to the countless faceless members of civil society who waged a life-and-death battle with the man they called the Khalifa. A battle that showed what Nigerians are capable of if united in a common cause. Who was Abacha? For those too young to recall, a few words on the Khalifa appear in order. As with most rulers of his generation, Abacha’s biography is fragmentary. We know he joined the army in 1962, commencing a stellar military career. It was Abacha who

announced Buhari’s 1983 coup on Lagos radio. By 1985, he was Chief of Army Staff in Babangida’s regime, his reward for having helped topple Buhari. But despite his high-profile position, he avoided the limelight, hardly ever speaking to the media. This did not change after he finally seized power for himself from Ernest Shonekan’s “transition government” in 1993. The Khalifa’s psyche is crucial to understanding his five-year rule. Former US Secretary of State Colin Powell said this of Abacha in 1995: “He has the worst C.I.A [psychological] bio I have ever read, and I’ve read lots of them.” Very short, Abacha was often bullied as a child and suffered from many illnesses, according to Abiodun Onadipe, a scholar who researched his past. He suffered chronic illnesses all his life, one of the reasons he avoided long-distance travels. Combine his persistent ill-health and short height in the uber-macho culture of the military and it is not difficult to understand Abacha’s focus on not appearing weak. To make matters worse, he was never considered overly bright or charismatic. He compensated for all these “shortcomings” with a ruthless brutality geared to impress even hardened soldiers. Abacha could not charm people into loyalty like Babangida, he had to scare them into it. Considering his predispositions, Abacha’s actions in power become almost predictable. In the years prior to his arrest, Abiola was apparently very dismissive of Abacha, reserving his admiration for IBB who he considered the Big Boss, even after Abacha had taken over. He

would be punished for this “disrespect”. Authoritarian rule can easily turn into a nightmare for a society if someone who feels slighted by the world gets into power. They are likely to use that power as an opportunity for retribution, not just against specific individuals who have wronged them, but sometimes against entire societies. Yes, Abacha wanted to steal billions and he wanted to be number one, but he also seemed to feel a strong need to punish. And punish he did, lashing out at anyone who voiced dissent which to a man of his mindset equalled disrespect and worst of all, a lack of fear. This he could not have. The dark years In his five years as head of state, Abacha imprisoned Musa Yar’adua and Olusegun Obasanjo, executed Ken Saro-Wiwa and eight other Ogoni activists despite the active intervention of Nelson Mandela, assassinated Kudirat Abiola and Alfred Rewane, attempted to assassinate Pa Abraham Adesanya and Alex Ibru, drove Wole Soyinka into exile and condemned journalists like Chris Anyanwu, Kunle Ajibade, George Mbah and Ben Charles-Obi to life in jail for doing their job. And these are just the prominent names that come to mind. Many more were jailed, killed or went missing during those years. The Oputa Panel hearings, set up to look into Abacha’s crimes, are available to watch on Youtube. But what was incredible in all this was the response of Nigerian civil society: It refused to shut up. Throughout the five years he spent in office, Abacha was embroiled in a persistent battle with Nigerian civil society, ranging from politicians

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Authoritarian rule can easily turn into a nightmare for a society if someone who feels slighted by the world gets into power. They are likely to use that power as an opportunity for retribution

and academics grouped around the National Democratic Coalition (NADECO) to journalists, trade unionists and students. The nameless heroes who resisted were many. While the struggle for democracy and against Abacha’s tyranny had its louder and quieter moments, there was no time at which the dictator could be comfortable of no resistance. He constantly struggled to assert his political legitimacy. In frustration, he often resorted to force. As is often the case with unpopular dictators, Abacha was overly-authoritarian in order to disguise his lack of authority. Of course, Abacha did not rule by force alone. He was supported by an array of political opportunists, many of whom had previously been Abiola-supporters. He used the usual methods to buy them over, oil blocs and the rest. A veteran coup plotter and post-coup manager, Abacha had first-hand knowledge of the nature of Nigeria’s political class. But even these betrayals did not diminish the resilience and perseverance of the countless Nigerian pro-democracy activists and heroes whose struggle was triumphant in the end; albeit aided by the Khalifa’s timely death. While democratic rule in Nigeria has admittedly failed to deliver on its promises, the promise of democracy remains. My utmost respect to those who paid the price to keep that promise alive for the rest of us. Talk about standing on the shoulders of giants. Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs,Washington Post and Politico among others. He tweets @ RemiAdekoya1

This DStv thanks Awoof Sef Adeolu Atayero

ecently, DStv announced an upgraded DStv Thanks promo for its loyal customers. The promo, which is targeted at customers who have been consistent with their subscriptions to the pay TV provider is a way of saying thank you to them for their unwavering loyalty. While announcing the upgraded DStv Thanks, the Chief Executive Officer of MultiChoice Nigeria, John Ugbe, termed the promo a way of establishing a stronger relationship with customers and appreciating them for their loyalty. In his words, DStv Thanks is, ‘’just our way of putting our customers at the heart of everything we do and showing them appreciation for their continuous support and loyalty to our business.” The promo is expected to run from May 2 to June 30, 2019 and it has something for every DStv subscriber. Premium subscribers will, for instance, enjoy discounted (pre-tax) flights with Emirates for all flights originating from Lagos, Abuja and Accra; while Compact, Family and Access subscribers will enjoy rewards such as cinema tickets and groceries. Compact Plus customers will in addition to enjoying Emirates discounts, also enjoy one-

week extra sports channels exclusive to the higher package, DStv Premium when they pay their subscriptions on time. One of the unique things about this promo is the retention of the one week extra sports channel reward in addition to the DStv Thanks. These extra sport channels that last for one week give customers the chance to view exciting sport channels that they don’t usually have a chance to view. For a company that puts customers at the heart of everything it does, this is highly commendable. In the one-week extra sports channel reward, which is totally free, subscribers on a lower package get the chance to enjoy a package higher than theirs. Compact Plus subscribers will have unfettered access to 7 days multiple HD sports contents exclusive to Premium subscribers. Compact Plus subscribers who love Rugby and Cycling, will enjoy Vodacom Super Rugby, Sevens World Series, Tour de France, UCI Track Champs and Cape Epic. But that is not all. Subscribers on the Compact Plus package also get to enjoy Premium packages such as PGA Tour, European Tour and Sunshine Tour under golf, as well as all the majors and Tennis; ATP Tour, WTA Tour. Lovers of athletics can also seize the opportunity to enjoy World Indoor Championships, major marathons and the ICC World T20 and IPL for cricket. The rewards also offer motorsport ad boxing

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tournaments to Compact Plus subscribers. Nothing can be more encouraging than for an organisation to dole out freebies to its loyal customers. This goes beyond a brand marketing gimmick; it is celebrating loyal customers. DStv Thanks has something for every one of its subscribers. Everyone is a winner as long as you consistently pay your subscription on or before due date and there is no disconnection. While the Compact Plus subscribers have all the goodies from the Premium package sports channels for one week, the DStv Compact subscribers have something to smile about too as they get to enjoy the sports packages on Compact Plus for seven days as well. Exciting sports matches like the UEFA Euro 2020 Championship and the UEFA Euro Qualifiers and the European qualifiers for the 2022 FIFA World Cup in Qatar and more all the other spellbinding football events will be unlocked for Compact and Compact Plus subscribers for one week in the rewards. Rewards for loyalty have never been this mouth-watering and generous, especially for the football offers. Nigerians who have displayed an undying affection for the thrills and magic of football will definitely love this amazing package that awaits them in the rewards. It is not only sports lovers that get to be thrilled in this season of DStv Thanks. The

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rewards have been programmed in a way that the rewards are kept refreshed and relevant to the lifestyles of the customers. Therefore, different customers will get rewards that add more value to their lifestyles. But when you think DStv are through with their kind gestures to customers for their loyalty, they end up serving you more. With DStv Thanks, customers who qualify for the groceries rewards are allowed to have a 5% discount on purchases from Addide of 5000 Naira and above during the validity of the promo. The voucher can be given to someone else to be redeemed, though it should be noted that it has only a single use. Each voucher has a validity period of 31 days. To redeem a voucher, you only need to have the code available for verification prior to the completion of purchase at the participating retail outlet. While customers that qualify for the Emirates discount can enjoy their discounts on all cabin classes (First, Business and Economy Class) as there are no restrictions on the classes. DStv Thanks has put in place measures to ensure that eligible customers get their due rewards without any hassle. An SMS is sent to customers who pay on time notifying them of their eligibility for the rewards. Atayero is a Public Relations/Communications Consultant

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Thursday 13 June 2019

BUSINESS DAY

Editorial Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua ASSIST. SUBSCRIPTIONS MANAGER Florence Kadiri GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Child abuse…an act of shame!

ection 277 of the Child Rights Act of 2003 defines “a child as a person who has not attained the age of eighteen years.” At different times and locations around the country, a child is being abused. Child abuse can be physical, emotional or sexual. According to UNICEF, 6 out of every 10 children experience some form of violence – one in four girls and 10 per cent of boys have been victims of sexual violence. Of the children who reported violence, fewer than five out of a 100 received any form of support. Abuse such as abandonment, child marriages, kidnapping, molestation, child labour to mention a few, are prominent in Nigeria. Despite these issues, there are laws made to protect the Nigerian child, many of which the perpetuators are ignorant of while some are aware, but believe the law cannot catch up with them or they can use their influence to go free. The society, deleterious attitude of some parents,

corruption, paucity of efficient therapy for the abused child, unreliable judicial system, poor law enforcement process among others have been major contributing factors which serve as constraints in implementing laws and policies created to guard the child from abuse. According to NBS, UNICEF and UNFPA, 40 per cent of females in Nigeria are married at 15 years or younger, 44 per cent married before 18 years of age. Nigeria has the largest number of child brides in Africa with more than 23 million girls and women who were married as children, most of them from poor and rural communities. Statistics show that there has been a reduction of 9 per cent in the incidence of child marriage since 2003. Data further reveals that there will be a probable reduction of 6 per cent by 2030. Though far from actualisation but can be seen as ‘good news’ right? The answer is NO! No because Nigeria’s sporadic increase in citizenry only shows that the number of child brides will escalate by over one million by 2030 and double by 2050. This is a major cause for worry. Violence against a child

is a shameful act that isn’t peculiar to a certain region in Nigeria. Take for instance, Lagos. Do you know that 6 out of every 10 children have experienced multiple violence in Lagos State before they attained the age of 15 years? Shocked? Well, it is not peculiar to the West but in different parts of Nigeria. Sadly, only the reported cases are documented as proof, however, there are more. Take the northern part of Nigeria for instance. In Northern Nigeria, almajiris between ages 7-15 years are sent to live with Islamic school masters. In 2010, the Nigerian Ministry of Education estimated that there are 9.5 million almajiris in the north. The children are treated as slaves and are compelled to be mendicants who must survive and also pay loyalties from the money gotten from begging to their ‘masters’. The Child Rights Act of 2003 says that children must be protected from : child marriage; child betrothal; tattoos and skin marks; exposure and use of narcotic drugs; abduction, removal or transfer of the child from lawful custody, and; child

labour, and unlawful sexual intercourse. In the case of sexual predators, some caught are paraded on social media and displayed for everyone to see. Some of them receive jungle justice while some face the law. These are the ones caught, how many paedophiles are freely roaming the streets in suits and ties? Some are teachers, mentors, religious leaders, chiefs, coworkers, fathers, mothers (because boys suffer abuse too), family-friends, uncles and many more. Solutions to the menace includes firstly, that legal institutions be strengthened to protect the child. Secondly, perpetuators MUST be prosecuted without exemptions no matter how highly placed they are in the society. Thirdly, Schools need to ensure they are on top of the matter through awareness and openness so that the students are not afraid to share their experiences for fear of being punished or alienated for speaking out. Fourthly, awareness among the grassroot is key. Finally, the government cannot do it all; NGOs fighting for the abused must be encouraged and strengthened.

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

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Thursday 13 June 2019

BUSINESS DAY

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Mission 2023: Applying the SDGs in the South East (2) The Public Sphere

CHIDO NWAKANMA

e ended last week on SDG5. More importantly, thanks to many readers who responded to say they enjoyed it despite the seriousness of the matter. There is much information available on the SDGs. https://www. undp.org/content/undp/en/home/ sustainable-development-goals.html. Get involved, dear reader. Learn how to focus that WhatsApp group and other platforms to be part of the solution https://www.sdginitiative.org/. Universities in the South East should rise to the challenge of educating citizens about the SDGs and their implementation. No fewer than 14 universities across the world have developed curricula to drive knowledge of the SDGS. https://www.humanrightscareers.com/un-sustainabledevelopment-goals-courses. None from Africa. https://sustainabledevelopment.un.org/sdinaction. We are helping to mainstream the SDGs, so it does not suffer the fate of the MDGs in our land. SDG6: Availability and sustainable management of water and sanitation. Sanitation is a growing challenge. Onitsha and Aba continuously feature among cities with the worst sanitation

status in Africa. Governments in the region need to device sustainable waste management policies and practices. Communities, NGOs and individuals should also get into the business of converting waste to wealth sustainably. Water, too, requires bold measures. The every-compound-aborehole current practice will not suffice given the low water levels. Water links to agriculture. Whatever happened to the River Basin Authorities in the region? What have they done lately? With the integration, the region should consider irrigation schemes urgently to push agriculture. SDG7: Ensure access to affordable, reliable, sustainable and modern energy for all From the initial attempt to “ringfence” Aba by an entrepreneur to the “captive power” schemes of the Rural Electrification Agency, the region has worked hard in efforts to get steady power. A key goal circa 2023 should be stable and sustainable electricity. Take advantage of the various policy options available through NERC. Focus on renewables and alternative energy: solar, biomass, coal, and hydro in places like Oguta. Power projects should feature prominently in community development efforts going forward. SDG8: Promote inclusive and sustainable economic growth, full and productive employment and decent work for all. State Governments should drive this process through the creation of enabling environments in their states. The Ease of Doing Business scores for the states here are poor. Improvements needed with the bureaucracy and the many taxes and levies that seek to punish entrepreneurs for attempting or for succeeding. Remove

the bottlenecks. Akulueuno will only happen sustainably when the bureaucracy is supportive rather than constraining entrepreneurship. Many investors ran from the South East to the South West and some to Ghana for this reason. They are homeboys keen on contributing. The unemployment of young people is a threat to stability and growth. SDG9: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation. Infrastructure is instrumental to economic and social development. Robust infrastructure opens territories and creates enabling environments. Ebonyi is currently enjoying the infrastructure boom of a road network as Anambra did over the last three governors and as did Enugu City that Sullivan Chime gentrified. Ifeanyi Ugwuanyi by providing infrastructure has made Nsukka de facto and dejure second city of Enugu State. The South East needs the proper foundation of roads, potable water and power primarily. Abia State has just created an Infrastructure Development Council to steer developments, drawing in the Abia State Road Maintenance Agency, Nigerian Erosion and Watershed Management Programme (NEWMAP), the Rural Access and Mobility Project and the Ministries of Education and Works. Governor Ikpeazu is chairman to underscore the seriousness and has outlined construction/rehabilitation of 20 roads by September 2019 (100 days). It should commence the process of taking Abia off the laggard’s table in infrastructure. The South East should have a

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The South East should have a grand plan to tackle erosion. It should involve all the capacities of the people, including the universities with soil science, engineering and other cognate disciplines

grand plan to tackle erosion. It should involve all the capacities of the people, including the universities with soil science, engineering and other cognate disciplines. Get on with it, please. Industrialisation is central to creating jobs. Too many young people wallow in the villages and towns of the South East with no work. Create synergy between the many entrepreneurs in the evolving ICT arena and upscaling their innovations to become products with commercial viability. SDG10: Reduce inequality within and among countries. The inequality among the states of the South East affronts the belief in onye aghala nwanneya. The region should devise a common approach to development that would reduce inequality. It must tweak FG policies to suit its needs and values. The FG has reportedly spent N300bn on the Social Investment Programme. In the South East, it has concentrated on Anambra State for the National Homegrown School Feeding Programme. One of the aims is poverty reduction and increased enrolment. The state that needs it the most in the region is Ebonyi with a 56% poverty rate, similar to northern states and the highest number of out-of-school children in the South East. If the government shared N300b regionally, the South East would get N50b and deploy it on a needs-basis. The South East should aim for 100% school enrolment and poverty rates below 10% across board by 2023. We will conclude next week with SDGs11-17. 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.

Imperatives for Entrepreneurial Success in Nigeria: From the horses’ mouth!

ik MUO

ast week we heard from the entrepreneur-horses, the realities and challenges of entrepreneurship in Nigeria. Today, I want to share with you another dimension of my discourse with the horses: their experience-based advice to intending entrepreneurs. Before then, Dr Chika Nwosu has asked pointedly and from the global side of the world ( the world is a global village but while some people are in the village side of the world, others are in the global side) who these horses are. Hoping they will not mind, some of the horses include Chief C.I Ezeh (John Holt PLC/UNICHRIS); Chief Eric Nwobi (Niger Holdings) Ikenna Oguegbu (Kojo Motors); Edy Muoemenam (Clarion Medicals); Basil Osuokwu (Obassey Group); Ijeoma Ubosi (Kontessa). Others are Emma Umenwa (Geneith Pharmaceutical); Ezenwagu Okafor (Anno Chemical Cosmetics Industry); Charles Egbudom (Form-Annex Associates); Bath Nwibe (Segofs Energy Services); Chika Muonanu (Niger Opticals); Sebastain Umeobi (Asjay Group); Johm Emetu (Big-Fish

Restaurant). Also included are Prof Uchenna Nwosu (Apex Specialists Ltd); Luke Muonanu (L.I Muonanu & Co), Dom Okafor( Jocaro Ltd). Now that I have satisfied the inquisitive tendencies of Dr Nwosu, I will move on to the ‘sole business of the day’ as they did at the National Assembly on 11/6/19. Our horses advised intending entrepreneurs who wish to make a success of it to embrace integrity, honesty, equity, truthfulness and trustworthiness. They advised them to be focused on what they are interested in, to make efforts to learn that line of business, to be vision driven, customer focused and passionate, and to offer unique values, which is the surest route to customer attraction and retention, and enables them to have reasonable markups in their prices. Those intending to make it as entrepreneurs in this highly competitive and harsh operational environment should acquire basic and business education, undertake feasibility studies, consult professionals and embrace the limitless possibilities of ICT. They should also scan the external environment, especially political and economic aspects, understand how government actions and inactions affect their plans and redirect their businesses into the priority established by the government. They should also be watchful of changes in the business ecosystem and strategise accordingly. For instance, solar energy is becoming a reality. An entrepreneur dealing in electrical parts (manufacturing or distributing) ought to note that the future of his business is shaky and plan accordingly. They should refrain from borrowing because loans are available and refrain from speculat-

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ing with bank funds because failure to deploy the funds to the purpose for which they are borrowed is the surest route to disaster, unless an act of God occurs to save the situation. While entrepreneurs should relate with other parties, they are advised to make out time for whatever business they want to venture into, rather than handing it over fully to someone who claims to be an expert in that field. Diversification is essential because it enables one side of the business to support the other but intending entrepreneurs should move slowly but steadily and ensure that they do not over-trade They should not go into a particular line of business because others are ‘making it there’; should dig in for the long term rather than adopting a hit-and-run perspective of voting with their legs whenever business is dull. They should eschew the get-rich-quick mentality, understand the principle of sowing and reaping, that they would sow before reaping and that one will certainly reap whatever he or she sows, whether good or bad. I have kept it short and simple but because this platform is not appropriate for an extensive discussion of the issues raised. But I believe that useful hints have been dropped and with this, I will leave the ‘horses’ for now and recall them when the need arises Other matters: Our ‘black-white’ ladies I will start this edition of other maters from two divergent but convergent stories. Before then, I wish to acknowledge the feedback from Ikenna Okonkwo of NNPC Environmental Services who informed me of his special interest in the ‘other matters’ segment of these interventions. Now, the stories: when Peter

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Obi was the governor of Anambra state, he took special pride of being the only ‘Mr’ in the comity of gubernators because his colleagues were Chief Dr… FAD, CLU, OPC, QED…. However, it is not just at the gubernatorial circles. Anywhere ten Nigerians are gathered today, nine of them are multi-titled: High Chief Dr Sir bla bla bla. In effect, the title ‘Mr’, is an endangered species, speedily heading for extinction. That is one story. The other day, I attended an event where the ‘jokist’ (MC) suggested that our ladies should seek NAFDAC certification because most of their body-parts, both seen and seen (eyelashes, nails, hair and the ‘other ones’) are artificial and mostly imported. These are different stories but they converge when you consider the fact that almost all our ladies are now ‘white’. Black (dark) ladies are now as scarce as the ‘Mr’ title and the emergent whitishness is another reason why some of them need NAFDAC certification. Look around your office, church, market or even your home and you will notice that all, well almost all, the ladies are now ‘white’. Well, not totally white but blackish-white! It is another dimension of our import dependence: foreign coaches, foreign toothpicks, foreign houses, foreign holidays, foreign accents and foreign accounts. I don’t want to comment on the wicked painting technology and the make-up, make-down or make-over, which makes it impossible for one to recognize an acquaintance at an event. Yes… we are progressing! Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye, Ogun State muoigbo@ yahoo.com ;muo.ik@oouagoiwoye.edu.ng ; 08033026625

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Thursday 13 June 2019

BUSINESS DAY

BUSINESS TRAVEL NCAA certifies DAV-AAKY Nigeria Ltd to carry out NDT inspections Stories by IFEOMA OKEKE

igeria Civil Aviation Authority (NCAA) has issued an Approved Maintenance Organization (AMO) Certificate on Non Destructive Testing (NDT) to indigenous Company, DAVAAKY Nigeria Limited based in Lagos to carry out NDT inspection to ensure aircraft airworthiness and serviceability. The company is now approved to inspect and carry out Non Destructive Testing on aircraft and aircraft components with a specifications covering Eddy Current Testing, Magnetic Testing, Dye Penetrant and Ultrasonic Testing inspection on all types of aircrafts and aircraft components. DAV-AAKY Nigeria Limited with AMO/5N/DAV is the first NDT AMO holder of its kind in Nigeria. Speaking to the media

L-R: Uche Nwiwu, engineer, Nigeria Civil Aviation Authority (NCAA); Prajo E.Narayanan, engineer, DAV-AAKY Nigeria Limited; Frank Igwe, engineer; NCAA with CEO DAV-AAKY Nigeria Limited; Ayoola Stephen, engineer, flanked by Adamu Malik, engineer, Sabruwa and Bankole Pius at the award of the Approved Maintenance Organization (AMO) Certificate at the NCAA Annex in Lagos.

after the brief AMO certification ceremony, Ayoola Stephen, Chief Executive Officer of DAV-AAKY Nigeria Limited, explained that the NDT tests are carried out on

aircraft whole or components to detect cracks, corrosion amongst others on the aircraft or aircraft components. Stephen added that the company has trained and

competent NDT personnel with certification on EN4179 and NAS410 which is internationally recognized. With this certification, the company can carry out NDT inspec-

Delta, Air France and KLM mark tenth anniversary trans-Atlantic partnership

elta Air Lines, Air France and KLM are celebrating 10 years of their successful trans-Atlantic cooperation, a partnership that has continued to lead the industry and set a trend for others to follow. Over the past decade, together the airlines have soared to new heights as they opened up new routes between Europe and North America and improved customer service. Built around a network of seven hubs – five in the United States and two in Europe – the partnership covers routes between Canada, United States, Mexico and Europe. “In 10 years, our NorthAtlantic JV has become the most advanced example of what an airline partnership can be and what it can bring

to the customers,” Patrick Alexandre, Air France-KLM Group Executive Vice President Commercial, Sales & Alliances, said. “The success of our JV with Delta comes from our combined and multiple offers which are adapted to all customers, from B2C to trade and corporate. Together with our integrated commercial teams, we aim at delivering the best service to our clients all along their journey. We are very proud of our achievements and look forward to further expanding our JV,” Alexandre added. Customers have benefited as the partnership has 38 more peak day North America to Europe flights today than 10 years ago bringing the number to more than 270 daily trans-Atlantic flights. It’s now easier to connect to destinations across North

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America and Europe thanks to more hub-to-hub flying, such as Detroit-Paris and Atlanta-Amsterdam that offer a wealth of onward flights. The partnership has also opened up new U.S.-Europe city pairs that would not be possible for them to do alone, including service from non-hub cities, including Indianapolis, Raleigh/Durham and Dallas-Fort-Worth, to Paris and Tampa-Amsterdam. Eligible customers can use the largest airport lounge network across North America and Europe. There are opportunities to earn miles and redeem them on a number of benefits, including flight upgrades through each airlines’ frequent flyer programmes. The partners carry 20 percent more customers today compared to 10 years ago.

“We have a lot to be proud of from the past 10 years. The key to our success has been continuing to innovate and a commitment to constantly improve our customer experience,” Steve Sear, Delta’s President & Executive Vice President Global Sales said. “Customers have benefitted from our awardwinning service, and close integration of our systems and teams in the airport, sales, call centres and back office. Most recently, we have expanded our cooperation to include Africa, improving the travel options for new and existing customers,” Sear added. The Delta, Air France and KLM partnership has its foundations in a previous agreement between KLM and Northwest Airlines. Following the U.S. and European Union Open Skies agreement in 2007 and the merger between Delta and Northwest, the Air France-KLM Group and Delta announced their long-term joint venture on May 20, 2009. Just over one year later, Alitalia joined the partnership, offering new flying opportunities between North America and Italy. Last year, Delta invested €375 million to acquire 10 percent equity in the Air France-KLM Group.

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tions internationally. The NDT tests are not restricted to aviation as they are carried out in automobile, sea, rail, and oil and gas industry. “We carry out NDT inspection on aircraft and its components to ascertain its serviceability. Apart from aircraft, we also carry out inspection on automobile, in the sea, marine, ships bridges and the rest but presently, NCAA has given us an AMO on NDT inspection in aviation and this is the first of its kind in this country,” he explained. According to him, “DAVAAKY Nigeria Limited is approved to offer NDT inspection services. You don’t need to come to our base for us to carry out inspection, if your aircraft is in Kaduna, Maiduguri, Port Harcourt, anywhere your aircraft is or anywhere the equipment or part you want us to work on, we will come down there and carry out your job which makes it the first mobile NDT service provider in the country.”

“We are filling a gap and it is a good advantage to our clients, our services make it easier for us to reach you and also for you to reach us, it cut costs to airlines because you don’t need to fly the aircraft down. It reduces a lot of cost for clients who would want to employ the services of DAVAAKY Nigeria Limited, plus we are affordable, reliable and efficient.” On his plans for the future, he said he envisions a scenario where his company would train no fewer than 500 people in the next five to ten years as professionals in the field of NDT are few and far in between. “It’s not easy, but we will be the first leading NDT in this country and would train no fewer than 500 staff on NDT to employ a lot of people in the years to come. NDT professionals are no more than 20 well trained in this country and this is sad. In the next five to ten years, we hope to have over 500 or 1,000 NDT professionals,” he said.

Ethiopian Airlines connects Johannesburg from Lagos

he General Manager of Ethiopian Airlines in Nigeria Firihiewot Mekonnen has announced that starting from the 15th of June 2019 Ethiopian Airlines will start Flights to Johannesburg from Lagos via Libreville. The flights will Operate Daily from Lagos via Libreville. In a statement sent by the airline, it hinted that as the African Football Nations Cup is about to begin and Nigeria is also involved in the FIFA female World cup, Ethiopian Airlines seeks to Wish the players well at the Two events even as the airline promised to always provide connections to these host countries of France and Egypt. “Ethiopian Airlines is

pleased to have served fans of the globally renowned British football teams Liverpool and Tottenham Hotspur in their travel to Madrid where the teams played for European Champions League final match. “Ethiopian deployed three chartered flights from London, Liverpool and Manchester carrying the fans to Madrid. Ethiopian Airlines is delighted that the supporters of the football teams enjoyed the features of its latest aviation technology aircraft along with the airline’s award-winning customer service and the overall travel experience. The Airlines would like to thank the fans for choosing and giving us the opportunity to serve them.”

Arik Air celebrates 2019 Children’s Day with orphans

rik Air, one of Nigeria’s leading carrier celebrated the 2019 Children’s Day in style with two notable events in Abuja and Lagos. In Abuja, the airline partnered the Nigerian Television Authority (NTA) to stage the 6th edition of its Children’s Day at the NTA Arena on May 23. More than 1,200 school children and children from orphanages within Abuja and its environs were in attendance. The event featured dancing competition, quiz and other variety shows. In Lagos, Arik Air visited the Love Home Orphanage, Magodo where assorted food items and groceries were donated to @Businessdayng

the children in the spirit of the celebration. Receiving the items on behalf of the orphanage, Funmi Ajasa, Customer Service/Front Desk Personnel, thanked Arik Air for the kind gesture and show of love. Roy Ilegbodu, the Chief Executive Officer of Arik Air, commented on the airline’s partnerships: “As a socially responsible organisation, we want to touch the lives of the children and the less privileged in our society. We identify with the significance of Children’s Day which is a day of giving love, attention, affection to children all over the world, and helping in charting a greater path to their development.”

Thursday 13 June 2019

Innovation

BUSINESS DAY

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Unicorn to deploy $30m to African tech startups in next 10 years FRANK ELEANYA

nicorn Group, the organisers of the two-day e v e n t Te c h Money Africa Summit said it plans to collaborate with international organisations to deploy $30 million to tech startups on the African continent in the next 10 years. During a media session before the commencement of the event, the Unicorn team said the tech startups on the continent represent opportunities for investment. “Our interest cuts across everyone; no matter the location,” Kola Abiola, chairman of Unicorn said. The first day of the TechMoney Africa Summit saw experts and tech entrepreneurs share their experiences from investing and servicing consumers on the continent. The Vice President who was represented by Adeyemi Dipeolu, special adviser to the President on Economic Matters in the Office of the Vice-President, noted that for Nigeria to begin to maximize the opportunities in digital technology there needs to be an enabling environment

for young Nigerians to create innovations that will thrive. The government, he said, is partnering with private sector to shore up investments to provide the necessary infrastructure in the space. Obafemi Hamzat, deputy governor of Lagos State, speaking through a representative, Segun Olufemi Adeniji, permanent secretary, ministry of Science and Technology, also disclosed that the commercial capital is prioritizing investment in upgrading infrastructure that will enable businesses to grow in the state. At one of the panel sessions focusing on building systems for business growth, Deepankar Rustagi, founder of VConnect, Nigeria’s largest online business directory and

local search engine with presence in 8 countries, explained that for startups to replicate success in their business, creating the right system is very critical. The systems that work, he added, are those based on data captured from interacting with customers. Rustagi said that expanding VConnect beyond Nigeria to eight other countries has thought the company why standardisation and structured processes matter. “If you plan to move your business to other countries, you will have to find out how standardisation of the system comes in,” he said. “It helps you know which services can be replicated. When you are looking at scaling, you can’t have unstructured processes. It has to be structured.”

