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Beg, threaten, or curse, ‘crazy electricity bills’ still await you …Regulation to end practice flounders one year after ISAAC ANYAOGU

fter electricity bill for his wife’s shop went up from N3,000 to N17,000 without a corresponding increase in consumption, Michael Segun (not real name) took to Twitter and wrote in anger, “Estimated billing is surely satanic and whoever came up with it surely works with the devil to swindle people.” Like a conquered people, large swaths of Nigerian electricity users are forced to pay outrageous electricity bills inflicted on them by electricity Continues on page 38

Inside UK, 17 countries ground Boeing 737 Max jet as Nigeria awaits investigation results P. 2

L-R: Ikechukwu Onwuegbu, command operations officer; Okon Eyo, commander, NNS BEECRUFT; Obed Ngalabak, flag officer commanding, Western Naval Command; Dickson Olisemenogor, fleet commander, Western Naval Command, and Fatai Ganiyu, wing commander, Nigeria Air Force representative, at a news conference on the forthcoming multi-national sea exercise dubbed ‘Obangame Express 2019’, in Lagos, yesterday.

New housing bill threatens Nigeria’s financial sector, economy T IHEANYI NWACHUKWU & LOLADE AKINMURELE

en percent of the profit before tax of Nigerian banks, insurance companies and pension fund administrators could go into a National Housing Fund promoted by lawmakers, according to an exclusive document seen by

Seeks 10% of banks, insurers, pension funds’ profits Places 2.5% levy per 50kg cement bag Overrules Pension Reforms Act, Insurance Act

BusinessDay. The so-called National Housing Fund (Establishment) Act, 2018 was secretly passed by the

Senate on November 6, 2018, following its passage by the House of Representatives on July 17, 2018.

An approval by the presidency is all that stands in the way of

Continues on page 38

2 BUSINESS DAY NEWS

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Wednesday 13 March 2019

12% drop in bank credit in Q4 2018 deepens real estate sector woes … Analysts call for JV, collaboration among investors CHUKA UROKO

he woes which define investors’ experiences in the real estate sector of the Nigerian economy have taken a turn for the worse as bank credit facilities to the sector dropped 12.39 percent in the last quarter of 2018 to N622 billion, from N710 billion in the preceding quarter. For reasons directly linked to the slowdown in the economy, the real estate sector has remained in recession for 11 straight quarters, making it an attractive investment destination for yield-hungry investors and a near dead-end for credit facilities in search of quick returns. Despite the positives recorded by the wider economy, the sector remained in negative growth territory. Bolaji Edu, CEO, Broll Nigeria, noted in the company’s fourth quarter (Q4) 2018 real estate market viewpoint that GDP growth in 2018 was positive, averaging 1.93 percent for the overall year. “The highest growth rate was evident in the last quarter of the year at 2.38 percent. Even though this growth was low, it was an improvement in comparison to quarterly figures recorded in 2017, as well as in comparison to the 2017 overall rate of 0.82 percent,” Edu said. The N622 billion credit to the real estate sector for the last quarter of 2018 represents 4.12 percent of the N15.13 trillion credit to the entire private sector within the quarter, figures from the National Bureau of Statistics (NBS) show. Experts note that the drop in credit to the sector was not surprising because banks had been shy of lending to real estate, describing it as a high risk sector coupled with its long gestation period as an investment asset class. Real estate is about real investment. Huge capital outlay is needed and the stake is very high. Femi Akintunde, GMD, Alpha Mead Group, explained in an interview that banks slowed down lending to real estate, just as even people taking corporate bonds were

being careful in Q4 2018, because of the uncertainties that surrounded the just-concluded general elections. This is quite evident from bank lending to the sector in the preceding quarters of the year. According to NBS, the sector got credit of N784 billion and N744 billion in the first and second quarters of the 2018, respectively. The N784 billion given out in Q1 2018 reflected an increase in lending to the sector when compared to the N753 billion lent in Q4 2017. But, comparing the lending in the first and last quarters of the year, there was a decline of N162 billion which, experts said, reflected the state of the economy and the uncertainties in the polity at the time. Since the onset of the 15-month economic recession in the country, real estate investors have been having it tough raising capital for their developments, hence the call for joint ventures and collaboration to lessen the burden on one individual seeking capital for projects. Analysts say joint venture arrangements are among the viable alternatives to funding real estate projects in Nigeria where cost of funds has made bank credit inaccessible, unaffordable and unattractive. They explained that one of the biggest challenges facing players in Nigeria’s real estate sector is the accessibility and affordability of capital to finance development projects. Udo Okonjo, CEO/vice chair, Fine & Country, pointed out the need for collaboration in an environment where credit is dry and risk is high, hoping that, through collaborations among stakeholders, the real estate sector could grow. “The case for collaborating in real estate cannot be stronger than now with a sluggishly recovering economy, where there’s not only massive infrastructure and protracted housing deficit, but also huge amount of under-utilised and idle asset,” Okonjo said at a real estate forum in Lagos.

•Continues online at www.businessday.ng

Women stage a peaceful demonstration at Sokoto office of the Independent National Electoral Commission (INEC) demanding release of March 9 governorship election results. INEC had said the election in the state was inconclusive, but protesters said the governorship candidate of the People’s Democratic Party (PDP), Governor Aminu Tambuwal, who scored the highest votes, should be declared winner. NAN

Nigeria records $2.80m surplus in Q4 ’18 balance of payment ... FDI inflow decreased by 28.3% to $314.44m ... as FPI dipped by 63.5% yoy to $1,382.40m HOPE MOSES-ASHIKE

igeria has seen significant improvement in the overall balance of payments, recording a surplus of $2.80 million in the fourth quarter (Q4) of 2018, compared to a huge deficit of $4.54 billion in the previous quarter. When compared with the corresponding period of 2017, the country recorded a surplus of $6.2 billion, according to the fourth quarter 2018 brief on balance of payments statistics released on Tuesday by the Central Bank of Nigeria (CBN). Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited, said on Tuesday that surplus balance in

the balance of payment is positive for the Nigerian economy as it would help the stability in the foreign exchange. He explained that the increase in exports and decrease in imports is responsible for the positive balance of payment. “The balance of payment is vulnerable to the movements in the crude oil and gas market as crude oil and gas exports accounted for about 93 percent of the total exports as at Q4 2018,” Akinwunmi said. A balance of payment (BOP) is the record of all economic transactions between the residents of a country and the rest of the world in a particular period of time. When a country’s BOP is in surplus, it means that such country is exporting more than it is importing.

Nigeria’s export earnings rose by 2.8 percent to $16.65 billion in Q4 2018 when compared with $16.2 billion in Q3 2018. It also indicated an increase of about 27.6 percent when compared to $13.05 billion in the corresponding period of 2017. Earnings from crude oil and gas, which accounted for 93.8 percent of total export earnings during the review period, increased by 2.1 percent to $15.62 billion in Q4 2018 when compared with $15.29 billion in the preceding quarter. Also, earnings from non-oil and electricity exports increased by 15.0 percent to $1034.59 million in Q4 2018 compared with $899.36 million in the preceding quarter.

•Continues online at www.businessday.ng

Pension enrolment report shows more UK, 17 countries ground Boeing 737 Max jet as men having secured future than women Nigeria awaits investigation results

…as registered contributors hit 8.4m ... NCAA says aircraft type not in Nigeria ... no basis to issue new guidance to operators – Boeing MODETUS ANAESORONYE

monthly pension enrolment data released by the National Pension Commission (PenCom) on Monday show that more men are having secured and guaranteed retirement future than their women counterparts. As the end of November 2018, 5.92 million males both in public and private sector employment have enrolled into the Contributory Pension Scheme (CPS), while only 2.46 million women have enrolled, bringing total enrolees to 8.39 million. The same trend continued through December, with men totalling 5.94 million while women totalled 2.47 million. This implies that more men will have something to fall back on during their retirement, whereas majority of the women who have

no structured pension arrangement will have to depend on their children and husbands for survival at old age. The objective of the Contributory Pension Scheme is to ensure that every person who worked in either the public service of the federation, Federal Capital Territory, states and local government or the private sector receives his retirement benefits as and when due. It also targets to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age. The gap between male and female enrolees into Nigeria’s Contributory Pension Scheme reinforces the gender inequality in the workplace and the fact that more of the women operate in the informal sectors of the economy.

•Continues online at www.businessday.ng

IFEOMA OKEKE, ISRAEL ODUBOLA & SEGUN ADAMS

n the aftermath of the devastating Ethiopian Airlines’ plane which crashed in the early hours of Sunday minutes after takeoff from Addis Ababa en route to Nairobi, resulting in the loss of 149 passengers and eight crew members on board, the United Kingdom and 17 other countries across the world have suspended Boeing’s 737 Max 8 planes from operating. The UK Civil Aviation Authority said on Tuesday it banned all Boeing 737 MAX Aircraft planes from its airspace after the fatal Ethiopian Airlines’ crash that killed 157 people weekend. In the absence of sufficient information from the Ethiopian Airlines’ plane’s flight-data recorder, the UK

Civil Aviation Authority issued instructions “to stop any commercial passenger flights from any operator arriving, departing or overflying UK airspace”,it said in a statement Tuesday. Between the close of trading on Friday March 8 at the New York Exchange, and Tuesday (7.05 pm), Boeing lost $50.61 or 11.98 percent to $371.93/ share, underperforming the aerospace & defense industry (-1.21%) Other countries that have grounded the aircraft include China, Germany, France, Mexico, Brazil, Argentina, Indonesia, Turkey, Ireland, Australia, Ethiopia, South Africa, Malaysia, Singapore, Oman, Morocco and Mongolia. While investigations are on-going to ascertain the cause of the crash and establish if there is any correlation with the Lion Air crash of October 29, 2018 involving the same

model, some other countries have adopted a “wait-and-see approach” to determine their next line of action. The aircraft type is currently not operating in Nigeria but the country’s largest indigenous carrier AirPeace and prospective airline Green Airways have ordered 10 and 100, respectively, of the same type of aircraft. “While we keep engaging with our partners in this regard, we repose implicitconfidenceinBoeingandaviation authorities to capably and satisfactorily addressalltheissuesifattheconclusion oftheon-goinginvestigationitisdiscovered that the challenge is with the B737 Max8,”Nigeria’slargestdomesticcarrier AirPeace said in a statement Monday, giving assurances that the issue would be addressed in the interest of clients.

•Continues online at www.businessday.ng

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Nigeria’s main opposition party gradually gaining state momentum MICHEAL ANI

resident Muhammadu Buhari’s ruling All Progressives Party (APC) appears to be losing grip to its main party rival - the People’s Democratic Party (PDP) in the keenly contested 2019 governorship elections. The candidates of the opposition PDP were announced winners in both Imo and Oyo states, which were previously won by the ruling APC in the 2015 election, after former President Goodluck Jonathan’s defeat in the presidential race. So, of the 23 governorship sets controlled by the ruling party after the 2015 gubernatorial elections, its main opposition party has so far broken into two, and might expand further when the six states that were declared inconclusive by the Independent Electoral Commission hold rerun polls.

“The opposition party is gaining strength because people see it as the alternative choice to the four years misrule by the ruling party,” said Yinka Odumakin, who is the National Secretary of Afenifere, a pan-Yoruba cultural group. “Even with the intimidation, you could still see the PDP winning some more states.” The INEC has so far announced results for governorship candidates in 23 states across the federation, while it declared a rerun in six other states and an outright suspension in Rivers. In most of the states, the electoral processes were marred by voter’s intimidation, killings, and ballot box snatching, among others. The main opposition party described the decision by the independent body as a plot to rob it of victory. The states where elections were declared inconclusive include Adamawa, Bauchi, Kano, Plateau, Benue and Sokoto. The PDP

lost all but Benue and Sokoto states to the APC in the 2015 governorship election. However, the results announced so far from the six states declared inconclusive had put the PDP on an early lead. It is not clear what will eventually happen when the electoral body organises a rerun within 21 days. “It is clear, going by statistics from the elections that the PDP is gaining strength gradually, breaking dominance in areas where they lost ground previously in 2015,” Gbolahan Ologunro, an equity research analyst at Lagosbased CSL stockbrokers said on phone. Both parties have so far shared the states—leaving out the remaining 89 registered parties with nothing to cheer-- coming from the governorship results announced in the 23 states, with the ruling party winning 13 states while the main opposition party so far won about nine states.

Inconclusive poll: Southwest PDP alleges conspiracy between INEC, APC INIOBONG IWOK

… as Afenifere rate INEC low on conduct of elections

he Southwest chapter of the main opposition People’s Democratic Party (PDP) has alleged that the Independent National Electoral Commission (INEC) is colluding with the ruling All Progressives Congress (APC) to derail the 2019 general elections. INEC Monday declared gubernatorial elections in six states of Kano, Sokoto, Benue, Bauchi, Adamawa and Plateau inconclusive, the first time since 1999 the nation embraced democracy. The commission has also stopped the announcement of results in Rivers State due to the violence that engulfed the state. This move has been

criticised by the PDP whose candidates were leading in most of the states. But Southwest chairman of PDP, Eddy Olafeso, in an interview with BusinessDay, Tuesday, berated the commission for declaring gubernatorial elections inconclusive in some states where the party’s governorships candidate were on the verge of winning. He described the move as a plot to militarise the affected states in the supplementary election and work in favour of the APC. The PDP chieftain stressed that the party was aware of the plot, describing the 2019 elections as the worse in the history of the

country. According to Olafeso, “We have seen this all the time, we have alerted the world of the plan of INEC and APC involving the security agencies to derail the general elections, so that they can continue to militarise the place. “We are aware of their plot, this is shameful, and this is the worse elections in Nigeria’s history.” Meanwhile, leader of panYoruba socio-political group, Ruben Fasonranti, has rated the conduct of the 2019 general elections low. Speaking in an interview with BusinessDay, Tuesday, Fasonranti said the election was a set back for the country.

Nigeria records decline in Lassa fever cases as NCDC sustains intensive response CYNTHIA EGBOBOH, Abuja

he Nigeria Centre for Disease Control (NCDC) has announced the rapid decline in the number of Lassa fever cases recorded in Nigeria over the past five weeks. Chikwe Ihekweazu, director-general, NCDC, in his statement on Tuesday, said Nigeria as a country had witnessed a reduction in the number of people who had died from the disease, stressing that NCDC would continue in its partnership to sustain response activities in states across the country, despite progress made so far.

‘’An outbreak of Lassa fever was declared in Nigeria on the 21st of January 2019. Since then, 420 confirmed cases and 93 deaths have been reported in 21 states, the national response is being coordinated by the national, multi-sectoral, multi-partner Emergency Operations Centre (EOC) led by NCDC. In addition, NCDC has supported Ebonyi, Edo, Ondo, Plateau and Kebbi states in activating sub-national level EOCs for coordination,” he said. According to Ihekweazu, following the large Lassa fever outbreak in 2018, the NCDC together with partners instituted five key measures to en-

sure improved preparedness in 2019. “We have instituted various measures which includes; Training over one thousand health care workers in the six zones in the country on Lassa fever management, diagnosis and surveillance, together with the Irrua Specialist Teaching Hospital; Prepositioning of treatment and diagnostic supplies to the 21 states that recorded cases in 2018, treatment centres and laboratories; Publication of Lassa fever messages on three major newspapers, weekly radio shows on Radio Nigeria, and intensive community engagement,” he said.

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Leadership and the challenge of mass poverty Small Business handbook

Emeka Osuji

ome say Nigeria has no business with poverty. I think they are wrong. Nigeria has every business with poverty, until we recognize the nexus between poverty and politics. Poverty and politics are united, just as economics and politics are intertwined. Thus, it is difficult to be completely apolitical and have a full life, anywhere in the world. The raging battle for the soul of the states of the country, whereby the peoples’ ballots are being stolen and replaced by those thumb printed by the candidates and their agents, speaks volumes about the many things, including the kind of leaders we are expecting and freedom of choice. Those who want to serve the people will allow them to choose who serves them. And the absence of free choice is a mark of poverty. The just conclude elections show that we have not made any progress in the democracy part of us. Nigeria has outperformed its peers in several human endeavours; not in the building of a united nation; not in rocket science or engineering; but especially in endeavours that are devoid of national pride and honour. We probably have the largest amount of money stolen by public officers in the world. For years, we have been repatriating funds stolen by a single man, the former Head of State,

Sanni Abacha, and we are not half way done. We have a divided country of we and them, masters and servants and winners and losers. We may have tribal rallying points but a national creed is not about to evolve. Clearly, we have not done anything to ginger the spirit of nationhood in all Nigerians. We do not care enough for our people. Therefore, they have become too poor, malleable and vulnerable to criminal pressure. If our elections have been devoid of honour and integrity in the past, the current one has completely upped the ante. It has become a kind of trial by ordeal. Ballot box snatching, which had begun to be a thing of the past, returned full scale in 2019. People were being killed like chicken, not only by party supporters but the security operatives sent to protect them. Many hearts, especially those of innocent voters have been broken, from a failed hope of a free and fair election that never happened and the large number of peopled killed across the states. The point of this piece is that our present political arrangements do not promote harmony and cohesion, and will not bring prosperity. Instead they guarantee poverty. They promote hatred and destructive rivalry because it is a winner takes all system. I have said elsewhere in the past that the current political system – the presidential system of government – may be doing more to unravel Nigeria than corruption and nepotism. It is not only so expensive that it starves critical public necessities of requisite funds, it also breeds disunity at all levels and generates poverty and lack. Has anybody tried to find out why the phenomenon of hate speech, which we did not see even at the end of the civil war, all of a sudden, became a burning issue during Buhari’s first term in office? Why did we suddenly grow more resentful and hateful of one another? It is because of the winner takes all nature

of our current politics and the fact that the enormous powers it confers on executive positions may get into wrong hands and be used against the people of Nigeria. This makes those outside the privilege of power resentful of those they perceive to be enjoying what belongs to all of us. Wrong use of presidential system and its powers breeds hatred among the people, especially the literate poor. Why, instead of hauling people out of poverty as India did, over the past few years, and handed the badge of poverty to Nigeria, we have shoved millions more of our people into poverty. To be an oil rich country and still be the poverty capital of the world is something to be scandalized about. How can we drop this crown of shame? Surely not by leaders who are lawless and selfcentred as those wielding thugs all over the country. It is by people-oriented leadership devoid of the current high levels of tribalism, clannishness and nepotism that ravage our national and subnational governments. Mass poverty is a product of failed leadership and leadership may fail for many reasons, of which incomeetence and lack of capacity are only a small part. For as long as our leaders, especially lawmakers, continues to preserve bad laws in the hope that they may profit from such laws in the future, for so long will their law-making be a waste of public resources. The National and State Assemblies have failed Nigeria in such a woeful way that they ought to be scrapped. They have not acted as defence for the people of Nigeria against oppressive governments. Instead they team up with such oppressive `governments, especially in the states But it is not right to continue to blame politicians for the ills of our political system when there are laws guiding practically all human action. As long as our institutions remain the private property of those appointed to

‘

...the current political system – the presidential system of government – may be doing more to unravel Nigeria than corruption and nepotism

run them, and offenses carry selective consequences, we go nowhere. The failure of our leaders to honestly reform the electoral system, for instance, has guaranteed that incumbency, cash and self-interest continue to dominate the political system. Even the process of recall, the so-called window for Nigerians to express their dissatisfaction with poor representation, is flawed. Nobody can ever be recalled through that process. We all know this but the so-called law makers are so shamelessly selfish that they won’t amend that process. Clearly, this kind of political system, where one man controls everything, either at the federal, state or local government level, and accounts to nobody except himself, is the most potent threat to the fragile peace we have in Nigeria. It is the source of all the poverty. This system gives too much powers to those in executive positions and has no way of compelling them to account. This is why governors who owe several months of salary arrears are being re-elected in many states. The people have been so weakened by penury that they actually have no votes effectively. Our electoral system has not improved beyond the primitive rigging techniques of yester years. The result is that services are not delivered and the people do not see their national resources. They become poor and desperate, and the same politicians who made them poor hire them as thugs. These people are too poor to care about anything including their own death. We must provide our people the minimum acceptable levels of living if we want them to be useful human being. Otherwise, we build a house of thugs to be harvested for selfish reasons by the people who made them poor. Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

President Buhari needs to be a Lionheart

J.B Nwachukwu

ith his re-election, President Buhari becomes the second military leader to serve a second-term as a civilian leader. Beyond this achievement, a litany of questions abound in the minds of people: will he be in good health to see it through; have the mistakes of the firstterm be learned from or will they be repeated, such as the appointment of dead persons as officials; which ministers and appointees will be retained, and who are the likely new appointees; when will the ministers be appointed; who will constitute the new cabal; will Tinubu be sidelined again and will the President fight corruption “ruthlessly” across party lines? The very important worry, that’s puzzling millions of Nigerians, is how the President will treat the regions of the country that didn’t vote for him. During his first term, the president was repeatedly accused of tribalism and nepotism when the most juicy and sensitive political appointments went to people of his region. He didn’t deny this charge but rationalized it. At an interview with Caroline Baker of the United

States Institute of Peace (USIP) on 22 July 2015, his rationale for not having an inclusive government was, “I hope you have a copy of the election results. The constituents, for example, that gave me 97% [of the vote] cannot in all honesty be treated on some issues with constituencies that gave me 5%.” Even though the figures he gave didn’t add up, the statement made many across the country shiver. It was also a shock to many who heard him say at his swearing-in on 29th May 2015, that he belonged to everybody and belonged to no one (This contradiction, in hindsight, was probably misinterpreted because of the euphoria over the first democratic transition). That May afternoon, many thought the healing process had started but his statement at USIP made it clear that the wounds were far from healing. Despite the uproar from this divisive statement, the president did not back down. Whenever he was accused of discriminating against the people from the eastern region, he would say “I got 198,000 votes which virtually any local government can give me but I have four substantive ministers and seven junior ministers from there”. The Igbo’s did not only feel short-changed or neglected by the appointments, they also felt the federal government treated them differently in its response to IPOB and other insecurity challenges in the region. Some commentators have accused the president of treating the easterners as enemies. Some have blamed his apathy to Igbo’s on his militarily training. A military man is trained to know his enemy and how to tackle his enemy.

For President Buhari to focus only on the infinitesimal number of Igbo’s who voted for him is short-sighted. He does not seem to appreciate, beyond their votes, what the Igbos contribute to the country: their entrepreneurial drive which generates revenues, creates jobs, and their academic achievements both at home and abroad. If the President saw the Igbos with this pair of lenses, he probably would have a better relationship with them. Surprisingly, during his campaign for the 2019 election the president came to the East to solicit for votes; the 5% have their value after all.Farooq Kperogi who captured the irony well said: “You don’t trust a people to appoint them to ‘sensitive positions’? Then don’t ask for their votes -- and don’t whine”. Unfortunately, the easterners are not interested, not even the promise that the 2023 presidency will be zoned to the East could entice them to change their minds. On the 23February they vented their frustration and voted overwhelmingly AtikuAbubakar. Though he got more votes than in 2015, it’s clear that four substantive ministers and seven junior ministers from the region won’t do. The President can react to this result in two ways. Either with the same divisive mindset of 2015 or that of a lionhearted leader. This will be in keeping with his acceptance speech when he charged his supporters “not to gloat or humiliate the opposition”. The president must respect the right of the electorate to vote whomever they want but this doesn’t give him the right to cherry-pick those he wants to rule. He has been elected the President of Nigeria not the president of a particular religious or ethnic group.

As President Buhari prepares to begin his second-term, Genevieve Nnaji’s latest film, Lionheart, provides a few insights. President Buhari needs to have a lionheart both in terms of courage in tackling the daunting challenges ahead and in his magnanimity in treating all justly. Nigeria at the moment can be compared to the motor company Lionheart, which at a point was at the verge of bankruptcy, but rebounded after its merger with Maikano Motors. Nigeria is at a point where the line between the North and the South, the rich and the poor appear to be expanding. We need a president who can close the divide; we need someone, like the character Genevieve plays in the movie, to strike a merger deal. If he can’t, he should not make it worse either by words or deeds. The late MaitamaSule called for a similar approach in 2015. MaitamaSule who led members of the Northern Leaders’ Forum (NLF) to congratulate President Buhari encouraged the president to be just. He said, “with justice, you can rule Nigeria well. Justice, is the key. If you do justice to all and sundry – and I say all and sundry – because Allah says if you are going to judge between people, do justice, irrespective of their tribe, religion or even political inclination; justice must be done to whosoever deserves it.” Continuing he said, “I am not asking you – and I know you will not – to discriminate against any part of Nigeria. But I am asking you to do justice to all parts of Nigeria. Justice will bring about peace. Peace and stability are the pre-requisites of development.” Nwachukwu is a lawyer and a writer

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Dapo Akande

’d be the last person to glamorise losing or to extol the virtues of a serial loser but over time I observed we’ve become a people who have an unhealthy fear of losing. In our quest to win at all cost, morality becomes an inconvenience which we hurriedly discard so as not to ‘besest’ us. This attitude is abundantly evident everywhere we look. Is it in politics, religion, sports, education. That’s perhaps why you will hear of Pastors faking miracles in order to boost church membership; or students involving themselves in sundry exam malpractices. Some trek down the bribery route while others in a more sordid display of depravity use their bodies to negotiate a more favourable result. It sickens me to say that in some cases, parents who ought to set the moral standard are the ones who go ahead to offer pecuniary gifts to lecturers on their children’s behalf; thereby disdaining the warning of God which says, “if anyone causes one of these little ones who believe in Me to stumble, it would be better for him to have a heavy millstone hung around his neck, and to be drowned in the depth of the sea”.

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A losing win Character Matters with Daps

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It’s worthy to note how we all claim to believe in God, no matter our religion but judging by behaviour, there aren’t many who appear to believe in what He says. Anyway, that’s another discussion entirely. I’m reminded of someone of our household many years ago who seems to have believed God however. And to give him credit, you certainly couldn’t accuse him of fearing defeat either. To crown it all, he appeared the epitome of integrity. Well, at least at “first glance”. There was a time when my mum was in the car with our house help at the time, Cletus. Now, Cletus took the concept of integrity to an entirely different level when he received the scolding of his life from mum. While mum was busy venting her anger and frustration because Cletus who had been with us for three years now was none the wiser about how to perform a particular chore, Cletus ever so politely interjected while raising his hand in objection, “Sorry, no be three years ma, na four years”. Neither my mum nor the driver who nearly lost control of the steering wheel knew whether to laugh or to cry. How’s any rational being meant to respond to that? Not a word was said until they got home. I remarked in an earlier article how our people are so aversed to finding themselves on the losing side in elections that they would prefer to vote for candidates they know very well will only impoverish them the more by stealing the treasury dry, than do the rational thing by voting their conscience. All because

they don’t want to “waste” their vote. With glee, difficult to comprehend, they celebrate when their candidates win. By virtue of association, they deceive themselves they have won too. A more grotesque form of sadomasochism is nigh impossible to imagine. A win which brings immeasurably more harm than benefit is an unmistakable loss. A supposed loss, however, which makes its mark by inspiring others is an honourable venture. A loss which makes a dent in the status quo thereby igniting the flame of hope in others that a new dawn is indeed possible is nothing but a win in my book. Our resort to winning at all cost has on several occasions brought disgrace to our dear nation. To mention one, in our desperate bid to win sporting laurels in the past, we have been known to field overage players in sporting competitions. That’s why football players who claimed to be teenagers “prematurely” stopped growing in height but instead began to balloon in size as their clubs endeavoured to enhance their growth. So embarrassing. Of course, cheating in sporting competitions is not something limited to just one country. Especially when it comes to doping. Russia and China have not only been found guilty of this in the past but incontrovertible evidence of state collusion has sometimes been found, thereby making it a state policy as it were. The wrongs of others however don’t make our wrongs right. Let’s not even talk about the terrible message this passes down to the younger generation, connoting

‘

A loss which makes a dent in the status quo thereby igniting the flame of hope in others that a new dawn is indeed possible is nothing but a win in my book

deceit is the best way to go. Needless to say, this orientation systematically unravels the moral strands which ought to hold the society together. Our youths erroneously associate the carefully choreographed picture of cavorting, scantily clad damsels, draped around an outrageously bejewelled male as he drives the latest wonders on wheels, carelessly offloading the almighty dollar while singing appropriately vulgar lyrics, with winning; so they throw all moral caution to the wind as they stride towards this crest of a lifestyle. Once they get there, no matter how, they have won. Unknown to the undiscerning and the unwise, this can only result in what I call a losing win. Why? Because a nation where decadence, cheating, might is right induced “victory” is on a fast lane to losing woefully. Such a win seldom produces any winners. Victory just has to be made of more noble stuff. I advocate a win that adds to us as a people and doesn’t decimate, desecrate or invert our values, leading us to a place where the end justifies the means. A win that degrades our minds and upends our values as a society is nothing but a pyrrhic victory. A defeat doesn’t always produce losers just as a win, depending on how you get it, doesn’t always make you a winner. The detrimental effect this has on the mindset of a nation is nothing but a losing win. Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Options before Atiku Ralph Nwangene

t’s over two weeks that Nigeria held her latest presidential election. Like most other such events in the last twenty years, it was momentous. It was presaged by its peculiar anxieties, electioneering brickbatting and the usual bi-polar party muscleflexing to mention a few. Unlike other high-calibre elections before it, this result took a bit longer to come; Nigerians had to wait about four days before the election arbiters could announce their verdict: an excruciatingly long time to wait after a dramatic postponement of E-day by one week. When the result was finally announced, it was a mixed bag of oohs and aahs. Something seemed amiss but not many could place a finger on it. The difference between the declared winner, President Muhammadu Buhari, and the closest rival, Atiku Abubakar, was much but again, not much. Some had thought Atiku would win but he lost. While many had believed the incumbent President Buhari was bound to lose, he won. Feelings were, therefore, not just mixed, but in staccato fashion. Supporters of Buhari, who are of course members of the All Progressives Congress and their sympathisers, were ecstatic in their rejoicing. On the other hand, supporters of Atiku, Wazirin Adamawa, became ‘disatikulated’, so to speak. They cried foul, they reckon that they had been dealt a bad hand both by the ruling party and the

arbiters INEC using the instrumentalities of the federal might. On that score, Atiku would not congratulate the declared winner as he was expected to do. A peace accord was signed after all that while whoever wins would be magnanimous in victory, the loser must accept defeat in good faith, embrace the winner and elect to act in ways that would uphold the future and overall good of the country. In other words, Atiku is urged to re-atikulate, to stretch a once-winning slogan. This is the thinking of some Nigerians. Olisa Agbakoba, eminent lawyer and one of those who wanted a change of the incumbent, had spoken about the futility of pursuing litigation and seeking to upturn the announced result. He urged Atiku, a former vice-president, to look beyond the defeat and take up the mantle of a statesman to build a new and united movement. Agbakoba said: “I understand the PDP is aggrieved at the outcome of the election and alleged massive irregularities. I urge former vice-president not to approach the Election Petitions Tribunal. He might have (been) moved backwards by his loss, but he should not lose sight of the legacy of greatness that lie in front of him. There is also a lot of work to be done in both political and electoral reforms. I request former vice-president Atiku Abubakar to step into those shoes. We look forward to a new Nigeria, strong and united, a new Nigeria that will not vote on the basis of ethnic and primordial sentiments.” Though many have criticised Agbakoba for suggesting that Atiku should not exercise his right, the former president of the Nigerian Bar Association (NBA) has raised some sumptu-

ous food for thought here. Again, though we understand the predicament of Atiku and his PDP quite well – the cost of a huge, elaborate campaign, the loss of opportunity to occupy the number one position and the need for selfpreservation and even possible witch-hunt by the ruling party. These anxieties and fears would push any man to press a matter like this to extreme, logical and even illogical ends if need be. Perhaps some reassurances and assuaging of fears by the winner could help here. But whatever the case may be, the Agbakoba option may well be the stuff for statesmanship in this circumstance. Atiku may well back-track still and surprise Nigerians with a statement like this: “My party members and all those who voted for me on the 23rd of February and indeed all Nigerians of goodwill, it is with great sobriety and a deep sense patriotism that I make this announcement today. It is true that I had rejected the result of our recent election, it is true that I have refused to felicitate with the declared winner and it is also true that I have approached the election tribunal to seek redress… “My fellow compatriots, I wish to inform you this day that in the overall interest of our beloved motherland Nigeria, I back-track. I hereby congratulate the declared winner of the election, President Muhammadu Buhari. “Yes, I still think the election was pockmarked by much irregularities, but we all know that no election is perfect. Yes, it is my right to seek legal redress, but I want to say instead that not all wrongs are righted or are

all rights pursued. My party and I have decided to take solace in the fact that we ran a good race, I and members of my party PDP gave a good account of ourselves through our robust and well-choreographed campaign. Though the result may seem not favourable, we have nothing to be ashamed of. “In adherence to the advice of many prominent Nigerians, we shall return to the drawing board and again, in the interest of our country, we shall initiate moves to ensure that future elections are much better handled than this one. We shall do all that is in our power to drive the change for a comprehensive electoral reforms; we shall help to birth far-reaching reforms to reduce malpractices in our electioneering processes and eliminate, to a large extent, the need for both pre and post-election litigations. We shall bring our election up to speed to compare with elections in most parts of the world. Though we have seemingly lost, we have determined to make 2019 elections a watershed in Nigeria’s march to democracy; a watershed of the most pristine kind.” As someone had said, one doesn’t have to be a president to be a statesman. Indeed, statesmen are not marked by the positions they held or that are bequeathed unto them; nay, it is by their sheer nobility of thought and purpose, by their great deeds to their country and humanity. To Atiku Abubakar, greatness beckons, nobility beckons and statesmanship is up for grabs. He may yet turn adversity to greatness. Nwangene writes from Lagos.

A Par

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Wednesday 13 March 2019

Nigerian brand of multi-party politics

hen, in 2002, the late Chief Gani Fawehinmi successfully challenged the decision of the Independent Electoral Commission (INEC) at the time to refuse registration to his political party, the National Conscience Party (NCP) and many others on the grounds that they did not meet the prerequisite set by the electoral body to be licensed as political parties, we all rejoiced that the decision of the courts to throw open the door for anyone or any group to register political parties to contest elections as a big victory for democracy and the freedom of association. It did not occur to us that multi-party systems work best in a parliamentary system with proportional representation in place and is not particularly suited to presidential systems, with an inbuilt winner-takes-all arrangement. Regardless, and as a consequence of the ruling, INEC, on December 3, 2002, registered twenty-two (22) new political parties, prominent among which are the National Conscience Party (NCP) of Gani Fawehimni, Movement for Democracy and

Justice (MDJ) led by former Inspector General of Police, M.D. Yusuf, the People’s Redemption Party (PRP) led by former Kaduna state governor, Balarebe Musa and the Green Party led by human rights activists, Olisa Agbakoba (SAN) to contest the 2003 general elections. One of the consequences of the ruling was that the door was thrown open to just anyone to register a political parties to contest elections without meeting any set threshold. But just like the opponents of the decision had argued then, none of the twentytwo registered political parties had grown or evolved into a national party. In fact, less than three of the 22 political parties still exist today, and even then, as shells rather than vibrant political parties truly fulfilling the functions of a political party to aggregate interests, educate the populace politically and serve as a veritable vehicle for capturing power. The unintended consequences of having an unregulated space for political parties is that there are, at present, over 91 political parties dotting the landscape of the country, majority of which, it is clear, were set up mainly for transactional purposes, for selling endorsements, and for hobnob-

bing with politicians of the main parties in search of connections and filthy lucre. Sadly, this figure may even rise to 131 if INEC were to register the over 40 so-called political parties who have submitted applications seeking registration. Take for instance the last presidential election. As much as 71 presidential candidates contested the elections but it was clear only two candidates stood any realistic chances of winning. The others were in it not to win but may even have been formed as shells of the major parties to confuse, distract and even balkanise votes of either of the major parties. First, many of them have just a single office or a few offices and branches and do not boast of branches and structures around the country – a prerequisite for any party that is serious and desirous of winning a national election. Secondly, many of them just sprang up so close to the elections and had not mobilised across all nooks and crannies of the country. Unsurprisingly, they began revealing their true intent so close to the elections as they jettisoned their pretentious candidates and began adopting or selling their endorsements for either the candidates of the APC and the PDP. Thirdly, on the day

of the presidential elections, none of the parties deployed agents to the over 120, 000 polling booths except the two dominant parties, an indication they were not really contesting to win. However, INEC was bound, by law, to take them seriously, increasing the logistic difficulties and the costs of the elections. Most voters didn’t find the long and unwieldy ballot paper funny as they had to search on end for the parties of their choice and run the risk of their votes being voided because the space allowed for thumbprinting had shrunk significantly. It got so bad that international media made fun of Nigeria’s motley of candidates contesting the presidential election, comparing them to the sizes of the entire parliament of some countries. Clearly the courts did not foresee the abuse that the opening up of the political space will engender. We have a responsibility to clean up the political space and prevent mercantilist and transactional parties as we have them today. We expect the incoming National Assembly to make a law to limit registration of political parties and set real criteria or thresholds for intending political parties to meet before registration.

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FCMB Pensions hints on doubling AUM in 3yrs amid stake increase

Pg. 14

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

AVIATION

Boeing shares sink the most since 2001 as jittery customers dump Boeing 737 Max …Air Peace, Green Airways under pressure to cancel orders IFEOMA OKEKE & OLUFIKAYO OWOEYE

hares of Boeing were in a free fall on Monday after Sunday’s air mishap involving Ethopian Airline Nairobibound Boeing 787 ax 8 aircraft which crashed shortly after take-off killing all passengers onboard. The shares sank 11 percent to $374.31 on Monday on the New York Stock Exchange (NYSE) after sliding as much as 13 percent for the biggest intraday decline since Sept. 17, 2001, the first day of trading after the infamous September 11 attacks. The ill-fated flight followed the crash of Lion Air’s 737 Max off the coast of Indonesia on October 29 last year killing all passengers onboard. This has raised concern among major airlines across the globe. The aircraft model, 737 Max 8 is Boeing’s most im-

portant aircraft type, generating almost one-third of the company’s operating profit and forming the backbone of many global airline fleets who use the model

and Airbus’s competing A320 family on shorter routes. Chinese airlines account for about 20 percent of 737 Max deliveries worldwide

and the country’s aviation authority has ordered carriers to ground all 96 of Boeing’s newest 737 model Following Sunday’s plane crash, Nigeria’s larg-

est carrier, AirPeace Airlines, and prospective airline, Green Airways, are currently under pressure from customers to cancel orders it made with Boe-

ing to purchase Boeing 737 MAX 8 aircraft. Recall that Air peace last year ordered for 10 of the same aircraft brand. Also, Green Airways Africa, a prospective domestic carrier also claimed to have ordered for 100 of the same B737-800 MAX from the aircraft manufacturer. Chris Iwarah, corporate communications manager, Air Peace Limited in a statement confirmed that the Airline placed orders for new Boeing 737 MAX 8 aircraft but are yet to take delivery of the aircriafts noting that the aircrafts are still at the design stage. “Although it is premature to comment on the incidents, we wish to assure members of the flying public that we are closely following and monitoring developments on the issue as an airline that prioritises the safety and well-being of our customers,” he said.

