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Teleology appoints new board of directors to run 9mobile Names Stephane Beuvelet acting MD As NCC approves sale T A

Analysts forecast higher yields as Nigeria starts road show for $2.8bn Eurobond

… dangles $4bn petrochemical, gas projects before investors at Africa forum

Jumoke Akiyode-Lawanson

IHEANYI NWACHUKWU, LOLADE AKINMURELE & ENDURANCE OKAFOR

fter the long drawn ou t p ro c e s s su rrounding the sale of 9mobile, Teleology Holdings Limited, the preferred bidder in the sale process has been allowed to constitute a new board of directors

he Federal Republic of Nigeria, rated B2 (stable) by Moody’s, B (stable) by Standard & Poor’s (S&P) and, B+ (stable) by Fitch, began its dollar bond roadshow yesterday in London, when officials from Africa’s largest oil producer met with investors about a planned sale of $2.9 billion in bonds. Citi and Standard Chartered are advising on the proposed transaction and benchmark sized dollar denominated bond offering with 7-year, 12-year and a “long” dated USD-denominated maturities under the Nigeria’s established Global Medium Term Note Programme. The country last sold $2.5billion over two tranches in Febru-

to run the telecommunications company following the successful completion of the tenure of the former Board appointed by the Central Bank of Nigeria

(CBN) and in fulfilment of the consequential transfer of final ownership to the new investors, Teleology Nigeria Limited. The company in a statement

sent to BusinessDay thanked all outgoing members of the board for “helping to shepherd 9mo-

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Inside FMDQ launches GOLD awards P. 4

Babatunde Fashola (l), minister of power, works and housing, with Mohammed Bukar, permanent secretary, works and housing in the ministry, during the Third Year in Office Progress Report Press Briefing of the Minister at the Conference Room of the Federal Ministry of Power, Works and Housing, Mabushi, Abuja.

Fashola highlights achievements, challenges of ministry at three P. 35

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deal

Actis, Westmont buy Lagos Four Points Sheraton Hotel for $16m, plus debt … Join scramble for market share OBINNA EMELIKE & MICHEAL ANI

ith the recent acquisition of Four Points By Sheraton Hotel Lagos, Actis, a private equity house and Westmont Hospitality Group, a Canadian investment firm, are eyeing larger market share of the Nigerian hospitality sector using the Marriot branded hotel as flagship property. The new owners acquired the 231room hotel recently for $16 million, plus the assumption of an undisclosed amount of debt, from Oceanwinds Hospitality Limited (OHL), hitherto owned by Asset & Resource Management (ARM), sources familiar with the matter told BusinessDay. Theyalsoannouncedtheirintention to collaborate with credible partners in acquiring hospitality assets across sub-Saharan Africa using Four Points By Sheraton Lagos as its base in Nigeria. “This is a very neat fit for our respective needs and ambitions in the region”,Funke Okubadejo, director at Actis in Lagos, said. “Hospitality is capital intensive and requiresanexperiencedtrustedpartner able to handle the operating aspects. Westmont has a fantastic reputation as an operatingpartnerandfranchiseefor some of the most prestigious hotels in the world and Actis has unparalleled experience investing in Africa. We are very excited about the potential of this venture together,” Okubadejo said in a mail response to BusinessDay. On the other hand, Ewan Cameron, director of Development (Africa) at Westmont, said “Westmont has committed to expanding its hospitality

investments in Africa, and is delighted to have partnered with Actis on the acquisition of Four Points Lagos. We look forward to collaborating with Marriott to ensure Four Points Lagos fulfils its potential to be the preferred business hotel at the heart of Lagos’ Victoria Island.” Presently, the Four Points by Sheraton, which is no small brand, has over 200 hotels in nearly 40 countries around the world and is looking to expand its portfolio of rooms by more than 50 percent in the next five years. According to a source at Marriot International Nigeria, the managers of the brand, Marriot is interested at seeing Four Points By Sheraton Ikot Ekpene, Four Points By Sheraton Benin City and other three brands across the country take off on schedule. “We have many pipeline hotels that are delayed due to lack of fund. If the developers here are willing, we will connect them with investors who have capacity to complete the project and share equity. That is better for their investment, help in expanding our brand and also the hospitality sector to grow”, the source said. Speaking on the swift acquisition of the hotel, Onike Ajibade, hotel consultant, noted that there are many hotels on sale for over three years now that have not seen buyers. For him, Four PointsbySheratonLagoswasswiftlysold because of its good book keeping and managementbyMarriot,goodlocation, exciting facility and service offerings for international business travellers.

•Continues online at www.businessdayonline.com

FMDQ launches GOLD awards

• recognises contributors to the Nigerian fixed income, currency, derivatives markets • CBN governor recognised as FMDQ Game Changer

s part of the plans to commemorate its Fifth Year Anniversary, FMDQ OTC Securities Exchange (“FMDQ” or the “OTC Exchange”), at a momentous occasion hosted key financial market stakeholders (governments, regulators, Members, issuers, strategic partners, foreign and local investors, media etc.), at the inaugural FMDQ GOLD Awards (the “GOLD Awards”) on November 9, 2018, at the Lagos Oriental Hotel, Victoria Island, Lagos. The GOLD Awards, which brought together domestic and international stakeholders in the Nigerian and global financial markets space, provided a platform to acknowledge and formally recognise the contributions of market participants within the FMDQ markets, whose activities have directly impacted the development of the markets and positively contributed to making them “GOLD” – Globally Competitive, Operationally Excellent, Liquid and Diverse. The long-awaited FMDQ GOLD Awards, first in the Nigerian financial markets, played host to the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, who was the Special Guest of Honour, the Deputy Governors of the CBN - Okwu Joseph Nnanna (also Chairman, Board of Directors, FMDQ), Aishah Ahmad and Adebisi Shonubi -, former and

current Board of Directors of FMDQ, the Nigerian financial markets regulators, including the Securities and Exchange Commission, Nigeria (SEC), FMDQ’s Members, and other players in the Nigerian financial markets, such as, issuers, investors, solicitors, media, international stakeholders, franchise promoters and industry experts, captains of the Nigerian financial markets, amongst others. Welcoming distinguished guests to the GOLD Awards, Okwu Joseph Nnanna,Chairman,BoardofDirectors, FMDQ, specially commended the SEC for demonstrating great foresight in registering FMDQ, and commended other market stakeholders for the support given to FMDQ from inception. The Chairman, during his speech stated that, “the inaugural FMDQ GOLD Awards which coincides with the celebration of the fifth anniversary of the OTC Exchange is meant to recognise the stellar contributions of stakeholders and celebrate the emergence of the FMDQ franchise”. He further stated that, “the uncommon contributions FMDQ has made to the growth of the Nigerian financial markets thus far, are directly proportionate to the support FMDQ has received from its world of stakeholders”. Nnanna, reiterated during his speech, that FMDQ will continue

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President Mohammadu Buhari a(3rd l) with members of his delegation, during a meeting with Nigerians living in France.

Sifax Shipping, 2 others to receive large chunk of N1.83bn SAHCO offer proceed ... IPO kicks off, closes December 19 Iheanyi Nwachukwu

he Initial Public Offering (IPO) of Skyway Aviation Handling Company (SAHCO) priced at N4.65 per share opened on Monday November 12, 2018. The net proceeds of the Offer, estimated at N1.83billion will be disbursed to the three Vendors in consideration for the shares divested under the Offer, the offer prospectus seen by BusinessDay shows. The Vendor in the offer are Sifax Shipping Company Limited, Taiwo Afolabi, and Folashade Afolabi. By way of Initial Public Offering, investors are offered 406.074million ordinary shares of 50kobo each in Skyway Aviation Handling Company Plc (SAHCO). The Offer closes on December 19, 2018. Out of 1.353billion ordinary shares of 50kobo each in the issued share capital of Skyway Aviation Handling Company, Sifax Shipping Company Limited owns 550million

units (40.6percent); Taiwo Afolabi owns 503.58million or (37.2percent) while Folashade Afolabi owns 300million or 22.2percent. The Lead Issuing House in the IPO is Vetiva Capital Management Limited while Joint Issuing House is Cordros Capital Limited. The Initial Public Offer is being undertaken to enable the Vendors divest 406,074,000 Ordinary Shares representing 30percent of the entire issued and fully paid up ordinary shares of SAHCO in partial compliancewith the terms of the SSPA (as approved by BPE). Ten (10) percent of the shares being offered for sale will be reserved for staff of SAHCO (in accordance with section 4.2 of the SSPA and section 5 (3) of the Public Enterprises (Privatisation and Commercialisation) Act No. 28 of 1999) under an Employee Stock Ownership Plan to be set up and administered by a Trustee. Only Nigerian citizens are entitled to apply for and be allotted shares under this Offer in accordance with

the provisions of the SSPA and Public Enterprises (Privatisation and Commercialisation) Act Cap. P38 LFN 2004. An application has been made to The NSE for the Admission to its Daily Official List, of 1,353,580,000 Ordinary Shares of 50 Kobo each representing the entire issued and fully paid up ordinary shares of SAHCO, according to the abridged offer prospectus. The shares being offered for sale will be allotted on the basis of equality between the three hundred and sixty (360) Federal constituencies in the Federation and the Federal Capital Territory. However, shares may be allotted from Federal constituencies with under-subscription to those with over-subscription. In the financial period to March 31, 2018, Skyway Aviation Handling Company reported revenue of N1.36billion; profit before tax of N23million and Loss After Tax of N25million.

•Continues online at www.businessdayonline.com

EU ban on Nigerian beans echoes furore over Sniper use CALEB OJEWALE

he recent revelation that some traders of foodstuff are applying an insecticide popularly known as Sniper on dried beans has reignited fears that Nigerians may have been consuming beans not fit for human consumption. Beans is staple food consumed in many Nigerian homes. They are bought in the open market and there are no regulations guiding their sale. The lack of a national pesticide policy and high levels of illiteracy among farmers means that beans planted in the country have been found to have high levels of chemicals that makes it unsafe for human consumption. Nigeria was banned from exporting beans to the European Union in 2015, as regulators found some consignments unfit for human consumption. Since the ban, regulatory authorities have done little or nothing to ensure that

beans consumed within the country are safe for Nigerians. While Nigeria has been fixated on meeting conditions set by the EU before the ban on exports is lifted, the local market is not getting the same attention, putting millions of Nigerians at risk. BusinessDay had contacted the EU last year; to enquire on the status of the ban and conditions to be met. Amongst other things in a detailed response, the EU indicated that samples of beans exported from Nigeria “presented a serious risk to human health”. Nigeria’s rejected dried beans were found to contain between 0.03mg per kilogramme to 4.6mg/kg of dichlorvos pesticide, when the acceptable maximum residue limit is 0.01mg/kg. “From January 2013 till April 2015, more than 50 notifications were issued to the Rapid Alert System for Food and Feed in relation to dried beans originating from Nigeria,” wrote

Aikaterini Apostola, press officer, Health and Food Safety, European Commission in an emailed response to BusinessDay enquiries last year. “Results provided evidence that the import of this food presents a serious risk for human health,” said Apostola. It was further explained that it became “appropriate to suspend the import into the Union of dried beans from Nigeria, until the Nigerian authorities can provide substantial guarantees that they have put in place an adequate official control system to ensure that the products concerned comply with the relevant food law requirements.” While the default in maximum permissible residue could be ascertained in the case of the EU, no one case say just how much the beans in Nigeria have been sprayed with the chemicals.

•Continues online at www.businessdayonline.com

Tuesday 13 November 2018

‘Nigeria’s 40bn barrels reserve by 2020 is a mirage’ OLUSOLA BELLO

igeria’s aspiration to achieve 40 billion barrels of oil reserve by 2020 has been described as a huge ruse because there is nothing on ground to suggest that such a target can easily be achieved within the target period. The Nigerian Association of Petroleum Explorationists (NAPE) says looking at what is happening in the industry vis a vis government policies, the country still has a long way to go in respect of the target it has set for herself. According to the association, the Petroleum Industry Bill (PIB) that would have helped has spent 18 years in the National Assembly without making any headway. Andrew Ejayeriese, president of the association, while speaking about the forthcoming international conference and exhibition coming up in Lagos next week, said it unfortunate that the bill had not been passed to law, but his association would continue to advocate for it to be passed. According to Ejayeriese, without passing the bill the industry will not grow and there will be no money to diversify because investors that consider the Nigerian environment not conducive enough will move to another clime favourable to them. He however said Nigeria could choose not to do anything, but one thing was certain, the world would move on. “It will not wait for Nigeria, while the country can continue to mock itself around by not getting her policies right. The money will move to where there are incentives for it to operate,” Ejayeriese said. He said the country kept mouthing diversification without investing in the oil and gas industry, and wandered where the money for diversification would come from. He said the money to be used for diversification could only come from oil and gas, and therefore urged the government to sit up about reenergising the oil and gas industry. On the issue of gas resources, he said the government should put in place appropriate gas fiscal incentives that would monetise gas through series of developmental projects. He said some companies might sometime prefer to pay tax rather than stopping gas flare, saying, “Such punitive measures might be a short-term solutions. The most sustainable solution would be by putting in place a gas fiscal framework. If the policy is right investors would come.”

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Nigeria needs ‘right leadership’ to achieve economic growth potentials – WEF CALEB OJEWALE

he usual suspects limiting Nigeria’s economic potentials have been reiterated in a report by the World Economic Forum (WEF), which highlighted limited infrastructure development, youth unemployment, insecurity, and governance issues as the bane of meaningful progress. With the right leadership, however, the WEF dynamic briefing on Nigeria for November, asserts that the country’s economy can grow at a double-digit rate, put-

ting it close to or among the 10 biggest economies in the world. This is predicated on the provision of adequate infrastructure, which is attainable when the country has strategic, discerning, and purposeful leadership. Nigeria can also seize the opportunity to achieve significant, sustainable and inclusive economic growth. The WEF briefing is based on the views of a wide range of experts from the World Economic Forum’s Expert Network and is curated in partnership with Franklin Nnaemeka Ngwu, Ndidi

Nnoli-Edozien, and Olayinka David-West of the Lagos Business School. “Without an improvement in basic infrastructure, it is difficult to see how the economy can meaningfully, sustainably and inclusively grow. It cannot also be dissociated from other socioeconomic problems such as unemployment, insecurity, recession and inflation confronting the economy,” noted WEF in the report. The fragile security situation across the country also makes it difficult to achieve the desired economic growth to transform the standards of

living, as investors find it too risky to bet on the safety of their resources. WEF stated, “Even with the curtailment of the deadly Boko Haram terrorist group, the violent activities of other ethnic militant groups and related criminal activities such as kidnapping, armed robbery and marauding Fulani herdsmen continue to pose serious socio-economic and political threats to Nigeria. “Outside Boko Haram, the activities of the Niger Delta militants and Fulani herdsmen pose the greatest challenge to Nigeria’s unity

and economy due to their impacts on two main subsectors of the economy: oil and gas, and agriculture. “As Nigeria depends on revenue from the oil and gas sectors, the activities of the Niger Delta militants like bombing and destruction of oil pipelines and facilities have had very negative impacts on revenue generation and governance in Nigeria.” In the area of infrastructure, the report indicated that over 70 percent of the 200,000 kilometres of national road network was in poor condition as of 2012. At present, not much has changed.

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Africa’s agribusiness requires $45bn annual investment to reach $1trn by 2030 CALEB OJEWALE

he value of agribusiness on the African continent can still reach $1 trillion by 2030, but business leaders and experts in the sector expect a $45 billion annual investment to stimulate the required growth. At the Africa Investment Forum last week, where project sponsors, borrowers, lenders and investors gathered to make deals on investment opportunities, the African Development Bank (AfDB) in a statement emphasised echoes of optimism that, with its vast ag-

Confab to reposition African health care for sustainable development IFEOMA OKEKE

s the Federation of African Medical Students’ Associations General Assembly (FAMSA GA) celebrates its 50th anniversary, it says its meeting is geared towards repositioning African health care for sustainable development. The anniversary that holds between November 18 and 24, will be the first ever health conference of its kind at the University of Ibadan, Nigeria. The General Assembly serves as the annual meeting of African Medical students under the umbrella of the FAMSA, an association with the vision of improving the health of the African people. In line with their vision, the weeklong conference is themed: Repositioning Healthcare in Africa for Sustainable Development. Healthcare is central to the overall development of a region, hence the need for the aforementioned. Of the 17 interwoven global Sustainable Development Goals, SDG 3 is specific to health. The FAMSA GA is a proposed solution that will bring together young vibrant minds as well as professionals and relevant stakeholders in both the public and private sectors from across Africa and beyond to discuss ideas and initiate steps towards the goal. This event will involve key-stakeholders in the healthcare industry in Africa and the world, to interact with healthcare students and youths to reflect, debate, discuss and proffer novel recommendations towards a healthier future. The conference will feature keynote addresses, plenary sessions, workshops, trainings, hackathon sessions, and scientific presentations on carefully selected subthemes all related and contributory to the goal.

ricultural potential, Africa’s agribusiness sector was still predicted to reach $1 trillion by 2030. Agribusiness will become the ‘new oil’ on the continent, African Investment Forum participants said, fuelling the motor of inclusive growth. The $1 trillion estimate first surfaced last year in the Africa Agriculture Status Report, released at the end of the African Green Revolution Forum (AGRF) in Cote d’Ivoire. It had emphasised that the power of entrepreneurs and the free market were driving Africa’s economic growth from food

production, as businesses wake up to opportunities of a rapidly growing food market in Africa, which might be worth more than $1 trillion each year by 2030 to substitute imports with high value food made in Africa. The emphasis, as BusinessDay previously reported, is however not just on crop production, but involvement of SMEs and other entrepreneurs in developing smart, innovative solutions to provide processing capabilities for the African food market. At the forum, some agribusiness leaders said there

was a need to invest $45 billion per year to harness the power of agriculture and move up the value chain to create jobs and wealth. At present, only $7 billion is invested in the sector. Investments from the private sector, the leaders said, will create the adequate environment and enhance the emergence of locally owned agro-processing industries, capable of creating jobs and increasing incomes in rural Africa. The continent could become a net exporter of agricultural commodities, replacing $110 billion worth of imports, as well as dou-

bling its share of market value for select processed commodities, the AfDB noted. “Agriculture is a key priority for the African Development Bank, through our Feed Africa strategy,” Jennifer Blanke, the AfDB vice president for Agriculture, Human and Social Development, said. “Understand that by transforming Africa’s agriculture sector, it will become the engine that drives Africa’s economic transformation through increased income, better jobs higher on the value chain, improved nutrition, and so on,” she said in her opening

remarks at an Africa Investment Forum session titled, ‘Agribusiness: investment conversation with industry leaders.’ Participants in the agribusiness session discussed the industry’s entire value chain. Leading the ‘fireside chat’ was a roundtable of experts that included Aliko Dangote, CEO, Dangote Group; Zainab Ahmed, Nigeria’s minister of finance; William Asiko, CEO, Grow Africa; John George Coumantaros, chairman, Flour Mills of Nigeria, and TP Nchocho, CEO, Land and Agricultural Bank of South Africa.

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Apapa gridlock: Senate committee decries delay in trailer park completion CHUKA UROKO & ENDURANCE OKAFOR

enate Committee on Works has decried the slow pace of work and the delay in the completion of the Trailer Park being constructed opposite Tin Can Island Second Gate on Apapa Oshodi Expressway. Contract for the construction of this park was awarded to Borini Prono about eight years ago along with the reconstruction of a portion of the Apapa-Expressway to take away about 400 trailers from the expressway and reduce the gridlock that is today a major feature of Apapa. When BusinessDay visited the construction site in the company of members of the Senate Committee on Works who were on inspection tour of roads construction sites in Lagos on Sunday, the contractor assured the park would be completed by the end of December this year. This, however, sharply contradicts an earlier pronouncement by Babatunde Fashola, minister for power, works and housing, that the park would be open for use on November 17, 2018, when reconstruction work would commence on Apapa-Oshodi

Expressway to be undertaken by Dangote Group. Dangote will be spending about N72 billion on the expressway in lieu of taxes it would have paid to the Federal Government and, according to Fashola, the group would be joined by two or three other construction firms to speed up completion of the reconstruction work. During the inspection of the trailer park, Kabiru Gaya, chairman, Senate Committee, said, “We are not happy with the speed of work here; we expect the contractors to move fast even though there is an additional work. Money has been paid, and the shoreline has to be constructed in order to protect the park. “We insist this project must be finished and the contractors are saying that by the end of this year we should be able to commission the park. We saw that facilities there are not good enough; there are only about 20-40 toilets; there could be more; there can be a restaurant, there should also be a small clinic. But even though the protection of the facility (shoreline) has not been done, we must commission that project by the end of this year.”

Gainrranco Albertazzi, joint managing director, Borini Prono, also assured that the park without the shoreline aspect would be completed in December this year, saying, “We have reached about 97 percent completion; what remains is asphalt. For the shoreline, we are going to import some materials.” Apapa Oshodi Expressway is one of the only two major routes to the Apapa and Tin Can Island Ports. The second is the Ijora-Apapa-Wharf Bridge, which terminates on the Apapa-Wharf Road. For more than six months now, this second route has been closed to motorists on the out-bound lane, causing neck-breaking gridlock. This lane has been undergoing repairs at two major spots—Leventis and Ijora ends of the bridge. Though work has resumed on those spots, motorists have been going through hell to get out of the port city. “To work on the Leventis end, the contractors had to import high quality steel and, therefore, I will advise that the state and federal governments work together to prevent a situation where there will be fire on the bridge.”

Corruption, ethics, good governance take centre stage at APBN professional week KELECHI EWUZIE

head of the 2019 general elections, discussions that centre on corruption, ethics and good governance will take centre stage at the third professional week lecture organised by the Association of Professional Bodies of Nigeria (APBN), Lagos State chapter. The lecture, which will congregate experts and economic professionals to discuss holistically the challenges posed by corruption as it affects the country and it growth potential, will be addressed. Wasiu Akewusola, chairman, Lagos chapter of APBN, says Femi Falana, a senior advocate of Nigeria,

is expected to deliver the thematic public lecture entitled: “Corruption, Ethics and Good Governance,” scheduled for November. Akewusola, while speaking at a press conference in Lagos to unveil activities for the professional week, says all the activities are aimed at bringing about fresh thinking through thought leadership lectures, health and legal aids, and career talks that will encourage youths to focus on their education and unleash their potential through professionalism. He further says the weeklong programme also aims at building new community of professionals, making its messages more contemporary, as well as recruiting new ambassadors. It builds

connection with ethics, education, industry, family, corporate social responsibility and nation-state development for its stakeholders. Akewusola, who gave highlights on the activities during the period said there would be innovative programmes to kick start the event, which include free seminar for the Lagos State civil service on November 27, 2018, to train them in areas where they would be beneficial to the state. According to him, there will be a career talk targeted at 4,000 secondary school students in the Lagos educational district 4 on Wednesday, Nov 28, with the aim of shaping their minds as they prepare for their career paths.

WCD Foundation holds last session for the year

he largest global membership organisation of women corporate board members, the Women Corporate Directors (WCD) Foundation, Nigeria chapter, held its last session for the year themed “Decision Making in the Visionary Boardroom” hosted by GTBank in Lagos. The session kicked off with an opening address from Bisi Lamikanra, cochair, WCD Nigeria chapter and Partner & Head, Advisory Services, KPMG Nigeria, on behalf of Mosun Belo-Olusoga (co-chair, WCD Nigeria/chairman, Access

Bank). In her statement, she said, “WCD remains committed to promoting good governance by ensuring board members are equipped with the necessary knowledge in fastpaced changing operating environment.” Hence, the theme for the last session of the year centred around forwardlooking decision making in the boardroom with a focus on techniques to broaden the perspectives of board members, properly hone information, confront barriers and improve the process of strategic high-quality deci-

sion making. She continued. Segun Agbaje, managing director, GTBank, gave a welcome address that was followed by presentation from the keynote speaker, Herta Von Stiegel, founder/ executive chair, Ariya Capital, Nairobi. She started with a quote from Science fiction author, William Gibson“The Future is here, it’s just not very evenly distributed” as she spoke on “the fundamentals visionary boards need to remain educated” as well as “the need for visionary boards to find the future and be conscious of decision-making styles and its impact on board decisions.”

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Empowering pharmacists to check drug misuse & abuse in Nigeria Mazi Sam Ohuabunwa OFR sam@starteamconsult.com

n the year 2001 or thereabout, I was a member of a delegation of the Nigerian American Chamber of Commerce (NACC) that visited President Olusegun Obasanjo at Aso Rock. The delegation was led by the President of the chamber at that time, Mrs Priscillia Kuye SAN. When Mrs Kuye finished addressing the President, she graciously requested if I had something to add. I rose up to grab the opportunity. But before I would speak, she introduced me to the President as a pharmacist and chairman/CEO of Neimeth International Pharmaceuticals Plc, a successor company of Pfizer Products Plc. As I tried to open my mouth, the President charged at me: “You pharmacists, you are the ones that import fake drugs into the country!” I was stunned, but quickly remonstrated that his statement was untrue. When he insisted, I told him emphatically that no trained and licensed pharmacist will deal in fake, adulterated or counterfeit drugs, except if he was insane (mentally deranged) or did so unknowingly. I told him that there were many interlopers and business miscreants who were pretending to be “pharmacists”, who actually were the ones making merchandise out of the suffering and death of innocent

STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

ince 1999 when the country embraced democracy, there have been assorted forms of social conflicts. These social conflicts have claimed many lives, and properties worth millions of dollars have been destroyed. These social conflicts now threaten national cohesion and survival of democracy. Throughout the entire nineteen years of democratic dispensation, the country has spent huge resources to ensure that there is peace and stability. When one looks at security challenges in the country, the only option available is to agree with the Sultan of Sokoto, Muhammad Sa’ad Abubakar, that “All is not well with Nigeria.” (see www. dailypost.ng accessed on 8 Sept 2018). Election season is here again, and the season is characterised by politi-

Nigerians. To further push his point as we all know that OBJ will never voluntarily lose an argument; he raised another accusation against pharmacists. He said:” But some of you make copies of your certificates and licenses and place them in many shops without adequate supervision”. Here I conceded that such could have happened in the years of yore, when there were very few licensed pharmacists in the country. I assured him that with the new Pharmacists Council decree of 1992, such practices had stopped and that as a matter of fact, there were many unemployed pharmacists looking for jobs, so it would be unacceptable to the profession and council for one person to oversee more than one premises or outlet while others were without job. We concluded this altercation which was now beginning to make Mrs Kuye ‘uncomfortable’ by the question OBJ asked me. “Ok you have defended your people well, what should we do to stop or minimize the problem of fake drugs?” I answered swiftly: Put the round peg in a round hole. After the meeting, I was asked to stay back. I was given paper to write out my thoughts and proposal. Few months later, late Pharm Dora Akunyili was appointed as the Director General of the National Agency for Foods & Drugs Administration and Control (NAFDAC). I do not in any way take credit for her appointment but for once Nigerians saw how a professional pharmacist put her life on the line to battle the fake drug merchants and the great success she

‘ I do not in any way take credit for her appointment but for once Nigerians saw how a professional pharmacist put her life on the line to battle the fake drug merchants and the great success she accomplished for Nigeria and Nigerian medicine consumers

’

accomplished for Nigeria and Nigerian medicine consumers. We also noted what happened when a non professional pharmacist was appointed to succeed her. Some of the achievements were rolled back, because no other professional has the in-depth knowledge on drug matters including the drug trade as

the pharmacist. After this encounter I began to reflect on why OBJ should place the problem of fake drugs importation and distribution on the lap of pharmacists. Pharmacists are the only professional group that are licensed by the government” to manufacture, mix, produce, warehouse, import, export, distribute and dispense, “poison & drugs” in Nigeria. In short they are the custodians of drugs and poisons in Nigeria. Poisons? Yes poisonschemicals and concoctions that can kill. Which is really the main reason government assigned this weighty responsibility to a group of people who are thoroughly trained and disciplined to manage these items called drugs or medicines. The real truth is that most drugs and medicines are potentially poisons. That is to say that they can really main or kill those who take them. That is the major reason the profession of pharmacy was created to be custodians of drugs and medicines, first to limit access to these potential poisons, and secondly to ensure that those who need the drugs or medicines are sufficiently counselled and guided as to how to take the medicines, when to take the medicines, what quantity to take at a time and for how long, what to avoid when taking particular medicines and how to respond should unanticipated reactions occur or should an overdose be mistakenly taken. The pharmacist is expected to be the intermediary between the medicine (prescribed by a doctor or purchased over the counter) and the patient. The truth

is that anytime this intermediation is breached, the patient or consumer of the medicine is actually putting his life in danger, because the same drug that can heal when taken appropriately as prescribed and dispensed may kill when taken inappropriately. And the tragedy is that very many Nigerians have more or less committed suicide through taking medicines inappropriately, often without the intermediation of the professional pharmacist. Therefore from OBJ’s point of view, if pharmacists are the only ones licensed to produce or import drugs, we should not search far for whom to blame when we encounter fake drugs in the system. Indeed this was the same thinking of our distributor in Lagos in the 80s. We had gone to Richson Pharmaceutical Company to show him that a set of Pfizer pharmaceutical products which he sold to a retailer in Ikeja were fake drugs. Richson laughed at us and asserted” Sam, I do not manufacture, I do not import Pfizer products, all that I sell are gotten from you. So if you say these items are fake or substandard, then it must be that Pfizer now produces fake drugs”. Of course I assured him that there was no way Pfizer could manufacture fake drugs.

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Political competition and armed violence cal competition. The size and shape of political parties have swollen to 91 registered political parties by August 2018. According to reports, a total of 79 candidates will be contesting the 2019 presidential elections, 1803 candidates want to fill 109 senate seats, and 4548 candidates want to fill 350 House seats. A mad rush to serve or be served. Political competition is allowed in a democracy, but it must be a healthy competition. “Nigerians are getting apprehensive daily over the likelihood of violence-prone general elections in 2019. The reason is wanton disturbances across the country. Nigeria has been experiencing increasing security challenges which appear to have defied solutions. Nigerians seem to have lost count of repeated promises and reassurances by the government on how to restore peace in society,” according to BusinessDay. (Rising violence and 2019 general elections, November 2, 2018) Nigeria is a country that is blessed with amazing human and material resources, but ominously, the same country has become a stronghold of inequitable state policies, injustice, shameless corruption, poverty and social decay, where religiosity and ethnicity pervade every facet of the country’s life, and fundamentally, determines who gets what, when and how. To sum up, these social conflicts are functions of frustrations on the

part of political thugs and disadvantaged religious and ethnic groups arising from failed expectations of governments at all levels-local, state and federal to deliver basic needs to citizens. However, the new dimension is the rise in the wave of extremism which is threatening the foundation on which the country was established. Analysing these societal challenges, this writer remembers Sun Tzu, the Chinese Philosopher and warrior, who said, “there is no instance of a nation benefitting from a prolonged warfare. Both political and military objectives of fighting the war may not be achieved if the war takes too long a time.” For developing nations at war, huge resources that would have added to their collective wealth have been used in procuring weapons. Nobody knows the quantity of small and light weapons that are exchanging hands daily in Nigeria. “Arms Proliferation: Troops kill 35 criminals, arrest 98 suspects.”- Punch October 26, 2018, p12. The Defence Headquarters, Abuja, said it had launched an operation to curtail arms proliferation in the country noting that 35 criminals were killed by troops and 98 suspects arrested in two weeks. The report further states that “the Army Chief, Buratai said the Exercise Crocodile Smile would be followed by Exercise Python Dance in Preparations for the 2019 general elections.” Hardly will a day go by without news about killings in one state or the other. The proliferation of arms before elec-

tions is a source of major concern. The worsening level of poverty has added a negative coloration to the security challenges in the country. Since most of our youths are not gainfully employed, they are easily recruited for violence during election season. Why, you may ask? It is because our politicians see ascension to power as a do-or-die affair, and they must win election at all cost. So, the solution is for politicians to acquire dangerous weapons to outwit each other. Politicians mobilize the pool of unemployed youths, often along ethnic, religious and party affiliations as vibrant political resource. In the process of fighting, security personnel are attacked. Regrettably, during security operations, the military suffers casualties, soldiers are killed in action, while others are injured. A pity! Governance is about the welfare of the people and the political leaders must attain leadership through laid down praxis that is devoid of rancour and violence. It is common knowledge that governance cannot thrive in an atmosphere of violence. Criminal politics and political violence have made the delivery of democracy in Nigeria since independence an illusion. This can always be referred by the ever-rising numbers of political killings and outright embezzlement that spread through all geopolitical zones of the country. The guarantee by the government to provide security of lives and property is threatened daily as thugs also chal-

lenge state security apparatus. Some observers argue that the transition from military dictatorship to democratic governance has occurred in parallel with the upsurge in armed violence in Nigeria. This they say illustrates the close connection between political competition during elections, small and light weapons and election violence. The security situation as it is today is very dicey and delicate. President Buhari was in Kaduna recently where he had discussions with political, religious and traditional leaders over the disturbance that claimed lives. The handling of the Shiítes’ crisis is also of grave concern to many observers as the country moves to election season. The situation if not well managed could lead to a second civil war which the country may not come out of in one piece. The level of kidnapping in the south, the bombings in the northern part of the country and the wave of gun running are pointers to the fact that “all is not well with Nigeria.” Politics of “bad belle” bitterness should be replaced with nationalistic politics. As 2019 approaches, we can only hope that our politicians will display patriotism. This writer joins the Sultan of Sokoto and other respected Nigerians to urge religious leaders to unite and preach against violence before, during and after the 2019 elections.