Paul Atat, group head, digital banking at Providus Bank, said putting systems in place may come at different levels. Startups should look out for systems that enable them build faster. It also depends on the ability of the founder to understand the people he has. “You need to understand people who are skilled and those who are ready to learn, because you don’t have time. The founder needs to know their capacity and be ready to delegate. You can’t do everything; understand what strength you have,” Atat said. On the day 2 of the summit, Vice chancellor of University of Lagos, Professor Ogundipe announced partnership with Omnicharge which will see the company train some engineering student of the university in China. Bola Onadele Koko, managing director and chief executive officer of FMDQ Securities Exchange PLC (FMDQ), one of the sponsors of the event described the summit as a platform to empower Nigeria’s “brightest” minds in technology and help scale up their ideas to effectively contribute to the development of Nigeria.

‘Bitcoin going through distinct hype cycle’ FRANK ELEANYA

nyone who has invested in bitcoin for a while is probably very used to the constant “Up one minute” “down next minute” price trajectory. The price of the cryptocurrency is at the moment struggling to sustain the momentum it has built in previous week which saw it reach $9,000. Currently, it is hovering a little above $7,500 after defending a $7,400 price support. Luno, a global cryptocurrency company with over 2 million customers in 40 countries including Nigeria, said in a new post on its website that bitcoin’s price movement could be a result of a distinct hype cycle. A hype cycle refers to the process new technology goes through before reaching mass adoption. Luno identified five steps to a hype cycle including technology trigger, peak of inflated expectations, trough of disappointment, slope of enlightenment and plateau

of productivity. At the technology trigger level the innovation is at its developmental stage and attracts people’s attention. The technology could be expensive, bulky, difficult to use and confusing to understand. Just like bitcoin, every technology innovation had to go through this process. A most recent example is the foldable phone which despite the launch by smartphone manufacturers like Samsung and Huawei is still going through production processes. The foldable phone is considered very expensive at over $1,500 to $2,000. It would also be recalled that Samsung had to withdraw its foldable after some defects were identified in the phone. The peak of inflated expectations is the stage where everyone including the media begins to talk about the innovation. It raises heated debates in media cycles and people begin to give success stories which may be exaggerated. Practically everyone has ideas for its future including scammers. At the trough of disappointment people begin to

realise the hype is not sustainable, hence they start losing interest. Those who criticised it are happy. But the technology gets better behind the scenes. “The only difference is that people realise it was overhyped and become aware of the gap between reality and their expectations,” Luno noted. On the slope of enlightenment people’s disillusionment begins to give way to the awareness that the innovation still has important relevance. The regulator also gets some form of grip and put some control to make it safer for everyone. The plateau of productivity is when the technology becomes mainstream ditching the hype and earlier disappointment users experienced. “The main lesson we take from the hype is that our perception of a technology doesn’t always reflect its actual quality and value,” Luno said. The company believes bitcoin has gone past the first three stages; technology trigger (when it was launched

in 2009 by a person or group known as Satoshi Nakamoto); peak of inflated expectations, (reached in 2016-2017 when prices exploded and everyone wanted to jump on the bandwagon) and trough of disillusionment (prices have dropped since their heights – a possible indication of public sentiment, reports of scams and companies making unrealistic promises have brought disappointment). Bitcoin, the exchange says, might be on the slope of enlightenment given that it is gaining acceptance in various industries, including the mainstream financial industry. Utility of bitcoin is also on the rise with more stores willing to accept it as a means of payment. Importantly, the technology is improving and become far more usable – faster, cheaper and safer. “But we believe that we are moving towards the point where widespread adoption of cryptocurrency is possible. We believe that the plateau of productivity will involve a frictionless financial system that is equal for everyone,” it said.

TECHTALK

Broadband Infrastructure

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Bank IT Security

First edition of ‘national Hackathon’ launched, calls for applications from Nigerians CALEB OJEWALE

he first edition of FutureHack, described as the national technology hackathon event in Nigeria has been launched, with teams expected to solve problems in three areas; Health, Agriculture, and Education. Apart from the bragging rights of winning the national hackathon, over N3 million in cash is available among other prizes and benefits. The Futurehack is intended for computer programmers and others involved in software development, including graphic designers, interface designers, project managers, domain experts (and others) collaborating intensively on software projects. The program is an initiative of the Office for ICT Innovation and Entrepreneurship (OIIE), a Subsidiary of the National Information Technology Development Agency’s (NITDA) “FutureHack is conceive d as an initiative to drive Nigeria’s Digital Transformation while addressing four of the agency’s priority areas- local content development and promotion, digital job creation, digital inclusion and Government digital services,” noted Isa Ali Ibrahim Pantami, DG/CEO NITDA. The contest is expected to generate ideas (and prototypes) for the specified sectors, and drive Nigeria’s innovation and digital economy. It has been designed as a regional event, which will hold in academic institutions so as to inculcate innovation and entrepreneurship culture in students. The organizing agency stresses, “Participation is not limited to citizens within a region. All Nigerians in the country and in Diaspora are eligible to apply”. The three editions of the FutureHack challenge will be held in the North-Central (focusing on eHealth), North-West (eAgriculture) and SouthWest (eEducation). The call for application for all identified areas ; eHealth, eAgriculture and eEducation is open until the 28th June 2019 and can be done via http://apply. futurehack.ng/

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

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For eHealth, identified problem areas include: 1. Drug abuse 2. Patient care and management 3. Healthcare in rural areas 4. Sanitation in healthcare facilities 5. Epidemics 6. Hazardous working conditions 7. Mental health and suicides For eAgriculture, identified problem areas include: 1. Climate change 2. Carbon emission 3. Genetically modified crops (GMO) 4. Disease control For eEducation, identified problem areas include: 1. In and out of school children and youth 2. Quality assurance and quality control in education 3. Gender divide in education and ICT 4. Affordable quality education 5. Teacher traning/recertification Criteria for applicants include: • Individuals and teams of a maximum of three can apply. • An executive summary clearly stating the area of interest/participation, with indication of the preconceived approach to tackling it • The team must be solving a problem in eHealth, eEducation, and eAgriculture sectors. • All team members should be present at the event and come with their own personal computers. • Teams are to create a pitch deck for the demonstrations in which each group presents their results to a panel of judges that will select the winning teams, and prizes will be given. Apart from the N3 million available for winners, there are other benefits including free cloud services from IBM for the winners of the challenge. There is also an opportunity for a 3-6 month incubation, which will include training, mentoring and workspace at an appropriate hub to nurture and transform the ideas into valuable products and services.

Thursday 13 June 2019

BUSINESS DAY

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Thursday 13 June 2019

BUSINESS DAY

COMPANIES & MARKETS

Fitch Affirms Nigeria at “B plus” with stable outlook Pg. 18

Company news analysis insight

HealthCare

Health stocks end Q1 with weakest profit since 2016 recession SEGUN ADAMS

isted Nigerian Healthcare companies, after two successive years of growing profit from the 2016 recession level, saw their bottom-line decline significantly in Q1 2019, with figures showing a 3- year low. The combined first quarterly profit of health-related stocks on the Nigerian Stock Exchange (NSE) dipped 62.98 percent in Q1, as all the firms which have reported their earnings scorecard noted a drop in profit- with the exception of two players which only pared their losses in the quarter. Data from NSE show the cumulative profit of health companies dropped from N687.11 million in Q1 2018 to N110.2 million in Q1 2019, after it had appeared to be reaching its pre-recession high of N850.67 million which was achieved in 2014. Healthcare companies covered in the analysis are Ekocorp, Fidson, GlaxoSmithKline, May & Baker, Morison, Pharma Deko, Neimeith, and Union Diagnostics. The double-digit decline in profit, was on the heels of revenue woes of the companies as the average sales decline stood at -15.13

percent in the period. GSK however in the period improved its sales by 19 percent and Morison recorded of 29.29 percent more revenue, while Pharma Deko, at -74 percent, suffered the biggest decline which affected its bottom-line.

The constraint on PharmaDeko was “due to working capital deficiency as company funds are tied down as a result of a temporary suspension placed on cough syrup containing Codeine by the Federal Government,” the company noted in its Q1 2019 earnings report.

For the recently concluded quarter, Ekocorp reported a loss of N53.92 million, 19 percent less than it had earned in the same quarter of 2018 while Fidson’s profit plummeted by 29 percent, dipping to N144.89 million. GlaxoSmithKline made 60

percent less profit in the period showing N102.44 million as against N258.29 million garnered in Q1 2018 and M&B’s bottomline shrank 18 percent to N133.59 million. Morison was able to pare its loss by 20 percent, even though the company was unable to turn the corner in the quarter. PharmaDeko and Neimeith recorded significant upset in their books, with both healthcare companies reversing previous profit positions by as much as 500 percent to post losses. Union Diagnostics pared its profit by 68 percent, to 32.83 million, overall showing a grim quarter for health stocks on Lagos Bourse. Nigeria’s healthcare sector, proxied by human health and social services, fell year –on-year by 0.37 percent and quarter-onquarter by 9.54 percent in the first quarter of 2019, according to data from the National Bureau of Statistics. Similarly, pharmaceutical and chemical products manufacturing GDP fell by 8.24 percent quarteron-quarter, although it improved by 1.36 percent year on year, the first quarter GDP report of the state funded data agency showed.

FUNDS

Stanbic IBTC, FBN Capital, ARM control 85% total mutual fund AUM ors of Treasury bills declined in two consecutive primary market auctions last month, a major causal factor behind the drop in money market funds, according to analysts. Stop rates on 182-day and 364day tenors at Central Bank of Nigeria auction on May 15, slows to 12.3 percent and 12.49 percent respectively from 12.49 percent and 12.77 percent at the previous auction, while the rate on the 91-day bills was retained at 10 percent. Rates on 182-day and 364day tenor further dropped to 11.95 percent and 12.2 percent respectively, as buy pressure heightens.

Israel Odubola

tanbic IBTC Asset Management Limited, FBN Capital, and Asset & Resource Management Limited (ARM) led the pack of fund managers with the highest assets under management (AUM), accounting for 85 percent in N741 billion total mutual funds, according to figures from Securities & Exchange Commission (SEC). For the week ended May 24, Stanbic IBTC Asset, which has eleven different funds across seven asset classes, topped 23 others with N329.8 billion net asset value (NAV), representing 45 percent of the total mutual funds NAV. A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds, and each share represents an investor’s part ownership in the fund and the income it generates. Meanwhile a fund’s NAV represents the net value of an entity and is computed as the total value of fund assets less total liabilities. FBN Capital Asset Management, a subsidiary of FBNQuest, emerged the second biggest fund manager, with NAV worth N173.4 billion, nearly half compared to Stanbic’s figure.

The fund manager controls six different funds across seven asset classes. Asset & Resource Management (ARM) trailed with N63.8 billion, with four funds. FSDH Asset Management Limited and AXA Mansard Investment Limited also featured in the top five list of largest fund managers with AUM worth N38.4 billion and N25.9 billion respectively. While the former has three funds under its custody, the latter controls two. The fund managers with the lowest AUM include PAC Asset Management Limited, Lead Asset Management Limited and Capital Express Asset and Trust Limited, with NAV at N765.9 million, N383.5 million and N328 million respectively.

Analysis of total funds managed by the 24 fund managers shed slightly by 0.58 percent to N741 billion as at May 24 2019, compared with N745 billion in the previous week, 15percent more than N645 billion at start of the year. The marginal decline in total mutual funds is largely attributable to slim dip in money market funds, which accounts for 76 percent of the entire mutual funds. Money market funds, which comprise investment in short-term securities such as treasury bills, commercial papers and certificate of deposit, halted its 3-week bullish run, to slide 0.83 percent to N599.8 billion in the last week of May. Stop rates across different ten-

Fixed income funds grew 0.94 percent to N77.5 billion, bond funds up 0.24 percent to N18 billion, equity funds were down 1.41 percent to N11.3 billion, with real estate funds remaining unchanged at N45 billion. Stanbic IBTC Money Market Fund, with AUM worth N262 billion, which nearly halves the N559 billion total money market funds, emerged the largest in the entire mutual funds. Followed by FBN Money Market Fund (N163bn), ARM Money Market Fund (N57bn), Stanbic IBTC Dollar Fund (N35bn) and AXA Mansard Money Market Fund (N26bn)

L-R: Ani Charles Bassey-Eyo, CEO, LANI Group and Co-founder Axiom Learning Solutions; Laure Beaufils (h), executive, AFED and Ifejola Dada, British deputy high commissioner to Nigeria and president of AFED during a panel discussion and reception on supporting low- cost education held at the residence of the British High

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Thursday 13 June 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

MARKET

Fitch Affirms Nigeria at “B plus” with stable outlook SEGUN ADAMS

itch Ratings, a global credit rating agency, has affirmed Nigeria’s LongTerm Foreign-Currency Issuer Default Rating (IDR) rating at ‘B+’ with stable outlook, after it saw support in the positive trajectory of the economy and a better performing global oil market in 2019. The International Ratings which is one of the biggest three credit rating agencies, alongside Moody’s and Standard & Poor’s, believes with the uneventful completion of the 2019 general elections Nigeria’s economy has become less risky, while the return of incumbency would serve as a positive in fast-tracking policy implementation. Consequently, Fitch expects to see continuity in policy, although it notes impediments to long-term growth in feeble

reforms, weak economic management and possible delays in approving key legislation on the heels of the tendency of the presidency and lawmakers to be at loggerheads. The international rating agency estimates a decline of General Government deficit to 3.6 percent of GDP in 2018 as against 4.5 percent in 2017. Fitch however forecasts the General Government deficit to worsen to 3.8 percent of GDP in 2019 “and further to 4.6% in 2020 as the rise in oil production with the coming on stream of the Egina oilfield will be offset by the decline in oil prices under our baseline,” the rating agency noted. Federal government’s deficit is projected to hit 2.6 percent and 3 percent of GDP in 2019 and 2020 respectively. Fitch highlighted vulnerability in the FG’s wallet which

continues to depend largely on oil revenue. “Public finances are vulnerable to disruptions to production caused by recurrent acts of vandalism or other force majeure affecting Nigeria’s aging oil infrastructure,” the rating agency warned, adding that a USD10 change per barrel in the Brent oil price would likely impact the General Government balance by around 0.6 percent of GDP. Overall the agency was guided by assumptions that Oil and gas revenues has accounted for 44% of general government revenues and 60% of currentaccount receipts over the last five years. The agency forecasts a stable Nigerian oil production volume of 2 million barrels per day (mmbpd, including condensates) in 2019 and 2020 against a 2019 budget assumption of 2.3 mmbdp.

L-R: Emmanuel Ijewere, special guest of honour; Nnamdi Anthony Okwuadigbo, president/chairman of council, The Institute of Chartered Accountant of Nigeria (ICAN), and Tijjani Musa Isa, 2nd deputy vice president, at the 50th Association of Accounting Technicians West Africa (AATWA) induction ceremony for the new members, with the theme “Fourth Industrial Revolution: Endless Possibilities for Accounting Technicians” in Lagos. Picture by Olawale Amoo

Technology

Weprototype Technologies boost activities with Google technology Gbemi Faminu

tart-up tech company WePrototype Technologies has officially launched its mobile app building services with the use of Google’s latest Flutter software Development Kit and App Prototyping technique for faster and more seamless operations. The company established in 2019 prides itself in aiding senior professionals deliver on their entrepreneurial ambitions with the creation of prototype and original applications at affordable rates.The company combines prototyping and Google flutter technology to build fast mobile applications that have a better chance of market success, this enables salary earners to launch a cost-effective side project quickly. Mayowa Okegbenle founder of WePrototype said “Tech is about providing solutions to business problems and when aspiring entrepreneurs are starting a business, they have a whole lot of

business problems to deal with. At WePrototype, we want to solve as many of these problems as we can.” “We want to play the role of the entrepreneur’s technical cofounder. Every start-up needs a really good technical co-founder, that is what WePrototype wants to be to its customers.” Okegbenle explained that Prototyping is an early sample of the app where all adjustments are done and perfections are made before finally building, and delivering the finished app to the client. He explains that it is necessary because it guarantees perfection and satisfaction and is perfect for concept testing, investor pitches, and market testing. The company’s head of productions, Maureen Omage said “At WePrototype Technologies, we use the Prototyping Methodology to deliver apps that succeed. We combine this methodology with the latest mobile app building tool from Google, called “Flutter” to build beautiful and high-

performance apps.” “With the prototype, our client can make corrections, show potential customers, and even pitch to investors. All these are very critical activities missing in the current development model provided by other IT outlets. The feedback from these activities helps our clients to better understand the market and even decide if they want to go ahead as planned or tweak their business model a bit.” Seye Seton, co-founder of VendorCredit and a client affirmed that the tech company has been active in building businesses adding that they help reduce workloads especially for entrepreneurs engaged in a daily 9-5 job. According to the company’s review by clients, Apps built by WePrototype Technologies are high performing, responsive, free of errors and completely native as the app runs as part of a device operating system using hardware features of mobile devices- like camera, contacts, geolocation, storage, vibration and more.

Technology

L-R: Mark White, partner, White Summers Caffee and James LLP; Akintoye Akindele, managing partner, Synergy Capital; Patricia Obozuwa, chief communications and public affairs officer, GE Africa; Oluwatoyin Ogundipe, vice chancellor, University of Lagos, and Wuraola Abiola, resident operating partner, Unicorn Group, at a cocktail dinner hosted by GE for the TechMoney Africa Summit at the GE Lagos.

Otto Orondaam, CEO/founder, Slum2School (l); Patrick McMichael, CEO, Eat’N’Go (2nd l); Amalia Sebakunzi, marketing director, Eat’N’Go (2nd r), and Sola Adeeko, head, HR, Eat’N’Go, at the Eat’N’Go’s press briefing and unveiling of its 100th store in Nigeria, in Yaba, Lagos.

PayU expands operation to Kenya to enable access to East African markets Head of Strategy & Business Development, PayU Africa, ayU has announced her “Kenya is a powerful and growexpansion into the East ing market, ideally suited for African markets by pen- investment and expansion for high velocity merchants.” etrating into Kenya. Bakker further said that According to the African Development Bank, Economic “With our global, long-standing growth in the East Africa region reputation, and local presis estimated to remain at a steady ence in the Kenyan market, we 5.9 percent in 2019, a signifi- provide organisations with a cantly higher percentage than doorway into East Africa that’s North Africa at 4.9 percent and built on the foundations of longstanding relationships and local Southern Africa at 1.2 percent. The countries with the high- expertise.” PayU’s successful Kenyan est economic growth include Rwanda, Kenya and Tanzania, operation has been approved with the service sector the pri- by the Central Bank of Kenya, mary driver of growth for the cementing it’s standing and local approval. latter two. The launch of PayU in Kenya For this reason, PayU has been a licensed operator in provides organisations with onKenya and has launched robust the-ground local liaisons, strong payment services for the region. relationships, improved stabilKenya, as the power hub for East ity and reduced downtime, and Africa is superbly positioned for localised customer support. expansion into the rest of Africa. With PayU Kenya, users are According to Corrie Bakker, able to transact in volume at Jonathan Aderoju

the approval rates certified by PayU, and are assured of robust, ongoing security. Bakker says “Working with us in Kenya not only opens the door to Tanzania, Uganda and Rwanda these are countries that have shown real GDP growth but provides our partners with the first line of local defence with people on the ground,” “We provide a new set of credentials and a tokenised anti-fraud offering with a reoccurring option that assures merchants of strong security and peace of mind.” In addition to strong economic growth prospects and a growing middle class, Kenya’s payment market is dominated by mobile transactions. More than 80 percent of payments take place over mobile wallets with M-PESA remaining the dominant provider of choice, closely followed by card payments, then EFT.

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R-L: Adebisi Odubela , Bukola Litan; assistant creative directors ; Mobola Abiru , creative director, and Jimmie Akinsola, event host, at the briefing on Afroprom class of 2019 for ages 14-18 years in Lagos . Picture by Pius Okeosisi

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Thursday 13 June 2019

BUSINESS DAY

MADE in aba Aba CFC unutilised 11 years after inauguration GODFREY OFURUM

he need to au t o mat e t h e Aba finished leather and g a r m e n t sectors of the economy to ensure that operators produced seamlessly was instrumental to the establishment of the Common Facility Centre (CFC). However, the facility, commissioned in May, 2008, to aid entrepreneurs in leather works and garment making has become a wasted project, as no concrete action has been taken to make it functional. The centre at the moment requires funds and skilled manpower to enable it achieve the aim it was establishment. Bu s i n e s s d ay c h e ck s revealed that the majority of shoemakers based in Ariaria area of the city, w h o e a r l i e r p ro t e s t e d the location of the centre at Industr y Road, have refused to use the facility, consequently leaving it unutilised.

C h r i st i a n Nnaj i a ku , managing director, Kenzy Shoes, obser ved that shoemakers are yet to understand the purpose b ehind the s etting up of the centre and urged the CFC management to enlighten its members on the facilities available at the

centre and its importance to their production. According to him, members need to be enlightened. “Majority of us are not aware of trends in the sector and if we must compete effectively, we need to imbibe modern trends, which include the use of

modern machines and participation at workshops and seminars,” he said. For Okechukwu Williams, president, Leather Products Manufacturers Association of Abia State (LEPMAAS), an association of shoe, belt and bag makers in

Aba, the CFC would serve the Aba finished leather sector better if it is made a training centre, rather than a production facility. He attributed the underutilisation of the facility to its location at Industry Road, which he said is about 10 kilometers away

from Ariaria, the present location of the Aba finished leather cluster. The ingenuity of Aba artisans, especially, the garment and finished leather sectors, attracted the United Nations Industrial Development Organisation (UNID O) in partnership with the Federal Government, to set up a common facility centre (CFC) in the city to support the clusters to further develop their skills. The strategy behind the setting up of the CFC was to gather sectoral and geographical concentration of enterprises, faced with common opportunities and challenges and with t h e p r i ma r y o b j e c t i v e o f e x p l o i t i n g e x t e r na l economies through collective effort and sharing common facilities for enhanced processing of their products. It is to also serve as a centre of excellence for cap a c i t y - bu i l d i ng a n d provision of cutting edge technology for competitiveness enhancement.

Revisiting N120bn Aba shoe industry ODINAKA ANUDU

he Aba shoe industry is getting bigger. The majority o f a r t i s a n s a re small and medium players struggling to compete with Chinese products, with little resources. Many Nigerians underestimate the potential of the industry. One million pairs of shoes are produced by more than 80,000 leather makers in Aba each week. Wi t h 4 8 m i l l i o n p a i r s produced each year at an average price of N2,500 a pair, the industry is said to be worth up to N120 billion. T r a d e r s f r o m We s t African neighbours storm the industrial city every w e e k t o bu y d i f f e re nt product designs, just as Southern African schools are beginning to place orders directly from the shoe makers. Canadians, Europeans and the Chinese are also in the party, placing orders themselves directly or through their Nigerian proxies, BusinessDay was told in Aba. “We are already struggling to meet demands,” said Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists

of Nigeria (ALAN), who produced Nigerian armed forces shoes in 2016. The business is going digital, with sales now online. The Aba leather industry i s m a d e u p o f s h o e s, trunk boxes and belts. It provides employment for tens of thousands, with many specialising in different stages such as designing, patterning, cutting, skiving, stitching, peeling and finishing. It is

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made up of clusters such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag, and Ochendo Industrial Market, comprising input supplers, among others. However, the industry is in thriving in chaos as the majority of shoe makers in the industrial city are poorly structured and are not registered at the Corporate Affairs Commission. Exports are

made informally, making tracking and planning difficult. Their machines are crude and much of their work is still done by human labour. The more advanced shoe makers in Lagos are mostly foreigners, who design their shoes abroad and then import Completely Knocked Down shoes back to the country for finishing. “ This is where the problem lies. We in Aba have no good machines,”

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Anyanwu of ALAIN said. He said this is why the majority of Aba shoe makers are not meeting demands and are over working themselves once orders are placed. “It is a problem already for us because if a customer comes and we can’t meet demand, he will go elsewhere. The industry needs retooling,” he said. Nigeria and Ethiopia have things in common in terms of leather. Ethiopia is home to 56 million cattle, which provide ready raw materials to shoe makers. But Nigeria has 131 million cattle, goats and sheep, according to the Federal Ministry of Agriculture (2011 figures), with more shoe makers. The country is the second most populous (with 105 million people) after Nigeria with almost 200 million people. Nevertheless, Aba shoe makers import animal skins from China and many parts of Africa and Europe. “What happens is that the tanneries in Kano and Kaduna process animal skins and sell them as leather in the global market, earning foreign exchange,” said Chinatu Nwagbara, @Businessdayng

coordinator of Made-inAba Project, who produced shoes for Olusegun Obasanjo in 2016. “So we go to China and other countries to buy. Sometimes, we buy our products and re-import,” he said. More investments are going to Ethiopia. Between October and December 2016, Ethiopia attracted over $500 million in FDI to the shoe and leather industry. About 124 investors willing to invest $3.5 billion indicated interest to swell the export-oriented shoe market, according to the E t h i o p i a n I nv e s t m e n t Commission (EIC). Ethiopia exported $33.7 million worth of footwear products, mainly to the United States in 2015, one million lower than the preceding year. Through the African Growth and Opportunity Act (AGOA), the US-Africa trade law that allows duty-free and quota-free access into the US market, Ethiopia shoe exports jumped from $630,000 to nearly $7m between 2011 and 2012, a more than tenfold increase, according to statistics from USAID.

Thursday 13 June 2019

BUSINESS DAY

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Thursday 13 June 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open 31 – 05–19

31,924.51 30,881.29

N13.685trillion

2,440.10

Week close (07 – 06–19)

30,432.13

N13.402trillion

30,432.13

Year Open

2,241.37

The NSE-Main Board

1,456.29 1,267.54 1,247.55

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

805.27

1,286.68 1,257.60

347.85

119.81

630.93

262.58

2,083.00

1,133.27

1,066.11

356.93

114.99

623.30

249.07

2,038.01

1,100.50

1,055.62

782.29

Percentage change (WoW)

-2.05

1.07

-1.58

-2.85

Percentage change (YTD)

-3.18

12.36

-13.35

-1.45

-2.26 -11.26

-1.28 -10.53

-4.02 -9.08

-1.21

-5.15

-16.76

-17.59

-3.13 -8.77

-2.89

-0.98

-11.10

-9.08

NSE houses 20 companies with locked-in shares Iheanyi Nwachukwu

here are currently twenty (20) companies listed on the Nigerian Stock Exchange (NSE) that are still deficient in their shares free-float. In stock market, free float represents the portion of shares of a listed company that are in the hands of public investors as opposed to locked-in shares held by promoters, company officers, or controllinginterest investors. A larger free-float allows a stock’s volatility to be lower because there are more traders buying and selling the shares; while a smaller freefloat equates to more volatility, since fewer trades move the price significantly and there are a limited amount of shares available to be bought and/or sold. Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed in order to ensure that there is an orderly and liquid market for their securities. The free float requirement for companies on the NSE ASEM Board is a minimum of 15percent of issued and fully paid up shares while that of the Main Board is a minimum of 20percent of the issued and fully paid up shares. Companies listed on the Premium Board are also required to have a free float of a minimum of 20percent of issued and fully paid up shares or the value of its free float is equal to or above N40 billion on the date The Exchange receives the Issuer’s application to list.

L-R: Richard Sandall, senior adviser, Department for International Development; Guy Harrison, head of Prosperity, British High Commission; Kaodi Ugoji, associate executive director, Corporate Development, FMDQ Securities Exchange Plc; Bola Onadele. Koko, MD/CEO FMDQ Securities Exchange Plc; Laure Beaufils, the British Deputy High Commissioner to Nigeria; Tumi Sekoni, associate executive director, Capital Markets, FMDQ Securities Exchange Plc and Hamed Kamal, head of Trade and Investment, Department for International Development; during the hosting of Laure Beaufils at FMDQ’s Business Complex, Exchange Place, Lagos.

The twenty (20) companies as shown in the X-Compliance Report of the NSE and the percentage of their free float are: A.G. Leventis Plc (11.64percent); Capital Hotel Plc (2.99percent); Caverton Offshore Support Group Plc (17.30percent), Champion Breweries Plc (17.17percent); Ekocorp Plc (11.84percent), and e-Tranzact

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International Plc (10.06percent). The X-Compliance Report is a transparency initiative of The Nigerian Stock Exchange which is designed to maintain market integrity and protect investors by providing compliance related information on all listed companies. Other companies that are

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deficient in their shares free float are: Infinity Trust Mortgage Plc (3.50percent), The Tourist Company of Nigeria Plc (1.75percent), Transcorp Hotels Plc (6percent), Un i o n Ba n k o f Ni g e r i a P l c (14.94percent), and Portland Paints & Products Nigeria Plc (14.57percent). Most institutional investors

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prefer trading companies with a larger free-float because they can buy or sell a big number of shares without having a big effect on the price. Global Spectrum Energy Services Plc has 7.01percent free float, CWG Plc (15.97percent), Aluminium Extrusion Plc (17.73percent), Union Dicon Salt Plc (18percent), Austin Laz & Company Plc (5.51percent), Notore Chemical Industries Plc (10.02percent), Medview Airline P l c ( 1 4 . 1 6 p e rc e nt ) , Sky w ay Aviation Handling Company Plc (19.39percent), and Omoluabi Mortgage Bank Plc (1.96percent). Though some of these listed company that have free float deficiencies many have applied for waivers from the Regulation Committee of the National Council of The Exchange (RegCom), and have specifically provided compliance plans with tentative timelines to support their requests. The increasing number, which is now a source of concern to market watchers should serve as a wake-up call for the regulator. There are indications that the RegCom considered and approved an extended timeframe for the companies to regain compliance with the listings requirement as the companies are required to provide quarterly disclosure reports to The Exchange detailing their level of implementation of the compliance plans. Some of these companies have requested for additional extension which would be presented to the Council for approval, according to the NSE. The Exchange said it is currently engaging some of the companies.