BANKING

Access Bank clears the air on metal billet allegations SEGUN ADAMS

ollowing publications in some media on charges filed against Access Bank by the Special Fraud Unit (SFU) of the Nigeria Police Force, the tier-1 lender has refuted allegations of conspiracy and theft of metal billets said to belong to BMCE Bank International whilst explaining its side of the story in a release sent to the Nigerian Stock Exchange (NSE), Monday. Last week, some publications across several media platforms stated that Herbert Wigwe, CEO of the Access Bank, and other named individuals were to stand trial before an Ogun State high court for the N2.5 billion fraud over the sales of some metal billets. However, Access Bank in the release to the NSE maintained that it financed the importation of the billets and that the Receiver/ Manager it appointed and a syndicate of lenders had the right to sell the goods.

In the statement, the Bank insisted that ‘’ at no time did the Bank or any of its executives or officers commit any of the alleged offenses’’. According to Access Bank, Metal Africa Steel Products Limited in 2015 was granted credit facilities to finance the importation of billets and machinery for expansion of the manufacturer’s factory. The Bank said it opened Form M and Letters of Credit, consequent upon granting the credit, in order to facilitate the importation of the billets for which the shipping documents were consigned to the bank. The credit facilities were secured by a Debenture Trust Deed over the assets of Metal Africa Steel Products shared with other lenders. Access Bank in the statement said that it released the shipping document to Metal Africa Steel Products upon arrival of the billets so the goods could be cleared but discovered thereafter that

Metal Africa Steel Products ‘’had cleared the goods from the port without payments of appropriate customs duty’’ Bound by its duty to protect its depositor’s fund, Access Bank said it reported the alleged crime to SFU and was authorised by a court order to take over Metal Africa Steel Product’s operations. The Bank further stated that it petitioned Interpol which is making efforts presently to repatriate from India, suspects in the alleged fraud. Access Bank explained that under the Debenture Trust Deed, it as well as the beneficiary banks appointed a Receiver/Manager to take over operations of the manufacturers business and paid the appropriate customs Duty on the billets. The Receiver/Manager subsequently obtained a court order from the Federal High Court, sold the billets and distributed the proceeds among Access Bank and the beneficiary banks. The tier-1 bank expressed that it was aware that BCME

Bank International also laid claim to the same billet and that there were unsuccessful attempts to settle between the Receiver and BCME Bank International, the petitioner, which led to BCME Bank filing a complaint with the SFU. In response to the recent development, Access Bank

stated the charges of fraudulence and theft brought against it is surprising and untrue. Access Bank said that it is both aware that there are civil matters in court on the subject matter and on-going settlement negotiations between the Receiver and BCME Bank International,

assuring stakeholders of its continued commitment to safeguarding depositors’ fund. Shares of Access Bank gained 0.83 percent in the Monday’s trading as the Banking index and NSE AllShare index declined by 2.87 percent and 0.90 percent respectively.

L-R: Yemisi Edun, executive director, finance, First City Monument Bank (FCMB); Eme Essien, country manager, International Finance Corporation; Adetayo John-Fishers, managing director, Richman Fishers Limited and a recipient of the FCMB SheVentures zero interest loan for Women entrepreneurs, and Olapeju Sofowora, director, FCMB Group Plc, during the launch of the bank’s SheVentures proposition and celebration of International Women’s Day in Lagos.

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Wednesday 13 March 2019

Business Event

PENSIONS

FCMB Pensions hints on doubling AUM in 3yrs amid stake increase MICHEAL ANI

CMB pensions will leverage the strength of the group to double the growth of its Asset Under Management (AUM) in three years and be a top tier industry player in the long run. This is on the back of an increase in majority stake by the firm in erstwhile Legacy pension to about 92 percent as at July 2019, Misbahu Yola, managing director/ CEO of the firm said. “In the short term, we are aligning with the brand and the culture of the firm with that of the group so we can become part and parcel

of the growth”, Yola said in an exclusive interview with BusinessDay. “In the medium term, we want to double our asset under management and be a top tier player in the long run”. FCMB pensions has a total AUM of N275 billion and a customer base of 400 thousand, as at end of January 2019. Double asset growth in three years means that the firm hopes to boost its asset to N550 billion by 2022. Yola noted that with an increase in stake by FCMB, the firm will have access to a wider branch network, more importantly; “we will have more brand recognition which the FMCB brand is known for because they

have been around for over 30 years”. Between 2017 and 2019, FCMB group completed an additional 63.8 percent stake in Legacy Pension Managers Limited from 28.2 percent to 92 percent as at January this year. The completion of the transaction follows the approvals of the Central Bank of Nigeria, the National Pension Commission, and the Securities and Exchange Commission. FCMB Group’s acquisition of Legacy was aimed at opening a new vista of sustained growth for Legacy through the enhanced distribution and market presence, the group said in a statement.

L-R: Olaoluwa Babalola, brand manager, Heineken; Leke Olugbemi, winner of All Expense Paid Trip To UEFA Champions League 2019 Semi-Final, and Mfon Bassey, senior brand manager, Heineken, at the Heineken UEFA Champions League premium viewing event in Lagos.

CONGLOMERATE

UACN appoints former Transcorp CFO as Group Finance Director amid shrinking profits OLUWASEGUN OLAKOYENIKAN

AC of Nigeria (UACN) Plc, one of Nigeria’s largest and oldest business conglomerates, has approved the appointment of Ibikunle Oriola as its Group Finance Director, even as the firm scuffles with dwindling profits. Oriola, who is a seasoned professional with 17 years’ experience gained from diverse functional roles, covering finance, strategy, risk management, and corporate finance, had served as the Group Chief Finance Officer (CFO) of Transnational Corporation Of Nigeria Plc until August 2017. After-tax profit of the conglomerate firm slumped 84 percent in 2017 to N962.82 million from N5.67 billion posted a year earlier. There is probably no end in sight for the company’s deteriorating

performance in 2018 as it could only record N252.41 million profit in the first nine months of 2018, that is more than 87 percent fallback from N1.97 billion posttax profit recorded in the same period in 2017. Consequently, UACN share price has maintained a downward spree in the last five years, tumbling to its weakest levels since 2005. It closed unchanged, Monday, at N8 after the close of trading at the Lagos bourse. UACN’s current performance is reminiscent of its conglomerate peer, Transcorp, in 2012 before Oriola’s appointment in September 2017. Transcorp could only shelve its waning profit in 2017 but resumed a year after to hit a loss of N1.13 billion in 2016. Transcorp, however, came out of the woods in 2017 after recording N10.61 billion profit. Despite the ups and downs, the firm continually increased sales

within the period. Oriola has provided strategic finance leadership driving transformational and growth agenda of conglomerate business spanning several sectors such as hospitality, real estate, power, agriculture, and asset management. He is expected to deploy his rich experience to the development and implementation of appropriate financial strategies to uplift productivity and business performance across the UAC group, the firm said in a notice filed at the Nigerian Stock Exchange (NSE) on Monday. The newly appointed director holds a Bachelor’s degree in Finance from the University of Lagos before being certified by the Institute of Chartered Accountants of Nigeria (ICAN) as an associate member in 2000. He also served as the Group CFO at Asset & Resource Management Holding Company Limited.

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R-L: Albert Thomas, organisational change manager, UAC; Omolara Elemide, Ag. group MD/CEO, UAC; Mojisola Bakare, MDS Logistics Limited (who won a washing machine for emerging the second prize winner); Vitus Ezinwa, group human resources director, and Muhibat Abass, Ag. chief financial officer of UAC at a poetry competition organized by the UAC Group to celebrate 2019 International Women’s Day

INSURANCE

Sunu Assurance aims to leverage population, technology to lift market share ISRAEL ODUBOLA

unu Assurances Nigeria Plc, a non-life insurance firm headquartered in Lagos, said it will take advantage of the country’s population as well as technology to elevate its market share in the insurance industry. This is part of the company’s quest to be among the biggest listed insurance companies in Nigeria before the year 2024. The newly-appointed Managing Director, Samuel Ogbodu, said at a news conference that the non-life insurance company is working hard to boost profitability, and meet the expectations of major investors. “We want to do business the way it should be done, to serve stakeholders and customers

better. We are working hard to increase Nigeria’s contribution in the group as the biggest economy in Africa”, Ogbodu stated. According to him, the company will harness several opportunities in the insurance industry to expand operations. He explained that the non-life insurer will rely on technology and physical presence to push growth. Ogbodu further stated that the insurer will leverage the success and expertise of its group, Sunu Assurance Group, to fast-track growth. The helmsman noted that the company will prioritize on the retail market to bring insurance to the doorstep of every Nigerian nationwide. The company recently unveiled an innovative mobile

USSD insurance solution. This initiative is a self-service solution that enables car owners or users to purchase third-party auto insurance with the use of their mobile phones within five minutes. According to the Managing Director, the company is now positioned for growth after years of struggling. Shares of Sunu Assurances Nigeria Plc fell to 20 kobo after the Nigerian Stock Exchange removed the 50 kobo pricing floor fourteen months ago. Last year, the Nigerian Stock Exchange sanctioned the non-life insurer for violating the post-listing rules which requires quoted companies to submit their audited earnings reports not later than 90 calendar days after each concluded financial year.

L-R: Adebowale Banzi, head, marketing and brand communications; Adedoyin Samo, head, human resources and administration, both of Zedcrest Capital Ltd; Oluwayemisi Mafe, facilitator and head, brand communications, SUNU Assurances, and Adedayo Amzat, CFA, group managing director, Zedcrest Capital/managing director, Zedvance Limited, at a mentorship session for Zedvance female staff in commemoration of the 2019 International Women’s Day in Lagos.

L-R: Kola Adesina, group managing director, Sahara Power Group; Peter Tufano, dean, Saïd Busines School, University of Oxford, and Bethel Obioma, head, corporate communications, Sahara Group, at the 2019 Oxford Business Forum Africa in Oxford, United Kingdom.

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

BUSINESS DAY

Wednesday 13 March 2019

CITYFile Police arraign fake lawyer

Members of the International Society for Social Justice, protesting over the suspension of Governorship and House of Assembly Elections result’s collation in Rivers, in Port Harcourt on Monday. NAN

Navy nabs, hands over 6 suspected oil thieves, 7 boats to JTF ... I got involved because I have no job – suspect

FRANCIS SADHERE, Warri

igerian Navy Ship (NNS) Delta has handed over six arrested suspected oil thieves and seven loaded Cotonou boats to the headquarters of the Operation Delta Safe (OPDS) for further investigations and prosecution. Commander, NNS Delta, Commodore Ibrahim Dewu, who spoke with journalists, said the suspects were arrested with products suspected to be illegally refined diesel, of an estimated quantity of 540,000 litres. Dewu, who was represented by the Executive Officer (XO) of the NNS Delta, Navy Captain Adeyemi Adewuyi, said the suspect were arrested on Wednesday, March 6, 2019. The product, according to him, was said to have been procured from Opudebubo Creek in Warri South-West council area of Delta State. He, however, warned those involved in illegal activities in the

maritime environment with the NNS Delta’s area of responsibility (AOR) to desist or face the law as the Nigerian Navy would not relent in its efforts to make the Niger Delta safe and fit for legitimate activities. “This morning we are handing over seven Cotonou boats that were arrested on the 6th of March to appropriate security agencies. The boats were arrested at Opudebubo Creek in Warri South-West council area of Delta State. “According to the suspects, they came all the way from Igbokoda in Ondo state to buy the products from the creek. They said they were taking the product to Igbonla in Okitipupa in the Igbokoda area of Ondo State. “The quantity is estimated at 540,000 liters of AGO, illegally refined. We managed to arrest six suspects. The original number of the Cotonou boats was eight; however, one of them sank at the point of arrest, due to leakage. Investigation is still on and that’s why

we are handing them over to the appropriate prosecuting agency for all other facts to come out. “I want to use this opportunity to warn all the criminals like pipeline vandals, to desist from their nefarious ways. Nigerian Navy will not relent in her efforts to stamp out criminality in the creeks of the Niger Delta”, he said. One of the suspects, who identified himself as Odusola Irewole told journalists that he was a first timer in the illegal business, adding that he was pushed into it by lack of a gainful employment. The suspect said, “We came from Ondo State on the 6th of this month to buy diesel in Opudebubo Creek. I don’t know the seller because I’m just a worker in the boat. The owner of the business is Femi Jafo. He’s in Ondo State now. This is my first time because this boat is a new boat. I’m doing this job because there’s no job anywhere else, nothing to survive on. I didn’t know it was illegal, it is now that I’m getting to know.”

Activist seeks legislation for gender balance JOSHUA BASSEY with agency

uman right activist, Joe OkeiOdumaki, says Nigeria is in dire need of a legislation to promote gender balance, curb violence as well as ensure peace and development especially for the womenfolk. Okei-Odumakin, who is the president of Centre for Change, spoke at a recent event in Lagos, organised by Industri-All Nigeria National Council, to celebrate the 2019 International Women Day, celebration tagged,” balance for better”.

According to Okei-Odumakin, the refusal of National Assembly to pass a bill on gender equality had weakened the value of women and caused them to be treated with contempt. She said both males and females were going through violence and unless a law was instituted, it would be difficult to stop. “In the Centre for Change, we have buried 30 women and 10 men, handled 4,000 cases since inception as a result of gender violence,” she said. The human rights activist showed a preview of about 10 gender cases that

had either led to death or maiming of the victims, adding that more women should be voted into the Senate and House of Representatives to make a change. Babatunde Olatunji, the chairman, Industri-All Global Union, Nigeria chapter, said that the union would support any policy that promotes gender balance. Olatunji said that there was the need to celebrate women because of their social, economic and political achievement. Oluchi Amaogu, the chairperson, Industri-All Women Committee, said that

he police in Lagos have arraigned a 53-year factory worker, Nwodo Eze, at an Ikeja Magistrate Court, for alleged impersonation. Eze, who resides at Iyana-Ipaja, Lagos, entered a `not-guilty’ plea on a charge of impersonating a defence counsel, when he appeared in court on Monday. The prosecutor, Josephine Ikhayere, alleged that the defendant committed the offence on February 5, in at Magistrate Court 20, Ogba, Ikeja. She alleged that the defendant presented himself as a counsel to a defendant in a criminal case. The prosecutor added that said Eze, who appeared for a defendant, was asked by a magistrate, O.O Akindosote, to present documents to prove that he was a lawyer. She said that Eze, failed to do so because he was not a lawyer and the magistrate ordered for his arrest. Ikhayere said the offence contravened the provisions of Section 380 of the Criminal Law of Lagos State, 2015, which prescribes three years imprisonment for any convicted offender. The magistrate A.K Dosunmu, admitted the defendant to bail in the sum of N300, 000 with two sureties in like sum and adjourned the case until March 28 for mention.

NAF destroys insurgents’ logistics in Borno

igerian Air Force (NAF) says its Air Task Force (ATF) of operation LAFIYA DOLE, has destroyed Islamic State of West Africa Province (ISWAP) terrorists’ vehicle at Tumbun Sale and Tumbun Allura in Borno. NAF’s spokesman, Air Commodore Ibikunle Daramola, said in a statement in Abuja. According to Daramola, the ATF equally destroyed some logistics infrastructure of the ISWAP at Tumbun Sale and Tumbun Allura on the fringes of Lake Chad in the state. He explained that the operation was conducted following intelligence reports indicating the presence of ISWAP fighters with some vehicles and logistic support items were “well camouflaged under the dense vegetation within the settlements.” “Accordingly, a NAF Alpha Jet, supported by an Intelligence Surveillance and Reconnaissance (ISR) platform, was dispatched to attack the terrorists’ hideouts in successive strikes resulting in damage to several structures as well as the destruction of one of the terrorists’ vehicles, which was seen engulfed in flames,” he said. The spokesman said the NAF, operating in concert with surface forces, would sustain its efforts to completely destroy all remnants of the terrorists in the North East. the women must be strong and united to achieve their desires. “There are gender policies and guidelines concerning gender rights that are in organisation to improve the lives of women. It should be implemented,” she said. The chairperson urged the students who participated in the programme to relay the gender balance issue to their schools. The Industri-All member unions gave fraternity messages in the event attended by eight secondary schools. The unions urged the women to continue to fight for their right and tackle issues hindering their contributions to nation’s development.

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Banking sector will witness increased risk-taking activities H2 Activities in the banking sector have been dominated by political environment with its inherent uncertainties, Magnus Nnoka, new national president Risk Management Association of Nigeria (RIMAN) and Chief Risk Officer Coronation Merchant Bank, in this interview with Hope Moses-Ashike, speaks more on issues in the industry and the Association. Excerpt. As a new president what changes are you bringing to the Association? he focus of the Association is very clear, so it may be difficult or inappropriate for me as the new President to claim or desire to bring certain changes for the sake of change, or as we understand it in our environment when a new Leadership takes over, be it in public or private Institution. Having said this, let me quickly point out that I have been part of the leadership structure of the Association in the last one decade on different capacities, and played key roles in the strategic growth aspirations of the Association. For us, we are still on a journey; my tenure as the President, working with my executive council would focus on achieving and strengthening most of the initiatives my predecessors started given that they are well thought-out programs. Maybe when we have achieved most of the ear-marked programs, we can begin to talk about new one or changes. This is however not to say that where certain changes become immediately imperative, we would not respond accordingly. What is your outlook for the banking sector? The business environment in Nigeria in the first six months would be dominated by political environment with its inherent apprehensions, uncertainty and short-term mind set in business considerations. Thus, the banking sector will face two halves of the year with different operating business environments. The first half would be marked by cautious business decisions, safety of investment will be the primary consideration. We have seen this in the portfolio of most banks which proportionately skewed towards risk free fixed income instruments. The second half of the year is expected to witness increased risktaking activities by Banks. This period would also see policy shifts no matter the political party that is in government and this would bear on key macroeconomic parameters that would present new risks and opportunities to the banking sector.

What have been the Association’s contributions towards the growth of the economy? RIMAN has been in existence formally for the last two decades. Within this period, it has championed and remained steadfast with its primary goals of risk management advocacy and capacity building. We led the advocacy and created platform for the establishment of private credit bureaus as we have them today. Such Agencies are very vital to support sound credit judgement to enable credit creation activities in any economy. We have been at the forefront in building strong risk management environment beyond the financial services sector where we started through formal training programs and public workshop/seminars. In the last couple of years, we have extended our risk awareness and capacity building through separate certification and academic collaboration programs with The Chartered Institute of Bankers of Nigeria (CIBN) and The University of Lagos (UNILAG). We are currently holding discussions with other potential partners to reach most parts of the Country. The Association has also being working closely with the various regulatory Institutions in some policy formulation that support economic activities. In doing all these, we are clear that an economy can only grow where decision makers take risk informed decisions. Banking sector NPLs are seen be rising, what is your take on this and what are the reasons for this? It may appear too hasty to make this conclusion at this point in the New Year; however, we saw that the NPL ratio in the banking industry was on the upward trend for most part of last year-2018, even on the back of timid growth in the aggregate lending portfolio to the private sector. The question however is around what we should expect to see this year around NPL. My view is that we would likely see lower NPL ratio based on some expectations around some macroeconomic indices. But before we guess into the future, let us take a step back. Part of the reasons for huge NPL in

Magnus Nnoka

the past few years could be traced to the challenges witnessed in two major sectors namely construction industry and energy sector and more specifically the downstream oil and gas sector and the impact of that loan portfolio in the books of banks. However some reprieve was seen when substantial stock of this portfolio was settled by the government via issuance of promissory note late last year, so banks with impaired loans in these sectors in their books began this year with lower figure of NPL. Another favorable factor is optimism on further recovery of the economy. Although the national election has taken centre stage since the beginning of the year, I have the believe that in spite of any hiccups that may arise in the electoral process, the outcome will provide direction and some measure of predictability for investment decisions; therefore the second part of the year would witness high tempo of economic activities including increased demand for credit facili-

ties by the businesses and consumers. Banks will certainly respond positively to the demand in order to post profit given my projection that it would become more attractive than fixed income trading. On overall, I expect lower NPL volume in the banking industry this year. Lending in the sector is poor, how can this be enhanced? Lending by the banking sector should be seen from two perspectives. Most times people tend to see the lending activities of banks from what goes to the private sector only, and recently this has led to a perception of thanks not doing enough lending. However, when we consider the huge funding the public sector has raised in the last few years, the narration should change. The argument rather in some circles is the negative impact of huge public sector borrowing in terms of crowding out the private sector. Having said this, we should appreciate that Banks are set up to facilitate financial intermediation hence they need to lend in order

to make returns to investors. I think the challenge most banks face in lending is signing on quality credit or borrower’s ability in meeting the risk acceptance criteria for accessing loans. This is not also to rule out the challengers borrowers face in meeting certain lending conditions and of course relative cost of financing which can still be considered high particularly when you look at some economic sectors I therefore think that some of the measures to enhance lending will require improving quality of Obligors. Among issues to be addressed are encouraging strong corporate governance, transparent financial reporting on the part of borrowers as well as strengthening regulatory and judicial system for loan disputes settlement. A culture of credit discipline, information asymmetry and self-disclosure are critical elements of any environment that seek to enhance credit creation activities As the country is experiencing macro-economic challenges, which areas should risk managers focus on to forestall bank’s failure? Bank’s failure can be precipitated from two principal sources from outside, this reflects a bank’s failure or inability to respond effectively to a contagion effect of macroeconomic challenges or financial meltdown. We witnessed this across the globe during the 2008-2009 financial crisis. The second source this from within, and this often emanate from issues around poor decision making which could be borne out of capacity deficiency across board, lack of best practice risk management, absence of corporate governance and inordinate ambition to out-compete, amongst others. Now, notwithstanding the source, banks must first see their role as going beyond financial intermediation; once this is done the two key areas risk managers should focus on to forestall bank failure are enthroning strong corporate governance and enabling appropriate risk culture.

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NIRSAL MFB set for launch in March HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) and the Bankers Committee will by the end of March, launch the NIRSAL Microfinance Bank which is the new National MFB being set up by the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), the Nigeria Post Office and the Bankers Committee. Tokunbo Martins, director, Other Financial Institutions (OFIs) department of the CBN explained that there are National microfinance banks already operating in the country but NIRSAL is a specialised MFB which would be launched at the end of March. The CBN and the Bankers Committee announced in December 2018, a plan to establish the National Microfinance Licensed Banks in 774 local governments across the country. This is part of efforts to

enhance access to financing by Small and Medium Enterprises (SMEs), create jobs and promote financial inclusion. Godwin Emefiele, governor of the CBN, has been worried that access to credit by SMEs was still a major issue, despite the several real sector intervention initiatives launched by the bank, like the Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), which he said was an initiative of the Bankers’ Committee that had so far raked in over N60billion, but was still not being accessed by small businesses. Emefiele announced last week, that the NIRSAL MFB will take off with N5bn initial capital and the loan disbursement will attract five percent interest rate with seven years tenor and two years moratorium. However, the National Association of Microfinance Banks (NAMB) has countered the plan to establish this National MFB, saying it runs counterproductive to the salient objectives of the National

Godwin Emefiele. CBN, governor

Microfinance Policy, Regulatory and Supervisory Framework for Nigeria as well as the objectives of the National Financial Inclusion Strategy. Rogers Nwoke, presi-

dent, said the CBN and the Bankers Committee should utilise existing touch points and offices of existing microfinance banks which meet approved criteria to disburse its intervention

funds including but not limited to the ACGSMEIS, Micro Small and Medium Enterprises Development Fund (MSMEDF). Reacting to concerns on NIRSAL MFB crowding out the existing microfinance banks, Emefiele said, “the existing microfinance banks are doing their best. I have heard this is an attempt to crowd them out. This is not an attempt to crowd them out but to complement their services and see to it that whatever service is being provided by these microfinance banks should be seen to be fair to their customers.” He said he has heard about the rural communities where the microfinance banks charge very prohibitive interest rates. “But here, we are talking about making funds available to these people. This will help to create some form of competitive landscape so that those kinds of practices will no longer arise.” NAMB is planning to float a National MFB licence with N10 billion

capital base, ahead of the new National MFB and the deadline for recapitalisation of microfinance banks operating in the country. The CBN had in October 2018 increased the minimum capital requirement of Unit microfinance banks from N20 million to N200 million, State MFBs from N100 million to N1 billion and the National MFB from N2 billion to N5 billion. The CBN recognises that the greatest challenge confronting the MSMES and local farmers is access to credit, and to unlock the growth potentials in the country ; these group must access funding seamlessly. So far, the CBN has through its MSME development fund disbursed over N100 billion to the MSME sector, but still feels a lot can be done. “We will continue to explore ways, in partnering with the fiscal authorities, on how we can best provide farmers and SMES with the support they need to expand their operations”, Emefiele said in November 2018.

Sterling Bank woos travel agencies for industry expansion

Women’s empowerment central to sustainable economic growth says Heritage Bank

eritage Bank Plc is of the opinion that making women’s empowerment central to organisations’ business strategies is not only critical to growth but to building a sustainable and flourishing global economy. Speaking on the International Women’s Day 2019 campaign theme, “Balancefor Better,” the Ifie Sekibo, managing director/CEO, who said the commemoration is a call to action for driving gender balance globally, also stressed that presently gender bias remains a significant obstacle to global progress, and it is particularly acute in the workplace. He said that organisations with greater gender equality are more innovative, generous, and profitable. Sekibo, who cited the Nations Sustainable Development Goals, which target gender equality because women and girls represent half of the world’s population and, therefore, half of its potential, noted that women still have fewer economic opportunities than

terling Bank Plc, is collaborating with the National Association of Nigeria Travel Agencies (NANTA) to develop a mutually beneficial relationship between the bank and members of the association. Olusoji Akintola, Sterling Bank’s business executive, retail and consumer banking Lagos, said the bank entered into the partnership as part of its strategic focus to contribute to the growth of the Nigerian economy by investing heavily in five sectors of the economy. He said the sectors which are the heart of the bank include health, education, agriculture, renewable energy and transportation, adding that it is the bank’s desire to play a part in the development of the transportation sector, a critical component of the HEART sectors. In his presentation, Olusegun Akinsanya, head of Sterling Bank’s transport and maritime sector, listed some of the bank’s product offerings that members of the association could take advantage of to expand their businesses. Akinsanya assured that

the Bank will put together series of products for operators in the sector in line with their unique business model ‘’to enable us customize them in line with your requirements and peculiar situation’’. He stated that the bank will remain committed to support Members of the Association to expand their business scope and become stronger players in the market and thanked the leadership of NANTA for providing the right platform for business engagement between it and the Bank. Responding, Bankole Bernard, National President of NANTA, disclosed that the association has more than three thousand members scattered across the country, with the largest number

based in the Lagos metropolis. He also expressed members’ appreciation to Sterling Bank for showing interest in their wellbeing. He noted that travel agencies only earn commission from the services they render to airlines and passengers. He, therefore, urged the bank to provide funding to the travelling public in order to guarantee steady income for members of the association who will then earn commission from passengers who travel with the airlines. Bernard added that senior officials of the bank can also arrange a meeting with the executives of NANTA in a bid to work out a more beneficial business relationship between the bank and their members.

Ifie Sekibo

men, less access to education, and less political representation. According to him, though there has been considerable progress in developing the capabilities of women, their participation in economic and political decision-making remains very limited. To help chart a path that will champion gender parity, the bank organised mentorship session in the Experience Centres (branches) across the country, where the senior colleagues spoke to the junior staff on proper grooming and better ways to excel in their homes,

career, politics, education and other crucial spectrum in life for better society. Addressing the staff, Sekibo stated that Heritage Bank will continue to drive work environment that is inclusive and ensure the number of women in leadership position of the bank increases. He disclosed that the bank recognises the contribution of women to the society and the vital role in driving bank’s business, for this reason Heritage Bank will continue to partner them to achieve its corporate goals. “Our culture is predisposed to welcome every woman and her vision into our mind-set of creativity and knowledge, helping her to grow her business beyond where she can ever imagine by offering specialised products and services for her business,” adding that “by our very nature, our services are personal, and deliberately approached from a bespoke angle, to simplify her life and business so as to be able to create, preserve and transfer wealth across generations,” he stated.

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Nigeria’s oil palm import from Malaysia hits 242,388MT amid increase in local production Stories by Josephine Okojie

espite the yearly increase recorded in palm oil production, Nigeria’s import of the product from top producers - Malaysia has hits 242,388 metric tons in 2018, data from the Malaysian Palm Oil Council (MPOC) shows. On a year on year basis, Nigeria’s crude palm oil import from Malaysia declined by 1.8 percent to 246, 909MT recorded in 2017. Similarly, to protect the country’s palm oil industry and spur the industry growth, the Nigerian government had imported a 35 percent tariff (10 percent duty and 25 percent levy) on palm oil imports into the country. Crude palm oil is also listed on the Federal Government 41 items restricted from forex access. Some industry experts who spoke to BusinessDay stated that the country’s crude palm oil is less competitive to the imported ones owing to the high cost of production, infrastructural gaps, and high logistic cost among others. According to them, this makes local manufacturers who use CPO as raw materials for production result to importing the product than patronising local producers. “Since the inclusion of CPO in

the country’s import prohibition list, Nigeria has significantly increase its production in the last 10 years,” Fatai Afolabi, executive secretary, POFON said in a statement last year. “But Nigeria is still importing a lot of CPO into the country and much more is smuggled through the land borders into the country,” Afolabi said. Oil palm has the capacity to produce more oil than any other oilseed crop. About 90 percent of palm oil is used in the production of foods, while the remaining 10

percent is used by the non-foods industry, industry players say. Foods like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil. Presco Plc, Nigeria’s biggest palm oil producers is yet to release its 2018 full year financial report, but its already released nine months financial statement shows that revenue dipped on surge in crude palm oil imports and weaker prices as well as consumer demand.

EZ-Farming wins 2019 Georgetown African Business start-up competition …rev up agritech space with highest ROI

Z - Fa r m i n g , N i g e r i a’s fast-rising agritech startu p ha s w o n t h e 2 0 1 9 Georgetown African Business Conference new venture competition, hosted by the Young African Professionals in Washington DC. The agr itech star t-up als o won the peoples’ choice award at the at Georgetown University’s McDonough School of Business. EZ-Far ming beat other six finalists to win the $5,000 first prize money for the competition. Adewale Oparinde, founder of E Z -Far ming, said that the f e at i s a n o t h e r t e s t a m e nt t o the work put in by the agritech start-up in firming up the base for the investments in Nigeria’s agricultural sector. “We are really delighted to have won the contest here in Washington DC. It is our first outing after several months of inventing our business model to meet the demands and dynamics of

the market. We took our time since 2015 to conduct thorough research in designing our business model,” Oparinde said in a statement. “The glory goes first to our farmers and to our investors in Africa and the diaspora, who appreciate the work we do and have reposed confidence in our model. “It is important to us that we build a sustainable business that is most trusted by our investor community and which can last beyond the current era of hype. We are a platform beyond money, investor and farmer,” he said. He noted that there is currently no existing platform in the sector connecting old and young people together for intergenerational transfer of knowledge for the next generation of farmers, saying EZFarm is bridging the gap through its platform. “We also connect our farmers and value chain actors to land and extra spaces, therefore, making us

an excellent platform for people to monetize their resources,” he added. According to him, EZ-Farming is the first agritech intergenerational platform crowd-funding to scale small farms into commercial sizes while connecting unemployed youth with experienced farmers via internships-and-funds to start their own farms. Reiterating that the platform has one of the highest ROIs across various investment options in the agritech space, he said that it was made possible by EZ-Farming’s unique model that uses data to identify the best farmers who have potential to scale and especially the business peculiar financial engineering framework and a commitment to sharing great proceeds with our investors. “It is also made possible by a model that guarantees that farmers adopt up-to-date Good Agricultural Practices (GAP), making them export-ready.”

Presco reported a decline in revenue of N16.2 billion for the period ended 30th September, 2018 from N16.9 billion over the same period in 2017, representing a four percent decrease, data from the companies nine month financial statement states. Similarly, profit after tax declined marginally from N5.3 billion in nine months of 2017 to N5.2 billion over the same period in 2018. Also, Okomu, Nigeria’s second largest oil palm producer posted a revenue contraction of 8.9percent

to N3.75 billion largely driven by the free fall of global Crude Palm Oil (CPO) prices. Globally, the prices of crude palm oil has been weak with Globally, the prices of crude palm oil has been weak and has falling by 17 percent when compared to prices in January 2017, according to data from Indexmundi. Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to recover and take its proper place in the comity of crude palm oil producing nations owing to the discovery of oil, which changed the country’s palm oil narrative of the 60’s. As a result, Indonesia and Malaysia have now surpassed Nigeria’s production becoming the global leaders in oil palm production. Henry Olatujoye, president, National President, National Palm Produce Association of Nigeria (NPPAN), stated that the inability of government to provide a reliable data for the industry has remained a major problem for the industry, saying that some foreign investor are taking the advantage to deceive the government in allowing the importation of the produce into the country. Some experts attribute the increase in imports to the high population growth rate in the country that is fuelling demand.

US, NGOs call for concerted action on marine wildlife conservation

s Niger ia joined the rest o f th e w o rld to commemorate the 2019 Wo r l d Wi l d l i f e Day , the United States Consulate General in Lagos in collaboration with the International Climate Change Development Initiative (ICCDI) and Wildlife of Africa Conservation Initiative has called for concerted action on marine wildlife protection in the country. In a statement made available to BusinessDay, Abiodun Adekoya, communications director at ICCDI, noted that effective climate change mitigation in the country would require concerted a c t i o n by g ove r n m e nt s a n d individuals, with an emphasis o n c o n s e r vat i o n e d u cat i o n , rec ycling programs and the creation of a legal framework for the nation’s policy on the environment. Also, Russell Brooks, public affairs officer of the U.S. Consulate General Lagos, in his remarks at the event attended by leading environmental conser vation activists, urged Nigerians to treat the conservation of the

oceans and aquatic wildlife as an individual responsibility, in order to preser ve marine habitats for future generations. “Marine wildlife has sustained human civilisation and development for over a thousand years, from providing food and nourishment, to providing material for handicrafts and construction. We cannot take t h e i r s u r v i v a l f o r g ra n t e d ,” Brooks said. “We can reduce some of the negative effects of our activity on life under the water, by working hard to spread the message to reduce marine pollution.” He added. Brooks, speaking on the theme of ‘Life below Water’, observed that as much as 40percent of the world’s oceans are negatively affe cte d by human activit y, including overexploitation of marine species, loss of coastal habitats and pollution. He highlighted the crucial importance of the oceans and marine species to human development and emphasized t h e n e c e s s i t y f o r i n c re a s e d conservation education.

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Boosting Nigeria’s cocoa yield through rehabilitation of old trees Josephine Okojie

n the 1960s and 70s, Nigeria was a major cocoa producer and supplied most of the world’s demand. C o c o a w a s a maj o r revenue and foreign exchange earner for Nigeria and provided millions of jobs for the people, especially those in the southwest region. S e v e ra l ye a r s d ow n the line, the once major cocoa producer now lags behind Ivory Coast, Ghana and Indonesia in cocoa production. The reasons for this are not far-fetched. stakeholders finger bad weather, old trees that have not been rehabilitated, and lack of improved seedlings (planting materials) as major reasons for Nigeria’s loss of ‘cocoa power’ in the global market. In fact, Nigeria was unable to supply large quantity of cocoa to the world in 2015 despite rise in the prices of ICE and Liffe cocoa beans. Nigeria is no longer getting full economic benefits from growing cocoa as most cocoa fields are old and small as well as the poor genetic qualities of the planting materials used. However, succour has finally come to Africa’s most populous country in the area of planting materials as farmers can now rehabilitate old cocoa trees using bud wood- for production of more high-yielding cocoa seedlings. Experts say Nigeria must begin now to rehabilitate its old cocoa plantations, incorporate modern

agricultural techniques in expanding its cocoa production and ensure that farmers have easy access to hybrid seedlings, while ensuring that only approved agro chemicals get to the markets. To a c h i e v e t h i s , Anna Muyiwa, plant biotechnologist, Cocoa Research Institute of Nigeria (CAN), said the country must start rehabilitating o l d c o c oa p la nt at i o n s and develop more hybrid varieties. “We need to rehabilitate our old cocoa trees in all cocoa producing states. A completely rehabilitated cocoa plantation of proven clone will produce as much as 2.5 tons per hectare,” Muyiwa said, stressing the need to develop more hybrid varieties “Nigeria’s cocoa average yield per hectare is among the lowest in the world and this is due to old age of most cocoa plantations,” she further said. Nigeria needs to move its cocoa’s industry from

the 19th century to the 21st century by exploring the massive investment opportunities and its inherent p otential for the Niger ian economy in the sector by building the capacity of extension workers to help farmers rehabilitate old cocoa trees and cultivate new clonal seedlings gardens. Als o, by suppor ting young entrepreneurial cocoa farmers with renovation and expansion of atomised farms to 3-5 hectares and creating the enabling environment to spur investments in the sector. Nigeria currently produces less than 500kg of dry bean per hectare. According to Muyiwa, this very low level of cocoa production has made it necessary to change protocol of production. She stated that vegetative propagation is the best way to ensure increased production of high quality cocoa pods or beans instead of seedling

cu l t i vat i o n b e cau s e i t enables multiplicity and commercialisation of highyielding strains. The plant biotechnologist explained that vegetative p ro p a g a t i o n m a k e s i t possible to multiply desired cocoa varieties, thereby ensuring ‘quick replication of highly productive planting materials, production of uniform trees with shortened gestation period and cocoa plants are protected against diseases. Irrigating cocoa fields Cocoa can be an all-year crop if farmers can have access to sufficient water supply. Over the years, Nigeria’s c o c o a p ro d u c t i o n ha s been seasonal as farmers continue to depend on rainfed agriculture, which has limited the country from realising the full potential of the crop. Agricultural activities are hard hit by irregular climate patterns, which hurt farming activities. Experts who spoke with

BusinessDay attributed this to climate change, which now affects the agriculture cycle, thus making irrigation farming the only way to cushion the effects of inadequate rainfall. “The time has passed for farmers to be solely relying on climate-fed agriculture as the climate changes,” Akpan Imeh, a climate change expert, said. Imeh stated that Cote D’Ivoire has expanded its cocoa productivity above Nigeria and every other country because it has evolved the cultivation of the crop beyond the traditional ways that rely on climate. “If the soil forms a bond, then the soil will be able to withstand a lot of water stress, but if there’s no bonding, irrigation is badly needed,” he added. But farmers have complained that lack of finance and inadequate government support have made it difficult for them to adopt irrigation farming. “Lack of funds, coupled with inadequate government support, which, even when in existence, hardly trickles down to we smaller farmers, makes it difficult for us to adopt irrigation,” Oladokun Wasiu, a cocoa farmer in Iddo local government area of Oyo State, said. The constant supply of water to the farm throughout the year— irrespective of climate— guarantees allyear high yield of cocoa. Aging farmers The average age of cocoa farmers in Africa’s largest economy is 60 currently, implying that the sector is yet unattractive to Nigeria’s

young population. “The average age of a farmer in Nigeria today is 60 years. For a crop that is highly labour-intensive, 60 years will not give the maximum impact in the industry,” Rima said. “Tree crops like cocoa suffer the most. We need to start making cocoa and the like attractive to the youths through incentives, because the investments in tree crops are very high and most youths cannot afford it,” he added. Lack of technology and innovation in the sector has continued to make farming unattractive to Nigeria’s younger population. “Youths will only find agriculture attractive if there are innovation and technology in the sector. Technology is very crucial if Nigeria really wants youths embrace agriculture and boost its productivity,” Abiodun Olorundenro, o p e r a t i o n s m a n a g e r, Aquashoots Nigeria said. Currently, the Federal Government is making efforts to make agriculture more attractive to the youths but such efforts have yielded little impact as most young people do not want to be involved in the drudgery of agriculture, experts say. According to experts, failure to make agriculture attractive to the younger generation would be disastrous to the country as population continues to grow at about 2.6 percent per annum. “If we are serious to feed ourselves as a nation, we must attract the younger generation to farming. If we fail to achieve this, our food import bill will continue to rise,” Olorundenro said.

