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news you can trust I **THURSDAY 13 SEPTEMBER 2018 I vol. 15, no 139 I N300

Sell

Foreign Exchange

$-N 357.00 360.50 Market Spot ($/N) £-N 468.00 473.00 I&E FX Window 363.10 €-N 409.50 417.50 CBN Official Rate 306.25

3M 6M 0.40 1.08 13.34 13.54

Currency Futures ($/N)

fgn bonds

Treasury Bills 0.02

10 Y -0.10

20 Y 0.00

15.29

15.14

15.26

NGUS OCT. NGUS JAN. NGUS JUL. 30, 2019 24, 2019 31, 2018 0.00 363.05

0.00 363.50

0.00 364.40

Stocks fail to rise on oil rally, worst among major exporters … Brent prices hit $80pb, further rise expected – analysts ... NSE down 3.46% to sixteen month low

APC, PDP ignore gloomy economic outlook by HSBC/EIU

EMEKA UCHEAGA & OMOBOLA ADU

hile oil exporting nations like Saudi Arabia and United Arab Emirates enjoy a market bull run this year triggered by improved investor confidence off the back of a rally in crude oil prices since January, Nigeria’s stock market has largely decoupled from rising oil prices as it has returned Continues on page 33

Owede Agbaji & James Kwen

President Muhammadu Buhari (m), submitting his Expression of Interests and Nomination forms for the 2019 Presidential Election to Adams Oshiomhole (r), national chairman of APC, at the party’s secretariat in Abuja, yesterday. With them is Mai Mala Buni, APC national secretary. NAN

Uncertainty clouds DisCos operations as performance agreement nears review ISAAC ANYAOGU

cloud of uncertainty hangs over the operations of Nigeria’s 11 electricity distribution companies (DisCos). This is as the November deadline for review of their performance agreement with the Federal Government approaches. The national electricity assets privatised and handed over to its new owners in November 2013. According to the privatisation

FG has not met its obligations – DisCos BPE may ‘reset’ power privatisation

rules drawn up in 2005, successful core investors were required to submit a proposal aimed at reducing aggregate technical, commercial and collection (ATC&C) losses over a five-year period. At the time this was being drawn up, it was envisaged

initially, that demand will trump supply. The level of loss reduction will be incorporated into the Multi Year Tariff Order (MYTO), which will stipulate the annual investment requirement, allowable operational expenditure,

approved rate of return on equity and other allowable expenses for each DisCo. Based on this, it was expected that the core investor that will be selected would have the best technical, financial and managerial qualification for reContinues on page 33

oth the ruling All Progressives Congress (APC) and opposition People’s Democratic Party (PDP) yesterday issued divergent statements Continues on page 33

Court documents show MTN paid taxes, fees of N2.164trn since 2001 …says $10.1bn demand makes IPO challenging Jumoke Akiyode-Lawanson

TN Nigeria says it has paid over N2 trillion in various taxes and fees to tax authorities and other Continues on page 33

Inside 2019: No rift between Tinubu and I, says Ambode P. 2

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2019: No rift between Tinubu and I, says Ambode

L-R: Gabriel Idahosa, vice president/chairman, trade promotion board, The Lagos Chamber of Commerce and Industry (LCCI); Segun Alabi, head, corporate communications, and Sola Oluwadare, assistant trade promotion manager, during the visit of LCCI team to BusinessDay head office (The Brook) in Lagos, yesterday. Pic by Olawale Amoo

... shifts support base to home town, Epe JOSHUA BASSEY

n spite of strong rumours about his strained relationship with Bola Ahmed Tinubu, his political godfather and national leader of the All Progressives Party (APC), with threat to his second term ambition, incumbent governor of Lagos State, Akinwunmi Ambode, says there is no a rift between them, describing ongoing media report as ‘untrue.’ Ambode’s denial of the rift comes as youths within the Epe division, where he hails from, on Wednesday, staged a peaceful protest in his support. The youths who displayed placards of various inscriptions, said Ambode was deserving of his second term bid. Others also backing Ambode are all the council chairmen in the Epe division including Adedoyin Adesanya, chairman, Epe local government area; Saliu Adeniyi, chairman of Eredo LCDA and Samson Onanuga, chairman of Ikosi-Ejirin LCDA. Others include party chairman in Epe local government, Kehinde Adeniyi; state welfare officer, Abiodun Bankole; former member of House of Representatives representing Epe, Bola Gbabijo and member of Lagos State House of Assembly representing Epe Constituency II, Segun Olulade. Ambode picked up nomination forms on Monday after which he officially declared his intention to seek a second term in office on the platform of the APC. His action was immediately followed by two other members of the party, Babafemi Hamzat, a former commissioner for works and infrastructure under the administration of Babatunde Fashola-led, and Jide SanwoOlu, managing director of Lagos State Property Development Corporation (LSPDC). Sanwo-Olu is allegedly backed by an influential political group- Mandate Group, made up of mainly of Tinubu’s associates thus fuelling speculation that he (Sanwo-Olu) is the anointed. Tinubu, a former governor of Lagos State (1999-2007) was significantly instrumental to Am-

bode’s emergence as governor in 2015, as he (Tinubu) fought other party’s stalwarts to secure him (Ambode) the party’s nomination in the 2015 governorship primary election. The media in the last two days had been flooded with news of a major rift between Tinubu and Ambode over alleged disagreement on the second term bid of the governor. But speaking in Epe, his home town, during the APC’s election of delegates for the forthcoming presidential primary election, Ambode played down the speculation of rift with Tinubu, saying the reports were out of place. “I want you to know that there is no fight anywhere. The national leader, Bola Ahmed Tinubu and my good self are not in any fight, we are not in any controversy. “We are praying to God that the best is yet to come and the best will be what Lagos State deserves and I want you to just continue with your prayers that at this time, God will show His hand and make sure that everything that is of blessing to Lagos State and also blessing of Epe will come to pass,” Ambode said. He commended leaders and party faithful who contributed to the success of the delegates’ election in Epe, saying APC remained the party to beat in Lagos and Nigeria. “We have just concluded our delegates’ election in Epe local government and by consensus, we have picked our three delegates that will be going to the National Convention come October 6 for the presidential direct primaries and the convention for all other people. “I want to say a very big thank you to all our delegates that are present here; I want to say a big thank you to all our leaders that have also supported us to make sure that this event has come and is done very successfully. “I want to reiterate once again that our party, All Progressives Congress (APC) remains the party to beat; we are the party at the national level and we are going to remain the party in the state,” said Ambode.

Thursday 13 September 2018

Sell-off hits bank valuations as stocks trade at depressed P/B ratios Oghogho Edosomwan

igerian banks have been particularly hit hard by the sell-off in the stock market with lenders trading at depressed valuations using the price-to-book (P/B) ratio measure. The P/B ratio compares a firm’s market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. For financials a P/B ratio below 1 often

means that the stock is undervalued. TieronelenderFBNHoldingstrades atalow0.44xsbookvalue,AccessBankat 0.50xs,ZenithBankat0.86xs,UBAtrades at0.53xsandGuarantyTrustBanktrades 1.98xs which is the only bank that trades above its book value. The selloff in Bank stocks comes as the country’s economic crisis intensifies from rising political tension and the recent MTN saga which has caused a huge drop in the market capitalization firms listed on the Nigerian Stock Exchange (NSE). The NSE broad market index fell

3.46 percent on Wednesday, bringing the downtrend to a six consecutive trading session, and the index to a 16 month low. At the close of trading yesterday, only GTB appreciated by 0.31 percent among the tier one banks. However, zenith bank fell by 1.01 percent, UBA declined by 2.76 percent, Access and FBN were down by 8.57 percent and 7.95 percent respectively. Year to date, Zenith Bank is down by 24.03 percent, UBA (-32.28 percent), GTB (-19.61 percent), Access (-24.53 percent) and FBN (-0.46 percent).

Abuja airport records highest number of aircraft movement in H1, 2018 Oghogho Edosomwan

mong all airports in Nigeria, Abuja airport recorded the highest number of aircraft traffic of 32,011 in the first half of 2018. This figure is slightly higher than the Lagos airport which recorded aircraft traffic of 31,037. In Q1 2018, aircraft movement at Abuja airport was 16,402 which exceeded that of aircraft movement in Lagos which was 15,866. It maintained the marginal dominance over Lagos airport in the second quarter of 2018 that is, 15,609 at Abuja compared with 15,171 at Lagos as complied from National Bureau of Statistics (NBS) air transportation data released in September 2018. This increase in the dominance of Abuja airport for aircraft movement contrasts with the sharp decline in aircraft movement recorded at Lagos airports in the first two quarters of the year. Although Lagos recorded a substantial growth in a total number

of air passengers in Q1 2018, the number of aircraft dropped to 15,866 in the same period, a 30.84 percent decline from the 22,939 aircraft recorded in Q4 2017. The top five airports in Nigeria in terms of the number of passengers who passed through in the first half of 2018 were Lagos, Abuja, Port Harcourt, Kano, and Owerri. These five airports served over 89.39 percent (6.7 million people) of total passengers in the first two quarters of 2018. The first two quarters of 2018 saw mixed performance in the various items that make up airport transportation in Nigeria. The total number of passengers passing through Nigerian airports reached 3.8 million in the first quarter of 2018 which is a 33.51 percent growth from the same quarter of 2017 and 3.7 million in the second quarter of 2018, a smaller growth of 15.24 percent from the same quarter in 2017. Consequently, there was 4.9 percent decline in passengers for Q2 2018 when compared to the preceding quarter. Total aircraft traffic de-

clined for both Q1 (1.48 percent) and Q2 (10.17 percent) when compared to the corresponding quarter in 2017. In the first half of 2018, aircraft traffic totalled 96,659, a 5.9 percent decline from total aircraft recorded in the same period last year. In total, 7.5 million passengers passed through Nigerian airports in the first half of 2018, this is a 23.9 percent growth from the 6.1 million passengers recorded in the first half of 2017. This significant growth in both the first and second quarters of 2018 was mainly driven by the increased passenger traffic through Abuja airports, compared with the same period in 2017 when the Abuja airport was closed during the period for runway improvements. There was also a boost in passenger traffic in March 2018 when total air passengers were recorded at 1,721,224 (797,608 arrivals and 923,616 departures), a 62 percent leap from the average passenger traffic from the previous two months (January & February 2018).

Time ticks for Nigeria as oil demand seen peaking 15 years earlier STEPHEN ONYEKWELU

igeria faces a bleaker future should oil demand peak 15 years earlier than previous forecasts that estimated it will take another 20 years to happen. This was deduced from a new report by London headquartered Carbon Tracker Initiative, an independent financial think tank that carries out in-depth analysis on the impact of the energy transition on capital markets. The report stated that a combination of technology, policy and “necessity” will translate into a peak in oil demand in the 2020s,

perhaps around 2023, much faster than almost anybody is predicting, not least oil companies and their investors. Previous forecasts had put the timeline around 2030s and ‘40s. Carbon Tracker says the necessity behind this change comprises the transition to cleaner energy on environmental grounds and the drive to avoid the geopolitical pitfalls of energy dependence. According to the report looking at past technology transitions, peak demand tends to occur when the upstart technologies capture only 5 to 10 percent of the market. Nigeria does not look ready for this eventuality. “Whatever happens, economies will continue to rely on oil

as energy resource for at least another 15 or 20 years,” Maikanti Baru, General Managing Director at state-owned NigerianNationalPetroleumCorporation (NNPC) had said at a recent Society of Petroleum Engineers event in Lagos. Investors are not going to wait for the complete phase out of fossil fuels before they start to redeploy capital and shun fossil fuel investments; that shift occurs much sooner, arguably around the peak. The motor of change now lies in the emerging markets, which is where all the growth in energy demand will come from, the Carbon Tracker report asserts. “They have less fossil fuel legacy

infrastructure, rising energy dependency, and are anxious to seize the opportunities of the renewables age. We believe it highly likely therefore that emerging markets will increasingly source their energy demand growth from renewable sources not from fossil fuels,” the report stated. Carbon Tracker said that there are three types of risk stemming from the coming peak: systemic risk to the financial system,countryrisk tomajor oil producers,andcompanyrisktoentities financially-tethered to fossil fuels. The total estimated value of fossil fuel infrastructure stands at about $25 trillion, the group says according oilprice.com. Also this week, a report from Nor-

wegian risk-management company DNV GL comes to a similar conclusion as Carbon Tracker – that is, peak oil demand will arrive in the next half-decade or so. “The transition is undeniable,” said DNV CEO Remi Eriksen, according to the WSJ. In an earlier report, BusinessDay had pointed to a raft of bans on petrol and diesel cars by European countries and China. The trend suggested that United States shale producers are perhaps less a threat to oil than the gradual shift to electric cars and subsequent ban of petrol cars by some of the world’s largest car markets.

•Continues online at www.businessdayonline.com

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CBN urges increased banking sector support for MSMEs ONYINYE NWACHUKWU, Abuja

he governor of the Central Bank of Nigeria (CBN), Godwin Emefiele on Tuesday urged commercial lenders to ensure more lending to the Micro Small and Medium Enterprises (MSMEs) seen as the engine of growth and development. Emefiele said that the CBN has done so much in the area of derisking the MSMEs and providing funds for on lending to the sector and that it was now left for the financial intermediaries to support and complement this effort and turn around the fortunes of these small businesses and the economy at large. Emefiele was speaking at the 11th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) holding in Abuja. According to him, the theme of this year’s conference MSME: The Game Changer for Economic Growth and Development was both timely and appropriate given the governments drive for inclusive economic growth and development which he said cannot happen without significant attention given to the activities of the 37million MSMEs considering their employment generation and financial inclusion capacities in Nigeria. He reminded the audience that the Nigerian economy has continued to show good signs of growth since exiting recession in the 2nd quarter of 2017, growing year on year by 1.5 percent in the second quarter of 2018. According to the National Bureau of Statistics (NBS) the second quarter growth was largely driven by growth in the non-oil

sector which grew by 2.05 percent in real terms with major contributions from agriculture, construction, information, technology, transportation, storage and services sectors. “Strikingly, an estimated 96% of enterprises in these sectors are the MSME’s that we are discussing today,” Emefiele who was represented at the event by Joseph Nnanna, Deputy Governor incharge of Economic Policy of the CBN. The governor regretted that despite their critical importance, the Nigerians MSMEs are confronted with numerous challenges that includes infrastructure deficiencies, harsh business environment and restricted access to finance among other challenges. “The huge financial gap in the sector has often been ascribed to financial intermediaries lending apartheid to MSMEs that is the real salvation which are usually perceived as being too risky, built high mortality rate and entrepreneurs often not possessing adequate collaterals acceptable for credit advancement,” the governor stated. He recalled that as a critical stakeholder in the financial sector, the CBN has designed and introduced some infrastructural support and financing initiatives to reduce the enormous financing gap in the MSME space. The actions, he said also aim to improve access to affordable financing for MSME’s particularly those operating in the informal sector of the economy and to support the federal government’s efforts on policy measures towards sustainable economic development and employment generation.