Thursday 13 June 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Investor’s Square

NSEASI tumbles 2.1 percent

he local Bourse opened the first week of June on a bearish note as the All Share Index tumbled 2.1percent to close at 20,432.1 points. This came amid Oando management’s skirmish with SEC during the review week. Thus, investors continue to take a hard look at the local market in the absence of a catalyst. Cons equently, market capitalisation plunged N282.2billion to end at N13.4trillion while YTD return waned to -3.2percent. Activity level weakened as average value and volume traded trimmed -7.6percent and -5.3percent to end at N4.2billion and 256.5million units respectively. Performance across sector was broadly bearish as none of the sectors under our coverage was speared. The Oil & Gas (-5.1percent) sector index led laggards for the week owing to sell offs across all major tickers that make up the index- MOBIL (-2.9percent), JAPAULOIL (-10.7percent),

Money Market : CBN reopens OMO sales The money market opened the week very liquid as inflows from OMO maturities and Joint Venture calls that hit the system. This prompted the Central Bank of Nigeria (CBN) to float its first OMO auction in 5-trading sessions, on Monday and Thursday as N177.6bn OMO maturity hit the system. In all, the Apex bank mopped up a total sum of N476.6bn from the system across three maturities. Notably, the demand at the auction was positively tilted towards the long-dated 360day bill with a total bid-to-cover ratio of 1.8x, while the demand for the short- and mediumterm bills was underwhelming with a total bid-to-cover ratio of 0.4x. Though more attractive compared to Treasury bills, stop rates at the auction came in marginally lower than the previous auction; short-tenor bills remained unchanged at 11.40percent, mid-tenor bill eased from 11.68percent to 11.63percent and long-tenor bill eased from 12.50percent to 12.48percent.

OANDO (-4.8percent), S E P L AT ( - 6 . 6 p e r c e n t ) , TOTAL (-7.4percent) and FO (-6.4percent). In the same vein, the Insurance (-4percent), Industrial (-2.9percent), Banking (-1.3percent) and Consumer Goods (-1.2percent) sector indices also trended southwards as price decline in GUARANTY (-3.8percent), DANGCEM (-5.3percent), PZ (-9.3percent), GUINNESS (-2.1percent), ETI (-10.3percent), NEM (-13.1percent), and MBENEFIT (-9.1percent). Market breadth - a proxy for investors’ sentiment- was underwhelming at 0.3x as only 14 stocks advanced against 42 decliners. Looking ahead, we expect market performance to remain tepid in the absence of a catalyst. However, we do not rule out the possibility of intermittent gains driven by bargain hunters.

Furthermore, wholesale FX intervention sales on Monday and bi-weekly retail FX funding sales on Friday drained naira liquidity from the system. Consequently, average interbank funding rates (Open Buy Back and Overnight rates) increased during the week, settling at 11.1percent from 4.5percent in the week before. Yet, activities on DMBs at the CBN interbank windows (SLF/ SDF window) largely favoured deposits. In the secondary Nigerian Treasury Bills (NTB) market, bearish sentiments prevailed as market players turned their attention to the more attractive primary OMO sales. Thus, average yields were up 71bps w/w to close the week at 12.9percent. Notably, the CBN published the Q3-19 NTB calendar wherein the Federal Government (FG) plans to

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roll-over total maturing bills worth N809.4bn. Furthermore, the calendar indicated FG’s willingness to reduced longdated bills by 7.7percent while increasing its short and medium-dated bills by 12.4percent and 22.1percent respectively. This week, sizable OMO maturity is scheduled to hit the system. However, we expect the current liquidity tightening stance to continue to cast a bearish shadow on the secondary market performances. In all, we expect money market rates to undulate around the level of liquidity in the system. Bond Market: A surprise buying interest in Eurobonds Naira bond market closed bearish amid the massive system liquidity mop-ups by the CBN. Notably, the decline in crude oil prices during the week further stoked bearish sentiments. In all, average bond yields rose 39 basis points (bps) week-on-week (w/w) to close at 14.3percent. In the Eurobond market, we saw a surprise buying an interest in the secondary Eurobond market. Demand for Eurobond rose despite the sharp decline in oil prices over the week. We suspect that investors took advantage of the cheap valuation in the market following a recent decline. Accordingly, sovereign Eurobonds closed the week on a strong footing as yields compressed by 22basis points (bps) week-on-week (w/w) to circa 7percent on the average across the curve. Similarly, sentiments for Corporate Eurobonds turned bullish as we witnessed a renewed buying interest across the outstanding papers. Consequently, average yields dipped marginally by 8bps w/w to close at circa. 7.2percent. In the rest of Africa, Togo looks set to join the 21 other African countries that have issued Eurobonds in recent years as S&P assigns a ‘B/B’ rating for the West African Country with a stable outlook. This week, we expect activities in the secondary naira bond market to remain bearish if the CBN continues to tighten liquidity while oil prices remain under pressure, guidance from the President’s June 12 speech will also determine sentiments. In the Eurobond space, we expect sentiments for FGN sovereign Eurobonds to become muted in this week amid the US-China trade spat.

•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

FMDQ Learning

Non-deliverable forwards

company requiring a certain amount of foreign currency at a predetermined future date faces the risk that the exchange rate may move in an adverse direction by the time the requirement falls due. In order to mitigate this risk, it can enter into an agreement called a Forward Contract (often referred to as a Forward). A Forward Contract is an agreement to buy or sell an asset at a certain future time for a certain price. In essence, the Forward Contract allows a company to buy the foreign currency at a specified point in the future, at a price fixed today. The company may also enter into a Non-Deliverable Forward (NDF) contract. An NDF, although broadly similar to a Forward, is a cash-settled, short-term Forward or Futures contract, where parties agree to a rate/price for a predetermined date in the future, without the obligation to deliver the notional amount on maturity. The NDF is settled at maturity for the difference in the Spot FX rate and the NDF rate. As settlement is done in cash, one party compensates the other with an amount reflecting the difference between the contracted forward rate and the value of the designated ‘fixing’ rate (the representative spot market rate), as is the case with the “Naira-settled OTC FX Futures” offered by the CBN and traded on FMDQ. These contracts [Nairasettled OTC FX Futures] are NDFs where parties agree to an exchange rate for a predetermined date in the future, without the obligation to deliver the underlying US Dollars (the notional amount) on the maturity/settlement date. On the maturity date, it will be assumed that both parties would have transacted at the Spot FX market rate, which will be the FMDQ Spot FX Rate Benchmark – Nigerian Autonomous Foreign Exchange Fixing (NAFEX) – used for settlement. The party that would have suffered a loss with the Spot FX rate will be paid a settlement amount in Naira. This ensures that both parties enjoy the rate that had been guaranteed to each other through the OTC FX Futures. Uses of Non-Deliverable Forwards •The demand for NDFs arises principally out of

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regulatory and liquidity issues in the underlying currency, where overseas players have limited or no access to the domestic market • They are typically utilised by banks, multinational corporations, investment managers, and proprietary traders to hedge currency risk • They are used as a planning tool in managing the currency risks associated with exporting o r i m p o r t i n g p ro d u c t s purchased in foreign currency, investing or bor row ing overseas, repatriating profits, or settling other FX contractual arrangements • They are also used as a tool to facilitate locking in the enhanced yields of currencies. Terms associated with Non-Deliverable Forwards (NDF) • Notional: This is the face value of the NDF to be transacted • Fixing Date: This is the date at which the difference between the prevailing Spot market exchange rate and the agreed upon NDF rate is calculated • Settlement Date: This is the date on which the payment of the difference between the NDF and spot rate is paid • Effective Date: This is the date when the NDF contract takes effect, usually the trade date • Maturity Date: This is the date the contract expires NDF contracts are similar to Forward contracts, however, they do differ in some respect: Non-Deliverable Forwards (1) Margin required to be posted at contract initiation. The margin will require marking-to market, with the one party’s account being credited with the difference while the other’s account is reduced by same. (2) There is no physical settlement of the asset at maturity. (3) NDFs bear lower @Businessdayng

counterparty risk since the notional sum is not moved at any point during the transaction. Forwards (1) No margin requirement. Contracts are settled at maturity and do not require marking-tomarket or parties to the contract settling up until the expiration of the contracts. (2) The asset is physically settled at maturity. (3) Forwards bear a higher counterparty risk as mark-tomarket and settlement of the transaction are only done at maturity. Key Benefits of NonDeliverable Forwards 1. There are no up-front costs 2. They provide protection against unfavourable foreign exchange rate movements between the time an NDF contract is executed and the maturity date 3. They are flexible and the maturity date and contract amount can be tailored to meet specific requirements 4. They help improve planning and capital budgeting as companies can make forecasts on budgets and investments with a greater degree of certainty 5. They improve manag ement of foreig n exchange risk as companies can hedge against cash flow shortfalls 6. They increase predictability of financial results as hedging enables companies deliver more predictable earnings by aligning their corporate hedging strategy to future FX cash flows in order to reduce the impact of currency volatility 7. They serve as hedging tools for foreign investors with local currency exposure, allowing corporates and other investors hedge or take investment positions offshore on local currency movements without dealing in the underlying

Thursday 13 June 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

‘We plan to create extensive trading community which brings opportunities’ Dayo Adeagbo is a Director in Apt Trading Company which offers trade ideas on forex, commodities and stock indices. In this interview with select journalists including Iheanyi Nwachukwu, he spoke on the UK-based Company’s plans to revolutionise trading in Africa. Excerpts Could you please let us know about Apt Trading and what drives you as a firm? pt Trading Company was incorporated in the United Kingdom in 2009 not long after the recession by a group of seasoned traders to provide clear and concise strategies for all levels of traders for financial markets, offering profitable, dynamic and actionable trading ideas. Our solution offers independent analysis and expert insight, delivered in a timely fashion to make trading markets an enjoyable experience. The experience of many traders is often one of utter disappointment as the true figures of traders that will ever be profitable is less than 20percent meaning over 80percent of traders will lose money and lose all the funds in their account within the first six months. Apt Trading provides a solution by publishing Buy or Sell trade ideas daily usually prior to the European market open, with a specified entry level, these are published with entry, target, and stop loss levels. This ensures trades entered meet the requirements for you to be in a successful trade, maximise profits and limit losses. What are your unique features? Why should a professional trader, money managers or even investors consider your trade ideas? What makes us unique is the fact we are entering the market with years of experience in delivering the service we have adapted for the African market to global markets. We currently have eight professional analysts analysing the markets to provide the same service across the globe, the signals provided are the same provided to banks and hedge funds and professional traders which have been adapted for the African market. What strategies do you have in place in your plans to revolutionise trading in Africa? It is a well-known fact around the world that Africans, especially Nigerians are very intelligent and often rise to the top of their relative fields. The same characteristics found in Nigerians in diaspora have been identified right here, which lead us to believe that with the right guidance we can evolve the trading markets for the average Nigerian in the hopes of creating an income stream. In our plan to revolutionise trading in Africa, we have taken the following steps, detailed analysis of the current market to see how viable providing a solution to the average trader would be. Apart from providing our signal service, we plan to implement a scholarship training programme for viable candidates with the potential to become skilled traders. We have plans in place to create an extensive trading community which will bring

Dayo Adeagbo

opportunities that allow the organic growth and bring knowledge to the masses with the capacity to learn, understand and thrive in the trading environment. As a UK based company, no doubt your target audience in African markets may be seeing things differently. How are you

“

All our trading is based on Technical Analysis principles, though many of the techniques we use were developed in house and form part of our bespoke indicator

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addressing those possible concerns from them? We work closely with our clients to provide a service which is easy to follow for the average trader. We prioritise keeping an uninterrupted line of communication with our analysts through our website live chat feature and WhatsApp group which in turn makes us available and helps to develop trust. Can you tell us some of the challenges you face while trying to revolutionise trading in Africa? As with entering any new market, one of the major challenges one faces is understanding the local culture and in this case the attitude and fixed mentality towards trading, people’s past experiences often go on to define them especially if it leaves a sour taste. Our major challenge we have faced is trying to change the mindset of traders to understand that there is a roadmap to profitability and creating an income if one would only follow the guidance provided. We also understand that traders have not really had companies take on the role of mentorship. Trust and morale are often low whilst trading is being discussed due to previous cowboys promising the world and not delivering. So, whilst trying to revolutionise trading in Africa we understand and are fully prepared to invest the time required and exercise patience to build the trust of traders to ensure they follow us on this wonderful

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journey we have planned for the market. How do you ensure trades entered meet the requirements to be in a successful trade, maximise profits and limit losses? Our trade ideas focus on historical support and resistance levels where there is a high probability of a good risk/reward trade set-up. A new trade idea is published every day in all markets that we cover. Often prices react around key levels and areas of support and resistance and our very experienced analysts seek to predict these key levels. Our ideas are formulated with two profit target levels which may be adjusted as directed in updates. Methodology behind our analysis is for taking profit on 75percent of a position at the 1st target level. However, performance is analysed by taking profit at the 1st target only. A target and stop loss level is always published in the analysis to limit losses and maximise gains, although these can also be adjusted as directed in live updates. If stop or target levels are not reached, traded price at 21:00hrs (GMT time) or in the case of Asian/Pacific ideas 16:00 hours (GMT time) the following day, will be used as a closing level for performance analysis. All our trading is based on Technical Analysis principles, though many of the techniques we use were developed in house and form part of our bespoke indicator. Considering your trade ideas, how many financial markets across the globe do you cover? …What are your target markets in Africa? We offer trade ideas in over 25 of the world’s major financial markets, packaged in three different asset groups: forex, commodities and stock indices. When you subscribe to our service, individual markets can be selected or de-selected as required on your own customisable dashboard. Our analysts carry out the technical analysis in the UK, we are however assessing the markets over here to see how viable it will be to expand and add some of the local stocks and indices but for now the asset groups we provide offer a much more stable environment for a profitable trade. In terms of your pricing, what does it take for traders and money managers to subscribe? / What of Online brokers or firms requiring access to your API? Our subscription options vary and depend on whether you are an individual or a corporation. Traders and money managers can subscribe for one, three or 12 months, starting at $60 per month for an annual subscription. The best price is available on the longest term of subscription. Online trading sites, brokers or firms requiring access to our API can contact us to discuss their requirements for a customised package.

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Thursday 13 June 2019

BUSINESS DAY

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Thursday 13 June 2019

BUSINESS DAY

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Thursday 13 June 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

Economy

Will Central Bank’s war on smugglers, be a boon for consumer firms BALA AUGIE

nalysts are of the view that Central Bank of Nigeria (CBN)’s decision to weigh on smuggling may ameliorate the pains of consumer goods firms that are struggling with weaker margins and poor declining profit. For instance, the combined revenue of the largest companies in the country fell by 3.06 percent to N419.4 billion in March 2019, from N435 billion the previous year, according to data gathered by BusinessDay. Similarly, profit after tax also followed the same downward slope as it dipped by 27.79 percent to N26.82 billion March 2019 as against N37.24 billion the previous year. Net profit margin, a measure of profitability and efficiency, fell to 6.04 percent

Godwin Emefiele. CBN, governor

to 6.0 percent in the period under review as against 9.17 percent the previous year. When the net profit margin falls, it means a company isn’t good at converting revenue into profits avail-

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able for shareholders. Smuggling and influx of cheap and substantial products are cannibalizing the sales of some companies, and the regulator has said the scourge is undermining

economic growth. In order to curtail block these loopholes, the Governor, CBN, Godwin Emefiele, has said the bank has blocked the accounts of some smugglers sabotaging Nigeria’s economy in the textile, rice and palm oil industry. Emefiele said the bank will come up with the names of those identified but they want to be sure that they have come up with something that is credible and that the culprits cannot deny. He added that the accounts of some in the textile, rice and palm oil industries had been blocked. The regulator banned certain items (including Textile, Fertilizers, Palm Oil etc.) from accessing FX from the official window in bid to encourage local industrial production and subdue the foreign exchange crunch of 2014-2017. It also established the Importers’ and Exporters Windows (I and E). However, smugglers found a way to bypass the system by bringing products through the porous borders. Dangote Sugar Refinery Plc, Nigeria’s biggest grower of the sweetener, said illegal, low-quality imports are put-

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ting pressure on its selling price, while a traffic gridlock around its production site in Lagos is hampering delivery to customers. “In our opinion, any move aimed at curbing the rising spate of smuggling in Nigeria is welcome given it remains one of the biggest challenges of the real economy’s development in Nigeria after infrastructural deficit,” said Analysts at CSL

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Stock Brokers Limited. Analysts at CSL Stock Brokers however said in saner climes, the monetary authority concerns itself with managing the cost, volume & value of money as well as the banking system while the federal government and associated authorities tackle issues such as smuggling via border controls. A breakdown of the numbers of consumer goods firms shows Dangote Sugar’s sales fell by 7.27 percent to N38.14 billion in March 2019 from N41.13 billion the previous year. Nascon Allied NASCON Allied Industries Plc’s net income dipped by 34.60 percent to N694.91 million in March 2019 from N1.06 billion the previous year while net margins moved to 10.18 percent in the period under review from 15.67 percent the previous year. Unilever Nigeria Plc’s profit after tax fell by 20.83 percent to N19.23 billion in the period under review, the first drop in four years while net margin fell to 7.90 percent in the period under review from 11.93 percent the previous year.

Thursday 13 June 2019

BUSINESS DAY

Retail &

consumer business

Consumer Spending

Price sensitive consumers shift spending to unlisted brand names OLUFIKAYO OWOEYE & DAVID IBIDAPO

he harsh and unpredictable macroeconomic environment have forced consumers to opt for cheaper unlisted brand names over food and personal care (HPC) as they their earnings continues to decline. A report by Coronation Merchant Bank revealed that in inflation-adjusted term, with the exception of Nestle, there has not been much growth in sales of food and HPC companies. This is largely due to upward pressure on consumer price index (CPI) which has resulted in falling earnings of middle-income earners in real terms coupled with downward pressure on private sector wages generally. According to the research report, “We do not deny that Nigeria’s population is growing. As important, urbanisation has swelled the cities creating consumer concentration,” Coronation Merchant Bank stated, “the masses are not getting richer and unemployment has risen. There is a mass market but, critically, its price points have shifted downwards.” The shrinking consumers’ wallet has seen a shift from the purchase of large listed players such as Unilever, Flour Mills, and PZ Cussons, towards a number of low-cost, low-price point competitors and new entrants.

The report noted that one of the unlisted group of companies reported nominal sales growth of 30 percent in 2018, far higher than any of the listed companies. “It is only logical to conclude that established market shares of the principal listed companies are being eroded,” the report stated. Taking listed companies into perspective, Nestle Nigeria stood as the only listed company with worthwhile inflation-adjusted

growth, hence, outperforming other listed companies in the industry. Result revealed that Nestle recorded an inflation-adjusted sales compound annual growth rate (CAGR) of 6.3 percent over the period, starting with calendar Q1 2011. Whereas taking four CAGR series (one each quarter) beginning in 2011, their average inflation-adjusted CAGR through to 2018 was 3.5 percent. The CAGR is the rate of return of an investment over a certain pe-

riod of time. The inflation-adjusted sales of Flourmill, on the other hand, was regarded as flat-tonegative. FMN experienced inflation-adjusted sales CAGR of -0.6 percent during the same period, starting with calendar Q1 2011. Others include Unilever with an inflationadjusted CAGR of -1.1 percent and PZ with a negative CAGR of 7.8 percent during the period respectively. This scenario hence paints a “more people, not more money” picture. According to the report, the middle-class individuals who are perceived to buy relatively expensive branded products from the listed companies seem to be affected also. This in the view of Coronation Merchant Bank is the combined effects of the oil price shock of 2015, the currency devaluations of 2016 and 2017 and the recession of 2016/2017 which eroded both company and public finances, leading to salary fall in real terms. The report noted that Nigeria’s population is growing, hence more households and consumers, however, these economic agents are not getting any richer. While the last recession almost certainly left many people poorer than before coupled with slow economic recovery. “We doubt that incomes, in inflationadjusted terms, are rebounding, although the upcoming implementation of the N30,000 per month (US$83) minimum wage at the national level is likely to have a positive effect,” the report stated.

Luxury

Gokada scale operations, set to launch yacht boat services, GBoat, in Lagos OLUFIKAYO OWOEYE

ays after the successful completion of $5.3 million Series A funding from investors, Nigeria’s on-demand bike-hailing startup, Gokada, has announced plans to scale its operations with the launch of yacht boat services, GBoat, in Lagos. According to Gokada, the boat service will provide comfortable transportation services while helping commuters to beat traffic. According to the Lagos State Traffic Management Agency, Lagos is home to over 24 million residents with over 2 million vehicles plying the roads daily. The pilot scheme from Gokada is targeted at commuters who ply between Lekki and Ikorodu axis. Potential in water transportation services remains largely untapped in Lagos, while few current operators do not provide top-notch services to commuters, issues of safety have also plagued these operators as cases of boat mishaps claiming lives are occasionally recorded. Emeka Orji, a commuter, believes that if any

disruption is going to take place in that market, potential players must be ready to innovate and reposition by addressing safety, pricing and quality issues among others. Esther Obianuju said investment needs to also go into new jetties and boat piers, proper training of staff for emergencies and strict compliance to marine craft piloting. “Fifth of the land mass of Lagos is water and

it is grossly underutilized. Safety and regulation need to be sorted out, of course, but this is clearly the future.” She said. Gokada said it has trained and on-boarded more than 1,000 motorcycles and their pilots on its app that connects commuters to mototaxis The startup has also completed nearly 1 million rides since it was co-founded in 2018

by Fahim Saleh a Bangladeshi entrepreneur who previously founded and exited Pathao, a motorcycle, bicycle, and car transportation company. Gokada will use the financing to increase its fleet and ride volume while developing a network to offer goods and services to its drivers. “We’re going to start a Gokada club in each of the cities with a restaurant where drivers can relax, and we’ll experiment with a Gokada Shop, where drivers can get things they need on a regular basis, such as plantains, yams, and rice,” Saleh told TechCrunch. The startup differs from other ride-hail ventures in that it doesn’t split fare revenue with drivers. Gokada charges drivers a flat-fee of 3,000 Nigerian Naira a day (around $8) to work on their platform. The company is looking to generate a larger share of its revenue from building a commercial network around its rider community. “We don’t do anything with the fares. We want to create an Amazon Prime-type membership…and ecosystem around the driver where we’re going to provide them more and more services, such as motorcycle insurance, maintenance, personal life-insurance, and micro-finance loans,” Saleh said

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Thursday 13 June 2019

BUSINESS DAY

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Federal Ministry of Justice committed to amendment of Cybercrimes Act - FG

he Federal Government has stated that the Federal Ministry of Justice is committed to pursuing the amendment of the Cybercrimes Act, which many lawyers, journalists and activists have considered repressive, unconstitutional and illegal. This was stated on tuesday by Terlumun George Tyendezwa, Head, Cybercrimes Prosecution Unit, Federal Ministry of Justice, at a Media Interactive Session on the ‘Constitutionality and Legality of the Cybercrimes Act in Nigeria’, organized by the Socio-Economic Rights and Accountability Project (SERAP) in collaboration with the National Endowment for Democracy (NED), USA. At the Media Interactive Session

held in Ikeja, Lagos, Tyendezwa said: “The Cybercrimes Act is not perfect. One of the reasons why I am here is that I have an open door, and we would want to engage on the Act. “We are interested in engaging with all stakeholders in the Justice sector. Whatever is not useful, we can seek amendment on this. From the point of passage, we as the operators knew that there were things that need to change. We are presently collating memoranda on amendment of the Act. But amendment takes time and cost money.” He also said: “We know the importance of law as a social driver. The office of the Attorney General of the Federation and Minister of Justice continues to place high value on entrenched fundamental human rights and engaging with all stake-

LAWYER OF THE WEEK

To further his education, Gbajabiamila decided to go back to school, this time in the United States. He attended John Marshall Law School in Atlanta Georgia where he graduated top of his class earning himself a Juris Doctorate. After passing his Georgia bar exams in 2001 he set up a law firm in Atlanta Georgia where he practiced law until his return to Nigeria. Femi has been a federal representative at House of Representatives from May 2011 to May 2019; and a majority leader at the House of Representatives from June 2015 to May 2019. His Legislative Interest(s): Independence of Legislature, welfare. In the 6th and 7th Assembly of

Femi Gbajabiamila, Speaker, House of Representatives

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“

Cyber bullying, rape, Internet fraud, others, prompted the Cher crime Act.

”

MOFE TAYO OYETIBO Continues on page 30

Femi Gbajabiamila, Speaker, House of Representatives

emi Gbajabiamila, is a Nigerian Lawyer, All Progressives Congress Leader, House Leader of Nigeria’s 9th House of Representatives, who was elected Speaker of Federal House of Representatives on Tuesday, June 11th, 2019 with 281 votes to defeat Hon. Umar Bago’s 76 votes. Born June 25th, 1962 into the family of Lateef and Olufunke Gbajabiamila. Femi Gbajabiamila started his elementary education in Lagos at the Mainland Preparatory School at the age of four and proceeded to Igbobi College, Yaba, Lagos in 1973 for his secondary education After completion of his secondary education in Nigeria, he enrolled at the King Williams College, Isle of Man, United Kingdom for his ‘A Levels’ where he graduated at the top of his class. Upon his return to Nigeria, Femi Gbajabiamila was accepted into the University of Lagos, Nigeria for a three-year LLB (Bachelor of Law) degree programme. He graduated with honors in 1983 and proceeded to the Nigerian Law school and was called to the Nigerian bar in 1984. As a young lawyer, Gbajabiamila started his career with the prestigious law firm of Bentley, Edu and Co, a Lagos based law firm where he distinguished himself as a brilliant legal practitioner. As intellectually adventurous as ever, Femi stepped out on his own and established his own law firm, Femi Gbaja and Co. on Broad Street, Lagos where he was principal partner.

holders on the Cybercrimes Act is one of our approaches.” Earlier at the meeting, a group of lawyers, journalists, activists

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the House of Representatives, he presented the highest number of Bills. One of his far-reaching Bills is the Interest-Free Student Loan among others. Gbajabiamila has also been very passionate about the Employee Rights Bill, Local content in Construction Industry Bill, Vocational Schools Bill, The Economic Stimulus Bill, Interest-Free Students Loan and Establishment of Nigeria Education Bank Bill etc. He fought tirelessly on the floor of the House through motions to compel the National Assembly to recognize the newly created local governments in Lagos State. He has also successfully sponsored several far-reaching amendments to the Nigerian Constitution.

Thursday 13 June 2019

BUSINESS DAY

RIGHTSWATCH

LegalBusiness

Buhari’s acceptance of Onnoghen’s voluntary retirement, welcome development - NJC

he National Judicial Council (NJC) has described President Mu h a m m a d B u hari’s acceptance of former Chief Justice of Nigeria (CJN), Walter Onnoghen’s voluntary retirement as a welcome development. Speaking after an emergency meeting on Monday, the Council’s spokesperson stated that the president’s action was in the best interest of Nigeria. Senior Special Assistant to the President, Media & Publicity, Garba Shehu, had on Sunday announced that President Muhammadu Buhari has accepted the voluntary retirement of Justice Walter Onnoghen as the Chief Justice of Nigeria effective from May 28, 2019. Shehu who disclosed this in an official statement made available to the press, revealed that President Buhari in a formal letter, accepted the former CJN’s resignation, thanking him for his service to the country and wished him well.

He further disclosed that the president had also written to the acting CJN Ibrahim Mohammed seeking the appointment of adding Justices for the Supreme Court. “Pursuant to the provisions of Section 230(2) A&B of the Con-

stitution of the Fed Republic of Nigeria, 1999(as amended), I am pleased to request that you initiate in earnest the process of appointing additional five Justices of the Supreme Court of Nigeria to make the full complement of 21 Justices

as provided by the aforementioned provisions of the Constitution,” the president said in a letter he wrote to the top jurist. “This is in line with the Government’s Agenda of repositioning the Judiciary in

general and Supreme Court in particular for greater efficiency, with a view to reducing the backlogs of appeals pending at the Supreme Court. “Please accept, your Lordship, the assurances of my highest regards,” the document read. It would be recalled, that Onnoghen tendered his resignation on April 5, 2019, a day after the National Judicial Council (NJC) recommended that he be compulsorily retired for misconduct - following his suspension by the President and subsequent prosecution at the Code of Conduct Tribunal (CCT). Justice Onnoghen, was accused of non-declaration of assets traced to him, was suspended by the president earlier in the year over, weeks the general elections. The Code of Conduct Bureau (CCB) had filed false assets declaration charges against the former justice at the Code of Conduct Tribunal (CCT).

Federal Min of Justice committed to amendment.... Continued from page 29

and other stakeholders unanimously declared the Nigeria’s Cybercrimes Act as “repressive, oppressive and unconstitutional. The Act should immediately be repealed or dropped, as many of its provisions blatantly offend the rights to freedom of expression, association and media freedom.” The group also called on the next Attorney General of the Federation and Minister of Justice to “prioritize challenging in court the constitutionality and legality of the Cybercrime Act, which is antithetical to respect for freedom of expression including online and the government’s commitment to fight grand corruption.” Participants at the interactive session included: representatives of the Premium Times Centre for Investigative Journalism (PTCIJ), National Human Rights Commission, Amnesty International, Wole Soyinka Center for Investigative Journalism, Media Rights Agenda, the German Consulate, Director General of the National Orientation Agency. Others included: Nurudeen Ogbara former Chairman Nigerian Bar Association, Ikorodu, Folake Falana, Malachy Ugwummadu, president, Committee For the Defence of Human Rights (CDHR) and representatives of BudgIT, CODE, Heda Resources, Enough is Enough Nigeria (EiE), Cleen Foundation, Federal Civil Service Pension, Community Life Project, journalists, lawyers,

activists and other stakeholders. Earlier, Tayo Oyetibo, SAN who was represented by his son, Mofe Tayo Oyetibo, stated in his paper titled The Constitutionality and Legality of the Cybercrimes Act in Nigeria that, “the supremacy of the constitution over every other law is an immutable principle of Nigerian constitutional law derived from the provisions of section 1(3) of the constitution itself. In creating criminal offences, section 24(1) of the Cybercrimes Act uses words that are entirely subjective in meaning to describe the actus reus elements of the offences, despite the fact that the actus reus of an offence ought to be capable of objective and not subjective definition.” According to him, “Worse still, the Cybercrimes Act makes no effort to give certainty to the meanings of any of the words used in its section 24(1) by defining them anywhere in the Act, which means that only www.businessday.ng

judicial definitions can be given to those words in any case where a person is charged with an offence under section 24(1) of the Act.” The paper read in part: “In the context of the constitutionally guaranteed right of citizens to freedom of speech under the Nigerian constitution, there is the pressing question of whether the Cybercrimes Act is fit for the purpose pursuant to which it was enacted, particularly in view of the provisions of its section 24(1)?” “It would appear that the answer to this poser is in the negative, which means that it is imperative for deliberate steps to be taken to remedy the situation, particularly against the backdrop of widespread complaints against the deliberate misuse and abuse of the Cybercrimes Act against certain categories of persons in Nigeria.” “In this regard, this is not a matter in which long winding technical recommendations are necessary.