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Ghana: Need for stronger banking supervisionsupervision Rafiq Raji “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

fter the failure of a couple of banks recently, the public is on edge. That is, even as the Bank of Ghana, the central bank, has provided assurances that depositors’ funds are safe. Not that a banking crisis is at hand. Far from it; although some might argue otherwise. But there is definitely a lot more that the BoG could and must do to restore confidence. For instance, culprits behind the failure of Unibank, hitherto Ghana’s sixth largest bank, where directors were found to have helped themselves to depositors’ funds to the tune of $1.1 billion, about 75 percent of the bank’s assets, should in addition to being relieved of their positions, also be prosecuted to the full extent of the law. Loan defaults have also become rampant, with non-performing loans (NPLs) accounting for 21.3 percent of all loans in August 2018; albeit largely unchanged from the same period last year when they were 21.9 percent of loans. Naturally, banks are reluctant to lend, preferring to buy government treasuries and bonds instead. Consequently, the government accounts for a great deal of banks’ exposure. And although private sector credit extension (PSCE) has been growing in real terms, at 5.4% in August 2018 from

UCHE UWALEKE Uche Uwaleke is Nigeria’s first Professor of Capital Market and the Chair of Banking and Finance Department at the Nasarawa State University Keffi

he kernel of the current industrial action embarked upon by the Academic Staff Union of Universities is funding of public universities in Nigeria. The university teachers are not happy over the non-implementation of the Memorandum of Action (MOA) signed with the Federal Government with respect to revitalisation of public universities. It will be recalled that sometime in 2012, the federal government had commissioned a nationwide survey of the needs of public universities which threw up disturbing revelations concerning the state of public universities in Nigeria ranging from overcrowded classrooms and empty laboratories to obsolete equipments and outdated engineering workshops some of which were operated ‘under zinc sheds and trees’. Not much has changed since then. Owing to increasing demand for university education in Nigeria, the financing needs have become stag-

-5.0% in same month last year, it is not the case when compared to GDP in nominal terms; based on Bank of Ghana data. In August 2018, nominal private credit extension was 14.7% of GDP from 15.2% in the same month last year. A great deal of regulatory drive would be required for a turnaround. Thus, the central bank’s directive in September 2017 for banks to beef up their capital base to a minimum of 400 million cedis from 120 million cedis hitherto should be pursued with the utmost determination. And there should not be a shifting of the end-December 2018 deadline. Better capital adequacy reporting via Basel II at the direction of the central bank in July is also laudable. More consolidation & liquidation To date, the BoG has taken the following actions to clean up the banking system and restore confidence. It liquidated and gave control of UT Bank and Capital Bank to Ghana Commercial Bank in August 2017 “due to severe impairment of their capital.” A year later, it revoked the licenses of Unibank, Royal Bank, Beige Capital, Construction Bank, and Sovereign Bank and put them together under Consolidated Bank Ghana Ltd, a special purpose vehicle, which it capitalised to the tune of 450 million cedis. The authorities also issued a 5.8 billion cedi ($1.2 billion) bond to cover their liabilities. Considering when put together, the five banks have pending obligations that require funding of about 5.8 billion cedis, the measures put in place by the central bank should suffice for now. Much more funds would probably be needed in due

‘ BoG deputy governor Elsie Awadzi said the central bank was “working very hard on submitting a dossier on each of these banks to the law enforcement agencies…to further investigate criminal behaviour or what could potentially be criminal behaviour and to prosecute

’ course, however, as more information is discovered and perhaps other banks are found to be in less than ideal positions. Not only were the failed banks found to be struggling but some obtained their licenses fraudulently; Sovereign Bank, Beige Capital and Construction Bank for instance. With the benefit of hindsight, the BoG was not quick to act. Unibank and Royal Bank were known to be

significantly undercapitalized as far back as 2016. Almost 80 percent of Royal Bank’s loans were non-performing, it was discovered. It is certainly curious that it was only until 2018 that Unibank was declared to be “beyond rehabilitation.” Surely, there was no need to wait that long. The reason might not be too hard to determine. Unibank had some influential board members, including former Ghanaian finance minister and central bank governor Kwabena Duffuor, the founder. In early September, KPMG, an audit firm and receiver for the now defunct Unibank, asked a High Court to declare unlawful, loans made to Mr Duffuor, other named shareholders and their so-called related interests. KPMG is also asking Mr Duffuor et al. to pay back 5.7 billion cedis ($1.1 billion), about 75 percent of the defunct bank’s assets, of allegedly misappropriated funds of Unibank. According to Bloomberg, a news wire service, Nii Amanor Dodoo, a partner at KPMG in Accra, says Mr Duffuor and co. have committed to the repayment; albeit Daniyal Abdul-Karim, Mr Duffuor’s attorney, raises doubt about that when he remarks in the same report that “[KPMG’s] claims are extremely weak…[and]…are defeated both on facts and the law.”And in a report by Reuters in mid-August, Mr Duffuor disputes the figures: “We believe the figures the central bank is putting out are not right.” Other banks would definitely not want to become part of “Consolidated Bank.” Thus, there is almost certainly going to be more consolidation in the industry, as smaller banks or those not able to raise enough capital in time to meet the BoG end-December

deadline, merge with bigger ones or come together to become bigger and stronger. Others are looking to raise capital on the stock market. But considering the supposedly lucrative 1.14 billion cedis ($238.5 million) initial public offering (IPO) of MTN Ghana, a telecoms firm, in late August underwhelmed below its 3.47 billion cedis target, there are doubts about how successful the banks looking to take this route would be. That is not deterring them, it seems. In September, just weeks after the MTN listing, Energy Commercial Bank secured approval from the Securities and Exchange Commission (SEC) to raise 340 million cedis via an initial public offering to enable it meet the new minimum capital requirement. There should probably be a few more before the December deadline. Additionally, a couple of merger talks are ongoing; some not so well, though. In late July, for instance, there were reports Premium Bank and BSIC Ghana were abandoning merger plans with GN Bank. A merger proposition between Sahel Sahara Bank, GN Bank and Premium Bank also fell through. Instead, Sahel Sahara Bank chose to go with Omni Bank in mid-August, making it the first potential merger since the scramble to meet the new capital requirements, having since received a no objection nod from the central bank. • An edited version was published in the Q4-2018 issue of African Banker magazine Note: the rest of this article continues in the online edition of Business Day @ https://businessdayonline.com/

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Is there a capital market solution to universities’ funding? gering leaving in its wake a huge gap that must be narrowed one way or the other. Unfortunately, poor funding has continued to challenge federal and state universities in Nigeria. Indeed, for several years, allocations to education have been nowhere near the UNESCO recommended minimum of 26 per cent. For example, in the 2018 federal government budget, education got a total of N541.47 billion (recurrent N439.26 billion, capital N102.21 billion) representing just about 6 per cent of total budget size of N9.12 trillion. Any wonder, Nigerian Universities are often missing in the list of Times Higher Education rankings of top 1000 universities in the world that considers factors of teaching, research and influence in ranking universities. In spite of the growth in the number of private universities in Nigeria, enrolment into public universities has continued to outpace private ones not least because unlike private universities that run market-driven degree programmes, the cost of tuition in public universities is largely subsidized. Education is essentially a public good and so

the benefits of university education continue to justify substantial government funding despite competing priorities such as health care and infrastructure. There is a broad consensus that funding for university education needs to increase, but no unanimity on the best means of financing expansion. Understandably, the idea of cost sharing has never caught on. The main reason is that given the high level of income inequality in the country, such an approach is capable of constraining enrolments and could actually be counterproductive. Without any doubt, increased output of university graduates is essential to support economic growth and development. Against the backdrop of dwindling revenue and other competing needs, funding of public universities will continue to remain a challenge in Nigeria except new funding strategies are explored. It needs to be acknowledged that solutions to the challenge of sustainable funding for universities have to go beyond the traditional mechanisms where private finance finds accommodation. One way that universities can tap capital markets is through the issuance of bonds on a securities exchange which enable them

to raise large amounts of capital over a very long period. As a matter of fact, bond issues by universities in the United States are common, particularly among the Ivy League. Some of the biggest US universities, including Harvard, Yale, MIT, Stanford and Princeton, feature in the list of top borrowers. With support from Rating Agencies, they are also becoming popular among Universities in Mexico, Canada and Britain. Moody’s, one of the leading global credit-rating agencies, has issued ratings for universities in the US, Canada and the United Kingdom. Not too long ago, the University of Oxford successfully tapped the capital market, offering investors a bond with a record maturity of 100 years – the longest in the history of university bonds and longer than any publicly issued UK government bond. While it is easy to dismiss the capital market option as unviable for public universities in Nigeria, the experience of an Australian university illustrates the possibilities. Following the winding up of the Education Investment Fund, the public body that funds teaching and research

in Australian public universities, the University of Melbourne issued US$250 million in bonds in 2014 to build student housing facilities and generally upgrade infrastructure, a move that saw an exponential increase in the number of its international students from Asia, UK and the US according to data by Dealogic. There is no reason why this cannot work in the Nigerian context. The challenge would be to find a sustainable means of servicing the debt. Because bond markets tend to favour large and reputable universities and penalise smaller ones through high interest costs, the federal government can encourage the big first generation universities to tap the capital market through the issuance of government-backed bonds. This would entail greater autonomy and responsibility on the part of those universities to ensure that the loans are properly serviced. Note: the rest of this article continues in the online edition of Business Day @ https://businessdayonline.com/

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

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Tuesday 13 November 2018

Lessons from the American midterm elections

he electoral umpire in Nigeria will flag off campaigning November 18 against the backdrop of the recent midterm elections in the United States of America. There are many lessons for citizens, politicians and the umpire from the elections that have changed the outline of the government in America. They concern essentially participation, representation and change. As the world knows, the elections delivered a divided Legislature. Democrats now control the House of Representatives while Republicans control the Senate. It would require negotiation and compromise on significant issues to make progress. It is the best of democracy. The midterms are significant as an indication of the direction of the pendulum. They also represent a vote on the president. In most midterms, historically, the incumbent president takes a beating as his party loses significantly in the Legislature at state and federal level and in Government Houses. A high degree of polarisation characterised the American electorate for this election. The polarisation reflects the growing divisions following the 2016 elections. President Trump has remained on the stumps, pushing nationalism and populism. It appealed to some and turned off others. Each side held on passionately to their views, interests

and understanding of where and how America should run. The midterms in America underscored the imperative of citizen participation in the electoral process. Bothered by the changing tenor of government and governance under President Donald Trump, American citizens not only registered but trooped out in large numbers to cast their ballots in this critical election ahead of the central general elections in 2020. The outcome has been dramatic. Two years of anger, frustration and activism by women appalled at the treatment of their gender by President Donald Trump led to an increase in the participation of women. Activists transmuted into candidates. They came out in large numbers, with 590 women entering the race. In the end, 273 of them were on the ballot. There was a broader representation because of the increased participation. Native Americans, a group relegated for years, also came out in large numbers. They responded to the threat to their environment represented by a pipeline project of the Trump Administration. Two of their kind, both women, entered Congress for the first time. Muslim women, Latinos, and LGBT candidates all showed up, and some won to Congress or Governorship. They diverged on several fronts. The issues covered demography, educational attainment and psychographics. According to the Pew Research Center, “There were wide differences in voting preferences

between men and women, whites and nonwhites, as well as people with more and less educational attainment.” Amidst the divisions, everyone rallied around the idea of America. The division was essentially around issues, worldviews, where and how to manage America. No one threatened the nation. Issues dominated. President Trump made it a conversation around immigration and American security. The other side responded with the idea of the need for a more inclusive America rather than one that excludes people. Issues canvassed included education, healthcare, reproductive rights, immigration, gun violence and the environment. The election was also a referendum on several policies. Citizens in various states voted not just to choose politicians but also to choose policies. Some states such as North Carolina and Arkansas approved voter ID requirements. Others such as Nevada approved automatic voter registration while Michigan voters approved sameday voter registration, straightparty voting and no-excuse absentee voting. In Florida, citizens approved restoration of the voting rights of 1.4million residents prevented from voting in the past because of felony convictions. The idea of elections as a platform for direct citizen participation in the policy process is very appealing. It is democracy in its purest form. Note that it happened in addition to the existence of rep-

resentatives in the state assemblies. Nigeria should take a close look at this system. Research mattered. The issues that featured on both sides came from in-depth insights into the electorate and what mattered to them. It was primarily about the citizen and what she considered necessary. The system worked more than 98 percent of the cases. The integrity of the system is critical to faith in the electoral and democratic process. INEC and all parties involved in the Nigerian electoral system must continue to build faith in Nigeria’s democracy by making the system work. There were glitches. Four days post-election, there were still no results for the gubernatorial contests in Georgia, Arizona and Florida. There are charges of denial of voters, machines that do not function, and under-counting. There are also technical issues of the margin of difference between candidates triggering a need for a recount. What matters is that there is a system in place to correct the anomalies and make it work. The message above all. Change happens only because people are motivated enough to get involved. They start from pushing causes, then turn them into platforms and parlay that into politics. Activity is critical. Citizen involvement must happen in the February 2019 elections and would include vigilance over every step in the process from now until election day and after that.

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Tuesday 13 November 2018

Evaluating agitations over status, future of APCON Stories by Daniel Obi Media Business Editor

ong delay by Buhari-led government in appointing the board for Advertising Practitioners Council of Nigeria, APCON has generated other issues in the public including possible replacement of APCON with Institute and removing the council from government control. Daniel Obi assesses the development and writes on the dangers of weakening APCON. Non-appointment of the governing council of Advertising Practitioners Council of Nigeria, APCON, in the last three years by Buhari administration has led to frustration and agitations in the advertising industry. The vacuum of the governing council which has been a recurring decimal has naturally encumbered normal operation of the advertising industry. The previous administration led by former president Goodluck Jonathan also behaved in like manner of delaying and playing with the appointment APCON governing council. The cyclical development has forced the public and some advertising operators to demand for the removal of APCON from government grip in order to obviate distortions in running the about N150 billion advertising industry. They are conceivably advocating for a professional advertising Institute in place

of APCON or to have both exist side by side. Top professionals who spoke in the past supported an independent apex body while others believe that as long as APCON collects yearly subvention from the government, it shall continue to remain a lackey on government political chess board. The desire in some quarters to, perhaps, have APCON run as an Institute instead of a Council is strong even among some advertising practitioners and other stakeholders as they compare APCON with some professional institutes which they desire APCON to operate like. The call, without first understanding the difference between a Council and Institute and their respective roles clearly justifies the frustration with the current impasse over the government delay in the appointment of APCON

council. Between Council and Institute APCON was established by an Act 55 of 1988 and Act 93 of 1992. The provisions of Act 55 of 1988 are not significantly different from the Act establishing many professional institutes but APCON Act, however created a Council rather than Institute. The difference, according to experts is that whereas Institute is strictly a professional body; a council has the dual role of a practice regulation as well as professional body. Also governing council or boards of professional institutes are elected by members, the governing council of a regulatory body such as APCON, NAFDAC, SON are appointed by the government, according to the provisions of the council’s enabling law. Regulatory councils are agencies of government supervised by rel-

evant Federal Ministries. Therefore, in-the-dark call informed by government induced frustration to transform APCON to Institute will not only require the amendment of the law, but it has its immediate and long term implications for Nigerian advertising industry. Naturally, if APCON becomes a professional Institute, it will therefore be stripped of its powers as a government regulatory agency. This means that the advertising industry will be bare without control over operators. This will be similar to the food and drug industry operating without NAFDAC. Again, advertising industry is a peculiar case for the creation of an Institute. Institute is a professional body that deals with those who are practicing that profession but in advertising, there are

Media penetration in Nigeria driven by digital platforms - study SEYI JOHN SALAU

he advent of the new media and digital driven platforms has revolutionalised the media landscape, especially media penetration in Nigeria. With shift from analogue to digital TV, advertisers need to pro-actively consider investment on pay-tv which is increasingly affordable as witnessed in the growth of cable TV penetration over the past year. According to recent the Nigerian Media Advertising Guide (NMAG), a Starcom Media Perspectives industry report; radio remains the most efficient medium to drive frequency for brand communication while brands increasingly leverage the integration of TV and social to maximize

engagement. The report findings which is now an App and made available for download from Google play for Android and Apple store for iOS at no cost to users, reveals that more brands are utilizing digital media innovation to engage the youth who have the highest media penetration and drive increase in return on investment (ROI). According to the report, TV and radio penetration have reached a peak nationally, indicating that opportunity for growth lies in digital. While environmental factors like urbanization, security affect Outof-home (OOH) penetration. NMAG report reveals that there is no significant growth in newspaper penetration as hard copy is being threatened by online version and blogs. However, there is an opportunity for brands to bundle offline/online print investment

leveraging technology. “In line with our commitment to champion industry thought leadership and keeping our promise of continuous improvement, we launched the 2018/19 edition of the insightful marketing communications advisory annual publication, Nigeria Media Advertising Guide (NMAG),” said Jude Odia, COO, Starcom Media Perspectives. According to Odia, this edition of NMAG is in line with the promise to democratize media research data, by making it accessible to all stakeholders.

“Therefore, I am glad to inform you all that the comprehensive version of this book is now available for download on Google play for Android and Apple store for iOS,” he stated. “…in our efforts to fully operationalize the Starcom brand in Nigeria, we have included a new section in this edition tagged Trends and Projections. This is aimed at helping clients and businesses predict and proactively position for the near future realities. This section is an output from our advisory and consulting unit, a new arm in our overall bundle of professional services,” said Odia. Ose Osundeko, head, digital services, Starcom Media Perspectives, said deploying the report in the form of an app became necessary due to the inability of most stakeholders to get the hard copy of the last edition.

people who are not necessarily practicing advertising but they have something to do with advertising. It would therefore be difficult to compel somebody who has something to do with advertising but not practicing advertising to become a member of the institute. Similar to Nigerian Bar Association, ICAN, Nigeria Medical Association, NIPR, an Institute could be established in the industry with proper definition of who is an advertising practitioner. But this is not to replace APCON with the Institute. When this happens, APCON can cede its professional functions including member registration and professional development roles to the body while it maintains its regulatory functions. Alternatively, the status quo can be maintained but with proper education of government functionaries to respect the APCON law by appointing advertising practitioners to the council. In this case government should therefore not see APCON as another patronising board appointment. Government created the law establishing APCON which requires appointment of advertising practitioners to the council; therefore government should abide by it. This however requires industry stakeholders and sectoral groups to properly educate government on this understanding. But the quagmire here is, as politicians, government as funders of the council, wants

to have a say in the board as it is applicable to NAFDAC, BON, SON among others. It should therefore amend the law establishing APCON to have it as a solely regulatory body. In this case, government can appoint into the council whoever it considers fit to handle the regulation of the advertising industry. This will necessitate the industry on its own, if it desires to form a professional institute for its affairs. In spite of the limitations of APCON Act, which has necessitated the urge for amendment of the Act to strengthen its regulatory enforcement capacity, APCON has, to an appreciable extent, succeeded in enforcing suitable standards in commercial communication across the segments of the advertising industry. A government that appreciates the power and influence of advertising in determining perceptions, behaviour and choices of millions of people who are daily exposed to ever-growing advertising message and the consequential need to regulate the practice in public interest, is not likely to abandon this role. Advertising wars, hate-advertisement during political campaigns and offensive and indecent adverts underscore need for regulation. As it is, APCON has to remain as government agency if it has to be effective and successfully carry out its functions of regulation of the advertising industry.

MTN partners Sterling Bank on Smartphone device financing scheme

n a bid to provide more Nigerians with access to the benefits of a digital world, MTN Nigeria in partnership with Sterling Bank and PayJoy recently launched a Device Financing Scheme (DFS) to provide customers (who meet their requirements) with the opportunity to purchase smartphones of their choice and pay over a period of six months. Speaking at the launch, Sales & Distribution Executive, MTN Nigeria, Adekunle Adebiyi said in a statement, “MTN wants every customer to benefit from the modern, connected life and it is through partnerships like this that we will see the kind of change that we want to see.” Under the DFS, the smartphones ranging from N25, 000–N400, 000 can be pur-

chased by any customer at its current purchase price plus a 20% interest with the Device Financing Scheme. The pilot scheme will start with Samsung smartphones but will be expanded to include other Original Equipment Manufacturers, OEMs. The Device Financing Scheme aims to drive the adoption and uptake of smart devices through the provision of affordable credit facilities to eligible customers. The maximum loan tenure under the scheme is 6 months with pocket-friendly monthly instalments, and I it is open to all customers who meet their credit requirements. According to Shina Atilola, Group Head, Strategy and New Business at Sterling Bank, “Paying upfront for everything you need can be limiting.

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Marketing&Pr

Early awareness, intervention can control autism – says Loretta Burns Loretta Burns is the founder/ CEO of Advanced Behaviour and Education, ABE International Clinics and Consultancy Limited, USA. For 25 years, she is committed to improving the lives of individuals with autism and cognitive disorders. She was in Nigeria last week to facilitate the interactions and learning, necessary for all individuals to successfully become contributing members of society. BusinessDay engaged her on her mission. Excerpts.

Why are you in Nigeria? am in Nigeria at least 3-5 times every year. However this time I am looking to kick start of my lifelong dreams which is helping Nigerian children and people with autism and cognitive disorders. Over the years I have always had to come to Nigeria because I have a lot of clients who are Nigerians and they struggle with visas and many other issues to come to my clinic in US and UK. So we decided to come to Nigeria to bring the services to them. I focus on cognitive disorders, providing support to people who are suffering from autism, Down syndrome, intellectual disorders and mental health support. I have been in this service for 25 years. What informed your interest in handling these issues? When I began many years ago, I saw people that have autism could do anything, learn or be engaged in productive activities. I noticed that most people with these disorders were placed in special homes and some families are separated because they don’t know how to deal with the issue. I therefore researched on dealing with it and specialised on it. After working closely with families, children and seeing their changes, they were able to get jobs and become part of society, this boosted my passion in this area. From your experience, what are really the causes of this disorder, especially among children? Research shows that there are two reasons that people have autism. It is either generational or environmental. It is either parents have it in their genes or it could be from the environment. When I said environment, I mean pollution because when you look at autism, it is a neurological disorder and it impacts communication and social skills. Also, when you look at intellectual disability, it really focuses on what is happening in the society or environment that causes the deficit in neurons. It is seen more now because it is prevalent. Before, people didn’t know what to call it. Now, they believe that every mental disorder is

Loretta Burns

autism, which is not. Unfortunately, there is always an overlapping misdiagnosis or mis-treatment. So how can it be controlled? By keeping the environment clean but my role is really early intervention. The sooner we can identify, make changes, even within the homes or certain areas such as schools and communities, to train and shape behaviours quickly so that all these individuals can get jobs, become contributing members of the society, the better. If it is controlled, they are able to be engaged in the society and not kept at home or in the shadows. My role is to detect it early enough so that it can be controlled or treated. What else can society do to check these disorders? It is really about supporting schools. School is a big part as almost everybody sends their child to school. It is also training and working closely with doctors, hospital and facilities so that they know what to do. As early as 6-months or a year or two of a child, it can be diagnosed if there is any deficit. We don’t have to wait till a child is 6 or 8 years, because by then, time is lost. We can test sooner, which is good and can

begin building behaviour strategies. We can also train you on how you treat the child every morning and we go into classrooms, teach teachers and principals on how to blend inclusion. Children with autism and disorders don’t need to go to separate schools, but it is about providing support in similar background. So what are you offering Nigerian families whose children are suffering from these disorders? The treatment would be how people come in for sooner checkups, being able to test quickly, support quickly. People always ask whether autism has a cure and my answer is no. It is not about curing autism but about strategizing so by the time the individual is at certain age, it may not be identified that the individual suffered autism. The whole idea is being able to diagnose sooner. We have a foundation that even as much as we charge for the work we do, the foundation also supports people who cannot afford the bill. What challenges do you foresee coming into Nigeria? The biggest challenge is segregation and having people to un-

derstand that segregation is not necessary and it is not the solution. I understand that those with autism here have supporting partners, which is not the answer. The answer is building independence and teaching the skills. There is also the religious, as well as spiritual myth, where many tend to think it has something to do with some forces that are after them; hence many focus more on dealing with it as such as opposed to focusing on proper care and training of the child. Our goal is to gradually change all of these and provide better understanding of the issue. What is the role of the parents in assisting the society in controlling autism and similar cases? I tell everybody that parents have the number one role and the big part of what I do is to train parents .The child with autism spends more time with the parents, so it is important to train parents and siblings so that everyone is on the same page and strategy and that is what we call intensive support. When there is intensive support, changes occur quickly. From your research, what percentage of Nigerian children are suffering from these disorders The number has grown considerably over the years. In my clinics the number was small initially but in the early year 2000 when autism became prevalent, that number grew to about 15 percent. Now it has grown to about 35 percent. I now receive a lot more calls in the US from Nigerians who want to bring their children over. What is the effect of autism and other neurological disorders on the productive capacity of economies? Autism is a neurological disorder that affects and impacts the social and communication skills. We are building a generation to be employable. They don’t need to be a burden to the society. Economically, it will be an asset to have everyone with controlled autism and intellectual disability have jobs and after their education.

Hollandia Chocomalt drink launches small size for market appeal

ollandia ChocoMalt Drink, Nigeria’s first ready-to-drink chocolate, malt and milk drink, is now available in a new 180ml pack. The new pack is intended to provide an entry point for adults and upsize for kids, while building on the commercial success the brand is enjoying following its launch in 2017. Retailing at N100, the new 180ml pack comes handy with a straw. For consumers, Hollandia ChocoMalt Drink which is filled with the goodness of milk, energy giving malt and delicious chocolate, will take away the hassles and inconvenience involved in preparing Choco-based beverage drink the traditional way because it can be consumed immediately after opening. According to the Managing Director, Chi Limited, Deepanjan Roy, the growing popularity of Hollandia ChocoMalt Drink reflects how its ready-to-drink convenience and quality instant nutrition is driving consumer demand for packaging sizes tailored ever more precisely to their specific lifestyle needs in an increasingly dynamic market.

Chivita Ice Tea Sport re-brands

hi Ice Tea, one of the fastest growing brands from Chi Limited, is now Chivita Ice Tea. As part of the rebrand seen as a strategic move to integrate with the Masterbrand Chivita, Chivita Ice Tea now comes in a new product pack that is more aspirational, modern and trendy, with the promise of the same refreshing goodness. With an exciting logo that reflects its new positioning under the Chivita Masterbrand, the product’s innovative back of pack prominently features its health benefits, product quality and consumer benefits. The pack’s design also has a top to bottom label that is bolder, visually disruptive and combines perfectly

MultiChoice Nigeria committed to empowering women, says CEO Daniel Obi

anaging Director of MultiChoice Nigeria, John Ugbe has said that the company is committed to empowering women. Ugbe who spoke recently at the maiden edition of Women in Advertising forum in Lagos, where he joined some of the most influential ladies in media and advertising for a panel discussion on advertising.

‘‘From having a senior management team of an almost equal gender split, to actively putting in place programs which celebrate gender equality, MultiChoice Nigeria has been extremely progressive in numerous ways. Some of our most important operations are headed by very brilliant, hardworking women who, I must say, give the men a run for their money” The United Nations says,“Women in every part of the world continue to be largely marginalized, often as

a result of discriminatory laws, practices, attitudes and gender stereotypes and low levels of education…..” “Individual women have overcome these obstacles with great acclaim, and often to the benefit of society at large. But for women as a whole, the playing field needs to be level, opening opportunities for all”. Ugbe advised women with a few poignant tips on how they can make substantial progress at their workplace. “Take on more projects

that will stretch you and Like Sheryl Sandberg says ‘sit on the table’. Take ownership of your success and toot your horn where necessary”. He was joined by Tope Jemerigbe, CEO, DKK Nigeria and Angela Emuwa, Chairman, Punch Newspapers, during the fireside chat. Stressing the importance of mentorship, networking, capacity building and work-life balance, Ugbe gave relevant examples to further drive home all his points. “Get a mentor, be a mentor”.

with the colour pallet. It is expected that the new product pack would energize the brand in the marketplace and endear Chivita Ice Tea to a growing number of consumers who have embraced a tea drinking culture because of its antioxidant properties and vitamins which rejuvenate and invigorate the mind, as well as the body.