Thursday 13 September 2018

L-R: Pascal Grangereau, country director, Agence Francaise de Development (AFD); Kayode Fayemi, Ekiti State governorelect, and Jean Laurent, project manager, rural development, during a meeting with officials of the development agency in Abuja.

Analysts urge investors caution amidst volatility in the Nigerian financial market OMOBOLA ADU & DAVID IBIDAPO

he increased volatility in the Nigerian financial market in the last two weeks provides evidence of a continuous downturn in the Nigerian stock market, prompting analysts to urge caution. The sell-off in the Nigerian stock exchange (NSE) reflects the overall bearish state of the market as it has been on the decline since January this year. Year-to-date analysis reveals that the market is down by 12.54 percent. Following the unexpected fine of MTN on August 29, the largest telecommunication firm in the country and six banks by the CBN, the banking sector was recorded to have lost about N144 billion within two days. A number of analysts surveyed by BusinessDay have urged investors to remain cautious going forward, citing some reasons which include:

Political risk: In the wake of the upcoming elections next year, there have been several defections between the All Progressive Party (APC) and the People’s Democratic Party (PDP) that have kept investors on their toes. The increased political turmoil and uncertainties has coincided with foreign inflows in the nation’s bourse declining by 78.3 percent from January to July 2018 as reported by the NSE. This has led foreign transaction to fall by 78.26 percent from N166.39 billion in January to N36.17 billion as at July according to data sourced from the NSE. Henry Ogbuaku, Group Head, asset management GDL, asserted that “it is important for investors to apply caution always in the stock market even when the market is bullish as there is always risk. In the current market state, the major factor to consider is what the investment horizon of the investor is. An investor looking to buy and sell short term will lose

money; however, an investor with a medium to long term horizon has higher probability of gaining especially after elections”. “Lot of foreign investors have cashed out and largely because of political risk and we shouldn’t expect them coming back till after elections” Henry added The tension between MTN and the Nigerian government: The Central Bank of Nigeria (CBN) ordered the return of improper capital repatriations by MTN to its shareholders worth $8.1 billion back to them, while the Attorney General of Federation (AGF) has alleged unpaid taxes approximately $2.0 billion to be paid to the Federal Government of Nigeria. Recent development has revealed that MTN has charged the CBN and AGF to court over the alleged dispute. Segun Afolabi, an investment analyst at Afrinvest told BusinessDay “these actions by the Nigerian government

are likely to scare off foreign investors. Investors trying to enter into a new country evaluate possible economic and political risk. The tension between MTN and CBN is more of a regulatory risk that can influence negatively foreign investor’s decision’’. Slowing growth rate of GDP: Nigeria’s GDP growth rate slowed down to 1.5 percent in Q2 2018 against the 1.95 percent recorded in the previous quarter due to the contraction in the oil and gas sector despite crude oil prices above $70 per barrel in the last six months. Analysts expect that the slowdown in GDP to rub off on investors’ confidence in the market. Tajudeen Ibrahim, Head of Research, Chapel Hill Denham, said that “there is a likelihood that slowing economic growth experienced in the economy will affect the confidence of investors as the government is more focused on election than implementing economic plans.

C’River traders laud FG’s financial inclusion scheme for SMEs Minimum wage: NLC, TUC issue 14 day-ultimatum to FG KELECHI EWUZIE

raders in the popular Watt Market in Calabar, Cross River State, have lauded the federal government for its National Social Investment Programme scheme geared towards boosting financial inclusion for small and medium enterprises (SMEs) They observed that through the Trader-Moni initiative, massive potential in the informal economy will be unlocked which, in turn, supports government’s agenda on poverty alleviation, job creation, financial inclusion and prosperity of all Nigerians irrespective of their educational qualifications or background. A cross section of traders made this known after

Vice-President Yemi Osinbajo unveiled the Federal Government’s programme tagged: Trader-Moni, in Cross River State where several traders were given N10, 000 each to pay back in six months. “I am very happy to have registered and this is one of the most visible signs of government that we have seen” says Atim Ededem, one the traders, adding that the initiative was a welcome development. “So, I think in future, government should go through our market unions and possibly double the money. On the whole, this is a very welcome development.” Joy Unasi, said, “I think it is a very good development and will go a long way in ameliorating our plight. It is better than collecting money from con-

ventional sources where the interest will make it discouraging so I really commend government for this. However, we would appreciate it if they double the money from N10, 000 to N20, 000 in future.” On his part, Godwin Ikpot, said, “at first I thought it was one of these 419 schemes and did not believe it until when the vice-president came to our market. This is the first time in my life that I have seen the vice president, Osinbajo and any doubt I had about trader-Moni has been cleared. “In fact as I speak to you, I registered after the vice president left so this is a very good development and I think for some businesses like mine which is meat, government should increase the money for us because we are able to pay back,” he added.

JOSHUA BASSEY

he Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) of Nigeria have demanded that the Federal Government concludes negotiations with labour and other stakeholders to arrive at a new national minimum wage within 14 days or face industrial upheaval in the country. Labour’s is infuriated by the recent statement credited to Chris Ngige, minister of labour and employment, that National Minimum Wage Committee be adjourned indefinitely to enable him (Ngige) do further consultations with the government. The tripartite committee

is charged with working out a new national minimum wage alongside other social partners or stakeholders including organised labour, organised private sector and government. Ayuba Wabba, president of the NLC and his counterpart from the TUC, Bobboi Kaigama, at a joint press conference in Lagos, Wednesday, said labour was amused that Ngige is asking for indefinite adjournment of the committee at the time the committee should be concluding its negotiation on a definite figure to pay as new national minimum wage. “We view his latest pronouncement with great concern, suspicion and outrage. This new antic certainly is not acceptable to

Nigerian workers who had expected a new national minimum wage since 2016, but who, out of uncommon sacrifice and patriotism hearkened to government’s appeal and the process was delayed. “In view of the foregoing, we demand that government does all that is necessary to ensure that the tripartite committee is allowed to conclude its work within 14 days from today. We would want to use this opportunity to let the government and the whole world know that in the event that this demand is not met, we will not guarantee continued industrial peace and harmony,” the labour leaders said in a joint statement.

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

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In association with research@businessdayonline.com

08094821958

How capital importation is boosting African economies ISAAC ESOWE

total capital importation, data sourced from the National Bureau of Statistic (NBS) and analysed by BusinessDay Research and Intelligent Unit (BRIU), has shown. On year on year basis, the total value of portfolio investment in Q2 2018 which was $4,119.46 million rose by 434.64 per cent from $770.51 million imported in Q2, 2017. The 9.76 per cent quarter on quarter decline was due to a fall in the largest sub-component

of portfolio investment which was money market instruments. In both the first and second quarters of 2018, money market instrument was the largest component of portfolio investment just as other components include bonds and equity. Capital importation in the form of money market instruments stood at $2,670.93 million in the second quarter, representing a 24.29 percent decrease over the previous quarter. Investments in both equity and bonds

million, according to Ghana bureau of statistic report. In first quarter of 2018, South Africa’s foreign portfolio investment recorded an increase amounting to $7.48 billion in March 2018, when compared with an increase of $6.93 billion in the previous quarter. According to data gather by BRIU from CEIC, a data company from their web platform, it shows that South Africa current account segment recorded a deficit to the tune of $4.79 billion in March 2018. Essentially, growth in foreign portfolio impact could impact positively on the economy by providing financial resources for investment in key areas like infrastructure, agriculture, solid minerals, manufacturing, banking and other financial service. FPI can provide the needed resource to the government and corporate organisation in Nigeria through the bond market for infrastructural and industrial productivity. The foreign portfolio investment in bond market could either be invested in government bonds or corporate bonds. If invested in government bonds, the proceeds would be used for financing infrastructural facilities that are so much needed in Nigeria while if invested in corporate bonds, the proceeds would be used to finance business projects that will enhance the profitability of the corporation without putting any hurt on the cash flows of the corporation compared to when the projects are financed by bank loans which usually have a high cost of capital. 12734BDN

ortfolio investment is an aspect of international capital flows of financial assets comprising cash, stocks or bonds across international frontiers in want of profit. This type of investment has become an increasing part of the world economy over the past decades, and also a significant source of investment funds not only in developed countries, but in the developing economy. In Nigeria, it has reached an essential level in the Nigerian capital market as it accounts for not less than two-thirds of the capital inflows in the last two quarters of 2018. Investment inflows into the Nigerian economy in the first six months of 2018 shows investors’ risk preferences and opportunities across different segments or sectors. Portfolio investment, which is one of the sources of funding for different investment opportunities, accounted for 74.7 per cent of the total capital imported into the Nigerian economy in the first six months of 2018. This is equivalent to N1, 261.1 trillion when expressed at official exchange rate of N306.15 to the US dollar. Portfolio investment has grown recently in higher proportion relative to other types of capital inflows into Nigeria over the years. While the absolute value declined in the second quarter of 2018 especially when analysed on a quarterly basis, falling from $4,565.09 million in Q1, 2018 to $4,119.46 million in Q2, 2018, portfolio investment remained the largest constituent of the

under portfolio investments recorded steady quarter-onquarter growth, to the tune of 49.43 percent and 19.13 percent respectively. It is worth noting that investments in bonds that came into the country in the form of capital importation have been steadily increasing since Q2, 2017. In Q2 2018, it accounted for 9.71 percent of total portfolio investment. Furthermore, portfolio investment maintained a prominent position in 2017 (year on year), with additional $5,516.18, over its level in 2016. In the first quarter of 2018, portfolio investment level was $4,565.09, but declined by $445.63 in Q2 of 2018. As capital importation into the Nigerian economy fluctuated in recent times, emerging countries in West, East, Central and Southern African economic blocs witnessed the same trend. Results showed that Kenya’s foreign portfolio investment fell by $109.84 million in December 2017, compared with an increase of $39.90 million in the previous year. According to the Kenya Bureau of Statistic in their latest report, the country experienced a decline to the tune of $315.00 million in December 2017 in portfolio investment, while its foreign direct investment increased by $671.49 million in the same year, just as its direct investments abroad have an upward movement of $257.09 million in December. Ghana’s long run portfolio investment from 1998 through 2017 has been on steady decrease, in 2017, net portfolio investment reduced by $2,536

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COMMENT POSITIVE GROWTH WITH BABS

BABS OLUGBEMI Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa

ne of the comments I received on last week’s topic: culture eats strategy was a question on the requirements for a successful culture audit and change. Based on the response, I decided to write on culture and its importance in building sustainable institutions. The responsibility for the defining of the culture of any organisation is that of the Board of directors. The executive management is toimplement the board’s decisions. Where there are culture deficiencies, the management must have either misinterpreted the culture or implement it as favourable to them and not likely work in the interest of the company for the long term. One of the reasons managementsubverts culture is for short term personal gains and recognitions. Institutions likes Twinnings, Tabasco and Jim Beam that are over 100yearsold must

BELLO OMOLULO Omololu is of the Centre for Economic Inclusion and Growth, Ahmadu Bello Way, Wuse II, Abuja

he recent action of the Central Bank of Nigeria (CBN) of sanctioning four banks and MTN reminds one of the often brazen manner the Nigerian police carries out its duties. Stories abound of people who find themselves in police detention and made to face criminal trials over trumped up charges. The average law enforcement officer will readily intimidate and harass hapless citizens based on his own interpretation of a policy or issue which may, in itself, be suboptimal, incoherent and ridiculous. However, the actions of an industry regulator, whose responsibility it is to protect and ensure fair practices that will foster growth and development of that industry should be far removed from the often tactless actions and pronouncements that accompany police investigations. The CBN had on August 28, 2018 sanctioned the banks, namely Standard Chartered Bank (SCB), Stanbic IBTC Bank, Citibank Nigeria and Diamond Bank over remittances made on behalf of MTN, claiming that the banks used irregular Certificates of Capital Importation (CCI) to illegally remit foreign exchange amounting to $8,134,312,397.63 for MTN between 2007 and 2015. Among other infractions labeled against the four banks by the CBN were the failure to issue CCIs within 24 hours of receipt of funds inflow

Thursday 13 September 2018

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Send 800word comments to comment@businessdayonline.com

Culture: Executive integrity under audit have had a synergy of culture as crafted by their founders and as implementation by the management teams over the years. Thelikes of Safaricom in Kenya and Nandos in South Africa must have had a positive correlation of culture and strategy to emerge among thetop-most innovative companies. Where there are negative correlations or huge culture gaps, the integrity of the executive management is at stake. As I did mention to thetwelve thousand teachers I spoke to at the Lagos Teachers’ Conference last week, anyone who failed to develop the competence required todo what he or she is being paid to do lack integrity. Culture audit is, therefore, one of the ways for the executive management to gauge itscompetence integrity to the board except where the written culture is a mirage. Where the envisaged culture is a mirage; the core valueswill never be the way of life. Aside from the source of information for the audit of a culture, the avenue of getting the information is also important. Culture audit failedto achieve its purpose where people who execute it are theoreticians. A foreign firm might write good proposals on culture audit and usequestionnaires, but it takes external personnel with the knowledge of the industry and the company auditing its culture to connect with thestaff and

‘

The test of the effectiveness of a company’s written values and the manifested culture is in the ways staff exits are being managed and the level of ambassadorial commitment of the exstaff to the company

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extract information on the ways of life at the workplace. One of the best ways to obtain information on the manifested culturefrom employees is by asking a set of probing questions, which cannot come from someone without the experience of similar culture and theknowledge of the industry’s peculiarities. Below are four of the requirements for a successful culture audit for organisations aspiring to transform into institutions. This first bastion is candour. A

management team that cannot accept open and sincere feedback will make a mess of the essence of any culture audit. One of the ways to know a culture with a conscious bias against candour is if the leaders of the team at strategy or culture alignment meetings give assurance or grant amnesty to staff to speak their minds ahead of comments or response session. This is an indicator that people can easily become anathema for being sincere in their feedback and comments. The second requirement for a successful culture audit is sincerity of purpose. This is the level of desire to weeding out the unintended behaviours in the workplace. It is not enough to harvest honest suggestions or feedbacks. The management must be willing to take the difficult decisions for the long-term interest of the organization. Another requirement for an effective alignment of culture with strategy is the avoidance of ‘graderange’. Grade-range is a shielding behaviour where offenders get away unpunished because they are either above or on the same grade with the custodian of the culture. The offences are often settled at the close door meetings where the staff of lower grades who have been offended are not privileged to attend or even get consulted. The grade-range culture encourages impunity and executive high handedness with grave consequences on the com-

pany’s brand. To avoid grade-range a senior and non-compromising staff should be the custodian of the culture. In most organisations, human resources are perceived as the owners of the culture but experience showed this role as a relegated option to recruitment, promotions, and processing of documents. It is, therefore, desirable for companies who are serious about their middle-level employees to empower a department possibly the compliance team for effective monitoring of the culture and core value violations and report to the Board of directors directly. Since most people will end their career at the middle level in the organisation, a culture that treats the majority of the workforce fairly will encourage ownership thinking and resultoriented atmosphere. It will reduce attrition and disengagement rate among the staff and ensure a better exit where necessary. The test of the effectiveness of a company’s written values and the manifested culture is in the ways staff exits are being managed and the level of ambassadorial commitment of the ex-staff to the company. Hence, culture is a key factor for organisational sustainability and is a measure of the integrity of the management.