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The simple recommendation is that section 24(1) be entirely deleted from the Cybercrimes Act, due to its apparent irreconcilability with the provisions of section 36(12) and 39(1) of the constitution.” “From a practical standpoint, it means that a person charged with an offence under section 24(1) of the Cybercrimes Act will involuntarily be playing the lottery of judicial interpretation of the words and phrases used in that section. This is because virtually all of the words used in section 24(1) of the Act are of such personal character that, any attempt to define them is entirely subject to the whims and caprices of two different sets of people- complainants and judges.” “It is impossible for a person to be convicted of an offence under section 24(1) of the Cybercrimes Act without conjecture or inference by the court as to the meanings of the words used in that section. Worse still, such conjecture or inference can only be imputed by the court at the point of delivering judgment in the matter, at which point the accused person will not have had the opportunity to be heard by the court as to the court’s interpretation of the meanings of those words and phrases.” “Apart from the above, every person is constitutionally guaranteed the right to freedom of expression, including freedom to hold opinions and to receive and impart ideas and information without interference under section 39(1) of the constitution. A scenario in which a person is bound by section 24(1) of the @Businessdayng

Cybercrimes Act to second-guess the exercise of his right to freedom of expression under section 39(1) of the constitution is certainly not one contemplated by the constitution in any way.” “Freedom of speech and freedom of assembly are part of democratic rights of every citizen; our legislature must guard these rights jealously as they are part of the foundation upon which the government itself rests.” “It is clear that section 24(1) of the Cybercrimes Act portends great danger for every person in Nigeria. This is by reason of the fact that at the time of issuing any communication in exercise of the right to freedom of expression, it is impossible for a person to determine whether or not an offence is being committed under the Cybercrimes Act. Surely, this is the exact scenario that the framers of the constitution sought to legislate against by the inclusion of the express provisions that are sections 36(12) and 39(1) of the constitution.” “24(1) is a tool that readily lends itself to abuse and misuse by those in authority against freedom of expression in Nigeria. This is particularly because the Cybercrimes Act contains no safeguards whatsoever to the enforcement of section 24, which carries with it severe criminal sanctions.” “The Cybercrimes Act is already in desperate need of a significant overhaul to ensure that it does not unwittingly and unconstitutionally place citizens at the unfortunate risk of the luck of a criminal draw.”

Thursday 13 June 2019

BUSINESS DAY

GLOBAL REPORT

LegalBusiness

CC follows Freshfields with £100k package for junior lawyers as pay war with US rivals intensifies

lifford Chance (CC) has become the second Magic Circle law firm to raise the starting pay for its associates to £100,000, a month after City rival Freshfields Bruckhaus Deringer announced a similar increase. In a move signalling the widening impact of the pressure for talent from US firms on the City elite, CC has raised its compensation for newly

qualified (NQ) solicitors from £91,000 including bonuses. Freshfields’ NQs still have the potential to receive higher compensation, with discretionary premiums on top of the £100,000 base salary while the new figure at CC includes bonuses. Freshfields’ hike from £85,000 has been linked to the increasing pressure to retain junior talent. The much-cited departures of heavyweight partners

David Higgins and Adrian Maguire to Kirkland & Ellis has been cited by observers as a catalyst for London’s elite players to attempt to protect their stock at all levels and CC’s latest move confirms this. All eyes will now be on Slaughter and May, Linklaters and Allen & Overy after the trio set their NQ rates at £83,000 in their most-recent reviews last year. The associate pay increases at Freshfields and

CC, by £15,000 and £9,000 respectively, echo the steep pay rises of the early 2000s. After the banking crisis, the starting rate at Magic Circle firms was reset downwards from around £66,000 to £60,000. Real-term increases had generally been modest since – until now. The need to absorb the cost of the resurgent associate pay wars is likely to push the City elite towards the US model: smaller pools of associ-

JEE At Tech Point Inspire 2019

gozi Ader ibigbe, Sector Head, Technology, Media & Entertainment, at Jackson Etti & Edu (JEE) spotted with team members at the Techpoint Inspired 2019 Conference in Lagos, where she spoke alongside others on Artificial Intelligence, Future of Work, Blockchain and several other

trends in technology. Techpoint Inspired is one of the largest tech conferences in Africa and has been a choice destination for participants interested in the result-driven amalgamation of discovery, innovation, technology, Internet & startups for Africa’s development. www.businessday.ng

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ates with higher billing targets, more outsourcing to regional firms or use of low cost centres and technology for due diligence and other lower-value tasks. Yet despite the latest increases, several US firms are still able to offer their NQs a more remunerative package alongside a faster track to partnership. Kirkland’s starting rate is £143,000, while Latham & Watkins offers its City associates $190,000.

Thursday 13 June 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

Investment, growth, employment top discourse at 13th annual business law conference IFEOMA OKEKE

his year, the Nigerian Bar Association Section on Business Law (NBA-SBL) will again hold its annual business law conference, this time focusing on economic growth, increase in investment, and employment opportunities in Nigeria. The conference which has been successfully held in the last 12 years will once again bring together a faculty of distinguished resource persons, and participants cut across all sectors of the economy at the Eko Hotel and Suites, Victoria Island, Lagos on the 26th to 28th of June, 2019. Conference sessions will examine the factors, steps and actions required to ensure economic growth and increase the rates of investments and employment in Nigeria, with the role of legal practitioners and the opportunities for business growth and capacity development being central to the discussions. Speaking during a press conference to announce the forthcoming conference, Ozofu Ogiemudia, vice chair, Conference Planning Committee and Chair, Programme Subcommittee disclosed that some of the speakers for the conference include Bimbo Ogunbanjo, Cecilia Akintomide, Kingsley Maghalu, Toyin Sanni, Dada Thomas, Nankunda Katangaza, Andrew Nevin, and Olubunmi TalabiAboderin amongst others. Ogiemudia further disclosed that the twoday conference which is themed, ‘Growth, Investment and Employment : Beyond the Rhetoric’ will focus on issues around Nigerian economy; health, security, education; from crude oil to value addition; sexual harassment in work place, investment in trade and building investor confidence in the administration of justice. She said on the second day of the event, speakers will address the private and the Nigerian economy, smarter regulation, mining, agriculture value chain, improving financial services as a catalyst for growing small and medium enterprises, taxation in Nigeria, the changing face of legal

Conference vice chair/ Programmes sub-committee Chair, Ozofu Ogiemudia

L-R, Council Member, Mena Ajakpovi, NBA-SBL secretary/conference chair, Adeoye Adefulu, NBA-SBL chairman, Seni Adio, SAN, conference vice chair, Ozofu Ogiemudia, Council Member/company secretary sterling bank, Justina Lewa and Council member, Okey Egbuchu.

L-R, Council Member, Mena Ajakpovi, NBA-SBL secretary/conference chair, Adeoye Adefulu, NBA-SBL chairman, Seni Adio, SAN, conference vice chair, Ozofu Ogiemudia and Council Member/company secretary sterling bank, Justina Lewa.

NBA-SBL secretary/conference chair, Adeoye Adefulu, NBA-SBL chairman, Seni Adio, SAN,

Council member, Olawale Akoni, SAN speaking at the press counference.

Council Member/Company Secretary Cadbury, Fola Akande.

NBA-SBL Chairman, Seni Adio, SAN and Conference Chair flanked by Council.

Council Member/Company Secretary, Sterling bank, Justina Lewa

Conference vice chair, Ozofu Ogiemudia, Council Member/company

Conference Chair flanked by Members of the 2019 Conference Planning Committee (CPC).

profession and the path to partnership. She also added that this year’s conference will take a slightly different turn, as a special event for General Counsel and Senior in-house lawyers organised in conjunction with International Lawyers for Lawyers, Africa (ILFA), is scheduled to hold on Tuesday, 25th, June 2019, themed ‘Gaining Perspective: Shaping www.businessday.ng

the Role of the African GC as part of the 13th Annual Business Law Conference. Also speaking at the press conference, Adeoye Adefulu, chair conference planning committee said the NBA-SBA is involved in the National Assembly Business Environment Roundtable which is about creating a better environment for business in Nigeria; and the Presidential Initiative

L-R, CPC member, Damilare Ojo, Conference Assistant Secretary, Tifeoluwani Soremekun and Chair Media & Publicity sub-committee, Theodora Kio-Lawson

A cross section of the audience.

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known as PEBEC aimed at creating an enabling business environment in Nigeria. Adefulu reiterated the objectives of SBL to include promoting the delivery of qualitative business services to the public, promoting and providing Continuing Legal Education (CLE) to members of the section. As well as guiding, assisting and organising enlightenment programmes for young lawyers via the sector’s committees. The Section is also involved with helping legislative bodies and parastatals - working with them to drive policies and draft legislations pertaining to commercial and businessrelated laws in Nigeria.

Thursday 13 June 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

Waltersmith’s modular refinery begins operation Q2 2020 Olusola Bello

he 5000 barrels per day modular refinery being developed by Waltersmith Refining & Petrochemical Company Limited with equity investment from the Nigerian Content Development and Monitoring Board (NCDMB) would be completed in May 2020. This date was confirmed by the executive secretary of NCDMB, Simbi Kesiye Wabote and the Director of Finance and Personnel Management, Isaac Yalah inspected the project site at Ibigwe, Imo State, in company of the chairman of Waltersmith, Abdulrasaq Isah and the executive vicechairman, Danjuma Sale. The progress completion of the project stands at 65 percent, seven percent ahead of the original schedule. The engineering and procurement components had also been completed, withconstruction at 60 percent.

Giving his assessment after taking a tour of the site, Wabote described the project as investment channelled in the right direction. He hailed the contractorsLambert Electromac and Zerock for their remarkable pace ofexecution, dedication and expertise, noting that they continued with the

project despite the onset of the rainy season. He also expressed delight with the highnumber of Nigerians working on various aspects of the project, stating that it underscores President Mohammed Buhari’s commitment to create employment for young Nigerians from the activities

OPEC crude oil output shrinks in May, organisation struggles to avoid $40 oil OLUSOLA Bello with Agency report

s OPEC and nonOPEC members are preparing to put an end to the crude oil production cut agreement which has been in place for some time by the end of this month, there are palpable fears that exiting the production cut agreement may allow for free fall of crude oil price to about $40 per barrels which they would not be comfortable with. This is even as the crude oil production of the cartel in the month of May dropped as the OPEC’s 14 members pumped 30.09 million barrels per day, with a 170,000 barrels per day fall from April and the lowest since February2015. A few weeks ago OPEC+ was mulling the possibility of exiting the production cut agreement because the oil market was at risk of overtightening. Now Saudi Arabia is scrambling to extend the cuts and may even unilaterally lower its own production further in an effort to head off a price slide. On Monday, officials from Saudi Arabia and Russia reportedly discussed a possible Olusola Bello, Team lead,

scenario in which oil prices crashed below $40 per barrel, a recognition that the market has rapidly deteriorated. They view that outcome as a possibility if they can’t agree on an extension. “Today there are big risks of oversupply,” Russian Energy Minister Alexander Novak said in Moscow after meeting with Saudi oil minister Khalid alFalih. “We’ve agreed that we need to run a deeper analysis and to see how events unfold in June.” Russian President Vladimir Putin seemed to fuel speculation of a rift in Vienna in comments where he said: “Of course Saudi Arabia wants oil prices to remain higher,” the Interfax news agency quoted Putin as saying. “But we have no such need due to the more diversified nature of the Russian economy.” The Saudis, of course, are desperate to prevent such a downward spiral. “Both at the bilateral and the OPEC+ level, we work in order to take preventive steps so as not to allow that scenario to happen,” al-Falih said in Moscow. He is undoubtedly trying to convince Novak of the wisdom of extending the production cuts. Saudi energy minister Khalid al-Falih has been in

Graphics: Joel Samson.

mad Chit stated that all outstanding construction at the site were above the ground and being fast tracked. He stated that the installation stage is expected to take four weeks when itbegins in October 2019. Chit also said the modular refinery project begun on a good footing with the host community and had continued to enjoy conviviality from the local population. The Board and Waltersmith signed the equity investment agreement in June 2018. Wabote had explained at the ceremonythat the investment decision was in line with the Board’s vision ‘to be the catalyst for the industrialization of the Nigerian oil and gas industry and its linkage sectors.’ He added that the Board was also keento support the Federal Government’s policy on modular refineries and meet the key objectives of the Petroleum Industry’s Seven Big Wins launched by President Mohammed Buhari in October 2016 and the Economic Recovery and Growth Program (EGRP).

Oil firm expresses readiness in filling knowledge gap in Nigeria’s fire fighting system Russia since last Thursday, meeting with Russian counterpart Alexander Novak to debate the future of the 1.2 million b/d supply cut agreement, which is set to expire at month’s end. In all, OPEC’s 14 members pumped 30.09 million b/d in May, a 170,000 b/d fall from April and the lowest since February 2015, before Gabon, Equatorial Guinea and the Republic of Congo joined and Qatar was still a member, the Platts survey found. In fact, Saudi production has been well below its quota of 10.31 million b/d under an OPEC/non-OPEC supply accord, which went into force in January, with the kingdom persisting in its aim of draining what it sees as a glut of oil in storage to bolster prices. Nigeria also saw production fall significantly in the month, hampered by a fire at its Trans Forcados crude pipeline that forced it to shut down and force majeure on key export grade Bonny Light that was lifted mid-May. The declines were partially offset by major gains in Iraq, which appeared to flout its production quota by hitting a record high of 4.82 million b/d, according to the survey.

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of the oil and gas industry. “I hope similar projects would come on stream pretty soonto generate employment for Nigerians.“ In line with the requirements of the succession plan requirements of the Nigerian Content Act, Wabote charged the contractors to train and absorb more Nige-

rians in senior management positions and make them permanent members of their companies, even after the project phase. Wabote also noted that the Ibigwe modular refinery was the first of such projects to be undertaken by the NCDMB and Watersmith and hinted that the Board had sanctioned anothermodular refinery project to be developed at Calabar, Cross River State. In his comments, the Chairman of Waltersmith thanked the Executive Secretary for the visit and affirmed that the company was satisfied with the quality of work from the contractors. He also noted that Waltersmith had been steadfast on its obligations to the firms. “We expect you to remain consistent with us as well. But we are very happy with what we have seen and we are looking forward to commissioning and beginning to sell diesel and kerosene from this site in May 2020.” The Project Manager of Lambert Electromac, Moha-

DIPO OLADEHINDE

ith urbanization and industrialization birthing the need for more possibility for fireoutbreak, Nigeria based Oil servicing firm Prime Atlantic, a subsidiary of Prime Atlantic Limited is organizing a capacity building training for fire fighters in Nigeria, in a bid to increase the knowledge gap needed in the efficient running of Nigeria’s fighting system. According to Prime Atlantic Limited, the wholly owned Nigerian company dedicated to effecting development in the Nigerian oil and gas industry, it’s training program will not only expose Nigeria fighters to international best practices but also allow participants participate in four selected courses needed in filling the knowledge gap recorded in the sector. The Director of Business Development at Prime Atlantic, Folake Soyannwo disclosed that the firm facility in Ogun state on about 50 acres of land, is the only facility in Nigeria that can provide the

internally recognized practical training that is required by the Nigerian oil and gas industry. In terms guaranteeing standard, Soyannwo explained that Prime Atlantic have also gained third-party accreditation for all the courses and training delivered, which not only guarantees the standard of the training but further allows clients have confidence in the training system delivered. The training organized with partnership with the UK based Fire Service College would bring together 40 firefighters from across the federation from 10th of June till 21st June 2019. On the reason for the specific interest in fire fighting since Prime Atlantic’s training are conducted to Offshore Petroleum Industry Training Organization (OPITO) standards for the offshore and marine sectors, Soyannwo said the company is into interested in safety, sur vival and emergenc y response which is the reason why it’s focused on fire fighting. “The first set of people we had here were NNPC firemen and the feedback immedi-

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ately was the fact that some of the firemen are seeing or handling fire equipment they have previously seen from a distance,” Soyannwo said. Notably since the invasion of petrodollars in Nigeria, there has been massive, but haphazardly coordinated expansion in economic activities across the country. This development has made fire incidents such as petrol loading bays, tank farms, pipelines and other similar sources a major source of danger to the public safety and property. Soyannwo further revealed that Falck Prime Atlantic would be collaborating with the Fire Service College, Moreton-in-Marsh, UK to ensure that the training meets international standards for professional fire fighters. Kelvin Keeler, the head of International training at Fire Service College, Moreton-inMarsh, UK said the College is well equipped to deal with the fire challenges in tropical areas like Nigeria and further express its readiness to provide capacity training for international fire fighting agencies, oil and gas fire fighting agencies and counter-terrorism training.

Thursday 13 June 2019

BUSINESS DAY

ENERGYREPORT OVH Energy eyes substantial chunk of ECOWAS lubricant market

OVH Energy has been at the forefront of getting rid of adulterated lubricants in the market sector of the downstream oil and gas industry. It is also making moves to expand its market share beyond the shores of Nigeria. LILIAN IKOKWU, Head Lubes in this interview with OLUSOLA BELLO explains the various moves industry operators have taken to control the inflow of adulterated lubricants into the market. Excerpts; What is your overall view of the lubricant market in Nigeria? he lubricant market in Nigeria has evolved. Traditionally, it was dominated by the majors in those days. When I say majors, I am referring to the international oil companies (IOCs) such as the Total, National Oil, Agip and the African Petroleum which was marketing British Petroleum Lubricant. But with all the divestments that had happened in the downstream sector of the petroleum industry, a lot of local players have come in. Interestingly this was not the only thing that happened in the industry as the barrier for entry into the lubricant market was lowered and there was massive influx of lubricants from Asia and Europe into the market. The implication of this is that there was a lot of pressure on the local manufacturers. There are about 46 licensed manufacturers here locally. A lot of them are faceless. But if you go to the market and do a count of the lubricants, you would see over 50 brands out there contesting for space. For the consumers, there is room for options but there is also a challenge because the labels say one thing but there are only few brands that you can guaranty the quality of products they have in the bottle. The industry has a lot of potentials. It has witnessed some growth over the years and it has been quite stable with reduced economic activities. We have just got out of recession. The country is expected to be distributing

Your market share? If you look among the major marketers, we used to have seven per cent share. This was in 2016. But in the last two years we have grown to about nine per cent.

annually about 400 millions litres of lubricant. Not all of these are produced lubricants as the chunk of these is oil based or straight oil that you can see on our road sides. So essentially, the industry has grown because a whole lot players came in. This is not without its own problems. Some other issues such as counterfeiting and adulteration have besieged the industry. How are these issues of adulteration and counterfeiting being addressed? What OVH Energy did in 2015 to address this particular issue was that it embarked on a project which ensured it changed the packaging completely. This allowed us to achieve two goals - to improve on the quality of the product and to address the issue of counterfeiting and adulteration. So in the designing process, we made sure we built in-security features so that it becomes quite prohibitive for people that want adulterate the product. We also track our bottles so that if there is any adulteration we can easily take action on it. We track our delivery chain because we have registered distributors. So it is quite easy to follow the movement of our bottles and it has helped us to curtail adulteration - so far so good. What is your expansion programme for the product like? This year alone we have installed two additional products lines in our Apapa lubricant plant, the first-of-itskind in Africa, to support the drive to meet local demand

Lilian Ikokwu

and opportunity to export to the ECOWAS region. Expansion is key in growing our business. So would it be right to say your company is working towards increasing your market share in West African sub region? Definitely, taking a share of the market is something we are very big on. We had stepped back some time ago when we went back to the basics, when we started with the packaging. It was clear what our strategy was. It was to reposition and grow our market share and we have seen steady growth in the past two years. The opportunity to export to West Africa sub-region is there and we are tapping into it. We already have a subsidiary in Togo that markets our lubricants brand in that region. But we are now going to expand that by reaching out to other countries along

Ikeja Electric rolls out prepaid meters for Ikorodu customers under MAP Scheme

keja Electric Plc. (IE) has announced the roll-out of prepaid meters for customers in the Ikorodu Business Unit. According to the Disco, the deployment and installation of prepaid meters to customers in Ikorodu, which will be carried out by one of its MAPs, New Hampshire Capital limited,will commence on June 17th 2019 following the successful registration and subscription for meters by thousands of customers spread across Ikorodu and Epe. This was made known at customers forum held in Ikorodu and which was attended by customers, stakeholders under Ikorodu Busi-

ness Unit of Ikeja Electric. According to Ikeja Electric, this is part of the first phase, which will further be extended to Abule Egba and Shomolu Business Units next week. The Nigerian Electricity Regulatory Commission (NERC) empowers third party companies identified as Meter Asset Providers (MAP) to procure and install meters for electricity consumers under this scheme. Speaking on the roll-out, Head of Corporate Communications, Ikeja Electric, Felix Ofulue said, “In line with NERC regulations, customers are expected to pay for meters. Through the online process, customers are to abide the www.businessday.ng

the ECOWAS corridor and we are going as far as Niger and Chad. We plan to increase our market share locally and in West Africa’s sub-region. Any reward for your loyal customers? Just to show our customers that we appreciate them, we have in the last two years made it a point of duty to always give back to the general consumers. Last year, we ran a 4 -for-4 promo campaign for 3 months where we partnered with Coca-Cola and gave out soft drinks when people bought our lubricant. This year we are taking it higher. We have started the Oleum ‘Awoof Scratch & Win promo’. There is something for everyone who buys our product. This is running till the end of September and there would be a lots of gift to be offered to winners at the end of the promo when the raffle draw takes place.

What is the worth of the lubricant market? If we are to go by the volume that is sold annually and what the cost of a litre of lubricant on the average is, depending on the kind of base oil, this will determine your cost. But an average lubricant at the minimum rate should cost about N550 per litre. If this is multiplied by 400 million litres which is the estimated volume that goes into the Nigerian market annually we would say the industry is worth about N220 billion. It could be more than this, because I am using an average number. I don’t think we do more than 400 million litres. I actually think we are not yet at 400 million but somewhere between 320 and 400 million litres. Because there is no data published to this effect, it is difficult to say what the exact figure is. But if you add what comes to what we projected as locally produced and what is consumed, we can say the upper band is 400 million litres. Do you see the potential for the country growing more than 400 million litres? I don’t see that potential right now but assuming the industries are working at optimum capacities, we can begin to think along that side. A lot of the factories in the country are at their sub-optimal performance. Some of them are as low as 30 per cent optimi-

zation. As they improve their output and more industries come on stream, then we can start noticing improvement. If you look at the gross domestic product (GDP) of the country, you will see that agriculture is the greatest contributor but not much of lubricants is used in the sector because our mechanized farming level is low. This could only happen if the processing aspect of agriculture products come to live. This will engender more movement of goods and services. As we get better roads in the country, products that are harvested in the farms can then come to the city or to the market places to be sold. The more there is movement, the more engine oil is consumed. Yes, I agree with you that there is prospect but a lot of it also depend on so many other things such as our roads maintained as and when due. The industry is expected to grow three per cent a year largely driven by the estimated number of vehicles that are expected to be added yearly in the country. What is the contribution of lubricant to your company’s bottom line? Lubricant typically used to be the next after the white product. But the business has refocused that position. With the downstream sector experiencing thin margins, the only place you get reasonable margin is liquefied petroleum gas (LPG) and lubricants. The focus has changed. In recent times, lubricant is the major focus of the business. Today it is about the sole highest contributing product line to the business.

Ibadan Disco commences metering of all distribution transformers rules and regulation guiding the metering process and they should not to pay cash to anyone or fall prey to unscrupulous element who may want to take advantage of the scheme to fleece customers. They will be advised on the designated channels for payment” While explaining the process, he noted that every customer is expected to go through the Know Your Customer (KYC) process and also agree on settlement of the outstanding debt. After this, account survey will then be carried out before payment for prepaid meter is made. The meters will be provided and installed within 10 working days of payment.

s part of the drive to provide quality service to its customers, Ibadan Electricity Distribution Company (IBEDC) has commenced the deployment of Distribution Transformer (DT) Meters to all public Distribution Transformers under its franchise using an Advanced Metering Infrastructure (AMI) Solution. Speaking on this development, the Chief Operating Officer, . John Ayodele stated that ; “with the installation of these meters and the deployment of the AMI technology, IBEDC will be able to measure the actual energy consumption of customers in real-time.

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This initiative will greatly benefit customers as the smart meters will ensure better energy accounting and accountability, thereby making estimated bills more accurate and reliable. It will enable us to reduce our response time to fault clearing and improve on our operational efficiency as the AMI solution can detect if there is a fault within a Transformer, its associated LT lines & accessories and communicate this information in real time to our control room. This will make fault clearing faster as the time wasted on patrolling the lines to locate the fault is eliminated. He said the company’s @Businessdayng

technical team and authorised contractors have already begun the deployment of these smart meters and configuring some of our Transformers to enable them to be compatible with the AMI solution. We are appealing for the cooperation and understanding of our esteemed customers as our technical officers will require access to Transformers that are situated within customers’ premises as well as those safeguarded by communities. It has been our mission to always serve our customers better, and this initiative is a step further to ensuring this commitment.”

Thursday 13 June 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Obijackson Foundation and the reimagining of Okija Onuwa Lucky Joseph

kija got into the Nigerian lexicon and reckoning on a rather sour note: Nigerians saw the now Senator Theodore Orji in a state most unbefitting for a statesman, right in the thick forest of Okija clad only in his underpants. It was like something straight out of Nollywood: the red background cloth and the prancing ‘Dibia’ (witchdoctor) making guttural incantations while holding tight to a cock whose blood would soon be spilt. And there was Orji in the foreground, bound hand and foot, taking the oath, ostensibly of loyalty to his former boss, to whom he had been Chief of Staff. We all know how that oath was broken and how the pair no longer see eye to eye. After those images went viral, Okija shrine became the catchphrase for politicians who would go to any length to attain their political goals. And after the Orji Okija show, Nigerians have been exposed to video capture of several other Nigerian politicians from different geographical locations, some bathing in substance suspected to be human blood, some totally naked and walking the forest at night with their

spiritual Wi-Fi that’s supposed to garner them power beyond what the ordinary eyes can see. Oh, well, quite a lengthy diversion, that, but necessary to contextualise the story of Ernest Azudialu-Obiejesi who is giving Okija a different kind of name, a more befitting one, one that eight years of Orji Uzor Kalu and another eight years of Theodore Orji could not deliver to the long suffering denizens of Okija. His Obijackson Foundation purpose-built the Obijackson Women and Children’s Hospital in Okija, a paediatric health care institution, first of its kind in the eastern Nigeria that provides specialised care, includ-

ing surgeries, for children. When he visited the kids and women last week, to celebrate with the kids born at the hospital, Dr. Obiejesi lamented that millions of Nigerian children die from avoidable ailments due to lack of access to primary healthcare. He cited that as a strong reason the Obijackson Women and Children Hospital was set up: to provide quality healthcare to children in Anambra and beyond, regardless of the economic status of their parents. The word there is ‘regardless of the economic status of their parents’. It’s a lofty goal and one that requires lots of money to run. Our governments open

hospitals they do not fund or properly manage, thereby rendering them useless. And while the well-heeled can afford to hightail it to India, Europe and America, the less privileged have to wring their hands and watch as life ebbs from their loved ones. It’s an unfortunate scenario replicated many times daily in different parts of this huge country. The Ernest-Azudialus, he of Nestoil, as well as other corporate titans are sorely needed to, might we say, complement, or more matter-of-factly, take over duties abdicated by our governments. Might sound naïve, and it is, but the nature and texture of government is not going to change anytime soon. We know what to expect and a lot more of what we are not going to get if all we do is count on their campaign promises. While corporates may not have the wide ranging reach and resources of government, they can make a difference that resonates, even if in just one area. Watch out on these pages in the next few weeks as we give you details of the Obijackson Foundation and how it hopes to sustain this laudable project that’s begun in Okija, and which, by the way, ought to be replicated by other well-meaning individuals and organisations in every part of the country.