TAAT, ACAI collaborate to technologies on cassava to farmers

he Technologies for African Agricultural Transformation (TAAT) and African Cassava Agronomy Initiative (ACAI) have collaborated to train cassava farmers on the use of the six steps to Cassava Weed Management toolkit. The toolkit which was developed by the Cassava Weed Management Project has proven to help users to more than double their yields from the current African average of

nine tons per ha to more than 20 tons per ha. The refresher training of trainers (ToT), which comes ahead of the 2019 cassava cropping season aims to equip partners with the necessary tools for successful delivery of technologies. Addressing participants at the training, Adebayo Abass, compact leader, TAAT Cassava said the ToT would place the participants in a better position to deliver the technologies

being out scaled by the TAATCassava Compact program. Ab a s s n o t e d t hat t h e Six Steps to Cassava Weed Management toolkit had been consolidated into a Cassava Technology Demo toolkit and is being disseminated across 15 African countries under the TAAT program. While commending the work in Nigeria, he reiterated that the aim of TAAT Cassava Compact was to scale out proven technologies across

Africa with the view to achieving an African Green Revolution. In his welcome remarks, Friday Ekeleme, ACAI Weed Scientist, said the training would contribute positively towards the implementation of demos this year. Ekeleme urged participants to adhere to the principles of the Six Steps to Cassava Weed Management toolkit for better results. Godwin Atser , digital extension & advisory

services specialist, ACAI’s took participants through the theory and practice of the Six Steps to Cassava Weed Management. He explained that the to o l ki t wa s a c o mp l e te package that addresses all aspects of good agricultural practices in cassava production, adding that farmers who used the toolkit had more than doubled cassava yield per hectare. Participants at the

training were drawn from the National Root Crops Research Institute (Umudike), University of Agriculture Makurdi, Federal University of Agriculture Abeokuta, Leventis Foundation, Psaltry, Oyo State Agricultural D e v e l o p m e n t P ro g ra m, Bestacor, Oyo State Cassava Growers Association, Justice Development and Peace Movement, Oyo; KOLPING in Abia, and Obafemi Awolowo University, Ile Ife.

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Aon partners with software firm Skytek on marine risk accumulations

Third left Funmi Omo, managing director/CEO, African Alliance Insurance Plc, and other dignitaries during the unveiling event of the new African Alliance Insurance corporate identity in Lagos

Bancassurance: NAICOM to review first batch of licensed firms Stories by Modestus Anaesoronye

ndustry regulator, the National Insurance Commission (NAICOM) will soon appraise the successes and otherwise of partnerships between banks and insurance companies under the bancassurance scheme. BusinessDay gathered that the commission had to suspend approval of new partnerships to review existing arrangements before new ones are approved, having given some approvals over the last two years. Insurance companies granted approvals are being monitored while pending applications are under

processing, a senior official of NAICOM said. Bancassurance is an arrangement in which insurance companies leverage on the customer base of banks to sell insurance products to banks’ customers. Furthermore, the referral model, which is the scheme in place, is a model whereby a bank refers its customers to its partner insurance companies. In return, the bank receives a commission on each lead closed by the insurance company. The bank is not involved in marketing the products. But the Central Bank warned that banks should not provide the bancassurance referral service in a manner that contravenes

these guidelines. “Banks shall not engage in any other model of bancassurance other than that permitted under these guidelines and for which approval has been obtained from the CBN. The referral model of bancassurance arrangement between a bank and an insurance company shall not be valid without an executed Bancassurance Agreement. “Banks shall not undertake any insurance marketing, underwriting or claim settlement. This must be clearly stated in the Bancassurance Agreement. Banks shall ensure that no risks are transferred to it and shall not assume any fiduciary responsibility or liability for any consequences, financial or otherwise, aris-

ing from the subscription to insurance policies by their customers under the Bancassurance Referral Model. “Banks shall conduct a thorough due diligence/ periodic assessment for the selection of partner insurance companies, which would be restricted to two insurance companies. Banks shall ensure that only insurance products approved by NAICOM are offered by their partner insurance companies to their customers,” it added. Furthermore, the guidelines state that banks shall not enter into bancassurance agreement with insurance companies who do not hold a valid operational license from the National Insurance Commission (NAICOM).

nsurance and reinsurance broker, Aon plc has partnered with software firm Skytek to provide real-time monitoring of re/ insurers’ marine risks and to identify accumulations for enhanced underwriting and reinsurance programs. As part of the collaboration, Aon has established a new consultancy based on the Skytek system that uses real-time satellite tracking to allow re/insurers to visualise the precise location of their insured risks, in addition to offering detailed vessel and cargo information. Aon will then work with re/insurers to analyse potential accumulations and make recommendations for efficient reinsurance programs and underwriting insights. “As part of Aon’s commitment to Data & Analytics, this InsurTech partnership is focused on using innovative technologies to enhance risk management practices,” said Christian Silies, head of Marine & Energy at Aon’s Reinsurance Solutions business. “As part of our develop-

ment partnership, we will be taking the analysis beyond cargo and hull marine aggregation to also weave in business intelligence functionality using clients’ own data,” he added. Sarah Bourke, CEO at Skytek, also commented: “The ability to take vast amounts of earth observation and space-based data and create tailored insurance products was inconceivable only a couple of years ago.” “These new products now open up an exciting future for deeper risk insights within the marine re/insurance world and beyond,” she continued. “Aon and Skytek are already developing transparent algorithms to determine cargo exposures at ports in real-time, using the latest earth observation technology alongside the latest artificial intelligence and machine learning techniques.” The technology behind this partnership emerged from a Skytek and Aon research initiative with the European Space Agency.

Munich Re develops insurance for long-term battery performance

lobal reinsurance giant Munich Re is the first re/insurer to provide a solution that protects battery performance, enabling manufacturers in the battery market to offer long-term performance guarantees. Munich Re’s latest development in the energy sector sees it become the first in the world to offer long-term insurance for battery performance, with a solution that covers manufacturer performance warranties for ten years. The new product ena-

bles battery manufacturers to unburden their balance sheets by providing insurance when repair or replacement costs that come under customer warranties exceed a predetermined amount. Member of the board of management at Munich Re, Peter Röder said: “The ability to insure battery performance is a key piece of the puzzle in decarbonising our energy sector. For the first time, battery manufacturers can insure against the risk of their products not delivering as promised.

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Experts point critical factors for consideration as Nigeria set to deploy micro pensions Modestus Anaesoronye

xperience across the different markets shows that dealing with low income people or those not covered under a corporate regulatory arrangement are the same, and requires some strategic approaches to win their interest. They can be resistant unless they understand what is being offered to them and its benefits, with a lot of attractions. The issues, which the government or regulators must take seriously into consideration are coming up with a scheme that will take care of governance, administration, design and efficiency, according to experts in different markets. Micro-pensions aim to provide a flow of income to coincide with this decline in earnings capacity as people get into old age. As Nigeria therefore plans to launch its micro pension scheme, the National Pension Commission and the operators must consider the critical issues of concern for the scheme to be successful. Experts looking at the micro pension scheme in Kenya, say the formulation of such plans requires a delicate balance between economic viability, generation of adequate returns and customised features for the participants. A study that sought to determine the pragmatic models for implementation of micropension plans, regulatory issues surrounding their operations, challenges to implementation and the strategies that can address the challenges, concludes that the ideal micro-pension scheme needs to address governance, administrative, design and efficiency issues to succeed. The study also recommends a multi-model implementation of micro-pension plans in addition to a separate set of regulations to govern the micro-pension plans. In India, author, Moin Qazi writes that micro-pension, is a personal retirement savings planthat ensures people save a small part of their income individually during

their working life that is invested collectively to generate periodical returns. When people retire their accumulated capital is paid out in monthly amounts. According to the author, though informal sector workers may not â&#x20AC;&#x153;retireâ&#x20AC;? in the formal sense like employees in the organised sector, they need to prepare for the eventual reduction in earning capacity that will occur during old age, especially on account of ill health. Micro-pension, therefore, aims to provide an income stream to coincide with this decline in earning capacity. For micro-pensions to succeed, the experts said, a delicate balance between economic viability, generation of adequate returns, and customised features for the participants is required. As the flow of income of low-income communities is uncertain or volatile, on account of the nature of their economy, they should be offered a degree of financial flexibility providing for low or no minimum contribution requirements in order to encourage membership. However, contributions that are set too low or which are paid very unevenly may not provide sufficient income security. Experience with micro-savings indicates that low-income groups prefer lower-value and frequent

RC634453

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

deposits, rather than infrequent larger-value deposits. As there are competing demands on their resources, it is difficult for them to accumulate large amounts. In order to facilitate the making of frequent deposits, convenient door-to-door deposit collection has to be organised. The experts also said that mobile phones have transformed the landscape in a revolutionary way and this may not be a tall order. As the poor typically have multiple demands on their scarce resources, savings that are targeted or are specifically aimed at a lifecycle/family event might motivate them to save more if the appropriate savings instrument is available. Field studies indicate that there is a preference among the poor for small, frequent contributions that are collected at their doorstep. A limited duration of illiquidity and features that discourage early withdrawals by members could also help increase savings levels. The Micro Pension Plan in Nigeria is an initiative conceived within the context of an industry wide strategy by the Pension Commission (PenCom) to bring the informal workers into a contributory Pension Scheme (CPS). In addition, due to their widely dispersed nature and generally low and irregular incomes, there is a need to provide a pension

plan that would meet their special characteristics. In implementing this initiative, PenCom has segmented the informal sector into three broad categories; the low income earners, the high income earners and the SMEs. Each of these categories is going to be targeted with appropriate pension products and sensitisation programmes that meet their peculiarities. However, it is evident that a robust technological platform that would support the provision of customer service is necessary to effectively and efficiently register, collect contributions, provide Retirement Savings Account support, pay benefits and provide financial advisory services to this class of workers. Coincidently, special mobile phone applications had been successfully implemented in some jurisdictions for financial transactions including provision of pension services to the self-employed and informal sector workers. The success stories of these applications drives the confidence that similar platform can be designed and implemented in Nigeria. Consequently, the Commission had already commenced the sensitization of service providers and relevant regulators as well as the targeted workers in the informal sector with a view of creating the enabling environment and buy-in.

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

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Allianz selects Abidjan as new strategic hub for its African operations …Delphine Traoré Maïdou to head new African hub Stories by Modestus Anaesoronye

llianz Africa is to officially open its new strategic hub located in Abidjan, Ivory Coast. Following on from other regional hubs based in Casablanca and Nairobi, Allianz Africa will be bringing its operational teams to Ivory Coast’s economic capital to steer its transformation and improve the service it delivers to its clients and partners. The group identified Africa as a major growth driver three years ago and has invested significantly by expanding operations in the countries with the strongest growth rates. Allianz began its operational transformation

in a bid to further this objective with the aim of bringing the very best of its expertise to the continent. The hub in Abidjan, which will serve as a base for underwriting and business development activities, IT and Communications, will be at the forefront of this strategic project. “The development of this new hub marks a key milestone in our strategy for growth in Africa. Ivory Coast offers both solid local expertise and a strategic position in the sub-region. By setting up our new hub in Abidjan, we are consolidating the strong links that we have forged during our 43 years in this key market,” says Delphine Traoré Maïdou, regional chief operating officer and regional executive board member of Allianz

Africa. Allianz Africa Services are therefore set to unveil its new offices located on

the 7th floor of The Green on Avenue Noguès in the Plateau business district. The Allianz Group is

one of the world’s leading insurers and asset managers with more than 92 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 673 billion euros on behalf of its insurance customers. In Africa, Allianz is currently present in 17 countries and accompanies clients in 39 countries. Its 1,500 employeesachieved regional revenues of 630 million euros in 2017. Allianz also provides microinsurance for 500,000 low income families and individuals in Africa.

SUNU Assurances set to explore opportunities in retail space …targets first 10 in industry

UNU Assurances Nigeria Plc, a member of SUNU Group is set to explore opportunities in the retail space with plan to launch in June 2019 a mobile App. This will compliment its initial digital USSD code platform in the continuous effort to reach the population of the uninsured Nigerian populace. The new management led by Samuel Ogbodu, the managing director/CEO said the focus of the company is to drive retail sales and increase market share in a professionally sound manner that will see the company play in the top ten in the industry over the next five years. Ogbodu, joined by top management of the company including Adeleke Hassan, executive director, Technical and Operations and Karim Dione, executive director, Strategy and Performance made the disclosure during an interactive session with journalists in Lagos. Ogbodu stated that the coming on board of SUNU

has repositioned the erstwhile Equity Assurance Plc to deliver quality and efficient service, operating professionally with good corporate governance structure. He said SUNU can boast today of prompt and efficient settlement of claims, having cleared its legacy claims debt under Equity Assurance, stating that cli-

ents don’t need to know anybody for their claims to be paid in SUNU. “Under SUNU, we paid over to N2 billion on claims, which were legacy claims from the former company”, he said. Ogbodu said the work environment has changed, with staff now excited to work, given the good ambiance.

SUNU Assurances Nigeria Plc was incorporated as Equity Assurance Nigeria on December 13, 1984 and was licensed to underwrite all classes of general business. The company changed its name from Equity Assurance Plc to SUNU Assurances Nigeria Plc after completion of its acquisition in 2018 and a new license was

L-R: Karim Dione, executive director, Performance and Strategy; Oluwayemisi Mafe, head, Brand Communications; Samuel Ogbodu managing director/CEO and Adeleke Hassan becomes executive director, Technical & Operations, all of SUNU Assurances Nigeria Plc during a press briefing in Lagos

issued by NAICOM. The name change was necessitated by SUNU Group’s (a foremost PanAfrican Insurance Group), recent acquisition of majority stake in Equity Assurance Plc. With operations in 14 African countries and 24 office locations spanning West and Central Africa, this acquisition positions SUNU Assurances Nigeria Plc., to leverage SUNU Group’s vast network of knowledge capital, financial strength and technical resources in our quest to differentiate its offerings and service standards in the Nigerian marketplace. In addition to strengthening the company’s balance sheet, this strategic investment and name change also provides SUNU Assurances Nigeria Plc. with critical organisational capabilities and competencies which will be harnessed to create and deliver value to their esteemed brokers and clients. This new name reflects its pan African presence as a full-fledged member of the SUNU Group.

Chubb confirmed as lead insurer for Ethiopian Airlines crash, WTW as broker

eports have confirmed that Chubb was the lead underwriter on the account for the Ethiopian Airlines jet that crashed on 10 March, while Willis Towers Watson (WTW) acted as the insurance broker. A WTW spokeswoman revealed that Chubb and WTW would be liable for losses resulting from the crash, which are speculated to be in the region of $50-60 million. Ethiopian Airlines flight ET302 crashed shortly after take-off from Addis Ababa yesterday, killing all 157 passengers on board. Reports suggest that the plane’s vertical speed was unstable after take-off and that the pilot had experienced difficulties and asked to return to the capital’s airport. While the cause of the disaster is not yet clear, an automated anti-stall system on the aircraft – a newly commissioned Boeing 737 Max 8 – has come under scrutiny. The crash was the second in five months to involve a 737 Max 8, following the Lion Air incident in Indonesia last year, which killed 189 people. “It’s highly suspicious,” Mary Schiavo, former Inspector General of the US Transportation Department, told CNN. “Here we have a brand-new aircraft that’s gone down twice in a year. That rings alarm bells in the aviation industry, because that just doesn’t happen.” Boeing is expected to release a software patch to deal with potential issues in the aircraft’s system, according to reports from Reuters, and several airlines have grounded the model in the meantime. Aviation experts discussing the crash on social networks seem to suggest in the majority that this may be a related issue to the Lion Air incident. Should it be found that a fault in the aircraft design is to blame there may be other insurance claims to be paid by Boeing, should it become the target of compensation efforts. Reuters has also reported that Marsh is the broker for Boeing’s insurance and that British insurer Global Aerospace is the lead carrier for Boeing’s policy and also for Lion Air.

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Private equity deals in Nigeria hit N277 billion in 2019 so far DAVID IBIDAPO

o far into the year 2019, the Nigeria private equity space has recorded investments worth N277.65 billion ($767 million) in deals sealed between January and February. This is an improvement by 345 per cent compared to N62.37 billion ($172 million) worth of deals closed during corresponding periods in 2018. Private equity deals so far this year was dominated by a 100 per cent stake in Chi ltd by Coca-Cola to a tune of $500 million in value, which accounted for about 66 per cent of total private equity value so far in 2019. The acquisition according to Coca-Cola is said to signal

its optimism about Africa’s consumer opportunity and a commitment to its long-term investment and growth plan on the continent, where it has been present for more than 90 years. Also the soon to be concretized merger between Access bank, a Nigeria Tier one deposit money bank (DMB) and Diamond Bank, a Tier two DMB came second on the private equity chart. The deal between Access bank and Diamond Bank is said to worth $200 billion accounting for about 73 per cent of a total deal so far. The deal is said to accelerate Access Bank’s strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial service champion according to Herbert

Wigwe, CEO of Access Bank. Meanwhile, acquisition of WAKANOW by Carlye group in the Aviation sector was valued at $40 million which accounted for 5 per cent of total investment value. The deal was announced in December 2018 by global alternative asset manager The Carlyle Group assenting to invest $40 million in Wakanow. com Limited (Wakanow), an online travel agency focused on West and East Africa, with principal operations in Nigeria. Equity came from Carlyle’s SubSaharan Africa fund. According to Mayowa Ayodele, one of Wakanow’s lead investors “as we continue to grow and expand in Africa and beyond. Carlyle’s global foot-

print and scale, as well as its extensive experience and network in the online travel sector, will help us to further develop our offerings and broaden our customer base.” The consumer goods industry also witnessed private investment between Vectis & AGL and Leventis over a deal worth $12 million accounting for about 2 per cent of total private equity deal value in 2019 so far. Meanwhile, CDC Group plc, a development finance institution owned by the UK government invested $15 million in a Nigerian-based private firm, Cardinal Stone Capital Advisors Growth Fund (CCAGF), to support high-growth SMEs in Nigeria.

CDC has worked closely with the CardinalStone Capital Advisors team for two and a half years and has played a key role in the formation of the fund, the UK-based financial institution said in a statement on its website. “As a pioneering investor in African private equity, we are delighted to be supporting CardinalStone’s first fund that will bring investment and expertise to the local entrepreneurs and high growth SMEs that are vital to Nigeria’s long-term economic growth and job creation. We have worked with CardinalStone from the beginning, helping them build a team and raise other investment”, Clarisa de Franco, CDC’s Managing Director said.

eFront survey shows Private Equity LPs performing low on key competencies MICHEAL ANI

imited Partners (LPs) in the private equity space, lack adequate knowledge in areas around negotiation, position monitoring and reporting, according to key findings from a survey by eFront The survey, which captured the opinions of 179 LPs across the globe ranging from high net worth individuals to major pension plans, showed that investors are performing below industry best practice in the above-listed areas. Based on the report, 35 per cent-- more than a third of the LPs surveyed—do not attempt to seek better alignment with GPs or separate accounts. Similarly, nearly half or (45 per cent) of investors rely entirely on GP-provided material and do not seek standardised/digitised information that supports advanced analytics, while more than half

(53 per cent) of the investors, say they use the simplest form of monitoring, failing to leverage integrated systems for analytics and industry-wide transaction libraries. “There is no shortage of commentary about the value created by general partners of private equity funds”, said Tarek Chouman, CEO of eFront. “Much less consideration is given to the value added by the proficient and engaged limited partner. And yet such is the complexity of managing a portfolio of private equity funds, and such is the range of sophistication in how LPs approach this challenge, that the LP value creation dynamic ought to be a major consideration.” The strongest metrics for LPs based on the survey includes private equity allocation-- where more than 90 per cent of respondents display a high or medium level of proficiency; return metrics-- with more than 85 per cent of the investors saying they

use sophisticated methods to measure performance; and risk management, where 46 per cent take a rounded and comprehensive approach. Given that this is the competency area with the largest dispersion in answers, the benchmarks are less clearly defined, the report says eFront’s analysis showed that, while investors perform very well across a number of key metrics, their sophistication score sits below half marks in six of the ten skill categories studied. LPs performed particularly poorly in negotiation, with more than a third saying they focus on very simple negotiating points. Meanwhile, just a tenth seeks a segregated account or the option to make the final decision on capital deployment. In reporting and information exchange, there is significant variation in sophistication. The largest proportion of LPs (45 per cent) passively accept GP information and do no detailed

analysis of NAV or distributions, while only 17 per cent of the respondents in the survey reported that they employ the use of platforms that collect and streamline this type of report. LPs received their lowest score in position monitoring, where more than half of investors (53 per cent) use the simplest form of monitoring and just 15 per cent exploit integrated systems that pair proprietary data with third-party sources, enabling sophisticated analysis. On the positive side, LPs appear to be highly proficient at determining the appropriate private market allocation. This competency has the least divergence among the investors, and the fewest low scores, with just 8 per cent of investors passively following their peer group to determine allocations. Indeed, no pension fund or fund of funds respondents followed this least sophisticated strategy. Performance measurement,

meanwhile, is the area of greatest proficiency among LPs, with more than 85 per cent of investors using sophisticated methods and just 14 per cent of respondents using a simple IRR calculation to measure performance. Risk measurement was the third-strongest category, but the way LPs measure risk varies greatly. This may indicate that there are no clearly established benchmarks in this competency area and that self-assessment choice depends on the internally defined benchmarks within each organization. Almost a third of respondents devise a simple metric which is equivalent to public market volatility; almost a quarter use Value-at-Risk methodology and track correlations between values of different positions in a portfolio; and 46 per cent take a comprehensive and rounded approach, encompassing specific metrics and extraneous risks.

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

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

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FEATURE

Recycling PET waste for healthy environment gaining traction in Nigeria The growing impact of waste on environmental health in Nigeria today due to improper and uncontrolled disposal habits can only be left to the imagination. This has been made worse by the increase in the quantity of post-consumer polyethylene terephthalate (PET) bottles arising from global increase in the consumption of food beverages. To save the environment and preserve lives, recycling of these non-degradable waste products is the way to go, writes CHUKA UROKO, Property Editor.

he past five to 10 years have seen a phenomenal growth in post-consumer polyethylene terephthalate (PET) bottles arising from the increase in the consumption of beverages in cities and semiurban areas. Available statistics shows that production and use of these nondegradable products have equally been phenomenal. In 2016, for instance, 485 billion PET bottles were produced globally and it is projected that, in 2021, about 583.3 billion will be produced. The global PET resin production capacity in 2017 was some 30.3 million tonnes, with China accounting for 30.8 percent of that amount. This made the country the largest producer of PET resin and the largest consumer of PET bottles too. According to The Guardian UK, one million plastic bottles are bought around the world every minute and the number will increase by another 20 percent by 2021. This demand is driven by an apparently insatiable desire for bottled drinks and the spread of ‘on-the-go’ culture. PET bottles are the modern, hygienic package of choice for many food products-particularly carbonated soft drinks and water. The primary reasons for their popularity are the glass-like transparency and their ability to retain carbonation and freshness. The indiscriminate and uncontrolled disposal of the post consumption wastes has become a great concern as it poses huge risk to both health and the environment. The non-degradable nature of these wastes makes the situation more challenging and deepens the risk. But there is always a way out. This is where recycling which has become a new normal in waste disposal strategies becomes first consideration along with its benefits and profitable business potential. As the process of converting waste materials into new objects, recycling provides an alternative to conventional waste disposal that can save materials and help lower greenhouse gas emission. It involves collecting and processing materials that would otherwise be thrown away as trash. Apart from ensuring a clean and healthy environment, recycling has, over the years, become a profitable business. It is estimated that PET plastic collection earns a profit of N54,000 ($150) per ton to be shared

R-L: Nwamaka Onyemelukwe, Technical Lead; Adekunle Olusuyi, vice chairman; Sade Morgan, chairman and Tokunbo Ibrahim, Technical Member; all of the Food and Beverage Recycling Alliance (FBRA) at the opening ceremony of the twoday NESREA 12th National Stakeholders’ Forum held at the Nicon Luxury Hotel, Abuja.

by government authorities and the recycling company. This is good news for both parties and the environment. However, these PET bottles, if not properly disposed after use, pollute the environment, lakes, rivers and oceans. They sometimes end up in landfills and take over 450 years to decompose. It is estimated that 12 billion metric tonnes of plastic will find their place in landfills by 2050. Another sink for PET bottles is the ocean. According to a research conducted at the University of Georgia, United States, 8,000,000 metric tonnes of plastic end up in the oceans every year and it is projected that, by 2050, the ocean will contain more plastic by weight than fish. In Nigeria, the pollution caused by post-consumer PET bottles is alarming. It has caused blockages in drainages, canals, lagoons, filled refuse sites, landfills and litters the streets in cities and towns thereby causing flooding. The situation has called for a more pragmatic action by government and the private sector and the outcome is the recycling of PET bottles into newer products for other uses. Recycling organisations in the country have made significant progress in this area. Notable among them is the Food and Beverage Recycling Alliance (FBRA)—the Producer Responsibility Organisation (PRO) for food and beverage companies with its collection partner, RecyclePoints. RecyclePoints is Nigeria’s foremost waste recycling and social benefit venture that motivates postconsumers to recycle by creating

value from their everyday waste. Others are the Recycling and Economic Development Initiative of Nigeria (REDIN) that is focused on proper disposal of used lead-acid batteries (ULABs) and the Alliance for Responsible Battery Recyclers (ARBR) for renewable energy companies. Remarkably, FBRA with its partners has been embarking on enlightenment campaign on the ills associated with environmental pollution, measures for curbing it, proper disposal and separation of PET bottles that have, in some ways, caused flooding in the cities. Founded in December 2013, the Alliance has membership drawn from responsible and forwardthinking companies, including the Nigerian Bottling Company Limited/ Coca-Cola Nigeria Limited, Nigerian Breweries Plc, Seven-Up Bottling Company Limited, Nestle Nigeria Plc and Guinness Nigeria Plc

‘

In Nigeria, the pollution caused by post-consumer PET bottles is alarming; it has caused blockages in drainages, canals, lagoons, filled refuse sites, landfills and litters the streets

’

It has been championing the Extended Producer Responsibility (EPR) policy of the Federal Government which transfers significant responsibility to producers for the entire life-cycle of their products. This has earned the non-profit organisation recognition from the National Environmental Standards and Regulation Enforcement Agency (NESREA) as well as commendation from the Lagos State government. Both the Commissioner for Environment, Babatunde Durosinmi–Etti and his counterpart in Transportation, Ladi Lawanson, applauded FBRA for demonstrating strong commitment in mopping the waterways from post-consumer PET bottles and campaign on environmental pollution, especially on separation of waste for recycling purposes. At this year’s 12th National Stakeholders’ Forum of his agency in Abuja, NESREA Director-General, Lawrence Anukam, said that there was a strong commitment by the food and beverage and renewable energy companies in curbing waste generated from their products. He said the steps taken by FBRA were quite commendable and that other sectors should follow suit, by working together as a PRO. At the forum, FBRA emphasised that recycling of waste, especially those of food and beverage packaging was vital in environmental preservation as the value chain in the recycling process leads to job and wealth creation. According to Vice Chairman, Adekunle Olusuyi, the Alliance has been intensifying awareness on separation

of waste and environmental pollution, especially on PET bottles which can further be recycled to other useful products. Olusuyi affirmed that FBRA’s initiatives are in line with its commitment to the EPR policy of government which is directed towards building a sustainable healthy environment that leads to business growth. “We are looking at the entire packaging lifecycle – from how bottles and cans are designed and made, to how they are recycled and repurposed. We want to reduce the waste we generate as much as possible, encourage recycling, and our initiatives in this regard has been well tailored in achieving tangible results along with our partners,” he stated. The FBRA Vice Chairman noted that in a circular economy, proper waste management which involves different stages leads to job and wealth creation along the value chain. According to him, a recent survey indicates that the volume of post-consumer PET waste is over 800,000 tonnes which requires participation of all stakeholders at the different stages to drive a robust circular economy. On her part, FBRA’s Technical Lead, Nwamaka Onyemelukwe, said the Alliance, as a PRO, would help improve recycling rates and apply the global marketing muscle of its members to help educate the public on what, how and where to recycle their food and beverage packaging waste. She assured that it would continue to partner with local communities, non-government organisations (NGOs), industry peers and consumers to help make recycling easier and more accessible for everyone by improving collection systems, local recycling systems and driving policy change that supports a truly circular economy. “As part of FBRA ambitious goal towards a cleaner environment, it has concluded plans to clean up the waterways in collaboration with its partner, RecyclePoints and the Ministries of Transportation as well as Environment in Lagos state”, she said. FBRA chairman Folasade Morgan, therefore urged Nigerians to shun indiscriminate dumping of food and beverage packaging waste, especially PET bottles, as they can be taken to collection centres for recycling which could lead to job and wealth creation.

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FEATURE How power outages widened rift between Osinbajo, VGC neighbours

The Victoria Garden City has houses that look like they belong in travel magazines complete with serene boulevards. Visitors have designated entrance and are screened and given a tag before gaining access to the estate. It is home to the high and mighty including Nigeria’s vice president but the estate has unreliable power and the neighbours think the VP should do something about it, writes ISAAC ANYAOGU

hile President Muhammadu Buhari arrived his polling unit 003 at Sarkin Yara ward A, in Daura, Katsina to a raucous welcome by excited admirers in Katsina, his deputy, Yemi Osinbajo, had a subdued reception at his Victoria Garden City polling unit. Many say it had something to do with the poor state of power supply in the area. Perhaps, seeing an outlet for their disappointment, the voters gave the vice president a humiliating defeat. Atiku Abubakar of the PDP secured 425 votes to defeat Buhari with 229 at his polling unit 033 in Victoria Garden City. The president scored 523 votes while the PDP challenger Atiku Abubakar got only three votes. VGC is a gated estate, off Lekki expressway, Ajah in Lagos. It spans approximately 200 hectares and serves as a residential, commercial and public service area. It is owned and operated by HFP Engineering, a construction company and is privately owned. Modern infrastructure and manicured lawns dot the serene estate and it boasts of a good road network, good drainage system, round the clock security, recreational parks, commercial banks, schools, water treatment facilities and an upscale shopping complex but it has pathetic power supply. Residents also go through a harrowing experience when the rains pour for too long. Residents wonder how they could be subjected to frequent power outages when the vice president has a house in the area. The expectation was that his influence would compel Eko DisCo to provide better service. Some residents also express anger at being disconnected from a line servicing Chevron Estate which has regular supply. Residents are unhappy that the VP’s influence has not improved power supply “It’s a shame where the vice president lives, here in VGC, no light and they want us to vote for them,” says Mayowa Ola, a resident of highbrow area. It is easy to see how this rage could seep into voting decision as logic is not often the most important factor in the choice of whom to vote for. However, aides of the Vice President blamed elite conspiracy for the loss of their principal in his VGC polling unit. Babafemi Ojudu, special adviser to the President on Political Matters, in an op-ed said Osinbajo lost to a combination of several factors including ethnicity, elite mentality and living in the midst of people who the policies of the administration do not favour. “As we held those meetings, I saw it coming and told colleagues that coming toVGC and appealing to the voters there might be a waste of time. I could see it in their utterances, in their body language,” Ojudu said.

Ojudu said that in a period of two months Osinbajo must have visited VGC more than 15 times. “A town hall meeting here, parlour meeting there and street walk there. He met with

nonetheless. Traditionally, the opposition has performed better in elite areas in Lagos because the politics of hand-outs rarely entice the rich. They prefer a market-led economic

Residents are unhappy that the VP’s influence has not improved power supply

professionals and engaged resident associations just as he dialogued with people of faith. At the end of the day they still did not let him deliver his unit.” Ojudu further said that many of the residents of VGC who voted against Osinbajo had complained during some of the town hall meetings that the VP failed to help them tackle flooding in the estate or build a stadium for them. Perhaps what contributed to the loss was a poor understanding of the people’s grievances and little effort to address them, the several meetings

approach which rewards enterprise rather than wealth redistribution. Lack of basic infrastructure worsened the outrage. Many residents rank absence of regular power as a key problem in the area. One resident posted on her social media handle on February 23: “Two days, no light in VGC, two whole days people running generators. I’m never coming back to settle here.” Residents told BusinessDay that for the past two months, the power situation has worsened in VGC and it got to a point, power was even being rationed.

But power supply has mostly been poor not just in VGC but the entire Lekki axis in the past three months. Last month, electricity customers in Awoyaya, Ibeju Lekki, staged a protest over the poor supply. “Electricity supply here is frustrating. For the past weeks, we have been forced to live in darkness without any explanation. It has really affected the socio-economic activities here because there is no business that can strive in darkness,” one resident who gave his name as Fred told journalists. Godwin Idemudia, general manager of Corporate Communications, EKEDC, called for calm and said the company was putting in place structures to tackle the crisis. The worsening power supply to VGC is affected by poor revenue from the area. Last year, EKEDC filed legal action against 15 residents of the community for stealing power by bypassing prepaid meters. Adeoye Fadeyibi, managing director, of EKEDC told journalists that the VGC estate used to be billed as a single-customer using one meter but following agitations by residents for individual metering and billing system, the company installed meters for houses. “It is unfortunate that while the company is doing everything to respond to its customers’ demands and give them the best in service delivery, some unscrupulous elements are out to thwart the efforts and aspirations of the company. “The company is determined not to allow such people have their way in their illegal mission as all

lawful means will be deployed to bring them before the law to answer for their misdemeanour. The war against energy theft is yielding result as more and more culprits are being brought to book,” he said. However, the resident Association of the estate under the aegis of the Victoria Garden City Property Owners and Residents Association (VGCPORA) said it actually reported the matter to the electricity company. Olusegun Ladega, chairman of VGCPORA, told journalists, “Not only did we expose the incidents and residences where bypass of meters occurred, we encouraged the EKEDC to prosecute those residents engaged in this illegal activity, and we shall continue to deploy our internal management mechanism to identify cases of meter tampering.” Residents were angry that despite having individual meters, VGC was billed as a single customer from June 2007 to July 208, an arrangement that was declared illegal by the Nigerian Electricity Regulatory Commission. The angst felt by residents of VGC, mirrors the frustration many feel in different parts of Nigeria where power supply is unreliable. Big estates are moving to supply their own power through Independent Power Projects. The Eligible Customer policy created by the Nigerian Electricity Regulatory Commission (NERC), which allows big power users buy directly from generation companies are designed to improve energy access for bulk buyers.

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Wednesday 13 March 2019

Maritime e-Commerce

Containerised cargo volume yet to recover from 2015 shock

…2014 remains peak amaka Anagor-Ewuzie

olume of containerised cargoes imported through the nation’s seaports has continued to dwindle after it reached peak in 2014, when Nigeria recorded the highest number of container throughput in 20-foot equivalent unit (TEUs), the Nigerian Ports Authority (NPA) container traffic statistics show. Ironically, Nigerians are heavily dependent on foreign goods which are mostly imported through the seaports. This is why the nation’s maritime value chain plays a crucial role in the nation’s economy, as around 80 percent of Nigerian trade is transported by sea and via ports. A breakdown of the NPA statistics shows that the volume of containerised imports started growing in 2010 with 430,923 TEUs; the volume increased in 2011 by 24.5 percent to 536,719 TEUs; it grew by 3.7 percent to 556,900 TEUs in 2012; the volume rose by 11.9 percent to 623,409 TEUs in 2013 and it reached the peak in 2014 with 4.2 percent growth, showing a total number of 649,514 TEUs imported through the ports. M e a n w h i l e , Ni g e r i a

Source: Nigerian Ports Authority Website

started experiencing shock in its container throughput as the total volume of imported containers started decreasing in 2015 with 17.8 percent decline to 534,223 TEUs; which further dropped by 16.4 percent to 446,645 TEUs in 2016 and a continued drop of 1 percent to 442,290TEUs in 2017 was recorded, showing that the nation’s port business is yet to recover from the 2015 shock, when throughput started to drop. “Port usage nevertheless has seen a decline in recent years according to the NPA which owns the eight

port complexes across the country. Cargo throughput excluding crude oil rose to its highest point in 2014 with 84.9 million tonnes. Afterwards, there has been a decline in preceding years with provisional data for 2018 standing at 35.9 million tonnes (January to September),” confirmed a recent report by the Nigerian Maritime Administration and Safety Agency (NIMASA). According to the report, external factors remain the key reason for the decline experienced in Nigeria’s port usage. “The volatile nature of international crude oil prices,

led to a fall in the value of the naira against other international currieries, especially the dollar and has also reduced domestic demand for imports. “Likewise the ban on import certain consumer goods- which was part of the government’s efforts to encourage domestic production and reduce the country’s trade deficit also had impact. These policies, including the ban on import of certain products were intended to increase value addition and domestic production,” the report stated. Records show that the

Central Bank of Nigeria (CBN) restricted 41 items from accessing foreign exchange (forex) from the official local currency trading market in 2015. “The port started recording low tonnage at commencement of the 41 items policy because manufacturers that used to bring in raw materials in large quantity in the past were not able to do so since the introduction of 41 items,” Tony Anakebe, managing director of GoldLink Investment Ltd, a port operator, told BusinessDay. He said the imple mentation of the policy crippled

port business as only few imports were coming in through the seaport. According to him, the shipping companies and terminal operators recorded a significant downturn in business caused by a shortfall in dollar supply. He further observed that this also resulted to over 6,000 job losses in the maritime sector between 2015 and early 2017. Emma Nwabunwanne, a Lagos based importer, observed that effect of the policy restricting importers’ of 41 items, was responsible for the skyrocketing prices of inputs and commodities in the market at that time and the trend has continued till date. He said that the NPA statistics on vessel traffic and cargo throughput for 2015, 2016 and 2017, was clear evidence to the fact that Nigerian seaports did not do well. Presently, world economy, business and societies depend on the efficient clearance of vessels and goods in ports to function, develop and prosper. Pundits believe that if not for the high level of inefficiency at the nation’s seaports, many transshipment cargoes from the neigbouring landlocked countries could have been attracted to make up for the lost volume.

Chamber of Shipping sees alternative cargo destination in Eastern ports …Lists ways to revive them amaka Anagor-Ewuzie

orried by the underutilisation of the seaports located outside Lagos, especially in the East, the Nigerian Chamber of Shipping (NCS) has identified ways to improve the viability of the Eastern Ports as alternate cargo destination for the benefit of shippers, investors and the economy at large. A communique issued by the Chamber at the end of its one day focus group meeting held in Lagos last week with the theme, ‘Maximising the Economies of the Eastern

Ports,’ suggested that there is need to increase awareness of the existence and the use of the Eastern ports in order to develop and increase their economy of scale. The Chamber further stated that there is also need to reduce tariff across board particularly in the Eastern ports to significantly increase traffic in those ports. “In addressing security issues around the Eastern ports, economic integration through poverty elimination programmes and training will reduce community interference on government right of way in and outside the ports,” the communique stated.