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In search of an independent central bank and the issuance of CCIs on foreign currency that was sourced locally by MTN investors. The apex bank therefore summarily sanctioned the banks with fines of N2.4B, N1.8B, N1.2B and N250m for SCB, Stanbic IBTC, CitiBank Nigeria and Diamond Bank respectively. MTN was ordered to return the sum of $8,134,312,397.63 to the coffers of the central bank. Many industry watchers immediately surmised that there were unseen forces at play that have deployed the regulator to meet a predetermined end. Some stated pointedly that it was a continuation of the nation’s Attorney General, Abubakar Malami’s inquisition of MTN while others aver that the CBN and the four banks were included as a sweetener to provide a semblance of rigour and validity to Malami’s inquest. The events that followed the CBN’s initial pronouncement and have now culminated in the apex bank debiting the accounts of the four banks of their respective fines, leave one with no doubt that we have a case of the proverbial “hand of Esau but voice of Jacob”. No independent regulator would engage in actions that serve to deprecate its own industry. As we find below, the narrative just does not add up and points to the bidding, behind the scenes, of another party. Upon the announcement of the CBN’s sanctions, MTN released a press statement in which it refuted any allegations of wrongdoing while Stanbic IBTC reportedly sent a response letter to the CBN Governor where it absolved itself of the stated

infractions. MTN based its defense on the fact that the CCIs were issued by bankers with the approval of the CBN, as well as a clean bill of health it got from the Nigerian Senate in 2016. Stanbic IBTC’s response letter as published in the national dailies, termed the CBN allegations as based on “factually incorrect premises”. The CBN promptly released a clarification that did nothing more than deepen earlier suspicions. In the clarification, the CBN governor revealed that the CBN conducted a painstaking investigation into MTN’s foreign currency (forex) repatriations, an exercise that lasted 30 months during which the four banks were investigated on three charges of infractions. The first charge was how some investors in MTN bought forex to pay for their shares in the telecoms company. This, the apex bank stated, involved the investors procuring funds locally from the Nigerian foreign exchange market and round tripping same such that they were issued CCIs by their banks which helped the investors repatriate proceeds of the invested capital. The CBN said it forgave that infraction because forex regulations at that time allowed Nigerians to purchase shares with foreign currency. The second charge was the failure of the banks to issue CCIs within 24 hours of funds in-flow into Nigeria as stipulated in the country’s regulations. This charge was again not sanctioned due to the fact that the transactions took place over 10 years ago, Mr. Emefiele revealed. If these charges were forgiven, one wonders why the CBN is dredging up these infractions again which formed

the bulk of the misdeeds in the letters sent to the banks by the regulator. The claim of forgiveness coming after the hammer clearly indicates that pressure from “higher parties” may have forced the CBN’s hand in slamming the sanctions on the banks in the first place. CBN’s letter to MTN stated that the $402,590,261.03 invested by shareholders in the company from 2001 to 2006 was evidenced by CCIs issued by Standard Chartered Bank (SCB), Citibank and Diamond Bank. Now, if indeed these funds included locally sourced funds that were round tripped, why would the CBN then also accuse Stanbic IBTC of issuing CCIs based on locally sourced funds when they apparently were not part of the initial activity? The clarification also stated that the third charge, which was the crux of the matter, was the conversion of $399 million shareholders’ loan to preference shares in 2007, which led to the repatriation of over $8 billion as dividends by MTN. That this is different from what the telecoms company was cleared of by the Senate. The CBN stated that the CCIs issued in respect of the importation of $402,590,261.03 by MTN shareholders indicated $59,436,923.44 invested as shareholders’ loan and $343, 153,339.56 as equity but a review of the company’s financial statement for the year ended December 31, 2007 revealed that $399,594,146.00 was recorded as invested as shareholders’ loan and $2,996,117.00 as equity in accordance with shareholder’s agreement but contrary to the CCIs issued by the banks. MTN’s subsequent request

through Standard Chartered Bank for CBN’s approval to convert the shareholder’s loans to preference shares got an approval-in-principle and the fulfillment conditions were apparently not met by MTN but SCB issued new CCIs all the same. It is the basis of these re-issued CCIs that the banks repatriated the dividends of over $8 billion. Having clarified that only one of the banks performed the unapproved conversion and thereafter reissued CCIs, which were then signed by the CBN, why again did the CBN accuse and sanction all the banks for illegal conversion even when it confirmed that the erring bank had apologized and stated that it was an “unintended error”?. Where does an industry regulator act in this fashion? Then there was the unsolicited revelation that the investigation was initiated after tip-off from a whistle blower. Pray, how does this information promote the competence of the CBN or the integrity of its monitoring and supervisory processes? That the regulator failed to detect this infraction for 10 years and would have continued to approve the CCIs had it not been rescued by a third party does not inspire confidence. How does this information promote the Nigerian Financial sector if the world is being led to make the inference that Nigerian banks still engage in, and cover up fraudulent transactions? Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Uprooting the climate menace NNIMMO BASSEY Nnimmo Bassey is Director of Health of Mother Earth Foundation (HOMEF)

bring you greetings of peace and a pledge to stand in solidarity with you all until the dangerous ecological problems confronting us and our children become a thing of the past. Our ecological challenges are widespread and suffocating. The clearest for those of us in Port Harcourt and the Niger Delta at large, is the visibly polluted and unhealthy air that we have been forced to breathe. We applaud our brothers and sisters that have championed and continue to champion the Stop the Soot campaign. This is one campaign that has been backed by research, competence and high-level articulation of the health and debilitating impacts of soot, or black carbon, that citizens have been condemned to breathe. The petition that has been raised on this matter should be endorsed by all citizens of Nigerians, not just residents of the Niger Delta who breathe this toxic air. The soot is the manifestation

EHIWE SAMUEL Samuel is an associate at Perchstone and Graeys, a full-service law firm. He can be reached at samuelehiwe@ perchstoneandgraeys.com

n his classic work, ‘The Wealth of Nations’, Adam Smith postulated that : “every tax system must ensure that the process is fair, certain, convenient and efficient”. This well considered theory has effectively shaped taxation as we know it today. In times past, tax officials would traverse land and sea to collect taxes. In the end, the expense of collecting the taxes would either exceed or equal the taxes collected. The advent of technology has however heralded a new dawn in taxation all over the world. Nigeria, of course, is not left out of this development which has changed the face of taxation for the better. The Federal Inland Revenue Service (FIRS) in Ni-

of insidious atrocities that have gone on unchallenged in our environment. It is one that cannot be swept under the carpet. Our creeks have been dastardly polluted, indeed coated by crude oil and we have silently continued to drink the polluted water. Our lands have been heavily contaminated, our crops have wilted, rotted and we have gone home empty handed at harvest time, yet we eat our rotted tubers and continue to fall into the grip of disease. Sixty years of gas flaring has secured huge profits for oil companies and limitless revenue for politicians to fight over, but for poor communities these have meant cancers, bronchitis, asthmas, skin diseases, birth defects and acid rain, to name a few. Our people on the coast line are continuously losing land to coastal erosion. Inshore and offshore fishing grounds are being lost to oil pollution and ocean acidification daily. We must ask the question: what have we gained from sixty years of crude oil extraction? Today we are gathered to examine two issues at this summit. One is soot. The other is climate change. Our determination is to stop the soot. Our plan is to tackle the climate menace. Their root cause is one. To achieve the results, we need to and must aim at the root. That root is well known: fossil fuels. It has long been determined that for the world to have a

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It has long been determined that for the world to have a reasonable chance of keeping to a 2 degrees Celsius temperature rise above 1750 or preindustrial levels, at least two thirds of known fossil reserves must be left in the ground. This is a scientific fact attested to by relevant global scientific and expert bodies

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reasonable chance of keeping to a 2 degrees Celsius temperature rise above 1750 or pre-industrial levels, at least two thirds of known fossil reserves must be left in the ground. This is a scientific fact attested to by relevant global scientific and expert bodies. We cannot wish this away.Fossil fuels must be left in the ground. We have no luxury of choice on this

matter. Delay will be like the case of the emperor that was dancing shakushaku while his domain was burning. Some Nigerians think that if new oil or gas fields are not opened our economy will collapse. Nothing can be farther from the truth. It is not about new oil fields, it is about stopping oil theft and reckless oil pollution. It is known that industrial scale oil theft is ongoing in our nation. If we consider estimates of stolen crude that we have heard from government officials over the years and combine these with the amount of oil regularly being spilled into our environment, we can safely say that, indeed, our oil output would almost double if the stealing and the spilling are stopped. Is it oil that is keeping our economy afloat? Now that we are pumping oil at full throttle, how many of you have public electric power supply? Our gas flares or furnaces burn without ceasing, but our people still cook with firewood. If oil is boosting our economy, how come many in the formal sector go for months without wages and over sixty per cent of Nigerians eke a living in the informal sector? Why is virtually every building having a shop at the frontage? Where is almost everyone one sort of petty trader or the other? The soot that is choking us is from the burning of fossil fuels. The sources are well known, even though officials are shy to

agree. These sources include: the aged refineries, the gas flares, the bush refineries, oil spills and stolen crude that are set on fire by security forces. We cannot emphasise this loudly enough: the soot that is choking us is from the burning of fossil fuels. The soot is choking us and our children. The solution is for us to choke the soot. We can only choke the soot by choking all the sources of soot. Stop the gas flares. Stop the ancient refineries. Stop the burning of spilled crude as well as stolen crude and illegal refineries. We must rise and take real climate action. This is an emergency. We cannot afford any more delay. Stop the soot. Stop the pollution. Let us think, and think hard. The old mindset will not get us out of the pit. Whether we like it or not, the petrol age is drawing to a close. We must quickly close the chapter of crass pollution. Now is the time to think. It is time to act. It is time to prepare for life after oil. Have a great summit, great Nigerian people! • Being a statement by Nnimmo Bassey, Director of the ecological think tank, Health of Mother Earth Foundation (HOMEF) at the #RiseForClimate and Stop the Soot Summit holding at Emerald Hotel, Port Harcourt, Nigeria on 11 September 2018 Send reactions to: comment@businessdayonline.com

Technology as a panacea to the challenges of taxation geria has commendably been able to effectively leverage this revolution. The Revenue Performance Report for the first half of the year 2018 submitted by the FIRS to the Ministry of Finance, suggests that there has been a marked increase in its revenue generation when compared with previous years. Clearly, the decision of the FIRS to automate its data base and processes has gone a long way in introducing a series of tech inspired innovations, which have positively impacted on the Nigerian economy. The effective use of electronic channels such as Remita and e-pay for tax payment/collection are but some examples of the gains achieved by actively harnessing technology in our tax system. The introduction of the e-filing of tax returns, e-registration and e-TCC (Tax clearance certificate) have birthed a convenience and effectiveness in Nigerian taxation that were unimagined before the advent of an automated tax system. The generation of a Tax Identification Number(s) (TIN) automatically at the point of

incorporating a company or registering a business also improves productivity in business. The cumulative productive time and human capital that are spared as a result of the deployment of these technological innovations all culminate in increased ease of doing business. Resources that would have been otherwise deployed into the manual payment and/ or collection of tax, processing of tax clearance certificates amongst other things, can now be channeled into other productive ventures. It is therefore not surprising that Nigeria has been positively ranked as one of the countries with thriving ease-ofdoing-business policies, particularly in view of these disruptive innovations in the tax regime in Nigeria. It is safe to say that the traditional ways of revenue collection are rapidly being phased out. Technology is indeed the future. Aside revenue generation, one might ask what other benefits an automated tax system holds for businesses in Nigeria. The increased and more effective use of information technology in taxation systems will not

only create more transparency, accountability, and efficiency in tax collection and payment, it will create a system that will not adversely affect the economic position of the tax payer. The compliance cost of the business man will be substantially diminished with the advantage of being able to pay taxes from anywhere. Additionally, with the automated generation and distribution of tax clearance certificates, businesses will be saved the time and resources that would ordinarily be expended in queueing up at tax stations. An increasingly automated system will also make it possible to transfer excess tax payments or refunds due to a tax payer, to the settlement of another tax obligation. For instance, excess Pay As You Earn should be available to defray development levy or education tax, in absence of which the tax payer can easily demand and receive refunds promptly by electronic transfer. Admittedly, Nigeria cannot be said to have fully harnessed the benefits that technology has to offer in taxation. However, with the commendable pace

with which Nigeria continues to adapt to new, ground breaking technology, the government, public and private enterprises and investors stand to gain even more from an automated tax system. When the Nigerian tax system is completely automated and with the introduction of blockchain technology to monitor the veracity of data, the benefits will exceed expectations, including improvements in productivity, better profit performance, a higher degree of accuracy of information and tax computations, amongst others. The role of technology in Nigeria’s tax regime will be further discussed at the “Technology as a Catalyst for the Ease of Doing Business” Conference 2018, due to hold on October 5, 2018, organised by Perchstone & Graeys and Knowledge Resources Limited, in conjunction with The Presidential Enabling Business Environment Council (PEBEC). Kindly indicate your interest in attending this conference by sending an email to editor@ perchstoneandgraeys.com. Send reactions to: comment@businessdayonline.com

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Thursday 13 September 2018

On Ghana’s one district, one factory plan

n ambitious effort to industrialise all parts of Ghana is recording slow but steady progress as the government reported the near-completion of 36 out of 51 factories promised as the government clocked two years in office. President Nana Akuffo-Addo and his New Patriotic Party came to office in 2016 with a campaign theme that resonated in Ghana and across Africa. He promised to plant in cooperation with the private sector one factory in each of the country’s 216 districts over the four-year tenure of the administration. We commend the progress, even as it falls short of the plan. One District One Factory aims to stimulate industrialisation in all parts of Ghana through value-added agriculture and exploitation of the country’s natural resources. The first factory opened in 2017 in Ekumfi District. The Ekumfi Fruits and Juices Company Limited employs 250 people and processes 25, 600 tonnes of fruits per annum. It taps into the comparative advantage of the region. While commissioning the Ekumfi Factory, Akufo-Addo promised that each of the country’s 216 districts would get a factory within the first four years of his government.