Broadcom Billionaire Henry Samueli Gives $100 Million To UCLA roll at least 7,000 undergraduate and graduate students by 2028, according to a press release. Samueli earned three degrees from UCLA before founding chipmaker Broadcom: a bachelor’s in 1975, a master’s in 1976 and a doctorate in 1980. He also worked at the school as an electrical engineering professor from 1985 to 1995. “The demand for engineering graduates has continued to grow unabated, so it is exciting to see UCLA’s significant commitment to increase the number of students and faculty, and expand research and entrepreneurship within the school,” Samueli said in a statement. “Such a commitment will ensure that UCLA Samueli remains among the elite engineering schools in the world, with an ever-growing impact on our society’s greatest challenges.” Samueli made his fortune after

Kristin Stoller

roadcom billionaire Henry Samueli, along with his wife Susan, announced a $100 million donation to UCLA’s engineering school Tuesday. The pledge, which will be given over 10 years, is the largest gift ever to the engineering department. Forbes pegs Samueli’s net worth at $4.2 billion. The donation was made through the couple’s Samueli Foundation and will go toward the expansion of the engineering school, which is named for Samueli. He and his wife had previously donated $88 million to UCLA. The engineering school was named after Samueli in 2000 when he donated $30 million toward capital improvements and fellowships for graduate students and faculty. With Samueli’s latest donation, the school hopes to add 100 professors and enwww.businessday.ng

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cofounding San Jose, Californiabased Broadcom, now one of the world’s largest semiconductor and infrastructure software companies, with Henry Nicholas in 1991. Broadcom was acquired by Avago Technologies in 2016 for $37 billion and renamed itself Broadcom Ltd. Samueli served as the company’s chief technical officer until December 2018 and is now the company’s chairman. The $188 million that Samueli has promised to give to UCLA is not the couple’s largest philanthropic gift. In September 2017, the Samuelis pledged $200 million to the University of California, Irvine. Including Tuesday’s gift, the Samuelis have given or pledged more than $478 million to the University of California system, according to Tuesday’s statement. (Courtesy Forbes Magazine)

Thursday 13 June 2019

BUSINESS DAY

Corporate Social Impact

National Team Sponsorships: It’s Good to Pitch In; It’s Better to Pitch In Early Onuwa Lucky Joseph

s at the time of writing this story, Nigeria had lost its first match 3:0 to Norway at the Female World Cup holding in France. What is not certain right now is whether the Falcons will make it past the Group stage, something the team usually finds hard to do. Very strange, that, considering our record in Africa where we are tops and the very top, time and again. Even when upstarts like Equatorial Guinea, Cameroon and South Africa bare their impotent fangs from time to time, we have generally found a way to neutralize them and show them who’s boss on the continent. (How’s that for fan speak?!…) Not the same on the global stage, where we have been known to catch fright for reasons our African victims can’t quite comprehend. We have what it takes, we know, to come from the dead, if need be, to take a game. At the world cup, however, even when we meet less illustrious opponents, we lose the sting and have to contend with an early flight back to Naija. For most of the players, they don’t even bother. They go straight to their bases scattered all over the world as there is no elaborate welcome for those who have not done the green-white-green proud. So what’s the problem? Sports analysts (not to mention non analysts), agree that it’s wholly due to lack of early preparations. In sports, as in life, it all comes down to starting early. While the worms are wriggling at a time they

consider safe and too early for disturbance, you’re right there spoiling the party and giving them the surprise of their wiggling lives. Not so with our 11th hour Nigerian mindset. Training is not our strong suit. We just like to show up on the day and blow the competition away. Only it doesn’t quite work like that at the elite level. When you are far superior to the competition, you might not need more than a show up. Like Mike Tyson used to do. Until he ran into the Buster Douglas and Evander Holyfield brick walls. Those two were ready to meet him punch for punch, guile for guile, and to go toe to toe until they wore out his confidence and sense of invincibility. The point is, we don’t prepare early enough or well enough. Why? Preparation is not sexy. It’s too much sweat and grunt work that’s usually all done in solitude. A few fans might show up, but not enough to put up a show. Not to mention the pesky trainer or coach who stops you in mid stride with inane remarks that do nothing

but meddle with your flow. The press isn’t exactly interested either. It’s not the main event. Why should they bother? Readers and viewers aren’t fascinated by reports of trainings and preparations, except maybe where Alex Ferguson throws something at David Beckham or where Mourinho and Pogba exchange words and stares capable of starting a heat wave in the middle of winter. Our teams don’t understand the virtue of starting early. And it’s not just the players or athletes. They will come whenever the federation says to show up. The problem is with the federation. And it’s possible that the problem with the federation is that sponsors don’t catch the bug until the flu is already an epidemic. This is so bone-headedly wrong, and it’s cost us dearly time and again. The issue is that sponsors must see the big picture even while it’s yet a nondescript dot. We want to win the World Cup? Let the sponsors quickly identify that as an opportunity and let them, if possible, in concert with others,

get the boys and girls fit for competition so that by the time D-Day arrives, we are as ready as anyone else to blow the field away. Anything short of adequate preparations will leave us as mere footnotes at competitions we work so hard to qualify for. We are reduced to, as we say in Nollywood, waka-pass roles; just there to make up the numbers and to give the tournament some stolidity. First round gone and we are goners like all the other weak teams, our depth of talent notwithstanding. Amstel Malta, sponsors of the Falcons to the ongoing World Cup is running a good, well-crafted and executed campaign. But if the girls are back after the first round, what’s the point? Wetin Amstel Malta gain? Wetin Nigeria gain? All of that bubbling vitality and svelte physicality that the brew is supposed to engender in the ladies would have all gone to waste. Remember when the Super Eagles went to Russia last year? There was fever pitch excitement, sponsors falling over

themselves to be part of the party, unpaid musicians doing their patriotic bit with hit songs that captured the mood and spirit of the time. Naira Marley, wow, what difference a year makes! Issa goal, issa goal was the anthem. But you know how long that song would have been on replay had the Super Eagles progressed further? While it’s undeniably a socially responsible endeavour to sponsor a national team to a global sporting event, it’s even the more responsible thing to ensure that stakeholders get good value for their sponsorship investment. And that only happens if the sponsored team goes further in the tournament. Sustained top of mind awareness as against the short term type is what’s gained. The further the distance covered, the better. Nigeria may not win at the end of the day, but if we do better, the brand is imprinted deeper in the subconscious and there’s no doubt that those times of victory become associated for a long time with the brand. Sponsorship success is predicated on longevity of enterprise. The longer we are there, the more profitable the investment. If Peak is in you, and it doesn’t take the team far, then does Peak really make you peak? Same question for all brands whose teams fail to deliver. Because that’s how a disappointed fan is going to react to the messaging thereafter. Any sponsoring organisation that does not take cognizance of the full spectrum of needs before the event so as to have the team fully prepared is selling itself short at the end of the day.

Quotable Quotes on CSR & Sustainability As I look back on my life’s work, I’m probably most proud of having helped create company that by virtue of its values, practices and success has had a tremendous impact on the way companies are managed around the world. I’m particularly proud that I’m leaving behind an ongoing organisation that can live on as a role model long after I’m gone. William R. Hewlett, cofounder of Hewlett-Packard

“Companies that are breaking the mold are moving beyond corporate social responsibility to social innovation. These companies are the vanguard of the new paradigm. They view community needs as opportunities to develop ideas and demonstrate business technologies, to find and serve new markets, and to solve longstanding business problems.” Rosabeth Moss Kanter, Harvard Business Review.

“In terms of power and influence you can forget about the church, forget politics. There is no more powerful institution in society than business... The business of business should not be about money, it should be about responsibility. It should be about public good, not private greed.” Anita Roddick, Business as Unusual

“Not long ago the concerns of ecologists were as irrelevant to business planners as those of ethicists are today. “Green” has gone from being a disparagement to becoming a badge that no smart company would risk being without. Ethics are similarly en route to becoming a strategic imperative.” John Dalla Costa, Ethical Imperative “We know that the profitable growth of our company depends on the economic, environmental, and social sustainability of our communities across the world. And we know it is in our best interests to contribute to the sustainability of those communities.” Travis Engen, CEO, Alcan

“It is not good enough to do what the law says. We need to be in the forefront of these [social responsibility] issues.” Anders Dahlvig, CEO of IKEA, quoted in Financial Times. “Ethics is the new competitive environment” Peter Robinson, CEO Mountain Equipment Co-op “Companies with their eye on their ‘triple-bottom-line’ outperform their less fastidious peers on the stock market” The Economist

“It takes 20 years to build a reputation and five minutes to ruin it.” Benjamin Franklin “Stakeholders want companies to make a profit, but not at the expense of their staff and the wider community.” Brian Gosschalk, CEO, MORI, quoted in Financial Times. www.businessday.ng

“People are going to want, and be able, to find out about the citizenship of a brand, whether it is doing the right things socially, economically and environmentally.” Mike Clasper President of Business Development, Proctor and Gamble (Europe)

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“Corporate social responsibility is not just about managing, reducing and avoiding risk, it is about creating opportunities, generating improved performance, making money and leaving the risks far behind.” Sunil Misser, Head of Global Sustainability Practice, PwC

“Business has a responsibility beyond its basic responsibility to its shareholders; a responsibility to a broader constituency that includes its key stakeholders: customers, employee, NGOs, government - the people of the communities in which it operates.” Courtney Pratt, Former CEO Toronto Hydro. @Businessdayng

“The brands that will be big in the future will be those that tap into the social changes that are taking place.” Sir Michael Perry, Chairman of Centrica PLC “Our consumers are very sensitive to social and environmental issues... We have actively engaged with them on these issues in the last ten years, and they have become very aware as consumers. They especially ask for information on environmental policies, workers’ rights and product safety.” Walter Dondi, Director of Co-op Adriatica (Italy’s largest retailer) “Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it... because it is good for our business” (Niall Fitzgerald, Former CEO, Unilever)

“In my view the successful companies of the future will be those that integrate business and employees’ personal values. The best people want to do work that contributes to society with a company whose values they share, where their actions count and their views matter.” Jeroen van der Veer, Committee of Managing Directors (Shell)

Thursday 13 June 2019

BUSINESS DAY

POLITICS & POLICY Nigeria elections, strategic planning and monitoring: The APC example Iniobong Iwok

The Election Planning & Monitoring Story, a 240-Page Coffee Book by the All Progressives Congress Presidential Campaign Council, highlights the tough but rewarding 49-Day 2019 campaign undertaken by the Council that culminated in the victory for President Muhammadu Buhari. n the old dispensation and since the return of democracy in 1999, Nigeria has always operated a multi-party political system. With mergers and alliances, it can be said that only two or three political parties have maintained strong footings in the polity. Since 1999, the People’s Democratic Party (PDP) had controlled the Presidency and the National Assembly until the 2015 Presidential and National Assembly elections which the current President, Muhammadu Buhari, on the platform of the All Progressives Congress (APC), won. In 2015, the presidential candidate of the APC emerged after keenly contested primaries by aspirants such as Muhammadu Buhari, Atiku Abubakar, Rabiu Kwankwanso, Sam Nda-Isaiah and Owelle Rochas Okorocha at the Teslim Balogun Stadium, Lagos, on December 10, 2014. Muhammadu Buhari polled 3,430 votes to get the ticket of the party after the delegates had voted. His votes outnumbered those of former Kano State governor, Rabiu Kwankwanso and former Vice President Atiku Abubakar who got 974 and 954 votes, respectively. While Owelle Rochas Okorocha got 624, Sam NdaIsaiah scored 10 votes as 16 voided votes were recorded. In 2019, it was a different ball game as the APC chose the American-style direct presidential primaries. The primaries took place on Friday, September 28, 2018, and held across the states of the federation, including the Federal Capital Territory (FCT). President Buhari, who was the sole aspirant, polled a total of 14, 842, 072 votes to be declared as the party’s

candidate. After the presidential primaries by the different political parties, candidates emerged. There were about 30 candidates who were poised to wrest power from the President Buhari-led All Progressives Congress. There were contenders like Atiku Abubakar of the PDP, Donald Duke of the SDP, Omoyele Sowore of the AAC, Kingsley Moghalu of the YPP, and many others. But after the 2019 Presidential election held on February 23, 2019, President Muhammadu Buhari won his re-election bid as he polled 15,191,847 votes to defeat his closest rival, Atiku Abubakar of the PDP, who polled 11,262,978 to lose the election with a margin of 3,928,869 votes. Through the book, many issues around the 2019 elections were brought to the fore, one of which is strengthening of institutions around elections. It showed that for us to advance our democracy further, institutions around the conduct of credible elections must be strengthened reasonably. The electoral umpire, the Independent National Electoral Commission (INEC), must be transparent and seen to be independent. They should also be provided with every needed support and legislation in order to effectively carry out their responsibilities. Adequate provisions should equally be made for proper security of properties, electoral materials and personnel to avoid reoccurrence of ugly incidences which would have truncated the entire process. The ad hoc staff often recruited must be adequately trained in good time before the commencement of elections in order to be accustomed to equipment and materials used in the electoral process. Adequate budget for the welfare of the ad-hoc staff should also be looked into to avoid issues witnessed in most places where some were forced to sleep on bare floor in the course of the exercise. The judiciary should be positioned to handle matters arising from political party primaries in good time to avoid creating uncertainties

Delivering some key nuggets, Fashola, who led over 350 members of the EP&M Directorate, noted that political parties desirous of winning elections in the near future must put in place a great team to do the thinking. The team must be able to draw up a Pre-Election plan, Election Day plan and Post Election plan. They must deliver a datadriven campaign using polling and other election related data. They should able to collate and manage datasets of polling unit agents, train polling agents, provide strategy, equip and staff the National Situation Room. Political parties must fund

Strategic Teams (War Rooms) that aid better performance at elections through the use of data gathering and use of media. Aside pre-election plans, political parties should put it place a team to monitor and track delivery of election materials on election days proper. They should be able to provide crisis support, collect intelligence from field agents to protect the interest of their, escalate incident and security issues to the relevant agencies. The team should equally be able to articulate a plan and coordinate post-election events and crisis management. For APC, the party’s National Situation Room situated in Abuja had 150 staff strength with 80 Call Center Volunteers, 37 Support Staff (Medical, Admin, IT and Intelligence) and 33 Secretariat Staff (Data Analyst, Comms, Operations, Drivers and Support Staff). The EP&M team processed over 200,000 datasets from polling units to state level via an exclusive online portal. There were over 81,000 calls made from the National Situation Room to party agents and stakeholders across the 37 States. On Election Day proper, the National Situation Room received over 520 intelligence and incident reports across the country. “No great plan can be executed without a great team,” Fashola said. Available data showed that the eligible voters for the 2019 elections were more of the youth population. Before now, the youth were used to cause

mayhem during elections. But INEC deployed technology in the electoral process, the issue of using the youth to cause violence, snatch and stuff ballot boxes has reduced considerably. It is now left for political parties to more importantly encourage the youth participation in the whole process. As it concerns elections, the book highlights the facts that Nigeria may not be where it ought to be but certainly not where it used to be. Nigeria has witnessed reasonable improvement in the democratisation process since 1999. It is believed before now by many voters across board that their votes do not count as the process will eventually be manipulated. But things are changing which had made many to insist on having their names on the voters register. Looking back, one can conveniently say that with a little more transparency in the process Nigeria’s democracy will be one that can be envied by other countries. The Card Reader used during the accreditation process during the elections guaranteed reasonable transparency and drastically reduced inflation and manipulation of figures, though a lot more can be done. The cases of violence and rigging, seen as the chief factors around elections in Nigeria, will be things of the past if political parties can follow the APC example; ensure emergence of candidates through a transparent process, constructively engaging the youth population, assembling a formidable Situation Room, drawing up technology driven approaches to electioneering campaigns, having the political will to allow the independence of electoral body and being able to properly sell your policies to the populace through the proper channels. Therefore, that the Coffee Book documented the collective efforts and the lessons learnt from the task undertaken by the EP&M team with intention of providing valuable insights and reference materials to the future generations of Nigerians and political gladiators.

His words, “Today is a historic day. The actualisation of the long battle and campaigning for justification for June 12 as Democracy Day has finally come to fruition. The event of June 12 marked the freest and fairest elections held in Nigeria at the time”. “The decision of General Ibrahim Babaginda to annul the election was a surprise to both

my family and the Nigerian people in general because my dad and the General (Babaginda) were close friends.” “It is a day of reflection. I do not intend to celebrate this day. I intend to reflect on where we are as a nation, where we intend to go and where my children will be.” Governor Dapo Abiodun, represented by deputy governor,

Noimot Salako-Oyedele, pledged that his administration would incorporate the visions of Abiola into his government, urging political leaders to make the sacrifice of Abiola count and continue to enthrone good governance for the benefit of the people. According to him, “Abiola did not only fight for the entrenchment of democracy in Nigeria but “died fighting for the people.

Babatunde Fashola and other members of the team

and logistics challenge for the electoral body. Security agencies should also be given adequate training to handle cases that may arise before, during and after elections. Before now, winning elections and emergence of winners had been herculean tasks. It is obvious that there is great need for proper docu-

driven as more people for fear of violence shun the campaigns grounds and may not connect with their messages. In the words of Babatunde Raji Fashola, senior advocate of Nigeria (SAN), head of APC Directorate of Election Planning and Monitoring: “Those who want to defeat us, must first be able to outthink us”.

mentation. Proper documentation will greatly take care of the usual tussle and violence associated with acceptance of winners. The opposition parties will have to look at the processes culminating in the winning of elections and can build memories looking at the emergence of President Muhammadu Buhari as the winner of the 2019 as point of reference. Political parties in Nigeria must as matter of urgency appreciate the role of technology and data collation in future elections. The old ways must be discarded as more Nigerians are embracing the use of technology in their daily lives. Political campaigns must be structured to be technology

June 12: My father’s vision has been fulfilled - Abiola’s son Razaq Ayinla, Abeokuta

bdulmumini Abiola, son of acclaimed winner of the June 12, 1993 election on Wednesday said that his father, MKO Abiola died a happy man having fought for the entrenchment of democracy in Nigeria. Abdulmumini, who spoke at an event organised to mark

Democracy Day in Ogun State, his father’s home country, said, “With the declaration of June 12 as Democracy Day, my father’s vision has been fulfilled, even after death. It is important we understand that Nigeria belongs to all of us or none of us at all. Speaking on behalf of the family, Abdulmumini commended the Federal Government for at last recognising www.businessday.ng

June 12 as Democracy Day, insisting that the decision would entrench the country’s democracy. He urged the Federal Government to look into his father’s manifestoes, especially the areas of poverty alleviation and appealed that the Federal Government must take urgent steps to lessen the poverty level in the country.

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Thursday 13 June 2019

BUSINESS DAY

news How NERC derailed Nigeria’s power... Continued from page 1

have availed little in terms of measureable results and

comfort for consumers. Three days before the 2015 presidential elections, the NERC took a significant decision to reduce electricity tariff. This decision clearly dented NERC’s credibility, power sector reforms outlooks, market and investors’ confidence. For four years the NERC had been going around the country making a case to Nigerians about the need for a cost-reflective tariff and finally effecting the tariff changes just two months earlier on January 1, 2015. The decision had also implied the commissionwastakingoffmore than 30 percent from the 2015 cost-reflective charges taking, going lower than it was before January 1, 2015. Sam Amadi, former chairman of NERC, said the commission unilaterally took the decision without interferences from former President Goodluck Jonathan after listening to complaints from consumers and operators alike. ‘’We have always tried to listen to complaints from consumers and operators alike and

we carry out tariff reviews when necessary. We are a responsive and accountable regulator,’’ Amadi had said on March 15, 2015 at a meeting with a delegation of the Electricity Consumer Association of Nigeria (ECAN). Amadi had explained that the reduction in tariff was a decision reached in line with the Commission’s Business Rules after consideration was given to protests from the Manufacturers Association of Nigeria (MAN) on the implication of the January 1, 2015 increase in tariff on their businesses. However, the person under whosepurviewtariffissueswere supposed to have been issued, EyoEkpo,formercommissioner ofmarketcompetitionandrules (MCR) at NERC, said the tariff change was done immediately he started his leave on February 19, 2015 without due process or proper consultation inside the Commission. “He (Sam Amadi) completely bypassed the Market Competition and Rates Division, which I headed and which alone had responsibility for staffing, proposing and implementing ratemaking decisions on behalf

of NERC,” Ekpo said in a tweet on Wednesday via his verified handle @eyoekpo. Ekpo narrated that he proposed alternative ways of dealing with concerns that were raised by those complaining and suggested a way to deal with the complaints and advised Amadi that his real objection was not about the tariff change itself. “I advised him that the customers and the general public would assume (correctly?) that thistariffdecisionwaspoliticallymotivated coming as it did just a few days to the 2015 presidential elections,” Ekpo said. After the decision to reduce tariff the worst happened, the electricity Distribution Companies (Discos) declared force majeure while the NERC suffered massive loss of credibility with all its stakeholders who resolved never to accept the commitment of NERC in good faith, a development which ruptured the industry. “In the most cavalier manner, he (Sam Amadi) waved aside my objection. These things are in writing,” Ekpo said. However,theNERCcommissioner who took over from Ekpo sent a memo to the commission making it clear that the tariff

reductiondecisionwasamistake. “Instead of immediately correcting his mistake, Sam Amadi used his Chairman’s office to filibuster the market correction process that ought to have followed,” Ekpo said. “He made sure it was at the end of tenure in December 2015 that the correcting Order was made and even then it was stated to take effect in February 2016, after he and the remaining 5 Commissioners would have vacated office. By then, 9 months later, it was far too late.” After NERC reflected the cost-reflective tariff on January 1, 2015, the outlook for the electricity market changed dramatically as collections and remittances for energy purchased went up rapidly. The cost-reflective tariff is good for Nigeria on several fronts. The obvious advantage is that it will enhance power delivery as it will enable Distribution companies (Discos) pay the Generation companies (Gencos) for power generated. Gencos too will be able to pay gas suppliers to enable them generate more power. Besides, it will also enable both the Discos and Gencos to make more investments in their networks and in power

generation. Gas suppliers also will be able to invest in more gas production. Similarly, it will enable the Transmission Company of Nigeria (TCN) to strengthen their weak transmission lines so that they can be able to evacuate more power. The development of which would have brought in the second wave of privatisation that would have seen Discos gaining new institutional equity owners and later on doing Initial Public Offers (IPOs) on the Nigeria Stock Exchange(NSE). As of the 1st of February 2015, contracts between market participants were effective which implied some certainty of responsible market behaviour had kicked in while an N204billion loan from the Central Bank of Nigeria (CBN) designed to tidy up the sector’s balance sheet was already being disbursed although it was later terminated in March after the tariff reduction. Meanwhile, Ekpo explained that he resigned from NERC after discovering Sam Amadi had actually campaigned for former President Goodluck Ebele Jonathan something unheard of in good regulatory practice and which no other regulator did

Central Bank Of Nigeria (CBN), Securities Exchange Commission (SEC), and Nigeria CommunicationCommission(NCC) even though we were all ostensiblyPDPmembersorsupporters. “Our story could have been different and former President Goodluck would have gone down in history as the leader who kick-started Nigeria’s electricity and industrialisation renaissance. In my honest opinion, Sam Amadi, for his own intellectual aggrandisement, destroyed that possibility,” Ekpo concluded. To date, the electricity sector (no longer a market) is yet to recover. Sam Amadi can never say that he was not warned. So, it does not avail him to hide behind the fig leaf of technical jargon and all manner of -isms. The decision to reduce tariffs just 2 months after increasing them to marketmaking level in the manner it was done was patently wrong. No amount of dissembling can change this reality. The Nigerian Electricity Supply Industry continues to be a disabler, not an enabler of the country (and indeed the ECOWAS sub-region’s growth). It need not have been so.

Purposeful leadership can lift 100m... Continued from page 1

for the country in 2019 by international economic

institutions. It is also boosted by external reserves of $45 billion, enough to finance over nine months of the country’s current import commitments. “With leadership and a sense of purpose, we can lift 100 million Nigerians out of poverty in 10 years,” Buhari said. About 93 million Nigerians live in extreme poverty, and six Nigerians slide into extreme poverty every minute, according to a Brookings Institution report. But Buhari said his administration is laying solid foundation and taking bold steps in transforming the country, and that his policies are focused on “liberating the people from the shackles of poverty”. Some of the steps, he said, include integrating rural economies to the national economic “grid” by extending access to small-scale credits and inputs to rural farmers, credit to rural micro-businesses and opening up of many critical feeder roads. On the small-scale enterprisesintownsandcities,Buhari promised to expand facilities currently available to encourage

and support domestic production of basic goods and reduce reliance on imported goods. “For the next four years, we will remain committed to improving the lives of people by consolidating efforts to address these key issues as well as emerging challenges of climate change, resettling displaced communities and dealing decisively with the new flashes of insecurity across the country, and the impacts on food scarcity and regional stability,” Buhari said. “We are not daunted by the enormity of the tasks ahead. Instead, we are revived by this new mandate to work collaboratively withstateandlocalgovernments, legislators, the diplomatic corps and all Nigerians to rebuild and reposition our country as the heartbeatandreferencepointfor our continent,” he said. Government is also relying of the positive performance in the agriculture and industrial output, which have recovered since the recession, even as it has promised to work with the private sector to improve productivity and accelerate economic growth. “The Manufacturing Purchasing Managers Index which is the gauge of manufacturing activity in the country

CBN says no change in exchange rate... Continued from page 2

the inflation rate numbers, exchange rate to USD, Monetary Policy Rate (MPR), and crude oil numbers, but as at Tuesday, the exchange rate numbers had been removed and replaced with “the naira exchange rate is market determined”. However, the CBN on Wednesday removed the

“market determined” on its website and replaced it with “Exch. Rate (USD) N306.95”. Godwin Emefiele, governor of the CBN, had last month said Nigeria does not operate multiple exchange rates but has multiple foreign exchange windows. Nigeria’s foreign exchange windows include www.businessday.ng

L-R: Hadi Sirika, former minister of state for aviation; Ibijoke Sanwo-Olu, wife of Lagos State governor; Babajide Sanwo-Olu, governor, Lagos State; Bola Ahmed Tinubu, APC leader; Aliko Dangote, president, Dangote Group; Femi Otedola, chairman, Forte Oil, and Abdulsamad Rabiu, chairman, BUA Group, at the inaugural June 12 Democracy Day ceremony in Abuja.

has also risen for 26 consecutive months since March 2017 indicating continuous growth and expansion in our manufacturing sector,” he said. Buhari lamented that “it still takes too long for goods to clear at our seaports and the roads

leading to them are congested”, adding that “it also takes too long for routine and regulatory approvals to be secured”. These issues, he said, affect the country’s productivity and his government is committed to addressing them permanently.

Buhari also acknowledged the existence of a strong correlation between economic inequality and insecurity, adding that “when we actively reduce inequality through investments in social and hard infrastructure, insecurity reduces”.

“The disturbing increase in rates of kidnapping, banditry and other criminal activities can be attributed to the decades of neglect and corruption in social investment, infrastructure development, education and healthcare,” he said.

the investors and exporte r s f o re x w i n d ow , t h e inter-bank window, the official, the window for Small and Medium Enterprises (SMEs), business travel allowance (BTA) and personal travel allowance (PTA). Emefiele said the foreign exchange has substantially converged at N360 per dollar at the Nigerian Autonomous Foreign Exchange (NAFEX) window and BDC

segment of the market. Meanwhile, the CBN on Tuesday injected a total of $210 million into the inter-bank foreign exchange market. Figures obtained from the CBN indicated that authorised dealers in the wholesale segment of the market were offered the sum of $100 million, while the Small and Medium Enterprises (SMEs) segment received the sum of

$55 million. The sum of $55 million was allocated to customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others. Confirming the figures, Isaac Okorafor, director, Corporate Communications Department of the CBN, reaffirmed the bank’s commitment towards ensuring stability in foreign exchange

market. It will be recalled that at the last intervention on Friday, June 7, 2019, the bank injected the sum of $294.7 million and CNY31.4 million into the Retail Secondary Market Intervention Sales (SMIS) segment. Gross official reserves increased by US$330 million in May to US$45.12 billion. It has risen to $45.17 billion at June 6, 2019.

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FCCPC orders MultiChoice to grant pause option on subscriptions OLUWASEGUN OLAKOYENIKAN

he Federal Competition and Consumer Protection Commission (FCCPC), formerly known as the Consumer Protection Council, has ordered MultiChoice Nigeria Limited, operatorofDStv,toprovideanoption that would allow its subscribers pause their active subscription. With the new directive, MultiChoice is compelled by the commission to allow its subscribers to periodicallysuspendsubscription for at least three times every year for up to 14 days in each instance. The instruction was part of the 11 directives in a “Final Order” issued by the commission against MultiChoice for raising its subscription tariffs despite a court order barring it, and in line with its new mandate after President Muhammadu Buhari signed the Federal Competition and Consumer Protection Act 2018 (FCCPA) into law in January 2019. The law provides the statutory andregulatoryframeworkforamore

robustregulationofanti-competitive conduct and greater scrutiny of conduct in the market place that could distort the market, or impede competition,accordingtoFCCPC. The commission said the directives contained in the final order were issued “considering thatconsumerswerenotreceiving thebenefitsoftheproposedmodificationofMultiChoice’sapproach to consumer protection”. It would be recalled that the commission had filed a suit against MultiChoice before a FederalHighCourt(FHC)inAbujafor increasingsubscriptionratesonits packages against a consent order agreed jointly by both parties, according to the commission. The consent order contained a mutual understanding that no material terms of the Subscription Agreement between MultiChoice and its subscribers – which includes increasing subscription rates–willchangeduringanagreed period of supervision by FCCPC. This is “to ensure that the crucial issuesin repeated complaints,

and that were covered by the Consent Order were sufficiently addressed under the existing terms and rubric of expectations by consumers,” the commission said in a statement. Furthermore, the court granted an interim injunctive order prohibiting MultiChoice from raising its subscription tariffs. However, FCCPC claimed the firm failed to obey the court order, but went ahead to challenge the validity and proprietary of the orderandpowersoftheAbujaCourt at the Court of Appeal. While the case remained pending in the Court, the commission noted that its mandate under the FCCPA is not retroactive, but renders MultiChoice’s argument before the court “mute and untenable.” “Thecombinationofthecommission’s new mandate/powers under the new law, and its Final Order, renders the issue the commission sought to enforce in part mute, and MultiChoice arguments defeated,” FCCPC stated.

State focuses on capacity building in Edo civil service – HoS

he Edo State Head of Service (HoS), Isaac Ehiozuwa, says the Governor Godwin Obaseki-led administration is committed to capacity building in the civil service to ensure that the state’s workforce is well prepared to support sustainable socio-economic development unfolding in the state. Ehiozuwasaidthisduringaday training programme organised for staff of the Edo State Oil and Gas Producing Areas Development Commission (EDSOGPADEC), in Benin City, Edo State capital. He described the training as timely and “in line with Governor Godwin Obaseki’s vision for the public service. The public service, asweallknow,isdynamicinnature andassuchtrainingissinequanon to staff development.” Notingthatregulartrainingwas important for efficient service delivery, he said the programme was meant to sharpen the focus and broadenthehorizonofparticipants to “update their knowledge of the workings of the public service. I mustcommendthemanagement of the Commission for keying into the vision of the governor of Edo Statebyorganisingthisveryimportant training programme.” He urged the participants, “to work towards ensuring that the government’s policies are fully implemented. The topics to be delivered during the workshop have been carefully selected to address

the current needs of the service. In all we do, effective management of time as well as men, money and materials,iskeyforprofitable,effective and efficient service delivery.” “As we progress in our careers in the state public service, there is need to improve on our morale, integrity and consciousness to properly fit into the vision of the government. We need to develop a positive attitude at all times in order to promote the image of the service,” Ehiozuwa noted. HeexplainedthattheObasekiled administration is working assiduously to reposition the public service, noting, “This is evident in the provision of conducive and well-equipped work environment, prompt payment of salaries and pensions, implementation of reforms in line with industry best practices, and willingness to implement the new minimum wage of N30,000.” Chairman of EDSOPADEC, Kennedy Osifo, said the board is focusedonrepositioningthecommission to meet its responsibility to the people, adding, “We can’t do much without training our workforce.Assuch,wewillembark on several of these trainings. This training is the first in over 12 years of establishing the commission. We are determined to equip our staff with requisite skills so we can contribute our quota to the development of Edo State.”

Edo, BoI, others brainstorm on access to finance for MSMEs

he Edo State government andotherstakeholdersinthe investment sector, including officials of the Bank of Industry (BoI), are finetuning modalities to easeaccesstofinanceforSmalland Medium Enterprises (SMEs) in the state to boost productivity. During a presentation on ‘SectorOpportunitiesandEaseofDoing BusinessinEdoState,’seniorspecial assistant to the Edo State Governor on Investment Promotion, Kelvin Uwaibi,saidthestatehadimmense opportunities for investment in the oil palm industry and automobile sales, as records show that the state

recorded the second largest automobile sales in Nigeria. According to Uwaibi, Edo ranks eighth in terms of ease of doing business in Nigeria and is largely becominganinvestors’hubwiththe increasing reforms in the industrial sector. He said reforms in land management through the Edo GeographicInformationSystemAgency (Edo-GIS) had improved access to land and the state intended to partner development finance institutionstocreatemoreopportunities for SMEs. www.businessday.ng

June 12: Eminent Nigerians demand announcement of June 12, 1993 result … as Gani Adams, Odumakin, Ndubusi Kanu, others eulogise Abiola Iniobong Iwok

m i n e n t Ni g e r i a n s, Wednesday, urged the Federal Government to immediately announce the result of the June 12, 1993 presidential election result and officially declare Moshood Abiola the winner of the election. The 1993 Presidential election, which was presumed to had been won by the late Abiola, who was a candidate of the Social Democratic Party (SDP), is perceived to be fairest election conducted in the history of Nigeria. The then military ruler, Ibrahim Babangida, annulled the election result after most of the result counted showed that Abiola was clearly leading and would win the election. However, in a programme held by the Oodua People’s Congress (OPC) at Ogba, Lagos, to commemorate June 12, with the theme: ‘The mantra of

June 12 Democratic consolidation in Nigeria,’ the Federal Government was commended for the honour bestowed on Abiola, but urged to move a step further by declaring him winner of the election and a former president of the country. Host of the event, Gani Adams, who is the Aare Anakakanfo of Yoruba, said the recent honour bestowed on Abiola by the Federal Government was deserving, but, however added that the Yoruba nation would be more fulfilled if the government pronounced Abiola winner of the election and give him all his dues as a former president. Adams further lamented that the current state of affairs in the country negate the belief of June 12, which Abiola stood for, stressing that only restructuring of the country could salvage it. “Our demand now is the declaration of June 12 election result and immediate declaration of

Abiola as a former president of Nigeria. “What is happening across the country is against the spirit of June 12 whose mantra was ‘hope for all’. “Today, killings and hunger are everywhere; only restructuring of the country can help us. It is a shame that in this age, states still go to Abuja to get federal allocation before they can survive,” Adams said. Activist Joe Okei-Odumakin, noted that declaring the result of the election and declaring Abiola a former president was the best way to immortalise him, charging the Federal Government to provide good and accountable leadership which was a virtue associated with June 12. According to her, “We appreciate what the government has done so far, but the befitting way to immortalise him is to declare that election result and declare him a former president of Nigeria.