The communique, which noted that the lack of comprehensive shipping policy, derived from the transportation policy for Nigeria had made it difficult to adequately plan, implement and address issues in the sector, particularly the ports, their usage and the port area infrastructure, as well as the multimodal activities around the ports. It therefore suggested that there is need for a comprehensive shipping policy for Nigeria. It added that security needs to be holistic, integrated and be approached on a multi-level that starts with all-inclusive analysis of the issues that lead to maritime

related security issues. “To maximise the economies of the Eastern ports requires more than a port plan, but a port masterplan, as well as a holistic and integrated approach to the issues of security, container management, port infrastructure, geographical areas of the ports, the relationship between the public and private sector, and financing requirement. All these must be derivable from a comprehensive transport policy and its resultant shipping policy,” it stated. The communique, which suggested that there is need to develop deep seaports and its attendant infrastructure

facilities, further stated the port should be automated to help reduce the issues of corruption and gridlocks at major Nigerian ports even as it advised port managers to address issues around managing containerised cargoes. Delivering a welcome address at the event, Andy Isichie, president of the NCS, said that the underutilisation of the Eastern ports have taken toll on the nation’s economy and it contributed to the gridlocks experienced daily on the road leading to Apapa and Tin-Can Island Ports. He listed shallow draft, insecurity and port cost as factors responsible for the un-

derutilisation of the eastern ports as 70 to 80 percent of the cargoes coming to Nigeria come in through Lagos ports. Isichie, who pointed out that Eastern ports are reportedly too expensive in terms of freight due to lack of economy of scale, suggested that there is need to segment the problems with the eastern ports into long and short term basis in order to properly advise the government. “The nation must make conscious commitment to making Eastern ports viable by specifying cargoes to be received by individual ports through the policy of cargo categorisation,” Isichei said.

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Cabotage: NIMASA poised to develop shipping, save jobs through strict compliance amaka Anagor-Ewuzie

hen in 2003, the Federal Government came up with the Coastal and Inland Shipping (Cabotage) Act, the idea was to not only grow the Nigerian maritime sector vis-à-vis the economy through effective participation of indigenous owned vessels in the nation’s lucrative shipping business, but to also restrict the use of foreign vessels in domestic coastal trade in order to promote the development of indigenous tonnage. Secondly, the Cabotage Act was geared towards securing jobs for qualified and upcoming Nigerian cadets presently training in the different maritime institutions of the world, and to also increase the number of Nigerians participating in the shipping aspect of crude oil lifting business. This became essential bearing in mind that Nigeria is one of the world’s leading producers and exporters of crude oil. According to the Act, “A vessel other than a vessel wholly owned and manned by Nigerian citizens, built and registered in Nigeria shall not engage in the domestic coastal carriage of cargo and passengers within the coastal territorial inland waters, or any point within the waters of the exclusive economic zone of Nigeria. It went further to put out certain clauses to accommodate granting of waivers of

different categories to foreign owned vessels in the event that Nigerians fail to produce qualified manpower to man Cabotage vessels, own ship yards to build Cabotage vessels and acquire the specific vessels required for a particular Cabotage trade.” For instance, the act states: “The minister may on the receipt of an application grant a waiver to a duly registered vessel on the requirement for a vessel under this Act to be wholly manned by Nigerian citizens where he is satisfied that there is no qualified Nigerian officer or crew for the position specified in the application.” Meanwhile, the Guidelines on Implementation of Cabotage Act 2003, issued by the Federal Ministry of Transportation in 2007, defined Cabotage cargo as cargo and passengers originating from one port or point in Nigeria to another within Nigeria. It emphasises on the loading and discharging ports, meaning that it involves cargo originating from Nigeria and destined for the Nigerian market. The guideline listed Cabotage vessels to include passenger vessels, crew vessels, bunkering vessels, fishing trawlers, barges, offshore service vessels, tug boats, tankers, carriers and among others. Fourteen years into the implementation of the Act, Nigeria is yet to actualise the purpose of its existence obviously due to several violations by foreign owned ships that presently dominate the nation’s shipping business. Finding shows that these

Dakuku Peterside

foreign owned vessels ride on the back of perceived ‘poor capacity’ including lack of funds among Nigerian ship owners for the acquisition of standard vessels to participate in Cabotage trade as well as lack of sufficient manpower to man vessels at sea as required by the law. Worried by the trend especially the level of violation of the Act, in 2017, Dakuku Peterside-led management of the Nigerian Maritime Administration and Safety Agency (NIMASA), the Cabotage enforcement agency, introduced Cabotage Compliance Strategy (NCCS), which made it clear that the agency shall no longer consider applications for granting of waiver on manning for prescribed categories of officers in vessels engaged in Cabotage trade.

The effected officers include second officer, second engineer, second mate, seamen, ratings and stewards. Upon the introduction, Peterside said that special applications for captains, chief engineers, chief officers, first mate in the absence of qualified Nigerians, shall be considered on merit, but on the condition that such company will make plans to train a Nigerian and put in place a transition plan to ensure that the Nigerian will take over the job within one year. For Peterside, this was to not only assure Nigerians that NIMASA will continue to support and promote indigenous participation in the Nigerian maritime sector, but to also ensure that Nigerians are not deprived of the jobs due them. Sadly, despite the aware-

ness created among the international oil companies (IOCs) to support NIMASA’s bid to ensure full implementation of the Act, some shipping companies have vehemently gone against this move by constantly allowing foreigners to man ships involved in Cabotage trade. The most recent was the case between NIMASA and a motor tanker, MT NAVIGATOR CAPRICORN, a Liquefied Petroleum Gas (LPG) carrier, used for the movement of Liquefied Natural Gas (NLNG), which was arrested for contravening sections of the Cabotage Act. NIMASA issued a detention order against the vessel, which was first boarded in October 2018 and all infractions of Cabotage noncompliance were noted and communicated accordingly to the charterer/owners representatives, but a 90-day grace period to comply was also given to them. The vessel was arrested at the expiration of 90 days grace period on the 31st January 2019, because the vessel owners failed to rectify the Cabotage infractions that were noted in 2018 by NIMASA. The LPG carrier was said to be responsible for bringing gas every two weeks to Lagos for the licensed off takers appointed by the Nigeria LNG to distribute LPG to the domestic market. This was why alarm of possible scarcity was raised at that time. Beyond that, NIMASA has promised not to compromise the growth of the maritime sector, especially when it comes to the issue of enforc-

ing its statutory regulations enshrined in the Agency’s empowering instruments. To br idge manpow er supply gap in the Nigeria’s maritime sector, NIMASA created an interventionist programme known as the Nigerian Seafarers Development Programme (NSDP), which has trained over 2000 cadets, and is making serious headway to also create seatime training opportunity for the cadets, after graduation. Upon obtaining their Certificate of Competency (CoC) after the sea-time training as required by the International Maritime Organisation (IMO), this crop of seafarers, need ships especially Cabotage vessels that would employ them to earn a living. This is the more reasons IOCs operating in the nation’s waters needs to comply with the rule of the engagement in order to preserve the jobs of Nigeria’s future generation. Just like Peterside had always said, NIMASA does not need to change the rule of engagement to a confrontational one, because the mandate is to grow shipping for our economic benefits, and this will be difficult to achieve if industry players refuse to cooperate and collaborate with the maritime regulatory body. Having said that, industry players need to draw up a 5-year strategic plan for the cessation of application for Cabotage waiver, and pursue the utilisation of Nigerianowned vessels and seafarers for the execution of marine contracts.

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Leadership

Wednesday 13 March 2019

SHAPING PEOPLE INTO A TEAM

The feedback fallacy MARCUS BUCKINGHAM, ASHLEY GOODALL

he debate about feedback at work isn’t new. But recently, the question of how to get employees to improve has taken on new intensity. Netflix’s culture, which The Wall Street Journal recently described as “encouraging harsh feedback,” is an example of the overriding belief that the way to increase performance is through frequent and often critical feedback. The research on feedback is clear: Telling people what we think of their performance doesn’t help them thrive, and telling people how we think they should improve actually hinders learning. Underpinning the conviction that feedback is an unalloyed good are three theories that the business world commonly accepts as truths. The first is that other people are more aware than you are of your weaknesses, and that the best way to help you, therefore, is for them to show you what you cannot see for yourself. We can call this our theory of the source of truth. The second belief is that the process of learning is like filling up an empty vessel: You lack certain abilities you need to acquire, so your colleagues should teach them to you. We can call this our theory of learning. And the third belief is that great performance is universal, and that once defined, it can be transferred from one person to another. Hence you can, with feedback about what excellence looks like, understand where you fall short of this ideal and then strive to remedy your shortcomings. We can call this our theory of excellence. Research reveals that none of these theories is true. The more we depend on them, the less learning and productivity we will get from others. To understand why and to see the path to a more effective way of improving performance, let’s look more closely at each

theory in turn. THE SOURCE OF TRUTH The first problem with feedback is that humans are unreliable raters of other humans. Our evaluations are deeply colored by our own understanding of what we’re rating others on, and our own inherent and unconscious biases. You may occasionally have team members ask you to tell them where they stand, objectively. You may feel that it’s your duty to try to answer. But you can’t — none of us can. All we can do is share our own experiences and reactions. Thus we can tell someone whether he’s persuasive to us, whether his presentation is boring to us. We can tell him where he stands with us. HOW WE LEARN Another of our collective theories is that feedback contains useful information, and that this information will accelerate someone’s learning. The research points in the opposite direction. Learning is less a function of adding something that isn’t there than it is of recognizing and refining what already is. There are two reasons for this. The first is that, neurologically, we grow more in our areas of greater ability. The brain continues to

develop throughout life, but each person’s does so differently. Because of your genetic inheritance and the oddities of your early childhood environment, your brain’s wiring is unique. Through this lens, learning looks like building on the patterns already there within you. Second, getting attention to our strengths from others catalyzes learning, whereas attention to our weaknesses smothers it. EXCELLENCE We pursue excellence in the belief that while defining it is easy, the hard part is codifying how to get there. We’ve got it backward: Excellence in any endeavor is almost impossible to define, and yet getting there, for each of us, is relatively easy. Each person’s version of excellence is uniquely shaped and is an expression of that person’s best extremes. Since excellence is idiosyncratic, we can never help another person succeed by holding her performance up against a prefabricated model of excellence. HOW TO HELP PEOPLE EXCEL To get into the excellence business we need some new techniques: — LOOK FOR OUTCOMES:

Excellence is an outcome, so take note of when a prospect leans into a sales pitch or an angry customer suddenly calms down. Then turn to the team member who created the outcome and say, “That! Yes, that!” By doing this, you’re helping your team member recognize what excellence looks like for her — you’re offering her the chance to gain an insight. — REPLAY YOUR INSTINCTIVE REACTIONS: The key is not to tell someone how well she’s performed. While simple praise isn’t a bad thing, you are by no means the authority on what objectively good performance is. Instead, describe what you experienced when her moment of excellence caught your attention. Use phrases such as “This is how that came across for me.” When you relay your reactions in detail, you aren’t judging or fixing her; you’re simply reflecting to her the unique “dent” she just made in the world. — NEVER LOSE SIGHT OF YOUR HIGHEST-PRIORITY INTERRUPT: If you see something go off the rails, the instinct will kick in to stop everything to tell someone what she did wrong and what she needs to do to fix it. But remember that when you do, you’re merely remediating — and

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

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that remediating not only inhibits learning but also gets you no closer to excellent performance. If you see somebody doing something that really works, stopping her and dissecting it with her is your highest-priority interrupt. — EXPLORE THE PRESENT, PAST AND FUTURE: When people come to you asking for feedback on their performance or what they might need to fix to get promoted, try this: Start with the present. If a team member approaches you with a problem, he’s dealing with it now. He’s feeling weak or challenged, and you have to address that. But rather than tackling the problem head-on, ask your colleague to tell you three things that are working for him right now. These things might be related to the situation or entirely separate. Getting him to think about specific things that are going well will help open him to new solutions. Next, go to the past. Ask him, “When you had a problem like this in the past, what did you do that worked?” It’s likely that he has encountered this problem before. On one of those occasions he will almost certainly have found some way forward. Finally, turn to the future. Ask your team member, “What do you already know you need to do?” Offer up one of your own experiences to see if it might clarify his own. But operate under the assumption that he already knows the solution — you’re just helping him recognize it. Marcus Buckingham is the head of people and performance research at the ADP Research Institute and a co-author of the forthcoming “Nine Lies About Work: A Freethinking Leader’s Guide to the Real World.” Ashley Goodall is the senior vice president of leadership and team intelligence at Cisco Systems and a co-author of the forthcoming “Nine Lies About Work: A Freethinking Leader’s Guide to the Real World.”

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King Long begins market recovery drive Pg 30

Auto journos plans capacity building/training workshop

Toyota ups Corolla’s game ahead 2020 ... Compact, broader appeal, more style, safety, connectivity MIKE OCHONMA mikeochonma@gmail.com

s many global customers continue to redefine their preference for passenger cars and many others even falling out of love with the traditional sedan derivative, and many other automakers re-strategizing to remain in contention, Toyota Motor Corporation, the Japanese company behind the world’s topselling car of all time, is cracking up the nuts to remain in strong contention to remain on top of the perking order, especially with the refreshed and more enhanced Toyota Corolla 2020 that is coming with all the trapping or modern automotive luxury. In redesigning the steadfast compact for 2020, Toyota is showing its commitment to the seg-

ment, offering more content and trim levels, including the first Corolla hybrid. By adding more choices, Toyota aims to offer a Corolla for even more people, as well as attract more diverse, younger buyers who want more style, safety, connectivity and performance without trading away Corolla hallmarks that comes in the form of value, fuel economy and reliability. The Corolla, along with the Camry, remains a cornerstone for Toyota, even as research has shown that, some 65 percent of Corolla owners return to the brand when they buy a new vehicle. But even with one of the highest loyalty rates in the segment, Toyota still recognized the fact that, it needed to raise its game as one of the most celebrated automotive market leaders. The 2020 Corolla is the latest

retooled Toyota to come off the company’s new global architecture to cut costs and weight while enhancing safety, driving dynamics and fuel economy. The platform allows for a lower center of gravity, a Corolla body that is 60 percent more rigid, and the addition of a multilink rear suspension, replacing a torsion beam, and active cornering assist to deter understeer. Meanwhile, the Corolla hybrid is being added to serve as another entry point for Toyota’s family of gasoline-electric cars depending on the market and slotting between the Prius and the Camry hybrid. The sedan is expected to account for 90 percent of Corolla sales, with the hatchback introduced last year in the United States market for instance representing the rest. Toyota forecasts the hybrid could account for up to 6

percent of sedan sales. There are very strong indications that Toyota is setting modest expectations for the 12th-generation Corolla, even as it hatches plans to produce the car at two North American assembly plants. Ed Laukes, head of marketing for the Toyota division, said the company sees U.S. sales of the Corolla totaling about 250,000 this year, a drop of about 18 percent from 303,732 in 2018. Since U.S. compact car sales reached 2.22 million units in 2015, they have declined three straight years, including a 14 percent drop in 2018. Laukes says the decline in car sales has not been as severe in several key regions notably Southern California, Northern California, Florida and other markets in the Southeast where Toyota’s lineup still fares well.

Peugeot’s all-new 208 gets added panache

eugeot has pulled the covers off its new-generation 208 hatchback ahead of its Geneva Motor Show debut and it’s packed with technologies that you’d usually expect on larger cars. Built on the company’s latest CMP platform, the newcomer is 30kg lighter than its predecessor and inherits some of Peugeot’s latest design cues from newer models like the 508 and 3008 while also harking back to that legendary 205 in places. Moving inside, the 208 takes a great deal of design inspiration from that aforementioned 3008, with its ‘3D i-Cockpit’ set-up, as Peugeot calls it, featuring ‘piano’ toggle switches and a 3D digital instrument panel. Various high definition touchscreen infotainment options are available, depending on the model, as is a configurable head-up display and an eight-colour LED

mood lighting system. There is a raft of driver assistance gizmos available, including adaptive cruise control with stop & go, a new-generation emergency

brake assist system with pedestrian and cyclist detection, smartbeam headlights with automatic dipping and driver attention monitoring, to name just a few.

On the powertrain front, Peugeot comes to the electrification party with a fully-electric version called the e-208. Featuring a 100kW motor and 50kWh battery, the e-208 is said to be capable of a range of 338km between charges and the car can even be put on charge remotely through a smartphone app, which also allows you to control the car’s climate systems from a distance. Also available are range of conventional petrol and diesel engines, including three variations of the 1.2-litre puretech three-cylinder petrol unit in the form of a normally aspirated option with 55kW and turbocharged variants with 74kW and 96kW. The sole diesel option is a 1.5-litre four-cylinder with 74kW on offer. Transmission offerings, depending on the engine selected, include five- and six-speed manuals and an eight-speed automatic.

rrangements are now on top gear for the 2019 Nigerian Auto Journalists Association (NAJA) Capacity Building and Training workshop scheduled before the second quarter of this year. The annual training workshop which is designed to boost human capacity for journalists reporting the automotive sector in the country is the fourth edition in the series. It would be recalled that while Ford Motors South Africa (FMCSA) in collaboration with Coscharis Motors; its local franchisee were the lead sponsors of the first and second editions held in 2016 and 2017 with its global Driving Skill For Life (DSFL) programme domesticated in Nigeria, Stallion Motors Nigeria Limited in tandem with Nissan Motors South Africa emerged as the lead sponsor of the 2018 NAJA Capacity Building/Training programme. According to Julie Chi-Nwaoha, head of this year’s NAJA capacity building /training committee, if all things go according to planned, this year’s event will be segmented into sessions cutting across test-drive, safety, automotive, tyre maintenance, lubricants, auto insurance, photography and government policy. Chi-Nwaoha who pointed out that the event will also provide avenue for critical stakeholders in the auto industry to rub minds on way forward, said that, the auto industry is one fundamental industry in Nigeria that one cannot ignore because of the huge contributions to the nation’s economy. She therefore, emphasized that there is need for consistent training and retraining for motoring journalists who cover the beat. On how the training can benefit journalists and stakeholders, ChiNwaoha stated that, there is no way NAJA can finish the training programme and remain the same. “Journalism is wide and we must open ourselves to consistent training and retraining. It is important that journalists writing about the automotive sector are well informed; they must be well educated and empowered to write effectively without fears”, Chi-Nwaoha added. Also commenting on the training programme, Chairman of NAJA, Mike Ochonma said the annual training workshop has been a very big eye opener to its members as knowledgeable and competent instructors drawn from the different sectors of the automotive sectors including the academia and those from government and private sectors are always be on hand to give their best to members. The NAJA training workshop is an annual training programme organised to refresh the minds of practicing auto journalists on the trend of auto journalism worldwide. Members of the association cuts across over reputable print, electronic and online media outfits across the country.

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King Long begins market recovery drive MIKE OCHONMA mikeochonma@gmail.com

According to her, the buses which she has been using for some years now for school runs, are “fuel efficient, rugged, easy to maintain and importantly, affordable”. She explained that before settling for King Long buses, she used tokunbo (second hand) buses of other brands, but got her hands burnt because of too frequent down time. When she turned to another popular brand, she added, the price was too expensive. The challenge of transporting her school students from their homes to school and back was tackled when through a driver; she discovered the King Long

brand. Some of the buses on her fleet, she revealed, have run over 200,000 kilometers and are still offering service. A CFAO dealer, Adeleke Samuel, stated that he has been doing business with CFAO for over 10 years, and from his experience selling the King Long buses, there is always demand for the buses because it gives value for money. Laurent Friedrich, general manager of CFAO Equipment; a division of the multinational company saddled with the responsibility of distributing the brand in Nigeria, , stated that his company known for distributing only quality products, settled for King Long because of its salient features.

Friederich said the bus can be used for a wide variety of purposes such as city and inter-city transportation, school bus, church and mosque bus, Fast Moving Consumer Goods (FMCG) and cargo distribution bus, ambulance etc. The Kingwin Cargovan also comes on a long wheel base with a high mount stop lamp, tyre size of 195/70/R15, 2.237 litre engines, and other standard features applicable to the 15 seater bus. It also comes with a generous 7.6 cubic meter space. With the relaunch, the King Long buses are now available for purchase in all CFAO Motors outlets nationwide. Warranty is two years or 60,000 kilometers, which ever comes first.

Hyundai shifts Sonata upmarket with 2020 revamp

hile G eneral Motors and Ford Motor Company are paring cars from their United States lineups to focus on crossovers, SUVs and trucks, Hyundai is positioning itself to siphon off buyers who still want a sedan. The eighth-generation Hyundai Sonata coming for the 2020 model year takes the Korean automaker’s midsized sedan upmarket with a new design language and new technology. Hyundai released images of the revamped Sonata on Wednesday along with a few details, mostly focusing on the car’s new design language, which it calls Sensuous Sportiness. One design element that intersects with technology new to the Sonata nameplate is the vehicle’s daytime running lights. They are thin lines of light that border the upper ends of the grille and stretch from outer sections of the fenders to the top of the hood. When the lights are off they appear to be chromatic material, Hyundai says. The redesigned Sonata also grows in nearly every dimen-

Lagos debunks rumours of Road Worthiness Certificate price increase … cautions against purchase of vehicles with mechanical faults

ecently, the Nigerian was greeted with the dramatic comeback of the King Long buses into the Nigerian market by the centennial CFAO group, following a very successful relaunch of the 15 and 18 seater intra and intercity passenger buses in Lagos. The Kingwin-15 Seater bus which is ideal for modern day passenger transportation comes with a 2.237 litre engine on a long wheel base, 5-speed transmission and safety features such as Anti-Locking Braking System, stop lamp, seat belts on all seats, and appropriate braking system. The functional equipment of the bus include front fog lamp, rear view mirror, rear stepped bumper, speed limit device, among others. It also comes with a petrol engine, CD+MP3 player, and front and rear air conditioning system among others. The returnee King Long bus was lauded by customers that have been using the buses and dealers who were at the event in Lagos. Erinma Kanno, one of the satisfied end users of units of the King Long buses and proprietor of Troika Schools, Lekki, Lagos, noted that the quality of the bus is top class in all ramifications.

Wednesday 13 March 2019

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sion. The wheelbase is about 1.5 inches longer than the outgoing model, while the overall length grows an inch and three-quarters. The car’s sloping roofline reduces height by just over an inch, which wills likely aid aerodynamic performance. It also helps give the car a coupelike appearance. Hyundai has also overhauled the interior. To create more room, the height of the

dash and air vents has been compressed. Hyundai says this design treatment helps convey a sense of lightness. The dash has satin chrome accents and a large screen styled into its center. Long armrests run almost the length of the door panels. There is no word yet on prices, powertrains or when the car will go on sale. It arrives about the time Ford will wind down

the Fusion sedan, one of the Sonata’s chief competitors. Although GM is keeping the midsize Malibu, it is building the last compact Cruze sedan this week, and the large Impala sedan is scheduled to go out of production in January. The Honda Accord and Toyota Camry have recently been refreshed and Nissan retooled the Altima for 2019.

agos Vehicle Inspection Service (VIS) has dispelled rumours of price increase for the issuance of Road Worthiness Certificate (RWC) to vehicle owners in Lagos State. Abdul-Hafeez Gbolahan Toriola, director of the VIS, described the rumours as unfounded and without any substance and reiterated the commitment of the state government to ensure that Lagosians were able to process their RWC seamlessly. Toriola stated that in spite of the fact that the state government had invested substantially in establishing 10 computerised centres across the state, the government was not considering increasing the price for the processing of document. He enjoined motorists wishing to process their RWC not to patronise touts but visit any of the 45 VIS work stations or the

10 Lagos Computerised Vehicle Inspection Service (LACVIS) centres. He said motorists who process their RWC in VIS Zonal offices without a computerised centre were to visit any of the 10 LACVIS centres across the state with their referral note for a free computerised inspection after which they would be issued an Inspection Report. He assured motorists that officers of VIS and LACVIS had been trained and positioned to attend to customers’ enquiries and concerns in a professional manner. He stated that the computerised vehicle inspection would also help vehicle buyers from buying imported vehicles with mechanical faults, which were usually hidden by unscrupulous sellers. “A valid safety check is required before a vehicle can be registered. These tests which include the Autovin are carried out at the LACVIS centres to know the history of the vehicle and all the modifications and alterations done on the vehicle, if any,” he said. He also called on all insurance companies, vehicle documents processing agencies, car dealers/importers and all safety agencies to cooperate with the government to actualise the aims and objectives of the government to ensure total safety on the roads by insisting that the Autovin exercise was carried out before vehicle purchase and registration was completed.

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BUSINESS DAY

Financial Inclusion

& INNOVATION

CBN-backed NIRSAL Microfinance bank to drive financial inclusion through 5% interest rate Stories by Endurance Okafor

n the quest to meet the set 80 percent financial inclusion rate, the Central Bank of Nigeria (CBN), in collaboration with the Bankers Committee, and Nigerian Postal Service (NIPOST), have set up N5billion Nigeria Incentive-Based Risk Sharing System (NIRSAL) Microfinance Bank. Unlike other microfinance banks whose lending rate are almost beyond the reach of the low-income and small and medium enterprises, the NIRSAL Microfinance bank according to the central bank governor, Godwin Emefiele, will have a 5 percent interest rate on the loans under a sevenyear tenor, plus two years moratorium. T h e b a n k w i l l h av e branches in all the 774 local councils in the country and already, seven of the branches have commenced operations, according to the governor. “The biggest problems that small businesses have always had is access to credit; and I’m happy that with the establishment of this microfinance bank, with at least one located in each of the 774 local governments in the country, we would be able to have a financial institution that will help deepen financial inclusion,” Emefiele said. He further explained

that the establishment of the microfinance bank will make it easy for people to access credit, particularly the small and u n b a n ke d p e o p l e, b e caus e the y are said to be at the bottom of the pyramid and seen as being economically weak. According to the figures by the Enhancing Financial Innovation and Access (EFInA), compiled from its results of the 2018 Access

to Financial Services (A2F) Survey, Nigeria’s financial exclusion rate reduced from 41.6 percent in 2016 to 36.8 percent. The sur vey revealed that 55.9 percent of women were financially excluded in comparison to 44.1 percent men. Similarly, rural areas had a higher financial exclusion rate of 78.5 percent compared with an exclusion rate of 21.5 in urban

areas. With a set target to reduce the country’s exclusion rate to 20 percent by the year 2020, the CBN governor said technology will be used to carry out the operations of the microfinance bank “The loans will be disbursed through the Bankers Committee’s AGMEIS scheme, being five per cent of profit after tax set aside by banks to support small

and medium enterprises (SMEs) in agriculture or other small businesses badly in need of finance to scale and enhance their competitiveness and profitability,” he noted. He also applauded the already existing microfinance banks as he said these banks were doing their best, and “I have heard this is an attempt to crowd them out, but this is not true; rather it

is to complement their services.” Emefiele said he was aware that there were some rural communities where microfinance banks charge very prohibitive interest rates, but explained that “here, we are talking about making funds available to these people. This will help to create some form of competitive landscape so that those kinds of practices will no longer arise.” A c c o r d i n g t o Wa l e Okunrinboye, a Lagosb a s e d Inv e s t m e nt R e searcher, when loans and credits are given to individuals who have basic bank accounts especially those in the informal sector, (as they contribute to the larger population of the country),” they will be encouraged to operate formally in the financial circle other than their normal traditional way of carrying out financial transactions.” Eze Onyekpere, the director, Centre for Social Justice, has advised the Central Bank of Nigeria, the Bankers Committee and NIPOST, who established the NIRSAL Microfinance bank, to raise the capital base of the microfinance bank from N5 billion to N100 billion. Onyekpere said this was because “the loans will be available at lower rates below inflation and monetary policy rate,” as such he said the N5billion capital base of the MFB might not be adequate to bridge the funding gap.

UN to improve Digital Financial Inclusion in Africa with FITA

he Universal Postal Union (UPU), an agency of the United Nations, has officially rolled out a digital financial service project targeted to reach around 800,000 people across Africa, Asia, and the Pacific. The agency under its Financial Inclusion Technical Assistance Facility (FITAF) initiative plans to achieve its set target by the end of 2019. The project is borne out of the need to reduce the number of the unbanked in highly excluded countries in

Africa, Asia and the Pacific. According to UPU, it would help to build capacity to offer the digital financial services that can reach anyone, anywhere, anytime, giving citizens a safe place to keep their money and enable small businesses to access the financing they need to grow and contribute to the economy. Bishar Hussein, UPU Director General, while speaking at a panel session during UNCTAD’s Africa eCommerce Week in Nairobi, said the UPU was “acting concretely to

develop digital finance through the Post on the ground, to the benefit of the underserved population and businesses.” He added that in Africa, the project would first launch in Benin, Côte d Ivoire, Ghana, Rwanda, while also focusing on the digitalisation of postal financial services. “The UPU helps its member countries to introduce or develop inclusive and sustainable financial services.” According to him, some 91 percent of postal outlets worldwide already offer

some form of financial services, “there is still work to do when it comes to bringing more unbanked people into the formal financial system,” the UN said on its website. On how FITAF would be used to drive inclusion of the 800,000 targets, the agency said it would provide selected Posts with support on several fronts, including: Digital Financial Services (DFS) Assessments, Software acquisition, New financial services, and Capacity building Expertise.

Th rou g h F I TA F, t h e UPU will also carry out broader research on postal financial inclusion, and will share new insights and resources for UPU members and stakeholders, such as case studies, a readiness guide and the organisation of workshops. “Assistance will be provided according to need, based on requests from designated operators following the required process as detailed in the relevant call for projects,” UPU noted. Th e c r i te r i a f o r t h e

agency to select a Post include: commitment from the Post’s management a n d f ro m g ov e r n m e nt leader, the existence of a legal and regulatory framework to enable the Post to deliver financial services, including digital financial services, evidence of innovation, impacts on financial inclusion, and willingness to co-fund 20 percent of costs. “Countries can apply for assistance through the UPU’s call for projects,” the UPU notified on its website.

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Wednesday 13 March 2019

INSIGHT

How FIRS tax reform initiatives are driving Nigeria’s revenue collection only option for taxpayers to file and pay taxes through a manual process. Besides making tax payment less-traumatic in the country, the latest reforms would also help to improve transparency, efficiency in tax collection and administration, and ultimately increase tax revenue.

OLUWASEGUN OLAKOYENIKAN

ax collection in Nigeria was close to a nightmare years back with a significant number of eligible taxpayers, which include individuals and corporate organisations, raking in billions of naira without paying their taxes, thereby making the nation’s revenue from taxes lean considerably. The tax-default culture transcends from series of governments until recently after the nation slumped into recession as a result of shock in the prices of crude oil, its main source of revenue, in the international market, causing oil-dependent Nigeria to seek for alternative sources of revenue to finance its bogus expenditure. Ni g e r i a’s w o r k i n g - a g e population stood at over 110 million between April and June 2017, according to data obtained from the National Bureau of Statistics (NBS). But in the same period, only 14 million, representing less than 13 percent economicallyactive Nigerians paid taxes. Worried by the paltry number of taxpayers in Africa’s second-largest economy after South Africa, which may have been informed by a number of reasons including accessibility, coupled with over 40,000 millionaires tax defaulters marked in 2019, the Federal Inland Revenue Service (FIRS) came up with a variety of reform initiatives to spur taxpaying culture in affected Nigerians and corporate firms. Ideally, the tax payment is a civic responsibility of qualified individuals who fall within 15 – 64 years of age and corporate organisations in the country to enable the government to gather financial resources to fund state projects and provide the common needs of the people. Companies are required to file their Company Income Tax (CIT) returns with FIRS, while Personal Income Tax (PIT) returns are for self-employed individuals, employees and employers in the form of Pay As You Earn (PAYE).

This means that: • Taxpayers can now file and pay federal taxes online from the comfort of their offices or home • Taxpayers can make electronic payment and filing of state taxes including PAYE, etc. • Employers can remit statutory deductions on behalf of personnel online • Corporate income tax (CIT) audits to be done within a 63day timeline • There is access to e-platforms for all classes of tax payers Potential taxpayers can benefit from this by: • Visiting the FIRS website to file all Federal taxes online

Babatunde Fowler, FIRS Chairman No doubt, the Nigerian economy was as volatile as its only source of revenue – crude oil – as the government had no substitute for the commodity to create a buffer for the nation’s economy when oil was becoming less important globally. The trend has however been reversed lately as the apex tax administration agency in Nigeria did not only record over 5 million new taxpayers, but it also broke an all-time high revenue generation of N5.32 trillion in 2018. As a result, the FIRS in its quest to make taxpaying easier for individuals and corporate organisations in the country, the tax administration agency introduced some innovations to help reduce the time spent for filing and paying taxes by 50 percent and also to improve transparency and efficiency in tax administration. Under the initiatives, which were driven by the FIRS, the Presidential Enabling Business Environment Council (PEBEC), the Kano State Inland Revenue Service (KIRS) and the Lagos State Inland Revenue Service (LIRS), po-

‘‘

The tax payment is a civic responsibility of qualified individuals who fall within 15 – 64 years of age and corporate organisations in the country to enable the government to gather financial resources to fund state projects and provide the common needs of the people

tential taxpayers can now file all federal taxes and pay for Value Added Tax (VAT) and Company Income Tax (CIT) online on FIRS website from the comfort of their offices or home, while electronic payment and filing of state taxes including monthly PAYE can be made LIRS and KIRS websites. The FIRS online platform helps taxpayers by stating the timeline to complete the CIT audit, registering companies on the e-filing platform and creating a simplified single schedule for each tax type. The average time spent to file and pay tax is halved, making tax payment very convenient unlike before where physical visitation to FIRS/ KIRS/LIRS tax offices was the

and to pay for Value Added Tax and Company Income Tax. • Visiting the LIRS/KIRS websites (www.lirs.gov.ng and www.kirs.gov.ng) to make electronic payment of taxes including monthly PAYE. • Electronic self-service help desks are also available at all FIRS offices for payment of taxes. Other benefits Improve transparency and efficiency in tax collection and administration Improved tax revenue likely Progress Continuous improvement on the e-platform for better taxpayer experience based on feedback received

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BUSINESS DAY

Tax Issues

Corporate taxes remain key source of government revenues Iheanyi Nwachukwu

axes paid by companies remain a key source of government revenues, especially in developing countries, despite the worldwide trend of falling corporate tax rates over the past two decades, according to a new report from the Organisation for Economic Cooperation and Development (OECD). Corporate Tax Statistics, a new OECD report and database provides internationally comparable statistics and analysis from around 100 countries worldwide on four main categories of data: corporate tax revenues, statutory corporate income tax (CIT) rates, corporate effective tax rates and tax incentives related to innovation. Comparing statutory corporate tax rates between 2000 and 2018, 76 jurisdictions had lower tax rates in 2018, while 12 jurisdictions had the same tax rate, and only six had higher tax rates. In 2018, 12 jurisdictions had no corporate tax regime or a corporate income tax rate of zero. The new OECD analysis shows that corporate income tax remains a significant source of tax revenues for governments across the globe. In 2016, corporate tax revenues accounted for 13.3percent of total tax revenues on average across the 88 jurisdictions for which data is available. This figure has increased from 12percent in 2000. Corporate taxation is even more important in developing countries, comprising on average 15.3percent of all tax revenues in Africa and 15.4percent in Latin America & the

Caribbean, compared to 9percent in the OECD. Corporate tax revenues have also held up when considered as a percentage of GDP, where the average share increased from 2.7percent of GDP in 2000 to 3percent in 2016 across the jurisdictions included in the database. The new OECD analysis shows that a clear trend of falling statutory corporate tax rates – the headline rate faced by companies - over the last two decades. The database shows that the average combined (central and sub-central government) statutory tax rate fell from 28.6percent in 2000 to 21.4percent in 2018. More than 60percent of the 94

jurisdictions for which tax rate data is available in the database had statutory tax rates greater than or equal to 30percent in 2000, compared to less than 20percent of jurisdictions in 2018. The OECD analysis highlights that CIT revenues are influenced by many factors, and therefore focusing on headline statutory tax rates can be misleading. For example, jurisdictions may have multiple tax rates with the applicable tax rate depending on the characteristics of the corporation and the income. Progressive rate structures or different regimes may be offered to small and medium-sized companies, while different tax rates may be

imposed on companies depending on their resident or non-resident status. Some jurisdictions tax retained and distributed earnings at different rates, while some impose different tax rates on certain industries. Lower tax rates are often available for firms active in special or designated economic zones, and preferential tax regimes offer lower rates to certain corporations or income types. Another factor influencing CIT revenues is the definition of the corporate tax base. The OECD Corporate Tax Statistics database assesses how standard components of the corporate tax base reduce the effective tax rate faced by taxpayers, including

the effects of fiscal depreciation and several related provisions, such as allowances for corporate equity. Taking these provisions into account, the database shows that “forward-looking” effective tax rates are generally lower than statutory tax rates, with an average reduction of 1.1 percentage points observed in 2017 across the 74 jurisdictions analysed in the database. Targeted tax incentives such as for research and development (R&D) expenditures and intellectual property (IP) income, are widely used to reduce the corporate tax burden for specific activities. The new database is intended to assist in the study of corporate tax policy and expand the quality and range of statistical information available for analysis under the OECD/ G20 Base Erosion and Profit Shifting (BEPS) initiative. In 2015, the OECD reported that base erosion and profit shifting was having significant effects on the corporate tax base, estimating revenue losses to governments from BEPS in the range of USD 100-240 billion (2014 figures), equivalent to 4-10percent of corporate tax revenues. The new database, which will be updated annually, aims to improve the measurement and monitoring of BEPS. Future editions will also include an important new data source – aggregated and anonymised statistics of data collected under country-by-country reporting now being implemented under BEPS Action 13 – that will allow “backwardlooking” assessment of effective tax rates actually paid by firms.

How tax is transforming in the digital age

he digital age is changing the relationship between tax authorities and taxpayers. Learn the impact and ways to rise to the challenge, says EY Global Driven by a desire for more revenue, greater efficiency and improved compliance in an atmosphere of shrinking resources, tax authorities are increasingly relying on digital tax data gathering and analysis — using digital platforms to facilitate real-time or near real-time collection and assessment of taxpayer data. This move toward tax “digitalization” is allowing tax authorities to collect tax data in real time or near real time; they can then use the information to respond quickly and in more targeted ways to perceived compliance risks. Digitalization is, in some cases, allowing taxpayer information to be cross-referenced and shared among governments and agencies. Some countries are leading the digital revolution, others are forming a second wave and still others are years away from embracing digitalization. Some Latin American countries, such as Brazil, are among the more advanced, while the United States is not as far along in its efforts.