He promised the first batch of 51 districts. The budget for the project is a handsome $465million. The One District One Factory (1D1F) programme aims to establish a minimum of one factory in the 216 districts of the country. The goal is to create economic growth poles that would accelerate the development of those areas and create jobs for the growing number of young people. It seeks to transform the structural bases of the Ghanaian economy from dependency on production and export of raw materials to value-added industrialisation. President Akuffo-Addo rightly decried the dependency on the export of raw materials that hitherto characterised industrialisation in Ghana. The 1D1F programme follows best practice principles of driving linkages to agriculture and natural resources of the country. It is bottom-up as it commences from the regions. It is also in collaboration with the private sector. Adding value to primary products such as cocoa, gold and timber would involve the grassroots directly. Ghana already recorded success in adding value to cocoa, moving two steps up in the global ladder of cocoa producers as a result. “We cannot create the necessary numbers of highpaying jobs that will enhance the living standards ofthe mass

of our people if we continue to maintain the economic structures that are dependent on the production and export of raw materials. Raw material producing economies do not create prosperity for the masses”, Akufo-Addo observed. President Akuffo-Addo stated in 2017: “All I ask is for God’s wisdom, guidance and strength, and, I assure you that by the end of my first term in office, each district would have a factory. 51 out of 216 in my first year indicates that even before my first four years are over, each district would have its own factory.” He gave the assurances as he toured various regions of the country. More importantly for the citizens of Ghana, the president declared: “Whether you voted for me or not, whether you supported me or not, I am going to be President for all, and I am going to work with every one of you. As President, I need the support of all the Chiefs and traditional rulers across the country. This is the only way by which we can develop all parts of the country, and bring prosperity to all.” The outlined path to industrialisation in Ghana is inclusive. There is no division of the country into supporters and antagonists, or the infamous 97% versus 5%. It builds on a foundation of incentivisation and collaboration with the private sector. The elements

include reduced or minimal tariffs, reduced taxation and elimination of duties on imports of raw materials. In particular, the country seeks to incentivise Small and Medium Scale firms. It reduced Value Added Tax for such firms from 17.5% to 3% for SME goods and services. Direct stimulus using tried and tested fiscal approaches. There is more ambition as Ghana recently also embarked on free education at Senior Secondary School levels. One direct outcome of the policy is increased enrolment and better access. Education and industrialisation are two critical paths for African economies. Also recently, Volkswagen AG announced that it would build a vehicle assembling plant for the West African market in Ghana. Volkswagen had a plant in Nigeria, built in 1975. It withdrew in the late 1980s following repeated policy somersaults and the collapse of the Nigerian economy. The positive news from Ghana is ennobling. It is worth monitoring as the country grapples with the realities of an ambitious “Ghana Beyond Aid” project that seeks to free the country from dependence on foreign aid. It is worthwhile to note that Ghana is embarking on the programmes in the wake of its emergence as an oil producing and exporting nation. We wish the Republic of Ghana progress on all fronts.

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Thursday 13 September 2018

CityFile

Trafficking: NAPTIP rescues 13,000 victims L

LASG releases N720.5m for retirees JOSHUA BASSEY agos State government has released about N720.5 million to settle backlogs of 190 pensioners’ entitlements under the Contributory Pension Scheme (CPS). Folashade Onanuga, director-general, Lagos State Pension Commission (LASPEC), made the disclosure. Onanuga said the total pension fund released by the current administration since August 2015 stood at N39.5 billion. According to her, “9,591 retirees have had accrued rights of N39,450 billion paid into their Retirement Savings Accounts (RSA) from August 2015, when Ambode assumed the office, till date.’’ Onanuga said that pensioners were on the payroll priority of the state, hence the monthly release of pension payments by the state government. “Lagos is happy that the backlog which was on ground at the beginning of the administration of Governor Ambode has been cleared,’’ she said. Onanuga thanked the retirees for their contribution to the development of Lagos State and assured them of the governor’s commitment to their welfare in retirement. She advised the retirees to spend wisely in retirement, saying “any project you know you cannot finish, don’t put your money into it.’’

KEHINDE AKINTOLA, Abuja

ulie Okah-Donli, the director general of the National Agency for the Prohibition of Trafficking in Persons (NAPTIP), says the agency has rescued more than 13,000 victims from human traffickers. Okah-Donli, who made the disclosure on Monday at an interactive session with newsmen in Sokoto, also said 6,000 victims had been rehabilitated since 2014. She said three females out of those rehabilitated were trained to university level and were now employees of the agency. “It may interest you to know that three of the victims that were rescued by NAPTIP were sponsored in school and are now graduates working with NAPTIP. “So we do not only train our victims but we also give them employment. We partner with sister agencies to train and ensure that they are empowered,’’ she said. The director-general said her visit to the Sokoto zonal office of the agency was part of her working visit to the six geo-political zones to boost the morale of the staff. Okah-Donli assured the staff that more training opportunities would be created for staff in order to improve operational activities in the zones. She described human trafficking as a component of terrorism and a major threat

to good governance and rapid economic development of any country.

Human traffickers, she added, should be treated as enemies of the state.

urvivors of the recent attack by Boko Haram in Gudumbale, Guzamala local government area in Borno have been narrating their still near death experience in incident. Scores of insurgents in gun trucks and various caliber of arms, stormed the town and attacked a military base, a battle that lasted for about 12 hours. Some of the survivors who spoke with journalist expressed mixed feelings over the incident Bintu Bukar, 33-year old mother of three, said the insurgents held them hostages for several hours and continued shooting throughout the period. “I cannot describe the type of shock I went through. I was waiting to hear them brake into our home and kill us. They were chanting Alhahu Akhbar sam amidst sporadic shootings from a very close range. “We all got down on the floor for fear of stray bullets. They continued shooting untill around 3 a.m.. That was when we escaped and started running. I held my three children very close because it was dark at that time. I also found five other children belonging to my naighbour who fled away and held them close. “We trekked more than 20 kilometres where some vehicle conveying other IDPs assisted us to Gajiram. It was from there that

we came here in Maiduguri. Modu Bukar, who escaped with his goat, said he couldn’t run away because he was taking care of his two aged grandparents. Bukar said that when he realised the criminals were not targetting civilians, he decided to lock himself with his parents with a padlock so they would not come into the home. “They left the town after several hours. They were chanting “Munkama garinsu gabadaya” which means we have taken over the town completely. The rains suddenly stopped but we were advised to remain in the house. At that time we knew that the military had also left the place because they fought nonstop for almost 12 hours. “On Saturday, they came back to the town again and started shooting. At that time I assumed that they came after civilians. So I left my parents and ran away. I trekked a distance of 7 kilometres through the plantation and found myself in Gajiram where I took a transport and returned to Maiduguri this evening. Ahmed Usman, another victim who expressed the same sentiment said that most of the soldiers were not on ground when the sounds of shootings stopped. “The brigade commander had visited the town with additional troops but the people were still in the fear of the unknown.

“We have been there for almost three months. I am willing to go back if the military can provide additional forces to protect us. “Many of our people are farmers and have invested lot in this year’s farming in the area. But we have no choice than to wait untill total peace is restored. “We are here as elders of the community to make preparation to return our people to Bakkassi IDPs camp. We have contacted our secretary of local government and we fixed a date for Monday so that those who escaped and are still on the way could arrive Maiduguri and join other IDPs. “We therefore urge the government to make the necessary preparations for food, shelter and even clothing as we ran out of the town with nothing and many may not be willing to go back to the town again,” he said. Texas Chukwu, director, army public relations, had earlier disclosed in Maiduguri that combined troops of 82 Division Task Force Brigade and 158 Task Force Battalion conducting Counter Insurgency Operations in North Eastern Nigeria, had encountered the insurgents in Gudumbali but successfully repelled the attack. “The encounter took place when the insurgents attacked the community, set some buildings ablaze and quickly withdrew from the community. However, no human casualty was recorded in the encounter.”

Remains of vehicles after a gas explosion that rocked Natson Filling Station, Opposite Police Clinic on Jos Road in Lafia, Nasarawa State on Monday. It is not yet confirmed where the fire started from but some people are feared dead. NAN

Flood displaces over 200 residents in Plateau

A Borno attack survivors recount near-death experience S

9 die, N108m property lost to Kano

ine persons died, while property worth N108 million was lost to fire outbreaks in Kano State in August, the state fire service said on Monday. Saidu Mohammed, the public relations

officer of the agency, who disclosed this in Kano, said that 12 houses and 10 shops were also razed during the month. He attributed the fire outbreaks to the use of inferior electrical materials, use of boiling

rings in houses, poor handling of electrical appliances and cooking. Mohammed said the fire service was, however, able to rescue 112 persons and goods worth N300 million in 22 fire outbreaks

bout 200 households have been displaced by flood in Rikkos community of Jos North local government area of Plateau, following heavy downpour on Sunday afternoon. Al’Amin Yakubu, head, Emergency Response Team of the community who disclosed this, added that though no life was lost, the flood destroyed properties and washed away valuables. “The flood didn’t claim lives, but because it was huge, it displaced over 200 households. These households have lost all their properties and are left with nothing,” he said. He said that the displaced persons were currently staying with neighbours, as no camp had been put in place for them. Yakubu described the condition of the displaced persons as pathetic, adding that access to food, shelter and clothing is already becoming serious challenge for them. “As a community, we don’t have the capacity and resources to camp these people; we would have done that pending when government will intervene. “But we have contacted the National Emergency Management Agency (NEMA) and the State Emergency Management Agency (SEMA), and both have promised to respond soon,” he said. Efforts to reach Alhassan Barde, SEMA Executive Director, proved abortive, but a senior staff of the agency who prefers anonymity confirmed the incident. He said that the agency had already sent its personnel to the affected community to assess the level of damage. (NAN)

in August. According to him, the service received 82 rescue calls and 18 false alarms from residents during the period. The spokesman advised the public to be careful with fire and to desist from storing petroleum products in their cars and houses.

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BUSINESSTRAVEL How Dana Air’s partnership with Asky will benefit Nigeria market- Mbanuzuo Obi Mbanuzuo, is the accountable manager and chief operating officer of Dana Air. In this interview with BusinessDay’s Ifeome Okeke, he speaks on the details of Dana’s partnership with Asky and prospects for the future. What are the details of your relationship with Asky? e had announced earlier in February this year that we had signed some partnership agreement with Asky. One question people always ask is when we will expand our fleet. We always work gradually and rationally, putting one foot in front of the other. It is not the fastest that wins the race. Dana Air is here to stay. In November this year, we will celebrate 10 years of being in the market place. This partnership with Asky involves so many things. This initial partnership you see today is the aircraft lease part of it. Recently, we have had some constraints; we have two of our aircraft in France. Hopefully, one will be back before the end of the month. Part of this is that we are preparing for fleet augmentation which is successfully on track. Asky is providing us Boeing 737-700 aircraft. There will be three aircraft flying at different times. It is a complex wet lease operation. They will provide an aircraft, take it and put another one in the system. There is also another 737-800 that will also be leased out to us. As time goes on, we will help our staff get acquainted and trained with the aircraft type. We will go further to entrench this agreement with the code share. We are discussing many of these agreements even with other airlines. If you want to go to Cotonou, we will provide you the same service. We will be a marketing carrier and they are the operating carrier. This gives benefits to Dana Air and Asky as well. Today, you will see Asky aircraft, wet lease to Dana air, op-

erating on behalf of Dana Air. This will be with Dana Air’s standards, catering on board and operating to our schedule. Then we will entrench further the agreements. They also have an aircraft maintenance facility. These are the things we are looking at in future. We are making sure Nigerians are trained but we also have to be sure that we bring those things here. Sometimes we can’t do these ourselves. The partnership is multi-faceted and we are starting today. Do you have any relationship with Ethiopia Airlines in this partnership and what are you giving in return? We have had no discussion with Ethiopian Airlines, even in terms of the aircraft. This is strictly between Dana Air and Asky. For now, it is an aircraft lease agreement, so what we are giving in return is the usual economic remuneration at a friendly rate as brothers who are planning further things. It is at a cost. The code share is also between us and Asky. People think this partnership is such that will make Asky exploit the Nigerian market using fifth freedom. Is this true? Fifth freedom is similar to something like Air Peace going from Accra to Monrovia. Air Peace is Nigerian airline lifting passengers from Ghana to a third country, Liberia. This is fifth freedom. This is not supported by the Nigerian government and has never been in any way, shape or form. Lufthansa flies in from Frankfort to Lagos every day and further from Lagos, they go to Malabo and they are not allowed to carry passengers from Lagos to Malabo. They are not given

Obi Mbanuzuo

fifth freedom and as far as I know, the Nigerian government has no plans to give fifth freedom to anyone. Dana Air will not allow anyone do that because it is taking the food from our own mouth. This is simply an aircraft agreement. This partnership is a temporary deal; it is not going to be forever. This partnership is for the benefit of the Nigerian market. Fifth freedom has no say here. What are your plans to ensure that this type of partnership works with domestic airlines and international airlines? I can tell you that we will probably have code share agreement with other domestic airlines in the

near future. There are few international airlines that we are speaking with now. Dana Air’s plan is not necessarily spreading our own operations, we want to reach out. I want people come into our offices and go online and book our tickets to Sokoto. We do not fly to Sokoto currently. We are discussing with a particular Airline domestically and in return, they will sell my Owerri. So, we are on that part and it is something that we have recognised and we are working on it. Have you looked at the big problem that may arise technologically with infrastructure in terms of what percentage you will take and what percentage

the other airline that will do the carriage will take? Thankfully, in the airline industry these things have already been settled in the past. There is something called an interline service charge, unless airlines agree not to follow the internationally recognised interline service charge. So, it is a not a big issue. One of the things that slow down things like this in the domestic market has been something like the clearing house, which is always something available for the international carriers run by the International Air Transport Association (IATA). Last two months IATA had a meeting locally, where they are trying to put in a local clearing house. Dana Air has similar agreement with a couple of local carriers. Dana Air and Medview have something similar but that is done on a one-to-one basis. With what IATA is trying to do in the Nigerian market, it will move things further. After we did this with Medview, two other airlines have approached us. What other things will you be partnering with Asky on? There are some aircraft on ground undergoing necessary checks. Work is being done on them to ensure they conform to our regulations here in Nigeria. We are working very hard with the Nigeria Civil Aviation Authority (NCAA). We are in progress and I won’t give a date yet. Asky do a lot of C-checks, if they can help us do something here, it will be perfect. We have engineers capable of doing this work themselves; we just don’t have location and place. We are looking at options but sometime in the future, we will have pilots, big enough for the heavy checks. This is just the beginning.