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COMPANIES & MARKETS

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Interswitch, Microsoft pioneer blockchainbased supply chain service in Nigeria JUMOKE AKIYODE-LAWANSON

nterswitch Group and Microsoft have partnered to extend supply chain financing (SCF) service to Nigeria’s growing SME community using blockchain technology. Supply chain finance is a set of technology-based business and financing processes that link various parties in a transaction (buyer, seller and financing institutions) in order to lower financing costs and improve business efficiency. At the formal launch of this service on Friday 2, November 2018, Interswitch, an integrated digital payments and commerce company said that its supply chain finance module is built and hosted using the Microsoft Azure blockchain technology which provides a proven security, compliance and scalable cloud platform that accelerates and supports the next generation of blockchain applications. Mitchell Elegbe, group managing director and chief executive officer at Interswitch said; “In our 15 years of operation, we have experienced the bottle necks associated with the existing corporate-based financing infrastructure in Nigeria. This is why we are happy to partner with Microsoft, by leveraging

L-R: Nnamdi Enuah, state controller, Federal Ministry of Labour and Employment; Jukka Takala, president, International Commission on Occupational Health (ICOH); Adedamola Dada, medical director, Federal Medical Centre, Ebute-Metta; Oladejo Oluseye, Lagos State commissioner for special duties, and Okon Akiba, president, Society of Occupational and Environmental Health Physicians of Nigeria (SOEHPON), at the Annual Scientific Conference of (SOEHPON), in Lagos . Pic by Pius Okeosisi

the advanced technology of the Microsoft Azure Blockchain, to prove the possibility of building a distributed ledger that is practical, viable and has the propensity to solve some of Nigeria’s most difficult financial and logistic problems.” “With the launch of the Interswitch Blockchain Service (Supply Chain Finance Module),

FSDH Research advocates private sector involvement in infrastructure funding FAMINU GBEMI

SDH Research, an arm of FSDH Merchant Bank limited, is calling on the Federal Government to involve the private sector to finance infrastructure gap in Nigeria. Ayodele Akinwunmi, head FSDH Research, made the call while speaking on the topic: Local Competitiveness: A Prerequisite for Inclusive Growth, at the firm’s monthly economic and financial markets outlook. It is estimated that about US$100 billion must be invested annually to finance infrastructure development in Nigeria to close the deficit. However, the weak revenue generation of the Nigerian Government shows that the country cannot meet the capital required through annual budgetary allocation. The FGN 2019 budget call circular published on 25 October 2018 by the Budget Office of Nigeria, indicates that the capital expenditure for 2019 is set at about N1.98 trillion, 30.92 percent lower than the N2.87 trillion approved in the 2018 budget. Adjusting the proposed capital expenditure in 2019 for inflation, it represents a steep decline from the 2018 figure in real terms. This underscores the

need for Public-Private Partnerships (PPP) to drive infrastructure development in Nigeria. The draft 2019-2021 Medium-Term Expenditure Framework and Fiscal Strategy Paper notes that Nigeria faces medium-term fiscal challenges especially with respect to revenue generation. FSDH Research believes that one of the reasons for the weak revenue generation is inadequate infrastructure in the country. “Adequate and functional infrastructure will have a multiplier effect on the growth of the economy and should attract investment into the non-oil sector”, Akinwunmi said. The firm admitted that infrastructure development is critical for a sustainable growth of the Nigerian economy. Given the FGN revenue constraints, partnership arrangements with the private sector is a cost-effective funding model for infrastructure development in Nigeria. FSDH Research forecasts that the inflation rate for October 2018 will trend upwards to 11.34 percent on account of high food prices largely due to a drop in food supply. The shortterm inflation outlook means that monetary policy stance will remain tight.

small to middle-sized businesses can access more funding in a shorter time (up to three weeks) from participating banks such as United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc (GTB) and Zenith Bank Plc and enjoy increased sales cycles from participating corporations such as the Dangote Group. The scheme is also open for other banks to

join in,” Elegbe told BusinessDay. BusinessDay finds that in a globalised economy, industrial value chains are becoming more complex, spanning more countries and more companies than ever before. Yet, while flows of goods in the supply chain are increasingly integrated and optimised, the same cannot be said of the financial supply chain,

GNI reaffirms commitment to regulatory compliance

reat Nigeria Insurance Plc has never received any warning,queryorsanctions regarding insider trading from the Securities and Exchange Commission (SEC) or National Insurance Commission (NAICOM) who are both regulators of its services. The company is making the clarification following allegations on non compliance by the House of Representatives Sub-Committee on Capital Market and Institutions following a recent public hearing held on Wednesday, October 31, 2018, Cecilia O. Osipitan, managing director/CEO of the Insurance Company made this known in a statement made available to Journalists in Lagos. Osipitan said it has come to the notice of the Board of Directors and Management of GNI that the House of Representatives Sub-Committee on Capital Market issued a statement on Monday, November 5, 2018 threatening to authorize SEC to take over the Management of GNI Plc. She assured the company’s shareholders and general public that the organisation is compliant with all the rules and guidelines of the various regulatory agencies thatoverseeitsoperationsmaking all the allegations of insider deal-

ings, failure to pay shareholders’ dividends, tax evasion and failure to comply with corporate governance regulations as accurate. She stated that the restructuring process put in place by the Board and management has boosted the Company’s retained earnings of circa from (N2.4billion) in 2009 to (N0.59billion) in 2017. This improvement in retained earnings was achieved through organic growth only. She added that the Company has also been meticulous about making tax remittances to both the State and Federal Government and has up-to-date receipts to corroborate this fact. While allaying the fears of all stakeholders, she said the Company will ensure that the misconception regarding its operations will be resolved with the Committee. Sheexplainedthattheinability of the Company’s representative to attend the Committee’s meeting was unavoidable and same was duly communicated to the Committee. She further stated that the Company has forwarded totheCommitteewrittendetailed responsestoallquestionsraisedto set straight earlier communicated misrepresentations and will be willing to answer further questions that may arise.

where the credit crisis revealed structural weaknesses. The cost of finance is rising, while suppliers, especially SMEs and those located in developing countries such as Nigeria; have difficulties obtaining the credit they need to grow. To address these issues, which bring with them the risk of disrupted supply chains, large buyers arestartingtomanagethefinancial

supply chain with the same integrated approach they apply to the physical supply chain. SCF will significantly improve access to finance or reduce the need to finance by unlocking potential funding from within supply chains instead of relying on external creditors. While the application of blockchain is usually associated with cryptocurrency, the Interswitch Blockchain service does not deploy the use of cryptocurrency in its application. It was explained that transaction enquiries and verifications will be handled by authorised officials from participating entities, without the incentives of a cryptocurrency. Michael Glaros, principal program manager, Microsoft Azure Blockchain at Microsoft Corporation, said: “We are excited about this partnership with Interswitch. This will be the first enterprise-grade blockchain service in Nigeria, and one of only a handful of production blockchain applications in use by banks and corporates globally. The blockchain technology is still in its infancy in Nigeria and we are happy to pioneer its deployment in partnership with Interswitch, an innovative and forward-thinking company which has evolved its business around financial technology.”

Eat‘N’Go hits PH to create new taste in Niger Delta with three brands IGNATIUS CHUKWU & I NNOCENT ETENG

ood and taste may take a new shape in the oil region following the entry into the market by Eat’N’Go, a franchisee outlet. The new taste giant has made inroads into Port Harcourt, introducing three world class brands, Domino’s Pizza, Cold Stone Creamery (ice cream) and Pinkberry Gourmet Frozen Yoghurt. This was revealed on November 7, 2018, in Port Harcourt during a press briefing that marked the unveiling of the outlet located at Olu Obasanjo Road during which invited members of the public received free pizzas and their chosen flavours of ice cream and yoghurt. Eat’N’Go, which came to Nigeria in 2005 but mainly maintained a presence in Lagos, opened shop in Port Harcourt the next day (Thursday) for formal business transactions. It will join other international taste brands such as Mr Biggs, Chicken Republic, Kilimanjero to fight for space. There are some dominant local brands such as ‘The Promise’ that work hard to dominate the

local market. According to the company’s Chief Operating Officer (COO), Antoine Zammarieh, the reason for storming Port Harcourt is because the people deserved the best, not only in terms of rich brands, but also in efficient service-delivery. He said the strategy if to strive to take the Niger Delta region from Port Harcourt. Meanwhile, the company’s human resource director, Adeeko Olusola, stated that not less than 150 persons have already been directly and indirectly engaged by the company in Port Harcourt. He promised that customers would get value for every naira they spent on the company’s products. He also assured that the products would be affordable to all classes in society, depending on the buyer’s preference. “Our guarantee to you is that (for) every one naira you spend, you get absolute value,” he said. Domino’s Pizza is a world brand that started in the United States (US) in 1960. The company currently has 900 outlets in the world, with 300 stationed outside the US. Also, Stone Cold Creamery and Pinkberry Yoghurt owe their origins to the US.

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Tuesday 13 November 2018

COMPANIES & MARKETS

As oil prices dip, Nigerian economy could feel strain DAVID IBIDAPO

ecent occurrences in the crude oil space could signify distress for the Nigerian economy being the major sector and source of Government income. The month of October recorded the second biggest decline in crude oil export from Nigeria since January after export declined 7 percent from previous levels of an average of 1.9 million b/d in the month of September to about 1.7 million barrels on average. The highest monthly average of crude oil exported in 2018 was 1.9m b/d in September growing at an average of 3 percent after crude oil export declined to lowest levels of 1.61 million barrels in May 2018. Ayo Akinwunmi, Head of Research, FSDH, said “it is not looking good for Nigeria if oil prices are dropping and we are not able to sell our crude oil because this accounts for over 80 percent to our revenue and foreign exchange”.

Brent crude oil prices on Friday declined below $70 per barrel p/b, after reaching all time high of $84.16 in October 2018. According to Chattered S t o c k b ro k e r s L i m i t e d , “This was on the back of reports that the U.S. has softened its crackdown on Iranian exports amidst a surge in American supplies which eased concerns of an impending shortage. According to the West Africa crude, condensate exports from tanker tracking for October by Bloomberg, the five biggest West Africa exporters of crude oil all recorded a decline in crude exports. Africa fell to 3-month low in October, as flows from region’s 2 biggest producers, Nigeria and Angola, were down. Nigeria’s crude and condensate export declined 5 percent from 2 million barrels p/d to 1.89 million bp/d. Angola’s exports on the other hand declined 9 percent from 1.4 million bp/d to 1.3 million bp/d. However, analysts believe that efficient management of Nigeria trade

Renmoney appoints Boshoro new CEO

enmoney has announced the appointment of Oluwatobi Boshoro as its new Chief Executive Officer. Prior to her appointment, Tobi served as the head, Digital Strategy, Issuing and Service Management at Stanbic IBTC. The new Renmoney CEO had also headed Stanbic IBTC’s Electronic Banking and Digital Strategy units at various times, where she was responsible for the digital transformation of the bank. Between 2008 and 2014, Tobi held senior positions at the Interswitch Group, including Group Head, Issuer Management. She is an alumnus of the prestigious Harvard Business School, having completed multiple Executive Management programmes including the General Management Programme in 2013. Tobi also holds an M.Sc. Strategic Marketing degree from Cranfield University’s School of Management and a BSc. In Economics from Ogun State University. Tobi has been described as an innovative and transformational leader with proven abilities to develop strategies to deliver customer-focused solutions and drive bottom line growth in highly competitive

markets. Renmoney’s new CEO is excited by the opportunity to significantly empower underbanked individuals. She said: “I am thrilled to be part of an organization which is passionate about leveraging data and technology to enable individuals achieve their dreams. There is a synergy between the values I espouse and what Renmoney represents as an organization. Our customers will continue to be the core of our focus as we work hard to build even more convenient solutions to help them achieve their goals.” Speaking on Tobi’s appointment, Kieran Donnelly, chairman, Renmoney board of directors said: “We are very excited to have Tobi on board. As a fintech company, her experience in driving innovation and excellent service delivery, will be critical to our success. Under Tobi’s leadership, I am more confident than ever that we will deliver outstanding digital service experiences to even more customers in Nigeria.” The new Renmoney CEO is a member of the Chartered Institute of Marketing (CIM) and The Market Research Society (MRS), both in the United Kingdom.

L-R: Paul Igbinoba, member, trade promotion board, Lagos Chamber of Commerce and Industry (LCCI); Leye Kupoluyi, chairman, Specialised Exhibitions; Babatunde Ruwase, president, LCCI; Remi Giwa, member, trade promotion board, LCCI, and Bunmi Banjoko, member, trade promotion board, LCCI, at a media parley to unveil the 2019 edition of Lagos Chamber of Commerce and Industry ICTEL Expo in Lagos.

policies will help reduce the negative impact of declining oil prices and oil exports on the Nigerian economy. “The major buyer of Nigeria’s oil has been India and there are indications

that India will start buying from Iran. If this happens, this will shift away more demand from Nigerian oil grades which spell more trouble despite forecasts of $70p/b,” Akinwunmi added. Ayo Teriba, CEO, Eco-

Caritas hosts maiden edition of Reputation Leadership Roundtable

aritas Communications, a leading reputation solutions and strategic communications company, in partnership with the Nigerian Institute of Public Relations, (NIPR), is set to host the maiden edition of the Caritas Reputation Leadership Roundtable Summit 2018. The summit, which has the theme, ‘Ethics, Reputation & Technology in a VUCA Economy,’’ will attract top executives, business and thought leaders from various sectors of the economy. The keynote address will be delivered by Emeka Opara, Vice President, Corporate Communications & CSR, Airtel. This will be followed by a robust panel discussion that will explore new themes in reputation management, strategic communications in crisis situations, and the influence of modern technology on reputation management. The panel discussion

will be moderated by John Ehiguese, president, Public Relations Consultants Association of Nigeria (PRCAN), The event will also serve as a platform for the official unveiling and presentation of the book, “Public Relations Thoughts & Deeds,” written by Adedayo Ojo, Founder and Chief Executive Officer of Caritas Communications. The book will be reviewed by Opeyemi Agbaje, Chief Executive Officer, RTC Advisory Services. According to Boye Longe, chief operating officer of Caritas Communications, “the art of reputation management has evolved globally, and we deemed it fit to highlight some of the new developments. At Caritas, we are practical about implementing new thinking and the book we are about to present is a bold tool for disseminating some of the innovative ideas which are at the center of modern reputation management.”

nomic Associates (EA) explains that, “what is important for the Nigeria economy is not where the oil price is at a point but the average oil price for the year.” BusinessDay analysis reveals that the average

crude oil price year to date (YTD) stood at $73.5, some 47 percent above the budget benchmark of $50 while average crude oil output YTD stood at 1.8 million bp/d, 10 percent below benchmark of 2 million bp/d.

Nigeria seen as a leading country in Fintech space HOPE MOSES-ASHIKE

igeria has been described as a leading country in the Financial Technology (Fintech) space in the world. Executive Director, Systemspecs Limited, AdeRemi Atanda, stated this recently at the Centre for Financial Journalism (CFJ)Association of Corporate Affairs of Managers of Banks’ (ACAMB) Business Forum held in Lagos. According to him, many things have happened in the fintech landscape in Nigeria that have not happened elsewhere in the world. However, he lamented that the success stories in this area has not been adequately captured and celebrated. This, he said, is because “we are not schooled in value narratives”. He advised that we should “understand the paradigm that shape narratives”. This way, we can capture the successes achieved so far in the Fintech landscape. He said despite the successes achieved so far, even well acknowledged by advanced countries, there is still a lot of room for improvement. Atanda said that Fintech is

part of the digital age which evolved partly as a result of revolution in mobile telecommunications. Dwelling on the theme of the Business Forum Fintech and Financial Services Delivery in the Digital Age, he said that Fintech which is driven by data, is transforming the ways financial and business transactions are now carried out. He noted that pay-tech is just one aspect of Fintech, and virtually the only aspect that we are still dealing with now as there are many other aspects that are yet to be integrated into the entire architecture of Fintech. According to him, it is not only the banking sector that requires the services of Fintech providers. He said that insurance, pension schemes, medical services, oil and gas and even agriculture require Fintech to drive them. “There is huge potential yet untapped that can help to move the entire system forward to new stage of development”, he said. He optimistically said that indeed Nigeria can really lead the entire world by being at the forefront of Fintech, providing veritable model for others to follow.

Tuesday 13 November 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

‘We are more interested in data crossing line, integration’ Christine Heenan, vice president, Global Policy and Advocacy at The Rockefeller Foundation was in Lagos recently for the Africa Trade Forum 2018 where she spoke to MICHEAL ANI in this interview

hat is your foundation about, what is your ideology and what are you guys coming to preach? Rockefeller foundation has for a 105years been about trying to harness science and technology to deliver the fundamental of human well-being in more people around the planet. We think about things like food, health and power. The ability to have a level of power, that allows you to power your business, one’s life and lift one’s self out of poverty, health, which is the foundation of all well-being. Rockefeller Foundation is in how many countries, African countries precisely? Our work in African countries is largely around Agriculture and over time, it has also been about health and power. Our offices are in Nairobi, but half of all our overall giving globally goes to Africa. Can you tell us why Rockefeller foundation is interested in the Africa Continental Trade Agreement? Our interest in AFCFTA is around trade agreement and our interest in joining with the government of Nigeria is to help organize this conversation, because we believe that intercontinental commerce and cooperation will lead to further progress in those areas that we care so deeply about. It will also help solve malnutrition and hunger from more people, it will help bring health care and help data across country line and it will allow for solution of energy and power. There are off-grids there are renewable that will lift more villages to have entrepreneurs who are interested in doing more with their ideas and with their farms, but needs the power to do that. What is Rockefeller seeing in that space that is making it key into reaching the poor on power, health, and education? We really believe that we are at a point in time, where we no longer rely globally for solutions because the solutions are increasingly known just that they are just not scaled, they are not reaching all the people who can benefit from them, so our interest is in using harnessing science, harnessing data, technology, to bring these solutions. For example, far too, women still die in child birth around the world, including here in Africa but if you look beneath this statistics, they die of three primary causes, all of which are preventable, that is why we are bringing in community data, along with experience, that will allow community health workers To help women, avoid those conditions, survive, thrive

Heenan

and help their family. A perfect example will now enable us know what the causes are and know how to prevent the problem, which is a matter of having those solutions through to meet more people. 49 countries have signed the agreement excluding Nigeria. What hope lies for us, what are we missing out without signing that contract? It is very interesting listening to the vice-president and to the minister of trade, talk about Nigeria’s interest in carrying along stake holders and making sure it get it right. So what I heard is enthusiasm and interest to stay up to a commitment of deliberations and inquisitivity. What potential do you think that the signing of AFCFTA it will unlock in Nigeria? I will turn to those who know better than me, like hearing Aliko Dangote say that Nigeria stands to be one of the biggest beneficiaries in terms of having a manufacturing base, having an economy that produces majorly for exports and removing some of those barriers, will be an opportunity for Nigeria and Nigerians. So I think the robust nature of the Nigerian economy, reaching more of the continent seems very promising in this conversation. How can you descried Nigeria’s ease of doing business, how stressful or easy is it to have investment done in Nigeria? I can tell you about the ease of doing business but one of the things that interest us, is the ease of sharing data, integrating data, the ability to look across the continent and say, this is where weather patron walks their way through and affect drought and their performance, this is where the part of the continent is still underpowered and will benefit from a simple mini grid to bring more villages online, bring them the value, poverty alleviation of productive power. So I think that we are more interested in data crossing

line and integration, and what we can all learn, is the clear picture driven by more integrated cross country data. Coming into Nigeria, disrupting the system with the data you talked about, what do you expect from Rockefeller in 5years time? I think data has disrupted industry, to the point where commerce is being completely transformed by alI and by big data. What we have yet to do, is see that same transformation, for the people who are most vulnerable in the planet. So let’s talk about an example of a disruption. Imagine right now, if in New York I could order a book on Amazon, and immediately they say to me, people who like this book, also like this other seven books right? That’s predictive analytics and big data. Now imagine a farmer who is pregnant with a child, who developed a condition when she gave birth the second time that makes her at risk this time. Imagine if she is wearing a device that has the data from her previous two pregnancies that tells exactly the number of weeks she should have a certain critical test, and tells her within mileage, the closest distance where she can get that test done. That’s the kind of disruption we will love to see bring to Africa, to the developing world, to that mum and that farmer. Why is Rockefeller coming in when some other are putting their investment on hold based on the forthcoming elections? We have been in existence for 105 years, we have been in Africa since 1965, so part of what is unique about the Rockefeller approach is taking the longer view, not quarter to quarter, not election to election, but what kind of innovation can we bring to bear now, that will pay dividend in a year or two, even up to 10 years, even more profoundly 20years, that’s what we are really excited about. Do you have anything to say about the Nigerian power sector? I think we are very interested in the potential of bringing some of the solutions we have seen deployed in India and Mayamma that brought such promise to that part of the world that had remote villages not easily connected to main grid. What we have seen is, if you can have a remote source that is renewable, like a solar mini-grid, a village can take control of its power usage and it’s power supply in a way that can fundamentally change the Local economy, so we love the idea of talking with others here in Nigeria about what will be possible in that space, what we have learnt from elsewhere and on how public private partnership, will make us work even further.

L-R: Gbenga Onitilo, national sales manager (Nigeria), Air Namibia; Bode Ainah, sales support executive, RwandAir; Mark Loxley, general manager, Southern Sun Ikoyi; Udeme Ufot, group managing director, SO&U, and Eyanimo Steven, administration manager, Distell Beverages Nigeria Limited, at the Media Briefing ahead of the 7th Annual Southern Sun Ikoyi Tournament in Lagos.

L-R: Ayo Fashina, senior investment officer, International Finance Corperation (IFC); Olufemi Ilesanmi, group head, credit risk management, Bank of Industry; Patricia Mwangi, IFC senior operations officer; Chioma Nwagboso, IFC financial sector specialist, and Nate Dickerson, facilitator, GBRW Consultant, during the BOI/ IFC capacity Building,’’ Problem Loan Management Workshop for Nigerian Banks ‘’ held in Lagos.

L-R: Anthony Youdeowei, chief executive officer, Ikeja Electric; Enyinnaya Abaribe, chairman, Senate Committee on Power, Steel Development and Metallurgy, and Adamu Aliero, Committee Member, during the oversight visit of the Senate Committee to Ikeja Electric Headquarters in Lagos.

L-R: Tobechukwu Okigbo, corporate relations executive, MTN Nigeria; Adekunle Adebiyi, sales and distribution executive, MTN Nigeria; Esther Akinnukawe, human resource executive, MTN Nigeria; Mazen Mroue, COO, MTN Nigeria, and Lynda Saint-Nwafor, chief enterprise business officer, MTN Nigeria, at the maiden edition of MTN Partner Summit in Lagos recently.

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Tuesday 13 November 2018

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Huawei launches public cloud to boost digitisation in Africa

…Builds first African station in Johannesburg Stories by JUMOKE AKIYODE-LAWANSON

s the move to cloud intensifies in today’s digital era, Huawei, global information and communications technology (ICT) solutions provider has completed plans and is making moves to build its public cloud in South Africa to provide cloud services to all sub-Saharan African countries. The company is taking this major step in a bid to accelerate its cloud business across the world, especially in Africa, which is an important piece of Huawei’s cloud globalisation map. According to the plan, Huawei will hold a launching ceremony on 14th November in Cape Town for its first African station in Johannesburg. The company believes cloud services are essential for digitisation of economies and has expressed commitment to providing open, flexible, easy-to-use and secure cloud services, laying a solid foundation for a fully connected, intelligent world by bringing digital to every person, home and organisation. Another jigsaw puzzle piece of

globalisation Since it was established in March 2017, the Huawei Cloud Business Unit (BU) has unveiled more than 120 cloud services in 18 major categories. These cover more than 60 general solutions including SAP, high-performance computing (HPC), Internet of Things (IoT), Security, DevOps and more than 80 industry scenario solutions; covering manufacturing, e-commerce, gaming, finance and Internet of Vehicles (IoV).

In 2018, Huawei Cloud officially launched the Hong Kong, Russia and Thailand Stations. By end September 2018, Huawei Cloud had provided services in Asia Pacific and partner public cloud services in Europe and Latin America, outside of the Chinese market. Huawei Cloud and Huawei partner public cloud are available in 14 countries and regions, and will be available in most of major the regions around the world by end of 2018. Referring to globalisation

strategy, Deng Tao, vice president of Huawei Cloud BU said, HUAWEI Cloud was globalised since its inception because Huawei had been providing its products and technologies in the form of cloud services to partners like Deutsche Telekom (Germany), Orange (France), Telefonica (Spain) and China Telecom. “Based on Huawei’s 30 years of ICT infrastructure experience and nearly 10 years of continuous R&D in cloud computing technologies, Huawei Cloud can provide a onestop solution to large enterprises; addressing their challenges in digital and cloud transformation, as well as to small and medium-sized companies that aim to expand their business.” Deng said. From AI to EI This month, Huawei launched its comprehensive Artificial Intelligence (AI) strategy and full-stack, all-scenario AI portfolio which is designed to provide powerful support for Huawei Cloud EI (Enterprise Intelligence), an AI service platform for enterprises and governments, was released in September 2017. To turn AI into a practical reality, Huawei came up with the concept of EI. The company believes that

a cloud will prosper only when it helps customers create value on an ongoing basis. Talking about how to combine industry insight with AI, Jia Yongli; general manager of EI product department of Huawei Cloud BU said, Huawei Cloud EI is a scenariosbased service. “Huawei Cloud EI drives industry modernisation in three scenarios, including repetitive and highvolume work, tasks that require expert experience and work that needs multi-domain collaboration. These will help improve efficiency, pass on expertise, and break the limits of human intelligence,” according to Jia. On April 17, 2018, Cloud Native Computing Foundation (CNCF), the world’s top open source community in cloud technology, officially announced Huawei election to the Technical Oversight Committee (TOC), making Huawei the first Asian company to be admitted into the CNCF TOC. In May, Huawei Cloud became an SAP-certified platform for deploying SAP HANA and SAP NetWeaver Huawei predicted that there would be five major cloud platforms in the world and promised that it would be one of those five.

First Bank launches chat banking on WhatsApp platform

irst Bank of Nigeria, in its bid to make banking easier for its customers has officially launched its chat banking services on WhatsApp. With the rising need for customers to easily carry out transactions anywhere, the newly launched chat banking is a move by the bank to reduce the barriers for its customers. Speaking at the event which held at the First Bank digital lab in Lagos, Adesola Adeduntan, managing director/CEO, First Bank of Nigeria Limited & Subsidiaries

said; “As a leading banking service provider and customer-friendly bank, we are keen to offer excellent financial services to our esteemed customers and also very keen to device new ways of effectively and efficiently meeting customers’ financial needs”. With a customer base of about 12.5 million and monthly transactions worth over 20 billion naira, the need to expand transaction channels to online platforms is something which has prompted the bank to come up with innovative services such

as the chat banking platform on WhatAapp. WhatsApp messenger is a free to download messaging mobile application that has more than one billion people in over 180 countries using the app. “We have optimised our digital banking offerings to ensure ease of banking and convenience; our FirstMobile app, Firstonline, FirstMonie and USSD banking are some of the channels we have put in place to make this happen. FirstBank Chat Banking on WhatsApp is

our latest addition. We have gone live with this product and I am pleased to formally introduce this product to our media partners today,” Adedutan said. He also stated that the bank has gone to extra lengths to make the process seamless and safe. “Customers can now carry out various transactions on the chat platform including, transfers, payment of utility bills, mobile phone credit top-ups amongst others,” Adedutan explained. On the security of the platform, he said customers would be able

to generate a WhatsApp banking PIN and all transaction authentications will be done using a safe link, thereby ensuring the security of banking details. First bank WhatsApp banking could be done by easily adding 08124444000 on the app and sending a simple message to begin banking. “We remain committed to leveraging evolving technology in delivering easy and convenient banking services and products to our esteemed customers,” the bank stated.

BUSINESS DAY

Tuesday 13 November 2018

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E-mail: jumoke.akiyode@businessdayonline.com

World’s first integrated biometric path debuts with Emirate Airlines …Technology to eliminate passport control queues, physical stamps Stories by JUMOKE AKIYODE-LAWANSON

mirates Airlines says it has concluded plans to inaugurate the world’s first integrated ‘Biometric Path’, which will offer its customers a smooth and truly seamless airport journey at the airline’s hub in Dubai International airport. The biometric technology allows for a mix of facial and iris recognition, hence Emirates passengers can check in for their flight, complete immigration formalities, enter the Emirates Lounge, and board their flights, simply by strolling through the airport. The biometric technology will be positioned across multiple points from check-in to boarding, thus being the first in the world in terms of its integration across airport stakeholders. Adel Al Redha, Emirates’ executive vice president and chief operations officer, said; “Guided by our chairman His Highness Sheikh Ahmed bin Saeed Al-Maktoum, Emirates continuously innovates and strives to improve our day-today business. After extensive research and evaluation of numerous technologies and new approaches to enhance our passenger journey, we are now

satisfied with the preliminary work we have carried out and are ready to commence live trials of the world’s first biometric path at Emirates Terminal 3”. “These ground breaking initiatives are a result of close collaboration with our stakeholders - particularly GDRFA who have been instrumental in the programme to bring the biometric path to fruition. The recent launch of the Smart Tunnel trial by GDRFA is a great achievement and clearly dem-

onstrates the unique and collaborative nature of innovation at Dubai airport. All systems will eventually be linked with each other resulting in better service to our customers and a happier journey whether arriving, departing or transiting in Dubai. This is very much in line with Emirates’ ‘Fly Better’ brand promise. We will soon invite customers to participate in the trials for our biometric path, and we look forward to their feedback, he explained.”

BusienssDay finds that advanced stage of implementation with testing programme is currently “live”, and pilot trials involving passengers will follow suite. According to Emirates Airlines, the latest biometric equipment has already been installed at Emirates Terminal 3, Dubai International airport. This equipment can be found at select check-in counters, at the Emirates Lounge in Concourse B for premium passengers, and

L-R: Ike Eyisi; executive director, SIMS Nigeria Ltd (SIMS), Sarah Agha; executive director, Technologies Distributions Ltd (TD), Bisola Aiyeola; event compere and Eunso Shin; logistics manager, Samsung Electronics West Africa, during the launch of Samsung’s newest and smartest Television, The Samsung QLED TV, 2018 model, at The George Hotel, Ikoyi, Lagos on November 8, 2018.

Indigenous FinTech company releases latest enterprise budgeting software

he importance of budgets in any company’s strategic planning cannot be overstated. A budget is a comprehensive financial plan for achieving the financial and operational goals of an organisation. When deployed correctly, it can be the map of the company’s strategic plan. Having this in view, FinTrak, an indigenous financial technology firm in Lagos has made the challenges associated with budgeting easier with the upgraded FinTrak Budgeting Software. Budget has gone past the era of spreadsheet and formulas, with FinTrak budget software, budgeting has been taken to a new level by introducing a high level of automation.

The software which is embedded with features such as IFRS compliant calculations, formula-free technology, budget versioning and scenarios, budget simulation, automated consolidation of multiple units and extensive built-in financial and business intelligence will make the work of chief financial officers (CFOs) easier and error free. Speaking on the software, Bimbo Abioye, the group managing director of Fintrak said that; “It’s time to move beyond manual intensive budgeting through spreadsheets and formulas. This product enables you concentrate on the structure and performance of your business, and not on troubleshooting spreadsheets one cell at a time.

FinTrak Budgeting software is developed for confidence, productivity and insight into your financial operations and enables organisations to achieve proper budgeting and controls.” The company states that unlike other budget software solutions in the Nigerian market, Fintrak budget software offers organisations added advantages such as greater ownership of financial performance by all strategic business units and managers. “The upgraded software solution also avails users an easy adaptation to any structure and reporting requirements or standards. Most importantly, an integration of income statements, balance sheets and cash flow reporting are amongst

at select boarding gates. Areas where biometric equipment are installed will be clearly marked. Trials for the Smart Tunnel, a project by the General Directorate of Residence and Foreigners Affairs in Dubai (GDRFA) in collaboration with Emirates, was launched on 10 October. It is a world-first for passport control, where passengers simply walk through a tunnel and are “cleared” by immigration authorities without human intervention or the need for a physical passport stamp. Once its internal tests are completed, Emirates will shortly launch trials for biometric processing at the other key customer points at the airport – check-in, lounge, and boarding gate – and subsequently at transit counters/ gates, and for its chauffeur drive services. All biometric data will be stored with GDRFA, and customers invited to participate in the trials will be asked for their consent. The Dubai General Directorate of Residency and Foreigners Affairs (GDRFA), Mohammed Ahmed Almarri, on his part, reiterated, “We are pleased to roll-out these new initiatives at Terminal 3 in collaboration with Emirates and our airport stakeholders.

The Smart Tunnel tests are running smoothly, and we are now preparing to mobilize the other biometric systems at the other areas in T3. All these initiatives are in line with the government’s vision to be a world leader in innovation and public services. It will ultimately improve the traveler experience at the airport, and enhance the efficiency of our operations.” Emirates’ “biometric path” will improve customer experience and customer flow through the airport with less document checks and less queuing. Eventually, the “live” passenger tracking capability will also improve security and the airline’s ability to deliver even better and more personalized services. For instance, enabling the Emirates airport team to locate and assist ‘late’ customers who would otherwise miss their flights. The airline’s “biometric path” will cover departures, arrivals, transit, chauffeur drive connections, and lounge access in Dubai. Initially focused on First and Business class travelers, Emirates intends to speedily extend the “biometric path” to Economy class travelers in Dubai, and in the future potentially to other airports outside of Dubai, and also for its own dedicated crew check in facility.