L-R: Paul Adebo, head, SME liability, First City Monument Bank (FCMB); Lola Egboh, head, digital marketing and communications of the bank; Christopher Effiong, managing director, Krifon Foods Limited; Peace Peters, chief executive, Plural Links Limited, and Tochukwu Ezeukwu, lead consultant, Lepton Consulting, during the Business Empowerment and Sustainability Training (BEST) programme organised by the bank for Small and Medium Scale Enterprises (SMEs) in Uyo, Akwa Ibom State

African governments urged to work toward elimination of non-tariff barriers HOPE MOSES-ASHIKE

frican leaders on We dnes day underscored the urgent need to fast track the continent’s regional integration process in order to accelerate Africa’s economic transformation. The call was made at the opening ceremony of the African Development Bank’s (AfDB) 2019 Annual Meetings, in Malabo, Equatorial Guinea, with the theme: “Regional Integration for Africa’s Economic Prosperity.” “Apart and divided, Africa is weakened. Together and united, Africa will be unstoppable,” the bank’s president, Akinwumi Adesina, told delegates at the Sipopo Conference Centre. In a statement made available to BusinessDay, Adesina urged African governments to work toward the elimination of non-tariff

barriers. “Pulling down non-tariff barriers alone will spur trade by at least 53 percent, and potentially double trade,” he said. The opening ceremony was presided over by the host nation’s President Teodoro Obiang Nguema Mbasogo. Also in attendance were King Letsie III of Lesotho; President Félix Antoine Tshisekedi of the Democratic Republic of Congo, and Ambrose Mandvulo Dlamini, Prime Minister of eSwatini. High-level government officials from Rwanda, Cameroon, the Central African Republic, and Côte d’Ivoire were also present. In his opening speech, President Obiang Nguema Mbasogo recalled that Equatorial Guinea, once one of the poorest countries in the world, had since been radically transformed with one of the highest per capita incomes on the continent.

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“For me, development is not about per capita income, it is about expanding the opportunities for the people to live a more dignified life,” Obiang Nguema Mbasogo said. “Equatorial Guinea is open for business. We are committed to regional integration for shared prosperity. We count on the African Development Bank to help us achieve economic diversification and the consolidation of social equality.” Regional integration is one of the Bank’s strategic High 5 agenda to rapidly advance Africa’s economic transformation. In the past several years, the AfDB has invested over $13 billion in the central African region. “And for every dollar invested, the region has leveraged $36, an incredible rate of return of 36 times,” Adesina noted. The bank’s investments in@Businessdayng

clude the construction of the Central African fibre optic network that connects the population with faster and less expensive access to the Internet, and is boosting businesses and regional integration. In his remarks, Equatorial Guinea’s finance minister Cesar Mba Abogo, said: “Progress is the realisation of utopia. This is a country of utopia in Africa, with independence and the ability to control our own destiny. It seemed impossible at first in the last century but it was done. Now our utopia is regional integration.” More than 2,000 participants are attending the annual meetings, a unique opportunity to share the Bank’s perspectives on the state of Africa’s economy. The meetings also provide updates on the Bank’s work and serves as a platform for the exchange of views on emerging issues shaping the future of the continent.

Thursday 13 June 2019

BUSINESS DAY

Research&INSIGHT

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

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Fiscal composition and status of sub-national governments AMAMCHUKWU OKAFOR

very fiscal year comes with both new challenges and backlogs from previous fiscal year. Often, it is the ability to meet fiscal responsibilities in capital and recurrent terms as well as coordinating a proper debt management scheme that moderates debt obligations on future generation. That is, high debt today implies higher taxes tomorrow. This year, it is the legislation on the minimum wage and an over-hang in subnational and national debts. The minimum wage is a law which sets the smallest wage an employer can pay the least paid worker. The minimum wage is subject to periodic reviews so as to reflect the current realities in an economy. While it is meant to close the gap in income inequality, it is a major call for concern along a 3-dimensional issues space – government, policy and the people – for states in Nigeria. A policy on minimum wage increases the fiscal burden on government and firms, while it expands the income to household – with possibility of labour cuts and wage-induced inflation however. A number of states have revealed there incapacity to meet the full obligations that follow the legislation on the new minimum wage of N30,000. They cite growing debt profile and non-increasing revenues as the major reasons. In 2018, the average state debt which stood at N138.25 billion and the average debt per capita of N24, 100 provides some insight on the fiscal stance across the 36 states of the federation. Ogun, Kano and Bauchi are the average states in terms of debt, while Plateau, Abia, Adamawa, and Ebonyi are the average in term of debt incidence (per capita). Further into specific states, 9 states have debt per capita above the new minimum wage of N30,000 – with Lagos as the highest with N 70,048.25 debt per capita, followed by Bayelsa,

N59,319.36 and Cross River, N53,548.80. Others include Ekiti, Nassarawa, Edo, Akwa-Ibom, Rivers and Osun. Some other states display a moderate debt per capita lower than the previous minimum wage of N18,000. These six states include Niger, Kano, Jigawa, Sokoto, Taraba and Kebbi as the states with the least debt burden per head. On the other hand, average state’s IGR as of 2018 stood at N30.7 billion – well below the average states debts of N138.25 billion. The fig-

ure in debt-to-IGR chart shows the distribution of debt-to-IGR across states – notice how it is different from the debt distribution chart. For instance, Lagos which has the highest absolute debt has about the least debt-to-IGR.This implies an average state’s debt-to-IGR of 451 percent. We use IGR here in place of revenue so as to capture the pure ability of the states to meet their obligations independent of the monthly allocation from the federal government. The debt-to-IGR chart shows multiple peaks (compares to the single peak in the other chart). Ekiti, Osun, Adamawa, and Kebbi are the peaks with the most significant debt challenge per IGR – above 15 points.

12734BDN

Annual States Viability Index 20172018 Economic Confidential – a media and information firm – releases the Annual States Viability Index to determine the ability of states to meet their fiscal obligations looking at the ratio of IGR to statutory federal account allocation committee (FAAC). It ranks the states according to the ratio of their Internally Generated Revenue (IGR) to the total Federal Account Allocation Committee (FAAC) in a given year. The index however emphasizes the IGR mechanism of the states

rather than as a measure of the obligations of the states and the level of fiscal discipline. Through the years 2017-2018, Lagos, with score-points of 165 percent and 147 percent in 2017 and 2018 respectively, always ranked the highest due to its exposure to high commercial and services activities which translate to huge tax remittances in terms of Pay as You Earn (PAYE). Typically followed by Ogun State, (107 percent, 90.7 percent), and Rivers States (50 percent, 47.5 percent) in 2017 and 2018 respectively. In both years, seventeen states have scorepoints below 10 percent. The states with the least performance in 2018 include Kebbi, Yobe, Katsina, Borno, Adamawa, Taraba, Bayelsa, Ebonyi, Jigawa, Ekiti, Bauchi, Akwa-Ibom, Niger, Zamfara, Gombe, Nassarawa and Benue. The implication is that the reliance on Federal Account Allocation Committee (FAAC) is heaviest in the Northern part of the country. This is especially emphasized as the same states made the list in 2017 albeit in different order. Bauchi and Imo states were two states that displayed impressive improvements in their IGR, leaping several steps higher as a result. In the review period, Imo State’s IGR increased by 117.26 percent. This pushed the state several points upwards on the states’ viability index from a score-point of 8.01 percent and a rank of 29 to a score-points of 13.08 percent and a rank of 17. Even though Bauchi increased its IGR in the review period by 121.79 percent, it did not enter the double digit score-points. It however went from the last position in 2017 with a score-point of 5.13 percent to the 26th position with a score-points of 8.54 percent. This is similar to that of Osun State which rose from the 26th position with a score-point of 8.45 percent in 2017 to the 19th position in 2018 with score-points 10.21 percent. Taraba and Enugu are states where there was only a marginal increase in their IGR in the one-year period. While for Enugu, the drop along the viability ranking was one step down from the 6th to the 7th position implying a decline in score-points from 32 percent to 23.87 percent, the impact was more drastic for Taraba State. Taraba State’s IGR increased by 3.55 percent but in rank from 24 to 31, and in score-points from 8.7 percent to 6.77 percent in the review period 2017-2018. Implication The analyses in the preceding paragraphs show tough fiscal year ahead for most of the subnational governments. It is of importance that these governments adopt some inter-temporal decision framework in the design of their fiscal strategies in order to achieve sustainable fiscal balance both for current and future generations. There is no gainsaying that like Lagos, most states would need to double their IGR in order to moderate their debt burden.

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

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How banks performed in first quarter of 2019 ISAAC ESOWE

or investors and business managers alike, a few critical financial metrics help assess a company’s financial health. This gives investors head up on how liquid a company is and one of the common ways of using these metrics is to compare them, ratio by ratio, with the financial ratios of other companies in the same industry and with key performance indicators. It is important to note that banks are largely exposed to various types of risks and these risks are attributable to liquidity management, which affects the performance and operations of banks. It will not be an overstatement that banks’ primary goal is to maximise shareholders’ wealth. Thus, in doing so, there is need to assess the cash flows and the assumed risks in order to direct financial resources in different areas of utilization. In addition, this helps to ensure that it does not suffer from a lack of or excess liquidity to meet its short-term obligations. Also, capacity of banks to perform their intermediation and credit creation roles in a manner that guarantees optimal profitability and minimum risk is greatly contingent on having adequate liquidity. However, this article aims at investigating the interrelationship between liquidity and corporate performance of the following banks – Zenith Bank, Guaranty Trust Bank (GTB), FBN Holdings

Source: FBHN, BRIU

and the United Bank for Africa (UBA) with by analysing their unaudited financial statements for the period ended March 31, 2019. To analyze the financial health of the aforementioned banks, we employed the following indicators –gross earnings, operating income, profit before tax (PBT)

and profit after tax (PAT) among others. These will be useful for a basic understanding of a company’s financial position. Zenith Bank Plc unaudited first quarter results for the period ended March 31, 2019 shows that the bank’s gross earnings declined by 6.5 per cent to N158.11 billion

Sources: UBA Plc, BRIU

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from N169.19 billion recorded in quarter 1 of 2018. Interest income grew by 4.9 per cent to N122.48 billion from N116, 712 billion; PBT grew by 6.1 per cent to N57.29 billion from N54.00 billion while PAT grew by 6.7 per cent to N50.23bn from N47.08 billion. Furthermore, the total comprehensive income for the period declined by 16 per cent from N43.63 billion in March 2018 to N43.63 billion in March 2019 (QoQ). However, the bank’s balance sheet recorded an improved balance in its total assets which increased by 4 per cent from N5.68 trillion to N5.90 trillion as at March ended 2019 and the total shareholders’ equity was up by 6 per cent from N735.4 billion to N780.8 billion. GTB witnessed an improved performance across all its financial metrics in Q1’2019. The bank declared growth in its gross earnings which was up by 1.2 per cent to N110.3 billion in Q1’2019 from N109.0 billion in March 2018. PBT was not left out as it also increased by 8 per cent to N57.0 billion from N52.6 billion in March 2018. Profit for the period grew by 10 per cent from N44.7 billion to N49.3 billion. This growth can be attributed to the growth of customers’ deposits which grew by 6.0 per cent from N2.274 trillion to N2.410 trillion. Similarly, the bank’s loan book was up by 1.6 per cent from N1.262 trillion as at December 2018 to N1.282 trillion in March 2019. The bank’s balance sheet maintained a @Businessdayng

solid position closing the first quarter of 2019 with total assets amounting to N3.556 trillion with a growth rate of 8 per cent from N3.287 trillion in December 2018. Total equity was up by 9 per cent from N575.6 billion in December 2018 to N627.2 billion in March 2019. First Bank Holding Nigeria FBN Holdings of Nigeria recorded an increase of 5 per cent in gross earnings from N138.9 billion to N145.8 billion. Profit before tax(PBT) of N19.3 billion was as a result of 2.6 per cent year-on-year increase while profit after tax(PAT) was up 6.9 percent year to date to N15.8 billion; profit after tax rose by 7 per cent from N14.8 billion to N15.8 billion in Q1’19. The bank also recorded a robust profitability improvement; annualized earning per share, increased by 8.9 per cent to N1.69 billion. Furthermore, non-interest revenue increased by 21.8 per cent Y-o-Y to N30.2 billion. UBA Plc’s gross earnings for the period ended March 2019 increased by 10.3 per cent to N131.7 billion from N119.4 billion in corresponding period. Profit before tax increased by 13.6 per cent from N26.5 billion in December 2018 to N30.1 billion while profit for the period was up by 20.8 per cent from N23.7 billion in Q1’2018 to N28.7 billion in March ended 2019. The bank’s total assets increased in the period under review by 5 per cent from N4.9 trillion to N5.1 trillion by March 2019.

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Thursday 13 June 2019

BUSINESS DAY

GARDEN CITY BUSINESS DIGEST PHCCIMA:

Nabil Saleh outlines new strategies to create massive jobs in Rivers ...Youth must however enlist in RivJob portal to be picked IGNATIUS CHUKWU

abil Saleh, who late last year emerged president of the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA), has outlined new strategies for massive creation in Rivers State. The chief, a naturalized Nigerian, told BusinessDay in an exclusive interview in Port Harcourt that every city chamber tries to align itself with the aspirations of its host city as well as joins to fight the threats of the city. For now, he said, unemployment is the greatest threat in Rivers State and finding jobs for the teaming youth population is a big task for everyone; adding that this was the cardinal objective of his candidature while coming into office. On what specific steps PHCCIMA can take to fight unemployment and create jobs in the state, the CEO of M-Saleh group said: “You know that I as PHCCIMA president am chairman of the Rivers Roundtable for Job Creation which is a project coordinated by the Ministry of Employment. The Organised Private Sector (OPS) in the state are partnering with the Ministry of Employment to mount workshops and roundtable for the business community in Rivers State to see how we can create employment for the youths. “For us to achieve this, it must be a team work with relevant sectors including the OPS, the Government (public sector), the high chiefs and monarchs, and including the local government

PORT HARCOURT BY BOAT

IGNATIUS CHUKWU

ew gospel singers and artistes would be unveiled in Port Harcourt on Sunday, June 23, 2019, to take Nigeria and the world by storm. JC Records, the recoding label that says it is out for gospel talent hunt, said its aim is to discover more of the likes of Mercy Chinwo right from source, according to the PH Coordinator, Emmanuel Steve. Each star has a unique story and passion behind the song to be unveiled on the day, but Miracle Victor Fred (Miracle V) seems to aim at the top spotlight. She is known as a well talented and spirit-filled gospel worshiper, a singer and a song writer. Miracle V hails from Ukanafun local council area of Akwa Ibom State and started singing at age 12, in FULGA Uyo. At the age of 17 in Communion Church, Abuloma, in Port Harcourt, he performed as a guest artiste. She became a committed church choir member and a praise singer.

Nabil Saleh

chairmen. All hands have to be on deck. The government knows that business operators cannot come and invest if you do not create the right environment. They are aware that creating good business environment translates to creating jobs. In this era, entrepreneurship is the best option to achieve this because that is the surest way to create jobs in reasonable volume and we have to train the youths and make them entrepreneurs. When you do this, you have created more jobs.”

He said this must be done by different sectors coming together to tackle this job creation drive. If this is consistently done, there would be massive jobs in Rivers State in the next five years. On the need for database to guide in this effort, Saleh pointed at the establishment of the RivJob portal by the Rivers State Government which he termed a meeting point of the public and private sectors for recruitment. “Our members know that if any of them needs a worker, you contact

RivJob to send you their details or curriculum vitae (CV). So, job seekers are encouraged to send in their CVs to the Ministry. If our youths do not send in their CVs, how would the government and OPS know about them?” He lamented thus; “Most of our graduates need go and put their CVs in RivJob. You cannot stay in your house and keep your certificate while you are asking the Ministry to help you find a job. First step is to file in your CV, and wait for contacts. This is where employers go to pick workers. Our members are taking people from there. People there are getting jobs. There are different sectors in the PHCCIMA and they are picking people from there.” Saleh said street traders and other groups complaining of harassment must articulate their complaints and present them formally through their unions for attention, though they may not be members of PHCCIMA. “Traders must have a union to present their matter by collaborating with PHCCIMA. If they cannot reach the police or the government, they can come to PHCCIMA as a union and we are ready to assist them or give them advice. This is applicable to any business group, not just traders.” On transformation now going on in PHCCIMA and how groups would follow up for benefits, the M-Saleh CEO said a platform for members has been created for interaction real time. “There are associate members such as fast food association, shippers, stock brokers, etc. Next, we have created a one-stop-shop which is not for PHCCIMA members alone but for all private businesses.”

He further explained the impact thus: “For instance, we have brought some critical agencies of government hitherto not in Rivers State now to Port Harcourt by creating office space and equipment for them at the PHCCIMA secretariat. In the entire south-south, NEXIM Bank was only found in Calabar (Cross River State). Imagine how someone in Rivers State or the other states would have to drive to Calabar to meet them. “Now, NEXIM Bank is coming once a month to Port Harcourt to operate at the one-stop-shop facility in PHCCIMA. Anyone who needs their services can come to the Garrison area on Aba Road in Port Harcourt. The Nigerian Investment Promotion Council (NIPCo) is only in Enugu. If you wanted to transact an important business with them, you faced hazards. You could get to Enugu and hear that one document needed for the transaction is not complete, so you drive back, burning fuel, time, hotel bill, etc. Now, now they come once a month to the PHCCIMA. “The Rivers State Ministry of Commerce now has a desk in PHCCIMA to attend to those who find it difficult to go to the State Secretariat to deal with transactions and inquiries.” The president observed that several walls or barriers have been erected over the years against business operators but that there is need to begin to dismantle them. “We need to break those walls for the private sector to move faster. Some of these agencies run huge cost setting up offices but with the office provided by PHCCIMA, those problems would reduce cost especially power supply.

JC Records stars set to dazzle Port Harcourt as ‘Miracle V’ eyes top spotlight She said: “I want to express my sincere gratitude to the Lord God Almighty who made this to come to pass in my life, because it can only be Him. I will say waiting on God’s time is very important especially when God by Himself tells you to wait. I never dreamt of becoming a gospel artiste in future, but rather a lawyer. It was after my 15 birthday that I started seeing myself singing before the crowd in a dream and lives were blessed. “There I discovered my true identity and purpose on earth. God told me to wait on my own time that at my own time He will advertise me and announce me to the world. So it is God’s perfect plans that JC Records came into existence because of me, to be as channel (platform) through which my destiny will be unveiled. I knew that Rivers State is a land where my talent will be planted, germinate and spring forth fruits. Any time I minister God’s song, there is always exceeding grace of God upon my life. Music is my life.” There are about 40 singers jostling to gain attention at the unveiling on June 23. Miracle V said his song has a big chance. “My song with JC Records is titled: Baba You Too Much. The song says, ‘You are the love of my life, You are the King of my life, You are the rescuer of my soul.” She said so many people in the world www.businessday.ng

today are very ungrateful to their Maker who is God. “So I want to use this song to let them see reasons to say Thank You Jesus at all time whether good or bad, because He owns their lives. I have so many blessin filled and inspiring songs such as, Your Name is Mighty, I worship you Jesus, Olorumi, Heaven is my goal, Make Your Way Straight. “My expectation is to be popular in the world within three months interval through my song and I am aspiring to sing more than my role model Sinach, by God’s grace. “I say, please, try care to know the mind of God for your life and destiny because if His thought for your life is to

‘‘

God told me to wait on my own time that at my own time He will advertise me and announce me to the world. So it is God’s perfect plans that

Miracle V

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become a multi- millionaire by you selling garri, don’t waste all the time looking for office work in order to become who God really want you to be, that is discovering yourself on time like Joseph.. God is still in the business of men. Please watch out for the release of my brand new single. Baba You Too Much by Miracle V, on 23rd of June 2019 at the “ HUB” in Port Harcourt. A writer recently said: “Port Harcourt has been seized by the forces of violence for some years now. Then, JC Records stepped into the city and mobilized a 500-man choir and 50 gospel singers pumping positive vibes into the Garden City in preparation to a world-class music concert. Just then, even before the trumpet would sound, the political warlords and antagonists that had defied all entreaties suddenly on their own decided to make peace and end the wars. “Now, there is high expectation of peace and stability in Rivers State, probably because Jesus Christ Records stepped into the Garden City. Now, people say politics has caused its harms, but gospel music has come with its balm to heal the land.” The likes of VOW (Voice of Wisdom) and Miracle V would join many others to thrill Port Harcourt and the gospel world and return joy to the city.

Thursday 13 June 2019

BUSINESS DAY

Investing in Rivers State NLNG Train-7’s $1Bn community content:

BOCCIMA to perfect int’l business partnerships & transactions for Bonny businesses • As Bonny elite search for formula to maximize coming opportunities Ignatius Chukwu

eality of Train 7 of the Nigeria Liquefied Natural Gas (NLNG) to be built in Bonny seems to have dawned on the elite and business community as news filters in about the signing of a whopping $1Bn (about N366Bn) local content opportunities dedicated to the host community. As the wave of excitement sweeps through the island population, the monarch, chiefs, elders and leaders of thought are said to have called for caution but for action. The young and dynamic Amanyanabo of Grand Bonny, Edward Asimini William Dappa Peple 111, who is Perekule X1, was said to have assessed the upcoming scenario and set up a body of strategists called the Bonny Kingdom Local Content Compliance Committee (BKLCCC) to ensure that the $1Bn does not disappear back to sender through manipulation by outsiders or lack of preparedness by the local community. He was also said to have decided that only a business body could drive the plans for economic developments of the island and manage the opportunities on the way. He thus saw to the revival of the long moribund Bonny Chamber of Commerce, Industry, Mines and Agriculture (BOCCIMA) which has just completed its digitalization and IT-compliance process engineered by Mobil Producing Nigeria Unlimited. The BKLCCC organized an enlightenment and sensitization workshop at Igbanise Hall on Saturday to train at least five leaders of each group and House in Bonny on expec-

Moving for maximisation of Train 7 opportunities in Bonny

tations of the Kingdom from NLNG Train 7 to avoid the mistakes of the past. This is especially to prepare the local business on how best to be ready to supply inputs to the project through technology transfer. The newly engaged DirectorGeneral (DG) of the BOCCIMA, Constance Nwokejiobi, was one of the resource persons lined up for this enlightenment and she spoke on how the Chamber of Commerce would do exactly that. She was introduced and presented by the interim president, Lawrence F. Jumbo, who said: “There is no lift to the top in life. The only thing that can do it is hard work. So, the Train 7 as a project will not carry you to the top, but it is the hard work you put in it that will do it. If you do not bring competence into your work, you will not go up. So, the BOCCIMA is here to help you achieve that competence to take you to the top. We have got that expert

who will take you to the top. Those of you who attended the BOCCIMA training would by now be getting text messages to that effect. He name is Constance and she is constant in her approach indeed”. Thrilling the business audience, the new DG said: “The Bonny Chamber of Commerce has come to stay. Train-7 construction has gestation period of five to six years but BOCCIMA has come to stay as the hub of economic activities on the island. It is to be the driver of your businesses in Bonny Kingdom. She went on: “In the capacity development area, we are offering you training that will not only be for Train-7 but one that will take you beyond that to anywhere in the world. In activating the BOCCIMA, we are competing with international global standards. Our baseline is Singapore, London, and the US, and we are looking at technology from the point of

view of places like Switzerland and China. “So, whatever capacity development we are giving and whatever technology we are giving, you must know that after Train 7, there is life. These investors that are coming in or you would want to partner with also want partnership with the local communities, they would want to first know if the local company has what it takes; endorsement, certification, etc. It is the Bonny Chambers of Commerce that would give that international endorsement.” As the eye-opening messages sank with excitement on the faces of the business elite, the DG added; “Another one is, those coming are all business people. The BOCCIMA is the economic hub and we are not going to talk to them as individuals but as companies. No segregation. They are members like us. So we

talk on equal terms. There would be international activities and our members would be able to go on trade missions. We would not be waiting for the Chinese to come here but we tailor our trade missions to meet our needs and the kind of technology we need. We go and acquire it and come back. “If what we need is in Germany, we go to the embassy and ask and connect our members. However, we are not going to give these benefits to non-members. As mother will first consider her child before anybody else, so will BOCCIMA first assist her members to access these benefits. It will be business to business connections.’ She said BOCCIMA would also offer mediation and reconciliation platforms for members and this would make the incoming businesses comfortable. She said being a member of BOCCIMA gives these things. “Research is crucial to a business organisationa dn the BOCCIMA is already doing this so that members would simply have to pick up the results and do what they needed. So, you just pick it up and use. Its plug and play. If you seek partnership, we make them to come here. The global brands can be bought and brought to Bonny. It’s not about begging them but engaging them. “So, we will give you the economic side of Train 7 and help Bonny to look back 10 years after Train 7 and be proud. Whatever opening we are giving you will take you to the next level of business and make life after Train 7 to be for you. The Bonny Chamber of Commerce is your own asset and is named after Bonny and it is in your place. We will try and maintain global standards. Our forms are out. You will get more information and we wish to see all of you at the Chamber office.”

We will use dialogue this time to get what we want – BKLCCC chairman

he chairman of Bonny Kingdom Local Content Committee, a lawyer and the Omuposenibo, Oruada Willie-Pepple, said at the sensitization seminar in Bonny on Saturday that the people would this time adopt strategic dialogue mechanism to get whatever they wanted from the upcoming Train-7 of the Nigeria Liquefied Natural Gas company. Opening the seminar, he said: The king in 2018 constituted this committee to ensure that what happened in the NLNG Base project and Trains 1- 6 does not happen again. This time, the Kingdom will have to maximize opportunities in the upcoming Train-7.

We have met the two companies bidding for Train-7 and they have submitted the technical bid and soon to submit the commercial bid. What is important is what they have in each bid for Bonny, but since none has won the bid yet, it is not possible for them to expose the content. We however know that it is only menial jobs that multinational companies usually give our people but if we can create capacity, we can get bigger jobs and thus survive for the next five years that the Train 7 construction would last. 22 years ago, we had to occupy the NLNG Roundabout in protest but this time, its by dialogue and strategy. You can partner with those with www.businessday.ng

competence to qualify for jobs so that they don’t give you pittance. Insist on skills from the jobs you will do in Train 7. Now, most of those who worked in Bonny are now working for Dangote in Lagos. That is what happens when you gain skill on a project. Take this development very seriously and do not come back in future to complain. Note also that Train7 is not for Bonny alone but for all Nigerians but we are the primary stakeholders. We stand to face any threats and outcomes. Bonny has stood out for long because here is favourred by God. But if you do not maximize what God has given you due to greed, others will occupy it. So, lets be one

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and work as a team. We alone will build Bonny - Vice chairman; Bonny Chiefs Council, Hanniel Jack-Wilcon Pepple: Let me bare my mind: This is our kingdom and we have no other, but how many of us are conscious of these blessings. God put us in this strategic place. We should not live in poverty in the midst of plenty. If we are poor, we made it so. If you fail to take advantage or to believe in yourself, you have failed. The king is only showing the way with what is coming. We must be good followers because we are all stakeholders. We must come together, build together but not by fighting. We were not prepared 22 year @Businessdayng

ago when the NLNG came. Now, we must prepare. Bonny can be like Dubai, but there must be action, not just words. We must benefit from this. We lose when we compete against each other. If we divide, we play into the hands of our enemies. We alone will build Bonny, and make it what it will be in the next 10 to 30 years. We have to take over and take what God has given to us. Note: The master of ceremony said: When the NLNG was being built, many workers converted our schools to camps to live in. Now, there is need for support services for Train 7; where will people coming to work here live, where will they eat? Think about this as business people.

Thursday 13 June 2019

BUSINESS DAY

NEWS

Gravitas Investments in Ajiran community Etsako West, Akoko-Edo councils canvasses safe, liveable environment present 2019 budget proposals CHUKA UROKO

s part of its community development initiatives and commemoration of this year’s World Environment Day (WED), Gravitas Investments, on Monday, went on environmental sensitisation at Ajiran community in Eti-Osa area of Lagos State with a view to educating them on creating an environment that is safe and liveable. Gravitas Investments is a real estate investment and development company, in collaboration with Lagos State government, is developing Gracefield Island. The island is an ambitious mixed-use city development sitting on about 100 hectares of land reclaimed from the Lagos Lagoon. The company, which is a strong stickler to safe, liveable and sustainable environment, is highly concerned about the welfare and development of the community in which it operates. It had, in the past, done some enlightenment in the area of education for some communities, believing that education plays a big role in the environmental health of a people. “As part of our community development initiatives, we have done other things in our communities, but this year, because of rising concerns about the environment, we decided to do this sensitisation which we planned as part of the World Environment Day,” Jumoke Owoyeye, the company’s business development officer, explained to BusinessDay in an interview on the sideline of the Tuesday event.