As countries move toward digitalizing their tax administration, their efforts can often follow a similar pattern. Of course, the move to digitalization is not necessarily linear, nor should higher levels of digitalization be viewed as the ultimate goal of either taxpayers or tax authorities. Business impact The data businesses are being asked to submit under tax digitalization reaches far beyond tax forms, and often includes accounting and sales data. Legacy systems and processes may not be able to support these and

other government requirements. Challenges may include: Lack of data available in the required formats Difficulty submitting data Inefficient processes for transforming data Lack of process support for new data requirements Outdated tax operating models More frequent need for more comprehensive analytics, in advance of submission to tax authorities Inability to respond to audit notices in a timely or effective manner

Inability to respond quickly when there is disagreement with a tax assessment A detailed review and possible re-engineering of the processes companies use to record and report their data may be required. Businesses that outsource these and related functions need to make sure that their third-party solutions are flexible and updated frequently. Businesses will also experience a financial impact as tax administration is digitalizalized — more complex data requirements, delayed refunds, construction of new systems, retooling of processes and more time spent on compliance could negatively affect cash flow. Data security will also be a major concern as governments share data and BEPS reports. Businesses will need to implement digital solutions that can work within and across countries. Meeting the challenge As tax authorities move at varying speeds toward greater digitalization of tax information, businesses need to develop a detailed understanding of digital tax requirements in their markets. Following developments closely and engaging in conversations can

help businesses better meet the challenges as governments expand their digital capabilities. They must also determine whether their tax function is able to meet digital data and filing obligations in operating jurisdictions and is prepared to defend audits in real time or near real time. Businesses will need to implement digital solutions that can work within and across countries and that can respond to evolving compliance and controversy requirements. They should explore the use of real-time data analytics for tax planning and compliance purposes, to measure and mitigate risk, to better target controversy interventions and to resolve issues as they occur. Businesses should consider what investment may be needed to respond to the increasing demand for digital tax information and how to manage the risks inherent in the expansion of electronic data submission. Taking the time to understand these issues and explore forward-looking solutions today — and conveying these options to policymakers — may help avoid more costly and time-consuming remedies tomorrow.

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Wednesday 13 March 2019

Live @ the Stock exchange Prices for Securities Traded as of Tuesday 12 March 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. 173,567.83 6.00 -0.83 172 11,451,446 258,205.63 7.55 -0.66 228 8,529,931 UNITED BANK FOR AFRICA PLC 707,990.93 22.55 -0.88 325 46,460,559 ZENITH BANK PLC 725 66,441,936 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 294,341.40 8.20 0.61 296 60,138,964 296 60,138,964 1,021 126,580,900 BUILDING MATERIALS DANGOTE CEMENT PLC 3,305,858.44 194.00 -0.51 84 2,243,934 112,754.57 13.00 4.00 45 444,115 LAFARGE AFRICA PLC. 129 2,688,049 129 2,688,049 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 351,242.56 596.90 - 8 1,140 8 1,140 8 1,140 1,158 129,270,089 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 -9.24 1 113,000 1 113,000 1 113,000 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 1 113,000 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 100 75,358.89 79.00 - 29 220,258 OKOMU OIL PALM PLC. PRESCO PLC 75,000.00 75.00 - 7 7,920 37 228,278 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,740.00 0.58 - 9 282,600 9 282,600 46 510,878 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 -8.82 2 1,000,000 202.36 0.52 - 2 1,516 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 0 0 51,622.95 1.27 0.79 70 4,038,483 TRANSNATIONAL CORPORATION OF NIGERIA PLC 23,050.37 8.00 - 46 986,416 U A C N PLC. 120 6,026,415 120 6,026,415 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 10 34,146 165.00 6.60 - 0 0 ROADS NIG PLC. 10 34,146 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 5,066.87 1.95 7.14 27 1,888,729 27 1,888,729 37 1,922,875 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,135.72 1.55 - 2 751 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 147,084.21 67.15 - 30 20,889 INTERNATIONAL BREWERIES PLC. 206,730.48 24.05 -9.93 11 188,578 NIGERIAN BREW. PLC. 599,767.65 75.00 0.67 78 2,030,644 121 2,240,862 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 50,000.00 10.00 -2.91 51 706,623 DANGOTE SUGAR REFINERY PLC 168,000.00 14.00 -3.78 45 307,591 FLOUR MILLS NIG. PLC. 78,932.31 19.25 - 38 73,106 HONEYWELL FLOUR MILL PLC 9,833.45 1.24 -3.88 33 635,090 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 54,843.37 20.70 -4.61 16 107,944 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 183 1,830,354 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 22,538.42 12.00 -0.83 28 231,827 NESTLE NIGERIA PLC. 1,173,131.25 1,480.00 - 42 137,657 70 369,484 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,978.36 3.98 -0.50 27 1,030,296 27 1,030,296 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 43,675.25 11.00 -5.58 31 267,916 UNILEVER NIGERIA PLC. 222,331.71 38.70 - 30 29,911 61 297,827 462 5,768,823 BANKING DIAMOND BANK PLC 56,048.14 2.42 -1.63 101 14,466,731 ECOBANK TRANSNATIONAL INCORPORATED 250,471.37 13.65 -0.36 43 358,373 FIDELITY BANK PLC 65,193.29 2.25 -1.32 104 5,632,935 GUARANTY TRUST BANK PLC. 1,044,806.86 35.50 -4.83 194 4,865,185 JAIZ BANK PLC 15,616.05 0.53 -8.62 16 1,042,310 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 61,899.40 2.15 - 52 1,695,229 UNION BANK NIG.PLC. 203,845.27 7.00 1.45 38 2,787,715 UNITY BANK PLC 9,702.15 0.83 -7.78 50 3,078,968 WEMA BANK PLC. 30,859.57 0.80 -6.98 43 4,054,006 641 37,981,452 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,059.05 0.73 2.82 17 1,220,034 AXAMANSARD INSURANCE PLC 23,100.00 2.20 - 6 88,127 CONSOLIDATED HALLMARK INSURANCE PLC 2,195.10 0.27 -3.57 4 1,000,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,093.20 0.21 - 6 166,126 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 1 9,000 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 50 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,270.26 0.31 - 4 65,500 LAW UNION AND ROCK INS. PLC. 2,405.95 0.56 7.69 5 352,785 LINKAGE ASSURANCE PLC 4,640.00 0.58 -7.94 5 223,000 MUTUAL BENEFITS ASSURANCE PLC. 2,000.00 0.25 -4.00 10 1,858,600 NEM INSURANCE PLC 12,673.21 2.40 - 5 60,100 NIGER INSURANCE PLC 1,702.69 0.22 -4.35 6 183,823 PRESTIGE ASSURANCE PLC 2,906.58 0.54 - 8 190,050 REGENCY ASSURANCE PLC 1,733.88 0.26 - 10 598,540 SOVEREIGN TRUST INSURANCE PLC 2,085.21 0.25 - 4 8,251 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 1 100 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 520,000 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,912.00 0.21 - 0 0 WAPIC INSURANCE PLC 5,219.27 0.39 -2.50 28 1,320,811 123 7,864,897

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,429.96 1.50 -6.25 12 355,984 12 355,984 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 3 120 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 1 50 2,265.95 0.20 - 1 200 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 5 370 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 9,840.00 4.92 2.50 128 3,781,182 35,291.19 6.00 - 20 1,218,601 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 39,605.42 2.00 -3.85 115 7,541,697 1,646.52 0.32 - 2 87,838 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 491,546.54 48.00 - 37 582,488 19,680.00 3.28 4.13 113 5,306,774 UNITED CAPITAL PLC 415 18,518,580 1,196 64,721,283 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 994.88 0.28 -6.67 2 116,080 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 116,080 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 2 20,005 13,812.37 11.55 - 24 106,873 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 4,140.56 2.40 - 7 54,000 1,234.45 0.65 - 3 16,938 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 36 197,816 38 313,896 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 4 144 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 4 144 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 1 500 11,088.00 2.64 - 0 0 E-TRANZACT INTERNATIONAL PLC 1 500 5 644 BUILDING MATERIALS BERGER PAINTS PLC 2,391.04 8.25 - 6 4,022 23,800.00 34.00 - 5 100 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 249,726.52 19.00 - 16 17,068 612.00 0.29 - 5 3,038 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 286.87 0.54 - 2 3,886 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 1 100 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 35 28,214 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,962.97 2.25 - 8 133,343 8 133,343 PACKAGING/CONTAINERS BETA GLASS PLC. 39,497.79 79.00 - 1 290 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 290 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 44 161,847 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 5.00 40 8,148,208 40 8,148,208 INTEGRATED OIL AND GAS SERVICES OANDO PLC 70,859.05 5.70 -0.88 62 1,553,705 62 1,553,705 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 59,498.22 165.00 -3.00 32 84,156 CONOIL PLC 15,960.90 23.00 - 6 4,386 ETERNA PLC. 5,738.24 4.40 - 11 49,510 FORTE OIL PLC. 36,469.47 28.00 - 11 29,821 6,354.80 20.85 - 13 144,637 MRS OIL NIGERIA PLC. TOTAL NIGERIA PLC. 67,904.37 200.00 - 17 15,353 90 327,863 192 10,029,776 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 16,576.10 1.70 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,947.48 5.00 - 1 13,800 TRANS-NATIONWIDE EXPRESS PLC. 304.75 0.65 - 0 0 1 13,800 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 3 100,040 3 100,040 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,427.84 2.13 - 1 2 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 45,222.40 5.95 - 0 0 1 2 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 217.73 0.36 - 3 170 LEARN AFRICA PLC 1,118.60 1.45 - 7 100,450 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 862.82 2.00 - 4 69,615 14 170,235 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 895.16 0.54 - 1 100

Wednesday 13 March 2019

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Wednesday 13 March 2019

Live @ The Exchanges Market Statistics as at Tuesday 12 March 2019

Top Gainers/Losers as at Tuesday 12 March 2019 LOSERS

GAINERS Company

Opening

Closing

Change

WAPCO

N12.5

N13

0.5

UCAP

N3.15

N3.28

0.13

UAC-PROP

N1.82

N1.95

0.13

AFRIPRUD

N4.8

N4.92

0.12

UBN

N6.9

0.1

Company

ASI (Points)

Opening

Closing

Change

N170.1

N165

-5.1

INTBREW

N26.7

N24.05

-2.65

GUARANTY

N37.3

N35.5

-1.8

DANGCEM

N195

N194

-1

VALUE (N billion)

N21.7

N20.7

-1

MARKET CAP (N Trn

MOBIL

NASCON

DEALS (Numbers) VOLUME (Numbers)

31,313.36 3,345.00 219,369,104.00 2.927 11.677

Global market indicators FTSE 100 Index 7,151.15GBP +20.53+0.29% S&P 500 Index 2,792.34USD +9.04+0.32% Generic 1st ‘DM’ Future 25,573.00USD -117.00-0.46%

Stock market loses N120bn in one day ...pushes year-to-date returns back to negative zone …Bismarck retires from Board of Directors of FCMB Group Stories by Iheanyi Nwachukwu

n Tuesday March 12, the Nigerian equities market closed on a negative note, leading to a record reroute of the year-todate (ytd) returns into the undesirable zone of -0.37percent. The market’s dismal performance was caused by 29 stocks that lost their values as against 8 gainers. The Nigerian Stock Exchange (NSE) All Share Index (ASI) depreciated by 1.02percent at the sound of closing gong to 31,313.36 points as against 31,636.66points recorded the preceding trading. The value of list-

ed equities closed at N11.677trillion on Tuesday as against Monday’s level of N11.797trillion which represents N120bil-

lion loss. Mobil Oil Nigeria Plc led the losers table after its share price declined from N170.1 to N165, down by N5.1 or 3percent;

FCMB’s value-added initiative targets women-owned SMEs

irst City Monument Bank (FCMB) has introduced another value-added initiative called SheVentures for women-owned Small and Medium Scale Enterprises (SMEs). The initiative will provide enhanced support to existing and upcoming women-owned SMEs through access to finance, training and mentoring to boost their business in a sustainable manner. This initiative is the FCMB Women in Business Unit, and was launched at an impressive ceremony on March 7, 2019 in Lagos as part of the Bank’s activities to celebrate this year’s International Women’s Day under the theme Balancing for Better. At the ceremony, some women SME operators received loans ranging from N500,000 to N5,000,000 In a statement, FCMB

explained that SheVentures is anchored on a unique selling proposition of ‘’Be You’’, which connotes confidence, independence and the courage required by women to fulfil their aspirations. It is designed to engage, inspire and equip potential and existing women entrepreneurs to take bold steps that would launch their business to greater heights. SheVentures comes with several cutting-edge features and benefits for women-owned SMEs. One of such is the zerointerest rate for an initial period of three months. In addition, FCMB will

organise free training and mentoring programmes for 80 women entrepreneurs every quarter, out of which 40 of them will access this loan. This means that by the end of the year, the Financial institution would have mentored 320 women and 160 of them would receive the Bank’s support. At the launch ceremony, the Managing Director of FCMB, Adam Nuru, said the Bank strongly believes in the power of entrepreneurship. He added that the contribution of women to economic development cannot be understated, noting that over 30% of businesses owned globally are either female owned or managed as women establishbusinesses at a much faster rate than men, thereby making significant contributions to job creation and economic growth.

while Lafarge Africa Plc occupied topmost position, moving from N12.5 to N13, up by 50kobo or 4percent.

In 3,345 deals, stock traders exchanged 219,369,104 units valued at N2.927billion. FBN Holdings Plc, Zenith Bank Plc, Diamond Bank Plc, Access Bank Plc and UBA Plc were actively traded stocks on the Nigerian Bourse. Meanwhile, Bismarck J. Rewane has retired from the Board of Directors of FCMB Group Plc as announced on Tuesday March 12, 2019 at the Nigerian Stock Exchange (NSE). Rewane retirement follows the acceptant of his retirement by the Board, at its meeting held on Friday March 8, 2019. The Board and Management of FCMB Group appreciates his contribution and for always being available whenever called upon.

NSE releases statement on Lagos State Government’s N4.85bn Municipality Note

he Nigerian Stock Exchange (NSE) has responded to publications with respect to the Lagos State Government’s N4.85 Billion, 15.75% Series 1, Tranche B, Environmental Note (Municipality Note) and the alleged default in repayment of the coupon and principal on the Municipal Note due on Tuesday March 5, 2019. The Exchange recognizes that the publications if not addressed has the likelihood of dampening investors’ confidence in the Nigerian capital market. “Information garnered by The Exchange in the wake of the media publications reflects that the Municipality Note was issued under a N50billion Medium Term Note Programme by Municipality Waste Management Contractors Limited, a privately owned company promoted by Visionscape Sanitations Solutions Limited”, the NSE said. “We wish to inform

the investing public and our stakeholders that the Municipality Note was not listed on The Nigerian Stock Exchange. As part of its regulatory oversight to safeguard investors in the Nigerian capital market, “The Exchange takes steps to satisfy itself that the financial and other advisers have done due diligence on all financial instruments listed on The Exchange in order to ensure that the obligations attached to those instruments are met as and when due”, it noted. The NSE further stated, that “As part of the requirements for the issuance and the listing of similar debt instruments, The Exchange requires that a Guarantee on the revenue of the State Government is issued, in addition to an approval of the State House of Assembly to back the Notes.” “The established requirements are necessary to ensure that the risk of default on such instruments when listed on The Exchange is reduced to the barest minimum.

Deutsche Boerse AG German Stock Index DAX 11,524.17EUR -19.31-0.17% Nikkei 225 21,503.69JPY +378.60+1.79% Shanghai Stock Exchange Composite Index 3,060.31CNY +33.32+1.10%

LSEG acquires 4.92% stake in Euroclear share capital

ondon Stock Exchange Group plc (LSEG) has announced it will acquire an aggregate 4.92percent stake in Euroclear’s share capital for €278.5 million (£241.9 million). Euroclear is a leading financial market infrastructure company, providing settlement, custody and collateral management services across Europe with €28.2trillion in assets under custody. LSEG’s minority investment is expected to strengthen LSEG and Euroclear’s existing operational and commercial relationship and provide further opportunities for the companies to deliver benefits to their customers through commercial collaboration and product development. Following LSEG’s minority investment in Euroclear, LSEG and Euroclear anticipate that a representative of LSEG will join the Board of Euroclear Holding SA/NV. The transaction will be funded from existing cash and debt facilities and it is expected that the Group’s adjusted net debt to EBITDA will remain within its target range of 1-2 times following completion. The transaction is expected to be earnings accretive. David Schwimmer, CEO of LSEG, commented, “We are delighted to become a shareholder of Euroclear, with which we have a long-standing operational and commercial relationship. Both LSEG and Euroclear share the same open access philosophy and a customer partnership approach which is central to our businesses. We look forward to working with Euroclear to drive continued innovation and efficiencies for the benefit of our customers and the wider market.”

Wednesday 13 March 2019

BUSINESS DAY

38 BUSINESS DAY NEWS

C002D5556

New housing bill threatens Nigeria’s... Continued from page 1 the secret Act, which managed to elude private sector lobby groups,

from becoming law, after it quietly made it through the National Assembly in 2018. “When you put such a financial strain on private companies, they are forced to cut costs by sacking staff and freezing new investments,” a senior business person who did not want to be named said. “This regulation will be poorly timed as it is happening when other countries are lowering corporate tax rates to incentivise investments,” the person said. The levy will probably see some of the companies pass on the cost to consumers, thereby triggering a surge in inflation. A race to cut spiralling operation costs created by the new levy could also force companies to lay off staff while barricading new investments in the economy. That would be a tough blow to take on an economy still recovering from a contraction in 2016.

“Buhari has a chance to be the hero here if he refuses to assent to the Bill, but given his welfarist ideology, that may not happen,” a company CEO said on condition of anonymity. The Act repeals the National Housing Fund Act Cap. N45, Laws of the Federal Republic of Nigeria, 2004 to provide for additional sources of funding for effective financing of housing development in Nigeria and was sponsored by Ahmad Kaita (APC, Katsina North). The Act provides among others for every commercial or merchant bank, insurance company, and Pension Fund Administrator (PFA) to invest 10 percent of its profit before tax (PBT) into the Fund at an interest rate of 1 percent above the interest rate payable on current accounts of banks. The Fund will also forcibly collect contributions from Nigerians, both in the public and private sectors, manufacturers and importers. The Federal Government is to contribute to the Fund at its discretion.

Employees and self-employed Nigerians, who earn above the minimum wage, must contribute 2.5 percent of their monthly salaries to the Fund. Manufacturers and importers are also to contribute 2.5 percent to the Fund. There’s also a levy on locallyproduced and imported cement, which will be 2.5 percent ex-factory price before transportation cost for each bag of 50 kilogramme or its equivalent in bulk. In the end, this levy may not be restricted to cement alone, as the Act provides that the President, by an executive order, could add, delete, amend or substitute consumer goods, services or products and approve rates for the levy as and when he thinks fit in the circumstance. The Federal Mortgage Bank will manage the pooled funds, Section 15 (1) of the Act provides. “The proceeds from the fund will be used to finance the housing sector of the economy through wholesale mortgage lending to primary mortgage banks,” section 15 (2) of the Act reads. The failings of the former National Housing Fund and the track record of similar funds managed by

L-R: Ifeyinwa Osime, non-executive director; Mary Agha, company secretary, both of Wapic Insurance plc; Amuche Okeke-Agba, partner, Mckinsey & Co; Yinka Adekoya, MD/CEO, Wapic Insurance plc, Enase Okonedo, dean, Lagos Business School, and Abimbola Tiamiyu, director of examination, CIIN, at the 2019 International Women’s Day Celebration themed #BalanceforBetter, organised by Wapic Insurance plc in Lagos.

XXXXXX Continued from page 1

distribution companies (DisCos) as the regulator and government officials look the other way or

resort to platitudes where sanctions should suffice. Emboldened by the tacit acceptance of estimated billing as normal by the Nigerian Electricity Regulatory Commission (NERC) which even provides a regulation for it, thereby normalising an aberration, DisCos are not just billing customers upon a

cruel exercise of discretion, they have become predatory in their charges. Electricity customers like Raji Adetayo, who lives in Ajuwon area, a suburb of Ogun State but managed by Ikeja DisCo, has had his old meter removed without getting a new one and placed on estimated billing. His charges have gone up from N5,500 to N21,000. Five years after taking over government power assets, DisCos have only metered 3,704,302 (about 45 percent) of their 8,310,408 registered electricity customers, according to

NERC’s 2018 third quarter report. This is a gross violation of the DisCos’ performance agreement which demands they fully meter customers. Rather than sanction the erring investors, NERC provided the Credit Advance Payment for Metering Implementation (CAPMI), which allows electricity consumers to self-finance theirmeteracquisitionandinstallation. DisCos soon found a way to game the system by keeping customers on endless waiting lists claiming meters were unavailable. Some DisCos had contractualagreementswithforeignmeter manufacturers but things went awry when Nigeria’s 2016 foreign exchange crises, caused by fallen oil production and prices, led to a shortage of dollars. Many customers lost their money. Babatunde Fashola, minister of Power, Works and Housing, threw out the policy and told customers to enter negotiations with their DisCos on meter provisions. OnMarch8,2018,NERCcreatedthe MeterAssetProvider(MAP)regulations which allowed DisCos to outsource meter provision. The policy would create over N70 billion worth of market for local meter manufacturers as they were supposed to supply 30 percent of the required meters, NERC said. One year later, the policy continues to wobble. NERC in March 2018 issued a deadline of August 1, 2018 to

Wednesday 13 March 2019

government cast a cloud over how efficiently the new Fund will be managed and the chances that it achieves the primary objective for which it was created. Industry players, who are worried that the provisions of the Bill overrule carefully-crafted regulatory guidelines that guarantee the safety of depositors’ funds sitting in the banks and pension funds, were critical of the Act and warned it would have dire consequences on the economy and investor confidence. Boniface Okezie, national coordinator, Progressive Shareholders Association of Nigeria (PSAN), calls the Act a “fraud”. “How can we be talking about extorting companies to fund something without seeking their consent,” Okezie said. “This is unacceptable. Companies should not comply; rather they should rely on the provision of the Companies and Allied Matters Act (CAMA),” Okezie added. There are severe punishments for defaulters. In the event that a company fails to pay the levy 60 days after it was due, it warrants a demand notice to be accompanied by a penalty of an additional 2 percent levy on the 10 percent that should have been paid. If payment drags for another 60 days after the demand notice, the company pays a flat rate of N100 million and the CEO of the company risks spending three years in jail in addition to a personal fine, separate from the company fine, of N10 million. In the case of importers, a twomonth delay is all that is required before the importer is slammed with a N100 million fine, which the Bill says is the minimum. A fine of N10 million could be slapped on individuals who fail to make their contributions as and when due. The banks are expected to pay the levy to the Central Bank while the insurance companies and pension funds will pay to the National Insurance Commission and National Pension Commission, respectively. For manufacturers and importers, the levy will be collected by the tax authority, the Federal Inland Revenue Service. Sources say some private sec-

tor interest groups are planning to engage the Presidency with a view to stopping the implementation of the Bill which, they say, is inimical to the private sector and the economy at large. The equities market would be directly affected if this Bill becomes law as investors worried about the impact the levy could have on company profitability may dump stocks at a frantic pace. The document obtained by BusinessDay was signed February 19 by Mohammed Ataba Sani-Omolori, a clerk at the National Assembly. Shareholders of companies, particularly the banks, insurance companies and PFAs, have kicked back. Issues ranging from accountability to accessibility were raised and they advised their companies’ Boards of Directors not to approve any form of contribution into the Fund. “The Act does not make sense because the contributors won’t have control over the Fund. Why do we scare investors? I don’t think it is good idea as it will scare away investors, so it must be jettisoned,” Sunny Nwosu, national coordinator emeritus, Independent Shareholders Association of Nigeria (ISAN), told BusinessDay on phone. Moses Igbrude, publicity secretary, ISAN, said, “You can’t make companies to contribute to the NHF without letting them have access to it. President Buhari should not sign it. The shareholders own the companies and we need to ask the companies whether they were represented at the public hearing on the Bill before its passage at the National Assembly. If they were represented, they will need to explain to shareholders the benefits and who manages the funds.” Attempts to reach the chairman, Senate Committee on Housing and Urban Development, Barnabas Gemade (APC, Benue), proved abortive as he did not pick his calls. However, a member of the committee, Matthew Uroghide (PDP, Edo), told BusinessDay on Tuesday that he would check on the Bill before commenting on it. “When I am in the office, I will go through the Bill before commenting on it. I will be in the office by next week,” he said in a telephone interview.

the 11 Discos to engage the services of MAP. This was ignored and NERC kicked the can further down the road. One year later, the regulator says it continues to register new entrants even as Nigerians groan under bruising estimated billings. “You’re using the estimated billing system to rip off money from poor people in peri-Urban areas like Jikwoyi breeding a corrupt system of impunity. I have made application for pre-paid metre for two years now without any reasonable response, submitted necessary documentations,” Abraham SolomonsaidinatweettoAbujaDisCo. Anotheruserasked,“Whodowerun to when u (you) give estimated billing, destroy our devices with high and low voltageordon’tgiveuselectricalpower?” According to NERC, DisCos received 128,791 complaints from consumers in the three months ending December 2018. Metering and billing accounted for 68,749 or 53 percent of the total complaints. DisCos now write bills based on the perceived purchasing power of customers. They test customers’ purchasing power by sending an unreasonable bill as bait. If the customer settles it, he is trapped. It becomes a benchmark to be reviewed upwards after two or more attempts. Requests to audit a customer’s electricity usage are often ignored.

Savvy customers play them at their game. “When they first sent me a crazy bill of N27,000 for a two-bedroom apartment from N10,000, I decided to start paying N7,000. It went on for three months and now they have cut the bill to N8,000 monthly. But they are threatening to disconnect me unless I settle the accumulated difference. I threatened to sue them if they tried it,” said Jimoh Akindele, a lawyer in Ketu area of Lagos. Some have more colourful description for the practice. “This estimated billing is broad day robbery,” Inyang said in tweet to Abuja DisCo. A bill to criminalise estimated billing passed the third reading in the House of Representatives in January. “Any regulation that allows estimation of bills when the actual consumption can be ascertained is against natural justice and equity and should not stand,” raged Femi Gbajabiamila, majority leader at Nigeria’s House of Representatives, who sponsored the bill. “The bill will ensure that prepaid meters are installed in all houses, so long as the customers applied for the meters.” But with barely two months to the end of the current National Assembly, chances that the bill will become a law appear illusory.

Wednesday 13 March 2019

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L-R: Abidemi Raji, permanent secretary, ministry of wealth creation and employment, Lagos State; Nwamaka Onyemelukwe, public affairs and communications manager, Coca-Cola Nigeria; Akintunde Oyebode, executive secretary, Lagos State Employment Trust Fund (LSETF), and Ifeoma Okoye, regional, public affairs and communications manager, Lagos/ West, Nigerian Bottling Company (NBC) Limited, during the presentation to some of the beneficiaries out of the 1,000 women targeted for the Lagos State Employment Trust Fund/Coca-Cola Women Empowerment initiative held in Lagos, yesterday.

Inconclusive elections: Yari leads six APC governors to meet Buhari

NNPC to woo foreign investors at CERA Week, Houston

… as APC continues desperate moves to reclaim states

TONY AILEMEN, Abuja

hairman of Nigeria Governors’ Forum (NGF) and Governor of Zamfara State, Abdulaziz Yari, is currently leading five other governors of Ekiti, Kaduna, Jigawa, Kogi and Kebbi of the All Progressives Congress (APC) to meet with President Muhamamdu Buhari. The meeting, seen as part of desperate moves to retain powers in states such as Kano, Adamawa, Plateau, Bauchi and Benue, ended with the governors refusing to speak with journalists, even as outgoing Borno State governor and senatorelect, Kashim Shettima, later joined the group. Apart from Governor Yari, the party has assembled a team of governors

including Nasir el-Rufai of Kaduna, Kayode Fayemi of Ekiti, Atiku Bagudu of Kebbi, Abubakar Badaru of Jigawa and Yahaya Bello of Kogi to assist the party mobilise ideas and resources to achieve it aim. The meeting started at about 3pm soon after the President arrived from Daura, where he had gone to vote during the governorship and House of Assembly elections. The meeting, BusinessDay Villa sources said, is part of last minute efforts to salvage states belonging to the party currently encountering electoral difficulties. The APC is currently under threats of losing some of the states they control such as Kano, Plateau, Adamawa and Bauchi. The sources disclosed that Adamawa governor, Jubrilla Bindo, had mounted

pressures on his colleagues to help him salvage the state from the PDP. But the meeting, which lasted until about 5.30pm, ended with the governors keeping sealed lips over the outcome of the meeting with the President. It was gathered that the governors were bent on helping their colleagues and consequently the party regain the shaky states, even as they desperately were pushing hard to win in Rivers. The development is coming as INEC declared elections in six states including Adamawa, Bauchi, Plateau, Kano, Bauchi and Benue states inconclusive, while that of Rivers suspended. BusinessDay gathered that the meeting was expected to continue later this night at an unknown destination inside Abuja.

EDPA revokes sublease deeds of 24 abandoned properties in BDPA Estate, Ugbowo

do Development and Property Agency (BDPA) has revoked sublease deeds of some abandoned properties in the Bendel Development and Property Authority (BDPA) Estate in Ugbowo axis of Benin City, the state capital. The agency said the deeds were revoked in line with the clauses 2(j) and 3(a) of the deed of sublease and following several abandonment notices published in local and national newspapers. In a statement by Isoken Omo, executive chairman, EDPA, the agency said trespassers on the revoked plots would be prosecuted, asking those with enquires to contact the agency for further clarification. The affected plots are lo-

cated on A close, 9th, 18th, 11th, 19th, 2nd, 14th, 16th, 7th, and 15thstreets. According to Omo, “The general public’s attention is by this notice drawn to the fact that the following abandonment notices placed in the Observer Newspaper of May 2, 2018 (page 9) and ThisDay Newspaper of May 2, 2018 (page 47) and Final Notice to Repossess Abandoned Properties at BDPA Estate Ugbowo, Edo State, placed in the Vanguard Newspaper of January 21, 2019 (page 28) and the Observer Newspaper of January 22, 2019 (page 19), the subleases of the following properties have been revoked forthwith by Edo Development and Property Agency (EDPA) by virtue of Clauses 2(j) and 3(a) of the Deed of Sublease.”

The affected plots are: Plot 23, A Close; Plot 176, 9th Street; Plot 178, 9th Street; Plot 179, 9th Street; Plot 181, 9th Street; Plot 182, 9th Street; Plot 261, 18th Street; Plot 172, 11th Street or Lucky Street; Plot 41, 3rd or 19th Street; Plot 100, 3rd Street or 19th Street; Plot 101, 3rd or 19th Street; Plot 87, 2nd Street and Plot 229, 14th Street. Others are Plot 230, 14th Street; Plot 224, 16th Street; Plot 148, 7th Street or Jonathan Akpoborie Street; Plot 72, 7th Street or Jonathan Akpoborie Street; Plot 159, 11th Street; Plot 167, 11th Street; Plot 186, 15th Street; Plot 132, 7th Street or Jonathan Akpoborie Street; Plot 195, 15th Street; Plot 146, 7th Street or Jonathan Akpoborie Street and Plot 104, 3rd or 19th Street.

HARRISON EDEH, Abuja

roup managing director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, will today address foreign investors at the CERAWeek, an international energy conference taking place in Houston, United States. Baru, who will speak at a special session entitled “Africa: Foundations for New Investment,” will be joined by some African petroleum ministers, heads of national oil companies (NOCs) and other global energy industry leaders. He is expected to discuss the abundant investment opportunities in Nigeria’s oil and gas industry, particularly providing meaningful insights into key investment initiatives as they affect the country’s emerging capital projects within the oil, gas, power and the renewable energy sectors. In the same vein, he will be among African Oil and Gas Industry leaders who will join the US Energy Secretary, Rick Perry, in a private government-to-government meeting on trade engagement between the US and African countries. Organised by IHS Markit, CERA is a global platform on energy trends and public policy where over 4,000 oil and gas experts convene annually to debate the future of oil, natural gas, renewable energy, power and new technologies. The 2019 edition has the theme: “New World of Rivalries: Reshaping the Energy Future.” The year’s edition will also explore other big issues confronting the energy industry, hosting such speakers as US Secretary of State, Mike Pompeo; OPEC Secretary General, Mohammed Sanusi Barkindo, and the Crown Princess of Denmark, Mary Elizabeth, among others.

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BUSINESS DAY

Senate begins budget debate Wednesday OWEDE AGBAJILEKE, Abuja

he Senate will commence Second Reading and debate on general principles of the N8.83 trillion 2019 budget on Wednesday. The development comes about three months President Muhammadu Buhari presented the 2019 budget to a joint session of the National Assembly. Senate president, Bukola Saraki, who revealed this at a brief session of the Senate on Tuesday, urged lawmakers to write down their names to indicate when they would make their submission on the appropriation bill. “We will commence the Second Reading and debate on general principles of the budget. So, colleagues please put your names on the list for Wednesday,” he said. Saraki also announced

that following the absence of Sola Adeyeye (APC, Osun), chairman of the Senate Ad hoc Committee on the New National Minimum Wage Bill, Senate Minority Whip, Francis Alimikhena (APC, Edo) will now head the panel in acting capacity. Motion for the adjournment was moved by Senate leader, Ahmad Lawan (APC, Yobe) and seconded by Biodun Olujimi (PDP, Ekiti). In line with parliamentary practice, the Senate adjourned plenary till Wednesday in honour of a serving member of the House of Representatives, Temitope Olaoye ‘Sugar’. The lawmaker, who represented Lagelu/Akinyele Federal Constituency of Oyo State, was reportedly shot on the eye by unknown gunmen in Ibadan during the March 9 governorship and state assembly elections.

Neonatal mortality, great challenge to developmental goals - paediatrician

consultant paediatrician, Olukemi Tongo, on Tuesday said neonatal mortality remained a great challenge to achieving developmental goals. Tongo, who works at the University College Hospital (UCH), Ibadan, made the assertion in an interview with the News Agency of Nigeria in Ibadan. She said the survival and health of newborn babies was critical to the achievement of Sustainable Development Goals (SDGs). “Neonatal mortality, which occurs in the first four weeks of life, contrib-

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utes significantly to underthe-counter deaths. “However, a lot of these deaths are due to preventable causes, including prematurity, neonatal sepsis, jaundice, infections and birth asphyxia,” Tongo said. The paediatrician said that the country would miss the SDG 2030 target if the trend continued. According to Tongo, making healthcare accessible and affordable is an important factor to the reduction of newborn deaths, saying many newborn babies that died have no access to proper medical care.

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BUSINES DAY

Wednesday 13 March 2019

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Buhari’s early rejig of team will inspire confidence in economy DANIEL OBI

f President Muhammadu Buhari re-jigs his economic management team early in his second term, his government may yet inspire some level of confidence in the Nigerian economy, market analysts say. The 76-year-old Nigerian President was re-elected for a second term in the February 23 presidential election, defeating his closest rival, Atiku Abubakar of the People’s Democratic Party (PDP), with a margin of almost 4 million votes. Some analysts have earlier expressed apprehension that the economy may likely work on the same level of last four years if Buhari is re-elected but they are comforted with the promise by the President to restructure his cabinet for better economic performance. Mid last year, Nigeria wobbled, which saw it becoming the nation with

the highest number of extremely poor people globally according to a report by Brookings Institution. According to the report, the number of Nigerians in extreme poverty increases by six people every minute. This has to be reversed with good economic managers, the analysts say. Buhari, who was declared winner of the February 23 presidential election, promised during a victory dinner organised for the All Progressives Congress Women and Youth Campaign Council at the Presidential Villa, Abuja, on March 2 that only credible persons with proven character would be appointed into office in his second term. The President in another development also promised to re-jig the police and judiciary for better results in the fight against corruption, if re-elected. John Ehiguese, CEO of MediaCraft, a public relations agency who assesses

the last three and half years, agrees that it is necessary the President re-jigs his cabinet and appoints technocrats who will drive the fledging economy forward. “It will be necessary to alter his team to inspire the needed hope,” Ehiguese says. The communication consultant who is also the president of Public Relations Consultants Association however says the new appointments will depend on their quality and their performance in the short and long run. Assessing possible impact of the proposed restructuring of Buhari economic team, Kayode Oluwasona, former president of Association of Advertising Agencies of Nigeria (AAAN), says the rejigging of the team is long overdue, asking, “Does it mean that the administration has not embarked on performance review for four years? The re-jigging should have been carried out since.”

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Manpower, shipping development top agenda for Buhari’s second term AMAKA ANAGOR-EWUZIE

resident Muhammadu Buhari has been urged to critically reposition the nation’s maritime industry towards attracting foreign direct investments by prioritising issues around manpower building and shipping development, in his second term in office. Charles Uwadia, former president of the Association of Marine Engineers and Surveyors (AMES), said recently in an interview that there was need for the President to rebrand the Maritime Academy of Nigeria (MAN) Oron in order to bring the Academy to international standard. According to Uwadia, MAN Oron should be issuing Certificate of Competency (CoC) up to Class One Mariners and Engineers, an internationally recognised certification for seafarers, regulated by International Maritime Organisation (IMO). “Presently, one of the major income earners for the Philippines is manpower (seafaring) in the maritime

sector. This is why most of the vessels abroad, especially the foreign registered vessels, go to Philippine to look for manpower. The Philippine invests so much in their training programmes. Nigeria is currently investing so much in seafarers training outside the country, but government needs to improve our own academy,” he said. To develop shipping by increasing the number of Nigerian owned ships involved in Cabotage trade, he called on the President to assist ship owners in the area of capacity building to enable them compete with their foreign counterparts. “We want the President to look at how to put more focus on the industry in order to make the industry investment friendly. We have to get it right in this industry and we wish that this second term, president will look holistically into the maritime sector, implement most of the recommendations which several committees have made and sent to the Federal Government in the past,” he said. Tajudeen Alao, president of the Nigerian Association

of Master Mariners (NAMM), said, “The President needs to professionalise the sector by ensuring that only career minded people are appointed to man the maritime institutions, parastatals and agencies so that experiences garnered for years could come in handy in running the agencies. “We must exploit the huge potentials the maritime sector has to offer. We must get something out of it. In the present economy of Nigeria, the maritime sector must play a pivotal role.” Stating that the era of paying lip service to the sector must be jettisoned, Alao noted that the President must appoint a senior special assistant on maritime as a matter of urgency, adding that the potentials in the maritime sector must no longer be allowed to waste. “Nigeria used to have about 300 boats but they are nowhere today. In shipping, we have maritime hub where ships can come in, take bunker and water, do repairs and other things. But now, nobody is taking that serious. We challenge Mr. President on this.