Rack Centre receives award for Best Data Centre Innovation

many things that organisations stand to achieve when the software is deployed,” Abioye stated. BusinessDay finds that about six commercial banks and two mortgage banks in Nigeria are currently using this innovative platform. Fintrak’s clients in Nigeria include United Bank for Africa (UBA), Diamond Bank, Access Bank, First Bank of Nigeria among others. Industry stakeholders say that the homegrown financial software – Fintrak Budget solution is a welcome idea, especially as the Nigerian government is intensively trying to boost local content development in ICT. They strongly believe that the budget solution can favourable compete with similar foreign solutions.

ack Centre, Africa’s premium data centre has been named winner in the Best Data Centre Innovation category of this year’s Capacity Europe 2018 Global Carrier Awards in London. Rosalind Irving, CEO of Capacity Media, said the award “underscores the high benchmark Rack Centre has achieved since its launch as it has truly set the pace, raised the bar in its region, and has operated with 100 percent efficiency” In the past 14 years, the Capacity Media Global Carrier Awards, celebrating innovation, and excellence, has become a highly regarded global award event in the wholesale telecoms and technology calendar. The award has over the years provided an avenue to reward genuine innovation and service excellence reflecting the continuing evolution of international carriers. Winners of the awards were chosen by a judging panel of industry experts and

senior team members of Capacity Media, and all submissions were assessed using an incisive points system to allow further depth of analysis and rigour. The 2018 award was presented by Ed Stafford, the world record breaking polar explorer, a Guinness World record holder. Speaking of the 2018 the award, Jason McGee-Abe, the Capacity Media editor in chief and head judge, said” we have seen a number of key innovations and developments in the wholesale market and so it was great to take the time to celebrate the exciting companies, projects and partnership in today’s dynamic wholesale carrier industry” Commenting on the prestigious win, Ayotunde Coker, managing director, Rack Centre said, “we are truly honoured with this recognition of excellence and innovation on the world stage, a testament to the sustained world class quality and innovation delivered by Rack Centre, anchored in Nigeria.

Tuesday 13 November 2018

BUSINESS DAY

EDUCATION

Weeklyinsightoncurrentandfuturetrendsineducation

Primary/Secondary

Higher

Human Capital

Private sector initiative to tackle unemployment, bridge digital skill gap Stories by KELECHI EWUZIE

igeria, Africa’s largest economy, has an estimated population of 190 million, majority of who are faced with the challenges of securing good paid jobs. As a result, the potential as well as the contribution of this large population especially those within the ages of 18 to 35 years, towards the economic development of the country, is being constrained. According to the Nigerian Bureau of Statistics (NBS), Nigeria’s unemployment rate increased to 18.80 per cent in the third quarter of 2017 from 16.20 per cent in the second quarter. It is against this backdrop that SAP Skills for Africa Initiative, has shown determination to scale up the employability profile of Nigerian youths by training 22 Nigerian students. The students, whose graduation ceremony took place in Lagos last week, were the first set

L-R: Bolarinwa Onaolapo, Nigerian content industry collaboration manager, Shell Nigeria Exploration and Production Company; Hakeem Fahm Popoola, Commissioner for Science and Technology, Lagos State and Johann Pretorius, director, training, SAP training and development Institute at the SAP Skills for Africa Graduation and Networking Event in Lagos.

of Nigerians to benefit from the SAP scholarship programme, which was introduced to help in developing certified SAP Associates Consultants with the aim of bringing SAP business skills to the people with the cul-

tural and social understanding of Nigeria. The graduates were taken through a 3-month intensive training on SAP Technologies; Financial Accounting; SAP Active Project Management and

Educationists seek more creative ways to engage children

ducationists have encouraged parents to deploy physical activities as a creative way of engaging children to achieve good health and prevent sedentary lifestyle. Dolapo Fatoki, head of school at Greensprings School, Ikoyi Campus, stated this against the backdrop of the long term negative impact of uncontrolled screen time on children. Fatoki obser ves that screen time has become an inescapable reality of modern childhood, with children of every age spending long hours in front of screens, from televisions to computers, tablets and smartphones etc. She further says that although spending time in front of screens can sometimes be for positive use, as children are able to access various educational apps that help stimulate their brains, she however, noted that if not controlled, it will impact

negatively on children in the future. According to her, “The period between birth and age three, in medical terms is called the critical period because the changes that happen in the brain during these tender years become the permanent foundation upon which all later brain function is built. “The human brain within this period develops very quickly and is particularly sensitive to the environment around it”. Research shows that children who consistently spend more than four hours per day watching TV are more likely to be overweight while those who view violent acts on TV are more likely to show aggressive behaviour. Magdalene Okrikri, principal Greensprings Secondary School, who noted that it may be difficult to totally stop children from spending time on screens in this digital era,

said that there must be some form of parental control on these devices and more importantly adult supervision. To her, it is important for parents to keep tabs on their children’s screen time and set limits to ensure they are not spending too much time in front of a screen. She opines that studies show children with extended exposure to electronic media suffer delayed cognitive development. According to developmental psychopathology expert, Lynne Murray, of the University of Reading, “There are well-established literatures showing the adverse effects of prolonged screen time on the cognitive development of children under three years of age. This has therefore led to the recommendation by the US Pediatric Association that there should be no screen time for children before the age of three.

among others. Speaking at the event held in Lagos to mark the end of the 12th chapter of SAP Skills for Africa Initiative programme, Johann Pretorius, director of programme, told newsmen

that the programme came into existence when SAP wanted to grow its business in the MiddleEast and could not find local capacity to enable the company achieve its aim. According to Pretorius, SAP management decided to put together a programme that will specifically focused on building capacity among African youths, and will most importantly, ensure that jobs are made available for the youths that benefited from the training. “For this programme, more than a 1,000 graduates applied but only 22 were selected. They went through SAP training on Finance and were given two certifications including SAP Project Management that are globally accepted because the graduates wrote same exam with those from Germany, China, Japan, Europe and US,” Pretorius explained. Continuing, he said: “The qualification will allow them to work with any SAP partners and customers. We also train them on soft skill like Thinking and Business Model; Innovation, Communication and Presentation

skills, and this rounded up the programme. Hakeem Popoola, Lagos State commissioner for Science and Technology, says the programme fits into what the state government is doing in the area of job creation. “It is important to Lagos that the private sector is involved in creating jobs because government alone cannot address the issue of unemployment. On his part, Bolarinwa Onaolapo, representative of Shell Production and Exploration Company, partner to SAP on the programme, said that the real value of the programme is in placing trainees to work in an office environment. Onaolapo said that such enable them to practise and show how competitive they are in the labour market with the aim of becoming professionals. “Our own leg of support is in providing opportunity for trainees to express the skills they acquire in a real multinational company. We want to increase the number of Nigerians with the capacity of doing things independent of external resources,” Onaolapo said.

Vodacom launches annual Interschool Robotics training for secondary students

s part of its effort to enable the Nigerian education system advance teaching and learning programmes towards the fourth industrial revolution, Vodacom Business Nigeria, recently organised a one day robotics training workshop for students from five secondary schools in Lagos. The training, which took place at the Canton Concourse Training Center in Victoria Island, provided the students the opportunity to open their minds to knowing the various ways technology is shaping the world around them. The schools represented were Dansol High School, Ikeja; Edgefield College, Lekki; Fruitful Ville College International, Ikorodu; Halifield Schools, Maryland and Holy Child College, Ikoyi. The students were also equipped with useful mechanical and programming

skills that can be developed as they further their education. The students with age range of 12 to 15 years were given opportunity to immerse themselves in the complexities that surround the Internet of Things (IoT) and how it will affect their lives in the future. They were also taught how to build, program and control various kinds of robots used in performing numerous functions in today’s world. This demonstrated the importance of technology in all sector including manufacturing, transportation and even securing lives and property. Solomon Ogufere, commercial director for Vodacom Business Nigeria said: “We are committed to equipping Nigeria’s next generation with the requisite ICT skills needed to prepare them for the fourth industrial revolution. We believe that

it is never too early or too late to begin this immersive process in students, thereby preparing them for the post - digital age, which will demand technical knowledge and skills.” Ogufere said that Vodacom through its Corporate Social Responsibility initiatives in education, capacity building, training, industrial tours and more, seek opportunities to enhance the lives of the next generation. “By empowering the next generation, Vodacom aims to drive positive change in the Nigerian economy through the use of telecommunications technologies,” he added. Recall that Vodacom had earlier in the year, organised an ICT skill development training day for 36 students from the S.S. Peter and Paul Nursery and Primary School, a school that serves the underprivileged in Lagos State.

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EDUCATION Lafarge Africa, UNESCO, others partner to bridge literacy gap …Soyinka to speak at national literacy competition finals KELECHI EWUZIE

afarge Africa Plc has continued to show commitment to bridging the literacy gap through the organisation of National Literacy Competition, as part of its support to government efforts in raising the standard of reading among pupils in public primary schools. According to Lafarge, over 500,000 primary school pupils in 886 schools across 544 local government areas (LGAs) have been impacted since the inception of the competition. At the finals of the 2018 Lafarge Africa National Literacy Competition (LANLC), Wole Soyinka, Nobel laureate and iconic Nigerian playwright, will deliver the keynote speech scheduled to hold this Thursday in Lagos. Folashade AmbroseMedebem, director of Communications, Public Affairs and Sustainable Development said that the theme for this year’s competition ‘Bridging the Literacy Gap Together,’ will create literacy enhancement opportunities for indigent students across Nigeria. “We have been doing this successfully for the past five years and we are quite happy with the positive impact we have made so far”.

L-R: Abu Etu (Far left), senior manager, Product development, Vodacom Business Nigeria; Olumide Idowu(Far right), executive head of department (Ag), Operations and students of Dansol High School, Ikeja; Edgefield College, Lekki; Fruitful Ville College International, Ikorodu; Halifield Schools, Maryland and Holy Child College at the maiden edition of Vodacom Robotics Day 2018.

Ambrose-Medebem opines that LANLC is part of the overall sustainable development strategy of the LafargeHolcim 2030 Plan, which has four action pillars –including Climate, Circular Economy, Water and Nature and People and Communities - each with specific actions and targets to ensure we achieve our ambitions. “It is in our People and Communities category that our National Literacy Competition is making a difference in Nigeria.

“We are especially pleased to have Wole Soyinka as our keynote speaker this year as he will be a source of inspiration for a new generation of Nigerians. We are also very proud of the partnerships helping us scale our impact including Oando Foundation, UNESCO Abuja regional office and the British Council” she said. LANLC is organised and delivered across all 109 senatorial districts in all 36 states of the federation and the FCT working with implementa-

tion partners - State Universal Basic Education Commission (SUBEBs) across Nigeria, Ovie Brume Foundation, Thistle Praxis and TruContact. The competition has been endorsed by the Universal Basic Education Commission (UBEC) a parastatal of the Federal Ministry of Education in charge of Basic Education across the country, for its nationwide education intervention and outstanding contribution to the development of literacy in the country’s primary schools.

Edufirst signs $1m deal with Jobminders ODINAKA ANUDU

dufirst.ng, a subsidiary of Skoolmedia Limited, has signed a $1 million partnership deal with Jobminders incorporated, Canada. The deal is expected to strengthen business collaboration between Nigeria and Canada in bridging the skills gap prevalent in the country over the next five years. A joint statement signed by Moses Imayi, CEO/co-founder, Edufirst.Ng and Charles Osazuwa, vice president of Job Minders Inc., said, “This is the first series of our international partnerships which is focused on building capacity and developing core skills that will be relevant to the future of Nigeria. “With the growing trend of job losses and skill gaps in the Nigerian labour market, Edufirst.ng remains committed to ensuring these deficits are addressed and the Nigerian labour market becomes more vibrant, adopting relevant skill sets that resonate with the 21st century.” Jobminders Incorporated is a Canadian based organisation, which has, over the years, remained committed to providing and enhancing skill sets aimed at improving capacity. Jobminders Incorporated offers job placement services to support corporations and businesses in achieving its corporate goals and enhances client satisfaction.

LCCI, Unifoam partner on essay competition

T Vietnam’s education system holds lessons for Nigeria … In enrolment, learning outcomes, attitude, funding strategies ISAAC ANYAOGU

ith over 13million children out of school in Nigeria, Africa’s most populous nation can learn lessons from Vietnam, a developing country but with almost universal school enrolment at the primary and lower secondary levels. Vietnamese students beat both the United States and the United Kingdom in the last international PISA assessment for math and science. The reason is obvious. Vietnam recognises education as a national priority. Since 2008, the government has been spending 20 percent of its budget on education. Nigeria compares poorly with a paltry 7.04 percent of its

2018 budget devoted to education. Since the beginning of this administration, education has not ranked very high on the priority list as budget allocations have yet to surpass 8 percent in three years. The Goalkeepers report by the Bill and Melinda Gates Foundation holds Vietnam as a success story. Though the country’s GDP per capita is only slightly higher than India’s, Vietnam’s 15-year olds outperform students from wealthy countries like the United Kingdom and the United States on international test. “In Vietnam, there are very clear expectations about the foundational skills in math and reading that every primary school student should master. “Teachers believe that all

children, no matter how poor, can and must learn, and they hold themselves accountable for results. Finally, schools analyse data routinely to track progress and change course when necessary,” the report said. Across Vietnam, the primary school enrolment rate is virtually 100 percent. Primary education is free, as mandated in the constitution, and extremely good: Vietnam’s literacy rate is 97 percent. In 2012, the country made international headlines because its performance in the Programme for International Student Assessment (PISA) was so impressive. In 2015, Vietnam was the poorest country to participate, but still its students ranked eighth in science, 22nd in math, and 32nd in literacy

out of 72 countries higher than both the U.S. and the U.K.Vietnam also ranked first in the share of poor students who perform well in science. During a recent press conference in New York, organised by the Bill and Melinda Gates Foundation, Bill Gates said, “The benefits of improving human capital investment in Africa is that kids are well educated and have the health and nutrition not only for survival, but they achieve their full physical and mental potential.” Pernille Ironside, UNICEF’s deputy representative in Nigeria said urgent action was required. “Nigeria needs to take leap to bring more children into education and into learning. Partnerships and collective actions are essential.”

“Job minders Incorporated has over the years placed exceptional individuals in Accounting and Finance, Information Technology, Engineering, industrial and skilled trade and health care,” the statement says. It adds that being a staffing support industry, Jobminders Inc. is poised to deliver personnel with the right qualification, attitude and enthusiasm, allow companies hire personnel onthe-go, and provide support to existing HR, amongst others. The statement explains that the partnership will bridge the gaps in the Nigerian labour market by providing a standardised curricular inclusive of digital skills training programmes that support capacity growth; an online virtual learning and mobile app tagged ‘EdufirstTek Classes’ which will accommodate training programmes for fresh graduates, top level management, and executives on core managerial skills. The deal will also provide a platform that provides scholarship for potential students to Canadian Universities and job opportunities for Nigerians locally and abroad. “Edufirst.ng being a wholly indigenous organisation believes that such a strategic partnership is key in repositioning the scope of the Nigerian graduates and making them globally competitive. Our core value as a business is focused on creating value, providing an opportunity for growth and developing capacity,” the statement says.

he Lagos Chamber of Commerce and Industry (LCCI) has partnered UniFoam Group to improve learning in secondary schools in Lagos and instill the entrepreneurship spirit among students. The LCCI is Nigeria’s foremost chamber of commerce, promoting businesses, trade and investment. The chamber also helps to improve other critical sectors of the economy, including education. Unifoam, an indigenous manufacturer of foam products and beddings since 1981, says it is proud to be part of this initiative initiated by the LCCI. A statement by Udochi Ajuzie-Nwani, head, commercial (Lagos and Southern Nigeria), Unifoam Group, says, “We maintain a strong stance in supporting and encouraging the early involvement of the younger minds into entrepreneurship which we have displayed by rewarding these young stars who have displayed uncommon knowledge in the just concluded essay competition.

“In Unifoam’s tradition of providing maximum comfort through unique yet affordable products for almost four decades, we pledge our continuous support to Nigeria’s foremost chamber of commerce, LCCI as partners in progress going forward.” BusinessDay understands that all schools that participated in the essay competition were enlisted on Edufirst platform (an online educational platform) to provide visibility for them. Also, a capacity-building session on internet of Things (IoT) was done for 10 selected students from the best participating schools. A total of N5 million were also disbursed. Leonard Mary, a student of Festac Girls Senior Secondary School, came first and walked off withN250, 000, a plaque, Samsung tablet, Smile Internet modem and a certificate. Akintunde Bukola of Queens College Yaba took the second position, walking off with N100, 000, a plaque, Samsung tablet, Smile Internet modem and a certificate.

Tuesday 13 November 2018

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BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Nigeria’s cooking gas market faces old foes as demand grows

Environment

OPEC, allies assess output cut as rising inventory sink prices STEPHEN ONYEKWELU, with Agency Report

Olusola Bello

emand for Liquefied Petroleum Gas (cooking gas) in Nigeria has been increasing but the sector still struggles with some old foes, such as high cost of steel, foreign exchange bottlenecks and cost of imported raw materials needed to manufacture gas cylinders. Nigeria’s LPG market has witnessed massive growth from less than 70,000 metric tonnes consumed in 2007 to the current 400,000MT, a 471.4 percent increase within 10 years. Some of the challenges that must be addressed to enhance the cooking gas market include: availability, affordability, acceptability and accessibility of the product. Functional terminals are a critical component of the solution. The retail side of the business is not growing as fast as it should because of affordability. Experts say the product is not delivered to consumers at the right price because of sharp practices and the bottlenecks at the jetties. Also, limited number of trucks for distribution of the product is a challenge. The roads are bad leading to delayed deliveries and accidents in extreme cases. In 2008, the Nigerian Gas Master Plan (NGMP) came into force to provide

for conditions necessary to drive domestic gas market and encourage local consumption. The NGMP provided that multinational oil and gas companies necessarily channel certain proportions of the gas production to the local market. On case-by-case bases this ranges between 20 percent and 35 percent. The Master Plan also provided for a gas pricing strategy aimed at expanding gas infrastructure and sustaining the domestic gas market. Next is provision for power supply. While all three provisions together would great sustainable market environment, the first two have direct bearing on domestic gas market. Industry operators call for a policy that will drive the sector. “There is an urgent need for an LPG road-map in Nigeria that would drive development and growth in the market, otherwise, there would be limitations to the

attainment of the desired position that should be seen,” said Ken Abazie, corporate services and strategy, Techno oil Limited at a stakeholder conference recently. Nigeria currently relies mostly on gas from NLNG to meet local demand but even that suffers from delays due government’s decision to prioritise petrol in discharge to jetties and limited number of jetties and terminals. Yes, we do. Nigeria is a net exporter of LPG. We produce more than five million metric tons of LPG per annum and we are exporting over four million metric tons. Nigeria only consumes about 500,000 metric tons when we have the capacity to consume five million tons. The LPG market is a $10 billion industry with many multiplier effects, including employment. Average price for the refilling of a 5kg cylinder for cooking gas decreased by -1.20% month-on-month and -9.69% year-on-year to N2,010.45 in

July 2018 from N2,034.93 in June 2018. States with the highest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas (Cooking Gas) were Bauchi (N2,500.00), Borno (N2,401.43) and Gombe (N2,314.29). States with the lowest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas (Cooking Gas) were Edo (N1,731.25), Abuja (N1,730.00) and Ebonyi (N1,700.00). Similarly, average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas (Cooking Gas) decreased by -0.81% month-on-month and -2.97% year-on-year to N4,244.35 in July 2018 from N4,278.95 in June 2018. States with the highest average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas (Cooking Gas) were Benue (N4,775.00), Kaduna (N4,716.67) and Akwa Ibom (N4,660.00).

everal OPEC and allied oil producers consider it is essential to cut output and keep off a new surplus, a key member of the coalition said, as delegates converged in Abu Dhabi, in the midst of sinking prices. Brent plunged below $70 a barrel for the first time in six months, shedding 4 percent last week. West Texas Intermediate futures also tumbled, by about 5 percent. Many global producers agree they should pump less oil in 2019, and a reduction of 1 million barrels a day would be a good number, Mohammed Al-Rumhy, Oman’s Oil Minister said, according to a Bloomberg report. The producers are considering a range of cutbacks, including a decrease in output by as much as 1 million barrels a day, according to delegates. “I think probably there is support that right now there is too much oil in the market and stock, inventories are building up,” Al-Rumhy told reporters on Sunday in Abu Dhabi, capital of the United Arab Emirates. A technical committee representing the coalition projected that a global oil surplus will resurface in 2019 if they continue pumping at current rates, according to delegates familiar with its conclusions. Nonetheless, Saudi Arabia’s Energy Minister Khalid Al-

Falih, representing OPEC’s biggest member, said ahead of Sunday’s meeting in Abu Dhabi between the Organization of Petroleum Exporting Countries and its allies that it was “too premature” to discuss cutting output. A production cut in 2019 by the OPEC+ producers cannot be ruled out, Magzum Mirzagaliev, Kazakhstan’s deputy energy minister, told reporters in the U.A.E. capital. Russia isn’t ready to disclose its position on whether the group should reduce output further before the committee’s meeting, according to a person familiar with the matter. Al-Falih agreed in a meeting in Baghdad on Saturday on joint coordination with Iraq to achieve more stability in the oil market, Iraqi Oil Ministry spokesman Asim Jihad said by phone. Iraq, OPEC’s secondlargest producer after Saudi Arabia, has announced ambitious plans to keep expanding its output capacity. OPEC and its allies meet under mounting pressure to consider renewed production cuts after a slump in oil prices. Crude on both sides of the Atlantic tumbled Friday as the U.S. reported rising stocks and Washington granted waivers that lessen the impact of sanctions on Iranian exports. The OPEC+ Joint Technical Committee, which met for talks ahead of Sunday’s meeting, has given a preliminary 104 percent compliance rate to its cuts deal in October, according to a delegate.

Only customer centric firms will survive in Nigeria’s oil, gas downstream DIPO OLADEHINDE

n order to be relevant in the next era of digital transformation, firms in Nigeria’s oil and gas downstream sector need to be more customers centric to grow profitability. Speaking at the 12th Oil Trading and Logistics Africa Downstream Week which was a convergence of leading players in Nigeria’s oil and gas sector, Abayomi Elebute CEO of Energy360 Africa Limited said firms today need to focus on technology, innovations and address issues concerning the dynamic nature of retail customers.

“The king of the retail space in the downstream sector by 2030 will be the oil and gas firm which is the most customer centric; who focuses on the needs of customers rather than just supply trends. According to Elebute Elebute said with technology, firms will be able to keep track of how many customers come into their fuel stations to transact, what time and when they need their fuel, what their actual needs are and how to use customer’s feedback to grow revenue. “A digital culture allows people to drive results faster, it also attracts better skills; businesses who do not invest in digital transformation will start crumpling in the next

few years” Elebute told the audience. The CEO of Energy360 warned that if firms in the downstream sector continue to focus on the products and less on the customers it will

not only limit their expansion but will also limit their profitability. Abayomi Elebute noted that just as we have witnessed the tremendous growth in other sectors like telecoms,

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Fifen Eyemisanre Famous.

CEOs and business managers in the 21st century need to invest in digital transformation strategies that will help develop and transform them to meet the modern day needs of their customers. He acknowledged that in the retail oil and gas space, Energy360 has competitively changed the dynamics of oil and gas businesses by allowing CEOs and stakeholders to instantaneously control their business without allowing fellow competitors beat them to it. “Data is the new oil, if you don’t invest in understanding your data, you cannot grow; surpassing expectations,” Elebute said. Energy360 said it’s well

positioned to provide services for firms operating in the downstream sector which will protect their revenue and improve margins through elimination of losses from fraud and leakages. “Energy360 provides systems that provide real time data from retail fuel stations, fuel points (dumps) and trucks supporting the growth of data driven decisions within organizations and fostering the optimization of business processes. Our systems allow businesses to change pump prices remotely, monitor inventory and sales remotely, track replenishment and supply processes and a host of other functions” CEO of Energy360 said.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378

BUSINESS DAY

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Tuesday 13 November 2018

Energy Report

Local capacity development in oil and gas industry in danger ...as Nestoil,others suffer from low capacity utilisation Stories by Olusola Bello

ith the signing into law the nigeria content bill in 2010 a new vista of opportunities was opened to the local companies that have been struggling to have foothold in the oil and gas industry. Secondly it was the most reasonable thing to do because the bulk of the investments in the industry has been dominated by foreign companies who through capital flight take a lot of money out of country and also create jobs for their own citizens at the expense of Nigerians. But a lot has changed for good especially after the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in 2010, which gives much support to the development of local content and capacity building of indigenous oil and gas companies. After the signing into law the bill some other things have happened as the establishment of the Nigerian Content Research and Development Council (NCRDC) which has been established to advise the Nigerian Content Development and Monitoring Board (NCDMB) on matters relating to Research,

Development and Innovation strategy for the oil and gas industry. The council is to among other things “advise the Board on criteria and methodology for prioritising market cum demand-driven research projects, the appropriate strategies and governance arrangements to attract funding for research projects and on criteria for the award of research grants and review progress on impact of such grants on Research projects, Product development and Innovation.” However there are issues affecting the realisation of these innovations, and one of them is the problem of low capacity utilisation be the indigenous companies some or which have ingested so much on both human and material assets. A visit to some of the yards of these companies would reveal the level of idleness of the facilities in place. Take for example companies like NigerDock on the snake island in Lagos,MG Vowgas limited and Nestoil group yard in Port Harcourt you will discover that these indigenous companies have are lot of capacities but there are no works to execute. A typical example of such situation is what is happening currently with Nestoil Group which are currently operating below their capacities.

The companies in the group are Nestoil Ltd, Energy Works Technology (EWT) Ltd, IMPaC Oil & Gas Engineering Ltd, Hammakopp Consortium Ltd, B&Q Dredging Ltd, NestHak HDD Ltd, Shipside Drydock Ltd, Scorpio Drilling Ltd, NestAv Ltd and Century Power Generations Ltd The EWT,for example has the capacity to fabricate over 12 thousand metric tonnes of pressure vessels,Christmas Trees for local companies and international oil companies but it is currently producing less than 20 per cent of that capacity. Chuka Eze, managing director, IMPaC, explained

during a recent facility tour of the group’s facilities in Port Harcourt, Rivers state that: “Despite tremendous installed capacity, the Nestoil Group is operating well under capacity at a time successive governments have continued to promote local content in the Oil and gas industry. “My company has already carried out a detailed design of Forcados/Yokri Integrated Project , New Onshore Scope, OkolomaGas Plant & Pipeline Project, Afam Gas Receiving Plant –Onshore, Built Generation –3D Laser Scanning –Deep Offshore and Bonga FPSO Topside & Hull 3D Laser Scan,”he said.

Impac which is an engineering design and management company has capacity to deliver 400,000 man hours per annum but is currently delivering about 54,000 man hours. The entire Nestoil Group of Companies, about 13 companies has created well over 2,000 direct jobs and over 5,000 indirect jobs. The group’s team of engineers have performed a rare feat in the operation of the Oil Mining Lease, OML 42 oil field by devising an efficient system of separating gas oil and water at the Odidi and Jones Creek Flow stations. This technology is believed would of tremendous ben-

efits to the industry if it can be adopted throughout the entire Oil and gas sector. ‘’Three of the companies in the Nestoil Group (B&Q, Nestoil and EWT) were identified last year as companies that will lead Africa’s growth in the next decade. Over 98 percent of the workforce in Nigerian engineers ” The group has expertise in many areas,referring to B&Q Dredging which has expertise in dredging, declamation, sand filling of road embankments, flood and Erosion Control, Shore Protection and Consolidation,Canalization/ Channelization. It also operates a global standards (ISO 9001:2015, BS OSHAS 18001:2007 certified). LSE Group Award as one of the companies to lead Africa in the next decade (2017).” It also indicated that another company, EWT –Energy Works Technology Limited remains a wholly Nigerian Owned Fabrication, Manufacturing, EPC, Operations & Management Company that commenced operations in 2012. Ernest Azudialu-Obiejesi who is the managing director of Nestoil Group said the oil and gas industry stands to gain a lot of from supporting indigenous companies because of the positive ripple effects on job creation, technology transfer and overall infrastructure development.

Senate to tackle energy theft and vandalism through bills harmonization

he Senate Committee on Power, Steel Development and Metallurgy on Friday promised to harmonise all laws concerning energy theft, and vandalism scattered in different laws into single bill to drive power industry. Enyinnaya Abaribe, the Chairman of the committee disclosed this in Lagos during the committee’s oversight function to Eko Electricity Distribution Company (EKEDC) on facts finding mission to know the state of power distribution and challenges. According to Abaribe,this visit would help us to clarify issues that are ongoing om estimated billings, lack of meters and other power challenges related issues. “Our visit is also going to help us in policy formulation because we are also going to interact with the Ministry of Power, Works and Housing, the Nigerian Electricity Regulatory Commission and with other relevant agencies. “Clarification of issues is very necessary for us to understand exactly what is going on. Like I indicated during our meeting with the man-

agement of Eko Disco, there has been a counter-narrative that privatisation is a failure and there have even been an attempt by some persons that we should go back and take over the assets. “Now, why we are here is to be sure; if it is not working,

why is it not working? Who is at fault? What are the things that are supposed to be done, and those are the answers that we have come to seek, and, of course, Nigerians will get everything that will help them in making a good decision about whether it

was a very good decision or not,” he said. Abaribe said: “What we are doing is that as of now, the response to energy theft, vandalism and others is scattered all over different laws and different areas in our laws, and so we want to see whether we can consolidate them into one bill and that will help everybody in the sector””. He said it would also help Nigerians to know that if you, in any way, tamper with light or vandalise power equipment, that the penalties are very clear and cannot be applied at random , adding that the reason why they are were at EKO Disco to interact with the power providers, and make sure that whatever they see as problems, we can help them resolve them for the interest of Nigerian public. “We are quite satisfied with what we have heard; we know that they are operating under tremendous difficulties. And like we said, anybody who starts a business and the business starts at a loss, the cost of what you are giving is not what you are told to sell “it is a regulated industry,

which means that you cannot charge more than what the government says you should charge. And so, if government is selling to you at N100, and now tells you to charge at N50, you are already at a loss. “That is what we want to let Nigerians know; that there are some things that are in this regulated industry, which we need to resolve, and it is the resolution that has brought us here. The chairman, however, assured the management of EKo Disco that it will assist in ensuring that the outstanding debts of N20 million owed by the Ministries, Departments and Agencies (MDAs) are paid directly from source. He urged the Disco to ensure effective distribution of electricity to consumers within their network, adding that issues related to estimated billings and metering should be put at the front burners. Adeoye Fadeyibi managing director/chief executive officer,of Eko Disco in his remarks commended the legislature for its support towards educating the general public on the efforts his company is making at ensuring adequate

supply. He called for legislation of stringent punishment and prosecution of offenders involved in the act of vandalism, energy theft and meter tampering,requesting that the legislation should also cover those tempering with public power facilities and building on right of way. He appealed to the committee to assist in facilitating the payment of the MDAs’ debt as and when due and also appeal for the approval of special exchange rate for power Industry. According him, we have installed over 100,000 prepaid meters in the last five years. We are also working towards ensuring 100 per cent metering of customers within out network in the nest five years . “ We are also putting up the Supervisory Control and Data Acquisition (SCADA) in the next first quarter in our network for effective monitoring of distribution and faults. “We are in this together, and we must solve the issues because there are contractual obligations to fulfill by the government and the private investors.

Tuesday 13 November 2018

Harvard Business Review TALKING POINTS Rewarding Work 9 out of 10: A report from BetterUp found that 9 out of 10 people would accept earning less money if it meant doing meaningful work. + Screen Time 5.9: Internet users worldwide spend an average of 5.9 hours per day online, according to Mary Meeker’s annual Internet Trends Report. + A Leader’s Worth 5%: After Sergio Marchionne stepped down as chief executive of Fiat Chrysler earlier this year, the company’s stock fell by 5%. + Uphill Battle 60%: A majority — more than 60% — of startups that are backed by venture capitalists end up failing. + A Rising Tide 2060: By 2060, American women of color are estimated to represent the majority of all women in the country.

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BUSINESS DAY

Tips & Talking Points Have a bad boss? Consider your options

Shift your perspective at work by telling yourself a different story

aving a bad manager can feel like the kiss of death for your career, not to mention your happiness. But there are steps you can take to cope. First, don’t try to give your manager feedback about their frustrating behavior (bad bosses usually aren’t open to it anyway). Instead, put your energy into making requests for the resources and support you need to do your job. Be specific, and articulate how the request will benefit your manager and the organization. Another tactic is to find outlets away from work for socializing and reducing stress; a strong sup-

port network is crucial for dealing with an emotionally draining environment. If the situation doesn’t improve over time, consider exploring other opportunities in your organization. Meet with colleagues and managers to find out about positions that might interest you. And be open to the possibility of quitting. If you dread going to work every day, and if you spend more time thinking about your boss than about work, it may be time to go.