Ozoemezina Nwafor, urban planner at Gravitas, explained to the Ajiran community the need to have a decent environment free from waste and the resultant air pollution, which he said was hazardous. Nwafor noted that the biggest changes and effects human beings could experience from air pollution were not only real damage to the environment, but also bad changes in the quality of life and severe issues to their health. To reduce these, he advised the people not to burn household waste, explaining that, “by burning plastic, you release horrible toxic chemicals into the environment some of which will be sucked up by our own nose. Recycle your trash instead.” The company went to the sensitisation with LasGidisRecyclers - a neighbourhood wasterecycling firm that specialises in PEP plastic and sachet water collection and recycles it into other useful products. “We are building a new waste collection model; we have identified some streets in Lekki, VI and Ikoyi from where we collect PEP plastic bottles. We recycle these collected wastes in Awoyaya in Ibeju Lekki. We hope to crush them and recycle them into T-shirts, fibres and ropes,” Idu Okwuosa, LasgidisRecyclers’ managing partner, told BusinessDay in an interview. Nwafor told the community that proper waste disposal was critical because, according to him, certain types of wastes could be hazardous and could contaminate the environment if not handled properly.

IDRIS UMAR MOMOH, Benin

xecutive chairman of Etsako West Local Government Area, Yakubu Musa, has presented the 2019 fiscal year budget estimates of N3.133,752,905,32 billion to the legislative arm for consideration and approval. Musa said the 2019 budget tagged, “Budget of Rejuvenation” was N200 million lower than that of 2018 of N3.313,401,152,75 billion. He said the sum of N2.3 billion was proposed for recurrent expenditure while the capital expenditure was N741 million, saying the budget was aimed at meeting the electioneering promises to the people as well as complementing the developmental efforts of the state government. The council boss said the Economic sector had the highest allocation of N368 million, followed by Social sector with N289 million, Administrative sector N69 million, Law and Justice received N14 million. He disclosed that the local

government Internally Generated Revenue (IGR) was N252 million in 2018, pointing out that stringent steps were being taken to increase it to impact on the masses. “In this year, being the second lap of my administration, there is the need to ensure that we rejuvenate social-economic and infrastructural development activities in the local government. “I wish to appeal that the proposal be given accelerated hearing to enable the executives implement its policies and programmes in the overall interest of the people of the local government,” he said. In his remark, the leader of the council’s legislature, Kelvin Mohammed, assured the chairman of speedy passage of the budget, saying, “We the councillors shall prove ourselves to be worthy partners in the task of providing good governance to the people of Etsako West. “We promise to cooperate effectively with the executive arm and request that they do not constrain the relationship.”

Super Falcons beat Korea to keep World Cup hope alive Anthony Nlebem

frican champions, Nigeria’s Super Falcons, bounced back to winning ways following a convincing 2 - 0 victory over Korea Republic in their second game at the ongoing FIFA Women’s World Cup in France. An own goal from Korea Republic defender in the first half and a superb goal from Asisat Oshoala sealed the win for Nigeria. Having lost 0 - 3 to Norway in their first match and realising they could be heading back home after the group phase, the Super Falcons opted for a spritely approach against the Koreans. But captain Desire Oparanozie wasted a great opportunity in the eighth minute when presented with a simple header from a pullout from Ngozi Ebere. She nodded straight at the Korean goalkeeper. Perhaps the most inspired decision for the game by Nigeria’s coach Thomas Dennerby was starting former junior inter-

national Chiamaka Nnadozie in goal and sending Tochukwu Oluehi, so jittery against Norway, to the bench. The 18 year-old goaltender simply continued from where she left off at the 2018 FIFA U20 Women’s World Cup also hosted by France, where she drew some rave reviews. The win puts Super Falcons on three points and a hope of making it through to the last 16. Rita Chikwelu, Ngozi Okobi and Chinaza Uchendu worked hard in the middle. But it was the intelligent right back Okeke, another performer from the 2018 FIFA Women’s World Cup, who got her touches right to send Asisat Oshoala to nick the second goal for Nigeria with 15 minutes left. It was all the more disheartening for the Korea Republic as they dominated possession only to fall victim to two quick counter-attacks. No doubt, Super Falcons got a well deserved win as they open their France 2019 account. Falcons kept their concentration in defence, worked hard in the midfield and finished off their chances in attack.

IE Africa Center champions African solutions to global challenges MICHAEL ANI

he need to promote a good image of Africa in the global communitytookthecentrestage as IE Africa Center on Tuesday held the Lagos edition of its event series African Solutions, Global Challenges. The IE Africa Center, an academic and research centre of IE University, Spain, aims to revolutionisethewaythenextgeneration of global executives understand African innovation – past and present – so as to present the continent in a better light to attract more foreign investments. The forum featured a rich intellectual discussion with high level speakers from various sectors such as technology, law, agriculture, civil society and Fintech proposing ideas that they have developed to address global challenges. “Africa is becoming the cradle of talent in the future of global society in terms of population, integration and entrepreneurial pool but not much is known of the continent in terms of its history, societies and humanities,” said Santiago Iñiguez, president at IE University. IEUniversityisaleadingglobal higher education institution and has been promoting executive education and leading social impact programmes in Africa for the past 10 years.

“At IE University, we are committed to equipping our students and community with an education that will empower them to change the world. In order to do that, they have to learn lessons in innovation from Africa,” said Iñiguez. OtherspeakersincludedNadu Denloye, co-founder, Telnet; Ndidi Nwuneli, managing partner, Sahel Consulting; Ayuli Jemide, lead partner, Detail Commercial Solicitors; Olusegun Adeniyi, head, Africa Fintech Foundry, Access Bank, and Gabriel Okeowo, principal lead, BudgIT Nigeria. Africa, the world’s secondlargest continent, has in recent times been seen as a haven for advanced investment destination, thanks to its growing population currently at 1.3 billion, according to data from the United Nations. But the only way the African population can drive growth and development in the continent is by investing in education, said Iñiguez. “Globally, there is a huge correlation between investment in education and economic growth, stability, security and integrated democracy. Hence, Africa needs to expand good educational programme and institutions because with it they would produce more entrepreneurs,moretalents,more transformers, and more wealth in the country,” he noted. www.businessday.ng

L-R: Juan Antonio Moreda Otero, Consul General, Embassy of Spain in Lagos; Santiago Iñiguez, president, at IE University, and Juan José Otamendi García Jalón, Economic and Commercial Counsellor, Embassy of Spain Nigeria, at the IE University Africa Center event in Lagos.

Crude oil build up sends price lower Olusola Bello with agency report

r ude oil pr ice fell further Wednesday after the Energy Information Administration (IEA) reported another build in inventories at 2.2 million barrels for the week to June 7. The price dropped from $62.29 Tuesday to $61.13 per barrel. Precisely Brent crude, which is equivalent of Nigerian Bonny crude, was sold at $61.06 The authority expects Brent crude to average $67 a barrel, down from $69 a barrel forecast in the May edition of the Short Term Energy Outlook (STEO). According OilPrice.com, this compares with a build

of 6.8 million barrels a week earlier that combined with a 3.2-million-barrel build in gasoline inventories as well to push prices lower. Last week, gasoline inventories added 800,000 barrels, according to the EIA, despite driving season presumably gathering pace. Gasoline production averaged 10.3 million barrels daily last week, compared with 10 million bpd a week earlier. Distillate fuel production averaged 5.2 million bpd in the reporting period with inventories down by 1 million barrels. This compared with a sizeable build of 4.6 million barrels a week earlier. The inventor y repor t comes amid plunging oil

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prices as the market holds its breath for OPEC+’s decision on oil production cuts, namely, whether they will extend the cuts until the end of the year. There is also persistent uncertainty about demand trends as the U.S.-Chinese trade war continues to escalate. The latest update here came from President Trump, who threatened tariffs on another US$300 billion worth of Chinese goods if China’s President Xi Jinping does not make an appearance at a scheduled bilateral meeting during the G20 summit later this month in China. A day earlier, the EIA released its latest Short-Term Energy Outlook, in which @Businessdayng

it revised its average price projections in tune with the latest price developments. Now, the authority expects Brent crude to average $67 a barrel, down from $69 a barrel forecast in the May edition of the STEO. The EIA also had more bearish news for oil prices: it said US oil production will rise by 1.4 million bpd this year, which although a 1-percent reduction from the May projection is still a sizeable rate of increase. At the time of writing, Brent crude was trading at $61.06 a barrel, with West Texas Intermediate at $52.07 a barrel, both down by more than a percentage point from the opening of trade Wednesday.

Thursday 13 June 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Nicolle Liu, Alice Woodhouse, Eli Meixler and Sue-Lin Wong

rotesters fought pitched battles with police in central Hong Kong on Wednesday in an eruption of public anger against an extradition bill that critics see as a fundamental threat to the territory’s civic freedoms and rule of law. Police used pepper spray, rubber bullets and tear gas and by 7pm Hong Kong time had cleared demonstrators from immediately outside the Legislative Council, Hong Kong’s de facto parliament, following violent scenes that left several people injured. But by 9pm, thousands of protesters remained in a stand-off with police in the centre of the city. “The police used some aggressive actions towards protesters today,” said one 24-year-old demonstrator, who identified himself only as Joe. He joined the protests around 8am but took refuge in a McDonald’s restaurant in the early evening. “They shot consecutively towards the protesters, who had no protection — only gloves and goggles. We cannot fight back,” he added, saying he watched eight officers surround a protester “and beat him”. Lawmakers, who had been due to debate the bill, were forced to delay the session because of the protests, which shut down large parts of Hong Kong, Asia’s premier financial centre, since the early morning. The government says the

Hong Kong extradition bill protests erupt into violence Opponents shut down city in bid to block proposed law seen as threat to territory’s freedoms proposed law, which will allow criminal suspects for the first time to be extradited to mainland China, is needed to fill a legal loophole allowing Hong Kong to be potentially used as a haven for criminal fugitives. But opponents fear it will allow China to extradite political opponents or others from the city on potentially trumped up charges. Carrie Lam, Hong Kong ’s chief executive, has vowed to push ahead with the bill, ignoring a protest against the law on Sunday that was Hong Kong’s largest since its handover in 1997 to China from Britain, with an estimated 1m taking to the streets. The government has not yet set a new deadline for resumption of debate on the bill. Ms Lam wept in a Hong Kong television interview on Wednesday. “Some people are saying that I am selling out Hong Kong, how can I sell out Hong Kong? I was born and raised here,” she said. But she insisted that she would not withdraw the bill. “I have never felt guilty because of this matter because I just said that the initial intention of our work is still solid and correct.” The “one country, two systems” framework agreed at Hong Kong’s handover was meant to guarantee the territory’s civic freedoms and legal system — unique in China — for 50 years. But critics argue these have gradually been eroded

over the past five years, starting with a crackdown on the prodemocracy Umbrella Movement protests in 2014. “Don’t underestimate the anger among average people. The young people are . . . the front line but actually there are so many people out there — middle class, working class — who are very, very angry,” said Charles Mok, a former IT executive who represents the sector in Hong Kong’s partially democratic Legislative Council. “They are angry because the

government isn’t listening to them.” Hong Kong’s Hang Seng stock index dropped 1.7 per cent on the protests, in spite of the announcement that the debate in the legislature had been delayed. “It’s not a success,” said a 30-year-old protester in reaction to the news the government had postponed the debate, adding that it could be rescheduled for any time. China’s foreign ministry said Beijing supported the bill. “Any behaviour that undermines

prosperity and stability in the territory will be opposed by mainstream public opinion in Hong Kong,” a foreign ministry spokesman said. But Taiwan’s president Tsai Ing-wen said she was shocked that the government used rubber bullets against a peaceful protest. “When the freedom of the people of Hong Kong is facing a retreat under the trap of ‘one country, two systems’ set by China, we should resolutely guard the democracy and freedom of Taiwan,” said Ms Tsai.

VW and Goldman lead $1bn investment Agritech start-up Indigo to pay farmers for soil carbon capture Boston-based group wants to create market for selling carbon credits to companies in Swedish battery project Emiko Terazono and Leslie Hook

Northvolt plans to build two factories to challenge dominance of Tesla and Asian rivals Richard Milne

European attempt to build a battery maker that can challenge Tesla and Asian rivals has won the backing of Volkswagen, Goldman Sachs, Ikea and BMW, helping the Swedish project to raise $1bn of fresh capital. Northvolt, a Swedish company set up by former Tesla executives, is using the $1bn to build its first factory in northern Sweden and a newly announced second plant in Lower Saxony in co-operation with VW, which is based in the northern German state. The fundraising — on top of a promised €350m loan by the European Investment Bank — puts the Swedish group in pole position to be the first to establish a large European plant to take on Tesla’s gigafactory and those of Asian rivals such as Panasonic. “Today is not only a great milestone for Northvolt, it also marks a key moment for Europe that clearly shows that we are ready to compete in the coming wave of electrification,” said Peter Carlsson, Northvolt’s chief executive and co-founder. European carmakers have faced criticism for being slower

into electric cars than some Asian manufacturers such as Toyota and Nissan as well as Tesla. VW said last year that it would spend €30bn over five years in an attempt to boost its fledgling production of electric cars to 3m a year by 2025. VW and Goldman’s merchant banking arm are leading the $1bn equity fundraising for Northvolt. Others taking part include BMW, the IMAS Foundation from the Ikea furniture empire, and the Swedish pension funds AMF and Folksam. Construction work will begin in August for the battery cell factory in Skelleftea, close to the Arctic Circle in northern Sweden, with annual capacity set to start at 16 gigawatt hours and be increased to at least 32GWh. Tesla’s first gigafactory in Nevada in the US has a theoretical capacity of 35GWh per year but is running at about two-thirds of that, chief executive Elon Musk said in April. VW and Northvolt are setting up a joint venture to build a 16GWh factory to open in late 2023 or early 2024 in Salzgitter, close to the German carmaker’s headquarters. In total, VW is investing €1bn together with Northvolt. www.businessday.ng

ndigo Agriculture, a Bostonbased agritech start-up, will start paying farmers to store carbon in soil, as it seeks to spur a novel market that could help address climate change. The new initiative is part of a growing field of climate-related agricultural practices — which have been supported by companies including General Mills and Cargill — that seek to reduce the amount of carbon dioxide in the air. Indigo, which has raised $650m from investors including Baillie Gifford and the Investment Corporation of Dubai, said the initiative was part of its efforts to encourage sustainable agricultural practices and address climate change. “The potential for agricultural soils to capture and store atmospheric carbon dioxide is the most hopeful solution I know of to address climate change,” said chief executive David Perry. “This is completely within our ability to execute, and we’re not waiting for new technologies. Founded five years ago, Indigo sells crop microbials to replace chemical fertilisers and pesticides, and operates a digital marketplace for grains akin to an “Ebay for farmers”, as well as a grain transport

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service. Indigo said it hoped to sign up more than 3,000 growers, covering more than 1m acres this year. They will be paid $15 for every tonne of carbon dioxide that is stored underground. It plans to sell the carbon credits that can offset a company’s inherent emissions to the food and agriculture sector. Farming practices such as minimal tilling of the soil when planting, planting cover crops in-between main crops, and crop rotation can all help the soil capture more carbon. Plants absorb carbon dioxide from the air as they grow, then release it back to the air and soil as they decompose. But storing carbon in soil has traditionally been excluded from carbon markets because it is extremely hard to measure how much carbon goes into the soil and how long it stays there. Noah Deich, head of Carbon 180, a consultancy in California, said that storing carbon in soils has sometimes been an afterthought in climate policies because it is difficult to verify how much carbon has been stored. “We know a wide range of practices that almost certainly lead to carbon stored in soils. What we don’t know is exactly how much

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carbon, and exactly how long that carbon stays in any given field,” he said, calling for more research. Indigo says it will use satellites and image analysis to measure soil carbon sequestration and on-farm emissions. The company is also participating in a decade-long study including tens of thousands of farms to study how carbon is stored in soil. An increasing number of agriculture and food companies are focusing on carbon offsets as part of their sustainability efforts. Earlier this year, a group of agricultural traders and food companies — including Indigo as well as Cargill, General Mills, McDonald’s USA and Mars — launched the Ecosystem Services Market Consortium that encourages farmers and ranchers to adopt conservation management practices to improve soil health and reduce emissions Mr Perry said a farmer would probably be able to capture 2 to 3 tonnes of carbon dioxide per acre a year, meaning additional revenue of $30 to $60 per acre annually. “This is a big impact for farmers,” he said. After the ocean and fossil fuels, soil represents that largest pool of carbon on the planet. Carbon levels in agricultural soils have been depleted due to poor farming practices, and carbon-rich soils are considered more beneficial for plants.

Thursday 13 June 2019

BUSINESS DAY

NATIONAL NEWS

Sudan opposition leaders call off strike Protest movement makes concession as mediators step up efforts Tom Wilson

pposition leaders in Sudan have called off a general strike on Wednesday to allow international mediation with the country’s military leaders to continue but said the protest movement would make no further concessions until a return to civilian rule was agreed. The opposition Alliance for Freedom and Change announced the strike and campaign of civil disobedience on Sunday, five days after military forces raided the site of the movement’s prodemocracy sit-in in the centre of the capital, leaving more than 100 people dead. The industrial and civic action froze life in Khartoum’s central business district, though by Tuesday there were signs the campaign was easing, as informal traders restarted activities and some shops reopened. In one of the first interviews with the opposition movement since its leaders went into hiding at the weekend fearing arrest, Mohamed Yousif Ahmed Al Mustafa, the spokesman for the Sudanese Professionals Association, told the Financial Times that it was necessary to call off the strike to allow Sudan’s poorest citizens to return to work. “People in the informal sector, those who are completely without any income. They need to make some revenue generating activi-

ties,” Mr Al Mustafa said on Tuesday. “At the same time, we need to provide an opportunity for this mediation to go smoothly without accusations from the military council that we are trying to cause problems,” he said. An internationally backed mediator from neighbouring Ethiopia has been engaging with both sides since Friday, while the United Nations Security Council on Tuesday called for all parties to work towards a “consensual solution to the current crisis”. On Tuesday night, the Ethiopian envoy said talks between the opposition groups and the military leaders would restart soon, though the transitional military council is yet to comment on the potential resumption of dialogue and Mr Al Mustafa urged caution. The opposition alliance last week outlined six conditions for direct talks with the council to restart, including an international investigation into the killings at the sit-in by the armed forces. Those requirements remain unchanged, Mr Al Mustafa said. A former minister of state for labour, 68-year-old Mr Al Mustafa has been one of the leaders of the SPA since it began to organise Sudanese professionals in 2013. He was arrested during a demonstration in February and spent two months in detention before his release with other political prisoners after President Omar al Bashir was ousted from power in April.

Confidential cabinet note warns UK not ready for a no-deal Brexit on October 31 Document says it will take months to prepare pharmaceutical sector and for border checks

George Parker

oris Johnson’s promise to take Britain out of the EU with or without a deal on the scheduled Brexit date of October 31 has been undermined by a confidential cabinet note warning that the country is still far from prepared for the disruption of a disorderly exit. The note, seen by the Financial Times, says the government needs six to eight months of engagement with the pharmaceutical industry “to ensure adequate arrangements are in place to build stockpiles of medicines by October 31”. It also says that it would take “at least 4-5 months” to improve trader readiness for the new border checks that might be required, including the provision of financial incentives to encourage exporters and importers to register for new schemes. Mr Johnson, the frontrunner to become the next Conservative party leader and prime minister, launches his campaign on Wednesday. He will insist that the UK cannot “go on kicking the can down the road with yet more delay” over Brexit. But the cabinet note confirms that any new prime minister would find it very hard to conclude preparations, especially on medicines and border controls by October 31. The Foreign Office, according to the note, would need “at least a two-month period” to communicate with more than 1m UK citizens living in other EU coun-

tries and to allow them to prepare for the uncertainty around their future status. The note, prepared for cabinet on May 21, said that while government departments had delivered around 85 per cent of their “core no-deal plans”, many of those provided only “a minimum viable level of capability”. Of the remaining plans that had not been delivered, the note says the shortcomings in government readiness were “material”. The presentation to cabinet was drawn up with input from Steve Barclay, the Eurosceptic Brexit secretary, who has been frustrated by the government’s failure to accelerate its preparations for a no-deal exit. The note was never circulated for the cabinet discussion on May 21 because Theresa May was concentrating at the time on her ultimately failed bid to push through the legislation on her deal with the EU. After that attempt collapsed, the prime minister announced her plans to resign. A spokesman from Mr Barclay’s department said on Wednesday that the government would “absolutely continue to make all necessary preparations” after spending almost three years preparing to minimise the disruption of nodeal. He added that the government had published 750 pieces of no-deal communication since October and held 700 “cross-government stakehold engagements” this year. www.businessday.ng

Ebola outbreak in Congo spreads across border to Uganda Confirmed cross-frontier case marks significant escalation of epidemic David Pilling and Tom Wilson

five-year-old boy has died from Ebola in Uganda and two more cases of the disease have been confirmed in the first known incident of crossborder transmission since the outbreak began in eastern Congo last year. Health experts on Wednesday in both Uganda and Congo were racing to discover how the boy’s relatives crossed the border on June 9 and with whom they might have come into contact along the way. Uganda has been routinely screening people coming from Congo for signs of fever, leading to speculation that the boy’s family might have crossed into Uganda at an informal border post. The outbreak in eastern Congo, one of the most turbulent regions in the world, is already the secondworst in history. Efforts to contain it have been hampered by chronic violence and suspicion of outsiders. Half or more of all Ebola deaths have occurred in people

unknown to health authorities, implying that efforts to track the spread of the virus and isolate those contaminated are failing. Uganda’s health ministry said the boy’s mother, who is Congolese but married to a Ugandan and living in the Kasese district of Uganda, had travelled back to Congo to nurse her sick father, who subsequently died of Ebola. On returning to Uganda, the boy had started coughing up blood and vomiting and was taken to Kagando hospital where health workers immediately suspected Ebola. A sample of his blood tested positive for Ebola and on Wednesday two of the boy’s relatives were also confirmed to have contracted the disease. The World Health Organisation said an expert committee had been alerted about the possibility of a meeting at which it would have the option to declare the Ebola outbreak a global health emergency. Mark Eccleston-Turner, a glob-

al health lawyer at Keele University, said it was essential that the WHO declared an emergency. “A declaration acts as a clarion call to the international community that this is an outbreak that requires further attention — political attention, including resources and finances,” he said. While Mr Eccleston-Turner called the spread to Uganda “incredibly disappointing”, he added: “The expertise that Uganda has and the fact that this has been discovered quite quickly gives hope that this can be snuffed out.” Experts had previously warned that, if the deadly virus crossed into a neighbouring country, it would represent a dramatic escalation of a crisis that is already spinning out of control. Earlier this month, the WHO reported that 2,000 people had been infected, with two-thirds of them dying. The real number of deaths may be higher since many of those infected choose not to go to health centres to be quarantined, health experts said.

Pressure on Nissan chief executive Hiroto Saikawa intensifies ISS and Glass Lewis urge investors to vote against CEO’s re-election as director Leo Lewis

iroto Saikawa is coming under intensifying pressure as chief executive of Nissan as he faces a potentially damning appraisal from minority shareholders at the company’s annual meeting later this month, said people close to the carmaker. The assessment came as two of the largest proxy voting services recommended investors vote against Mr Saikawa’s re-election as a director at the meeting on June 25. People close to Nissan said Mr Saikawa was likely to gain the backing of Renault and its 43 per cent stake for technical reasons, but suspect he would lose the support of a majority of the remaining shareholders. One of these people said Mr Saikawa was on “borrowed time” as chief executive. Proxy voting services Institutional Shareholder Services and Glass Lewis based their arguments on Mr Saikawa’s long association with Carlos Ghosn, the former Nissan chairman who was arrested in November and is awaiting trial in Tokyo on charges of financial misconduct that he has

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consistently denied. In order to secure his reappointment, Mr Saikawa requires at least half of voting shareholders at Nissan’s annual shareholders’ meeting to decide in his favour. The recommendations of proxy voting services in Japan have taken on a far greater resonance following Tokyo’s efforts to foster greater attention on governance by institutional investors. Asset managers, especially those with mandates from the Government Pension Investment Fund, are under greater pressure to vote their shares and to explain their decisions. In a letter to investors this week, ISS said that owing to Mr Saikawa’s protracted stint on the Nissan board and because he has long been regarded as one of Mr Ghosn’s closest allies, it would be difficult to consider him totally unconnected to Mr Ghosn’s alleged wrongdoing. ISS said Nissan had built a corporate culture that reflected Mr Ghosn’s “effective dictatorship”. “In order to break from the past, the company needs to build a strong board with fresh members. Given the fact that Mr Saikawa has been on the board for @Businessdayng

14 years, and worked closely with Mr Ghosn, Mr Saikawa’s appointment to the board is not considered appropriate,” the letter said. The letter noted that Mr Saikawa, who has not been charged by Japanese prosecutors, had signed off on Mr Ghosn’s controversial retirement package — just one example casting doubt over Nissan’s contention that Mr Ghosn “is entirely wrong and Nissan is only a victim”, ISS said. In a separate recommendation, Glass Lewis wrote a scathing criticism of Nissan’s poor internal controls and weak risk management, and said it could not support Mr Saikawa’s reappointment as president because he “should have taken greater steps in performing its [the company’s] oversight responsibilities in the misconduct of the board members”. Nissan declined to comment on either recommendation. The calls to vote against Mr Saikawa’s reappointment come as the Nissan chief is struggling to rescue the Japanese carmaker from years of dismal governance, a quality control scandal and declining financial performance.

Thursday 13 June 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Uber to test food delivery by drones Shannon Bond

ber is testing food delivery by drone in San Diego and aims to ramp up commercial service this year. The company has been conducting early tests in the southern California city with McDonald’s, one of the biggest partners of its Uber Eats food delivery unit. It hopes to add more restaurants to the drone programme by the end of the year, it said as it announced the tests at its Elevate aviation conference in Washington. The US ride-hailing company is the latest tech group to unveil ambitions to make deliveries using unmanned aircraft. Last week Amazon, which has tested drone delivery in the UK, said it would begin delivering packages by drone within months. Earlier this year Alphabet’s Wing Aviation won the first US Federal Aviation Administration approval to make commercial deliveries in a limited area of Virginia. Wing is also conducting pilot programmes in Finland and Australia. The money being poured into developing delivery drones is an attempt to solve the problem of how to get items to people more quickly and cheaply, especially in traffic-congested cities. Food delivery is one of the fastest-growing parts of Uber’s business, reaching $3bn in total

bookings in the first quarter. But steep competition in the US and other countries has spurred a race to compete on restaurant selection and quick delivery time. “Our goal is to expand Uber Eats drone delivery so we can provide more options to more people at the tap of a button. We believe that Uber is uniquely positioned to take on this challenge as we’re able to leverage the Uber Eats network of restaurant partners and delivery partners as well as the aviation experience and technology of Uber Elevate,” said Luke Fischer, head of flight operations at Elevate, the company’s aviation division. Uber’s early drone service will not attempt to solve the complicated logistics of landing at a customer’s front door. Instead, restaurants will load meals into a drone which will meet an Uber Eats courier at a designated dropoff location. The courier will then bring the order to the customer. In future Uber said it hopes drones will be able to land on parked cars nearer to the orders’ final destinations. US regulators are still working out rules for drones and other lowflying aircraft. Uber received FAA approval to test delivery in San Diego last year and says it is working with the regulator for full approval to launch its commercial service. “This vision is impossible to realise without a clear regulatory pathway,” Mr Fischer said.

Stocks steady after tame US inflation data spur hopes for rate cuts Philip Georgiadis and Siddarth Shrikanth

all Street stocks were stable and European equities recovered off their worst levels as tame US inflation data spurred investor hopes for Federal Reserve rate cuts this year. The S&P 500 opened flat, while the Stoxx Europe 600 trimmed losses to trade 0.3 per cent lower after US consumer prices came in below analyst expectations, strengthening the market view that there is room for the Fed to cut rates if the economic outlook deteriorates. The consumer price index rose 1.8 per cent last month from a year ago. That compares with the 2 per cent pace recorded in April and expectations for a 1.9 per cent increase. The numbers “will only fuel the market clamour for interest rate cuts,” said James Knightley, chief international economist at ING. The dollar and US government bond yields fell following the data, but quickly recovered. Traders have ramped up their expectations for multiple Federal Reserve rate cuts this year in response to US-China tensions and slowing global growth, but some analysts have questioned whether market expectations are overblown. Pimco US economist Tiffany Wilding said the investment pow-

erhouse does not expect a rate cut in June, but a 50 basis point cut is possible in July if downside risks to the economy escalate. The inflation print injected some risk appetite into a trading day which had otherwise been dominated by a sharp fall in oil prices. Brent crude fell 1.7 per cent to $61.20 a barrel, leaving the benchmark on track for its fourth consecutive weekly fall after an industry report showed US crude stockpiles increased last week. Oil has fallen nearly 20 per cent since late April, having rallied from $50 to $75 between January and April. The index tracking the Stoxx 600 European oil and gas sector fell 1.9 per cent, with BP down 2.8 per cent, Total falling 2 per cent and Eni slipping 1.5 per cent. Markets in Asia dropped, with China-focused stocks suffering the steepest declines. Hong Kong equities fell after demonstrators blocked access to the territory’s legislature in protest against a controversial extradition bill. The Hang Seng declined 1.8 per cent. “Investors remain spooked the extradition bill could have farreaching consequences for attracting overseas talent and does question the viability of Hong Kong as a leading financial hub,” said Stephen Innes, managing partner of Vanguard Markets. www.businessday.ng

Oil slides as US stockpiles grow

Brent crude down nearly 2% as traders weigh turbulent period for market

Philip Georgiadis and

rude prices renewed their recent slide on Wednesday, as traders weighed the outlook for supply after closely watched US data showed a surprise build in domestic stockpiles. Brent crude fell 1.8 per cent to $61.15 a barrel in morning trading in New York, leaving the benchmark on track for its fourth consecutive weekly fall after numbers released on Tuesday showed a rise in US inventories. US marker WTI fell 2.1 per cent to $52.15, putting it on track to close in a fresh bear market. The Energy Information Administration said US crude inventories rose 2.2m barrels to 485.5m, bucking forecasts for a decline of 481,000 barrels, according to Reuters. Gasoline stocks grew slightly more than expected, sending futures in New York more than 2 per cent lower. The figures followed a report

late Tuesday by the American Petroleum Institute, which also showed US crude stocks continued to swell and sent crude prices sliding overnight. “This data print will likely cause a sleepless night for oil bulls as if the EIA data confirms, we could see a more significant cut and run on WTI oil positioning,” said Stephen Innes, managing partner at Vanguard Markets, following the API’s report. Oil has traded in sharp swings in recent months, and has fallen about 18 per cent since late April, having rallied from $50 to $75 between January and April. Traders are weighing an effort by Opec and its allies to prop up prices by cutting output, while US sanctions on Iran and Venezuela have also tightened supplies. But set against these factors are concerns a wider US trade conflict and global slowdown have weighed on prices, while the US shale industry is

also expected by some traders to quicken its growth. The EIA, in a report published on Tuesday, cut its outlook for global oil demand in 2019. The agency also lowered projections for US crude production, but the nation’s output is still expected to set new annual records this year and next. “Just the thought of overproduction in this deteriorating global economic environment suggests unless Opec and allies can bridge the agreement gap markets will head south in a hurry,” Mr Innes said. A top oil trader earlier this month told the Financial Times that the oil market “is as complicated as I have seen it in a long time.” Doug King, the senior trader at London-based hedge fund Merchant Commodity Fund, said there was still great uncertainty over the prospect for prices.