Akwaaba 2018: IATA, stakeholders urge domestic airlines to leverage SAATM to expand operations

he International Air Transport Association (IATA) on Tuesday urged Nigerian airlines to take advantage of the Single African Air Transport Market (SAATM) to expand their operations across the continent. Adefunke Adeyemi, Vice President, IATA for Africa, gave the advice while speaking at the just concluded Akwaaba Travel and Tourism Fair taking place in Lagos. Adeyemi noted that SAATM was inaugurated by Heads of States of the African Union (AU) in January to deepen bilateral relations among countries and foster cooperation among the airlines. According to her, Nigerian carriers have the right to fly into about 40 African countries and can establish hubs in these countries through negotiations and mutually beneficial

air service agreements. Adeyemi noted that no Nigerian carrier was flying to Chad and Niger Republic, despite the presence of viable trade on those routes. She said it was unfortunate that the airlines were not taking advantage of the SAATM the way Ethiopian Airlines had done so far, including its entering into a techical partnership with Asky, based in Lome, Togo. Adeyemi said African airlines should form alliances among themselves to improve their operations as well as profits, adding that some of them already belonged to international platforms like Star Alliance. She added that the airlines should also strive to get the IATA Operational Safety Audit (IOSA) certificate which would enable

them play on the global stage. Adeyemi also decried the high cost of air fares in Africa which she attributed to excessive aviation charges by African governments and also the notion that air travel was exclusively for the rich. “It is 45 per cent more expensive to fly across Africa than any other region in the world. “That is why we are trying to let African governments know that is not an elitist means of transportation,” she said. Also, Wimpie Van Vuuren, senior manager, Air Namibia, said despite the initial fears, SAATM had enabled the airline to expand its operations to Ghana and Nigeria. Vuuren said African airlines should look beyond the initial challenges of the policy and find

ways to make it beneficial to their operations. On his part, Richard Aisuebeogun, former managing director, Federal Airports Authority of Nigeria (FAAN) said governments must find ways to address the infrastructural deficit in the aviation sector in Africa. Aisuebeogun noted that upgrading of airport infrastructure would not only help reduce air fares but would attract more investors to the sector. The Lagos State Government has commended the organizers of Akwaaba African Travel Market (AAfTM) for sustaining the tourism event for 14 years with a break. Speaking shortly after declaring open the 14th edition of the programme at the Eko Hotel and Suites, Lagos, in company of Otunba

Olusegun Runsewe, the directorgeneral of National Council of Arts and Culture (NCAC), Steve Ayorinde, Commissioner, Lagos State Ministry of Tourism, Art and Culture, said the event is the only travel and tourism Expo endorsed in Africa by the United Nations World Tourism Organisation (UNWTO) due to its richness in entertainment, interaction and tourism. “The conception and sustenance of the annual Akwaaba African Travel Market is indeed worthy of commendation, as the platform has consistently provided an avenue for enriching and thought provoking treatise, meeting of like minds and brainstorming for major stakeholders in the tourism sector in Africa on issues that can help in tourism promotion and development in Africa,” Ayorinde added.

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ABC driving innovation in Nigeria’s road transport

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C Co om mpa pan ny y n ne ew ws s a n a ly s i s a n d i n s i g h t

PenCom announces January 2019 take-off date for micro pensions …laments contributor pressure on RSA for social needs …as legislators, labour demand payment of accrued rights …want FG to honour 5% pension redemption fund Modestus Anaesoronye

ension regulator, the National Pension Commission (PenCom) says the planned micro pension scheme aimed at expanding the Contributory Pension Scheme (CPS) into the informal sector will takeoff in January 2019. The Commission says the necessary infrastructure needed to enable implementation of the micro pension scheme is almost completed, and whatever left will be ready by end of this month (September). Aisha Dahir-Umar, acting director-general, National Pension Commission made the disclosure at the 6th Conference for Directors of Pen-

sion Operators organized by the Commission in Lagos. “Dahir-Umar speaking at the event said “the Commission is finalising arrangements for the introduction of the Micro Pension Plan, which seeks to extend the benefits of the CPS to the informal sector.” “We hope to achieve this latest by the first quarter of 2019 and we believe that the product would be part of the efforts towards ensuring in the long term, the sustainability of the Federal Government’s social empowerment programme.” The DG also brought the attention of the directors to the increasing pressure from contributors, and an underground campaign to redirect retirement savings accounts funds to social needs. “There is increasing clamour by pension contribu-

tors to redirect their retirement savings towards the resolution of other social problems, such as health, unemployment and other similar challenges.” While thanking the National Assembly and Labour Unions for standing against two Bills in 2017 that was almost about to destroy the CPS, she called on the directors to compliment the efforts of the commission towards sustainable pension industry in Nigeria. She also said this year’s Conference, the sixth in the series, is one of such conferences introduced by the Commission to constantly update members of the Boards of Directors of pension operator companies on topical issues in the industry and sharpen their capacity to effectively discharge the onerous responsibilities of steering the affairs of such companies.

“As you are aware, the pension reform has been very impactful in Nigeria since the beginning of its implementation in 2004. The major visible areas of this impact are the economic and social spheres. Thus, the formation of long term domestic capital, represented by the over N8.5 trillion worth of pension assets, though slowly, but surely changing Nigeria’s financial landscape and by extension, the course and pace of our socio-economic development.” Paulker Emmanuel, chairman, Senate Committee on Establishment and Public Service who gave a goodwill message applauded the successes recorded so far in the CPS, but lamented the non compliance by the Federal Government of setting aside 5 percent of annual wages and salaries into the pension redemption fund.

Paulker said this is the greatest challenge facing the CPS today, while urging the directors to join hands with other stakeholders to put more pressure on the executive arm of government to meet this obligation. “This is necessary so that when people retire, they will be sure their will get their pensions running immediately”. Hassan Adamu, chairman, House of Representative Committee on Pensions and Public Service who also lamented delay in payment of public sector retires their pensions, called on President Muhammadu Buhari on immediately pension accrued rights owed by the government, to ensure sustainability of the CPS. “Government set up a Committee and came out

with a good report on how to ensure government is up to date on pension remittance, this should be honoued by the executive, the honourable member said. Ayuba Wabba, who also commended the National Pension Commission and the legislators for standing tall to defend the workers contribution when it mattered most, said many people do not realise that this N8.5 pension fund we are talking about is peoples’ money. “Some people think, it is an idle fund, it is not, it belongs to Nigerian workers and retirees”. He called on all stakeholders to defend the CPS, and ensure that people are not allowed to dip hand into the fund, or invest it in unguaranteed investments. We will defend this pension fund with our life, the labour leader said.

Thursday 13 September 2018

BUSINESS

DAY

COMPANIES & MARKETS ABC driving innovation in Nigeria’s road transport

BC Transport Plc, inroad into the road transport sector, did not only innovate the sector, but deepened local road transportation and made it an alternative mode of transport to all classes of people in Nigeria. It is also on record that ABC Transport introduced formal road transportation within the West Coast, with the introduction of West Coast coaches that transport passengers from Lagos to Accra Ghana, daily. This is inspite of so many challenges faced, by the sector in the country. These challenges include bad road network, insecurity, high cost of diesel and vehicle spare parts. Frank Nneji, founder and managing director of the firm, attributed the success story of ABC Transport Plc, to focus on value creation. “Creating value for our customers, having a sense of innovation, while focusing on what is important and works for the industry. “And what is important in the industry is comfort and safety and this is where we pride ourselves. We also focus

on a staff culture that is really very strong, investing in human resources, because the rolling stuck-the busses are driven by people”. It is heartwarming that ABC transport Plc in 2004, opened the West Coast corridor for road transportation, prior to that time, there wasn’t any formal road travel, except by air. That corridor is strong, according to Nneji, noting that his firm focuses on the tourist segment, revealing also that there are a lot of trade going on between Nigeria and Ghana. Although that segment has attracted so many other players, but ABC has its position, as foremost and preferred operator on the West Coast corridor with quality service to commuters. According to the ABC Managing Director, our inroad into West Coast, has opened up the corridor to more operators. “I remember, when we started we were doing one bus per day, but now we run several busses and more than six other companies are on that route. He however decried infrastructural deficits, insecurity and high cost of procuring new

stuck-vehicles and spare parts as major challenges faced by the sector. In his words, “The road is like our own raw material, when the raw material is bad, you won’t have a perfect product and of course, safety and security. “When we started, huge percentage of our travel, were done in the night, but right now you can’t see much of that, because of insecurity. Manpower is an issue as well as the schools are not producing very wonderful hands to run the business. “Also we consume a lot of diesel and of course the price fluctuation is killing, right now a litre of diesel is N220 per litre and we consume tons and tons of diesel, to run the buses and trucks, so it’s quite a big challenge. And these are challenges that couldn’t have been there, if we had refineries”, he observed. “Despite these challenges, Nneji stated that prospects in the road transport sector are high, because people will continue to travel. “You cannot change personal touch with communication. You cannot shake hands by phone. “People still need to travel

for business and social interaction and so; the sector will continue to expand and of course it is dependent on a strong economy. As the economy expands, the sector expands also”. However, ABC Transport Plc, has returned to profitability after recording profit before tax of N105.31 million in 2017, as against a loss before tax of N258.11 million in 2016. In like manner, its profit after tax was N15.78 million in 2017, against a loss after tax of N359.64 million in 2016. This is despite the microeconomic and socio-political variables that affected its operations, which reflected on the firm’s operational efficiency and the result for the year ended December 31, 2017. Olumide Obayomi, chairman, ABC Transport Plc, announced the result at its 2018 (25th) Annual General Meeting (AGM) held at Mayfair Suites and Conference Centre, Egbu Road, Owerri, Imo State. He explained that the firm’s turnover grew by a mere 1.6 percent from N5.63 billion in 2016 to N5.72 billion in 2017, stating that the firm has succeeded in turning around the loss of the

previous year. He hinted that the firm’s return to profit was helped by the investment in income of N163.35 million received from its subsidiary Transit Supports Services Limited. Obayomi, however decried the operating environment, which according to him, remained challenging with a myriad of economic, social and political problems, beleaguering its business activities. He also observed that the manacles of the economic recession, which beset the nation in 2016, are still very much with the country, stressing that the key sectors, such as manufacturing, trade and services, from which the transport sector mainly derives her demand are yet to fully recover from the recession. “Also the lack of local oil refining capacity has led to volatilities in the local price of automotive gas oil (AGO). “The rise in the cost of this key input alongside the rise in the cost of imported spares and consumables, occasioned, by the devaluation of the naira, has placed our operating experience at considerably high

levels. “Our road infrastructure has remained in a parlous state, leading to persistent impairment to our buses and trucks, extended journey times and increasing levels of avoidable road mishaps. “The cankerworm of multiple taxation by agents of the 3 tiers of government, still persisted in the year under review, as the country’s transport industry remains largely fragmented and unstructured with no clear defining rules,” he stated. He further observed that unscrupulous operators were encouraged to cut corners to the disadvantage of good corporate citizens, noting that successive governments have failed to see the imperative of intervening in an industry, as critical as road transport and logistics, which has the potential of catalyzing economic productivity to unimaginable heights. The Chairman of the Board of ABC Transport plc, also noted that imbalance in the value sharing and extraction in the transport sector is punitive and crippling.