Wema Bank partners ‘Songversation with Aramide’ to celebrate Nigerian Women ANTHONIA OBOKOH

G L-R: Unoaku Anyadike, corporate communications and external affairs, GTBank plc; Mmuo Onyedikachi, captain, FSTC Yaba; Modupe Phillips, corporate communications and external affairs, GTBank plc; Chibike Igbori, captain, CMS Grammer School, and Idoko Negedu, corporate communications and external affairs, GTBank plc, at the quarter final qualifier of the season 8 of GTBank Lagos Master Cup, at Campos Stadium, in Lagos, yesterday. Pic by Olawale Amoo

CNN celebrates 10th anniversary of ‘African Voices’

NN is celebrating the 10th anniversary of ‘African Voices,’ which highlights the continent’s most dazzling trendsetters who create their own subcultures in areas such as travel, fashion, art, music, technology and architecture. To do this, CNN is looking back at some of the characters featured over the last decade. The first ‘African Voices’ show featured then President of Botswana Ian Kharma and the programme has since met icons such as Grammy award winner Angelique Kidjo, Noble Prize winners Denis Mukwege and Wole Soyinka, professional basketball player Joel Embiid, actress Lupita Nyong’o and comedian Tre-

vor Noah. The goal of the show has been to shine a light on the amazing stories and adventures from the biggest, brightest and boldest personalities on the continent. For 10 years, CNN has explored all parts of the continent to show Africa’s diverse talent and personalities while being a vehicle to introduce the world to people doing incredible things. In this special episode, ‘African Voices’ revisits some of its most popular guests including Nigerian author Chimamanda Adichie, Moroccan executive producer and director Sanaa Hamri, and Nigerian musician Femi Kuti. When ‘African Voices’ first visited Chimamanda Adichie

in 2009, the author spoke of the rejection she often faced when trying to get her first book published. Since then, she’s seen her Nigerian-centric novels receive numerous global awards and acclaim. CNN meets her at a shoot for ‘Vanity Fair’ where she tells the programme how she always feels more comfortable in front of a writer’s desk: “I’ve always said that if I had not had the good fortune to be read very widely across the world, I would be somewhere writing completely unknown but I would be writing and, for me, that’s really what matters. The writing gives meaning to my life. I’m very fortunate that people have read the books, but the writing is what mat-

ters.” Since her last appearance on ‘African Voices’, Adichie has discovered a new love – motherhood. She tells the programme how having a child has affected her writing: “My daughter tears up my books. She’s the commanderin-chief of my life… And, you know, the thing is to speak honestly about motherhood is to acknowledge that there are ways in which your life has changed forever, that you no longer have the sort of ultimate time for yourself and for your art. But what it also means is that you’ve opened up a new emotional plane that you can you can draw from for your writing that can feed your art.”

ender balance in society will take centre stage as Wema Bank collaborates with Afro-soul queen, Aramide to host Songversation with Aramide. As part of global efforts to promote women’s rights, equality and justice, the event will capture the ‘Balance for Better’ theme of the 2019 International Women’s Day. Although just in its second year, Wema Bank is poised to use the platform to promote a positive narrative for Nigerian women and re-emphasise their significance in establishing a better society. This is a continuation of the bank’s effort to provide avenues for the progress of women in society. Last year, the bank celebrated women in Nigeria’s tech space through Tech Chicks - a platform that highlights the achievement of young women in the technology industry. Tech Chicks calls attention and recognises the work of women such as Temitope Omotayo, Bolanle Banwo, Ada Nduka Oyom, and Dele Tejuosho. Through Tech Chicks, the bank has provided a channel for women to share related goals, dialogue and inspire each other. Wema Bank also marked the 2018 International Women’s Day themed ‘Press for Progress’, through the ‘Woman to Woman’ ALAT Open Office event. Omilola Oshikoya, Africa’s wealth connoisseur; Tomi Balogun, financial education

instructor; Chika Uwazie, chief operating officer at EnterFive, and Bimbo Agbejule, head of commercials ALAT by Wema, were among the panel of women leaders that deliberated on the advancement of Nigerian women. Enthused by the weighty role of women in the financial and institutional sphere in Nigeria, the bank plans to moderate thoughts for a gender-balanced world at Songversation with Aramide to mark the theme of this year’s International Women’s Day. The event will celebrate women leaders such as Kemi Onabanjo, management consultant, blogger, and mentor; Omoyemi Akerele, an icon in Nigeria’s fashion industry and artistic director of the Lagos Design and Fashion Week; Oghenekaro Omu, founder of Sanitary Aid for Nigerian Girls (S.A.N.G), a non-profit organisation that aims to provide free sanitary pads for young women, and Temie Giwa-Tubosun, founder of Lifebank, a company focused on health management and improving access to blood transfusions. Songversation with Aramide will blend music with lively conversation between musicians and fans. Activities at the event promises to motivate women to take lead, foster personal development and engineer societal recognition. With scheduled performances from Aramide, Niniola, Ric Hassani, Praiz and many more, the event will enunciate the need for women to network.

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Next global economic recession may start in Europe Sack of 47 pilots in Nigeria Airways was a sad moment – Ore …Italy,Turkey enter recession in Q4 while Germany, Sweden, Switzerland narrowly escape recession IFEANYI JOHN

t is now 10 years since the last global economic recession in 2009 and economists now say another may be on the horizon, and the avalanche is set to start falling from Europe this time. In the fourth quarter of 2018, Italy and Turkey entered an economic recession after posting consecutive declines in gross domestic product growth rate in the second half of the half while three other economies narrowly escaped recession. In economics, an economic recession is a business cycle contraction when there is a general slowdown in economic activity over two consecutive quarters. As of the third quarter of 2018, not less than five European economies were on the brink of slipping into an economic recession after posting negative GDP growth due to contraction in economic activities. Out of the 13 largest economies in Europe, two entered a recession (Italy and Tur-

key), three narrowly escaped a recession after reporting negative economic growth in Q3 (Germany, Sweden and Switzerland), another three countries reported slower growth in Q4 than Q3 (UK, Russia and Poland), three posted flat economic growth (France, Belgium and Austria) and only two saw their economic fortunes slightly improve (Netherlands and Spain), raising fears that Europe may slip into its first recession in five years. According to the Financial Times, this prompted the European Central Bank (ECB) to respond proactively by “reviving a crisis-era stimulus programme after two years of weaning the eurozone off its easy money policies, a sign of rising concern over the region’s faltering economy.” The new monetary policy dubbed Targeted LongerTerm Refinancing Operations, would see the ECB hold a series of auctions of multiyear loans at low rates to stave off a collapse in lending — the first time it has reopened the

programme in nearly three years according to FT. The monetary policy decision to make a fresh offer of cheap loans to eurozone banks was coupled with a signal it would keep interest rates at historic lows until next year, as fears that the economy may the too weak to manage a higher interest rate continued to echo from the Central Bankers. In a sign of how concerned ECB policymakers have become, they severely downgraded projections for the eurozone’s gross domestic product growth this year to 1.1 per cent from a forecast of 1.7 percent just three months ago. Inflation forecasts were also cut, with price rises now set to undershoot the bank’s 2 percent target all the way out to 2021. “It will be a miracle if Europe doesn’t enter an economic recession towards the end of this year,” said Maju Eldad, Lecturer in Economics Department at Federal University of Kashere, Gombe. “Four of its largest economies are struggling to grow.

IFEOMA OKEKE

ele Ore, the former director of operations, Nigeria Airways, says the sack of 47 pilots in one day by the Federal Government in the defunct national airline was one of his saddest moments in the service. Ore also recalled that he was appointed and sacked as the Chief Pilot in the former national carrier thrice by different governments, saying that inconsistency in policy formulation and execution led to the eventual death of the airline. Speaking Tuesday in Lagos at a pre-event press briefing of his latest book, ‘The Learned Commander,’ Ore explained that government policy and bad health of some of the pilots cumulated in the sack of 47 in one day. According to Ore, the government as a policy then, had wanted to reduce the workforce of the airline by 50 percent, stressing that before the retrenchment; the airline had about 3,700 staff.

He maintained that the sack of the pilots was a step in the wrong direction, which had a negative effect on the entire performance of the airline. The sack he said occurred in December 1988. Ore, who became a pilot at the age of 21, recalled that he found it painful that 47 pilots were sacked under his watch in one day, stressing that most of those sacked were already captains who the Federal Government trained for at least nine years. He said the 30-chapter book to be presented at the Nigeria Institute of International Affairs (NIIA) in Lagos encapsulated everything about his life from the cockpit to the courtroom as a legal practitioner. Ore, who participated actively in the Nigerian civil war when he was flying the wounded Biafran soldiers, said his last flight before retiring was “a mutiny,” but he survived it by the grace of God. Speaking on plan by the Federal Government to float a new national carrier, he noted that appointing

foreign technical advisers was a wrong step by Hadi Sirika, the minister of state for aviation. He said, “You don’t need all these financial advisors, advisers, transaction advisers. Where is Dele Ore? Where is Taiwo Adenekan and the like? “And when the thing is now coming so close to election, it is another agenda. I cannot fault the policy, the plan, but I have always said, may be that is the reason they don’t come to me, we are talking about a national carrier, but I said no, a flag carrier.” He, however, said Nigeria had always have good policy formulation, but lacked the political will to implement most of them, stressing that until the government deployed the political-will, the sector would continue to be stagnant. Ore also declined to comment on the Ethiopian Airlines crash, saying it would be too immature to comment on an accident the preliminary investigation was yet to be released to the public.

Investors lose N120bn, as equity market returns to negative territory DAVID IBIDAPO & SEGUN ADAMS

L-R: Comfort Chukwumeubobo, permanent secretary, federal ministry of water resources; Suleiman Adamu, minister of water resources, and Oyekanmi Gbeyega, director, legal service of ministry, during the media water sector workshop in organised by the Ministry in Abuja. NAN

We collaborated with NLNG to rescue distressed MV ORC4 vessel - NIMASA AMAKA ANAGOR-EWUZIE

ontrary to report claiming that the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigeria LNG failed to provide assistance to a distressed MV ORC4 vessel resulting in it sinking and loss of lives, NIMASA says it collaborated with the NLNG to save the vessel. A statement by Isichei Osamgbi, head, corporate communications of NIMASA, said the fishing vessel did not sink and was currently at the ORC Jetty at Kirikiri Lighter Terminal in Lagos, where it was towed after rescue.

Osamgbi said the agency’s Search and Rescue Control Room received a distress call at about 20:00hrs on February 6, 2019, that a vessel MV ORC4 was on fire at Bonny Anchorage and that the crew members were abandoning the vessel. “The Search and Rescue Station relayed the emergency call to ships within the area in line with its statutory mandate as enshrined in the NIMASA Act 2007 and the Merchant Shipping Act 2007 on Maritime Safety. “After preliminary investigation and assessment of the distress, the Agency immediately sought collaboration with the Nigerian Liquefied Natural Gas (NLNG) whose firefighting

tug was closest to the scene to assist in bringing the situation under control along with other neighbouring vessels that collaborated in the rescue exercise, in line with global shipping standard,” Osamgbi said. According to Osamgbi, the NLNG immediately dispatched the firefighting tug boat named; CTOW ANN SOPHIE to the scene which was used to extinguish the fire. “The crews onboard were safely evacuated and the vessel safely towed to her owner’s jetty where she is currently undergoing repairs.” Commenting, Sunday Umoren, head, Maritime Safety and Seafarers Standards Department of NIMASA, commended

the support of Atlantic Shrimpers’ vessels, NIMASA team and NLNG for the successful operation in saving the fishing vessel. “There is a difference between emergency and salvage operations. Saving of lives is the mandatory action during an emergency and should be treated with top priority, but saving an asset is salvage, which is never free,” he said. The statement further revealed that the owners of the vessel has sent in an appreciation letter titled, “Appreciation for Support During Fire Incident on Board ORCiv Trawler,” addressed to Dakuku Peterside, director general of NIMASA, on February 11, 2019.

gainst fundamental assumption of investors rewarding companies for impressive financial records and anticipated market recovery on almost cleared political uncertainty, the Nigerian equity market has recently turned bearish defying expectations of analysts. The Nigeria equities market on Tuesday closed on a negative note, as the All Share Index (ASI) dipped 1.02 percent to close at 31,313.36 basis points against previous day market decline by 0.90 percent. The market on Tuesday saw investors lose a whopping N120 billion amid profit taking in market bellwethers as year-to-date worsen. Analysis of year-to-date performance of the equity market shows returns currently stand at -0.37 percent. This however is the first time the market is entering the negative zone since it exited the zone on February 7, 2019. “There has been a lull in the release of financials by companies which should have strengthened the market, and investors are currently assessing the political space post-elections,’’ Gbolahan Ologunro, a Lagos-based equity analyst at CSL Brokers told BusinessDay. Market performance on Tuesday had extended the bearish trend to a 5-day streak, which started the week before despite rela-

tively impressive company results, which has been released so far this earnings season. International Breweries recorded the highest loss as shares went down some 9.93 percent in the day to N24.05. Other laggards in the day’s trading include Guaranty Trust Bank, which declined by 4.83 percent to N35.50 while Dangote Cement trailed by 0.51 percent to N194 per share at the close of trading. According to Fola Abimbola, an equity analyst at FBNQuest, “The day’s performance is largely as a result of profit taking especially since the market had a more or less positive run to the general elections.’’ However, while Abimbola sees the market picking up over the near term “if the other results announced by companies for the 2018 full year are positive,” Ologunro says, “the near term might show a see-saw performance,” he expects profit taking and bargain hunting in the market in the near term. Gainers for Tuesday was led by Law Union and Rock Insurance, which appreciated by 7.69 percent to N0.56 in the day while UACN property development also saw its shares gain 7.14 percent to N1.95. United Capital recorded an uptick of 4.13 percent to N3.28 while Wapco, Aiico insurance, Africa Prudential, Union Bank and Transnational Corporation rounded off the gainers table.

Wednesday 13 March 2019

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Labour awaits new wage as Senate Alleged N2.5bn NBC fraud: Court orders Kawu’s arraignment to fast track passage of bill JOSHUA BASSEY

rganised labour is waiting with expectation as the Nigerian Senate, on Tuesday, signalled intention to fast track the passage of the National Minimum Wage Bill that will see least worker’s earning in Nigeria raised to N30,000 from the existing N18,000 Bobboi Kagaima, president, Trade Union Congress (TUC), in a telephone interview with BusinessDay, said the expectation from the Senate was high, as the eighth National Assembly was gradually winding down. “There has been a delay by the Senate unlike their counterparts in the House of Representatives who fast-tracked the passage of the bill after receiving it from the Presidency. But it is better late than never. Our expectation is that the Senate will follow the path of the lower legislative chamber by endorsing and passing N30,000. That is what we expect and not N27,000, which the Presidency sent,” Kaigama said. Chris Onyeka, deputy general secretary, United Labour Congress (ULC), urged the Senate and the Federal

Government to consider the new N30,000 minimum wage as a gift to Nigerian workers before the termination of the current administration in May this year. The Senate on Tuesday appointed Francis Alimikhena, Senate deputy majority whip, as acting chairman of the ad hoc committee on minimum wage. Bukola Saraki, Senate president, said Alimikhena would work in acting capacity while the chairman, Olusola Adeyeye, was away on health grounds. Saraki charged the committee to expedite action on the matter to enable the Senate to be able to catch up with the House of Representatives, which had already passed the bill through third reading. Recall that the House of Representatives had on January 29 approved N30,000 as minimum wage for workers in the public and private sectors. The lower chamber increased the threshold for public and private sectors workers in states and local governments from N27,000 as proposed to the National Assembly by the Presidency, to N30,000.

FELIX OMHOMHION, Abuja

ederal High Court in Abuja has ordered the director-general of the National Broadcasting Commission (NBC), Ishaq Moddibo Kawu, to appear before it to answer allegations over his involvement in the mismanagement of N2.5 billion seed grant for the Digital SwitchOver programme of the Federal Government, even if he is on a stretcher. Kawu, who was to be arraigned alongside Lucky Omoluwa and Dipo Onifade, chairman of Pinnacle Communications Limited and the chief operating officer, respectively, over their alleged complicity in the mismanagement of the said grant, failed to appear before Justice Folashade Giwa, claiming to be on admission at the University of Ilorin Teaching Hospital, Ilorin, Kwara State. His counsel, A. U. Mustapha, presented a medical certificate to the court to back the claim, adding that Kawu, who had had a major surgery 10 years ago had to check into hospital due to

Nigeria’s inefficient waste management may worsen as UN warns of coming dangers STEPHEN ONYEKWELU

igeria’s waste management practices have come under severe criticisms in recent times and this is set to be compounded by the rising impact of chemicals on the environment, human health and economies. In its Global Chemicals Outlook released on Monday, the UN Environment says chemicals used in food and farming are harming wildlife around the world. Pesticides have been found to negatively impact pollinators and excess use of phosphorus and nitrogen in agriculture continues to kill ocean life, and chemicals used in sunscreen put pressure on coral reef ecosystems. The $5 trillion global chemical industry is expected to double production by 2030, and countries not expected to meet internationally agreed goals to minimise the adverse impacts of chemicals and waste by 2020. For Nigeria, the situation is dire because it is unable to deal with basic recycling of plastics. This will be made more complex by the need to manage impact of chemicals. In Lagos alone, according to a BusinessDay’s report of

January 18, millions of tons from plastic waste accumulated over time continue to pile up in the environment, with some buried in landfills even though science has established they cannot decompose for hundreds of years. Experts have opined that Lagos generates the highest volume of plastic wastes in Nigeria, and this volume may triple in the coming years if efforts are not geared toward redirecting the waste to economic benefits. In essence, about 2,250 tons of plastic waste is generated in Lagos on a daily basis, and which can be recycled, annually, this is 821,250 tons (almost 1 million tons). At $500 per ton, if only 500,000 tons of plastic can be recycled annually, it will potentially be a $250 million industry. This figure will increase significantly when other parts of Nigeria are factored in. The UN Environment’s Outlook says some antimicrobials, heavy metals and disinfectants exacerbate human resistance to antibiotics. The World Health Organisation has estimated the burden of disease from selected chemicals at 1.6 million lives in 2016, but this is “likely an underestimate,” it says. The body calls for re-

newed global efforts to prevent further damage from chemicals pollution. Despite agreeing in 2002 to work to curb the threat, hazardous chemicals continue to be released to the environment “in large quantities,” and they are now “ubiquitous” in air, water, soil, food and humans, the UN warns. But the report said solutions already exist to ensure more sustainable chemicals production, and estimated the economic benefits of minimising negative impacts of chemicals pollution are “in the high tens of billions of US dollars annually.” Some industry sources told BusinessDay, only one company, Alkem Nigeria Limited, is known to have the capacity to fully process recycled plastic in an industrial process that makes it into raw materials for end users. However, it is gathered that the company does not process plastic into new bottles; rather, it converts into fibre for making clothes. Meanwhile, thanks to increasing regulatory action from governments on many chemicals, as well as better supply chain management from companies and growing consumer demand for safer and more environmentally-friendly products, there is a “window of opportunity” to drive change, the UN says.

issues arising from the operation. He said: “He is on admission at the hospital at the moment. He had a major surgery 10 years ago and I have a medical report from the University of Ilorin showing why he cannot be here. I ask for adjournment pending when he will be well enough to attend court.” Counsel to ICPC, Henry Emore, did not oppose the plea for adjournment but however asked the court to note the maximum number of times adjournment could be granted based on the Administration of Criminal Justice Act, 2015. Justice Giwa, in her ruling, adjourned the matter to April 17, 2019, for arraignment. She also told the defense counsel to produce Kawu on the said date even if it meant bringing him to the court on a stretcher. She said, “You must ensure that your client is in court even if he has to be on a stretcher; I am agreeing to this adjournment taking into cognizance his health issues, but the trial needs to go on, you must ensure he is in court next time.”

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FMDQ sponsors FMDA workshop on derivatives SEGUN ADAMS

he FMDQ OTC Securities Exchange will be sponsoring the Financial Market Dealers Association (FMDA) conference on deepening the derivatives market holding next week in Lagos. The International Swaps and Derivatives Association (ISDA) Africa chairman, Brett Gallie, partner at Clifford Chance, Derivatives and Structured Trades, Matthew Grigg, and managing director/CEO, FMDQ OTC Securities Exchange, Bola Onadele (Koko) have all confirmed their attendance at the Swaps and Derivatives Workgroup’s Financial Markets Workshop. The event, organised by the Swaps and Derivatives WorkGroup of the Financial Market Dealers Association of Nigeria (FMDA), which holds at Lagos Continental Hotel, Victoria Island, on March 19, will focus on the theme: ‘Legal Documentation as Driver to introducing New Products and a Healthier Financial Market in Nigeria.’ According to the association, the theme is not only timely and apt, but also expected to discuss the standardisation of documentations in Nigeria’s market with

a view of boosting the integrity of markets and attract investors’ trust and confidence to the market. The event is expected to commence at 8.30am. The chairman, Swaps and Derivatives Workgroup and FMDA president, Samuel Ocheho, will deliver the opening remarks at the event. According to FMDA, Gallie and Griggs will be speaking on Market Documentation and the need for Standardisation while Onadele will speak on the Need for Derivatives in the Nigerian Financial Markets and FMDQ’s plan for product roll-out this year. Partner, Aluko & Oyebode, Olubunmi Fayokun will be moderating on the topic Transaction Netting in Nigeria – The Way Forward with other renowned panellists that will also contribute to make the event remarkable among whom are Yinka Edu - partner, Udo Udoma Bello Osagie & Co and Zeal Akaraiwe, CEO, Graeme Blaque. The FMDA is an association of licensed deposit money banks operating within the Nigeria financial market, emphasising on regulatory policy engagement/advocacy and professional ethics in the financial markets.

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INEC to partner security agencies to prosecute election offenders … Violence signs of system failure – Expert Iniobong Iwok

he Independent National Electoral Commission (INEC) has said it was working with relevant security agencies in the country to prosecute election offenders in the 2019 general election. International and Independent observers have reported that the 2019 general election in Nigeria were marred by widespread violence, vote-buying and intimidation of opposition supporters in several states across the country. The violence is said to be particularly wide spread in some Southern states such as Rivers State where election as been suspended by INEC. The observers had advised authorities to take urgent action to reform the electoral process. But Rotimi Oyekanmi, the Chief Press Secretary to INEC chairman, Mahmood Yakubu, said in an interview with BusinessDay, Tuesday, that the commission would prosecute anyone caught in relation to

the violence during the elections and had begun interaction with the Nigerian Police Force (NPF). Oyekanmi noted that the commission was more interested in

he Oyo State Governorelect, Seyi Makinde, has said that he would personally handle economic matters and take responsibility for anything that happens in the state. Makinde disclosed this during an interview with a radio station monitored in Ibadan. He also said his administration would set a six-month target for the economic revival and improve the health sector and the security of the state. According to him, “We will set financial targets for ourselves every six months to make us financially stable so that we will not rely on federal allocations anymore. I will personally handle the economy.” The governor-elect, who spoke in Yoruba language, Aalso said: “I will focus on agriculture and use it to drive the economy. We will put experts in that field.” Makinde disclosed that he would cancel the N3,000 education levy

According to him, “We cannot do it alone; we are doing that in conjunction with the Nigerian Police Force. We know the general elections have not finished, we are

Members of All Progressives Congress (APC) Caucus led by Leader of House Representatives Femi Gbajabiamila (m) briefing the press corp on the out come of 2019 general election at the National Assembly in Abuja. picture by TUNDE ADENIYI.

I will be in charge of economic matters, says Makinde Akinremi Feyisipo, Ibadan

arresting and prosecuting the sponsors of the offenders, stressing that the commission needs the total cooperation of the police and Nigerians.

which was imposed on students by the Governor Abiola Ajimobi administration. “The N3,000, which students are made to pay as education levy will be stopped immediately I take over on May 29. The money is about N1.2billion but let parents now hold unto that money and use it for their personal matters,” he said. He said his government would look into the dismissal of some government workers with a view to reinstating those who did not deserve to be sacked. “All government workers who were sacked without fault, we will review the circumstances surrounding their sack and those who didn’t deserve dismissal will be reabsorbed,” Makinde added. Governing a state like Oyo ,he pointed out would require cooperation and synergy noting that he would consult Governor Abiola Ajimobi; ex-Governor Adebayo AlaoAkala and his predecessor, Rashidi Ladoja, for advice as he prepares to resume office on May 29.

still on it; we are talking with the Police authorities because they are the ones who do the arrest, we don’t have detention facilities. “We have done it before, in 2015 we successfully prosecuted some offenders; we are even more keen on targeting those who sponsored them rather than the foot soldiers”, Oyekanmi said. Meanwhile a political analyst and Senior Advocate Nigeria (SAN), John Bayesha, has identified systemic failure for the increasing violence, which characterised recent elections in Nigeria. Bayesha, however, questioned why elections in Nigeria would continue to be characterised by violence in spite of the deployment of large security personnel across the country. “Anybody found guilty should be punished, it is because we are not doing that, we are seeing all this violence”, Bayesha said. “But I wonder why violence is rampant when we deployed large security officials everywhere, why can’t they curb it? Its means there is a systemic failure”, Bayesha added.

2019 polls: APC losses two-thirds majority seats in Ogun Assembly ...as APM, ADC, PDP win 11 seats RAZAQ AYINLA, Abeokuta

he All Progressives Congress (APC), the political party that produced Dapo Abiodun as governor-elect in Ogun State, has failed to win special majority seats -two-thirds - in the Ogun State House of Assembly, winning 15 parliamentary seats out of 26 total seats in the House. The list of the winners released by the Resident Electoral Commissioner (REC) of the Independent National Electoral Commission (INEC) in Ogun State, Prof. Abdul Ganiyu Raji, showed that the Allied People’s Movement (APM) won seven seats; the African Democratic Congress (ADC) won three seats and the People’s Democratic Party (PDP) won only one seat. The winning list signed and

re lea s e d by Ja m es Po p o o la, INEC Administrative Secretary on behalf of REC in Abeokuta, showed that Adams Olushola from Ijebu East emerged for APC; Oludare Kadiri from Ijebu North II emerged for APC ; Fasuwa Johnson won for APC from Ijebu North East; Oduwole Kemi also won for APC from from Ikenne and Soneye Kayode emerged from Obafemi-Owode. Others that won on the platform of APC include Elemide Oludaisi from Odeda; Bello Atinuke from Odogbolu; Akeem Balogun from Ogun Waterside; Osho Oluwaseyi from Remo North; Abdul Basir Oladunjoye from Sagamu I; Oduwole Kemi from Ijebu-Ode; Adejojo Yusuf from Abeokuta South I; Ademuyiwa Adeyemi from Abeokuta South II; Yusuf Sheriff from AdoOdo/Ota I and Olakunle Oluomo

from Ifo I. The list further showed that the Allied People’s Movement (APM) won seven seats which include Mujota Modupe from Abeokuta South I; Amosun Yusuf from Ewekoro; Bolanle Ajayi from Egbado South; Ganiyu Oyedeji from Ifo II; Lamidi Musefiu from Ado-Odo/Ota II; Sikiratu Ajibola from Ipokia and Adeniran Adeyinka from Sagamu II. The other two political parties that won the parliamentary elections include the African Democratic Party (ADC) that has three seats, namely, Jemili Akingbade from Imeko-Afon; Adegoke Adeyanju from Egbado North I and Haruna Wahab from Egbado North II; and the People’s Democratic Party (PDP) which has only one seat with Abiodun Niyi from Ijebu North I.

in collusion with parties in power. “We note that this style of mandate manipulation is again about to happen in the gubernatorial elections in some states like Kano, which shall be resisted with a nationwide mass action in Nigeria to express our principled grievances against the obvious lapses in the 2019 elections,” the statement said.

NIM and its allied political parties however, lauded the popular victory of Prince Dapo Abiodun of the All Progressives Congress (APC) in Ogun State and Seyi Makinde of People’s Democratic Party (PDP) in Oyo State adding that the victories was as a result of the alliance with both candidates before the governorship elections.

INEC declared elections inconclusive for eventual rigging - NIM ... Hails Dapo Abiodun, Seyi Makinde victory in Ogun, Oyo States Innocent Odoh, Abuja

he political third force in Nigeria under the umbrella of Nigeria Intervention Movement (NIM) has alleged that the Independent National Electoral Commission (INEC) declared elections inconclusive in Governorship elections in some states to pave

way to rig the elections. The Director, Media and Publicity Bureau of NIM, Debo Adeniyi, said this in a statement in Abuja on Tuesday even as he warned INEC to desist from the antics of declaring elections almost won inconclusive to enable its ‘favoured’ political parties to put machinery in place for eventual rigging of the elections

as cleverly invented during the Osun State gubernatorial elections last year “We wish to alert the entire country that we of the third force are already exhausted by this disingenuous antics of INEC officials and have decided to resist this with everything at our disposal as it is brazen corruption of our electoral system by INEC

Wednesday 13 March 2019

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Theresa May’s Brexit deal hopes hit by legal opinion on backstop Advisers to Eurosceptic Tories urge rejection of PM’s exit package after attorney-general’s advice HENRY MANCE

heresa May’s hopes of winning over Eurosceptic MPs to her Brexit deal were dealt a sizeable blow on Tuesday by a legal opinion from her attorney-general. Geoffrey Cox warned that the risk of the UK being trapped in a so-called backstop arrangement to avoid a hard Irish border after Brexit remained “unchanged”, despite new assurances about the prime minister’s withdrawal agreement that were published on Monday evening by the EU and Britain. Mr Cox’s legal advice had been seen by ministers as a key tool for persuading Eurosceptic Conservatives and the Democratic Unionist party to back Mrs May’s deal in a “meaningful vote” by the House of Commons on Tuesday evening. But a group of lawyers advising the pro-Brexit European Research Group of Tory MPs said after the release of Mr Cox’s opinion that the government had failed to meet its own tests and recommended voting against Mrs May’s deal. Nigel Dodds, the Westminster leader of the DUP, also appeared to take a dim view of the advice, noting that the UK “could be trapped” in the Irish backstop in certain circumstances.

Mrs May suffered a record Commons defeat in January when MPs last voted on her Brexit deal, with the ERG and the DUP both opposing it. Mr Cox concluded in previous legal advice last year that the backstop could endure “indefinitely”, enraging Eurosceptics who fear the arrangement would lock Britain into a permanent customs union with the EU and prevent the UK striking trade deals after Brexit. Some MPs had expected him to change his stance after the latest negotiations on Mrs May’s Brexit deal between the UK and Brussels, in which he was a key player. In a three-page letter to Mrs May published on Tuesday, Mr Cox said the new Brexit assurances “reduce the risk that the United Kingdom could be indefinitely and involuntarily detained” in the Irish backstop because of bad faith on the EU’s part. But he added that “the legal risk remains unchanged” that, if there were “intractable differences” between the UK and the EU, rather than bad faith by the bloc, Britain would have “no internationally lawful means of exiting” the backstop without the bloc’s agreement. David Davis, the former Brexit secretary, said earlier that if Mr Cox was “at all equivocal” about the legal position, the deal would be defeated again in the Commons.

Ballooning US debt piles put investors on guard Fears over ‘wall of maturities’ are weighing on stocks that have weaker balance sheets RICHARD HENDERSON

he classic “fortress balance sheet” made famous by JPMorgan Chase’s Jamie Dimon is back in vogue. Increasingly, investors are rewarding sober companies that largely sat out the big borrowing binge of the post-crisis period. Companies with strong balance sheets — those with low debt levels or strong cash flows which can quickly ratchet down leverage at the first signs of trouble — began to outperform weaker rivals when the Federal Reserve started tightening monetary policy in 2015. But the divergence deepened last year, when the US central bank kept raising interest rates even as economic growth slowed, and investors grew fearful that the postcrisis bull run was coming to an end. A Goldman Sachs index of US stocks with strong balance sheets has returned 11 per cent in the past 12 months, compared to just 2 per cent for the counterpart index of weaker balance sheet stocks. Of all the challenges confronting the US stock market, corporate debt levels are the biggest, says Rob Almeida, global investment strategist for MFS Investment Management, a Boston-based firm with about $430bn in assets. “It’s number one for us,” he said. “Leverage matters, especially for those that do something unsustainable. The gross amount of leverage which has increased since 2007 is problematic.”

Mr Almeida argues many companies have loaded up on debt through dubious acquisitions to stem the disruption to their businesses from smaller, nimbler competitors. He is especially worried by the growth of bonds rated triple-B, the lowest rung of investment grade debt, which have swelled from $750bn in 2007 to $2.7tn today. The need for companies to refinance all this debt in a less benign environment is magnifying investors’ unease. In the next three years, a third of US triple-B rated bonds will come due — a “wall of maturities” that will test the balance sheets of highly levered companies, predicts Kristina Hooper, chief global market strategist for Invesco, the $888bn-in-assets Atlanta-based fund manager. “This is a potential crisis that could evolve,” Ms Hooper said. “We could see a situation where companies are not able to cover debt service or, when debt matures, obtain new funding at higher levels, squeezing profit margins.” As a result, many investors are now urging companies to buttress their balance sheets by paying down debt and conserving cash, before circumstances force them to act. More than half of 218 investors representing $625bn in assets polled by Bank of America Merrill Lynch last month listed reducing leverage as the best use of company cash flows — the highest level in a decade.

Theresa May

The pound fell 1 per cent against the US dollar, to $1.3020 just after the release of Mr Cox’s letter, more than wiping out a rally late on Monday after Mrs May unveiled the Brexit assurances with the EU. Sterling had traded as high as $1.3288 after Monday night’s New York close. Members of the government pointed to the more upbeat parts of Mr Cox’s advice, including his “political judgment” that it was “highly unlikely” that an alterna-

tive to the backstop would not be found. But one Downing Street official, referring to Tuesday’s vote, said: “We’ve got a big selling job on our hands.” Mr Cox has become an influential figure in the Brexit process, despite being little-known in British politics until his appointment as attorney-general last year. In an interview with the Mail on Sunday last week, he insisted he would never deliver politicallyconvenient advice to the govern-

ment. “I have been a barrister for 36 years, and a senior politician for seven months,” he told the newspaper. “My professional reputation is far more important to me than my reputation as a politician.” The legal documents about the Brexit assurances, presented by the EU and the UK on Monday evening, fell short of a parliamentary amendment backed by MPs in January that said the backstop should be “replaced”.

Elon Musk accuses SEC of over-reach in contempt case Lawyers for Tesla chief say agency has engaged in ‘power grab’ regarding tweets KADHIM SHUBBER

lon Musk accused the Securities and Exchange Commission of “unprecedented overreach” as he asked a federal judge to dismiss the regulator’s attempt to hold him in contempt of court. The Tesla chief executive denied he had violated a settlement with the SEC in a 33-page court filing on Monday evening, arguing the agency had gone too far in seeking a contempt order. “The court should reject the SEC’s invitation to trample on Musk’s First Amendment rights,” wrote Mr Musk’s lawyers, who argued the securities regulator was engaged in an “unconstitutional power grab”. The broadsides from the entrepreneur came after the regulator accused him of breaking a 2018 settlement that required him to seek preapproval from a Tesla lawyer for any tweets containing material information about the carmaker. The agreement stemmed from Mr Musk’s claim on Twitter that he had “funding secure” for a buyout of publicly listed Tesla, a claim the SEC found was false as it imposed a $40m fine on both him and the company. Last month, Mr Musk attracted the ire of the regulator again after he tweeted about Tesla’s vehicle production estimates and subsequently had to correct it. The SEC asked the judge in New York who oversaw last

year’s settlement to hold Mr Musk in contempt of court for violating the settlement. In his filing on Monday, Mr Musk conceded that none of his tweets since the settlement through to February had been preapproved by lawyers at Tesla. But his attorneys argued that he had the right to make his own determination about whether his tweets contained material information. None of his tweets had risen to the level of materiality, and therefore preapproval, Mr Musk’s lawyers added. This included the vehicle production tweets last month, which they called “shorthand gloss on and entirely consistent with prior public disclosures”. “Musk correctly used his discretion to determine that his . . . tweet was not material and did not contain information that could reasonably be considered material,” wrote the lawyers. The latest round of duelling between Mr Musk and the US markets watchdog came as Tesla grappled with a host of problems alongside the chief executive’s tweeting. The carmaker has seen an exodus of senior executives, including its general counsel the day after Mr Musk’s February 19 tweet. On Sunday, Tesla suddenly U-turned on a plan to close most of its retail stores, forcing it to raise prices just days after announcing a price cut. The court filing on Monday re-

peated Mr Musk’s arguments the SEC’s enforcement activities had hurt Tesla’s shareholders more than it helped them, including by weighing on the share price. The filing pointed to the fact the February 19 tweet was posted outside of normal trading hours and to the absence of “any notable move in Tesla’s stock price” resulting from the post. “By contrast, the SEC’s filing a motion seeking to hold Musk in contempt caused a 3.4% decline in Tesla’s stock price during afterhours trading,” wrote Mr Musk’s lawyers. Even as Mr Musk criticised the SEC, however, there were signs of a more conciliatory approach in other parts of the court filing. While he had not sought preapproval for tweets before the SEC’s contempt filing last month, he had done so for “a wide range of Teslarelated proposed tweets, even those that are clearly immaterial”, wrote a lawyer for Tesla in a March 11 letter to the SEC attached as an exhibit to Mr Musk’s filing. In a sworn declaration, Mr Musk added that he was trying to comply with the terms of last year’s settlement, as evidenced by the reduction in his tweeting. “Among other things, I have dramatically decreased the amount that I tweet about Tesla,” he said. “I have cut my average monthly Teslarelated tweets nearly in half.”

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NATIONAL NEWS

FT Mexico delays contentious oil refinery project

Power suppliers offer off-grid solutions to Africa’s growing cities

Deputy finance minister says $2.5bn will instead be used to boost Pemex production

Solar units can plug gaps and help small businesses

JONATHAN WHEATLEY AND JUDE WEBBER

HENRY SANDERSON

he Mexican government has put a contentious refinery project on hold against a background of flagging economic growth and is preparing a fresh capital injection to boost production at Pemex, the debt-laden state energy company, the deputy finance minister has told the Financial Times. Arturo Herrera said $2.5bn earmarked this year for the Dos Bocas refinery project would instead be channelled into turning around Pemex’s 15-year slide in production. The cost of Dos Bocas has repeatedly been revised upwards and the decision on the project will be welcomed by investors, who feared it would be a burden that Pemex and Mexico could ill-afford as the economy slows. Rating agencies are turning increasingly negative on Mexico because of Pemex’s fragile finances. “We will not authorise [construction] until we have a final figure that is not very different from the original $8bn,” said Mr Herrera, adding that this year’s planned investment in the refinery “can go to exploration and production”. He spoke during a trip to London for meetings with investors. Many investors think that President Andrés Manuel López Obrador’s pledge to halt lucrative crude exports in three years, and refine oil domestically to sever reliance on imported US fuel, made little financial sense. “It’s almost a done deal that [the refinery] will be cancelled,” said another participant in recent investors’ meetings with senior government officials, who asked not to be named. Mr López Obrador, who wants the state firmly in charge of the energy sector, referred briefly to the refinery in a speech on Monday marking his first 100 days in office, saying it and other infrastructure projects would be delivered during his six-year term. Mr Herrera said the government was talking to the IMF and other multilateral organisations about structuring a fresh capital injection for Pemex. He said the discussions were technical and no borrowing was involved. The government has already put forward a package of financial help for Pemex totalling $5.5bn, including a $1.3bn capitalisation, tax breaks and expected savings from a clampdown on rampant fuel theft, to boost investment in the company by 46 per cent this year. “We know the size [of the planned additional capitalisation] but we are not ready to announce it,” Mr Herrera said. Finance minister Carlos Urzúa said last week that “other measures that will be a bit more significant” would be announced soon. Analysts said Pemex needed $10bn to $15bn a year to start recovering production, which sank to 1.64m barrels per day on average in January, far from the 3.4m b/d peak in 2004 and the government’s goal of 2.4m b/d by 2024. BBVA Bancomer has said a recent increase in a fuel excise tax could deliver a $2bn windfall this year, which could be ploughed into helping Pemex. “I’m worried we’re being overly pessimistic,” noted one senior banker.