France’s Casino sells stake in Brazilian retailer Via Varejo Robert Smith

asino has sold off its stake in Brazilian electrical goods retailer Via Varejo, the latest push from the French supermarket group to shore up its balance sheet after its parent companies filed for bankruptcy protection. Brazil’s GPA — in which Casino holds a controlling stake — announced on Wednesday afternoon that it was selling its entire 36 per cent stake in Via Varejo to Michael Klein, a Brazilian businessman whose family already holds a significant stake in the firm. Casino is part of a complex corporate structure built by its chairman and chief executive Jean-Charles Naouri. The French businessman controls

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the group’s shares through four holding companies piled on top of each other, but is now battling to keep hold of his empire after filing for bankruptcy protection across all four companies last month. While Casino itself was not placed under bankruptcy protection, it was hit with downgrades that left its credit rating deeper in junk territory, with Moody’s and S&P both citing the company’s strong connections with its overly indebted parents. The French retailer halted its dividend for the first time in years in response and has pledged to accelerate asset sales in a bid to reduce debt. GPA is selling its stake at R$4.75 a share, equating to more than €500m. Casino has long touted a sale of Via Va@Businessdayng

rejo, having first disclosed its plans to sell the unit in 2016. It has marked the retailer as a “discontinued operation” in its accounts since that time. Rating agency Moody’s has also factored the planned sale and a subsequent reduction in debt into its credit rating since it first began covering the French retailer in November 2017. Equity analyst at HSBC cut its price target of Casino’s shares earlier on Wednesday, in a note that said that, even though Latin American disposals were likely, their “concerns about the underlying French business remain”. Casino’s shares are trading 1 per cent lower on Wednesday afternoon, having fallen more than 12 per cent this year.

Thursday 13 June 2019

BUSINESS DAY

ANALYSIS

FT Americans may not be ready for a new cold war If there is to be a lasting struggle with China, the US public will have to consent Janan Ganesh

he US president and those around him are set on a showdown with China for mastery of the century. There is assent — even enthusiasm — from other quarters of the American establishment. As well as the end we know the means: tariffs and sanctions rather than ordnance, though both countries are arming and a proxy skirmish in some third nation is not all that hard to picture. So that is decided, then. If history is whatever leaders elect to do, we can anticipate the outlines of the next 50 years, and they are as fraught as billed. The air of certainty, even teleology, that is starting to characterise talk of a new cold war is warranted. It will happen. The great lever-pullers of state say so. Just a small word, though, about the 330m Americans below them. If there is to be a lasting struggle with China, the US public, who can vote

more or less of a piece. No doubt, there were rumblings under the conformist 1950s idyll. The mistreatment of black Americans was an increasingly vexed question. A counterculture was in utero. Both of these forces would break through in the next decade. But otherwise, the cultural resources were there for an indefinite competition against a foreign power. The governing class did not strain to persuade people of the necessity of the fight and its attendant hardships. You need only itemise these facts to understand the contrast with today. In March of this year, 17 per cent of Americans said they trusted Washington most or all of the time. The armed forces themselves are revered, but the effectiveness of hard power-projection is now doubted even by conservatives. As for crosspartisan unity, it is a feat to imagine how there could be less of it. Gauging the public’s tolerance of eco-

A lasting struggle with China implies open-ended public tolerance for economic disruption, military expenditure and the sheer psychic burden of conflict © AP

for something else whenever they want, will have to consent. This implies an open-ended public tolerance for economic disruption, military expenditure and the sheer psychic burden of conflict, with its high-risk moments and enervating longueurs. Perhaps the appetite is there. Even if it is not quite yet, I suspect it can be rallied. But to take popular support for granted — or to not even account for it, as though all that is needed for a conflict is the bellicosity of two governments — is to see politics exclusively from the commanding heights. The similarities between the onset of the cold war and the world of today are plain enough. There is the bipolarity and the clash of governing models. Less is said about the differences. When the US entered its long contest with the Soviets, it was, in a way that seems almost quaint now, a nation suited to a war footing. Deference to government was near-unanimous. As late as 1964, 77 per cent of Americans said they trusted Washington most or all of the time. The military still bathed in the afterglow of the second world war. Conscription in peace time, and in the Korean war, happened without wrenching acrimony. Citizens bore high tax rates, knowing that the receipts were not just funding their own interstate roads but the defence of West Germany and Japan. There was so little partisanship that the consecutive presidencies of Harry Truman (a Democrat) and Dwight Eisenhower (a Republican) seemed

nomic pain is tricker, yes, but polls suggest a nation split over tariffs, with opinion trending against them. At the start of the cold war, there was living memory of a depression and wartime privation. There is none of either now. The problem with realpolitik was always its “billiard ball” view of states. It treats them as undifferentiated entities bumping against each other. Their internal characteristics are held to matter less than their timeless goal, which is survival and, to that end, power. It makes for theoretical elegance — the scholar’s idea of success — but it is not a description of reality. It matters that the US is a messier, more sceptical nation than the one that volunteered for an unlimited tussle with communism a human lifetime ago. The point is not that America today lacks the “stomach” or the “heart”, or any other body part, for a fight, but that it might not see the need for a fight in the first place. The burden is on the governing class to show that a nation posing no conventional threat to the homeland must be countered, over an unspecified period, and at some expense. Too many assume that this has already been done, or that it does not matter. Just because the structure of international relations seems to mandate a new cold war, and some in power will one, it does not follow that it is inevitable. The public matter, too, and where they stand remains mysterious. The next election will start to tell us. The century is not written. www.businessday.ng

Chief executive Christian Sewing has promised a strategic overhaul that will involve ‘tough cutbacks’ to Deutsche’s ailing investment bank © FT montage / Getty

Deutsche Bank grapples with capital raising to pay for cuts German lender’s options to raise cash are limited as shares languish near record lows Stephen Morris and Olaf Storbeck

ith Deutsche Bank’s share price languishing close to a record low after talks to merge with Commerzbank collapsed this spring, Germany’s biggest bank is going through one of the toughest moments in its 149-year history. There are now serious questions over whether Deutsche will need to raise billions of euros for a further restructuring and, if so, how it will raise the money, hemmed in by its shrunken market capitalisation and increasingly frustrated investors. Top executives are doggedly working on the fresh strategic overhaul, which chief executive Christian Sewing has promised will involve “tough cutbacks” to its ailing investment bank, after it slumped to a loss over the past six months. However, investors may have to wait until its second-quarter results in late July to hear what Mr Sewing decides, and even then analysts are sceptical that the cutbacks will solve the core problems confronting the lender. Meanwhile, Deutsche is trying to keep a low profile — Mr Sewing cancelled a keynote address at the bank’s own financial conference in New York last month — as new problems keep sprouting up. Last week, Fitch Ratings downgraded Deutsche’s credit rating to triple B, only two notches above junk, warning that “a further restructuring would be difficult to implement” while the bank is squeezed by negative interest rates and continued erosion of its market share in investment banking. The Financial Times has spoken to more than a dozen banking executives, investors, regulators and analysts to assess why Deutsche’s restructuring plan is taking so long, what the major obstacles are and if the stretched bank can afford the extra costs. Sticky costs Mr Sewing has hinted that the next round of swingeing cuts will focus on the lender’s US equities and rates trading businesses because they are detached from its other operations and cost hundreds of millions to run each year. Kian Abouhossein, analyst at JPMorgan Chase, estimates that Deutsche’s global equities business alone loses about €600m annually

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on a pre-tax basis. Yet current and former senior Deutsche managers warn that even a complete wind-down of those units would not immediately improve profitability and could even push it into another annual loss, breaking Mr Sewing’s pledge to make a profit this year. “Deutsche is acting within tight constraints and strategic optionality appears limited given the depressed profitability . . .[It] cannot afford a radical strategy change at the moment on a standalone basis,” said Daniele Brupbacher, analyst at UBS. “Shrinkage of the investment bank could rapidly push the bank into lossmaking territory for a prolonged time.” A former senior executive at Deutsche said that when exploring the closure of the rates business in the past, management realised such a step was not straightforward because even a complete closure would only get rid of a fraction of its costs. “We realised that we could maybe fire 18 of the 23 guys on the trading floor,” this person said, however some will have to stay in order to oversee a rundown of legacy positions. The longevity of some swaps and derivatives also made it impossible to shut down the related IT systems monitoring them. Mr Abouhossein of JPMorgan wrote in a report: “The majority of cost savings will have to come from infrastructure and back office staffing.” Deutsche’s investment bank employs the same number of staff as the whole of Goldman Sachs, even though the Wall Street bank makes 1.5 times the revenue of its German peer, he said. Overall, operating costs in the corporate and investment banking unit absorbed up 95 per cent of its revenues last year. Mr Abouhossein said as many as 7,000 of the 24,000 staff working in “corporate functions” should go, and Deutsche must reduce its reliance on the roughly 10,000 expensive external consultants it pays in addition to its own 90,000-strong workforce. Deutsche declined to comment. Capital issue Where to swing the axe is only half of the challenge facing Mr Sewing. He also has to come up with a way to fund the restructuring. “The risk they face now, if they do attempt meaningful change [at the investment bank], is that they might have to do another capital in@Businessdayng

crease,” said a second former senior Deutsche executive. Stuart Graham, analyst at Autonomous, said restructuring costs in investment banks were usually 100 to 150 per cent of the targeted cost savings. Several people familiar with the internal discussions said a full cleanup of the investment bank could cost at least €4bn, with about half that sum to be booked in its accounts immediately, including severance pay for staff. Deutsche’s bombed-out share price makes it unappealing to cover this by raising fresh equity — a move likely to enrage investors. The shares this month dipped below €6 for the first time and shareholders are fatigued after four capital calls raising €30bn since 2010, at least one by each of the past four chief executives. That amount is more than double its current market capitalisation of less than €13bn. “The shareholders I represent totally disapprove of the idea of yet another capital increase,” said Klaus Nieding, vice-president of the German Shareholders’ Protection Association, a lobby group for retail investors. Shareholders have granted Deutsche permission for three different ways of raising additional capital. Taken together, the bank has the unfettered right to issue 1.2bn new shares, or 58 per cent of its current share count. Any more would require an extraordinary meeting to seek investors’ approval — an unappetising prospect. Assuming Deutsche offers a 32 per cent discount on the share price, as it did to entice wary investors in 2017, the bank could sell about €4bn in equity and €1bn in convertible bonds, FT calculations show. Equity squeeze Considering the massive dilution of existing shareholders and general unwillingness of investors to throw good money after bad, the lender is exploring more exotic options to free up more cash, said one senior insider. Last year Deutsche hired Cerberus, a controversial act considering the private equity group is also its fourth-largest investor, to help it squeeze more from its balance sheet. Cerberus has proposed deleveraging in certain areas, but it has also said the bank can find some breathing space by running a slightly lower capital ratio.

Thursday 13 June 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 11 June 2019

Top Gainers/Losers as at Tuesday 12 June 2019 LOSERS

GAINERS Company

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UNILEVER

N28.6

N30.95

2.35

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Change

N170

N163.5

-6.5

MOBIL

ASI (Points) DEALS (Numbers)

N6.3

N6.4

0.1

DANGCEM

N189

N185

-4

NEM

N2.05

N2.1

0.05

MTNN

N136

N135

-1

VOLUME (Numbers)

NAHCO

N3.06

N3.09

0.03

N58

N57

-1

VALUE (N billion)

JAIZBANK

N0.46

N0.48

0.02

DANGSUGAR

N11.5

N11

-0.5

ACCESS

MARKET CAP (N Trn)

30,099.83 3,169.00 233,451,164.00 3.520

Global market indicators FTSE 100 Index 7,398.45GBP +22.91+0.31%

Nikkei 225 21,204.28JPY +69.86+0.33%

S&P 500 Index 2,883.19USD -3.54-0.12%

Deutsche Boerse AG German Stock Index DAX 12,155.81EUR +110.43+0.92%

Generic 1st ‘DM’ Future 26,050.00USD -36.00-0.14%

Shanghai Stock Exchange Composite Index 2,925.72CNY +73.59+2.58%

13.256

Cancelled AGM: Minority shareholders of Oando fault SEC’s action …say not in their interest, want Presidency to intervene Stories by Iheanyi Nwachukwu

he minority shareholders of Oando Plc have faulted the decision of the Securities and Exchange Commission (SEC) to cancel the earlier scheduled Annual General Meeting (AGM) of the company. While briefing journalists on Wednesday June 12, the minority shareholders of Oando Plc led by Hamza Ridhwan, Secretary General, Association for Investors Liberation, said the actions of SEC are not in their interest. The recent suspension of Oando’s AGM is the second time in 3 years that SEC has tried to suspend an Oando AGM, said the minority shareholders. The Securities and Exchange Commission had on Monday June 10 suspended the 42nd Annual

L-R: Bisi Bakare, national coordinator, Pragmatic Shareholders Association; Hamza Ridhwan, secretary general, Association for Investors Liberation; Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria; and Adeniyi Adebisi, national coordinator, Independent Shareholders Association of Nigeria during the press briefing recently by minority shareholders of Oando Plc on the company’s suspended Annual General Meeting by SEC.

General Meeting (AGM) of Oando Plc (a company listed on the Nigerian and Johannesburg Stock Exchanges). The AGM would have held last Tuesday June 11 at the Zinnia Hall, Eko Hotels and Suites, Victoria Island Lagos. SEC in a statement said the decision was in adherence to the Ex-parte Order

of the Federal High Court, Ikoyi Lagos in SUIT NO: FHC/L/CS/910/19 in Mr. Jubril Adewale Tinubu & Anor V Securities & Exchange Commission & Anor. Oando Plc had in a statement at Nigerian Stock Exchange (NSE) dated June 11 and signed by Ayotola Jagun, Company Secretary disagreed

with Securities and Exchange Commission on its decision to cancel the company’s Annual General Meeting (AGM), adding that it had by a notice to the public and its shareholders on May 10, 2019 validly convened its 42nd Annual General Meeting. The minority shareholders said, “We the minority shareholders of

Why we train, empower entrepreneurs - FCMB

irst City Monument Bank (FCMB) has explained that the rationale behind its widely acclaimed comprehensive capacity building programme, tagged, ‘’Business Enterprises and Sustainability Training (BEST)’’, for Small and Medium Scale Enterprises (SMEs), is to lay a solid foundation for their longterm success. The bank added that this will also enable entrepreneurs to have access to business management skills and advisory services, learn and acquire competencies which they can apply for effective management of their respective businesses in a sustainable manner. FCMB held the sixth edition of the BEST programme for existing and start-up SMEs held in Uyo, Akwa Ibom State on June

8, 2019. Hundreds of existing and start-up entrepreneurs from the six states in the South-south zone took part and benefitted from the intensive training and empowerment exercise. This followed the huge success recorded at previous editions of the training across Nigeria since it commenced last year. The initiative, led by FCMB Training Academy, the Bank’s Business Banking Group and seasoned facilitators, focused on business and skills development, marketing, finance and accounting for SMEs. It covered various topical areas such as identifying business opportunities, surviving in a harsh business environment, improving productivity, raising capital, optimising sales, cost and revenue management, among others. It is one of the value-added www.businessday.ng

offerings of FCMB to complement its efforts in the areas of lending and advisory services to SMEs with the objective of stimulating their growth and contributions to overall national development. According to the Executive Director, Business Development of FCMB, Bukola Smith, the Bank recognises the increasing role and impact of SMEs. ‘’The BEST initiative is one of the innovative ways we empower, promote and support the growth of our SME customers because without effective training and exposure, it could be quite difficult for their businesses to succeed. We believe this training will go a long way to impact positively on the SME operators who have participated in this programme. It will propel them to further develop themselves

in order to compete favourably within and outside the Nigerian market. We, therefore, urge the beneficiaries to take advantage of the unique opportunities provided by this exercise, because it is a veritable platform for them to take the lead in driving the diversification and growth of the Nigerian economy’’, she said. Also speaking, the Head, Training Academy of FCMB, Sola Oyegbade, stated that: “Just like the roots of a tree are responsible for the overall health and strength of the tree, FCMB BEST initiative has become a forum for feeding the SMEs with relevant resources to nurture and nourish their businesses profitably through tested and proven principles for capacity building, skills development and sustainability.

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Oando Plc categorically state our utmost displeasure and disappointment at the SEC current management of the investigation into Oando Plc. The actions over the last 2 years and specifically the last 10 days have shown that our voices as minority shareholders are not being listed to”. “We fully support the regulator and applaud the Government for institutions such as SEC as we know the imperative role they play in regulating and protecting the capital market. However, in the case of Oando, we are not convinced that SEC has acted in our best interest or protected our investments. “We call on the Government and Presidency to intervene as it is not acceptable for SEC to attempt to take down a company the size of Oando that adds so much value to the Nigerian economy, which is an employer of labour and attracts significant Foreign Direct Investment (FDI) into the country,”, the mi-

nority shareholders stated. They challenged the SEC to tell the minority shareholders how the last minute suspension of the AGM is in their best interest. They noted that since SEC’s press release on May 31, “there has been erosion in the value of our shares from N4.20 on May 31 to N3.75 on June 11”. “We condemn in absolute terms, the way and manner chosen by SEC in announcing the cancelation on the eve of the event, despite having ample time to do same. We have shareholders who have come in from all over the country and it is disappointing and disheartening to think that the SEC did not think it worthy to consider us, the esteemed shareholders when determining when to notify the general public on the suspension of the AGM. Why was it done at such short notice?”, the minority shareholders said.

Johannesburg Stock Exchange successfully migrates Equity, FX Derivatives to LSEG technology platform

SEG Technology, part of London Stock Exchange Group said that the Johannesburg Stock Exchange (JSE) has successfully gone live with Equity and FX Derivatives on Millennium Exchange and Millennium Surveillance. This project entailed a major upgrade to the existing equity market whilst on-boarding both the Equity Derivatives Market (EDM) and the Foreign Exchange Derivatives Market (FXM). The new release covers all derivatives asset classes with the ability for JSE to extend to other products in future. The platforms contain a rich set of features specifically tailored to support the derivatives market, including implied-order trading, a host of multi-legged trad@Businessdayng

ing strategies and options theoretical pricing. These are supported by real time cross-asset class monitoring in Millennium Surveillance. This go-live is an indication of the scalability of LSEG Technology’s solutions to support multiple asset classes and different market structures on a single platform, thereby bringing in operational efficiencies to both users and the wider market. Nicky Newton-King, CEO, JSE said, “The successful launch, of what has been part of a multi-year project, enables our products to trade on robust technology using world class functionality, which we expect will enable our clients to lower their costs of trading.

Thursday 13 June 2019

BUSINESS DAY

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Thursday 13 June 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 11 June 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 227,489.44 6.40 1.59 161 25,090,305 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 -1.59 149 6,049,193 ZENITH BANK PLC 632,639.35 20.15 -0.49 317 28,157,649 627 59,297,147 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 251,267.05 7.00 -0.71 142 3,490,102 142 3,490,102 769 62,787,249 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,747,859.26 135.00 -0.74 200 11,138,952 200 11,138,952 200 11,138,952 BUILDING MATERIALS DANGOTE CEMENT PLC 3,152,493.87 185.00 -2.12 46 156,989 LAFARGE AFRICA PLC. 161,077.95 10.00 - 54 468,116 100 625,105 100 625,105 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 302,107.44 513.40 - 27 60,208 27 60,208 27 60,208 1,096 74,611,514 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 70,589.34 74.00 - 9 8,120 PRESCO PLC 58,000.00 58.00 - 12 19,621 21 27,741 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 7 74,671 7 74,671 28 102,412 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 5 33,000 JOHN HOLT PLC. 182.90 0.47 - 2 288 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 45,932.23 1.13 -0.88 53 2,708,138 U A C N PLC. 18,440.30 6.40 - 28 1,139,013 88 3,880,439 88 3,880,439 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 28,578.00 21.65 - 13 100,333 ROADS NIG PLC. 165.00 6.60 - 0 0 13 100,333 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,287.35 1.65 - 3 7,055 3 7,055 16 107,388 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 9,395.40 1.20 - 12 148,190 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 104,043.18 47.50 - 40 136,772 INTERNATIONAL BREWERIES PLC. 171,917.24 20.00 - 3 7,299 NIGERIAN BREW. PLC. 455,823.42 57.00 -1.72 136 13,406,609 191 13,698,870 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 80,000.00 16.00 - 70 607,379 DANGOTE SUGAR REFINERY PLC 132,000.00 11.00 -4.35 84 1,570,590 FLOUR MILLS NIG. PLC. 57,200.30 13.95 0.36 80 2,057,132 HONEYWELL FLOUR MILL PLC 8,564.61 1.08 - 25 669,409 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,211.69 14.80 - 8 10,321 UNION DICON SALT PLC. 3,321.07 12.15 - 1 300 268 4,915,131 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 25 52,524 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 - 17 3,523 42 56,047 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,678.16 3.74 - 10 48,071 10 48,071 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 29,183.01 7.35 - 35 137,305 UNILEVER NIGERIA PLC. 177,807.92 30.95 8.22 28 881,987 63 1,019,292 574 19,737,411 BANKING ECOBANK TRANSNATIONAL INCORPORATED 179,825.60 9.80 - 21 51,919 FIDELITY BANK PLC 50,126.40 1.73 0.58 66 3,411,412 GUARANTY TRUST BANK PLC. 897,650.97 30.50 -0.16 174 4,043,909 JAIZ BANK PLC 14,142.84 0.48 4.35 14 554,330 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 67,945.39 2.36 -3.28 151 21,087,829 UNION BANK NIG.PLC. 203,845.27 7.00 - 21 158,831 UNITY BANK PLC 7,481.18 0.64 1.59 15 316,900 WEMA BANK PLC. 22,758.93 0.59 -3.28 28 2,067,269 490 31,692,399 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,643.24 0.67 - 16 507,381 AXAMANSARD INSURANCE PLC 20,055.00 1.91 - 7 27,384 CONSOLIDATED HALLMARK INSURANCE PLC 1,788.60 0.22 - 9 26,700 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 0 0 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 20,000 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 - 2 50,010 LAW UNION AND ROCK INS. PLC. 1,976.31 0.46 - 1 300,000 LINKAGE ASSURANCE PLC 3,840.00 0.48 2.13 3 430,381 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 8 1,216,090 NEM INSURANCE PLC 11,089.06 2.10 2.44 11 340,444 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 2 21,356 REGENCY ASSURANCE PLC 1,333.75 0.20 - 2 772,511 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 -8.00 16 1,985,549 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 2 34,590 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 50,000 WAPIC INSURANCE PLC 5,486.92 0.41 2.50 26 50,303,347 107 56,085,743

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,292.76 1.44 - 5 89,035 5 89,035 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 6,820.00 3.41 - 67 1,020,606 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 - 2 1,783 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 32,872.50 1.66 - 59 3,441,353 1,131.98 0.22 - 1 23,965 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 435,223.50 42.50 - 18 116,063 UNITED CAPITAL PLC 13,320.00 2.22 0.45 98 3,662,654 245 8,266,424 847 96,133,601 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 8.33 6 1,130,001 6 1,130,001 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 1 5 9,148.46 7.65 - 32 484,384 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,812.77 2.21 -0.90 7 426,200 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 2 2,000 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 2 510 44 913,099 50 2,043,100 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 45 25,175,208 45 25,175,208 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 400 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 2 1,500 3 1,900 PROCESSING SYSTEMS CHAMS PLC 1,643.62 0.35 -5.71 29 1,855,777 9,996.00 2.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 29 1,855,777 77 27,032,885 BUILDING MATERIALS BERGER PAINTS PLC 1,854.87 6.40 - 5 9,151 21,770.00 31.10 - 4 2,227 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 177,437.26 13.50 - 10 7,408 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 2 25,664 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 2 100 23 44,550 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,501.08 1.42 -2.74 18 567,439 18 567,439 PACKAGING/CONTAINERS BETA GLASS PLC. 37,497.90 75.00 - 3 126 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 126 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 44 612,115 CHEMICALS B.O.C. GASES PLC. 1,565.08 3.76 - 1 300 1 300 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 633 1 633 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 79.20 0.36 - 0 0 0 0 2 933 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,565.68 0.25 -7.41 29 1,542,192 29 1,542,192 INTEGRATED OIL AND GAS SERVICES OANDO PLC 46,617.80 3.75 -2.60 85 1,943,302 85 1,943,302 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,957.33 163.50 -3.82 17 104,834 CONOIL PLC 15,960.90 23.00 - 13 19,223 ETERNA PLC. 4,760.13 3.65 - 1 1,370 FORTE OIL PLC. 34,515.75 26.50 - 40 182,323 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 1 1,000 TOTAL NIGERIA PLC. 50,928.28 150.00 - 34 50,480 106 359,230 220 3,844,724 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 450 1 450 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 5 19,050 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 0 0 5 19,050 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 3,014.25 1.45 - 3 1,100 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 3 260 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 100 7 1,460 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 163.30 0.27 - 1 50,530 LEARN AFRICA PLC 1,033.74 1.34 - 2 6,622 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 776.54 1.80 - 2 14,900 5 72,052 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 497.31 0.30 7.14 20 3,061,550

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industry Insight

BUSINESS DAY Thursday 13 June 2019 www.businessday.ng

Why Nigeria’s doing business ranking matters Odinaka Anudu, Joseph Maurice Ogu & Gbemi Faminu

he 2019 World Bank Doing Business indices showed clearly that Nigeria must get its acts together to become attractive. Perception matters and investors look at numbers to make vital decisions. Nigeria ranked 146 out of 190 economies in the 2019 World Bank’s ranking. Africa’s most populous nation ranked 12th on getting credit; 120 on starting a business; 92 on enforcing contracts; 171 on getting electricity; 157 on paying taxes; 182 on trading across borders; 149 on resolving insolvency, and 184 on registering property. From these, it is crystal clear that the country has major hurdles to cross in the areas of starting a business, getting electricity, paying taxes, trading across borders, registering property and resolving insolvency. Let’s start with starting a business. As of the time the report came, the Corporate Affairs Commission’s performance and compliance with 24-hour registration was poor. Has it improved? Many entrepreneurs agree, but believe it is not as fast it should be. Perhaps, the problem lies in the states where new businesses are asked to pay huge taxes and levies. All over the world, larger chunk of jobs are created by new businesses, not existing ones. This is why the United States of America is worried that new business formation is down 100,000 annually in the country. A study done by the United States Census Bureau on the jobs created between 1980 and 2005 showed that 100 percent of new jobs within this period were created by businesses that were less than five years. Older existing businesses, in aggregate, shed about one million jobs annually on the average. “Innovation mostly comes from new businesses,” John Dearie, founder and president of Center for American Entrepreneurship (CAE), said in Washington D.C, United States, recently. But most states in Nigeria do not care. Once an entrepreneur opens up a restaurant, hordes of touts besiege the business place demanding huge sums of money. Rwanda generally ranked 29 but specifically 51 on starting a business. Little wonder unemployment rate in Rwanda fell by 3.4 percentage points between

The chart in figure 1 shows the ranking of Africa’s emerging economies according to the World Bank Doing Business index for 2019. Out of the 190 countries examined, Rwanda and South Africa were graded positively with the 29th and 82nd position respectively. Ghana and Egypt recorded improvement moving from 120 and 128 in 2017 to 114 and 120 respectively. Nigeria regressed in 2019 having had 145 in 2017 and 146 in 2019.

Source: World Economic Forum 2018, BusinessDay

August 2017 and August 2018. This, perhaps, shows how the country values new businesses. Next is getting electricity where Nigeria ranked 171st. It is a shame that a country of 200 million people generates about 5,000 megawatts (MW),which is about 0.000025MW per capita. Worse still, it distributes 2,500 to 3,000MW. Potentially, Nigeria has the capacity to generate 12,522 megawatts of electricity from its existing plants across the country, according the data obtained from United States Agency for International Development (USAID). South Africa may be having problems with its Eskom, an equivalent of the old NEPA or PHCN in Nigeria, but it still has the capacity to generate 51,309 (MW). Yet, this country ranked 109 on getting electricity. Kenya’s current effective installed electricity capacity is 2,651 MW, with peak demand of 1,802 MW as of June 2018, which is why it ranked 75 on

getting electricity. According to a survey conducted by the Manufacturers Association of Nigeria (MAN), expenditure on alternative energy sources totalled N93.1 billion in 2018. In fact, MAN has set up a power company with a view to seeking ways of getting steady energy supply at reasonable costs. Kudos to Nigeria on being 12th on getting credit chart, but trading across borders is still an issue. The country ranked 182nd on trading across borders for obvious reasons. Today, Apapa gridlock and access to major ports in the country continue to make products less competitive in the global market. Cashew and cocoa exporters lament that their products get bad due to delays and they lose overseas customers because of Apapa and Tin Can situation. During a recent conference, the Ogun State chapter of Manufacturers Asso-

ciation of Nigerian (MAN) concluded that the gridlock in Apapa has raised production cost, as members often pay unnecessary demurrages due to delays of getting containers out and in of Apapa. “If Nigeria does not want to collapse its economy, then the Apapa gridlock has to be solved urgently,” the association said. Even the Nigeria Customs Service does not have functional scanners. More so, roads from Lagos to Cotonou, Benin Republic, are bad. There are more obstacles from those policing the borders than the two countries have. More so, other nations see Nigeria as a protectionist trying to ban products that they cannot even produce in the desired quantity. The steel sector is a clear example of this. Manufacturers say some items on the Central Bank of Nigeria’s list of banned items are still not produced in the right quantity. Again, Nigeria ranked 149 on resolving insolvency because cases are often stuck for ages in courts. It took many years to resolve the ownership of Ajaokuta Steel Complex. Aluminium Smelter Company’s case is still in court. When will this be resolved? Even cases taken out of courts are not easily resolved. Think about Nigeria’s regulators. They are powerful and sometimes perform overlapping responsibilities. The National Agency for Food and Drug Administration and Control (NAFDAC) does not accept tests done by the Standards Organisatio of Nigeria (SON). They both must do separate tests on an individual business. Other countries have performed better than Nigeria in many areas, which is why Rwanda was 29th I in this area; South Africa was 82nd, and Ghana was 114th. Analysts want Nigeria to resolve Apapa and Tin Can ports’ terrible situation, while also looking at renewable energy to improve the poor energy situation. They insist Nigeria cannot make headway without steady power supply, calling for a market-driven charges from power suppliers. They also want a speedy resolution of business-related issues as well as harmonisation of taxes and regulations. They add that Nigeria must bring many into the tax net while making taxes transparent and clear.

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