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Business Event

Nigeria presents robust trade delegation to SPACE 2018 in France

...amazed on new approaches to animal husbandry

Osa Victor Obayagbona, Rennes, France

he incessant clash between farmers and herdsmen has become a driving force among agro and livestock’s stakeholders in the Nigerian economy in seeking a better way in carrying out agribusiness. The various challenges have made Nigerian agriculture stakeholders explore places where practical solutions that could be replicated in checking the problems can be found. This has brought Nigerian agriculture stakeholders to Bretagne Commerce International, and Promosalons Nigeria, the exclusive official representative of Bretagne Commerce International France in Nigeria, has organised a mission of Nigerian firms to this year’s SPACE 2018 for animal and feeds production trade show in Rennes, France, from September 11 to 14 (ongoing). BusinessDay is the only media house from Nigeria and West and Central Africa covering the event. According to Akin Akinbola, managing director/CEO, Promosalons Nigeria, Cameroon and Gabon, who took some Nigerian public institutions and firms to this year’s show, SPACE is ranked as the world’s second largest Livestock Expo. “With its unique and diverse offering, participants are able to build relationships and contacts with a view to increasing their international trade productivity. SPACE is also an excellent avenue through which developmental strides in the agricultural sector can be achieved,” Akinbola said, at the ongoing show. “Every part of the agricultural sector is represented here. In Nigeria, we do poultry in a conservative way. For instance, we

still keep our birds on the floor. The implication of this is that they get in contact with their faces, and this leads to unnecessary diseases and reduce the birds to low productive levels. “My coming here is to learn new methods of improving what I have been doing. Coming here I have made contacts that would help enhance and improve my poultry business further. “Nigerian poultry farmers should step out to see things, such as new techniques to improve productivity. Things like bio-security measures ( new ways of preventing animal diseases and new ways of feeding your birds); new equipment and vaccines that can increase general productivity to minimize losses,” according to Daniel Adeboye, MD/CEO, Danny Agricultural Services Limited, a poultry farmer from Jos, Plautus State, after a tour of EARL Farm in Henlee, an outskirts of Rennes. Some of the institutions and firms include Federal Ministry of Agriculture And Rural Development; Bauchi State Ministry of Agriculture And Natural Resources; Space Age Continental Investment Limited; Kwa’ada Farms Miyetti Allah Cattle Breeders Association; Impextraco West Africa Limited, And Hybrids Feeds. Others Are H & F Allied Farms Limited; Bosland Agro Services Limited; Danny Agricultural Services Limited; Obasanjo Farms Nigeria Limited; Obasanjo Holding Nigeria; Glister Success Limited; Global Macron Pace Limited, And Tosam Intergrated Limited. The Nigerian business delegation is being provided with the atmosphere to interact, exchange ideas and contacts other professionals in the livestock industry from around the world. It also avails them the latest technological innovations, presentations in animal genetics and B-to-B

meetings. So far, highlights of this event include series of Free Farms Tours and Aquaculture Rendez-vous specially arranged for participants to maximize their experience at the Normande dairy farms include visits to Prim’Holstein breed dairy farmwholly robotic;Poultry farm (layers) - free range production; Sheep farms; Parthenais breed beef cattle farm; to an animal feed plant; Mixed farm (pig farm with fattening unit, cereals and animal feed manufacturing unit); Dairy goat farm with processing on the farm; Derval experimental dairy farm (with an anaerobic digestion biogas system);Cattle farm; Mauron experimental station - beef fattening station; Broiler chicken farm, and Mixed farm (pig fattening, cereals and dairy cows). This Animal Production Tradeshow is to provides a wide array of avenues for you to explore and experience New Technologies, New Breeds of Livestock, New Products, New Equipment and New Ideas being used. The Tradeshow also provides you with the ideal environment where you can interact, exchange ideas and contacts with other professionals in the livestock industry from around the world. With latest technological innovations and discoveries in animal genetics and production, visitors and participants are availed the access to VIP reception for international visitors and also engage in B-to-B meetings. The following sectors of the livestock industry are covered at the event (Fish, Poultry, Rabbit, Cattle, Sheep, / Goat, and as well as full a range of services for: Animal feed/Nutrition, Livestock equipment, Livestock materials for ranches, Genetics, Energy, Livestock effluent/waste treatment, Animal health and Milking).

Shareholder Group threatens NAICOM Tier Based capitalisation Michael Ani

ne of Nigeria’s Shareholder Group, the Independent Shareholders Association of Nigeria has threatened to sue the National Insurance Commission (NAICOM), if it goes ahead with enforcing the industry Trier based solvency capital policy. The Group therefore has given NAICOM thirty days to withdraw the Tier Based capital circular or face legal action. In a letter signed by Chuks Nwachuku of Indemnity Partners on behalf, legal solicitors to the Independent Shareholders Association, it says the hasty implementation of the policy did not give any reasonable room for

adjustment or recapitalisation for insurance companies, which could make many of them to lose their business. On the whole, it stated, the policy was targeted at pushing the majority of insurance companies out of business. It added that this could create undue advantage for a few, contrary to the letter and spirit of the Insurance Act. It stated that the implementation of the policy would lead to unfair loss in the value of investment of shareholders in insurance companies, constituting a breach of their property rights under the constitution. Besides that, it says the policy was aimed at compelling many insurance companies and their shareholders to sell their interests to a few, contrary to Section

25 of the Nigerian Investment Promotion Act. The circular read in part, “We therefore give notice that if the commission does not withdraw the offending circular within 30 days of this letter, we shall institute an action against the commission in accordance with the instruction of our client.” The circular said the policy was calculated to bar insurance companies generally from doing business for which they were currently licensed by introduction of a requirement other than minimum paid up share capital contrary to the Insurance Act. , “The policy is designed to have disproportionate effect on the operators and skew the paying group in favour of the operators.

R-L: Toyin Adeniji, executive director, micro finance, Bank of Industry (BoI); Vice President Yemi Osinbajo, and Ben Ayade, governor, Cross River State, during the inauguration of Trader Moni Programme at WATT Market in Calabar, Cross River State

L-R: Theophilus Oyeyemi Fadayomi, the vice-chancellor, Elizade University; Abiola Allen, President of The Association of Certified Forensic Intelligence and Crime Analysts [ACFICA] presenting Certificate to a course participant, CSP Veronica Ameh-Akpa, Officer in Charge, State Intelligence Bureau [SIB], Lagos and Deputy Commissioner of Police [Operations, Lagos], Alli Muhammed representing the Inspector General of Police at the brand unveiling of Academy Halogen and graduation of 88 Police Officers in Professional Executive Diploma in Crime Prevention and Community Safety at the Academy Halogen, GRA Ikeja, Lagos

Olurogba Orimalade, chairman, Nigerian Institution of Estate Surveyors and Valuers, Lagos branch; Sulaiman Balogun, chief business officer, PropertyPro.ng; Femi Akintunde, group managing director and Wole Olufore, executive director, commercial both of Alpha Mead Group, at the African Real Estate Conference Awards (AFRECA’18) recently held in Lagos, where Alpha Mead Facilities won the award for the Facility Management Company of the Year

L-R: Ekwulobia, Omotolani Anjou, senior area sales manager; Juliana Okafor, grant beneficiary; Oluyemi Ekundayo, regional trade marketing manager, Onitsha, and Rexanthony Anieke, assistant brand manager, Life Continental Lager Beer, NB Plc, during the presentation of cheques to beneficiaries of Life Progress Booster 2018 in Anambra.

Thursday 13 September 2018

BUSINESS DAY

C002D5556

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (17 – 08–18)

35,266.29

N12.941 trillion

2,527.30

1,572.19

809.92

Week close (24 – 08–18)

35,426.17

N12.933 trillion

2,527.30

1,544.54

809.92

Percentage change (WoW) Percentage change (YTD)

0.45 -7.37

3.15 1.66

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

835.80

296.07

2,428.66

1,716.66

1,314.12

817.57

295.38

2,455.40

1,750.30

1,288.23

NSE Banking Index

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

1,746.68

475.44

139.37

1,589.77 1,582.08

438.14

137.87

424.84

138.95

NSE 30 Index

-1.76

0.00

-0.48

-9.87

-25.51

-9.42

-3.04 -10.64

0.78 -0.30

976.10

-2.18 -16.24

-0.23

1.10

1.96

-1.97

-10.68

-4.10

-11.40

-6.63

More selloff looms in absence of positive trigger HEANYI NWACHUKWU

his is truly not an interesting time for s t o c k t ra d e r s a n d investors who have remained nervous as the market witnesses remarkable pullback of foreign investors due to uncertainties ahead of next year’s general elections and other recent developments in the country. The market’s recent woes worsened after Central Bank of Nigeria (CBN) debited four banks for various penalties that amounted to N5.87billion. The apex bank alleged the four banks – Standard Chartered, Stanbic IBTC, Citi Bank and Diamond Bank - breached forex rules in their Certificates of Capital Importation (CCI) in favour of MTN. The possibility of recording further sell-off at the Lagos Bourse is not far-fetched because there is still not positive news that could halt the trend. As at Friday September 7, the value of listed stocks on the Nigerian Stock Exchange (NSE) was N12.426trillion from year open level of N13.609trillion. The market cap declined to N12.270trillion as at Monday September 10, 2018, and furthered downward to N12.211trillion, placing the market on a record 14-month low. Stock trading figures from major custodians and market operators confirm exit of foreign portfolio investors from the Nigerian stock market

which fueled record loss now in excess of N1.34trillion. The CBN also ordered MTN to return some $8.1billion alleged to have been illegally repatriated from the country between 2007 and 2015, even as Africa’s largest mobile p hone company by subscribers is also allegedly on the hook for $2billion in back taxes –a claim brought against it by Nigeria’s Attorney General. The MTN Group has disclosed its intension to seek relief from a Nigerian high court to defuse the costly dispute with local

authorities which has wiped off a third of the market capitalization of the Johannesburg-listed telco. Before this recently development, the Nigerian stock market had earnestly awaited the proposed listing of Nigerian unit of MTN a development which would have broadened the number of plain vanilla stocks on the Lagos Bourse. The timing and level of penalty is curious and disruptive to company, industry, economy, markets, said analysts at Financial Derivatives Company Limited

who noted that foreign portfolio investors are nervous and have started dumping stock. Before now, both impressive firsthalf (H1) financial scorecards and positive macroeconomic indicators had tepid impact on Custom Street trading mood. Analysts see bears reigning further in the absence of positive trigger “We guide investors to trade cautiously in the short to medium term, as selloffs are likely to persist, amidst brewing political uncertainty, and the absence

of a one-off positive trigger. However, stable macroeconomic fundamentals remain supportive of long term gains”, said market analysts at Lagos-based Cordros Capital in their recent note. According to FBNQuest research, “The sell-off in May has since developed a second and third leg. The three leading stock markets in sub-Saharan Africa have followed the trend. The Lagos all-share index (NSEASI) has lost 12.1percent year-to-date (ytd), Nairobi (NSE 20) 17.3percent and the Johannesburg all-share 4.1percent in local currency terms. In this environment there is no hiding place for Lagos and Nairobi, and seemingly a little protection for Jo’burg”. “Some offshore institutional investors may wince at the news headlines surrounding the largest non-oil company in Nigeria. They may also voice their concerns over the forthcoming elections although we would argue that precedent suggests such concerns are overdone. The latest participation report from the Lagos bourse shows there was a net inflow of foreign monies in July, albeit of just N3.5billion amid thin liquidity”, FBNQuest. Afrinvest Research analysts had also said in their stock recommendation for this week that they “believe bargain hunting will drive performance in the first two trading sessions. However, for the week, we maintain a bearish outlook for the market due to the Continues on page 20

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Thursday 13 September 2018

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United Capital investment views Bearish sentiment lingers on sector-wide weekly decline

s at the week ended September 7, 2018, the local bourse extended the bearish streak from the preceding week after recording a 0.3percent decline week-on-week (w/w) to 34,037.9 points, following the domination of market bears on four of five trading days. Year-to-date (YtD) return slumped to -11percent while investors parted with N295.9billion as market capitalization diminished to N12.4tn. Activity level also dampened as average volume and value traded plunged by 41.8percent and 43.2percent to 178.5mn units and N2.6billion respectively. Dissecting performance on a sectoral basis, all key indices nosedived with only the Agriculture (+2.2percent) index closing the week positive, consequent on bargain hunting in LIVESTOCK (+5percent) and OKOMUOIL (+3.8percent). The Oil & Gas (+4percent) index led laggards as profit-taking in ETERNA (-6.7percent) and SEPLAT (-7.2percent) dragged the index. The Consumer Goods (-2.4percent), Industrial Goods (-2.2percent) and Financial Services (-2percent) indices also trended southwards as w/w declines in PZ (-10percent), UACN (-9.1percent), NB (-5.1percent), DANGCEM ( - 2 . 2 p e r c e n t ) , WA P C O ( - 2 . 1 p e rc e nt ) , STA N BI C (-6.3percent) and WEMA (-5percent) weighed. Investor sentiment lost momentum as market breadth closed at 0.9x (previously 1.2x); 33 stocks advanced while 36 declined. Despite, the dull theme, insurance companies, HMARKINS (+26.7percent), CONTINSURE (+16.8percent) and CILEASING (+16percent) were investors heartthrob for the week. This week, we expect a choppy theme to guide proceedings amid reports that the CBN has debited the accounts of the 4 banks involved in the MTN saga. We also anticipate the release of August 2018 inflation numbers, even as bullish triggers remain scarce. Money Market: OMO rates inch higher as CBN maintains its liquidity management stance Contrary to the preceding week, system liquidity was largely buoyant in the week to 7th September 2018 as Money Market (MM) rates averaged 3.7percent (Previous week: 10.5percent) due to an estimated inflow from FAAC to States & LGAs of N445billion, as well as OMO maturities of 294.5billion, which helped to offset sustained outflows in the form of wholesale FX funding by banks and OMO sales that took place during the week. Also, contrary to its recent weekly trend and due to the massive liquidity build-up in the system, the CBN carried out three successive days of OMO auction during the week, successfully mopping up a total of N498.6billion. However, given investors demand for higher rate amid rising risks in the polity space, the CBN finally

succumbed to a rate hike during its last auction of the week that took place on Thursday. The longer maturing bill of 182-days was up 35bps to 12.5percent (previously 12.15percent). Thus, the hike in OMO stop rates directed investors demand in the secondary T.Bills market on Friday as average T.Bills yield spiked 52bps. This week, a total of N240.6bn is expected to hit the system in terms of OMO maturity. Also, we expect investors to look for further clarity in the treasury bills auction. Yields: Spike in OMO rates dictates secondary market sentiment Despite the massive liquidity in the system, relatively higher OMO rates guided bearish sentiments in the T-bills space as expectations for higher yields spurred sell-off. However, a bullish theme prevailed on the long end of the yield curve as players were relatively moderate in their sell-off. Consequently, average T-bill yield inched higher by 25basis points (bps) w/w to close the week at 13.3percent.