Tim Sloan: the bank has ‘gone above and beyond what is required in disclosing these issues in our public filings’ © Bloomberg

Wells Fargo chief to outline progress made at scandal-hit US bank Tim Sloan set to face grilling from Democrats ahead of debates over financial regulation ROBERT ARMSTRONG

ells Fargo chief executive Tim Sloan will testify on Tuesday before the House Committee on Financial Services about the bank’s progress in transforming itself, in a hearing that will set the stage for fractious debates over the regulation of the US financial system during the 2020 presidential election cycle. Mr Sloan will argue before the committee that the bank, since it was drawn into its fake accounts scandal in 2016, has substantially overhauled its board and senior management ranks, rebuilt its compliance and controls systems, shifted its focus to innovative and customerfriendly banking products, and compensated customers who were harmed. Acknowledging the wrongdoing that necessitated the changes, Mr Sloan says in his statement to the committee that the bank has “gone above and beyond what is required in disclosing these issues in our public filings, we have worked to

remedy these issues . . . we have worked to address root causes that allowed them to occur in the first place”. The title of the hearing, “Holding Megabanks Accountable: An Examination of Wells Fargo’s Pattern of Consumer Abuses” might indicate the tone of the questions Mr Sloan would face from the committee, which shifted from Republican to Democratic control after the midterm elections in November. Democrat Maxine Waters, the new chair of the committee, represents a district in the Los Angeles area, where many fake Wells Fargo accounts were opened by bank employees working under heavyhanded incentive pay schemes. She said last year that “something is terribly wrong” at the bank. Also on the committee is Alexandria Ocasio-Cortez of New York, the first-term representative who has spoken in bold terms of reforms to the financial and tax systems. The hearing takes place against the backdrop of a presidential election cycle in its early stages. One prominent Demo-

cratic candidate, Elizabeth Warren, a Massachusetts senator and consumer rights champion, has as recently as last month repeated her call that Mr Sloan be replaced as chief executive before an asset cap, imposed on the bank by the Federal Reserve early last year, is lifted. Last year the bank told investors that the $2tn asset cap would be removed in the early part of 2019. In January, however, the bank said that the cap would remain until the end of 2019. Wells Fargo has faced a series of smaller scandals in its car loan, mortgage and wealth management businesses since the fake accounts scandal first emerged. This week Wells Fargo agreed to refund $17m to investment clients that were put into highcost mutual funds without being informed of lower-cost alternatives — the largest amount paid by any of the 80 institutions that reached a settlement with the US Securities and Exchange Commission. The companies involved avoided paying a penalty by co-operating with the SEC and returning $125m in fees.

Street Toolz wins West Africa’s best marketing communication agency of the year award

treet Toolz, Nigeria’s interactive marketing and advertising agency, was recognised as West Africa’s Best World Class Marketing Communication Agency of the Year at the Institute of Brand Management of Nigeria (IBMN) 2019 awards. The awards, which aimed at identifying, recognizing and rewarding companies that have been applying branding and brand management best practices to the analysis, planning, implementation and control of policies designed to achieve corporate objectives. Zanna Zakaria, MD/CEO of Kain Energy Limited and Wali of Bornu, in his keynote address said, IBMN has been consistent in recognizing brands and businesses that are doing exceptional and innovative works in the marketing communication space. According to him, the award was con-

ferred on West African companies, brands and individuals who have made impacts on the lives of West African consumers through their innovations, inventions and ideas. Jerry Ochei, MD of Street Toolz, expressing his delight over the award, reiterated his agency’s penchant for leveraging storytelling to create innovative and compelling marketing content for its clients. “Storytelling is a core element of human relations dating back to pre-civilization and cutting across different traditions and generations. At Street Toolz, we take brand storytelling beyond words, helping them speak to the target audiences that matter the most, in the most culturally relevant manner,” said Ochei. It would be recalled that Street Toolz, which initially carved a niche

for itself as a digital leader in the Nigerian advertising market space, was early last year officially inducted into the fold of advertising agencies in Nigeria by the Association of Advertising Agencies of Nigeria (AAAN). Since then, the agency has continued to push the borders of integrated marketing communications, creating bespoke strategies that are unique to individual brands and their objectives, and providing innovative solutions across the digital and traditional media landscape. A youthful creative agency with a strong tech bias, Street Toolz started as a digital marketing agency in 2012, delivering top-notch digital marketing solutions to a diverse clientele base across the Banking, FMCG, Government, Real Estate, Automobile and Insurance sectors amongst others.

s part of his re-election campaign this year, Nigeria’s president Muhammadu Buhari said reliable power supply was critical to help small businesses in Africa’s most populous country. Many small businesses such as barber shops and market shops still lack access to reliable supplies of electricity, even in areas covered by the nation’s electric grid. That is a problem that manufacturers of solar panels and batteries are hoping to solve, by providing standalone units that can replace diesel generators and provide small businesses with secure power to make up for times when the grid stops working. Following an initial solar and battery boom that was mostly concerned with providing power to remote rural villages, city dwellers and businesses have become the focus of a second wave of solar power in Africa. The number of people living in cities in Africa is set to grow from around 500m today to over 1.4bn in the next few decades. By 2025 there will be 100 African cities with more than 1m people, according to McKinsey. Nigeria’s electricity grid cannot keep up with the rapidly expanding urban population, says Alistair Gordon, chief executive of Lumos, which supplies 80 watt solar panel and battery sets in the country. “As you go further from the centre of cities very often, it’s getting worse and worse,” according to Mr Gordon. “That edge of the city is where a lot of people have a grid that’s not doing much for them.” He estimates that while 60 per cent of Nigeria’s population has access to the electricity grid, only 33 per cent have reliable electricity connections. The use of small-scale solar panels and batteries can help small businesses from hairdressers to market stalls power lights, fans, small televisions and charge mobile phones, according to Lumos. The rapid reduction in the cost of solar panels and improvements in lithium-ion batteries has made small solar power systems more affordable. Growing use of mobile payments has also enabled easy leasing and ownership arrangements. The Lumos units are cost-competitive with kerosene and more efficient than diesel-powered generators, according to Mr Gordon. Generators are inefficient as they have to be run no matter how much power is needed, wasting fuel and capacity. They also create polluting fumes. “You really are changing lives,” Mr Gordon says. Amsterdam-based Zola Electric, which sells small solar and battery kits in five countries across Africa, is also starting to focus on providing power to small businesses in African cities. This month Zola will launch its Infinity standalone electric power unit in Nigeria. This can power appliances from fridges to water pumps and also be connected to the local grid or a backup generator. The unit uses a battery and computer to maximise usage of solar energy when it is sunny, but also ensure reliable power in the event of cloudy weather or a failure of the electricity grid.

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US to withdraw remaining diplomats from Venezuelan embassy Mike Pompeo cites ‘deteriorating situation’ as tensions with Maduro regime intensifies AIME WILLIAMS AND GIDEON LONG

he US will withdraw all remaining diplomats from its embassy in Venezuela because of worsening conditions in the country, US secretary of state Mike Pompeo has said. In a statement made late Monday, Mr Pompeo said the country faced a “deteriorating situation”, and that the presence of US diplomats in Caracas had “become a constraint on US policy”. Although US officials have repeatedly denied that there are any plans for military intervention in the country, citing diplomatic engagement and economic pressure as their key strategies, President Donald Trump has previously insisted that “all options are on the table” — a position repeated by Venezuelan opposition leader Juan Guaidó on Monday. Mr Guaidó has called another street protest for Tuesday as part of his ongoing campaign to dislodge Nicolás Maduro from power. The US had already significantly reduced the number of personnel staffing the embassy, withdrawing all dependants and non-essential staff in January as tension between the US and the Maduro government intensified. Venezuela is currently suffering the biggest power outage in its history, leaving thousands of homes without electricity. Shops and businesses have remained closed after Mr Maduro’s government ordered people to stay home. The blackout entered its sixth day on Tuesday with no resolution in sight. The government said businesses and schools would remain closed until Thursday. There has been isolated looting of supermarkets, and the opposition said 24 people have died as a result of the blackout — many of them critically ill patients in clinics. In Caracas people have been forced to take water from dirty sewage

pipes as drinking water has dried up. “Over the past few days, Venezuelans have been thrown literally into darkness thanks to a massive electrical blackout,” Mr Pompeo said earlier on Monday. “Patients awaiting treatment in hospitals are dying, food is rotting, telecommunication networks are entirely collapsing.” While Mr Maduro has blamed the nationwide blackouts on US sabotage, Mr Pompeo has denied any US involvement and said they were caused by the Maduro government’s chronic under-investment. Washington has been increasing its economic pressure on Venezuela, issuing sanctions against key financial supporters of the Maduro government and cutting off the flow of foreign currency to state-owned oil company PDVSA. It is estimated that the US energy sanctions could halve Venezuelan oil exports this year to $14bn, accelerating the decline of a Venezuelan economy that has already halved in size over the past five years. The US announced on Monday it would freeze the assets of a Moscowbased state-owned bank that works in Venezuela on Monday as it ramped up punitive measures against non-US companies that deal with Caracas. Although more than 50 countries — including the US, Canada, most of Europe and nearly all of Latin America — recognised Mr Guaidó as the country’s legitimate interim president last month, Mr Maduro has managed to remain in power. Mr Pompeo criticised the “central role” of Cuba and Russia in “undermining the democratic dreams of the Venezuelan people”, accusing Cuba of being “the true imperialist power in Venezuela”. “When there is no electricity, thank the marvels of modern Cubanled engineering,” said Mr Pompeo. “When there’s no water, thank the excellent hydrologists from Cuba. When there’s no food, thank the Cuban communist overlords.”

Markets Briefing ritain’s benchmark stock index barely rose while the pound was little changed as the Brexit process twisted and turned ahead of Tuesday’s parliamentary vote on a revised deal for the UK’s exit from the EU. A legal opinion from the UK attorney-general dealt a blow to Theresa May’s hopes of winning over Eurosceptic MPs to her revised agreement with Brussels. Geoffrey Cox, the attorney-general, said on Tuesday the legal risk of the UK being stuck in a so-called backstop arrangement to avoid a hard Irish border was “unchanged”. The advice came despite assurances about the withdrawal agreement that were published on Monday by the EU and Britain. Mr Cox’s advice had been considered crucial in winning over Conservative Eurosceptics and Democratic Unionist party MPs before a “meaningful vote” in the House of

Debut bond from Benin will test demand for frontier markets West African country prepares to sell eight-year, euro-denominated debt NIKOU ASGARI

enin is limbering up for its debut bond issue, testing demand for more esoteric but high-yielding bets on the outer fringes of emerging markets. Finance minister Romuald Wadagni is due to meet potential investors in London on Thursday and Friday, as the west African country aims to become the continent’s 21st issuer of sovereign bonds. A trio of banks, led by Société Générale, is managing the bond offering. The expected eight-year bond will be denominated in euros and is expected to launch later this month, assuming healthy market conditions. Proceeds will be used to finance “priority projects in infrastructure, digital economy, electricity and [an] improvement in the standard of living”, according to an investor presentation seen by the Financial Times. Benin’s planned foray into bond markets follows that of Uzbekistan, whose inaugural bond issuance took place last month, buoyed by a thirst for high-yield investments

among fund managers while major countries’ interest rates remain close to historic lows. Positive demand for Uzbekistan’s deal, along with support for similar offerings by Egypt and Sri Lanka “suggest it is reasonable timing” for Benin to sell a bond, said Gregory Smith, a strategist at Renaissance Capital, in a note to clients. The country, which shares borders with Nigeria, Togo, Burkina Faso and Niger, has a population of just 11m and its gross domestic product is about $11bn a year, making it one of the smallest borrowers in global government bond markets. Last week Benin was awarded a rating of single-B by Fitch, the credit rating agency — a non-investment grade label that indicates high risk. In its assessment, Fitch said the country was experiencing “rapid economic growth, and relative political and institutional stability”, but that these strengths are balanced against “low development indicators, limited diversification of the economy and a weak external position”. Standard & Poor’s had assigned the country a B+ rating in July last year. The country’s economy is projected to grow by 6.5 per cent this year, boost-

ed by a three-year-old reform programme which focuses on dozens of areas including infrastructure and agriculture as well as inward investment. Benin was the continent’s third-largest producer of cotton in 2017 and the fourth biggest exporter of cashew nuts in 2015. The IMF, which has supported Benin through various programmes for over 20 years, wrote in a recent report that growth “should remain elevated in the following years” because of high agricultural production and port activity, and higher demand from Nigeria. However, a failure to keep a grip on government spending as well as a delay in Nigeria’s recovery “would weaken Benin’s exports, fiscal position and growth”, said Mr Smith. He added that “with the IMF looking over their shoulder and with their regional targets, there is a lot of pressure” for Benin to achieve a 3 per cent target for its fiscal deficit. “Benin is less rich than Ivory Coast and Senegal, and in our view also has weaker institutions and policies,” wrote Mr Smith. He added that despite being similar to Rwanda in many ways, “Benin lacks the buzz around Rwanda’s reform story”.

Sterling falls after legal memo undermines Brexit deal

Attorney-general’s advice suggesting UK could be stuck in customs union wipes out rally

FTSE 100 rises as sterling flat after Brexit blow to May SARAH PROVAN AND ALICE WOODHOUSE

Commons on Tuesday evening. The FTSE 100 index rose 0.2 per cent in mid-morning trading in London. The pound was down 0.2 per cent at $1.3122 in early afternoon trading in London. In a rollercoaster trading session for the UK currency, sterling had swung about half a percentage point higher than the US dollar in early trading before shedding those gains to fall more than 1 per cent lower at midday. Against the euro, the pound was down 0.2 per cent at €1.1559 having earlier touched its highest level since May 2017. Britain’s FTSE 250 gauge of mid-cap stocks, which are typically more domestically focused than those on the FTSE 100, fared better, rising 0.2 per cent. The gain came despite a sharp fall for G4S, which runs prisons and provides security for sports events and offices. The stock fell 1.5 per cent in London after the UK security outsourcer said it would spin off its cash handling business in the second half of the year. The Europe-wide Stoxx 600 index rose 0.03 per cent.

ADAM SAMSON, KATIE MARTIN AND LAURENCE FLETCHER

terling fell after the UK’s chief legal adviser said Theresa May’s revised Brexit deal could still leave Britain lodged in a customs union with the EU indefinitely, dealing a blow to Number 10 ahead of a vote on the matter. The pound fell by as much as 1 per cent against the US dollar, hitting a low of $1.3006, just after the release of the memo from Geoffrey Cox, more than wiping out a rally late on Monday after prime minister May had declared a new breakthrough in her efforts to get her deal approved by MPs. It recovered somewhat after lunchtime in London, leaving it down only 0.3 per cent at $1.3117. Following the release of Mr Cox’s advice, Northern Ireland’s Democratic Unionist party indicated it would not back the deal, complicating the path to agreeing a way forward with Brussels before the March 29 Brexit deadline. A group of attorneys advising the pro-Brexit European Research Group of Tory MPs said after the release of Mr Cox’s opinion that the government had not met its own tests and recommended voting against Mrs May’s deal.

In a sign of the acute uncertainty, a measure of expected overnight volatility in the currency jumped to levels seen at times of high stress, such as the snap UK election in 2017 and the Brexit referendum the previous year. So-called implied volatility rose to 26.9 points on Tuesday, from 15.8 the previous day, according to Refinitiv data. Sterling’s rise and then fall over the past day or two will have proved a mixed blessing for hedge funds, some of whom have been positioning for a move higher in recent months as the prospects of a no-deal Brexit appear to have receded. Ian Gunner, who runs a currency fund at Altana Wealth, has benefited from the pound’s general move higher this year as he’s been long the pound via options ahead of this week’s events. “There’s definitely a fear in the market of being short going into a positive event,” he said. “It’s difficult to see a completely negative scenario for sterling.” But he has also been trading the pound to take advantage of shorterterm fluctuations. For instance, he said that in the past couple of hours he has also taken a short position in sterling in the cash market “in the belief the legal advice won’t get the deal through”

parliament. “You can get lost in the detail but really it’s about politics,” said Myles Bradshaw, head of global aggregate fixed income at Amundi. Mr Bradshaw warned that “all the tail risks are to the downside.” Attention is focused on a so-called “meaningful vote” by members of parliament on Tuesday evening on whether to accept Mrs May’s exit deal. Jean-Claude Juncker, the European Commission president, hailed the deal on Monday night as enabling “one last push over the finish line”. MPs are due to begin voting shortly after 7pm on Tuesday, first voting on any amendments that are selected and then voting on the main motion. If the bill fails to pass today, the Commons will hold another vote on Wednesday at the same time on whether to exit with no deal — which it will probably vote against — then another on Thursday on whether to request a delay to Brexit. “Dear British MPs, please be sensible and accept the deal today,” said Antje Praefcke, a currencies analyst at Commerzbank in Frankfurt. “No doubt it would be the best outcome for all parties involved. And sterling would be able to breathe a sigh of relief.”

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ANALYSIS US business threatens to stay away from Russian economic forum Executives protest against Moscow’s detention of investor Michael Calvey HENRY FOY

New York’s business elite decamps to millennial-friendly Hudson Yards Bold $25bn development opens this week to companies seeking ‘workplace of the future’

JOSHUA CHAFFIN

rom a conference room at his 42nd floor offices, Henry Kravis took in a majestic view that stretched across Central Park and beyond — and contemplated giving it up. For 38 years, Mr Kravis and his private equity firm, Kohlberg Kravis Roberts, have occupied what is arguably Manhattan’s most sought-after business address, 9 West 57th Street, a mythical tower of hedge fund titans, private equity barons and corporate raiders. It is the office from which KKR launched the buyout of RJR Nabisco that was immortalised in the book Barbarians at the Gate. But next year KKR is leaving. It is heading to a sprawling new development on the far west side of Manhattan that was, until recently, a wasteland. The lure, according to Mr Kravis, 75, was escaping the formality of its current offices, which are spread across non-contiguous floors, and creating the open, free-flowing atmosphere of Silicon Valley. “We’re very focused on changing the way we work. Communication is critical — people talking to each other, people running into each other constantly: ‘Let’s go have a cup of coffee’. So everything we’re doing in our new space is directed at that,” Mr Kravis said. Among other features, the new office will have staircases running through its seven floors to encourage mingling. “That’s what younger people want today,” Mr Kravis explained. “That’s what they’re looking for.” The $25bn Hudson Yards, the site of KKR’s new office and one of the most ambitious New York developments since Rockefeller Center, officially opens its doors this week after more than a decade in the works. It is big, boasting as much new office space as all of central Pittsburgh. It is an engineering feat. Its towers are constructed on top of a platform that sits above a working rail yard. Its builders crafted 90-tonne columns to support the weight. They also devised a custom cooling system for the soil within the platform so that tree roots would not overheat. As KKR can attest, Hudson Yards represents another extreme: it is the boldest expression of a new fashion in corporate real estate that buildings and “space” should be potent weapons in a fight to recruit and retain talented young workers.

The Related Companies and its partner, Oxford Properties, have made that a central element of a sales pitch that has persuaded KKR and other power brokers to quit Manhattan’s corporate strongholds in midtown and downtown and move west. Joining Mr Kravis in his new home are Larry Fink, who is moving BlackRock, the world’s largest asset manager, to Hudson Yards; attorney David Boies and his law firm Boies Schiller Flexner, and hedge fund managers Daniel Loeb and Steven A Cohen, among others. “When we started talking to companies about coming here we would get sort of that blank stare,” Jeff Blau, Related’s chief executive, recalled. Mr Blau first tried a value pitch: in a city of ageing skyscrapers — many older than 50 years — Related could offer state-of-the-art offices at prices just below those of midtown. It turned out that offer had limited appeal, especially with chief executives. So Mr Blau went back to the drawing board. He eventually discovered that what enticed the likes of Mr Kravis was a different promise: that Hudson Yards, with its vibrant offices and rich amenities, could help its tenants appeal to a new generation of workers with different expectations. “They didn’t come for office space,” Mr Blau explained. “They came because they realised this is the way people want to work, and this is the workplace of the future.” That future includes floor-toceiling windows, whizzing elevators and towers without interior columns, which allows for uninterrupted floor plans. Outside the offices, Hudson Yards is stocked with baubles meant to pamper and dazzle a generation whose personal and professional lives increasingly blur. As Mr Blau sees it, a millennial might stroll to work on the High Line elevated park, which snakes around Hudson Yards, check in at an open-plan office, perhaps do yoga at the Equinox gym — owned by Related — and then toil by laptop from one of Hudson Yards’ cafés or public spaces. For entertainment, there is a $600m retractable arts centre, The Shed, that will roll out over one of the main plazas to house performances, and a $200m lattice of outdoor stairways to nowhere. Called “Vessel”, the public sculpture was designed by artist Thomas Heatherwick, of London

Olympics fame. Hudson Yards also boasts 1m square feet of shops and restaurants from star chefs such as Thomas Keller and José Andrés. If, amid such luxury, an employee is feeling unwell, they can visit the members-only medical clinic at 55 Hudson Yards operated by Mount Sinai Hospital. “The old story of going to the office building, you leave at 5, you get on a train to go back to the suburbs — that’s over,” Mr Blau said. Some New York natives scoff, sensing less a coherent vision than a desperation to lure tenants and tourists by any means possible to an otherwise forlorn part of town. They complain that the soulless “city within a city” is cut off from a Manhattan whose greatest amenity is its riot of street life. “If you like the Galleria in Houston, you’ll love Hudson Yards!” quipped Hank Sheinkopf, a veteran political consultant, likening Related’s creation to the Texan city’s shopping mall. Hudson Yards’ luxury condos, he argued, should suit Russian and Chinese oligarchs seeking to encase their children in a sanitised version of New York. In a blistering review, New York Magazine called Hudson Yards “a billionaire’s fantasy city”. Tech companies, whose freeflowing work culture appears to inspire so much of the place, are largely absent. Hugh O’Neill, founder of Appleseed, a New York economic development consultancy that has worked for Related, observed that major new developments have historically tended to receive a frosty reception in the city before eventually becoming a part of its fabric. “I think there was a time in the ’30s when you could have said that about Rockefeller Center,” Mr O’Neill replied, when asked if Hudson Yards was too removed from the rest of the city. Whatever its artistic merits, he argued, Related had answered a question uttered since it embarked on the project in the days after the 2008 financial crisis: “Could you get companies to move there?” One company that has helped supply that answer is Milbank, the august Wall Street law firm that long served the Rockefeller family. For decades, Milbank was based at One Chase Manhattan Plaza, a downtown skyscraper that was considered a bold attempt to revitalise a flagging Wall Street when it went up in 1961. Its designers commissioned no fewer than 20 distinct ashtrays to match its interiors.

S executives and officials are threatening to stay away from Russia’s premier economic forum in response to Moscow’s continued detention of prominent American investor Michael Calvey amid growing anger at his treatment. Jon Huntsman, the US ambassador to Russia, said he would not attend the St Petersburg International Economic Forum while Mr Calvey remained in jail, and no important US company leaders have made plans to attend the June event, according to people with knowledge of the situation. Mr Calvey set up Baring Vostok 25 years ago and the fund is now

its 2014 annexation of Crimea. “There is damage to the investment climate [by the Calvey case] and a lack of international presence in St Petersburg would be a clear sign of that,” said one senior foreign executive in Moscow. Mr Huntsman, who has been a strong advocate for deepening US-Russian corporate relations in recent years, told representatives of American businesses in Russia last month that as long as Mr Calvey remained in jail, he would not attend SPIEF. A spokesman for the US embassy in Moscow declined to comment. “Accreditation for the forum is open and will continue up to the start of the event,” the

the largest private equity investor in the country. He was arrested last month on suspicion of defrauding Vostochny Bank of Rbs2.5bn ($37m) and has been denied bail. The 51-year-old, who denied the charges, said the case was being used to pressure him and his fund as part of a corporate dispute with another shareholder in the bank. Since the opening of the investigation, which President Vladimir Putin is understood to support, several US businesses have cancelled planned investor trips to Russia or sought advice regarding the safety of their American employees in the country, people with knowledge of the discussions told the Financial Times. “It is hard to overestimate how freaked out people are . . . and the depth of people’s apprehension,” said one of the people, who declined to be named owing to the sensitivity of the case. “People used to tell themselves that X, Y or Z happened to someone because they did not follow the rules or were too political,” they added. “The reason the Calvey case has been so disturbing and game-changing is that with him it is impossible to construct that narrative . . . If he is in jail, it could happen to anyone.” Many prominent US investors in Russia or senior executives at American companies operating in the country are friends with Mr Calvey and his family. Russia’s largest foreign business lobby groups have called for his release, while several prominent Russian executives have publicly voiced their support for him. Mr Calvey’s arrest has further damped foreign investor appetite in Russia, already battered by the geopolitical fallout from souring relations between Moscow and the west, and the impact of sanctions imposed by the US, EU and others against Russia for

organisers of SPIEF said, adding that the US delegation is traditionally one of the largest. SPIEF is Russia’s most prominent corporate event, and last year was attended by eight US chief executives including Boeing International head Marc Allen, in addition to Mr Huntsman and the heads of energy groups Total, BP and Royal Dutch Shell. Russia has sought to use SPIEF to present itself as a global business and trade power. President Emmanuel Macron of France, Indian prime minister Narendra Modi and Italy’s former prime minister Matteo Renzi have been guests in recent years. The Kremlin dismissed the threat of a reduced US presence, saying it had not been confirmed. “You can recall these messages every year before the Petersburg Forum . . . in which some kind of boycott, non-arrival, and so on are predicted,” Dmitry Peskov, the Kremlin’s spokesman, told reporters. “Until now, all such messages have not been confirmed . . . We are counting on the same activity this year [as previously].” Mr Peskov said he knew of the concerns over Mr Calvey. “Every time, we assure our trade and economic partners that Russia was, is and remains committed to the main goal of creating the most comfortable conditions for foreign business and foreign investors here in our country,” he added. Herman Gref, chief executive of Russia’s top lender Sberbank, which is one of the event’s four general partner organisations, said he hoped the charges against Mr Calvey were a “misunderstanding”. Baring Vostok said in a statement that it had “often attended SPIEF and see it as an important event. As to this year, we haven’t had a chance to think about it.”

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understanding the economy of nigeria’s 36 states

he purpose of this series is to present evidencebased picture of Nigeria vis-a-vis the current presentations by politicians and various interest groups which are not backed by facts and figures. Such presumptuous speculations have driven the various national discourses or debates on the future of Nigeria, including such thorny issues as restructuring, whether fiscal, political, geographical or administrative. Facts are sacred, they say, and as such must be given priority in our search for national viability and survival.

‘Understanding the Economy of Nigeria’s 36 States’ series presents such an objective, dispassionate picture of the state of the economy and so viability and sustainability of the various component parts, sub-nationals or federating units of the country going forward. This series will serve to either buttress or discountenance some of the claims made on both sides of the restructuring argument. The series, written by Cambridge-trained economist, Dr. Ayo Teriba, looks at each state at a glance in the

context of its geopolitical zone and as it compares to other states. The data present irrefutable facts about each region and its component states and raise the question: are they viable as constituted today and going forward? Each series examines a state’s realities from the perspectives of economy, resource endowment, state of wellbeing of its populace, and its budget (revenue and expenditure profile). Today’s edition, covering Benue State in the NorthCentral region, concludes the series.

Benue Benue State Summary • Economy Benue’s GSP was 2.9 percent of Nigeria’s GDP in 2017, 3rd in the 7 North-Central, 4th in the North, and 7th in Nigeria. Agriculture was 76 percent, Services was 17 percent and Non-Oil Industry was 7 percent. Benue contributes 10.8 percent of all agricultural output produced in the country, 2nd, only to Niger State, in the North-Central, the North and in Nigeria. • Endowments Land Area of the State is 3.39 percent of Nigeria’s land mass, 3rd in the North-Central, 9th in the North and 11th in the country. With no coastline, the States shares a boarder with Cameroon and is encircled by six other States; Enugu and Ebonyi from the South-East, Cross River from the SouthSouth, Taraba from the North-East, and Nasarawa and Kogi from its region.

Industrial output in Nigeria, 3rd in the North-Central and the North, 7th in the Country. Manufacturing (majorly Cement and Food, Beverage and Tobacco) dominated 93 percent of the State’s non-oil output. * N568.9 billion Service output in Benue State was 0.9 percent of Nigeria’s Service output, 2nd in the North-Central behind FCT, 6th in the North and 17th among the 36 States and the FCT. Inter-State Comparisons With a Gross State Product (GSP) of N3.4 trillion or 2.9 per cent of Nigeria’s GDP in 2017, the 3rd among the 7 North-Central States, 4th in the North, and 7th in Nigeria. Benue’s 6 million Population is 3.0 percent of national population, the largest population in the North-Central, 6th in the North and 9th in Nigeria. Benue’s Land Area of 30,800/km2 is 3.39 percent of Nigeria’s land mass, 3rd in the North-Central, 9th in the North and 11th in the country. The State’s Revenue of N62.4 billion is 2.08 percent of all States’ total revenue, the 2nd in the North-Central, 6th in the North, and 15th among the 36 States and FCT.

• Wellbeing Benue’s population is 3.0 percent of national population, 1st in the North-Central, 6th in the North and 9th in the country. The State is the 25th most densely populated, 19th in literacy, and has the 25th life expectancy of 48 years in the country. Benue’s Per Capita GSP of N653 thousand is the 3rd among the North-Central States, 5th in the North and 9th in the country. • Budget Benue retained 2.1 percent of States’ revenue in 2017, 15th in the country; expended 2.8 percent of States’ outlays, 11th in the country; incurred a deficit, and held 1.9 percent of States’ total debt, 24th in the country.

1. Economy Structure Benue’s estimated Gross State Product (GSP) in 2017 was N3.4 trillion or 2.9 percent of Nigeria’s GDP, 3rd among the 7 North-Central States, 4th in the North, and 7th in Nigeria. Agriculture was 76 percent, Services was 17 percent and Non-Oil Industry was 7 percent.

2. Endowments Benue State was created by the splitting of the Benue-Plateau State into Benue and Plateau States in 1976. Benue has no coastline, shares a boarder with Cameroon to its South-East and shares boundaries with six States, Nasarawa to the North, Kogi to the West, Enugu, Ebonyi, Cross River to the South, and Taraba to the East. Benue State’s 30,800/km2 land area is 3.39 percent of Nigeria’s land mass, 3rd in the North-Central, 9th in the North and 11th in the country. Major towns are cities in the State are; Makurdi, Agatu, Gboko, Buruku, Guma, Gwer, Logo, Oju, Ado, Apa, Katsina-Ala, Obi, Ohimini, Okpokwu, Tarka, Konshisha, Otukpo, Ukum, Vandeikya, Ushongo.

* N2.578 trillion Agricultural output in the State was 10.8 percent of all agricultural output produced in the country, 2nd to Niger State in the North-Central, the North and in Nigeria. • N2.572 trillion in crops was 99.77 percent of the State’s agricultural output, • N4.4 billion, was livestock, and • N1.5 billion, was fishery, • Forestry was Nil. * Benue State’s N239.8 billion 2017 Non-Oil Industrial output was 1.6 percent of the gross Non-Oil

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Wednesday 13 March 2019

understanding the economy of nigeria’s 36 states 3. Wellbeing

4.1.2.1 Revenue Benue State’s 2017 actual total revenue of N62.4 billion was 2.08 percent of all States’ actual total revenue, 2nd in the North-Central, 6th in the North and 15th among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N31.8 billion was 2.17 percent of the total allocations to all States and FCT, the 3rd in the North-Central, 8th in the North and 16th in the country. • Internally Generated Revenue of N15.2 billion was 1.99 percent of total, 3rd in the North-Central, 6th in the North and the 14th among the 36 States and FCT. • Value Added Tax of N10.9 billion was 2.3 percent of States’ total, the largest in North-Central, 6th in the North, and 11th in the country. 4.1.2.2 Spending The State’s actual total expenditure of N106.6 billion in 2017 was 2.89 percent of actual total spending by all States, the 2nd in the North-Central, 5th in the North and 11th in the country. The spending components in 2017 were: • Recurrent Spending of N87.1 billion was 3.29 percent of the recurrent outlays of all the States and the FCT, 2nd in the North-Central, 5th in the North, and 9th in the country. • Capital Spending of N19.6 billion in the State was 1.88 percent of States and FCT’s total capital outlays, 2nd in North-Central, 9th in the North and 17th in Nigeria. 4.1.2.3 Deficits Benue was one of the 25 States and the FCT in Nigeria that had deficits in 2017. The State made an overall deficit of N43.2 billion, the 2nd deficit among the 5 States that had deficit in NorthCentral, 6th among the 17 States that had deficits in the North and 9th among the States that had deficits in the country. 4.1.2.4 Debt Total outstanding debt of N85.7 billion in the State was 1.9 percent of the States and FCT’s total debts, 4th in the North-Central, 11th in the North and 24th in the country. • Domestic Debt of N74.9 billion in December 2017 was 2.2 percent of States and FCT’s domestic debts, ranks 4th among the North-Central States, 9th in the North and 17th in the country. • Foreign Debt of N10.8 billion in December 2017 was 0.9 percent of the total foreign debts of the States and FCT, ranks 4th in North-Central, 12th in the North and 29th in the country.

Benue State’s population of approximately 6.0 million is 3.0 percent of national population, the most populated State in the North-Central, 6th in the North and 9th in the country. With a land area of 30,800/km2, Benue State has a density of 195 people per km2 compared to the country average of 219/km2, the 4th in the North-Central, 10th in the Northern region and 25th among the 36 States and FCT. Benue’s literacy is the 4th in the North-Central, 4th in the North and 19th in Nigeria. The State’s life expectancy of 48 years is the 4th in the North-Central, 10th in the North and the 25th in Nigeria. Female life expectancy of 50 years is the 5th in the North-Central, 10th in the North and 25th in the country. Male life expectancy of 46 years retains the 5th in the North-Central, 10th in the North and 25th in the Country. Benue’s Per Capita GSP of N653 thousand is the 3rd among the North-Central States, 5th in the North and 9th in the country.

4. Budget

2013-2017 Trends 4.1.3 Total Revenue: Benue’s Total Revenue declined slightly from N66 billion in 2014 to N62.4 billion in 2017. The decrease in revenue came from gross statutory allocations (GSA); while internally generated revenue grew, and value added tax proved resilient in the face of global oil price slump and concomitant recession in the national economy.

Total Spending: Despite revenue decline, Benue’s Total Spending grew from N71.1 billion in 2014 to N106.6 billion in 2017; recurrent spending increased from N56.6 billion in 2014 to N87.1 billion in 2017, while capital spending increased from 14.5 billion in 2014 to N19.6 billion in 2017.

4.1. Fiscal Realities of Benue State 4.1.1 2018 Aspirations Benue State’s 2018 budget of N190 billion is 2.05 percent of all States’ and FCT’s 2018 budget, 2nd in the North-Central, 6th in the North and 15th in the country. 4.1.2 2017 Realities

Revenue Use: Benue has incurred current deficits since 2016, and a widening overall deficits since 2014. Financing: • Revenue financing: overall deficits were 7.5 percent of total revenue in 2014, and 70.9 percent in 2017. • Spending finance: overall deficit as a fraction of total spending was 7 percent in 2014, and 41.5 percent in 2017. • Capital finance: overall deficits as a fraction of the capital budget was 34.4 percent in 2014, -103.5 percent in 2016, and 226 percent in 2017. Benue’s Debt • Domestic debt stock tripled from N24.9 billion in 2013 to N74.9 billion in 2017, from 38.6 percent in 2013 to120 percent of revenue in 2017. • Foreign debt stock rose from N4.8 billion in 2013 to N10.8 billion in 2017, from 7.4 percent of revenue in 2013 to 17.3 percent in 2017. • Total debt stock rose from 46.1 percent of revenue in 2013 to 137.4 percent in 2017.

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BUSINESS DAY

OIL

Senegal: Subsea 7 bags engineering studies deal in Senegal Page 52 GAS

Ghana: Ghana Gas to monetize vital gas product by mid2019

Page 53

Market Insight

L-R : Bamidele Abayomi, general manager, Nigerian Content Development and Monitoring Board (NCDMB) ; Simbi Wabote, executive secretary, NCDMB, and Funmi Ogbue, managing director, Jake Riley Limited, during the Nigerian Oil and Gas opportunity fair press conference in Lagos.

Debrief

Nigeria’s crude oil cargoes still attracting few buyers FRANK UZUEGBUNAM (with agency reports)

Oil drops 1 percent as economic outlook weakens Page 57 OPEC weekly basket price DAY

PRICE

8/3/19

64.78

7/3/19

65.57

6/3/19

65.94

5/3/19

64.98

4/3/19

64.86 Source: OPEC

here is no respite for Nigeria’s crude as it is still attracting few buyers on the spot market. Offer levels provide little value compared with rival grades from the Mediterranean, North Sea and Latin America. Less than 10 Nigerian cargoes remained from the March loading programme, and around 40 April-loading cargoes are yet to be taken. “Buyers have pulled back quite a bit and we may be in for a bit of a waiting game on the Nigerian front,” according to market sources reported by S&P Platts. High freight costs into Europe were another factor pressuring Nigerian crudes. Although Suezmax freight rates has fallen since peaking at multi-year highs late November, freight rates were still higher year on year. The West

Africa to UK Continent trip was assessed at $10.11/mt according to S&P Global Platts data, compared with $6.95/mt on March 5, 2018. “March Nigerian value was over-hyped and there appear to be pressures on competing Mediterranean grades that will affect Nigerian April crude. Urals, CPC, Sahara, and Libyan, especially as El Sharara is expected to be back,” a market source said. “Northwest European buyers might consider West African grades to be on the expensive side. The structure is not helping a lot. The North Sea has come off a bit, so competition for Nigerian grades is stronger. Just on an economic perspective, people will swing away from West African crude. Current linear programming runs would signal that as well,” according to the source. Linear programming is a model used in refinery planning and scheduling in regards

to what grades to select to optimize refinery runs and yields. Some traders, however, were not expecting North Sea crude to displace West African grades just yet, with one trader saying the distillate yield of West African crudes would keep them competitive. North Sea BFOE grades saw significant downward movement, weighed on in part by large arrivals of US crude into Europe while Chinese buying eased, sources said. The Dated Brent differential was assessed at minus 56.5 cents/b, down 1 cent/b day on day. The Brent and Forties blend values flipped into negative territory versus Dated Brent in the last decade of February as buying interest vanished to give way to competitive selling activity in the Platts Market on Close assessment process. In the Mediterranean, Kazakhstan’s CPC Blend and Algeria’s Saharan Blend, both light,

naphtha-rich grades, have remained near three-month lows in recent sessions amid weak gasoline and naphtha cracks and, more recently, the restart of output from Libya’s Sharara field after force majeure, which had been in place for almost three months, was lifted. Meanwhile, US imports of Nigerian crude have been sharply lower year on year of late. US Energy Information Administration data showed imports averaged 29,000 b/d in the four weeks to February 22, versus 308,000 b/d in the 2018 period. “With the USAC Philadelphia refiners now largely pulled out of WAF light sweet, the majority of the remaining Nigerian will be dependent on clearing in the prompter European market,” a crude oil trader said. US refineries have increased their intake of waterborne US domestic crude from the US Gulf coast, as well as some via rail tankers, he said.