(Adapted from “What to Do When You Have a Bad Boss,” by Mary Abbajay.)

e all tell ourselves stories about work, and these stories shape the way we think, lead and make decisions. For instance, if the story that runs through your head all day is “Everything’s a battle in this office,” you’re more likely to expect hostility and be primed to attack. Negative stories like this one generally don’t help you, so consider shifting to a new narrative. Start by identifying a challenge you’re facing, and then ask: “What is the basic story I’m telling myself about this issue?” Consider how the story is affecting you and your team. Is it constraining or liberating? If the latter, think about what you’d like to change and how your story needs to shift. What reimagined (and true) version of the story would be more useful for pursuing your goals or doing things differently? Rewriting a story is often a matter of choosing to see a situation from a different, more positive, perspective.

(Adapted from “To Make a Change at Work, Tell Yourself a Different Story,” by Monique Valcour and John McNulty.)

When starting a side hustle, focus on the right things Is it oK to tell a lie if your intentions are good? Build a network that challenges your point of view

side gig can be a great source of extra income, but when you’re launching one it’s easy to focus on the wrong things. For example, you shouldn’t be fretting over how much to pay for a fancy logo or website, or whether to incorporate as an LLC or an S corporation. In the early stages, those things aren’t critical. What is critical is determining whether you even have a business — meaning, do customers want to buy what you want to sell? Run a small, inexpensive test

to see if there’s preliminary interest: If you’d like to write a book about a particular topic, write a blog post and see what the response is. If you’d like to start a coaching practice, take on a pro bono client and see how it goes. Most successful businesses do eventually need a nice website and a proper legal structure, but those complex and expensive steps can wait until after you’ve proven your idea. (Adapted from “How to Get Your Side Hustle Off the Ground,” by Dorie Clark.)

eople often lie in an attempt to be kind. (“You look great in that outfit!”) When is it OK to tell an innocuous fib, and when is the truth a better bet? Before you tell a white lie, ask yourself if you’re sure it will lead to a better result in the long run. Sometimes the answer will be obvious; in other cases it may not be so clear. Consider whether the other person prefers comfort or candor, as well as whether they want different things in differ-

ent situations. If you don’t know, ask. With colleagues, for example, you could ask what type of feedback they generally appreciate, and when they want to hear tough but constructive criticism. But in most circumstances, as the saying goes, honesty is the best policy. If you’re not sure what to do, ask a group of people for advice — and if they don’t unanimously agree that a lie is OK, tell the truth.

(Adapted from “When Is It OK to Tell a Well-Meaning Lie?” by Adam Eric Greenberg et al.)

hen your network is mostly people whose backgrounds and skill sets are similar to yours, it’s unlikely to help you find new ideas or creative solutions. Diversify your network by connecting with people whose viewpoints, insights and experiences differ from your own. When you meet someone new, talk about what you don’t have in common. Ask friends to introduce you to their contacts who have an interesting job or who work in a unique space. In particular, try to meet people who will challenge your assumptions and biases. If you’re struggling to build your network in the usual ways, create a reason to bring a diverse group together. For example, a monthly book club can give you the chance to hear a variety of perspectives, as well

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

as to read authors you wouldn’t normally pick up. By making a concerted effort, you can develop a network that both inspires you and pushes you to expand your thinking.

(Adapted from “How to Diversify Your Professional Network,” by Amy Nauiokas.)

BUSINESS DAY

Tuesday 13 November 2018

Why real estate is fundamental to growing an economy

ANIFIOK UDONQUAK, Uyo

Stories by CHUKA UROKO

agos, Nigeria will, in the next 48 hours, be hosting the West Africa Property Investment Summit (WAPISummit) which is, easily, the region’s leading property investment conference. This is the summit’s second consecutive year in Lagos after its long sojourn in Accra, Ghana. Ahead of the conference, which will be featuring more than 90 speakers and 500 delegates from over 200 companies, economists are offering insights on real estate and the economy, insisting that reforming the real estate sector is key to propelling economic growth and alleviating poverty in Nigeria. Andrew Nevin, Partner and Chief Economist for PwC, is a respected regional and global authority on Nigeria and West Africa. Nevin will be making a presentation at WAPI on the topic, ‘The Global View On Geopolitics, Oil & Macro-Economics: How are these impacting investment in West African Real Estate?’ Asides his thematic commitment to this topic, Nevin will also be providing answers to a number of real estateretalted questions, especially on why this sector is fundamental to growing an economy. Apparently, the Nigerian government is in denial of the fundamental role real estate can play in growing the economy and that is why, in the hoax called economic diversification programme of government, real estate is not considered a possible growth sector. But Nevin reasons differently. “Real estate makes up 60 percent of the world’s global assets and in developed countries, real estate buttresses the financial sector, enabling for the creation of asset-backed loans and securities”, he explains, contending that Nigeria’s real estate system cannot work without a proper land registry while banks cannot lend against a property without evidence of ownership. “The current land titling system is onerous and excludes many people from formal ownership. Based on these facts, real estate is one of the most critical sectors that, if reformed, will propel growth and alleviate poverty in Nigeria”, he posited in a release obtained by BusinessDay. Global volatility, as exemplified by

1000 homeowners underway as A/Ibom, FHF build for workers

Trump, China and Turkey factors, are in a way impacting the local economy and, by extension, the real estate market. Foreign exchange and inflation have stabilized in Nigeria amid emerging market pressures, but crude reliance continues to leave the country vulnerable to external shocks, creating persistent uncertainty for investors in the country and affecting all sectors in the economy, including real estate. Nevin noted that in urban areas, commercial real estate occupancy has declined as a result of low demand in an underperforming economy. Consequently, office rent has declined by 20 percent over the last 3 years in the high-end market while co-working spaces are becoming more popular, consistent with the growing number of tech start-ups and entrepreneurs. “In the premium residential market, demand has shifted to less expensive semi-detached houses and apartments. There is also persistently huge demand for affordable housing in Nigeria”, he added, forecasting that “Nigeria’s population is set to exceed 250 million people by 2030 (roughly 50 million households), and by 2025, our housing deficit will be approximately 20 million. We are not building enough houses for people to live in”.

It is common knowledge that global volatility has increased oil price, which has benefitted the immediate public sector coffers, but, according to Nevin, this is not a good thing as it has been argued that a lower oil price will drive economic reform, but won’t $70 - $80 oil keep reform at bay? Unarguably, the Nigerian economy is benefitting from rising oil prices which is good, because the country requires capital to invest in critical sectors and fund long-term structural changes. Over the last three years, Nigerians have seen government debt grow from 12 percent of GDP in 2015 to 20 percent in 2017. A further indication of the high demand for government revenue is the Voluntary Asset and Income Declaration Scheme (VAIDS), which was implemented to grow tax revenue. Failure to diversify the economy is a result of bad policies and poor implementation of good policies. Oil prices have fluctuated since the first quarter of 2016 (over 2 years ago) and the country still has not achieved a diversified economy. There is no reason to believe that persistently low prices in the future will make this happen. Significantly, though in a negative way, macro-development factors have impacted the real estate sector in terms

of less transactions and low investment. The sector has not seen positive growth since the start of recession in 2016. It has continued to lag behind overall growth, recording a growth rate of -3.88 percent in the second quarter 2018. This is, however, an improvement from the -9.4 percent growth of the preceding quarter. Tight monetary environment, reflected in high interest rates and currency restrictions, are huge contributors to the slow growth in the real estate sector. Heavy government borrowing has crowded out the private sector, making it difficult for investors to finance the capital-intensive projects of the real estate sector. This issue reinforces the need for the government to undertake structural reforms that will improve capital stock and business environment. For real estate and other sectors of the economy, 2019 elections raise major concerns. The elections will revolve around the economy. There is growing frustration over slow growth, high unemployment, low liquidity and poor infrastructure. Foreign investors who have low confidence in the economy are also keeping close watch. Thus, the election outcome will have some effect on Nigeria’s economic health in the short run.

he housing shortage in Akwa Ibom State will be reduced significantly and some families taken off the housing market as the state government in collaboration with Family Home Fund perfect plans to build 1000 housing units in five local government areas of the state. The benefiting local government areas are Uyo, Eket, Ikot Abasi, Onna and Uruan. Given an average of four persons in a family comprising father, mother and two children, it means that, cumulatively, about 4,000 persons will be living in their own homes in these local government areas when these houses are completed and delivered to the beneficiary-workers. Authorities of the state government told BusinessDay that, in addition to the 1000 housing units, the state government has also acquired a parcel of land for a luxury estate that will deliver 555 units of houses in Uyo, the state capital. Ime Ekpo, the state commissioner for lands and housing, explained that the state government’s partnership with Family Home Fund on this project was to ease housing shortage in the local government areas,noting that people were moving to those areas because of increased economic activities. “These are areas that people are moving into. We want to increase the housing stock for the people and we want civil servants to have their houses before retirement,’’ he said. Ekpo disclosed that 50 hectares of land had been acquired for the state government-owned Akwa Ibom Property and Investment Company (APICO) for civil servants only, saying that the housing units would be completed within six months. The commissioner lamented the distortion in the master plan of the state capital which, according to him, has resulted in flooding within the city centre, revealing that a committee has been raised to bring down all illegal structures including churches as part of controlled development in the state capital.

Eximia Realty in bold entry into market to build future dreams today …focuses on retail, small-size residential units for first time buyers

t was all excitement in the property market last Thursday as Eximia Realty Company Limited made a bold and ambitious entry into the market, determined to ride the current and build future dreams today. Out with a vision ‘to become Africa’s pace-setting property company by creating real value for its customers, and investors’, Eximia aims to build these future dreams through innovative, value-driven and customer focused real estate solutions. Eximia was conceived as a real estate company that will ‘lead the world through Africa’. The overall objective is to re-define the narrative by challenging the status quo and creating

a unique and innovative platform to deliver real estate solutions in Nigeria and eventually Africa. It is a real estate company that focuses on creating a unique and innovative platform to deliver real estate solutions with special interest in the retail segment of the market. Eximia has made a promise to provide 5, 000 units of single and two-bedroom apartments in the next five years. The launch of the company which was tagged ‘Real Art meets Real Estate’ started with an art exhibition by leading exhibitors in the country and was witnessed by high profile people in society. “Our unique offerings are target-

ed primarily at the mid-tier market, especially first time home buyers, with two projects currently in the category that are set for launch in Lekki by November”, explained Hakeem Ogunniran, the CEO of the Company limited. Already the company is developing two projects in this category. These are the Lawton Park which offers 64 apartments comprising studios, 1 and 2 bedroom flats, and Maestroville which offers 42 apartments comprising studios, 1 and 2 bedroom flats. The two projects boast facilities and amenities that include communal lounge, 24 hour power

supply, children playground, gym, laundromat, sewage/water treatment plant, CCTV/controlled access/security, Wifi/hot spots, etc. Expectation is high from Eximia because Ogunniran, who is the immediate past managing director of UAC Property Development Company (UPDC), will be bringing his rich experience and success streaks that made UPDC the real estate market leader to bear on the running of this young company. According to him, Eximia has chosen to focus on studio, one bedroom and two bedroom apartments because lots of real estate decisions drivers cater to this category of

the market. “We are committed to promoting the ideal of sustainable development and creating a perfect harmony between the environment and our deliverables,” Ogunniran assured. Eximia is also a joint developer of The Mews at Katampe, Abuja, Genesis Commercial Park in Opebi Ikeja, and a joint promoters of the new Lake City in Lekki, Lagos. Nike Akande, chairperson of the NEPAD business group in Nigeria and special guest at the launch, said she was driven by the passion to see businesses that spring up in Nigeria grow and develop into sustainable brands.

Tuesday 13 November 2018

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House prices point downwards on election-induced transactions Endurance Okafor

t is exactly four months from now before the 2019 general elections in Nigeria and the season seems to be robbing off negatively on the property market as politicians, in the quest to raise funds for campaign and other election activities, are offering properties at low prices. This was discovered in a survey by BusinessDay in which industry experts confirmed that, indeed, the forth-coming elections have affected property prices but not across board. Abiodun Akanbi, Head of Strategy at Infinity Trust Mortgage Bank said “because of the forthcoming election, prices of property have declined in Abuja and also because money is not flowing like it used to be. But the areas where this is felt the most are some high end areas where politicians have acquired properties. Some persons that lost in the 2015 election may want to go and try their luck in this 2019 election and so they will sell their property.” Me a n w h i l e, Ni g e r i a property market has grown more in states experiencing a high rate of urbanisation, and it is not surprising that majority of states in Nigeria still have a long way to go in terms of real estate activity, considering that the country has about 4.3 percent increase in yearly urbanisation which is concentrated in only a few states. Modupe Anjous, MD of Rydal Mews Limited, a Lagos-

erties in Lagos for both sales and rents, has a property for sale at an average high cost of N308million for a 3-5 bedroom house while the lowest priced properties in Lagos are situated in the Alimosho axis with 3-5 bedroom houses going for N28million on average. In Abuja, which is the second most active real estate market, a plot of land in Lugbe axis of the country’s capital can be found for as low as N6.4million per plot. Land in Gwagwalada being one of the cheapest areas in the capital city, goes for about N3.3million. “Although there have not been a significant decline in the Lagos real estate market because rental prices of property in the state still remain in their regular level, at least, in the last 6 months of this year,” Anjous explained on phone.

The Rydal boss emphasised “there will definitely be a change in property prices prior to the election because there will be people that need money for the election but the ratio of the decline cannot be ascertained yet and it will not be as much as it will be in Abuja.” Yemi Stephens, Partner at Estate Links Limited, said properties prices drop as a result of the forth coming election is not across board in Lagos state. “It is relative, and some may choose to sell below the market price although not many people are buying the properties because there is no money anywhere and as a result properties are over-supplied. Although there are a lot of people selling properties below market price due to the fact that they have some urgent needs to settle.”

Professionals see sustainability, technology catalysing FM industry growth CHUKA UROKO

espite its relative newness in Nigerian environment, the facilities management (FM) industry is observably gaining traction, but there is need for sustainability and technology in that space to catalyse its growth, FM professionals and practitioners have said. The professionals under the aegis of the British Institute of Facilities Management (BIFM) Nigeria region, are of the view that the FM industry will be well positioned to support the goals and objectives of businesses in the future if its practitioners integrate their basic expertise with competencies such as sustainability and digital technology expertise. BIFM Nigeria was inaugurated in 2015 to support FM professionals in Nigeria in attaining, developing and main-

taining essential skills in the discipline of FM. On the global front, BIFM is a founding member of the Global Facility Management Association and full member of the Construction Industry Council. The professionals recognize that as trends such as globalization, urbanization and technological innovation grow, facilities managers must respond by becoming more strategic in their roles. “In the face of the current dynamic business environment, it is now imperative for FMs to tactically align their operational strategies to the client’s business objectives, if they must be seen to be delivering value”, said Abdulmalik Egbunike, founder, Total Facilities Management Limited, who presented a paper on ‘Trends in FM and future FM professionals’ at the quarterly meeting of BIFM in

Lagos recently. Egbunike explained that the pair of Building Manag ement System (BMS) and Computer Aided Facility Management (CAFM) has played a very crucial role as gateway technologies for the FM industry, noting that the introduction of Building Information Modelling (BIM) and Integrated Workplace Management System (IWMS) may present implementation challenges to FM. He add that emerging digital technologies such as Artificial intelligence, Internet of Things, Big Data, Cloud computing, Robotics, etc will redefine how FMs deliver service to clients in the nearfuture. “In addition to sustainability and digital technology proficiency, FMs should be knowledgeable in workplace and portfolio management,

whole life costing, procurement, contract, resource and risk management”, he advised. Mastering these skills have become crucial for FMs as trends such as globalization, urbanization, technological innovation continue to spread, the need for FM services will equally increase, given the peculiar challenges associated with these phenomena. Egbunike reasoned that with globalization, FMs face the task of internationalising the FM business as well as employing foreign market entry strategy in order to minimise risk of liability of foreignness. Likewise, the increasing rate of change in demography which leads to workforce diversity implies that FMs need to design workplaces that can accommodate four generations of workers: Silents, Baby Boomers, Generation Xers, Generation Ys or Millennials.

Infrastructure Maintenance With Tunde Obileye

Role of facilities managers during expansion or renovation

based real estate management and development firm, said “there is definitely going to be a change in prices of property, although the rate at which the prices of property might have declined in Lagos due to the forthcoming election will not be the same as it may be in Abuja. The prices of property in some parts of Lagos are still the same and there has not been a significant decline in the real estate sector in Lagos.” “I know a politician who wants to sell one of his properties in the residential area of Abuja and he does not mind selling it at the cost price of the property because he is in dire need of money to run his campaign for the forth coming election,” a property agent said, pleading anonymity. BusinessDay also found out that Ikoyi, which has one of the most expensive prop-

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acilities managers are usually confronted with many scenarios apart from the regular dayto-day activities. One such scenario is keeping a facility running during expansion or renovation. This is an extremely difficult job that requires skill, tact, purpose etc to succeed without disrupting normal activities. One key point is for all stakeholders to show understanding and work together for maximum benefits. It’s a common problem for facilities managers to ensure operations are not shut down during expansion or renovation work unless it is inevitable. However, it often seems impossible to accomplish both sides of that coin, and those involved can quickly find themselves in a pressure pot trying to balance all expectations. Before looking at details of how to keep a facility running during an expansion or renovation, it’s important to discuss why it’s a good idea to complete a construction project this way. Firstly, an owner may have no other choice. For organizations that lack the luxury of a constructionready site, completing a project while work remains ongoing may be the only option. Secondly, staying in operation means projects can keep moving. It won’t be totally free of interruptions, but, at least, the work will be on-going. This continuity benefits the end users whether students, patients or customers. Finally, staying in operation means organization’s goals can be achieved. Schools keep educating students. Hospitals keep healing the sick and injured. Factories keep turning out products. This is an attractive option for profit-driven organizations that must keep generating revenue during a time of significant expense. For the expansion or renovation work, the facilities manager must have a detailed plan with strict rules in place to ensure construction work can carry on with minimal interference with regular business. Some plans will make more sense than others depending on the site and circumstances, but no plan can be perfect. One approach that can be adopted is to proceed in phases during normal

business hours provided the work areas are safely sealed off. This approach may involve moving people and their work around. The benefit of this approach is that disruption is kept to a minimum level. If people and equipment cannot be moved, or the normal activities inside a building are sensitive enough to preclude daytime construction, overnight and weekend work is necessary. The benefit to users is that normal business can occur without disruption aside from some areas being sealed off. It also makes it easier for construction crews since they can do their work without having to dodge employees or patrons. However, it’s harder —and sometimes more expensive— to supply an adequate workforce on these jobs. Coexistence takes many forms, but flexibility and constant communication are paramount. It’s a twoway thing, and works best when ground rules and thoughtful plans are put in place from the start to finish. Choosing the right construction company to manage expansions or renovations while a facility stays running is critical. All companies can promise but not all can deliver. Therefore, the following questions should help in selecting a competent company: • Have similar jobs been done before jobs like this? If yes, examples must be shown. • How good is the network of sub-contractors such that a reliable workforce can meet scheduling needs? •Can work plans be changed at short notice due to unforeseen circumstances and still complete the job on time? •Is there a mechanism for continuous improvement in case there’s need to expand or renovate again in the future? Expansions and renovations are never easy but with the right partners, sound planning with flexibility and accessibility, facilities managers can oversee a successful completion. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

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Friday 06 November 2018

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Wapic Insurance Nigeria Plc: Investment in growth strategy underpins underwriting profit BALA AUGIE

first glimpse at Wa p i c I n s u rance Plc’s third quarter financial statement shows the insurer has been spending less on operating and management expenses to generate each unit of premium income, thanks to technological improvements in administration and distribution. Despite the lingering apathy for Insurance by the Nigerian populace, driven largely by cultural & religious beliefs, Wapic remains resilient, recording a compounded annual growth rate (CAGR) of 19.61 percent in gross premium Income (GPI) since 2014, according to Markers and Finance calculations Double digit growth in premium income Wapic Insurance’s gross premium written (GPW) increased by 28.04 percent to N10.09 billion in September

2018 from N7.81 billion in the previous year, this compares with an increase of 22.91 percent, 12.87 percent and 21.67 percent to N6.45 billion ,N5.67 billion, and N4.66 billion in the 2017, 2016, and 2015 periods. Gross premium income (GPI) followed the same growth trajectory as it grew by 18.40 percent to N8.62 billion in September 2018, from N3.52 billion recorded in the corresponding period of 2014. Net premium income (NPI) rose by 26.97 percent to N5.46 billion in the period under review from N2.14 billion recorded in 2014. NPI has been growing at CAGR of 20.61 percent since 2014. This meant Wapic has b e en grow ing re venue steadily even amid the economic recession of 2016 brought by a precipitous drop in crude oil price and a severe dollar scarcity that crippled many businesses. Net underwriting income was up 31.90 percent to N6.45

billion in the period under review as against N4.89 billion the previous year despite an 8.62 percent increase in reinsurance expenses. “Our nine months’ financial performance is reflective of the focused implementation of our growth objectives across all business lines,” said Yinka Adekoya, Managing Director WAPIC Insurance Plc. “Our ongoing digitization efforts and first-in-class customer experience offering will open up new opportunities which we believe will ensure the continued creation of sustainable value to all our stakeholders,’’ said Adekoya. Experts have commended the stellar performance of the underwriting firm given the tough and unpredictable environment companies operate in, which is why the insurance Industry remains small and fragmented compared to other Sub Saharan African countries like Morocco, Kenya, and South Africa. The total annual Gross Premium Income of all the insurance companies operating in the country amounts to 0.60 percent of GDP, this compares with a typical 7.0 percent in developed markets, according to a recent report by Coronation Merchant Bank. Despite the enormous challenges, there abound opportunities. With a low penetration rate and 1 percent of a population of 180 million holding any form of policy, the opportunities in the Nigerian market are enormous. This means insurers have more risk to undertake because a lot of people are going to need a cover. Moreover, the country is blessed with young populations that crave for consumption. However, the recent sluggish economic growth, dwindling purchasing power among consumers, decrepit infrastructure, emerging markets sell off due to political risk in Turkey, Brazil, and South Africa, could cast a cloud on future premium income. Nigerians are getting

poorer by the minutes, while unemployment rates are rising amid growing population, which means they do not have the money to take an insurance cover. According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins. Nigeria with a population of 180 million people has 87 million people, nearly half its population, in extreme poverty; as high inflation environment continues to erode discretionary income. Investment in growth strategy underpins underwriting profit Wapic insurance’s underwriting profit increased to N1.37 billion in September 2018, from N626 million recorded in 2016 when an economic downturn resulted in spiraling claims expenses. Improved underwriting results can be attributed to appropriate pricing, reduction in management expenses, and the process of implementation of solvency 11. Wapic Insurance has been spending less on operating expenses to generate each unit of revenue as operating expenses ratio (Opex ratio) fell to 67.12 percent in September 2018 from an all time high of 99.15 percent in 2016. Total operating or management expenses have been growing at a slow pace, which validates management and board of directors’ cost control mechanism. Total operating expenses increased by 7.19 percent to N3.50 billion in the period under review, this compares with an increase of 23.15 percent and 30.13 percent in 2016 and 2015 periods. Underwriting expenses were up 35.14 percent to N2.0 billion the period under review as against N1.50 billion recorded the previous year. Underwriting expenses ratio rose to 37.15 percent in September 2018 from 34.95 percent the previous year. Wapic Insurance total net claims expenses were

BD MARKETS + FINANCE Analysts: BALA AUGIE

up 48.82 percent to N3.11 billion in September 2018 from N2.09 billion as at September 2017. Claims ratio increased to 57.45 percent in the period under review from 48.25 percent as at September 2017 as the company continues to honour obligation to policy holders. Wapic Insurance’s total assets were up 22.22 percent to N34.97 billion in September 2018 from N28.60 billion as at September 2017; driven primarily by 130 percent and 175 percent surge in reinsurance assets and cash and cash equivalent to N3.60 billion and N4.80 billion in the period under review. Total liabilities grew by 59.77 percent to N17 billion

in the period under review from N10.64 billion the previous year. The growth in total liabilities was largely driven by a 49.85 percent and 124.13 increase in insurance contract liabilities and other payables to N10.70 billion and N3.25 billion in the period under review. Wapic is steadfast in maintaining its growth momentum as it has introduced new products into the market, with a view to magnifying its revenue income stream. With an excellent risk m a n a g e m e n t s t ra t e g y , proved reserve, a strong capital base to take on more risk, the Nigerian insurer is poise to magnify shareholder’s earnings.

Tuesday 13 November 2018

AVIATION

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GUIDE

BUSINESS DAY

in association with

FAAN may increase Passenger Service Charge on high cost of airport facilities upgrade IFEOMA OKEKE

assenger Service Charge (PSC) is paid by air passengers passing through the country’s airports. The PSC is collected by the airlines upon purchase of tickets and is paid to Federal Airport Authority of Nigeria (FAAN) upon completion of the flight. The charges are used to cover the cost of maintaining common areas in the passenger terminals, providing passenger information, maintaining security and ensuring that customers can use the airport in comfort and with confidence. The last time PSC was increased was in 2011, eight years ago, when the local currency was more than twice the current value and cost of operation was far lower than what obtains currently. In relation to airfares, the cost of a flight ticket has more than doubled because of increase in cost of operations, but FAAN has stuck to the same passenger service charge since then. Inflation through these years has drastically affected the cost of doing business; so is the cost of equipment, staff remuneration and introduction of capital intensive facilities and equipment to modernise passenger facilitation, airport infrastructure and check-in system. Within this period also airlines and other airport service providers have reviewed their charges severally. Speaking on some the reasons why

the authority is reviewing its PSC, a source at FAAN who craved anonymity, said “We have four new terminals built to international standards, the PSC tariff fixed eight years ago, will not be suitable for these new terminals due to new technology, maintenance and other related costs, as we usher passengers to new IT-driven service that is time saving and easy for air travellers. “We have to also admit that passenger traffic has grown during the period by more than 45 per cent between 2011 and 2019. The effect of this increased traffic on the airport facilities needs to

be taken into consideration because FAAN would spend more money on maintenance, replacement of fittings and transaction management.” Although the source did not disclose the amount that will be paid as new PSC, but explained that the increase is critical at this time because there is the urgent need to begin repayment of the $500 million Chinese Export-Import Bank loan and the $100 million DMO facility counterpart funding used in building the new terminals in order to meet the terms of agreement that guided the establishment of the terminal facilities.

John Ojikutu, former military airport commandant at the Murtala Muhammed International Airport, (MMIA) told BusinessDay that he sees nothing wrong in FAAN increasing PSC because of the rise in naira against the dollar which is impacting on the purchase of aviation amenities. “I do not see anything wrong in FAAN increasing PSC because things have increased. Some airlines on the other hand are only deceiving themselves by charging the same fare they were charging in 2014 and 2015. Aviation fuel has increased. In 2015, one dol-

lar was N180, today it is N360 to a dollar and some airlines are charging the same fare. How can they make profit? “So, it is only logical for FAAN to increase the PSC because everything has increased. For instance if FAAN wants to buy runway light now, the price it was sold ten or five years ago cannot be the same price now. Most of the things we use in aviation are bought offshore including aviation fuel. None of these things are provided here. “So, if they want to buy them, they have to buy them in dollars. If dollars have increased, price of services will increase. If FAAN increases its PSC, they are justified to increase. The airlines too can increase air fare based on the fact that dollars have increased,” Ojikutu said. However, Tayo Ojuri, the CEO of Aglow Limited, an aviation support services company in Nigeria told BusinessDay that in increasing PSC, the justification is always driven by service level and convenience the agency provides for passengers. Ojuri noted that passenger experience across Nigeria’s airports is improving especially with the upgrade of the terminals; he added that it is only expected that FAAN will consolidate on what they are doing and provide even better services to customers. “It is only logical for FAAN to increase PSC especially with the current increase in dollar rate, provided they deliver the needed services for passengers and the airlines,” he explained.

First A330-800 successfully completes maiden flight

he first A330-800 development aircraft to fly, MSN1888, landed at Toulouse-Blagnac, France recently after successfully completing its first flight which lasted four hours and four minutes. The aircraft, the second member of the A330neo Family, is powered by the latest technology RollsRoyce Trent 7000 turbofans. The crew in the cockpit comprised: Experimental test pilots malcolm Ridley and François Barre and Ludovic Girard, Test-Flight Engineer. Meanwhile, monitoring the aircraft systems and performance in real-time at the flight-testengineer’s (FTE) station were Catherine Schneider and Jose Corugedo Bermejo. “Today’s first flight of the A330-800 is the latest addition to our efficient Wide-

body family,” Guillaume Faury, President airbus commercial aircraft, said. “The A330-800 is an exceptionally versatile ‘route-opener’, offering unbeatable economics for airlines – encompassing everything from short to very-long haul widebody missions. We look forward to the successful flight-test campaign, leading to certification next year,” he added. The A330-800’s development programme will include around 300 flighttest hours, paving the way for certification in 2019. Its sibling, the larger A330-900 family member, recently completed its development testing and certification programme which validated the A330neo Family’s common engines, systems, cabin and flight and ground operations.

The A330neo comprises two versions: the A330-800 and A330-900. Both of these widebody aircraft incorporate new Rolls-Royce Trent 7000 engines, nacelle, titanium pylon, new wings and offer an exclusive ‘Airspace by Airbus’ passenger experience. The larger A330900 will accommodate up to 287 seats in a typical three-class layout, while the A330-800 typically will seat 257 passengers in three classes. At the end of September 2018, Airbus’ orderbook includes 13 customers who have placed orders for a total of 224 A330neos, with more to tro be delivered The A330-800 is the second member of the A330neo family and is the market’s newest-generation 250-seat aircraft, and is also the new entry-level

widebody aircraft in the Airbus Family. Based on the A330-200 which itself has sold 650+ aircraft with hundreds of operators, the new -800 version offers an even greater range capability of up to 8,150nm (similar to the A350) and representing more than 17 hours flying time, which covers 98% of all widebody routes flown today. This performance, which is made possible thanks to the NEO’s 3D-optimised wing, fuel-efficient Trent 7000 engines and a new optional maximum take-off weight (MTOW) of 251 metric tonnes, unlocks up to 1,300nm more range versus the earlier A330-200 models and enables non-stop routes from South-East Asia to Europe and transpacific routes from South East Asia

to the US West Coast. Moreover, with its superior economics, range, cabin comfort and passenger experience versus the 787-8, the A330800 is also best placed to replace ageing 767s in the near-term, and eventually the older A330-200s in service. The A330 is one of the most popular widebody families ever, having received over 1,700 orders from 120 customers. More than 1,400 A330s are flying with over 120 operators worldwide. The A330neo is the latest addition to the leading Airbus widebody family, which also includes the A350 XWB and the A380, all featuring unmatched space and comfort combined with unprecedented efficiency levels and unrivalled range capability.