4bps respectively to finish at N306.2/$1 and N362.8/$1. Looking ahead, the outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and forward market, as well as the better price discovery in the I & E FX window. Global Market Review and Outlook Bears rule the roost amid trade tensions Bears dominated proceedings in the global equity space as major indices across the globe diminished. In the US market, once again, reports surrounding trade talks sent jitters across the market as President Trump tipped that his administration would impose tariffs on Chinese goods worth $267billion – this is on top of the $50bn already executed, as well as the $200bn that will hit Chinese imports in a couple of days. Consequently, DJIA and S&P 500 diminished by 0.2percent w/w and 1.0percent w/w respectively. Meanwhile, the technology-laden NASDAQ index sank deeper, shedding

RSA fund price of PFAs as at August 3, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs. Stanbic-IBTC Pensions Legacy PFA NLPC PFA PAL Pensions First Guarantee Pension Trustfund Pensions SigmaVaughn Pensions AIICO Pension Managers Leadway Pensure PFA APT Pensions Fidelity Pensions AXA Mansard Veritas Glanvlls Pensions OAK Pensions Investment One Pension Mgrs. IEI Anchor Pension Managers Radix Pension NPF Pensions

91-day was up 130bps to 12.5percent), 182-day (up 20bps to 13.3percent) and the 364-day (down 75bps to 13.9percent). Similarly, average bond yield inched higher by 35bps to close the week at 15.3percent amid a continued rout in Emerging market assets; 3-year (up 115bps to 15.4percent), 5-year (up 12bps to 15.1percent), 7- year (up 8bps to 15.3percent) and the 10-year (up 20bps to 15.3percent). This week, we expect sentiments to be guided by the release of August inflation numbers, as well as the PMA scheduled for Wednesday. Also, we expect to see pockets of demand as yields remain relatively attractive. Foreign Exchange: Naira depreciates marginally across all FX windows In the Foreign exchange market, similar to the prior week, the naira depreciated marginally across all the FX windows. The parallel market depreciated by 14bps to settle at N359.5/$1, while the Interbank and Investors & Exporters FX windows inched lower marginally by 2bps and

CURRENT PRICE 3.9820 3.9805 3.9034 3.7542 3.6384 3.4638 3.4618 3.3070 3.2793 3.1244 3.0571 3.0502 2.7911 2.7460 2.7331 2.6680 2.5785 2.4792 2.3461 2.0434 1.4670

2.6percent w/w as declines i n A P P L E ( - 2 . 8 p e rc e nt ) dragged the index following a letter addressed to US trade representatives by the tech giant, stating that proposed tariffs on $200bn worth of Chinese would affect the firm’s products. European equities were not spared from the bear’s bite following reports that German’s exports for July declined by 0.9percent, hence slumping to its lowest level in almost four years. The Pan European STOXX, UK’s FTSE and Germany’s DAX shed 2.2percent, 2.1percent, and 3.3percent respectively, leaving Italy’s MIB index the only outlier which recorded a 0.9percent increase as the country reassured to uphold EU’s fiscal restrictions and consequently shed debt load. Emerging market performance was equally bearish as Brazil’s IBOV (-0.3percent), Russia’s RTSI (-3.8percent), India’s SENSEX (-0.7percent) and South Africa’s JALSH (-2.7percent) all declined w/w, following reports that the South African economy sank into a recession upon the release of its Q2-18 data.

Investor’s Square •Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

New reports seek to unlock diaspora investment

ew research from the Commonwealth Secretariat highlights the potential role that diaspora communities in the United Kingdom can play in promoting the development of their countries of origin. Country-specific reports on diaspora from Bangladesh, Fiji, Ghana,Jamaica,KenyaandNigeria show that tackling certain barriers to investment, could leverage untapped streams of income and boost economic growth. The Commonwealth represents one of the largest grouping of countries, outside the United Nations, with almost a third of the world’s population of 2.3 billion people and an enormous diaspora community of approximately 25.8 million. Remittance flows from this global Commonwealth diaspora have made considerable contributions towards the development of the recipient countries. The findings identify the current saving and investing practices of the six diaspora communities based in the UK as well as the unique challenges to increasing that investment. They outline ways to incentivise and facilitate investment by reducing financial risks and optimising best practices. The country reports build on the Secretariat’s flagship Diaspora Investor Survey, entitled Understanding the Investment Potential of the Commonwealth Diaspora, which was launched at the Commonwealth Heads of Government Meeting in April this year. They mark the end of the first phase of the Secretariat’s work on diaspora finance. The focus

is now on the second phase which seeks to work directly with countriestodeveloptailoredpolicy recommendations and product options to mobilise diaspora finance. This research would not have been possible without the support of the High Commissions of Bangladesh, Fiji, Ghana, Jamaica, Kenya, and Nigeria in the United Kingdom, as they crucially provided access to their diaspora communities for the Commonwealth Diaspora Investor Survey. Specialacknowledgementwas given to Gbite Oduneye of A&O Acquisitions, Oneykachi Wambu of Afford; Chibwe Henry of Comic Relief; Sophie Gitiba of Tujijenge Pamoja Network; and Madeline Page of International Organisation for Migration for their support in promoting the distribution and completion of the Survey. Speakingatalaunchceremony at Marlborough House, the

High Commissioner of Fiji, Jitoko Tikolevu acknowledged the work undertaken by the Commonwealth Secretariat. “In light of the findings of the country-specific reports, Fiji asked for the assistance of the Secretariat in the development of our country specific policy recommendations to take this project further.” he said. He commended the Secretariat’s role in drafting the policy recommendations for his country which are now under consideration by his government. He said that once these policies wouldbeimplementedtheycould boosttheshareofGDPcontributed by remittance flows. The reports note that the financial connections between the diaspora and their home countries are common yet remain predominately informal. Challenges such as perceived corruption, poor governance and fluctuating currencies were highlighted.

More selloff looms in absence of positive trigger Continued from page 19

absence of positive drivers”. “We expect a choppy theme to guide proceedings amid reports that the CBN has debited the accounts of the 4 banks involved in the MTN saga. We also anticipate the release of August 2018 inflation numbers, even as bullish triggers remain scarce,” according to United Capital Plc. As foreign investors flee, can domestic investors rescue the Bourse? The NSE data show 64.68percent decline in foreign transactions for the month of July as against June level, from N102.41billion as at June to N36.17billion at the end

of July 2018. As at January, it was N166.39billion, according to recently releas e d figures at the Nigerian Bourse. Analysis of transactions for the period ended July 31, 2018 shows domestic investors have 75.24percent control of the stock market (N109.9billion) while foreign investors account for just 24.76percent. The domestic composition of transactions on the Exchange b e t w e e n Ja n u a r y a n d July 2018 also shows the institutional composition of the domestic market reduced by 20.91percent, from N56.24billion in June to N44.48billion in July 2018 while the retail

composition increas e d by 124.66percent, from N29.12billion to N65.42 billion within the same period. This indicates a significantly higher p a r t i c i p at i o n by re t a i l investors over their institutional counterparts i n J u l y 2 0 1 8 . To t a l transactions at the nation’s bourse reduced by 22.21percent from N187.78billion recorded in June 2018 to N146.07billion (about $478.3 million) in July 2018. The cumulative transactions from January to July increased by 54.38percent from N1.129trillion recorded in 2017 to N1.743 trillion in 2018.

Thursday 13 September 2018

C002D5556

BUSINESS DAY

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Cement Company of Northern Nigeria: Another record year in sight?

R.T. Briscoe: Auditors make case for capital injection …full year scorecard disappoints further …loss margin widens to N3.16bn IHEANYI NWACHUKWU

he directors of R.T. Briscoe (Nigeria) Plc have presented to the investing public, the annual report on the affairs of the Company and its subsidiaries (the Group), together with the financial statements and independent auditor’s report for the year ended December 31, 2017. R.T. Briscoe financial statement which berthed on the Nigerian Stock Exchange (NSE) on Tuesday September 11, 2018 shows disappointing top-to-bottom line figures. Notably, the group’s loss after tax (LBT) widened to N3.160billion, from a loss after tax (LAT) of N2.900billion in the preceding financial year of 2016. The Group is primarily engaged in the sales and servicing of Toyota and Fo rd m o t o r v e h i c l e s, t e c h n i ca l e q u i p m e nt, including forklifts, industrial compressors, mining and drilling equipment and generating sets, facility management, property development and leasing of property. In t h e f u l l y e a r 2 0 1 7 under review, the group revenue declined to N4.376billion, from a high of N9.808billion in 2016 financial year end. Though gross profit

printed at N971.46million against N1.559billion in 2016, its net finance costs increased to N2.670billion from a low of N1.860billion in 2016 financial year. R.T. Briscoe group recorded full year loss before minimum tax of N3.137billion as aga i n s t N 2 . 8 0 2 b i l l i o n in the preceding year. The Group’s basic loss per share (LPS) has increas e d to 269kobo from 247kobo in 2016. R.T. Briscoe (Nigeria) Plc had reached a 52-week high of 50kobo but currently stands at a 52-week low of 46kobo. The company’s trading information at the Nigerian Bourse shows ma rke t cap i t a l i s at i o n at N541.124billion and shares outstanding of 1,176,356,880 units. The directors of R.T. Briscoe (Nigeria) Plc who served during the year in review and their direct interest in the shares of the Company as recorded in the Register of members are as follows: Clement A. Olowokande (retired as chair man on Apr il 30, 2017), 810,001 units; Sunday Nnamdi Nwosu (acting chairman), 10,873 units; and Bukola Oluseyi Onajide (Managing Director), 648,000 units. Shareholders who have indirect interest in the company and their shareholdings are: Akin

Ajayi (through Lusano Investments Limited), 50,000 units; and Adeola Adenike Ade Ojo (through Classic Motors), 97.2million units. As stated in the financial report released at the NSE, the Register of Members as at December 31, 2017 shows the following shareholders held more than 5percent of the issued share capital of the Company: Mikeade Investment Limited (339.93million units) or 28.90percent ; Classic Motors Limited (97.2million units) or 8.26percent; and Nigerian public (739.22million units) or 62.84percent. KPMG Professional Services, the independent auditors to R.T. Briscoe (Nig er ia) Plc in their report on the consolidated and separate financial statements said, “ The current liabilities of the Group and the company e xc e e d e d t h e cu r re nt assets by N11.27billion and N11.50billion respectively, while the total liabilities of the Group and Company exce e de d total ass ets by N6.04billion and N6.47billion respectively.” “In our opinion, the company requires capital injection to enable it continue as a going concern and as at the date of our report, the company

is yet to secure the required funding to enable it settle its outstanding obligations and to finance its working capital requirements,” the auditors further said. KPMG in its independent auditors report signed by Goodluck O bi fur ther said the y believe “these events or conditions, individually or collectively cast significant doubt on the Group and Company’s ability to realize its assets and settle its obligations in the ordinary course of business. As a result, the preparation of the consolidated and separate financial statements on a going concern basis is inappropriate”. R.T. Briscoe (company) five-year financial summary shows negative retained earnings widened to N10.328billion from N7.232billion in 2016; and N4.163billion in 2015. It had positive retained earnings of N60.39million in 2014 and N1.910billion in 2013. Share capital remains at N588.177million. For t h e G r o u p, n e g a t i v e retained earnings stood at N9.906billion as at December 31, 2017; N6.810billion in 2016; and N3.918billion in 2015. The Group had positive retained earnings of N240.964million in 2014; and N2.043billion in 2013.

n this report, Onyeka Ijeoma, an equity research analyst at Vetiva Capital looks at Cement Company of Northern Nigeria Plc (CCNN) recently released first-half (H1) 2018 results, urging investors to HOLD the stock. Vetiva sets target price of N14.31 for CCNN stock, noting that it currently trades at a premium price of N30.90. Outperforms estimates; reports impressive bottom line growth CCNN released its H1’18 results earlier, with bottom line growing 153percent year-onyear (y/y) – 29percent ahead of our estimate. Notably, the bottom line outperformance was supported by a strong topline growth as well as improved operating margins. Particularly, revenue for the second quarter came in much stronger, up 61percent quarter-onquarter (q/q), resulting in a 42percent y/y growth for the H1’18 period to N12.1 billion – ahead of our N10.9 billion expectation. We note that the topline boost was much in line with the impressive performance observed within the cement industry, with H1’18 topline growing an average of c.13percent y/y across the other listed producers. Furthermore, CCNN recorded improved efficiency within the period, with operating margin expanding significantly (both q/q and y/y) despite the company’s continued reliance on low pour fuel oil (LPFO). Overall, earnings before interest and taxes (EBIT) came in at N3.7 billion, 154percent and 38percent ahead of H1 2017 and our expectation respectively. Furthermore, following a 61percent y/y drop in Net finance expense to a negligible N31 million, Profit before tax stayed at N3.7 billion, rising 167percent y/y. Overall, PAT came in at N2.6 billion, ahead of our N2.0 billion expectation and on track to exceed full year (FY) 2017 bottom line of N3.2 billion – which was a record PAT at the time. Merger with KCC could unlock trapped potential In a recent publication, CCNN updated the market on its impending merger with Kalambaina Cement Company (KCC) – a sister company and

also a subsidiary of BUA Group. According to the publication, the merger will be executed through a share exchange, with CCNN expected to emerge as the surviving entity. We recall that KCC was the vehicle through which BUA Group constructed an additional 1.5 million MT plant in Sokoto, intended to supplement CCNN’s existing 0.5 million MT facility in the state. As detailed in our Company Update “Completes Sokoto plant expansion”, the expansion and subsequent consolidation of operations should support earnings performance over the medium to long term as topline has previously been constrained due to the erstwhile limited capacity. The combined operations should therefore favorably position the company to take advantage of strong cement demand outlook. Also, we anticipate stronger margins postmerge, given that the new plant operates a diversified kiln (can run on multiple fuel sources) and comes equipped with a 32MW captive power plant. We have not incorporated the impact of the merger in our forecasts and await further information from the company. Valuation revised higher on stronger-thanexpected H1’18 Following the impressive H1’18 result and in line with our positive expectations for the cement sector, we have revised our estimates across most line items. We raise our FY’18 topline estimate to N22.9 billion (Previous: N21.4 billion), reflecting the H1’18 run rate albeit adjusting for seasonally weaker demand in H2. Whilst we continue to monitor still-high crude prices and the consequent passthrough to LPFO price, we revise our FY’18 operating margin 6 percentage points higher to 29percent – taking account of H1’18 margins – translating to FY’18 EBIT of N6.7 billion (Previous: N5billion). At a revised effective tax rate of 29percent, we estimate a PAT of N4.8 billion (Previous: N3.8 billion) and a target price of N14.31 (Previous: N11.12). Despite the stock trading at a premium to our target price, we place a HOLD on CCNN in view of a potential upside from the upcoming merger.

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Thursday 13 September 2018

Artificial Intelligence: Nigeria is missing in the 4th Industrial Revolution These will be exceptions; the lone wolves. But whatâ&#x20AC;&#x2122;s the effect of one lone wolf in the sea of global intelligence?