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by Australian petroleum exploration and production company, Woodside Energy, builds on earlier similar contracts for Subsea 7 in Nigeria, Ghana and Egypt, probably an indication of growing influence of the company as an integrated project developer even as it positions itself for more offshore greenfield and brownfield assignments in Africa. Subsea 7, which recently declared a $4.1

Wednesday 13 March 2019

oil

Senegal: Subsea 7 bags engineering studies deal in Senegal ubsea engineering, construction and services company, Subsea 7 has added an engineering studies contract with a possibility of extending it to engineering, procurement, construction and installation (EPCI) phase for the SNE deepwater oil field located offshore, 100 km south of Dakar in Senegal. The new contract, which has been awarded

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billion revenue for 2018 up from $3.98 billion the previous year, has been arming itself for more challenging deepwater and shallow water assignments including investing $155 million in seaway offshore cables and two vessels. The SNE deepwater contract, valued at between $150 million to $300 million, was preceded in April 2018 by the Production Uplift Pipeline Project by Mo-

Brief

Egypt: DEA extends concessions in Egypt bil Producing Nigeria in the country’s shallow waters. The engineering, construction, transportation, installation and pre-commissioning of 20kms of a 24-inch Corrosion Resistant Alloys pipeline between Idoho platform and the terminal offshore in addition to a 2km of 24-inch pipeline between Edop and Idoho platforms as well as associated topside modifications and tie-ins at both ends. In Egypt, the company is leading the development of the West Nile Delta (WND) Gas Development project that entails developing of a series of gas condensate fields, offshore the north coast of Egypt, where Subsea 7 won the contract for the design, procurement, fabrication, installation and pre-commissioning and support to commissioning of subsea and topsides facilities in up to 600m water depth. The contract has been awarded by BP Exploration (Delta) Ltd for the greenfield component and Brullus Gas Company Ltd for the brownfield works.

erman oil company DEA Deutsche Erdoel AG said it has extended its concessions for the Ras Budran and Zeit Bay oil fields in the Gulf of Suez, offshore Egypt. The new agreement extends the concession for five years ending mid-2022. It includes an optional extension of another five years until 2027, subject to mutual agreement. Sameh Sabry, DEA’s general manager, signed the new concession agreement. “I am delighted that we managed to agree on a concession extension. DEA has been active offshore in the Gulf of Suez for more than 40 years. The fields are valuable assets in DEA’s Egyptian portfolio and we see upside potential in these mature oil fields,” Sabry said. Ras Budran and Zeit Bay are among the oldest producing fields in Egypt. To increase production from these fields in the Gulf of Suez, DEA is currently carrying out a work over campaign for existing wells, drilling side tracks and replacing existing pipelines with new ones of larger

capacity. Additionally, DEA is implementing a plan to maintain the assets integrity through an active maintenance and replacement program. “Joint cross-functional expert teams from DEA Egypt and DEA’s international operations are supporting the activities of our Joint Venture Company Suez Oil Company. With the implemented measures, we are not only working on further increases in production, but we are also sustainably increasing the safety and asset integrity of the infrastructure to the benefit of the environment”, said Sameh Sabry. “DEA’s recent engagement underlines the company’s confidence in the potential of Egypt’s oil and gas industry”, he added.

Libya: Sharara crude oil sees first scheduled exports in three months

he first export cargoes of Libya’s Sharara crude since the lifting of force majeure, the Aframax vessel Balla, by Austrian refiner OMV left for voyage from the western Libyan port of Zawiya to a Mediterranean destination on March 9 at Worldscale 112.5, according to shipping reports. A second Aframax stem, for loading March 11, is also being sought by OMV from Zawiya. Libya’s National Oil Corporation lifted force majeure on operations at the grade’s field after almost three months following the removal of an armed group that had occupied the site. The

300,000 b/d Sharara field has been shuttered since December 8, 2018 after armed groups, with the help of local people, occupied the site in protest at economic conditions and frequent power outages in the south of the country. Trading sources said the field is quickly ramping up production for exports over the course of the week. “NOC started at up to 80,000 b/d. We understand they should reach 300,000 b/d or slightly less soon, so we will see roughly that amount more on the market,” a trading source said. At least seven cargoes of Sharara are estimated

to load before the end of March, according to multiple trading sources,

with the additional volume likely to have a bearish effect on similar light

sweet grades in the Mediterranean such as Kazakhstan’s CPC Blend and

Algeria’s Saharan Blend. On the shipping side, previously there have been additional costs for ships to call on Libyan ports, due to civil unrest in the country. The port of Zawiya has higher port costs of approximately $75,000, compared with around $35,000 for the Eastern Libyan port of Es Sider. This can make cargoes loading here more expensive depending on the discharge port, but according to shipping sources, there is no additional premium for loading out of ports in Western Libya and recently these routes have largely seen costs normalize compared to other North African ports.

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gas Brief Mozambique: Anadarko sticks to Mozambique timeline as state boosts security

nadarko Petroleum Corp. said it is sticking to a plan to decide on a $20-billion gas development in Mozambique by the end of June 2019, after the government boosted security following attacks last month near the project site. “The government is providing additional security resources in the area,” Anadarko said in a statement on its website.

“Given this response and other ongoing security measures, we expect to continue moving the project toward FID according to our current schedule.” Anadarko has previously said it will make a final investment decision on the project in the first half of this year. It will be recalled that unidentified gunmen attacked an Anadarko Petroleum convoy near its liquefied natural gas project in northern Mozambique, the first targeting

an energy company since an insurgency by suspected Islamist militants began 16 months ago. At least four people were injured in the raid, the company said in an emailed statement. The February 21 raid, in which an Anadarko contractor was beheaded, was one of multiple attacks in the area that day. Further incidents may threaten the company’s plans to build an onshore LNG processing facility in Mozambique’s Cabo Delgado province, where the government has been battling suspected Islamic insurgents since 2017. “The evidence to date indicates both the convoy and a car belonging to a contractor encountered an existing event, which did not directly target our contract personnel, nor the LNG project, nor airstrip,” it said. The company said that in addition to the fatality, six people were wounded in the attack. Anadarko is expected to spend at least $20 billion on its massive LNG project in Palma, near the Tanzanian border, where more than 100 people have been killed in an insurgency that has also destroyed hundreds of homes. Up to now, the suspected Islamist militants have mainly targeted coastal villages and the government.

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Ghana: Ghana Gas to monetize vital gas product by mid-2019

hana National Gas Company (Ghana Gas) will by the middle of 2019 monetize an essential by-product, known as Iso-pentane, which would be used for power generation. The pentane gas is being flared since the country has not built the capacity to use this particular gas but, Ben Asante, CEO, Ghana Gas, said at a media briefing that by the middle of this year, Ghana Gas will be using the Iso-pentane gas produced for power generation. According to sources at Ghana Gas, two companies have shown interest in using the flared gas for productive purpose, such as the power generation. General Energy (GE) and Marinus Energy, a local company, announced a pilot project in 2018 to capture Iso-pentane gas and use it as a fuel source for generating electricity. The Atuabo Waste to Power Independent Power Project will be the first TM2500 power plant in Sub-Saharan Africa to use Iso-pentane gas as a fuel source and will run on GE’s latest TM2500 gas turbines. The first phase of the project will convert the Iso-pentane fuel into up

to 31 megawatts (MW) of power, generating enough electricity to supply power for more than 100,000 Ghanaian households. Currently, the local power producer operates the 93-MW Atuabo Power Plant. As additional gas is brought onshore, the plant is expected to add on extra

gas generating units up to a capacity of 100 MW. This extra Iso-pentane fuel will eventually be stripped off from an offshore gas supply and processed at Atuabo by the Ghana National Gas Company. In terms of gas reserves, Jubilee Field has associated gas reserves estimated at 490 Billion cubic feet

(Bcf); TEN field has associated gas reserve of 363 Bcf, and Sankofa Gye Nyame has non-associated gas reserves of 1,107 Bcf. When finally developed, the Mahogany and Teak discoveries will give the country total reserves of 120 Bcf, exclusive of the discoveries made by Aker energy at the Pecan Fields.

Egypt: February LNG exports at 391.3m cubic metre, up 44 percent on month

xports from Egypt’s Idku LNG terminal in February 2019 jumped 44 percent month on month to 391.3 million cu m, with Turkey absorbing the surplus, an analysis by Platts shows. This is the highest volume of LNG exports from Egypt since May 2013. Four cargoes were sent during the month, two of which went to Turkey, one to France and one to Singapore. Turkey was the leading destination of Egyptian LNG in January and

February, with three cargoes delivered for a total of 273.4 million cu m. France, China, Japan and Singapore imported one cargo each over the same period. France had been the main importer since the beginning 2018 but Egyptian volumes have fallen this year due to increased supply from both Russia and the US. The terminal was largely idle in the early part of the decade, sending just one cargo per month, but exports resumed in the fourth quarter of 2018.

The Egyptian government plans to increase its exports further thanks to the ramp-up of the Zohr gas field. S&P Global Platts Analytics forecasts Egypt’s domestic monthly natural gas production to expand by more than 810 million cubic metre before the end of 2019 through incremental production from BP’s West Nile Delta and Eni’s Zohr projects. Egypt is also expecting to start imports of gas from Israel in the near term. “Recently, production

growth from these projects have brought Egypt into a notable gas surplus, in turn allowing the Idku LNG export facility to ramp up from marginal utilization to around 35 percent utilization in Q4,” it said. In addition, Shell said last month that it will deepen its commitment to Egypt’s upstream by taking the largest number of awards in the country’s latest licensing round. It also plans to bring gas from Cyprus and Israel to use at Egypt’s LNG export facilities.

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ment Bank, World Bank and European Union will ensure that Gambia benefits from the most cutting-edge technical experience in the industry from around the world, and become a model for renewable energy for the rest of Africa,” said Ousainu Darboe, Vice President of the Republic of Gambia. “The European Investment Bank is committed to supporting climate action around the world. As the EU Bank, the EIB is pleased to support our first project in Gambia

since 1991 and provide EUR 65 million for this transformational project in cooperation with Gambian, international and European partners. “Connecting one of the largest solar power plants in West Africa to communities across Gambia will increase access to clean energy, create new economic opportunities and improve health and education for future generations.” said Andrew McDowell, European Investment Bank Vice President responsible for energy.

Wednesday 13 March 2019

power

Gambia: European Investment Bank backs €142m clean power initiative ambia is set to be transformed under a new €142 million initiative to harness solar power and supply clean energy across the country, backed by the European Investment Bank (EIB), World Bank and European Union. In a statement released by EIB, the Bank confirmed that the initiative will include solar and battery technology; 20MW solar energy and 400km distribution project to transform energy access and cut costs. Once operational, the scheme will increase energy supply in the Gambia by one fifth and transform electricity access in rural communities through construction of a new photovoltaic plant at Jambur near Banjul, new power transmission and distribution infrastructure. “Investment in Gambia’s energy infrastructure is essential to improve economic opportunities and daily lives in our country and this new project demonstrates how harnessing the power of the sun can power Gambia in the years ahead. “The close cooperation between Gambia and international partners such as the European Invest-

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“The Gambia will be the first country in Africa, if not the only country in the world, to have provided renewable energy electrification for all public school and health facilities. The Project is designed to assure the sustainable provision of electricity powered by the solar systems for at least 20 years and to lay the groundwork for a national solar energy industry to provide additional services in the future.” said Attila Lajos, European Union Ambassador to the Republic of Gambia.

South Sudan: Clean energy for Africa by Africans makes appearance in South Sudan

gandan-based Aptech Africa, a solar energy and water solution specialists, recently successfully designed, built and installed the first offgrid solar-battery hybrid power system in South Sudan. This USAID funded project, developed by AECOM International, incorporated a one-of-a-kind containerised PV storage solution by South Africanbased Sustainable Power Generation (SustainPower). In record time, Aptech Africa planned, installed and commissioned the 79kWp ground mounted solar power system, which feeds a SustainPower 125kWh lithium-ion storage system, SustainSolar. From their office in Cape Town, SustainPower built and delivered its pre-installed, temperature controlled, rugged

SustainSolar 20-foot container, equipped with SMA solar and battery inverters and BYD batteries. This turn-key solution helped to reduce the installation time on site and ensures a safe and tamper-proof operation of this world-class energy management and storage system. In South Sudan’s capital city, Juba, a leading radio station, Eye Radio, is no longer dependent on its old diesel generators. This is thanks to the new solar powered battery system, with engineering support from AECOM International Development, being the radio station’s primary power supply. The diesel generators are now only being used as backup. With the significantly reduced running time of the diesel generators, the fuel savings alone will lead to a speedy payback of the hybrid-storage system.

Côte d’Ivoire: Agreement reached to expand Azito gas-fired power plant

subsidiary of Globeleq, Azito Energie SA, has signed an amended concession agreement with the government of Côte d’Ivoire to add 250MW to the existing Azito gas-fired power plant near Abidjan. The existing power plant currently generates 430MW and plays an important part in the sector. The Phase IV expansion, combined with the technical MXL2 upgrade (being undertaken during 2019 adding 30MW to the plant’s capacity), will see Azito supplying

around 700MW, or approximately 30 percent of Côte d’Ivoire’s installed capacity. Abdourahmane Cisse, Côte d’Ivoire’s minister of petroleum, energy and renewable energy, noted that the signature of the amended concession agreement between Azito and the government of Cote d’Ivoire as an important step in the development of electricity generation. “This decision is part of the policy to control energy on line with the plan currently implemented by the President, Alassane Ouattara. This step is spe-

cifically crucial to answer the growth of electricity demand which has been estimated at about 10 percent. The government of Côte d’Ivoire is also working on several other projects which will enable us to reach the objective set up by President Alassane Ouattara which is to achieve 4,000MW in 2020,” said Cisse. The Azito Phase IV expansion is expected to reach financial close in June 2019 in accordance with the government’s desired target. “The Azito Phase IV tariff is one of the lowest

of the country’s thermal power producers and enables multiple synergies by using existing infrastructure and the expertise of its existing operational team. The Azito power plant will become one of the most reliable and efficient thermal power generation facilities in the region,” Paul Hanrahan, Globeleq’s CEO, said. “This new expansion of the Azito power plant is the outcome of a long and fruitful partnership with the Ivorian State in the energy sector, which began in the late 1990s.

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POLICY

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ENERGY intelligence

Ghana notifies Oil majors of bid evaluation results in offshore license round DIPO OLADEHINDE

nternational Oil companies (IOC) expressing interest in prequalifying for Ghana’s first offshore licensing round have now been notified of bid evaluation results. According to Norway based Upstreamonline, an independent oil and gas firm, a total of 14 suitors have been invited to submit competitive tenders for blocks 2, 3 and 4, located south of Takoradi, a town in the Western region of Ghana. The companies that have submitted applications are Tullow Oil, Total, ENI, Cairn, Harmony Oil and Gas Corporation, ExxonMobil, CNOOC, Qatar Petroleum, British Petroleum, Vitol, Global Petroleum Group, Aker Energy, First E&P, Kosmos, Sasol and Equinor. “The applications include expressions of interest in competitive bidding for three blocks in the Western Basin and for direct negotiations regarding another two blocks offshore Ghana,” Ghana’s energy ministry said in a statement. In support of the six-block licensing exercise, Ghana’s energy ministry said results from a survey carried out by seismic player Petroleum Geo-Services (PGS), comprising 22,600 square kilometres of 3D data and 24,000 lines of 2D data, are now being processed for interpretation and packaging for clients in the third quarter. In focus are tracts extending from the western Tano basin through to the Salt Pond basin off the Central Region, some acreage in the eastern Keta basin on the maritime boundary with Togo, and substantial areas in the Tano deep. Re-binning multiple survey data to a common grid, then matching it to produce “a phase-balanced and uniformly-scaled contiguous volume” helps companies explore for analogues of existing plays, identify new prospects and place field-scale geology in a wider basin-wide context, according to PGS, which is handling data promotion and packaging for the round. Blocks 5 and 6 will be allocated by direct negotiation, while Block 1 is reserved for state player Ghana National Petroleum Corporation. Since the Jubilee field started production in 2010, Ghana’s upstream regulatory frame-

work has undergone significant changes, with the introduction of a new Petroleum Act in 2016. As part of these developments, the government has introduced a new licensing round process and has implemented a new model contract. The new fiscal and regulatory framework will face its first major test of its ability to attract investment in the upcoming licensing round, announced on 15 October 2018. The blocks available in the open, competitive tender are located in relatively lower risk areas, with previous wells having proven the presence of hydrocarbons in each. Some of the interested firms have already started boosting their presence in the country. ExxonMobil, for example, recently signed a deal with Ghana

Snapshot

Since the Jubilee field started production in 2010, Ghana’s upstream regulatory framework has undergone significant changes, with the introduction of a new Petroleum Act in 2016

to explore for oil in the Deepwater Cape Three Point offshore (DWCTP) oilfield. Aker Energy AS, controlled by Norwegian billionaire Kjell Inge Roekke, agreed in February to buy Hess Corporation’s Ghana unit in a $100 million deal, gaining access to a 50 percent stake in the deepwater Tano Cape Three Points block. The block holds an estimated 550 million barrels of oil equivalent in contingent resources and potential for a further 400 million barrels. Ghana wants to be a petroleum hub for West Africa. It has drawn up plans to build four refineries of about 150,000 bpd each in the next 12 years. Ghana’s only oil refinery, the Tema Oil Refinery, processes about 25,000 bpd of oil, far below its capacity.

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Norway’s oil, gas divestment spares biggest producers

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Wednesday 13 March 2019

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South Africa’s Eskom may need more bailouts despite tariff hikes

Brief

orway took a partial step in divesting oil and gas stocks in its massive $1-trillion wealth fund, approving the sale of smaller exploration companies while sparing the biggest producers such as Royal Dutch Shell Plc and Exxon Mobil Corp. After more than a year of deliberation, the government approved excluding 134 companies classified as exploration and production companies by FTSE Russell, including Anadarko Petroleum Corp., Chesapeake Energy Corp., CNOOC Ltd. and Tullow Oil Plc. The proposal would see the fund sell about $7.5 billion in stocks. “It reflects to a larger extent the risk we ourselves have, the bulk of the state’s exposure in

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Norway is upstream activity,” Siv Jensen, Finance Minister said. “We are reducing our vulnerability by choosing to withdraw the fund gradually from this segment.” The government goes part of the way in meeting a 2017 proposal from the fund, which rattled global markets by arguing for a full divestment of the sector to limit Norway’s overall exposure to oil. The plan was hailed as a potential huge step by climate activists, some of whom lamented the limited scope of the decision. The partial move underscores the changing political climate in Norway, where opposition to oil and gas exploration is on the rise. Prime Minister Erna Solberg’s Conservative Party has been a long-time friend to the oil industry.

outh Africa’s struggling state power firm Eskom may need more bailouts from government to survive, after the country’s energy regulator granted it smaller tariff hikes than the utility had wanted. Eskom supplies more than 90 percent of the power in Africa’s most industrialised economy. But it is grappling with cashflow problems, breakdowns at its creaking coal-fired power station fleet and a $29 billion debt burden. The government last month promised Eskom a bailout of 69 billion rand over the next three years, but that is insufficient to cover the revenue shortfalls which will result from the tariff hikes granted by regulator Nersa. Nersa tried to partly shield South African consumers from Eskom’s financial woes, shifting the burden onto government. “There will have to be painful reform for Eskom, and that will have to come from either higher tariffs or the government increasing its expenditure,”

William Jackson at Capital Economics said. “The government will probably have to raise its funding.” Nersa granted Eskom average tariff increases of 9.4 percent, 8.1 percent and 5.2 percent over the next three years, far below the 17.1 percent, 15.4 percent and 15.5 percent Eskom said it needed last month.

The regulator also allowed Eskom to recover 3.9 billion rand from customers for electricity supplied in the 2017/18 financial year, but it has not yet decided when that recovery will happen. Nersa had already granted Eskom a roughly 4 percent tariff increase in 2019/20 as part of an earlier cost recovery application, so the effective tariff

increase felt by South Africans in 2019/20 will be over 13 percent. The exact size of the tariff increases in 2020/21 and 2021/22 has not yet been decided, as it will depend on how the latest cost recovery award will be phased in. But all of the awards are significantly above current inflation, which is running around 4 percent.

mismanagement, a lack of investment and financial sanctions imposed by the US government. Its declining oil exports have led the nation into a severe economic crisis and fueled an exodus of about 3 million residents. Venezuela’s main foreign asset is US-based Citgo Petroleum, an oil refiner that recently appointed with Washington’s support a board of directors independent of Venezuela’s socialist government. “For Venezuela, it is possible to pay Conoco with Citgo’s assets, so this award makes it politically complex for the US government to protect Citgo against creditors if one of the claimants is a US-based company,” said

Francisco Monaldi, an expert in Latin American energy at Rice University’s Baker Institute. While Conoco prevailed in its main claim of damages arising from the expropriation of its assets, the award represents about 40 percent of its claim. ICSID ruled against the company’s request for the loss of future tax credits, which was valued at some $10 billion, the ICSID said. The tribunal’s decision brings Conoco’s total awards under two different Venezuela arbitration cases to $10.7 billion. Under World Bank rules either party to a decision can request to annul the award, which would trigger a stay of any enforcement.

World Bank orders Venezuela to pay ConocoPhillips $8.7bn for seized oil projects

enezuela must pay ConocoPhillips $8.7 billion to compensate for the 2007 expropriation of oil assets by the country’s late socialist leader Hugo Chavez, the World Bank ruled, making the US energy company the largest victor in claims stemming from nationalizations in the OPEC country. The company may have to fight to collect. Venezuela has balked at paying in other arbitration cases and may challenge the World Bank tribunal’s decision. Conoco previously has used legal seizures of Venezuelan oil assets to enforce its claims. The oil company had sought up to $30 billion for the takeover of three oil projects more than 10

years ago, according to a World Bank report. The tribunal, known as ICSID, found the takeover unlawful in 2013 and two years ago rejected the OPECmember country’s request

for reconsideration. The tribunal said Conoco could not seek double recovery. It was not immediately clear how that finding would affect the total $8.7 billion award.

The past award covered two of the company’s three oil projects in Venezuela. Venezuela’s oil production has fallen to an almost seven-decade low due to

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ENERGY intelligence OPEC Flakes OPEC February crude oil output falls by 60,000 b/d

Oil drops 1 percent as economic outlook weakens

il prices fell about 1 percent after disappointing US job growth revived concerns about a slowing global economy and weaker demand for oil. With surging US oil supply also unsettling markets, Brent crude futures fell 56 cents, 0.8 percent, to settle at $65.74 a barrel. The international benchmark gained 1 percent for the week. US West Texas

Intermediate (WTI) crude futures fell 59 cents, or 1 percent, to settle at $56.07 a barrel. WTI rose 0.5 percent for the week. The European and U.S. economic weakness comes as growth in Asia is also slowing. China’s dollardenominated February exports fell 21 percent from a year earlier, representing the biggest drop in three years and far worse than analysts had expected, while imports dropped 5.2 percent.

So far oil demand has held up, especially in China, where imports of crude remain above 10 million barrels per day (bpd). Yet a slowdown in economic growth could eventually dent fuel consumption and pressure prices. On the supply side, oil has received support this year from output cuts led by the Organization of the Petroleum Exporting Countries. Saudi Arabia’s crude oil production in February fell to 10.136 mil-

lion barrels per day (bpd),. US sanctions against the oil industries of OPEC members Iran and Venezuela have also supported futures. But the United States is giving individuals and entities more time to wind down certain financial contracts or other agreements related to Venezuela’s state-owned oil company, the US Treasury Department’s Office of Foreign Assets Control (OFAC) said.

EIA: South Korea overtakes China as No. 2 destination for US crude in 2018

outh Korea overtook China as the No. 2 destination for US crude behind Canada in 2018, as shipments to South Korea soared to a record high of 558,000 b/d in December while shipments to China have started to return from zero, according to Energy Information Administration data released recently. The incentive to ship US barrels to North Asia was strong in October and November 2018. For example, WTI on a delivered-basis into North Asia held a-88 cent/b discount to ADNOC’s

Murban over October and a $2.10/b discount to Russian ESPO. These spreads were still largely workable in November as well. And while WTI’s discounts were largely eroded in December, spreads have again widened so far in 2019, suggesting exports to the region are likely to pick up. The US sent an average 236,000 b/d of crude to South Korea and 228,000 b/d to China in 2018. Canada remained the top customer on an annual basis for 2018, but South Korea took the top spot for December. The US sent an

average of 378,000 b/d of crude to Canada in 2018, with December exports at 431,000 b/d. December US crude exports to South Korea are up from 351,000 b/d in November and 50,000 b/d in December 2017. The US exported 97,000 b/d of crude to China in December, a sign that the flows might be returning after they disappeared in August, September and October over trade tensions. The December exports follow an average of just 8,000 b/d in November. Before crude became col-

lateral damage in the trade war, US exports to China set a monthly peak of 510,000 b/d in June. US refined oil product exports to China last year did not take the same plunge as crude exports. The US sent 5.74 million b/d of refined products to China in December, down from an all-time high of 6.06 million b/d in November. The UK and Netherlands were tied for third top buyer of US crude in December at 241,000 b/d, up from 189,000 b/d for the UK and down from 282,000 b/d for the Netherlands.

audi Arabia’s continued output discipline and Venezuela’s struggles under US sanctions led OPEC’s crude oil production in February dip by 60,000 barrels per day to lower than 30.80 million b/d. The figure is OPEC’s lowest output level since March 2015, when Gabon, Equatorial Guinea and Congo had yet to join the organization but Qatar was still a member. Despite the fall, OPEC still has more cutting to do to fully comply with its supply accord that went into force in January. The 11 members with quotas under the deal achieved 79 percent of their committed cuts in February, and remain 170,000 b/d above their collective ceiling. This is a slight improvement on January’s 76 percent, with Nigeria and Iraq producing far in excess of their cap, according to Platts calculations. Venezuela and Iran, both under US sanctions, and Libya, where instabil-

ity continues to impact output, are exempt from the deal. The agreement, which runs through June, calls on OPEC and 10 non-OPEC allies, including major producer Russia, to cut a combined 1.2 million b/d in supplies to help shore up oil prices. The February output figures will be reviewed by a six-country monitoring committee of the

OPEC/non-OPEC coalition, which meets March 18 in Azerbaijan to discuss market conditions and assess compliance with the deal. The committee is cochaired by Saudi Arabia and Russia. Saudi Arabia, OPEC’s largest producer, has made good on its pledge to lead the coalition by example, slashing its output to 10.15 million b/d in February, the survey found.

Libya’s biggest oil field restarts, adding hurdle to OPEC cuts

ibya’s biggest oil field resumed production, adding another complication to OPEC’s effort to trim a global supply glut. Sharara resumed production and is expected to reach 80,000 bbl in one day. Regular output will be fully restored in the coming days, now that the site has been re-secured after a threemonth occupation at the site, state energy producer National Oil Co. said in a statement. The field in southern Libya has a capacity of 300,000 bopd. It was shut down in December 2018 after guards and armed residents seized it over financial demands and was then taken over last month by forces loyal to eastern militia leader Khalifa Haftar. The NOC “has received assurances that site security has been restored, verified by our own inspection team, enabling staff to return to work,” Chairman Mustafa Sanalla said in the statement, which urged that

the oil company remain “free from extortion and armed incursion.” The shutdown led to $1.8 billion in lost production, according to the statement. The company officially lifted its declaration of force majeure, a legal status protecting the NOC from liability if it cannot fulfill a contract for reasons beyond its control. Plans are also in place to repair 20,000 bpd of production capacity destroyed by looting and vandalism during the blockade, according to the statement.

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ENERGY intelligence

59 talking points BUSINESS DAY

26 years after due date, Nigeria’s PSCs have not been reviewed STEPHEN ONYEKWELU

igeria loses large chunks of revenue to the delayed review of its Production Sharing Contracts (PSC), despite the Supreme Court’s October 17, 2018 judgement. Experts have said it will take series of negotiation between IOCs and the Federal Government to fix it. According to the provisions in Section 16 of the law governing the PSCs, the contracts ought to have been reviewed first, in 2004 (when real oil prices exceeded $20 per barrel); and secondly on 1st January 2008 (15 years from 1st January 1993). In its judgment, the Apex court mandated the Attorney General of the Federation to recover all lost revenue from failure to review the terms of these PSCs. It is also critical because production from PSCs has outstripped production from Joint Ventures (JVs), and production from PSCs constitutes now the largest component of oil production in Nigeria, according to the latest Policy Brief from the Nigeria Extractive Industries Transparency Initiative (NEITI). “You cannot change the rules of a game in the middle of play. The International Oil Companies have made investment projections based on existing fiscal regime. To change this requires negotiations between

the government and concerned parties” Henry Ademola, team leader at Facility for Oil Sector Transformation (FOSTER). To calculate the losses Nigeria has incurred, NEITI made use of financial modelling analysis, the standard methodology in the industry, applied it to data on production, oil prices and the applicable fiscal regimes to arrive at comparative revenue figures for the period 2008 - 2017. The results show that if the PSC contracts had been reviewed in 2008, and the fiscal regime from the 2005 PSC licensing round had been applied, additional revenue to the Federation between 2008 and 2017 would have been higher by between $16.03 billion and $28.61 billion. Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts specifies that: “the provisions of the Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $ 20 per barrel, real terms, the share of the Government of the Federation in the additional revenue shall be adjusted under the Production Sharing Contracts to such extent that the Production Sharing Contracts shall be economically beneficial to the Government of the Federation.” Section 16 (2) states that; “Notwithstanding the provisions of subsection (1) of this section, the provisions of this Decree shall be liable to review after a period of 15 years from the date of commencement and

Snapshot

The National Nigerian Petroleum Company (NNPC) should follow international best practices and make the contracts with oil companies’ public in other to ensure transparency and maximum government take, as Nigerians can properly scrutinise such contracts and draw attention to areas of improvement every five years thereafter.” NEITI made the following recommendation at the end of its March Policy Brief: The Federal Government through its appropriate agencies should commence urgent process to review the PSC agreement with oil companies now not later. That the FG should note that the affected contractors have expressed willingness to negotiate these terms and therefore they

and the state governments should be carried along in the review process. The National Nigerian Petroleum Company (NNPC) should follow international best practices and make the contracts with oil companies’ public in other to ensure transparency and maximum government take, as Nigerians can properly scrutinise such contracts and draw attention to areas of improvement.

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Opinion

The academia and 2019 elections: Where is the hope?

Franklin Ngwu (PHD)

oincidentally during a casual visit to a very senior friend on Tuesday 26th February, I met an unexpected audience of about 6 senior citizens watching the announcement of the presidential election results. Upon my introduction by my host, they all in unison asked why the academia especially the Vice Chancellors are seemingly more excited in working as INEC ad hoc employees than as employees and heads of our universities. To this I had no answer but tactfully appealed to them to find out from some of their friends who are vice chancellors. But truly, the sudden emergence and disappearance of the academia during and after the elections without any meaningful intellectual contribution is very sad, lamentable and clearly reflects signs of a failing society. No research or opinions before the election and none after! Who has really bewitched Nigeria? A friend, an Associate Professor of Law who worked as one of the collation officers confirmed that the main interest of many academics in the election work is purely because of the money they will make not only from INEC but also from the numerous political par-

ties. These are academics! Intellectuals! Even as the pre and post-election problems, challenges, accusation and counter-accusations continue, the academia is most surprisingly and lamentably very silent. Are they also in a kind of intellectual recession? Given the increasing number of universities in Nigeria, the reverse should be the case, the academia should be in the forefront of generating ideas and solutions on how to address all the election and wider socio-economic and political problems we have. The sustainable growth of most successful economies to a large extent depends on the tripod framework and relationship of the government, the academia and the private sector. The middle position of the academia is not accidental! It is strategic and normally protected and supported meticulously. Reason being that the academia performs a kind of fiduciary duty to the society. Through robust conceptual, theoretical and empirical research, they generate the ideas and policies used by both the government and the private sector. They are a kind of power house of ideas and innovation, a guardian, protector and trustee for a better society. Remember they are called the citadel of learning. It is a place where all kinds of skills and human capital are trained and developed. An environment where visionary leaders are identified, properly trained, moulded and announced to wider society for effective utilisation to achieve our common good. It is sad and painful that the only time we properly hear of our academia is during the announcement of an impending or imminent industrial action or their unending negotiation

‘

... the main interest of many academics in the election work is purely because of the money they will make not only from INEC but also from the numerous political parties

with the Federal Government. I was even informed that another strike is likely as the INEC contract has ended. Rumour has it that the strike was called off initially to enable participation in the election bonanza as the Federal and some state governments are yet to fulfil their promises. The economy is in crisis, security in crisis, agriculture and food production in crisis, unemployment unbelievably high and in crisis, election and governance in crisis! Everything in crisis in our dear country and nation! As citadels of learning and research, Nigeria wants and need to hear the views and positions of the academia on so many issues and challenges confronting us as a nation. When I say that we want to hear from them, I don’t mean the very few individuals that infrequently contribute to our myriad of challenges and problems. I am referring to well researched position papers from groups of academics. For instance, on the recent 2019 elections, we need to hear from our vice chancellors and professors on the accusations and counter-accusations of rigging, vote buying, card reader problems, conclusive presidential election and inconclusive governorship elections and many more. Is it not possible for the committee of vice chancellors based on their direct participation and experience with the elections to commission and author a report on reforms needed and then threaten and ensure non-participation of vice chancellors in subsequent elections if their report is not fully implemented. If they are not interested in preparing another report, they can insist that previous reports such as Uwais or Nnamani Reports are fully implemented

to guarantee their further participation. We cannot continue to claim to be intellectuals when in brazen atrocities and irregularities, we maintain a debauched unconsciousness and sometimes even collude and affirm immorality with our revered credibility and moral fortitude. A professor is the highest rank in a university. It is awarded to a person who internally and externally affirms to a faith or pledge an allegiance to the good of the society through what he professes, avows and practices. As PMB has been declared the winner, we desperately need to see and read the views and suggestions of the Department of Economics, University of Lagos or a paper jointly authored by about 10 professors of Economics and Finance on how best to salvage the economy. For instance, is the ERGP good enough and should we restructure or not. It is the same expectation that we have for Department of Economics/Finance of most of our universities especially the key regional ones such as- Nsukka, Ibadan, Port Harcourt, Jos, ABU Zaria and Maiduguri. The issues and problems we desperately want to hear from our academia are many but they are disappointingly very silent. With robust and healthy debate and suggestions, I am convinced that our key national problems will be better addressed. It is how it is done in other developed and developing economies. Why should our own be different? Continues online at www.businessday.ng

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@lbs.edu.ng

Education and the 2019 federal government budget proposal francis IYOHA

he annual government budget is a mirror into the culture of a country. Therefore, anyone who desires to understand the culture of a country should take a look into the annual budget and especially the education component thereof. This is because education is one of the objects of the highest importance to the welfare of any society. There is no country that can rise above the quality of the education it provides. In the quality of education of a country lies the answers to the miasma that beclouds the sensitivity of people in all areas of life. In Nigeria, there is no meaningful development that can take place unless and until the education sector is redeemed from the present state of chaos. Issues concerning education in Nigeria are currently at the short end of national discourse. Consequently, the bricks of the university system in Nigeria have fallen down and the sycamore tree of its glory cut down. The time has come, therefore, to begin to think of rebuilding the system with hewn stones and cedars of academic excellence and the starting point is the annual budget. The annual

budget should present just an adequate view of the education sector at all times and this has not been done in the context of the 2019 budget proposal. The budgetary provision for the education sector for the 2019 fiscal year provides no indication that the government realizes the central role of education in national development. The N620 billion provided for represents 7.02 % of the entire budget of N8.83trillion. The average provision in the last two and a half decades had been about 8%.This is far lower than the UNESCO range of 15% - 20% provision. Of the E9 countries to which Nigeria belongs, the average annual budgetary allocation to the education sector is 20% except for Nigeria. Among Africa countries, in terms of allocation to the education sector as a percentage of GNP, Nigeria is not anywhere close to the top percentile. No wonder, the World Bank forecasts that by 2030, Nigeria will harbour 90% of the world’s poor people. This can’t be controverted since Nigeria has not even understood the import of the Sustainable Development Goals (SDGs) in which education is the flagship. The allocation to the education is paltry but given the current size of the economy, it might not be possible to increase the allocation much more than it is currently. But a lot could be done to better manage and maximize whatever resources that are available. Value for money is of the essence in the situation in which the country has found itself. Of the proposed N620billion, a large chunk, in the sum N539billion is

provided for personnel emoluments while N33billion is for overheads and a lamentable sum of N47.29 billion, representing 7.6% for capital expenditure. This model of allocation of resources won’t take the education sector anywhere edifying. It is even curious that of the N47.29billion, N3 billion is provided for Security Infrastructure in the 104 Unity Colleges. The Unity Colleges were designed to achieve some national objectives and the question is: are these colleges still relevant in the context of their initial mandate? I guess not. It is high time that the various States where these colleges are located took them over to enable us to stop subsidizing the budget of a few privileged Nigerian whose children and wards are students of the colleges. Why, for instance, should the sum of N3billion be provided for ‘fencing’ of the colleges in one budget year? Why can’t the colleges fund the expenditure from their resources? It is also laughable that in a typical Federal University, for instance, personnel cost component of total budgetary allocation is over 95%. This suggests that the Universities are unnecessarily overstaffed. It would be necessary to carry out staff audit in these universities. If the exercise is diligently done with the required level of integrity, I believe about half of the personnel cost being currently carried would be avoided, thus making funds available for more meaningful development of the universities. It would also be necessary to introduce some level of fees in the Federal Universities. Education is not cheap and it should be the joint responsibility of all

‘

The budgetary provision for the education sector for the 2019 fiscal year provides no indication that the government realizes the central role of education in national development

stakeholders. There is no point running a ‘free’ system that is actually costly in terms of quality of output. The issue of a portfolio of parastatals under the Federal Ministry of Education is worthy of attention. Many of the parastatals either ‘Councils’ or ‘Commissions’ should be merged to ‘cancel’ part of the excessive recurrent expenditure component of the budget. Let’s someone have the courage to say, yes, we have moved around this mountain long enough. It is time to say no to anything that does not help the cause of education in this country. Besides the allocation of funds to universities, for instance, there should be a clear vision in place articulating what allocated funds would be used for other than salaries and allowance. In the 2019 budget of India, it is clear that the country desires twenty world-class universities in the next ten years and allocations have been made appropriately to kick it the vision. In Malaysia, the 2019 budget provides for fifteen specific items with clear and unambiguous deliverables including subsidizing the school fees of children of low-income families. In Indonesia also, the 2019 budget provides for a budget of human capital development with emphasis on four major issues including adapting to the Fourth Industrial Revolution trends. What is our vision for education in Nigeria? Prof. Iyoha is of the Department of Accounting, Covenant University Email: iyoha.francis@covenantuniversity.edu.ng

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