BUSINESS DAY

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LegalPerspectives

With

Tuesday 13 November 2018

Odunayo Oyasiji

Case Update

Afrotec Technical Services (Nig) Ltd. V. Mia & Sons Limited & Anor (2000) Lpelr-Sc.132/1992

of lien and “immediate possession” have been waived by the conduct of the parties. (d) Whether the plaintiff has by pleadings and evidence, established the defence of waiver. (e) Should the Court of Appeal have granted the relief that the equipment be delivered to the plaintiff subject to the defendant being paid the entire sum? (f) Was the Court of Appeal right in holding that the plaintiff had established a legal right to the equipment?” The court adopted the issues raised by the appellant/defendant for the determination of the matter.

hat to note: This matter was decided at the Supreme Court of Nigeria on the 15th of December, 2000. This matter bothers on commercial law issues like rights of a seller, lien, contract of sale, sale of goods, credit sale transaction and hire purchase. We will touch on some of these issues in the course of the review. Facts The plaintiff (MIA & Sons Limited) and defendant (Afrotec Technical Services (NIG) LTD) are both limited liability companies. The head office of the plaintiff is in Kaduna while that of the defendant is in Lagos. The plaintiff is a customer to the defendant. On February 8, 1978 the plaintiff ordered for Parker 5245 crushing plant combination (N476,600), Foden Dump Truck (N84,000.00 ) and BD 440440 KVA generating set (N66,000.00). The parties also agreed on the supply of spare parts for crushing plant (N38,000), transportation of equipment to Kotangora at the cost of 28,000 naira and commissioning fee of 10,000 naira. The total cost of everything is N702,600. The plaintiff subject to some terms and conditions contained in its letter of March 28, 1978 gave an undertaking to pay the defendant the sum of N702,900 being the cost of the equipment and other expenses agreed upon. The plaintiff claimed that it made a payment of N281,160 (representing 40% of the agreed sum of N702,900). On the basis of the payment, the defendant installed the equipment at Kotangora as instructed by the plaintiff. It was agreed that the 60% balance is to be paid in six equal instalments. The plaintiff gave post-dated cheques to cover the outstanding 60% balance. The cheques are to be presented for payment on April 27, August 27 and September 27. The plaintiff defaulted in the payment of the instalments. The reason the plaintiff gave for its failure to meet up with its payment obligations is that the equipment broke down soon after it was installed and the defendant failed to supply spare parts to fix it. The plaintiff requested that the defendant should transfer the equipment to Kaduna in 1980 and install it. The plaintiff agreed and dismantled the

equipment for the purpose of transferring it to Kaduna. However, the plaintiff kept the equipment in its warehouse claiming that it had repossessed it due to failure of the defendant to fulfil its payment obligation. On the basis of the above, the plaintiff instituted an action in the High Court of Kaduna State. The High Court dismissed the claims of the plaintiff and the plaintiff further appealed to the Court of Appeal. The Court of Appeal gave judgement in favour of the plaintiff. The defendant being dissatisfied appealed to the Supreme Court. Issues for determination The seven issues below were submitted to the court by the appellant/defendant“(i) Whether the Court of Appeal was right in its view that Ownership in the equipment passed to the plaintiff on proper construction of Exhibit 1 merely because the defendant had delivered the equipment at the site of the plaintiff at Kontagora. (ii) Whether the Court of Appeal was right in its view that acceptance of negotiable instruments as payment for the equipment had converted the conditional sale of these equipment into an absolute sale. (iii) Was the Court of Appeal right in its view that the only remedy open to the defendant was an action for the recovery of the balance of the sum unpaid and not in its exercise of the right of lien or Repossession of the plant when the agreement between the parties provided

for those remedies? (iv) Was the Court of Appeal right in holding that plaintiff has established a legal right in the equipment as to entitle it to the Equitable reliefs sought? (v) Was the Court of Appeal right in holding that the defendant has waived all the restrictive conditions in Exhibit 1 when the waiver of the same as a defence was not specifically pleaded nor were circumstances and facts amounting to waiver pleaded in answer to the plaintiff’s pleadings? (vi) Was the Court of Appeal right in making an order to enforce the second agreement when the respondent failed to fulfil its obligation under the first contract? (vii) Whether the Court of Appeal was right in making an order that the said equipment be delivered to the plaintiff subject to the plaintiff paying the entire sum outstanding as balance of total cost of the equipment taking into account N381,160.00, the plaintiff has so far paid to the defendant when such relief was not placed before the trial court.” The respondent/plaintiff on the other hand submitted the issues below“(a) Whether having regard to the pleadings and evidence led, the defendant established any legal right to the equipment in dispute. (b) If so, whether such legal right could be defeated by the “right of lien” or “right to immediate possession” clauses, following the failure of the plaintiff to complete the payment for the equipment. (c) Whether the said rights

Arguments/Submissions The learned counsel to the appellant argued that the appellant by virtue of the agreement between the parties have the right to repossess the property if the respondent fails to fulfil its payment obligations. Therefore, the appellant exercised its right under the agreement by repossessing the property since the respondent has defaulted in payment. The respondent’s counsel on the other hand argued that the conduct of the appellant with regards to parting with possession before full payment and charging of interest on the outstanding balance after the plaintiff defaulted is a clear sign of intention to transfer the property. He further argued that the appellant didn’t insert any clause that reserved its ownership right. Therefore, ownership cannot pass at the point of repossession after earlier delivering the equipment to the respondent. Judgement The Supreme Court in allowing the appeal and giving judgement in favour of the appellant held that- “An unpaid seller can exercise the statutory right of resale of the Goods in his possession whether or not properly, the goods has passed to the buyer or not and the new buyer acquires good title in such goods… Under section 48 of the Sales of Goods Act, the unpaid seller retains the right to sell the identified property, where the buyer has become insolvent. The right of sale can be exercised by the seller under this section where he has been in continuous possession of the goods or where he has regained possession by exercising his right of lien or stoppage of the goods in transit. This right is available to him whether or not the property in the goods

has passed to the original buyer who has become insolvent by his failure to pay or tender the purchase price as agreed in the contract, within a reasonable time. The intention to sell the goods must be notified to the insolvent buyer. What is a reasonable time in this context is a question of fact”. It was further held that “The object of sale of goods is generally to transfer its ownership to the purchaser from the seller. See sections 16-19 of the Sale of Goods Act, 1893. But where a contrary intention is shown, the property in the goods only passes to the buyer at such time as the parties to the contract intend to. And for the purpose of ascertaining the intention of the parties, regard must be had to the terms of the contract the conduct of the parties and the circumstances of the case. “ Also, the court noted that “where a contract for the sale of specific goods, as in the present case, is made subject to a condition which to all intent and purposes suspends the passing of property, the property will not pass to the buyer at the time of the making of the contract, but only when the agreed condition as stipulated by the parties is fulfilled. Until then, the contract takes effect as an agreement to sell, and not an outright or absolute sale of the goods.” With regards to the nature of credit sale, the court held that “in the credit sale transaction, there is a sale on credit. The credit may take the form of payment of the entire purchase at an agreed future time or payment of the purchase price by agreed instalments. In a credit sale, there is no question of an agreement to purchase the goods at a future time. A purchaser of goods under a credit sale agreement does not have the option, which the hirer has, of returning the goods and freeing himself from the obligation to pay further instalments…It is evident that a credit sale is not a hire-purchase transaction. A credit sale is a sale transaction subject to the same principles in regard to the passing of property in sale transactions which are not on credit.” Conclusion An unpaid seller still reserves some rights with regards to the property sold out. Furthermore, where the sale of goods is made subject to the fulfilment of some conditions, the ownership of the property will not pass until and unless the conditions are fulfilled.

Tuesday 13 November 2018

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Interview

BUSINESS DAY

We reviewed pensions to improve retirees’ welfare – DG PenCom The National Pension Commission (PenCom) has been in the news of recent for many good reasons. These include review of pensions of retirees under programmed withdrawal, introduction of multi-fund structure, revision of fees structure in the pension industry, and circular on voluntary contributions among others. Aisha Dahir-Umar, Acting Director-General, PenCom, in this interview with John Osadolor and Conrad Omodiagbe speaks on several areas of operation of the Commission. Excerpts:

ince your assumption of Office in April 2017 as the Acting DirectorGeneral of PenCom, a lot has happened in terms of the introduction of new plans to further enhance the pension industry. How has this experience been for you? The Commission has continued to work as a team and all the stakeholders have continued to give us all the necessary support and cooperation. Accordingly, we have been able to make significant progress on fundamental issues affecting the CPS. Some of these are as follows: Review of Pensions of Retirees under the Programmed Withdrawal-There have been several concerns by retirees on the issue of low monthly pensions. The main reason for low level of pension is the relatively low monthly pension contribution for most public service workers which continues to hamper the accumulation of sufficient funds in respective employees’ RSAs at retirement. This led to the Commission’s resolve to examine the balances in the Retirement Savings Accounts of retirees who are on Programmed Withdrawal and are receiving pensions through Pension Fund Administrators. It was discovered that the returns being generated by the PFAs on the balances of the RSAs of majority of the affected retirees could be used to enhance their monthly pensions. Consequently, the Commission, having followed necessary due processes, obtained approval for the implementation of pension enhancement which resulted in increased monthly pensions for most retirees on Programmed, Withdrawal, effective from December 2017. The implementation of the pension enhancement is one of the significant milestones attained since the commencement of the CPS, which testifies to the dynamism of the CPS in Nigeria. Multi-Fund Structure-The implementation of the RSA multifund structure commenced in July, 2018. Since the commencement of the Contributory Pension Scheme, all active contributors’ funds were being invested solely in the Retirement Savings Account (RSA) ‘Active’ Fund, irrespective of their age profiles. The Multi-Fund Investment Structure for RSA Funds was thus conceived by the Commission to align the contributors’ risk appetite with their investment horizon at each stage of their life cycle. It is a framework that aims to align the age and risk profile of RSA holders by segregating the RSA Fund into three Fund types, while retaining the single retiree fund. There are four fund types; 3 active funds and 1 Retiree fund. The main objective of the Multi-Fund Structure is to achieve optimum returns for contributors, provide investment portfolio choices to contributors and enhance portfolio diversification. Revision of Fees Structure in the Pension Industry Following the implementation of the Multi-Fund Structure, the Commission approved a new fee regime for the RSA Funds as well as the reduction of fees in respect of the CPFA and AES Funds. The new

Aisha Dahir-Umar

fee regime was hinged on the need to reduce the costs/charges to pension funds and thus enhance returns to beneficiaries, in line with the initiatives captured in the 2015-2019 Corporate Strategy of the Commission. It was also to comply with the provisions of the Regulation on Fees Structure by reducing charges to the pension funds, based on the significant portfolio growth over the past eight years (the last fees reduction was done in 2009). Circular on Voluntary Contributions The Commission issued a circular on Withdrawals from Voluntary Contributions (VC) in November, 2017. The circular was necessitated by the observed incidences of high rates of withdrawals from VCs by contributors, which appeared to negate the main purpose of augmenting pensions at retirement. In addition, the Commission was concerned about ensuring strict adherence to Anti-Money Laundering provisions and payment of relevant taxes. The main thrust of the circular is that VCs can only be withdrawn once in every two years, while subsequent withdrawals would be on incremental contributions from the last withdrawal. Furthermore, 50% of VC shall be domiciled as contingent and shall only be available for withdrawal within the stipulated timeframe. Investment in Infrastructure Pension funds are allowed to be invested in structured infrastructure projects that meet the stringent quality requirements as enshrined in the Investment Regulations set out by the Commission. The N100 billion Federal Government of Nigeria Sukuk, which was issued to provide funding for road projects nationwide was subscribed to by institutional investors. It is noteworthy to mention that pension funds invested about N50 billion in the FGN Sukuk. You recently announced that 24 States have actively adopted the CPS as a working formula. How has the

Commission been able to assist in making the transition seamless at the sub national level? What about the other states, how are they working towards ensuring adoption of the CPS in their pension management? One of the key intents of the Pension Reform Act 2014 is to ensure the domestication of the Contributory Pension Scheme (CPS) at the sub-national levels in Nigeria. The application of the CPS at the states and local government levels is however subject to legislations by the federating units within their various jurisdictions. As rightly affirmed in your request for information, a total of 24 states have adopted the CPS and are at various stages of implementation of the scheme in their respective states. Six other states have drafted CPS bills and are undergoing the legislative processes towards their passage into law, three states have embarked on pension reforms but chose not to adopt the CPS, while one has elected to continue with the Defined Benefits Scheme (DBS). To address your enquiry, it is pertinent to note that the process of adopting the CPS at the state and local governments levels is guided by the provisions of Section 23(i) of the PRA 2014, which mandates the National Pension Commission to promote and offer technical assistance to states, in line with the objectives of the CPS. Pursuant to the foregoing, the Commission carefully articulated practical steps which states and local governments were expected to take in order to effectively implement the CPS. These steps include the enactment of the State laws on CPS, establishment of administrative structures to drive the implementation of the scheme in the states, registration of employees by Pension Fund Administrators (PFAs) as well as the deduction and remittance of pension contributions. Other milestones are the determination and Funding of Past Service Liabilities and the institution of Group Life Insurance Policy. These broad parameters have been

the yardsticks for measuring the status of implementation of the scheme at the states and local governments levels. It is imperative to note that the Commission drafted the Model Pension Bill and availed the States with copies of the bill for adoption. This step has been quite resourceful and ensured that the State Pension Laws are substantially in conformity with the provisions of the PRA 2014. Further to this, the Commission played prominent role at ensuring the passage of the states pension bills into law by submitting memoranda at the various public hearings organized by the State legislatures. In the same vein, the Commission provided the states with technical assistance in setting up administrative structures to drive implementation of the scheme in the states and organised at its expense, capacity building workshops to enhance the technical knowledge of the management and staff of these institutions on pension administration. On special requests by states, staff of the Commission had been seconded to the states on technical assignments or as members of technical committees to facilitate the smooth implementation of the CPS in the States. The Commission had engaged and will continue to engage critical stakeholders in the states to ensure the deduction and remittance of pension contributions, determination and funding of past service liabilities and the institution of Group Life Insurance Policy that guarantees the payment of 300% of Annual Total Emolument of employees who perchance die in active service. The Commission also facilitated the generation of employer codes for the Ministries Departments and Agencies in the States towards ensuring hitch free registration of the States employees by Pension Fund Administrators (PFAs). As a regulator, the Commission overseas the activities of Pension Fund Administrators in the country. How is the Commission ensuring the efficiency of PFAs and protection of the owners of RSA holders and their pension assets? The need for efficiency and improved service delivery by PFAs is of paramount importance to the Commission. This is because the overall success of the Pension Reform Act (PRA) 2014 is largely dependent on effective and efficient service delivery by the PFAs. The Commission has recognized the need for a holistic approach to make pension administration transparent and seamless which include: Approval of a revised circular to PFAs to open more Branches and Service Centers across the country in order to meet the increasing demand for pension services by the public; Ensuring that the operators increase facilities to ensure accessibility by Retirement Savings Account (RSAs) holders to PFAs e.g. internet services, phones and walk in; Ensuring that the operators Conduct periodic customer and retiree sensitization forums. Annual examination of the Licensed Pension Operators to ensure safety of pension funds and compliance

with relevant rules and regulations. The Micro Pension scheduled to kick off in January, 2019, is a plan by the Commission to expand the CPS. Kindly explain how you hope to achieve this and the impact it would have on pension management in Nigeria, especially in the area of accessibility of pension to the informal sector? The National Pension Commission (PenCom), in accordance with the Provisions of Section 2(3) of the Pension Reform Act (PRA) 2014, introduces the Micro Pension Plan. The Micro Pension Plan is set to include the self-employed and persons working in organizations with less than three employees. The Micro Pension Plan aims at ensuring that the informal sector participants save towards their old age. It is also expected that the plan would expand the coverage of pension contributors by an estimated 30 million people by the year 2024. This category of workers constitutes a large percentage of the working population in the country. To implement this initiative, the Commission segmented the informal sector into three broad categories, namely; the low-income earners, the high-income earners and the small & medium scale enterprises (SMEs). Each of these categories will be targeted with appropriate pension products and sensitization programmes that meet their various peculiarities. The guidelines and framework for the Micro Pension Plan have been issued and the Commission is working on the IT infrastructure that will support the launch of the Micro Pension Plan. Tell us more about the recently introduced multi fund structure otherwise known as the Life Cycle Investment Structure, which kicked off in July 2018. The new RSA Multi-Fund Structure involves the creation of multiple Retirement Savings Account (RSA) Funds, with respective assets allocation, made to fit into the different demographic (age) profiles and risk appetites of registered Contributors i.e. young, middle-aged and retirees. The new structure would ensure that contributions of an RSA holder are invested in assets/securities with risks profile compatible with his/her age. For instance, it is expected that young contributors who have longer working years and relatively higher risk appetites would desire more investments in variable income instruments (e.g. Quoted Equities, Private Equity, Real Estate, and Infrastructure Fund/Bonds). On the other hand, middle-aged contributors or retirees who are risk averse, would prefer fixed income investments, with more stable streams of income. Consequently, the implementation of the Multifund structure will result to increased returns due to aggressive investments and ultimately growth of the pension funds. Implementation of the Multifund structure will result to increased returns due to aggressive investments and ultimately growth of the pension funds.

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Nigerian Reinsurance, Eleme Petrochemical Alaghodaro summit: Edo showcases reforms-driven growth, people-oriented governance do State governor, ers of micro, small and me- state. Through the strategic sic Education Sector Transto issue IPO in few months Godwin Obaseki, dium businesses as well as summit, we have been able formation (Edo-BEST) proDESMOND OKON

irector-general, Bureau of Public Enterprises (BPE), Alex Okoh, has revealed that there will be more companies going public by way of Initial Public Offerings (IPO) in the coming months, stating that plans are ongoing to bring Nigerian Reinsurance Corporation and Eleme Petrochemical to the market by way of public offer. Okoh disclosed this at the recent IPO signing ceremony of Skyway Aviation Handling Company Limited (SAHCOL), in Lagos. “By way of public offer, we are expecting that in the next few months, Nigerian Reinsurance should also be coming to the market by way of public offers. So, what we are doing today, we are likely to do for Nigerian Reinsurance Corporation in the next two months,” he said. He also said, “Eleme Petrochemical should also be coming to the market by way of public offer sometime around March next year. We are in the process of finalising all the documentation

required for that pubic offer. So, around February/early March next year, we should be having a ceremony similar to this for Eleme Petrochemical plant, which incidentally is also along with SAHCOL, one of the success stories of privatisation.” Speaking with BusinessDay at the SAHCOL IPO ceremony, Okoh revealed that AFAM Power Plant would be privatised along with three other National Integrated power plants. “We are also, by way of co-investors’ sales, privatising AFAM Power Plant, which is a power generation company. We are also looking at privatising three National Integrated Power plants in Kogi State, Calabar, and Omotosho power plant,” he said. He concluded by saying that in terms of the distribution part of the power value chain, “we are also privatising Yola Disco in the next couple of months. By January, we should have concluded on the sale of AFAM Power Plant, and Yola Disco. So, these are some of the assets that we are bringing to the market on behalf of the Federal Government.”

on Monday at the 2018 Alaghodaro Summit taking place in the state capital, Benin City, said the steady progress his administration had recorded in all sectors of the state in the last two years was spurred by time-tested reforms and people-centred governance. Obaseki made the submission before an array of personalities in government, private sector players, foreign investors, traditional rulers, thought and community leaders, own-

other stakeholders. According to the governor, the state has witnessed tremendous progress in the last two years of his administration, in the areas of infrastructure, quality education and job creation, with a policy strategy linking job seekers to trainings and employment opportunities, which have culminated in the creation of 77,200 jobs. The governor said: “Alaghodaro summit was designed to lay a solid foundation for the future of the

to lay out our plans for the Edo people and strategically showcase our potential to the world as guide to governance in the state. We understand that for there to be prosperity, peace and inclusive growth; reforms are imperative.” The governor said his government’s focus on the wellbeing of the Edo people and residents informed the choice of this year’s summit theme: ‘Edo of our dream: Investing in our people.’ He explained that the investment in the Edo Ba-

gramme has produced over 7,000 digital teachers with impressive learning outcomes in public primary schools across the state. “Primary school pupils can now read in our public schools. I got this result first hand after an interaction with a parent. A mother came to me, thanking me for what we have done in the schools. She said her six-year-old child cannot only read, but also always eager to go to school and have his name on the character board,” he said.

34 BUSINESS DAY NEWS Teleology appoints new board of directors... Continued from page 1

bile through the critical transition phase it has passed through

since July 2017.” “For us, the composition of the new Board of Directors is another significant milestone, and this follows the issuance of final approval of no objection by the Board of the Nigerian Communications Commission (NCC) to the effect that the technical and financial bids Teleology submitted for 9mobile met and satisfied all the regulatory requirements,” the company stated. Teleology which had earlier released a 10 point agenda stating plans to turn over the telecommunications company has appointed Nasiru Ado Bayero as the chairman of the new board. Adrian Wood, Mohammed Edewor, Asega Aliga and Winston Ndubueze Udeh have been appointed non-executive directors while Abdulrahman Ado is an executive director and Stephane Beuvelet is the acting managing director. Recall that BusinessDay had in May 2018, taken a deeper look into the company’s profile as registered with the Corporate Affairs Commission (CAC) and uncovered Mohammed Edewor was registered director in Teleology. BusinessDay findings reveal that the holding company registered Teleology Nigeria Limited under the CAC with the address of 155, Broad Street Marina Lagos, and share capital of N100 million, in Decem-

ber 2017 mainly for the acquisition of 9mobile, Nigeria’s fourth largest telecommunication operator. The new chairman of the board, Nasiru Ado Bayero welcomed the appointment stating, “as we begin this new epochal phase, we wish to thank all the employees who built this viable business. Our gratitude also goes to our subscribers even as we assure them to get ready for real best-in-class additional value for their relationship with the 9mobile brand. Without you, there could not have been a 9mobile business for us to invest in today. We will justify your confidence in our brand by making significant investments that will improve the value you get for using 9mobile.” The out-going board, chaired by Joseph Nnanna, deputy governor of the Central Bank of Nigeria (CBN), were selected by the CBN in collaboration with the Nigerian Communications Commission (NCC), after 9mobile, formerly operating as Etisalat Nigeria was taken over by the owed banks. The directors were to oversee the affairs of the company pending the completion of regulatory due diligence of the bid documents submitted by Teleology and sixteen others for its acquisition. The bid process was superintended by Barclays Africa. “With the emergence of the new board, the long process for the acquisition of 9mobile has reached a definitive end marking the beginning of a new era for the telecommunica-

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tion company,” a statement signed by Edewor said. Directors profile: Nasiru Ado Bayero served as Director of Platform Petroleum Limited and Sahelian Energy & Integrated Services Limited. Bayero has experience 16 Years in various Cadres of the Public and Private Sectors. He served at Continental Merchant Bank from 1988 to 1989, Coastal Corporation (Oil & Gas Company), Houston, Texas, from 1990 to 1991 and Hamlet Investment, Inc. from 1991 to 1992. He served at Intel (Oilfield) Services Nig.Ltd.BartonBayNig.Ltd.andSophitel Hotel Abuja. He served as District Head of Tarauni & Turakin Kano. Bayero holds B.A. (Hons.) in Mass Communicationin1987andCertificate in German Language in 1993. Adrian Wood is the pioneer former CEO of MTN Nigeria. He also held the position as former chief operating officer, MTN group and CEO of Brymedia West Africa Limited. He is the forefront promoter of Teleology. Asega Aliga is an investment banker, entrepreneur and financial services professional. He is the former CEO of DMA capital group. Winston Ndubueze Udeh is a practicing lawyer with a private law practice in areas of criminal and family law in Dallas Texas, United States of America. Abdulrahman Ado is the chairman at Bautek Nigeria limited. Stephane Beuvelet who is the new acting managing director was formally the CTO at MTN Cote D’ Ivoire (Ivory Coast).

Tuesday 13 November 2018

FMDQ launches GOLD awards... Continued from page 2

to provide the requisite platform to power growth and foster the deepening of the Nigerian financial markets”. The CBN Governor, Godwin Emefiele, during his Keynote Address stated that “FMDQ has proven to be a reliable partner to the Central Bank by providing an efficient platform for financial marketsparticipantsintheprimaryand secondary markets in a bid to ensure sustainable growth and development in the Nigerian financial markets”. He further stated that “FMDQ’s contributions towards the development of a well-functioning and transparent financial system have immensely helped to ensure system liquidity and significantly deepened the Nigerian markets”. The Governor, in his address, appreciated FMDQ’s staunch support to the CBN in stabilising the Nigerian FX markets and operationalising the OTC FX Futures market, and committed that the CBN will continue to support FMDQ in its joint quest to make the financial markets “GOLD”. The major highlights of the Ceremony were the presentation of the GOLD Awards to the winners of the various categories (Primary, Secondary and Members’ & Clients’ Choice Award Categories), the FMDQ Market Luminary Awards, FMDQ Game Changer Award and Special Recognitions for FMDQ’s Media and Technology Partners, who have all performed creditably in supporting the development of FMDQ’s markets over the past five (5) years,

from November 2013. The FMDQ Next Generation Financial Market Empowerment Programme (FMDQNext), FMDQ’s flagship corporate responsibility programme, a learning and development initiative aimed at providing financial markets education and promoting financial literacy among the youth (primary, secondary and tertiary students, and fresh graduates) in Nigeria, was also formally launched to the market with the presentation of gifts and certificates to the students of Lagoon Secondary School and Canterbury International School for participating and excelling in the FMDQ-Next Programme held during the FMDQ Anniversary week, November 5 - 9, 2018. Kaodi Ugoji, Associate Executive Director, Corporate Development, FMDQ, during the presentation of the GOLD Awards, stated that “FMDQ could not have achieved any of the progress made in its markets over the last five (5) years without the support of all market participants, and therefore the OTC Exchange is excited to have the opportunity, through the FMDQ GOLD Awards, to publicly recognise the contributions of market stakeholders.” She went ahead to congratulate not only the finalists and winners of the GOLD Awards, but also all market participants for their collaboration and support in building the efficient and fast developing fixed income, currency and derivatives markets in Nigeria.

•Continues online at www.businessdayonline.com

Analysts forecast higher yields as Nigeria... Continued from page 1

ary, 2018. Analysts see Nigeria

issuing its Eurobond at a higher yield. “I expect the cost of the issuance to be around 8.5 to 9.5 percent, resulting from higher U.S fed funds rates and also the political risk in Nigeria, ,” Gbolahan Ologunro, an equity research analyst at Lagosbased CSL Stockbrokers, said. The opinion of Rafiq Raji, the chief economist at Macroafricaintel Investment was not different as he said “the bond issuance will be more expensive now, because of fed normalisation, as yields are generally up and coupled with the fact that Nigeria is going to be issuing at the time of high political uncertainties in the country.” The push to issue new dollar denominated debt comes as the Debt Management Office (DMO) on Friday, published its fourth Strategic Plan (2018 – 2022) with key objective to use debt and debt-related instruments to support Nigeria’s development goals, while ensuring that public debt is sustainable. In the newest debt strategy, DMO wants to achieve an optimal debt portfolio mix of 60:40 for domestic and external debt by end-December, 2019. The debt office also hopes to attain 75:25 ratio for long and short-term debt instruments in the domestic debt portfolio by end-December, 2019. Nigeria’s external debt has increased by $10.7billion (majorly driven by new Eurobond worth $7billion) to $22.1billion between to 2016 and 2018. The new debt management strategy shows the DMO wants to keep the share of debt maturing within 1-year, as a percentage of Total Debt Portfolio at not more than 20 percent; and target an Average Timeto-Maturity (ATM) for the Total Debt Portfolio at a minimum of 10 years. “There might be a premium on the bond but I think they will probably get 100 percent or more subscription because the parameter to whether or not too buy a bond is

not necessarily domestic, it is based on your sovereign currency income and for Nigeria, I do not think that is a problem,” Raji concluded. The roadshow was attended by NigerianFinanceMinisterZainabAhmed, officials from the DMO, and CBN. https://ssl.gstatic.com/ui/v1/ icons/mail/images/cleardot.gifNigeria was also in the hunt for over $4 billion (N1.2 trillion), to fund projects across petrochemicals, power, gas, property and infrastructure credit, at the inaugural Africa investment forum organised by the African Development Bank November 7-9 in South Africa. The inaugural Forum, which attracted over 350 institutional investors and development finance institutions from 53 countries, concluded with five of Nigeria’s infrastructure deals advancing towards financial close, according to the project sponsors. StellaKilonzo,SeniorDirector,Africa Investment Forum (AIF) at the AFDB, saidtheForumleveragedbestpractices from several countries, including the project preparation approach of Nigeria’s Economic Recovery and Growth Plan (ERGP) Focus Labs organised betweenMarchandMay2018inAbuja. “AIF found a very good model in Nigeria where bottlenecks were identified and resolved through The Presidency. Several of the projects from the ERGP Focus Lab were taken forward,” Kilonzo added. There were as many as 61 closeddoor boardroom sessions between investors and project sponsors to de-risk andacceleratefinancing of the projects. One of the projects on show was the $3 billion Brass Fertiliser and Petrochemical Development Company Limited, which Frank Nweke the project’s manager said has a potential for creating 20,000 jobs. Other projects that benefited from the investor rounds included Gas for Development (GFD) Limited’s gas commercialisation project off the Lagos coast, and Geometric Power in Aba, South-East Nigeria.

L-R: Godwin Obaseki, Edo State governor, his wife, Betsy Obaseki; Asue Ighodalo, chairman, 2018 Alaghodaro Summit, and Sam Igbe, representative of the Oba of Benin, the Iyase of Benin Kingdom, during the Edo Summit, held at Edo Hotel, Benin City, Edo State.

Geometric Power, a 1,080 megawatt power plant, is scheduled to commence its 500MW first phase in 2019. Infrastructure Credit Guarantee Company Limited (InfraCredit), and Eko Atlantic City rounded up the projects. InfraCredit is a specialised infrastructure credit enhancement facility established by the Nigeria Sovereign Investment Authority (NSIA) in collaboration with GuarantCo (a member of the Private Infrastructure Development Group, to provide guarantees that enhance the credit quality of local currency debt instruments issued to finance eligible infrastructure projects in Nigeria. This month (November), the company announced the closing of a €31 million subordinated capital investment by its new investor, KfW, the largest Development Bank in Europe. The Eko Atlantic project, Nigeria’s answer to Dubai, is a multibillion dollar residential and business development located as an appendage to Victoria Island that will be the size of Manhattan’s skyscraper district.

It’ll be home to a quarter of a million people and employ another 150,000. In a sign of the level of interest showed by investors in the projects, Tunji Adebayo, executive chairman of GFD Energy said his company’s boardroom session was oversubscribed. “Over 60 investors were interested in our session, but we had to cut it down to 20,” Adebayo added. GFD Energy was out hunting for $USD1.3 billion. Sponsors of Ibom Deep sea port, a project spearheaded bythe Akwa Ibom government and the Federal government, were not present at the forum. Mustafa Chike-Obi, an investment banker and former managing director of the Asset Management Corporation of Nigeria (AMCON), commended the rigour of the Forum and the high-level representation of the Nigerian government who demonstrated an understanding of the transactions and a remarkable, unwavering commitment to supporting credible private-sector projects across political regimes. The Co-ordinator of Nigeria’s

Economic Recovery and Growth Plan (ERGP) Implementation Unit and Senior Special Assistant to the President, Folarin Alayande, who facilitated some of the investor meetings, observed that Nigeria had the second largest project representation at the Africa Investment Forum and these were all infrastructure projects. “The Forum was in some way a scaled-up and trans-border version of the ERGP Focus Lab, and we are glad that three projects out of the six shortlisted for the Nigeria boardroom sessions at AIF were from the Focus Labs,” Alayande told Business Day. “The Federal Government remains open to continuing these investment conversations even after the Forum,” he added. The African Investment Forum is Africa’s largest transactional marketplace and featured investor dialogue sessions on the Africa Energy Marketplace with the Minister of Power, Works and Housing, Babatunde Fashola, and on Agribusiness Investments with the Honourable Minister of Finance, Zainab Ahmed.

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Fashola highlights achievements, challenges of ministry at three STEPHEN ONYEKWELU & HARRISON EDEH

inister for power, works and housing, Babatunde Fashola, says his ministry has delivered on some of its promises, but there are still challenges to deal with as the ministry marks its third anniversary. In the third year progress report released Monday, Fashola stated that the ministry had walked its talk, and outlined some achievements under his leadership. “With regard to power, we have improved on what we met, by increasing generation from 4000MW to 7000MW, transmission from 5000MW to 7000MW and distribution from 2690MW to 5,222MW,” the minister said. However, some power industry players have challenged these figures. When in July, Fashola presented these numbers, Sunday Oduntan, executive director, research and advocacy, Association of Nige-

rian Electricity Distributors (ANED), said the figures were incorrect. ANED, which is the umbrella body of electricity distribution companies (DisCos), said generation capacity as of January 2015 was 6,421MW and not 4,000MW. In a recent phone interview with TheCable, Joy Ogaji, executive secretary of Association of Power Generation Companies (APGC), said generation companies had an installed capacity 13,000MW, and 7,500MW was available, while the actual capacity that got to Nigerian homes was 3,968MW. However, the minister counts on another source, customer experience to validate his claims as reflected in the third year progress report. “As some citizens recently reported they no longer have to iron all their clothes one week in advance as they previously used to do, because the supply is proving reliable and pre-

dictable even if not yet fully stable and uninterrupted,” he said. The minister enumerated some projects meant to shore-up generation, which included generation from Kaduna, 215MW; Afam IV 240MW; Kashimbilla 40MW; Gurara 30MW; Dandinkowa 29MW; power for nine universities, 15 markets and two big hydro power plants of 700MW in Zungeru and 3,050MW in Mambilla. For transmission, he said there were 90 projects nationwide with Apo, Mayo Belwa, Damaturu, Maiduguri, Odogunyan and Ejigbo being recently completed. “Although there are still people we have not reached, although there are still disruptions from time to time, and although there are still people who also need meters, and we are working to reach them, it is indisputable that we have delivered on incremental power,” he said in the report.

On housing, he counted buildings such as Federal Secretariats in Zamfara, Bayelsa, Nasarawa and Ekiti where public works were being undertaken, and the Zik Mausoleum in Onitsha, which he said was now practically completed. “Let me also point out that our pilot National Housing Programme has led to a nationwide Housing Construction being undertaken in the 34 states where we have received land,” he said. The minister claimed that no less than 1,000 people were employed on each site, apart from the staff of the successful contractors. He added that these sites were an ecosystem of human enterprise, where artisans, vendors, suppliers and craftsmen converge to partake of opportunities and contribute to nation building. “Our parastatals like the Federal Mortgage Bank of Nigeria (FMBN) and the Federal Housing Authority (FHA) are also contributing.”

GRI Amsterdam appoints Bekeme Olowola as board member

lobal Reporting Initiative (GRI), Amsterdam-based leading sustainability impact measurement and reporting standards body, has appointed Bekeme Olowola, founder/ chief executive of CSR-inAction, headquartered in Nigeria, as a member of its Board of Directors, where she will be joining a leading caste of global sustainability professionals. Olowola, who is the first West African member on the Board of Directors, will commence her three-year appointment on January 1, 2019. She was appointed alongside Jack Ehnes, CEO, The California State Teachers Employees’ Retirement System (CalSTRS), USA, and Jianzhong Lu, China president of Weir Group, China. The GRI board appointment process is rigorous and meritorious and other cur-

FIRS records 64% of 2018 revenue target CYNTHIA EGBOBOH, Abuja

he Federal Inland Revenue Service (FIRS) says it recorded N4.3 trillion between January and October, which translates to 64.2 percent of its total revenue target for the 2018 fiscal year. Babatunde Fowler, executive chairman, FIRS, disclosed this at the just concluded Lagos International Trade Fair, stating that there had been a notable performance in revenue collection of N4.3 trillion between January and October, representing 64 percent of the N6.7 trillion targeted for the 2018 fiscal year.

“We are working hard to ensure that the FIRS is in full alignment with all efforts to grow national revenue from taxation, while easing the administrative burdens inherent. The performance would not have been possible without the present administration’s policies of expanding the nation’s tax base and blocking revenue leakages,” Fowler was quoted to have said in a statement mailed to BusinessDay on Monday. Angel Fadahunsi, FIRS South West head, Federal Engagement and Enlightenment Tax Team, representing Fowler, noted that FIRS in a bid to recover all revenues due to the Federal

Government, focused attention on businesses with over a billion naira in annual turnover but had no records of commensurate payment of their tax obligations. Speaking further, he stressed that over 6,000 of such companies had been identified and contacted by the Service leveraging various data sources. “We place emphasis on human resources as one of several tools to achieve our aim of expanding the tax net. This is why we recently recruited young Nigerians to support our bid to effectively provide adequate services to all nooks and crannies of the country,” he said.

rent board members include Tim Mohin, chief executive, GRI; Alexandra Watson, vice-chairman, GRI Board; Girish Ramachandran, president, Tata Consultancy Services Asia Pacific, Singapore; Peter H. Y. Wong, chairman of General Fiduciary Company Limited, Hong Kong SAR; Roberto F. de Ocampo, OBE, founding partner of Centennial Group International, Philippines, and Sandra Guerra, managing director, Better Governance, Brazil.

Avant-Garde to hold 2018 sustainability series on sustainable development, green economy

L-R: Idim Okon Nsemo of Standards Organisation of Nigeria (SON) Lagos; Funmi Sanni, Route to market director, Dangote Cement plc; Wilfred Osadiaye, chairman, Edo State Block Makers Association of Nigeria, and Adeyemi Fajobi, national sales and distribution director, at the unveiling of the Dangote Cement BlocMaster, in Benin City, Edo State.

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vant-Garde Limited, an innovative frontier for advocacy on environmental protection and sustainable development in Nigeria, says the 2018 edition of the Sustainability Table Series will take place November 15 at the Four Points by Sheraton Hotel, Victoria Island, Lagos. The Sustainability Table Series will bring together policy makers, entrepreneurs, government agencies, leading corporate organisations and various subject matter experts as well as the general public to discuss the impacts of climate change in Nigeria and the economic, social and environmental benefits of a green economy. Speaking on the event, Kayode Olaniyan, principal consultant of Avant-Garde, and convener of the event, says the theme for this year’s edition is “Green Economy:

A Panacea for the Future of Sustainable Development in Nigeria – Opportunities for Growth.” According to Olaniyan, this year’s edition recognises that recalibration and paradigm shift to a green economy requires knowledge sharing, capacity building and partnerships between the private and public sector. “We are going beyond rhetoric. Our discussants and speakers are subject matter experts and builders of the green economy and will share successful examples of how they have contributed to job creation, poverty eradication and environmental protection and sustainability,” Olaniyan said. He continues: “As a nation faced with several environmental-generated issues, we realised that we need a platform to review the steps taken to combat the growing threat of climate change.

NIRSAL flags off model to empower smallholder farmers, boost output ONYINYE NWACHUKWU, Abuja

igeria Incentive-Based RiskSharing System for Agricultural Lending (NIRSAL) has launched a unique farming model designed to simultaneously empower smallholder farmers and boost agricultural production on a structured and sustainable basis. Formally launched at the Obafemi Awolowo University, Ile-Ife, Osun State on Monday, Farm Aggregation Model for Smallholder Agriculture based on Technology (FAM-SMART) is a rulesbased, market-led and technology-driven system of primary production ag-

riculture which would provide comprehensive financing to support farmers by anchoring them with input suppliers, mechanisation service providers, market, and financial institutions. NIRSAL said the model was designed for smallholder farmers anchored on three principles: Aggregation; Structured group dynamic, and proportionate cost and profit sharing in order to achieve economies of scale, maximum output and maximum profit. NIRSAL has established Geo-cooperatives in different parts of the country will serve as the operational hubs for FAM-SMART and the company plans to set up 16,000 of them in the imme-

diate to medium term. Though NIRSAL has rolled out several FAMSMART Projects in a number of locations across the country, the Ife project is the first to be launched publicly. The company estimates that a conservative estimate of 1000 geo-cooperatives producing a gross output of 1,250,000 metric tons of grain would generate a gross revenue of N125 billion and underscores the immense potential profitability of the FAM-SMART concept. Managing director of NIRSAL, Aliyu Abdulhameed, said FAM-SMART concept was a new paradigm in agricultural primary production in Nigeria.

Tuesday 13 November 2018

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Tuesday 13 November 2018

Live @ The Exchanges Top Gainers/Losers as at Monday12 November 2018 GAINERS

Market Statistics as at Monday 12 November 2018

LOSERS

Company

Opening

Closing

Change

Company

Opening

Closing

Change

FLOURMILL

N15.4

N16.5

1.1

GUARANTY

N37.15

N36.5

-0.65

OANDO

N4.65

N4.95

0.3

ZENITHBANK

N24.4

N24

-0.4

ETI

N15.55

N15.7

0.15

NEM

N2.8

N2.57

-0.23

VOLUME (Numbers)

N9.15

0.15

DIAMONDBNK

N1.28

N1.16

-0.12

VALUE (N billion)

N7.45

N7.6

0.15

ABBEYBDS

N1.17

N1.06

-0.11

MARKET CAP (N Trn

FBNH

ASI (Points) DEALS (Numbers)

Stock market down by 0.18% as investors book fresh loss of N22bn Stories by Iheanyi Nwachukwu

tock trading on the Nigerian bourse kickedoff this week on a negative note following a record N22billion loss at the close of trading on Monday. The value of listed stocks on the Nigerian Bourse decreased from N11.756 trillion to N11.734trillion, as supply side outweighed demand. The NSE ASI decreased by 0.18percent, while the Year-to-Date (ytd) return stood at negative of 15.95percent. Also, at the sound of closing gong on the Custom Street, the Nigerian Stock Exchange (NSE) All Share Index (ASI) which had opened at 32,200.21 points declined to 32,143.41 points. Diamond Bank Plc, GTBank Plc, UBA Plc, FBN Holdings Plc and Zenith Bank Plc were actively traded stocks on the Nigerian Stock Exchange.

The volume of stocks traded increased by 17.19percent, from 121.260 million to 142.111 million, while the total value of stocks traded decreased by 1.54percent, from N1.581 billion to N1.556 billion in 2,772 deals. “Following a mild uptick in market performance in the prior week, we believe this buying interest will be sustained this week. Nevertheless,

we expect profit taking to drag performance towards the close of the week”, said Lagos-based Afrinvest analysts in their November 12 note. Flour Mills Nigeria Plc recorded the highest price advance after its share price increased from N15.4 to N16.5, adding N 1.1 or 7.14percent; Oando Plc stock price also increased from N4.65 to N4.95, up 30kobo or 6.45percent;

32,143.41

ETI Plc shares price increased from N15.55 to N15.7, up 15kobor or 0.96percent; PZ Cussons Nigeria Plc gained 15kobo or 1.67percent, from N9 to N9.15; while FBN Holdings Plc was up, from N7.45 to N7.6, gaining 15kobo or 2.01percent. “With the culmination of the third-quarter (Q3) 2018 earnings season, we expect a mixed theme this week as issues around the polity remain in focus”, said United Capital research analysts. On the losers table, GTBank Plc stock price led the pack after its share price declined from N37.15 to N36.5, down by 65kobo or 1.75percent; Zenith Bank Plc followed, from N24.4 to N24, down by 40kobo or 1.64percent. NEM Insurance Plc share price declined from N2.8 to N2.57, losing 23kobo or 8.21percent; while Diamond Bank Plc was also down from N1.28 to N1.16, losing 12kobo or 9.38percent.

2,772.00 142,110,924.00 1.556 11.734

GTI Capital, NFF collaborate on football development

TI Capital Group and the Nigeria Football Federation (NFF) last weekend affirmed their commitments to work together for the development and activation of the Nigerian football economy for increased contribution to the nation’s output level. President, Nigeria Football Federation (NFF), Amaju Pinnick had at the weekend led other board members of the football governing body on a courtesy visit to GTI Capital Group at its head office in Marina, Lagos. Other board members at the visit included Vice President, Nigeria Football Federation, Seyi Akinwunmi and Akin Majekodunmi, a board member. Abubakar Lawal, Group Managing Director, GTI Capital Limited said the investment banking group is committed to the development of a “football economy” in Nigeria by investing in key infra-

structure and resources that will help to engender sustainable development of the Nigerian football industry. According to him, GTI Capital is leading privatesector initiatives that will change the face of football in Nigeria by harnessing the globally renowned passion of Nigerians for football into mutually beneficial investment vehicles that simultaneously drive football development and reward passionate supporters and investors in football. Pinnick commended ongoing initiatives at GTI Capital noting that a strategic partner like the investment banking group would complement the efforts aimed at transforming football in Nigeria. He said the NFF under him is determined to make a difference in football governance in Nigeria and as such, will need the support of committed private sector partners like GTI Capital.

SEC holds third CMC meeting in 2018

International Breweries appoints a new director

…restates development of Capital Market Studies curriculum to boost investor education

he Board of International Breweries Plc has appointed Andrew Scott Murray as a Non-Executive Director of the Company. Murray is currently the Vice-President, Finance for ABInBev Africa, leading the finance function across the AB Inbev Africa operations, and is based in Johannesburg, South Africa. He was the Global Director AB Inbev M&A based in New York with exceptional track record of handling transactions and corporate disposals of different description and magnitude. He was also part of the ABInbev’s focused group on Budgeting and Business Performance Optimization.

he Securities and Exchange Commission (SEC) has announced that the Third Capital Market Committee (CMC) meeting in 2018 has been scheduled to hold from Wednesday November 14th to Thursday November 15th 2018 at the Federal Palace Hotel, Victoria Island, Lagos. While the key stakeholders in the capital market will meet on November 14th, members of the media would be briefed on Thursday on outcome of the CMC meeting. However, SEC has advised that admission into the venue would be upon presentation of the CMC Identity Card and strictly by invitation.

According to the SEC, “Attendance to both events is strictly by invitation. Invited participants are expected to come with their identity cards to be admitted into the venue and all invited participants are expected to be seated by 9.45am,” The CMC was mainly established to serve as a medium for exchange of ideas among market stakeholders as well as for feedback to SEC on how to continuously improve the market activities and regulation. It is an industry-wide committee comprising members of the commission, representatives of capital market operators and trade groups and other stakeholders. The CMC meets every quar-

ter to deliberate on various issues affecting the market and other policy matters. During the meeting, issues bordering on implementation of the Ten Year Capital Market Master Plan as well as others relating to the capital market and the economy would be discussed and the outcome made known to the media. The ten-year master plan for the Nigerian capital market which is expected to refocus the

market and help double its size over time and grow the economy was unveiled November 2014. Recall that the Commission has vigorously implemented some initiatives in the Master Plan with the aim of attracting more investors to the market. Some of the initiatives include direct cash settlement, dematerialization and e-Dividend Registration, regularisation of multiple subscriptions among others as they promote transparency, protect and enhance investors’ confidence in the capital market. The SEC therefore enjoins all shareholders to take advantage of the initiatives introduced in the capital

market aimed, primarily, at strengthening the market and accelerating economic development. This, SEC said is in consonance with the present administration’s economic strategy focused on deepening the capital market as a vehicle for encouraging a private sector-led economy with enhanced productivity. Those who have been invited to attend the expanded session are Chief Executive Officers (CEOs) of all registered capital market firms (that is Broker Dealer, Capital Market Solicitors, Custodians, Fund Managers, Issuing Houses, Rating Agencies, Registrars, Reporting Accountants, Trustees, and Consultants, etc.);

Tuesday 13 November 2018

C002D5556

BUSINESS DAY

Politics & Policy

More than 800 people defect in Nsima Ekere’s stronghold in A/Ibom

ANIEFIOK UDONQUAK, Uyo

he gale of defections sweeping across the country ahead of next year’s general election has hit the stronghold of Nsima Ekere, the governorship candidate of the All Progressives Congress (APC) with more than 800 people defecting to the People’s Democratic Party (PDP) in Edemeya, Ikot Abasi local government area of Akwa Ibom State. The defecting members who are from the APC and drawn from the three political wards in the area dramatised the death of APC in the community with a mock coffin which they displayed during the reception for the defecting members held at primary school, Ikot Ubo in Edemeya, Ikot Abasi local government area. Among those who attended the defection ceremony were political stalwarts from the area including the local government chairman, David David Eshiet, the lawmaker representing Ikot Abasi in the state house of assembly, Uduak Ududo,

Nsima Ekere

women and youth leaders and well business leaders from the area. Welcoming the defectors, Eshi-

Ehiemere emergies Abia IPAC chairman UDOKA AGWU, Umuahia.

ugustine Ehiemere of the All Progressives Grand Alliance (APGA) has emerged as the chairman of the Abia State chapter of the Inter Party Advisory council (IPAC) during the election of the council which took place recently. He narrowly beat Gilbert Chikezie of the Independent Democrats (ID) by 24 votes to 23 votes. Japhat Anyanwu, national leader of Rebuild Nigeria Party and the presiding officer of the election which took place at the Abia State INEC office and observed by Joseph

Augustine Ehiemere

Iloh, associate professor, REC, while announcing the result of the election said it was free, fair and keenly contested. Chidi Nwosu of SDP won the position of the vice chairman by garnering 28 votes to beat his rivalry, Ezekwesiri Ananaba of PDP who polled 19 votes. Augustine Anyaegbu of APC scored 24 votes to beat David Kalu of the GPN for the position of secretary while Chris Uchegbu of ADC clinched the position of treasurer. Ehiemere, the newly elected chairman, in his speech thanked members for electing him into the exalted position as the IPAC chairman in Abia. He assured them that he would carry every member along and enthrone accountability in the council. “I will not fight government but the right thing should be done under my leadership,” he said. It would be recalled that the election which was earlier scheduled to hold on Monday, 5th September lingered till Friday due to alleged court order which one Ukaegbu Nnanna who claimed to be chairman of a faction of APGA brought to the venue against Augustine Ehiemere said to be the authentic chairman of the party in Abia. It was gathered that Ike Oye the national chairman of APGA was contacted to confirm who between the two claimants was the authentic, and he reportedly told the REC and presiding officer that Ehiemere was the authentic chairman.

et commended them for “seeing the truth” and deciding to move from their former political party

to the PDP saying the people could no longer be deceived by the promise of the APC governorship candidate that he would serve only for a single term of four years if elected. “An indigene of Ikot Abasi Local G overnment Area will serve for eight years, don’t be deceived by the selfish interest of any politician, we will support Governor Udom Emmanuel and Atiku Abubakar in next year’s elections,” he said. According to him, Edemeya has been regarded as the stronghold of the APC in the past, adding however, that with the defection, it is clear that the people are for PDP explaining that it is only PDP that has brought development to the area. He said the community had had a deputy governor who according to him did not provide a single electricity transformer to the community and wondered why the people would vote for him when did nothing for the people. Speaking on behalf of the defectors, Okon Nathan who until recently was a caucus member of

the APC in the area said APC has failed to recognise those who had worked for the party saying he could no longer work for others to be the beneficiaries. Other defectors who spoke criticised the poor quality of work on the Esene-Ukan road being constructed by the Niger Delta Development Commission (NDDC) saying roads constructed by the state government in parts of the were of a better of quality According Ifiok Bernard, chairman of PDP in Edemeya ward 2, PDP has been re-positioned to win the forthcoming elections following the defection of those he said who in the past had betrayed the party and called on all to vote for the candidates o f the party from the state assembly to the presidential elections. Apart from the poor quality of work on the only link road in the area, they also lamented that despite the Managing Director of the NDDC being from the community, the Bailey bridge constructed more than 40 years ago had remained in a deplorable state without the commission doing anything about it.

30 guber candidates jostle for Abia Government House UDOKA AGWU, Umuahia

he Independent National Electoral Commission (INEC) in Umuahia Abia State last Friday released the names of 30 governorship candidates who want to occupy the Government House, Umuahia come 2019. The list released by the election body has Okezie Ikpeazu, the incumbent governor, of the People’s Democratic Party (PDP), Alex Otti of the All Progressives Grand Alliance (APGA), his closest rival

in the 2015 election, Sampson Okechukwu Ogah, All Prograssives Congress (APC), who analysts have opined are the major contenders in the race. Others are Blessing Nwagba, SDP and currently, a member of the Abia State House of Assembly representing Aba Central state constituency on the platform of PDP but later defected to SDP when she was reportedly denied ticket to run for another term, Mike Imuo Ndu, AUN; Anyalewechi Nwazuru, GFN; CeeJay Igara Kalu, LP; Chijioke Owanta, ASD; Uche Eke Uche, ADC; Opara Alphonsus, ACD, and

Ulunna Morgan, ANP. Others who made the list include Gilbert Chimezie, ID; Okoronkwo Fortunes, PPC; Emeka Uwakolam, Accord; Benson Onyekachi, KOWA; Igwo Nnanna Okpan, AGA; Onuoha Igwe, AGAP; Charles Okereke, JMPP, among others. It could be recalled that this is the first time in the political history of Abia State that the number of persons vying for the number one position in Abia has reached 30. In the past, it had been between five and ten while the serious contenders were PDP, APGA, PPA, and ANPP.

We succumbed to pressure from Executive to change sources of funding 2019 elections budget OWEDE AGBAJILEKE, Abuja

member of the Senate Appropriations Committee, Rafiu Ibrahim (PDP, Kwara State) has explained that the Senate’s decision to rescind and revise the methods of funding of the N242 billion 2019 elections budget was done in good faith, after due consultation with the Executive. In a statement on Friday, Ibrahim said despite the earlier approval of the elections budget on October 16, the National Assembly had to rescind, reconsider and revise its position following pressure on members of the Appropriations Committee by the Executive. Ibrahim who chairs the Senate Committee on Banking, Insur-

ance and Other Financial Institutions, justified the latest approval which said the funds should be deducted from the Service Wide Vote as well as Special Intervention Programmes of 30 Ministries, Departments and Agencies. He said: “The insinuations being peddled that the Senate singlehandedly and unilaterally cut the budgets of critical MDAs is false. Such actions are uncharacteristic of this 8th Senate. “The facts remain that on Tuesday, October 16th, the Senate approved a Report that stipulated that the supplementary funding for INEC and security agencies to conduct the 2019 election should be sourced from the Service Wide Vote of the Executive through virement. This information is out everywhere.

“However, the Executive came up with a counter-proposal that asked that the election be funded through both the Service Wide Vote and the budgets of 30 MDAs —on a pro rata basis. This is why, the Chairman of the Senate Appropriations Committee, Senator Danjuma Goje, had to come up with a Motion to rescind, reconsider and revise the source of funding contained in the original approval granted by the Senate. “So, if you take a close look at the Senate’s Order paper of Wednesday, November 7, 2018, you will see that N121,122,525,050, which represents half of the entire supplementary budget, was sourced from 30 MDAs chosen by the Executive, while the other N121,122,525,050 was taken from the Service Wide Vote.

BUSINESS DAY

Tuesday 13 November 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

Russian sanctions: Why ‘isolation is impossible’

Oil prices gain as Saudi Arabia flags December output cut

Page A8

Page A7

World Business Newspaper

Barnier says Brexit treaty text almost ready

Diplomats say outcome depends on whether May can muster support from ministers Jim Brunsden, Alex Barker, Mehreen Khan and George Parker

he EU’s chief Brexit negotiator has said the main elements of an exit treaty text are ready to present to the UK cabinet on Tuesday, according to diplomats briefed on the discussions. Speaking after late-night talks that ran to almost 3am, Michel Barnier told ministers from the EU’s remaining 27 member states that “the parameters of a possible agreement are very largely defined” but still require political endorsement. While guarded and making clear that exchanges with London are continuing, Mr Barnier’s private comments have raised expectations in some national capitals that a breakthrough on a withdrawal text is within reach this week. Diplomats underlined that everything will turn on whether Theresa May will be able to muster support from her cabinet. “Even through this weekend [the negotiators] worked tirelessly to reach an agreement,” Mr Barnier told ministers, according to a witness. “As of this moment, this agreement is still not reached. As in any negotiation, the final stretch is always the most difficult.” However he added: “On the ba-

Michel Barnier told ministers that “the parameters of a possible agreement are very largely defined”.

sis of our common efforts, the parameters of a possible agreement are very largely defined. On the British side, the cabinet will meet tomorrow [Tuesday] to examine these parameters. We are at an extremely sensitive moment. The smallest public comment from my side could be exploited by those who want the negotiation to fail.” One national diplomat in the room said: “We all know that this is it.” The pound dropped on Monday on concerns that the timing of

China’s Xi Jinping revives Maoist call for ‘self-reliance’ President warns of new difficulties ‘obtaining’ foreign technology Gabriel Wildau

hinese President Xi Jinping has invoked a long discarded Maoist slogan to call on state-owned enterprises to make advanced components that are now mostly imported. Even as Mr Xi has sought to position China as a champion of globalisation amid the US retreat into protectionism, the call for “self-reliance” highlights how Mr Xi is also advocating mercantilist policies that could reshape global supply chains. The US commerce department’s ban on US companies selling components to Chinese telecoms equipment maker ZTE earlier this year, though subsequently lifted, exposed China’s vulnerability to such sanctions. “Internationally, advanced technology and key technology is more and more difficult to ob-

tain. Unilateralism and trade protectionism have risen, forcing us to travel the road of self-reliance,” Mr Xi told workers in September during a tour of China First Heavy Industries in north-east Heilongjiang province, known as the heart of China’s rust belt. Notably, state broadcaster China Central Television edited the video of Mr Xi’s remarks for its flagship evening news programme to remove the first part of Mr Xi’s statement. The same redaction occurred in the overseas edition of People’s Daily, the Communist party mouthpiece. Some political observers interpreted the redactions as reflecting concern by propaganda authorities that Mr Xi’s statement would be seen as an admission that China used coercion and theft to obtain foreign intellectual property, as the White House and Continues on page A6

a Brexit deal had slipped; sterling fell as much as 1.2 per cent against the dollar early on but then recovered to trade down 0.5 per cent at $1.2910. Negotiators have been grappling in recent days with how to design an EU-UK customs arrangement that would remove any need for a hard border in Ireland after Brexit and would be enshrined in Britain’s legally binding withdrawal treaty. The talks on this “backstop” plan have hinged on stringent con-

ditions that the EU would attach to the customs union, in a bid to ensure a “level playing field” with the UK after Brexit, and also on the procedures that would apply for bringing the backstop to an end. Mrs May’s spokesman confirmed the cabinet would discuss Brexit on Tuesday, as she tries to unlock a final deal at a special European Council later this month. “Talks are ongoing,” Mrs May’s spokesman said. “I believe they were negotiating until 2.45am last night and they are negotiating

again today.” The EU27 ministers set out their conditions for accepting any deal at their meeting on Monday, urging Brussels to take a tough line to ensure that the UK would not be able to compete unfairly with European companies by slashing regulations after Brexit. “[The] room for manoeuvre is very much limited and our British friends know exactly where our discussions are,” said Michael Roth, Germany’s EU affairs minister, ahead of the meeting.

Oil jumps as Saudi Arabia opens door to production cut Kingdom ready to reduce output but Russia says excess supplies will not last Anjli Raval

il jumped more than 2 per cent on Monday after Saudi Arabia opened the door to cutting crude production despite Russia saying that an excess of supply is short term, putting two of the world’s biggest producers at odds. Khalid al Falih, the kingdom’s energy minister, said on Monday that market analysis conducted by producer nations showed that a 1m barrel a day output cut may be necessary from October levels. The comment followed remarks on Sunday by Mr Falih who said that state energy giant Saudi Aramco would supply 500,000 fewer barrels a day in December compared with November because of lower demand. A drop in exports could lead to a cut in production. Saudi Arabia has targeted an increase in oil production of 1m b/d after pressure earlier this year from US President Donald Trump, who called on Opec to help compensate for a loss of exports from Iran after the re-

imposition of US sanctions. But even as Saudi Arabia pledged to increase output, the Trump administration granted waivers to big customers of Iranian oil such as India and China, creating concerns about oversupply. Brent crude, the international benchmark, was up 2.1 per cent at $71.63 in early trading in London. After hitting a fouryear high of $86 a barrel in early October, Brent has tumbled 17 per cent and slipped below $70 on Friday. The tumble over the past month came as Saudi Arabia signalled its concern over an excess of supply should the global economy slow further. Oil analysts, as well as Iranian oil officials, have said that a minimum of 1m b/d cut would be necessary to bring the market into balance. A Kuwaiti oil official said major exporters had “discussed a proposal for some kind of cut in [crude] supply next year”, state-run Kuwait News Agency KUNA reported on Monday, without specifying terms. Saudi Arabia, the world’s largest oil exporter and Opec’s de

facto leader, is grappling with a new drop in crude prices that could have an impact on its ambitious social and economic reform programme. But Russia, the kingdom’s partner in efforts to balance the market, said on Sunday that it was not clear whether the market would be oversupplied next year, with any imbalance caused merely by seasonal factors. People with knowledge of Moscow’s output policy told the Financial Times last week that the country’s oil producing companies aimed to boost production by 300,000 b/d. Saudi Arabia and Russia have collaborated on oil policy since 2016, leading to joint efforts among global producers to cut supply that brought a multiyear oil downturn to an end. In June this year countries agreed to relax oil curbs to alleviate a price increase. The official press release from producers who met on Sunday to monitor market fundamentals said that 2019 “[pointed] to higher supply growth than global requirements”.

BUSINESS DAY

C002D5556

NATIONAL NEWS

China’s Xi Jinping revives Maoist call...

YouTube chief says EU copyright plan could lead to blocked access

Continued from page A5

other critics alleged. The choice of China First Heavy as the backdrop for Mr Xi’s speech carried strong symbolism. The company was founded in 1954 with assistance from the Soviet Union as part of China’s first five-year plan. That plan, a blueprint for establishing a Soviet-style planned economy, envisioned a long struggle against the US following the Korean war. Today a large statue of Mao Zedong still stands in front of the factory headquarters. Mr Xi repeated his call for “self reliance” on a visit to appliance maker Gree Electric in Guangdong province, China’s technology heartland, last month. “By reviving the Maoist concept of self-reliance, Xi’s comments signal that state-owned enterprises will play an even greater role in the economy by leading efforts to achieve supremacy in key technologies,” said Wendy Leutert, a postdoctoral fellow in Chinese politics at Columbia and Harvard universities who co-authored a recent Asia Society report on stateowned enterprises. The term self-reliance has carried different meanings at different points in the history of Communist party rule over China. During the cultural revolution, Mao used the term to advocate isolation from exploitative capitalist and western forces. But Deng Xiaoping and other reformers later repurposed the term to promote greater integration in the global economy. China’s “ Made in China 2025” plan to encourage “indigenous innovation” in key sectors such as semiconductors and electric vehicles, unveiled in 2015, reflected the Communist party’s desire to reduce reliance on foreign technology well before the sanctions on ZTE and US tariffs. But that plan was largely motivated by economic considerations: enabling Chinese companies to compete globally in emerging industries and to reduce payments to foreign groups through component imports and royalty payments. By contrast, Mr Xi’s revival of “self reliance” shows how the push to master advanced technology has taken on geopolitical significance. It also illustrates the unintended consequences of export controls and foreigninvestment restrictions designed to keep technology out of Chinese hands. “The US has export controls for national security. That leads to industrial policies by the Chinese to duplicate the same technologies on an indigenous basis because we won’t sell them,” said Craig Allen, president of the US-China Business Council in Washington. “So there’s an internal contradiction between those two points.”

Tuesday 13 November 2018

Susan Wojcicki warns that article 13 proposal sets video site an ‘impossible’ task

Susan Wojcicki

King Salman has already curbed the enthusiastic backing by his son, pictured, for the White House’s Middle East peace plan © AP

Saudi crown prince faces attempts to rein in his powers Impulsive decisions and Khashoggi affair make crown prince a high risk for western allies Simeon Kerr and Andrew England

ohammed bin Salman’s authority is under threat as the Saudi crown prince faces domestic attempts to curb his wide-ranging powers in the wake of the killing of journalist Jamal Khashoggi, according to western officials. The officials said Prince Mohammed’s ailing father, King Salman, would like to restrain some of his son’s decision-making authority in response to the death of Khashoggi at the kingdom’s consulate in Istanbul. The western officials described “reckless” Prince Mohammed as a power-hungry young man seeking domination of his country and the broader region, but added that despite unease about him inside and outside the kingdom he was likely to remain in his position as heirapparent. The Turkish government has described the Khashoggi operation as a premeditated assassination. Riyadh has said it is investigating the case and will punish whomever is found responsible. Prince Mohammed’s impulsive decisions, from the apparent abduc-

tion of the Lebanese prime minister and the bloody war on Yemen, to the Qatar boycott and now the Khashoggi affair, have made him a high risk for western allies, who regard the kingdom as a bedrock of regional stability and a bulwark against Iran. King Salman has already curbed his son’s enthusiastic backing for the White House’s Middle East peace plan deemed too tough on the Palestinians. He may now expand the circle of influence in Riyadh beyond Prince Mohammed’s cabal of advisers, the western officials said. But one person close to the government denied plans for any such changes. Western powers are now seeking to exploit the crown prince’s weakness to secure concessions, including pushing for peace in Yemen and an end to the embargo on western ally Qatar. “We want action on human rights, prisoners,” said one western official. “Everyone would like to see progress on Yemen, for the kingdom to make something happen.” The US is to stop in-flight refuelling for Saudi-led coalition jets operating in Yemen as pressure mounts to end more than three years of bloody

conflict that has caused a humanitarian catastrophe. Mike Pompeo, US secretary of state, spoke with Prince Mohammed on Sunday and emphasised that the US “will hold all of those involved in the killing of Jamal Khashoggi accountable, and that Saudi Arabia must do the same”, according to a state department statement. One person close to the Saudi royal family said small groups have been plotting against Prince Mohammed, whom they believe has jeopardised the kingdom’s global standing by operating an out-ofcontrol royal court responsible for the end of Khashoggi’s life. In private discussions, relatives are voicing concerns about the danger of Prince Mohammed’s ascent to the throne, arguing that the family should not approve the succession in the event of the king’s death, said someone who had heard these complaints. After initially denying involvement, the Saudi government has since arrested 18 suspects and dismissed two of Prince Mohammed’s closest advisers, Saud al-Qahtani and Ahmed al-Assiri, for their alleged involvement.

SoftBank mobile unit cleared for record $21bn IPO Approval from Tokyo Stock Exchange clears way for Japan’s largest ever share listing Kana Inagaki and Leo Lewis

oftBank has received clearance from the Tokyo Stock Exchange for a ¥2.4tn ($21bn) initial public offering of its mobile unit, as Masayoshi Son prepares to pitch one of the world’s largest ever share listings at Japan’s “Mrs Watanabes”. The new share issuance, pegged for December 19, will be overwhelmingly marketed to Japanese retail investors, who have been allotted just over 87 per cent of all the new shares being issued, according to bookrunners. The IPO, which will place SoftBank’s mobile unit on a hefty valuation premium over its two main domestic rivals, includes a provision for an overallotment of additional shares worth ¥240bn if the demand from investors is strong. At a provisional price of ¥1,500 a share, the mobile business will be valued at nearly ¥7.2bn, ac-

cording to a company filing on Monday. With the overallotment included, the IPO would raise about $23.8bn — close to the $25bn raised by the 2014 IPO of China’s Alibaba, which bankers involved in preparations for the IPO say has been a “competitive target” for Mr Son, SoftBank’s billionaire founder. At $21bn, the listing of SoftBank’s mobile unit will compare with $22bn raised by Agricultural Bank of China in 2010 and $21.9bn raised by Industrial & Commercial Bank of China in 2006, according to Refinitiv. But concerns over the strength of demand for the offering have been stoked by a surprise announcement earlier this month of huge price cuts by SoftBank’s domestic rival NTT DoCoMo, prompting the sector to prepare for a price war. The announcement of the IPO represents what analysts

believe will be a fundamental strategic shift for Mr Son, who built the company’s mobile business through the 2006 purchase of Vodafone’s Japan operations. Mr Son is attempting to transform the Japanese technology group from a telecoms-centred conglomerate into a global investment powerhouse with the creation of the Saudi-backed $100bn Vision Fund. Some investors have questioned the wisdom of separating the heavily indebted SoftBank from its cash-cow mobile business even though the group will retain a 66.5 per cent stake in the mobile unit. The share sale comes as the Vision Fund, which has now become a bigger profit driver for SoftBank than its domestic mobile business, has come under scrutiny in the wake of the killing of Saudi columnist Jamal Khashoggi and ensuing furore over the involvement of Saudi government agents.

reativity has long been a guiding force in my life, which is why I jumped at the opportunity to be YouTube’s chief executive nearly five years ago. Creators have used YouTube to share their voices, inspire their fans and build their livelihoods. Kurzgesagt — In a Nutshell recently became the number one channel in Germany by creating videos that help others fall in love with science. Artists like Dua Lipa and Ed Sheeran reached fans on YouTube long before they were discovered by a label. And acclaimed musicians like Elton John have used our site to breathe new life into iconic songs. We have worked hard to ensure creators and artists are fairly compensated for their work. In the past year, YouTube paid content owners across the EU €800m. We have also paid the global music industry more than €1.5bn from advert-generated revenue alone. However, this creator economy is under threat from a section of the EU’s efforts to revise its copyright directive, known as article 13, which holds internet companies directly responsible for any copyright infringement in the content shared on their platform. While we support the goals of article 13, the European Parliament’s current proposal will create unintended consequences that will have a profound impact on the livelihoods of hundreds of thousands of people. The parliament’s approach is unrealistic in many cases because copyright owners often disagree over who owns what rights. If the owners cannot agree, it is impossible to expect the open platforms that host this content to make the correct rights decisions. Take the global music hit “Despacito”. This video contains multiple copyrights, ranging from sound recording to publishing rights. Although YouTube has agreements with multiple entities to license and pay for the video, some of the rights holders remain unknown. That uncertainty means we might have to block videos like this to avoid liability under article 13. Multiply that risk with the scale of YouTube, where more than 400 hours of video are uploaded every minute, and the potential liabilities could be so large that no company could take on such a financial risk. We have already taken steps to address copyright infringement by developing technology, like our Content ID programme, to help rights holders manage their copyrights and earn money automatically. More than 98 per cent of copyright management on YouTube takes place through Content ID. To date, we have used the system to pay rights holders more than €2.5bn for third party use of their content. We believe Content ID provides the best solution for managing rights on a global scale.

Tuesday 13 November 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Oil prices gain as Saudi Arabia flags December output cut Stocks stutter while UK pound slips on Brexit concerns Michael Hunter and Alice

il prices rose after Saudi Arabia opened the door to cutting production and helping reverse some of the previous week’s losses that sent Brent crude into a bear market. Meanwhile, the pound dropped in response to the latest Brexit concerns, while global stocks were steadier after a choppy run at the end of last week. Saudi’s energy minister said state energy giant Saudi Aramco would supply 500,000 fewer barrels a day in December compared with November because of lower demand. Russia, however, said it was not clear whether the market would be oversupplied in 2019. Brent crude climbed by as much as 2.2 per cent to a high of $71.88 a barrel, before easing back to $71.10, leaving it up 1.3 per cent for the session. West Texas Intermediate was up 1.5 per cent at $61.09. Last week, Brent dropped below $70 a barrel and entered bear market territory, having fallen 20 per cent from the four-year high hit a month ago. The decline for oil came after the White House agreed waivers to US sanctions allowing eight countries to continue to buy crude from Iran. Forex Sterling weakened on deepening concern about the government’s ability to secure a deal on the terms of the UK’s departure from the EU. The latest set of proposals faced opposition from both sides of the Brexit divide. The pound was down 0.6 per cent against the dollar in afternoon trade at $1.2901, after earlier falling 1.2 per cent to a seven-session low of $1.2828. The euro was also hit hard — down 0.6 per cent versus the dollar at $1.1266, its weakest level in 16 months — with the prospect of a

disorderly Brexit and the budget clash between the EU and Italy souring sentiment toward the shared currency. Japan’s yen was flat at ¥113.80 per dollar. The dollar index rose 0.5 per cent to 97.34, with a dominant bullish trend for the world’s reserve currency setting the pace. Equities Wall Street’s S&P 500 fell another 0.8 per cent to 2,759, adding to a 0.9 per cent decline on Friday, with the cautious tone also tracking worries over global growth and the US-China trade war. Technology stocks continued to look exposed on concern about their lofty valuations in the context of a potential slowdown and a lack of a breakthrough in trade relations between Washington and Beijing. The Nasdaq Composite fell a further 1.6 per cent, with Apple down 3.9 per cent — and back below $200 a share — following weak forecasts from two of its suppliers. The FTSE 100 outperformed its continental European peers, helped by the weaker pound. The main London stock index fell 0.4 per cent, against a 0.7 per cent decline for the Europe-wide Stoxx 600. Frankfurt’s Xetra Dax 30 was down 1.4 per cent, with the CAC 40 weaker by 0.6 per cent in Paris. The mood was stronger in much of Asia, although Japan’s Topix slipped 0.1 per cent with the technology sector under pressure, tracking losses for US peers on Friday. Seoul’s Kospi, also home to a range of tech stocks, underperformed with a 0.3 per cent decline. The Hang Seng index in Hong Kong rose 0.1 per cent, while on mainland China, the CSI 300 added 1.2 per cent. Commodities The price of gold was down $5 at $1,204 an ounce.

Wall Street futures retreat despite oil gains, dollar hits 2018 high Peter Wells

S futures were weaker on Monday morning, despite a likely boost to the energy sector stemming from rebounding oil prices after Saudi Arabia opened the door to cutting crude production. Meanwhile, the dollar chalked up a new high for the year as growing concerns about the UK government’s ability to secure a deal over Brexit dinged the pound, which in turn rattled the euro. Khalid al Falih, the kingdom’s energy minister, said on Sunday state energy giant Saudi Aramco would supply 500,000 fewer barrels a day in December compared with this month because of lower demand, and followed up today by saying market analysis conducted by producer nations showed a 1m barrel a day output cut may be necessary from October levels. That helped push the price of Brent crude, the international benchmark, 1.5 per cent higher to $71.20 a barrel in New York this morning, while West Texas Intermediate was up 1.1 per cent to $60.87. On Friday, WTI closed lower for a

10th consecutive session for the first time on record with investors fretting then about rising output from the US and Saudi Arabia that was outweighing the start of US sanctions against Iranian imports. The S&P 500’s energy sector was the second-worst performing sector last week with a 0.9 per cent gain, versus a 2.1 per cent rise for the benchmark, which was underpinned by a strong three-day winning streak around the US midterm elections. S&P 500 futures were down 0.1 per cent this morning, but energy stocks will probably buck that trend. Futures for the Dow Jones Industrial Average were off 0.3 per cent while those for the Nasdaq 100 were down 0.5 per cent. The dollar was stronger, trading at its highest level since mid-2017. The DXY index, which tracks the buck against a weighted basket of global peers, was up 0.5 per cent to 97.383, but had risen to as much as 97.578. The US Treasury market was closed for Veterans Day. Last week a sell-off as the Federal Reserve signalled it remained on track to raise interest rates in December helped push yields towards their highest level since 2011.

Stocks to watch: BAT, Imperial Brands, Apple, Smurfit Kappa, IQE Sports Direct looks most at risk from Amazon competition, says Berenberg Bryce Elder

ritish American Tobacco and Imperial Brands tumbled on reports that the US Food and Drug Administration was planning to ban menthol cigarettes. Talk of the ban came ahead of the FDA setting out its ecigarette regulatory plan this week. US menthol cigarette sales contribute about 25 per cent of BAT’s group profit and up to 60 per cent of its US volumes, said analysts. For Imperial, Piper Jaffray estimated that menthol accounted for about 25 per cent of its US volumes and between 6 per cent and 8 per cent of global earnings. “The FDA is reasserting its authority over the industry,” said Morgan Stanley. “While FDA tobacco oversight has done little to impact the industry’s business model to date, we expect increasing uncertainty to remain an overhang and cap multiples in the near to medium term.” However, most analysts saw no reason to panic. “We think that the menthol ban will face extensive litigation and is unlikely to impact tobacco cash flows for at least the next three years, if not more,” said Barclays. Piper Jaffray

guessed that implementation of any ban may take eight years or more. How much US menthol cigarette sales contribute to BAT’s group profit Jefferies added that the FDA would only support a menthol ban on proof that it would lead smokers to switch to reduced-risk products such as ecigarettes, and that the big tobacco companies may be expected to retain most of those customers. Apple was among the casualties after Lumentum, the maker of 3D depth sensors used in the iPhone, cut guidance and said one of its customers had requested to reduce meaningfully shipments of previously placed orders. Lumentum did not name the customer. The warning also hit Aim-listed IQE, which has been reported to supply silicon wafers used by Lumentum. Sellside stories Berenberg started coverage of JD Sports with “buy” advice and initiated Sports Direct with “sell”. Its price targets were 530p and 270p, respectively. The “athleisure” trend showed no sign of slowing, which would support compound annual market growth of at least 3 per cent over the next five years, Berenberg said. The

broker also noted that online direct sales had allowed the big sportswear makers to cut wholesale channels to favour key “destination” strategic partners: “JD is one of just two global strategic partners for Adidas and Nike, whereas Sports Direct’s strained relationship with the brands will, we think, leave it exposed.” Berenberg argued that JD Sports was much stronger online than Sports Direct, which it saw as the most exposed to Amazon’s growing presence in sports retail. Persistent market share losses, a brand unloved by the consumer, an underinvested store estate and a weakening competitive position all made Sports Direct a stock to avoid, the broker added. Kepler Cheuvreux downgraded Smurfit Kappa, the packaging maker, to “reduce” from “hold”. Smurfit has continued to trade at high levels after rejecting International Paper’s bid in June, said Kepler. But testliner prices in southern Europe had been weakening and looming increases to industry production capacity meant supply growth might outpace demand, which suggested Smurfit deserved a lower earnings multiple, it said.

Chipmaker Infineon downgrades 2019 growth on ‘challenging’ market Andrew Whiffin

uggestions of a sectoral slowdown from senior executives at semiconductor group Infineon Technologies sent ripples through chipmakers’ stocks on Monday, as investors worried the industry might come under further pressure in 2019. Commenting on the company’s full-year results for the year to September, chief executive Reinhard Ploss said Infineon faced a “challenging” market, and that revenue growth next year would be at least 9 per cent, a downgrade from previous guidance of growth of at least 10 per cent. “Our revenue outlook bakes in a higher probability of an international economic slowdown,” chief financial officer Dominik Asam said according to Reuters. “One thing is very clear: Infi-

neon’s environment is very challenging at present. There are many uncertainties. We are keeping a very close watch on further developments and will respond if demand weakens,” said Mr Ploss. Shares in Infineon were down 8 per cent half way through the European trading session, and shares in other listed chipmakers followed suit; AMS was down 10 per cent, STMicroelectronics fell 6 per cent, Finisar was down 5 per cent and Dialog Semiconductors slipped 3 per cent. However, Mr Ploss stressed that Infineon — which supplies chips to the automotive and industrial processes sectors — had full order books and “less reason to worry” than some competitors, adding there was “no reason” to believe that Infineon’s revenue growth was coming to an end. He said the company was “vigilantly monitoring further political

and economic developments,” but expected relative stability in the coming months, and for the global semiconductor market to continue to grow by around 4 per cent in 2019. Despite sectoral headwinds, Infineon said 2018 had been “very successful.” Revenues for the full year came in at €7.6bn, up 8 per cent compared to 2017, while operating profits rose to €1,469m from €983m. Analysts at Independent Researchers cut their price target for Infineon from €23 to €21.5. Shares were trading at €16.80 at pixel time. Meanwhile, shares in Apple — whose suppliers include semiconductor companies — were down 4 per cent after screenmaker Japan Display and optical component maker Lumentum, which both supply the tech giant, cut their forecasts.

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Tuesday 13 November 2018

ANALYSIS Labour threatens to block ‘no deal’ Brexit

Theresa May’s plan for leaving EU comes under fire from all sides Jim Pickard and Jim Brunsden

T Russian sanctions: Why ‘isolation is impossible’ The US-led measures were designed to ostracise Putin, but the rhetoric has not matched reality as Moscow sells arms and builds alliances Henry Foy

t fires missiles that travel at 2km per second and can hit targets flying twice as fast. It can target 80 different enemy aircraft, drones and cruise missiles at the same time from 400km away, and spot stealth warplanes that previously evaded detection. But arguably the most dangerous aspect of Russia’s S-400 Triumph missile defence system is the damage it has inflicted on the clout of Washington’s anti-Moscow sanctions programme, and concerted efforts by the US to isolate Russia from the rest of the world. Despite sweeping sanctions against Russia’s defence industry to shut down its lucrative exports and a ban on other countries buying the S-400 specifically, Russia is doing a roaring trade in what most experts consider the world’s most advanced air defence system. Over the past year, Turkey and India have signed deals to buy S-400s, China has received its first deliveries, and Saudi Arabia, Qatar and Iraq have begun negotiations over deals to acquire the sanctioned systems. If the west’s sanctions regime, first introduced in March 2014, was designed to cut off Moscow from the rest of the world and isolate its critical industries, the truck-mounted missile launchers are a $400m-a-piece example of how that effort has failed. “There is no question about the isolation of Russia. Nobody is even talking about it,” says Andrei Frolov, editor-in-chief of Russia’s Arms Export journal. “There are major breakthroughs thanks to China and India . . . the message is that Russia is still open for business.” Since 2014 and Russia’s annexation of Crimea, a sanctions regime led by the US and supported by the UK, EU and other western allies has sought to isolate Moscow by curbing its access to external finance, trade and diplomatic support in an effort to force a change in political approach from President Vladimir Putin’s administration. Initially targeting Russian politicians, the country’s vast energy sector and military-industrial complex, the sanctions have become ever more targeted against individuals and businesses. Allegations against Moscow of meddling in the 2016 US election, allowing the use of chemical weapons in Syria and carrying out the attempted murder of former spy Sergei Skripal in the UK this spring have resulted in harsher restrictions. But if the measures were designed to make Moscow an international pariah, friendless and toxic, they are falling short of achieving their goal.

An ever-closer friendship with China has provided Moscow with international finance, new trade opportunities and diplomatic heft. Moscow has also deepened its ties with a host of countries in the Middle East, from Turkey to Israel, Saudi Arabia to Iran, expanding its influence in the region at a time of American hesitation. At the same time, a steady stream of EU leaders visiting the Kremlin, foreign direct investment from European corporates and continued demand for Russia’s oil and gas exports belie the rhetoric of belligerence from Brussels. “Isolation is impossible, that is clear,” says Andrei Bystritsky, chairman of the Valdai Discussion Club, a Russian think-tank. “It was possible, 30 years ago, in the Soviet times. Then there were just two blocs. But now there are so many options.” When it comes to Russian isolation, reality has not matched rhetoric. While major defence deals like the S-400 agreements have drawn the ire of Washington, all of the EU’s biggest economies have quietly continued to do business with their eastern neighbour. Berlin, a key supporter of sanctions related to the annexation of Crimea, steadfastly supports Nord Stream 2, a Russian gas pipeline being laid under the Baltic Sea that opponents say will only increase Moscow’s influence over Europe’s energy supplies. French president Emmanuel Macron was Mr Putin’s special guest at the annual St Petersburg Economic Forum earlier this year, telling his host: “Dear Vladimir . . . let us play a co-operative game.” Total, the French energy group, bought a 10 per cent stake in Russia’s $25.5bn Arctic LNG 2 project soon after, and last month opened a new oil blending plant close to Moscow. The UK is one of the most hawkish towards Moscow, but British energy group BP is one of Russia’s biggest foreign investors through its 19.75 per cent stake in Rosneft, the Kremlincontrolled oil company subject to sanctions. “Look at Total, piling in as much as it can. Look at BP,” says a senior executive at a major international energy company. “You cannot isolate a country as big and as important as Russia. It was never going to work.” At a conference in Verona last month, Italy’s deputy prime minister Matteo Salvini told Russian delegates they were “peacemakers” and urged Italian companies to find ways around EU sanctions. “In 2018 we do not need sanctions, we do not need troops. We need dialogue, we need friendship,” he said. “I want to thank Italian businessmen . . . for resisting, for taking up the initiative with this.” Western diplomats in Moscow privately admit that the sanctions

have failed to achieve the impact many of their governments had desired. Some blame the staggered implementation that has largely allowed Russia’s $1.6tn economy to slowly adjust. Others argue that the recovery in oil and commodity prices since 2016 has provided the Kremlin with enough cash to offset the impact. But others claim that many countries have lacked the resolve to follow through with the measures, fearing damage to their own companies. Germany’s Daimler is building a factory close to Moscow that will start producing Mercedes-Benz E-Class sedans early next year. US aerospace giant Boeing opened a production plant in central Russia this summer to manufacture titanium components. Europe is buying more gas from Russia than at any time in history. All the activity suggests that for company executives, Russia is too large and lucrative to let politics get in the way. “There is something vitally important in the role of businessmen and policymakers continuing a dialogue,” Bob Dudley, BP’s chief executive, said at the Verona conference. “More and more there is a great importance that business plays in bringing the world closer. There are a lot of forces trying to push us apart.” Since sanctions were first imposed on Rosneft in 2014, BP’s stake in the company has earned Rbs90.7bn ($1.3bn) in dividends, according to information on the Russian company’s website. “It is very difficult to remain in business for a long time by taking sides . . . we try to build bridges,” Mr Dudley added. Compared with 2014, Rosneft has doubled the amount of oil it produces from joint projects with foreign companies to 1.4m barrels a day, thanks to partnerships with Norwegian, Vietnamese and Indian groups. “I am convinced that the mutually beneficial win-win ties will continue to develop, while any further escalation of sanctions will ironically set limits for the US themselves,” Rosneft’s chief executive Igor Sechin, who is banned from entering the US, said in Verona. The Kremlin has pushed heavily the line that Washington’s use of international sanctions against Moscow will only force third countries to distance themselves from the US. “It is pretty clear from where we sit that by trying to isolate Russia, America is doing a good job of isolating itself,” says one Asian diplomat in Moscow who declined to be named. “Even the Europeans are developing their own independent Russia policy.” As western sanctions sought to close off Mr Putin’s diplomatic options, he struck out aggressively in new directions.

he Labour party has warned Theresa May that leaving the EU without a deal is a “political hoax” that would be blocked by parliament, amid growing fears that the prime minister’s Brexit plan is coming unstuck. Keir Starmer, shadow Brexit secretary, said the House of Commons would “take back control” if the government’s plan was rejected by MPs. “There is no duty on MPs to surrender to a bad deal,” he wrote in The Sunday Times. It is broadly accepted that the Commons would reject the potential chaos of a no-deal scenario with up to 50 Tory MPs joining forces with Labour, the Scottish National party, Plaid Cymru and the Green party to vote against. The prime minister had hoped to win a cabinet sign-off for her Brexit plan at a crunch meeting early this week — but in the past two days she has been buffeted by criticism from Tory colleagues on all sides. Number 10 had been aiming for “decisive progress” at a historic cabinet meeting either last Thursday, Saturday or this Monday. But aides

ment. That, he wrote in the Mail on Sunday, would “finally dispel the ‘crash out’ Project Fear nightmare scenarios”. Negotiators are still trying to thrash out a legal fix to carry Brussels and London towards a Brexit agreement. The blockage is over how to resolve the issue of the Irish backstop, an EU-UK guarantee to prevent a return to a hard border in Northern Ireland. The backstop would allow the entire UK to remain in the customs union after a transition deal ends in December 2020 — at least until a new trade agreement is agreed. But Eurosceptic Tories will refuse to accept any backstop that could leave the UK in the customs union forever. Although some senior cabinet ministers have demanded a unilateral escape mechanism from the backstop, that is unacceptable to the EU. Instead Britain’s attorneygeneral Geoffrey Cox has tried to create a review mechanism involving both sides to allow the UK to leave in certain circumstances. Some cabinet ministers have demanded to see the full legal ad-

Theresa May, pictured with Labour leaderJeremy Corbyn on Remembrance Sunday, has been buffeted by criticism over the past few days © AFP

admitted the timetable had slipped and said they did not know if and when the meeting would occur. Downing Street now fears some pro-EU MPs will vote down any deal after the resignation on Friday of Jo Johnson, former transport minister. Mr Johnson said that other Europhile ministers were “reflecting hard” on their position. Mrs May also faces mounting pressure from Eurosceptic MPs, including several in her cabinet who could resign over Brexit. Andrea Leadsom, Commons leader, warned that parliament would reject any attempt to give the EU a say over when the UK can end any Irish border backstop. The European Research Group, which represents dozens of Eurosceptic Conservative MPs, has joined forces with the Democratic Unionist party — which is propping up the minority May administration — to threaten to vote down the deal In a joint statement, Steve Baker, deputy chair of the ERG, and Sammy Wilson, DUP Brexit spokesman, said they would vote against the deal if Mrs May failed to establish an “independent and whole UK”. Jacob Rees-Mogg, chair of the ERG, has previously argued against paying any of the £39bn Brexit divorce bill in the event of no deal. But on Sunday he said it would be acceptable to pay £20bn to seek an amicable “no deal plus” arrange-

vice on the backstop. But Damian Hinds, the education secretary, told the BBC’s The Andrew Marr Show: “There’s a long tradition that legal advice to government is not published.” Brussels has also insisted that European Court of Justice must remain the ultimate arbiter of EU law, something which in effect limits the scope for independent arbitration to manage future UK-EU disputes. EU officials say that any backstop solution for Northern Ireland must apply unless and until both sides decide jointly to stop applying it. On Friday night some consensus emerged on a tentative agreement over the Irish border, with three options. The first is to reach a separate agreement on Northern Ireland to replace the backstop, which could either be the full EU-UK future economic partnership or arrangements specific to Northern Ireland. The second would be to extend Britain’s transition beyond December 2020, an idea that some cabinet ministers have already mooted as a decent solution. The fallback option would be the new backstop for Northern Ireland, which would see the province under the EU’s customs and single market rules that allow the free movement of goods — a situation that would enrage the ERG and DUP.

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NEWS YOU CAN TRUST I TUESDAY 13 NOVEMBER 2018

INSIGHT/INNOVATION President Muhammadu Buhari is not for reforms

OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

n 2015, I did not support President Muhammadu Buhari for the presidential elections. He was Head of State of Nigeria between 1983 and 1985. In this period, the government was characterized by the war against indiscipline (WAI) and supposedly against corruption. What cannot be denied, but little known then, was that the government, led by the current President, showed enormous disdain for private enterprise, controlled the Naira’s exchange rate to the dollar, and expanded the control of the state and the military. In other words, and what many of the President’s supporters will not admit today, is that there is never a power vacuum. So, what the President took away from the “market” in the allocation of resources and goods and services, it aggregated those same powers to the military.Indeed, I will never forget that my mum and few of her business colleagues had to go and beg military personnel in order for us to get milk and other provisions. So, when people argue about taking powers away from some others, please ask where would the powers be transferred to – the state, often concentrated

PROPHYLAXIS

AYULI JEMIDE Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

s a sequel to all the strikes, plots and counterplots between organized labour and the Federal government, the N30,000 minimum wage is now imminent. Following the approval of the President, and pending when the National Assembly does the needful, I intend to throw up a few discussion points arising in relation to this new minimum wage. How do we compare with other African countries? I will use 5 random countries as benchmarks to underscore a few points: It is clear from the above table that Nigeria

in the hands of those ruling and their cronies, or the market, concentrated in skills, investments, risks, and innovations etc. No one should be under any illusion thinking that the Nigerian state is some sort of invisible and indiscriminate hand. It is not. Let me now drag my piece to our current circumstances. As Nigeria prepares for another round of elections, there is no doubt that the relevance of the Presidential elections remain strong because we still lack the strong institutions and agreed principle and value drivers that bind us all in a broad direction. Given this, one thing that is so sure is that President Buhari will not embark on any kind of reforms that reduces the powers of the state, reduces the powers of the President, and reduces the power of the federal government that will mean a reduction in the powers of the federal state. So, in the 21st century in a multi religious and multi ethnic group, we all have to wait for what happens in Abuja before we make progress. Therefore, for the benefit of those that are truly open minded about reforms or restructuring, it is not about the taking of resources from one region to another. Would there be some elements of that? I suppose so and may be it is, depending on what the country agrees. However, it is broadly the changes in legal foundations of the country and the power to change incentives. Our country is growing at the rate it is, developing at the rate it is, and confronted with widespread poverty because of the outcomes of all economic decisions made, allowed by the incentives provided in our economic structure. To change the outcomes, we need to change the incentives. Many areas of our economy including solid minerals, infrastructure, education, and heath will not change until we change the incentives. So, reforms to me is the possibility of multiple centres of economic incentives, the redrawing of our map of economic incentives, and the power to make changes to the laws that changes the economic incentives within the

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…the fact that President Buhari will not even contemplate any measure of reform, no matter how genuine and the likely benefits, means that another four years will be another extension of the already extensive and concentrated state powers

country. At the moment, this is too concentrated in the federal government. Matt Levine, one of Bloomberg’s popular opinion columnist wrote recently about the challenges of mergers and acquisitions and the roles that CEOs play. He argued that there exists conflict of interests if one is the CEO of a company that is about to be acquired, even if it is in the best interest of the shareholders for the company to be acquired. The conflict of interest arises because the CEO is either going to be a less important person in a new and bigger company or the CEO will no longer have a job. Now, we may think this theory only applies in the private sector in the kind of scenario described by Levine. However, this is the story of our inability to do serious, sustained, and aggressive economic and

political reforms in Nigeria. Those responsible for the reforms are also those that have the most to loose, even though the country as a whole stand to benefit. For instance, the Petroleum Industry Governance Bill (PGIB), the part law of the previously humongous Petroleum Industry Bill (PIB), will reduce the power of the President considerably, and we wonder why no President, including President Buhari, has put their mind to it and get it passed, despite Nigeria loosing billions of investment until now. Take education, especially higher education, then add the structural reforms that will change the responsibilities and therefore power equations between the federal and the states, it is all about reducing the influence and powers of the president. The President knows this is not working, but the fact that President Buhari will not even contemplate any measure of reform, no matter how genuine and the likely benefits, means that another four years will be another extension of the already extensive and concentrated state powers. Permit me to now conclude with the observation made by Levine. He wrote that “And if the CEO doesn’t want the company to be acquired, he generally has lots of ways to prevent it. He can refuse to meet with the CEO of a potential acquirer, or tell her “no we’re not interested” or “my board would never go for it.” After getting an acquisition proposal, he can tell his board that it undervalues the company, or that the acquirer doesn’t seem serious about moving quickly, or that there are antitrust problems, or just not tell the board about it at all. As the acquirer does its due diligence, the CEO can tell his employees to move slowly, to create lots of issues, or even to make the company look bad”. This is the same thing that President Buhari and his people are telling us about needed restructuring and reforms.Its all excuses for retaining power and control. I thank you.

And here comes Nigeria’s new minimum wage? is not on top of the chart in terms of a minimum wage despite being on top in GDP and population. Note that Nigeria’s population and the size of our work force should be a major factor in comparing minimum wages between countries. Do you realize that Nigeria’s population is almost the same as those of the other 4 countries put together? In Nigeria, there have been several minimum wage increases: N3000 went up to N7500 in 1990, and N18, 000 in 2010 and now from N18, 000 to N30, 000 in 2018. Given the inflation statistics in Nigeria and the recent

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However, whilst wage increases are salutary and expected from time to time, the current situation makes one wonder if both federal and state governments can afford this new wage

drastic devaluation of the naira there could be no better time for workers to ask for a wage increase: inflation has risen from an average of 9% between 2012 – 2015 to an average of 15% and predicted to be about 14% up to 2022. The Naira has lost over 50% of its value. However, whilst wage increases are salutary and expected from time to time, the current situation makes one wonder if both federal and state governments can afford this new wage. Here are the true facts: Federal government revenue has been unsteady and sometimes on the decline in the last few years; government recurrent expenditure is not on the decline; and federal governments borrowing has risen drastically. It is also a known fact that several state governments, despite

FGN bailouts, are still many months in arrears on salary payments and would therefore be burning their candles on both ends if they are saddled with paying the new wage and paying their salary arrears at the same time. When the National Assembly passes a new minimum wage bill, it will be interesting to see how this plays out in the months to come. Some of the issues to watch would be: How does government increase the pie to accommodate the wage increase? Would government resort to a reduction in the work force to accommodate this new wage bill? Would government seek to reduce inflation as a method of increasing the disposable income of workers? Do we have another crisis of failure in the waiting because the government is making a commitment it clearly knows it cannot implement?

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.