COLLINS ONUEGBU (Guest Writer)

he match of science and technology is a relentless one. And its transformative power has been profound. Most of the wealth created in the past fifty years in the developed world has been traced to science and technology. While we quickly notice the richest companies in the world like Apple, Google , Amazon, Facebook, Microsoft and several others as the warriors of this match, their profound effect on productivity has created more wealth for the world than it created for the companies. They have also in the process completely transformed the world. But what is to come is even more than what has happened. If you appreciated how email, instant messaging, internet, social media, the PC, the smartphone all came together to change the way we live and work, then imagine the future that is coming. Man has always craved extra intelligence and to create intelligent machines. Itâ&#x20AC;&#x2122;s been written in books for generations, predicted by futurist and scientists, made into movies for decades. But finally, we are (almost) there. All over the world, scientists, engineers, programmers, venture capitalist and governments are in a new race to augment natural intelligence. It is called Artificial Intelligence (AI) - the creation of intelligence that will match the intelligence that man was given during creation and evolution. You cannot miss the excitement in technology community and the worry and apprehension of those who regulate the world. We are getting into uncharted territory. What will become of the world we have known and gotten used to when we create intelligence? What will be the manifestation of this intelligence? How will the world fight wars, define sovereignty and national security in an age of artificial intelligence? What will be the effect of AI on productivity, health, leisure, recreation and work; on the entire human experience and our relationship with God? Artificial intelligence promises to be an uncertain

ride into the future we have to navigate as the perennial clash between science and civilization escalates. But like all such strides since the first industrial revolution, there will be consequences for nations and societies that have not prepared themselves for the age in which science and technology form the primary fabric of the society. Take Nigeria for example. Nigeria has not really benefited from the boom created by technology in the past 50 years. Look at any of the tech milestones of the past era. The PC era ushered in by Microsoft, IBM and Apple did not really benefit Nigeria. We were not ready for it. While Microsoft and IBM co-visioned a world in which every human beings had personal computer, in Nigeria, that vision could not be. It took the evolution of mobile technology and the advent of the smartphone to allow Nigeria and other third world countries to finally get access to the internet and the benefits that came with it. But the revolution it has brought to education, health, productivity and quality of life has been mostly absent for most of Nigeria. Our health system has not improved. Our educational system has decayed. Our infrastructure overall has degraded. There are patches of benefits here and there but overall, we have lost in the race to use these technologies to advance our civilization and build wealth for our citizens. Countries like India, China and some in Africa have latched on to the technology culture to pull millions out

of poverty. Age of Intelligence The foundation that will allow AI has building blocks that have layered on each other for decades: computer processing power, faster and pervasive internet connection, data storage, cloud computing and progressive policies around data sovereignty, security and safe and collaborative use of technology. The second industrial revolution was enabled by the successes and failures of the 1st; the 3rd on the 1st and 2nd. The 4th will take all the successes of the previous ones and build on it. Thatâ&#x20AC;&#x2122;s the way the world makes progress. The Nigerian tech community is obviously excited like their peers globally. I am excited for the world; by the progress of science but not excited for Nigeria. I feel mostly pity for us as a nation and for my colleagues in the tech industry. I think their excitement is misplaced and will be shattered by experience. Not that the technology will not berth here. AI will come to Nigeria. In fact it is already here. I use it when I open my smartphone; when I use applications that have bots on my laptop. In the near future I will possibly fly smart planes and drive smart and intelligent cars. But that will be it. I fear that the foundation that will make it pervasive has not been built. Some say that like mobile technology which allowed us to leapfrog the loss of the earlier era of wired telephones, some of the new technology will allow us get into the 4th industrial revolution without the foundations laid by the earlier

revolutions. I disagree. The 4th industrial revolution that will be driven by artificial intelligence did not come out of the blues. It layers on the progress of earlier revolutions starting from the steam engine of the 1st revolution. And sadly, Nigeria and most of the poor countries in Africa are not about to be given free tickets into the 4th industrial revolution after missing out on the preceding ones. In Nigeria, we are still battling to install electricity for the vast majority of Nigerians. Electricity was part of the 1st industrial revolution. Our government does not have secure mail, a key part of the 3rd industrial revolution. We have missed the revolution that has happened in health, education, all key foundations of leapfrogging into the 21st century. We have been unable to count ourselves and build the national data that can really create a culture of data collection and usage, again part of the building block for the promise of intelligence. How can you really hope for extra intelligence when you fail at basic intelligence? The prognosis is not good. While there will be flashes of intelligence among us as this age comes upon us, we will mostly be observers, admirers and at best, peripheral users. Our citizens will integrate into other societies and excel in science and technology and we will celebrate them gleefully, to tell ourselves that we can be like others. And sometimes, something great will happen locally that will show the possibilities of what we could have been.

Betting on the 5th industrial revolution What if we make a bet to join the 5th or 6th industrialist revolution - perhaps the age of machines? Or the age we migrate to Mars? What can we do now to give us a fighting chance to become part of the global culture that will be driven by periodic revolutions and continuous advancements? First, we must take our education system more serious. People talk of STEM education. But I say education. Science and Technology education is really important. But you cannot build a world on science alone. Our education must work as a tool for national aspiration; as a foundation for rebuilding our battered institutions; as a gateway to building the leadership we need for the tomorrow. The failure of our educational system means that even Nigerians human intelligence is totally underutilized. Will artificial intelligence enhance underutilized intelligence? A revolution in education required We must as a matter of urgency guarantee every Nigerian born henceforth good and quality education from kindergarten to the end of high school and reform the rules that govern the creating of higher institutions to make it easy for individuals and organisations to set up universities and other institutions of higher learning. Education technology has liberalized university education with Nigerians studying online - mostly frees or subsidized from global institutions. This is while our national education regulators are in self-denial and using a 20th century mindset to regulate 21st century university education. The Government must make it easy for Nigerians to get higher education online like it is to get the one offered by universities and institutions all over the globe. And this must start now. Other nations are laying the foundation for the 5th industrial revolution that will happen in the decades to come as I write. The think-

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

ing that time is waiting for Nigeria is a fallacy. The longer it takes for us to start on this path, the harder it becomes. Because no one is waiting and the pace of change is accelerating. We must save Nigeria from entering a future in which its citizens are disconnected from a progressive world. The consequence is already grave and will get worse as our population explodes without the support of the extra intelligence that the rest of the world will come to depend on. Meanwhile in the 4th industrial revolution How can we still make the best of the situation in the 4th Industrial Revolution? And get AI working for us as a country? I am not advocating that we fold our arms and wave a white flag of defeat, on the contrary. The Nigerian tech industry is really small but growing fast. What it lacks in size though, it makes up for in energy and some pomp. You would think, based on the narrative about the industry, it was one of the biggest contributors to the economy. It is not. But there is something going for the industry, that despite its size, it manages to get its message across. The industry has to however turn this star power into the right advocacy and lobbying and raising its voice in national conversations. Tech is eating up every industry. Building capacity for lobbying and policy making in collaboration with other industries will position tech as a key policy for the reform of the Nigerian economy. That would help create the momentum for adoption of technologies like AI in a widespread manner. Only then can we hope for a chance to join the AI conversation. Under the right guidance, Nigeria can aspire to join the next industrial revolution. And even have a play in the current one. In the process it will build a nation whose citizens can aspire to be the best in world. And join a future that will be led by educated humans, supported by intelligent machines. Collins Onuegbu is the founder of Signal Alliance and a director at Lagos Angels Network (LAN).

Thursday 13 September 2018

C002D5556

BUSINESS DAY

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AfCFTA will open a new vista of legal practice - international trade law to Nigerian lawyers - Seni Adio, SAN The Nigerian Bar Association section on Business Law (NBA-SBL) On Wednesday August 29, 2018 heldits annual general meeting during the NBA conference in Abuja, where a newly elected council for the section was inaugurated. Among those elected to steer the affairs of the NBA-SBL for the next two years are Seni Adio, SAN as chairman, Ayuli Jemide as vice chair, Dr Adeoye Adefulu, secretary and Chinyere Okorocha as treasurer. In this interview with Businessday Law Editor, Theodora Kio-Lawson, the new chairman of the section, Seni Adio, SAN speaks of the vision of this new council; disruptions in the legal profession; the role of business lawyers; the NBA-SBL, PEBEC and NASSBER collaborations, globalisation and capacity building, amongst other things. tion and simultaneously broadening our client base.

ongratulations on your election as Chairman of the NBA - Section on Business Law. What should we expect from this administration under your leadership? At the outset, I want to put on record that I feel very privileged and, indeed, divinely favoured to have the opportunity to serve as Chairman of the Nigerian Bar Association’s Section on Business Law. It is also a distinct honour to serve as Chairman on a Council comprising of exceptional legal practitioners who have already demonstrated a predisposition for sacrificial service to the Bar and, indeed, the society at large. Regarding what to “expect”, speaking as a member of Council, I would say that the 2018-2020 SBL Council will strive to elevate and burnish the already lofty accomplishments of our predecessors by enhancing various programs of the Section. We will also be a highly innovative Council in terms of broadening the areas of legal services and developing the professional expertise of business law practitioners. In sum, we intend to build on the foundation and building blocks laid by the pioneer Chairman of the Section, Mr. George Etomi, the inspiring and transforming accomplishments of successor Councils led by Messrs. Gbenga Oyebode and Asue Ighodalo, respectively and, more recently, Mr. Olumide Akpata. Much of the discourse at the 12th Annual Business Law Conference this past June 2018 led to a resolution that bar associations and law firms across Africa should reorganise and reposition for inevitable disruptions in the profession. I would expect that the Section on Business Law would be at the forefront of this move in Nigeria. How do you intend to drive this process? “Disruptions” come in different forms. One example is the inevitable advent of market integration across Africa. Indeed, your question dovetails with the consultations concerning the African Continental Free Trade Agreement (AfCFTA), which was initially signed by about 44 countries at the African Union Summit in Rwanda in March 2018 and, more recently, an additional 5

Seni Adio, SAN, Chairman, Nigerian Bar Association Section on Business Law

countries including South Africa signed the Agreement at the recent AU Summit in Mauritania, constituting 49 signatories out of a possible 55. Nigeria’s signing the AfCFTA would be a welcome “disruption” for numerous reasons. These include opening a new vista of legal practice – International Trade Law -- to Nigerian Lawyers. Other complements for lawyers, professional service providers generally, as well as stakeholders in other sectors of the economy include, a trading bloc of almost 2 Billion Africans; trading volume of approximately USD2.5 Trillion and growing; investments in utilities and infrastructure, such as power, transportation, water resources and environment; investments in agriculture and bio-diversity; as well as telecommunications technology and biotechnology. Integration will also foster innovation, specialization, competitiveness and collaboration. As legal practitioners, we have a critical mass of renowned commercial lawyers, and dispute resolution lawyers both as legal counsel and arbitrators. Therefore, Nigeria already has the foundation for being a preferred seat for arbitration and other forms of dispute resolution. Your question is also answered by the overall mission of the SBL, which includes providing first-rate continuing legal education for business lawyers in Nigeria. Before we move on to other

matters, be assured that I am also very much aware of certain concerns of participants in the market place about what an integrated market could portend. These include the potential for “dumping” artificially low-priced products, substandard products, migration and immigration, and even security. To these, my response is twofold. First, the Agreement itself already contains certain checks and balances. Second, herein lies the exponential opportunities for expanding areas of law specializa-

The Consumer Protection Council (CPC) has continued to push for a strong and effective competition regulation regime in Nigeria. It is currently in court against a wellknown company over alleged exploitation of Nigerian consumers and what it refers to as “obnoxious and exploitative billing systems and pricing regimes”. Is the SBL in support of this action? If so, what sort of backing would your committee on Consumer Protection & Competition Law be providing to the CPC to drive this cause and win the fight against exploitation? You, being a senior legal practitioner in your own right, already know that I ought not to comment on a matter that is sub judice and, indeed, I will not! That said, what the SBL is about is enhancing competencies, continuing legal education, and, very notably and importantly, mentoring young lawyers. One of the myriads of the dynamism of the law profession is that in a given dispute there is always at least two sides on an issue – a plaintiff and a defendant. So, within the Consumer Protection & Competition Law Committee of the Section, you have practitioners who may be pre-disposed to big business, others pro-consumers, and some indifferent who take issues as they come. Put another

Seni Adio, SAN, Chairman, Nigerian Bar Association Section on Business Law

way, the SBL has a big tent for disparate viewpoints and it is for individual legal practitioners to decide how to deploy their expertise. The elections for National Officers of the NBA have also come and gone and we are moving from a ‘BraveNewBar’ to a ‘Purified Bar’ - which is the mantra for the Paul Usoro, SAN (PU) – led administration. What sort of synergy would we see between the SBL and its parent body, towards moving the association forward? The SBL is one of three Sections of the Nigerian Bar Association. Therefore, the Section is and remains in sync with the National Body under the leadership of our President, Mr. Paul Usoro, SAN. Indeed, to give you some perspective and telegraph how aligned we are, Mr. President is a founding member of the SBL, is a pioneer Chairman of the Telecommunications Committee of the NBA-SBL, and has been a strong supporter of the Section since its founding. So, the entire members of Council are looking forward to working collaboratively with Mr. Usoro, SAN over the next two years. The SBL’s collaborations with the Executive through the offices of the Presidential Enabling Business Environment Council (PEBEC); and the Legislature/Private Sector through the National Assembly, Nigerian Economic Summit Group (NESG), and UK Department for International Development (DFID), established the National Assembly Business Environment Roundtable (NASSBER) which initiatives were directly under your purview, recorded a significant amount of successes. What is the next phase of these collaborations? Thank you for the compliment, which I accept on behalf of members of the Section and, especially, the individual members of the Steering Committee on Ease of Doing Business and their respective law firms. Indeed, the SBL worked very collaboratively with PEBEC and NASSBER on law reform and, in particular, in the area of easing doing business in Nigeria. I have to also put on record that it would not Continues on page 26

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Court acknowledges Multichoice appeal, rejects application to adjourn matter indefinitely

AfCFTA will open a new vista of legal practice Continued from page 25

THEODORA KIO-LAWSON

he Federal High Court on Monday September 10, 2018 acknowledged the appeal of Multichoice against its interim order prohibiting increase in DStv or GOtv subscription rates. The Presiding Judge, Justice Nnamdi Dimgba however refused the application by MultiChoice to adjourn the matter indefinitely. The case was thus adjourned to October 9th, 2018. Multichoice had on Friday August 24th, 2018 announced that it had filed a Notice of Appeal and an application for stay of execution at the Court of Appeal. However, the Court is yet to sit. Pending the hearing and determination of this appeal, the order of the Federal High Court prohibiting the increase in DSTV or GOTV subscription rates subsists. Describing the court’s Order as an “affront to the free market economy” Multichoice has vowed that it would fight against the government and its agencies dictating pricing for businesses. On the other hand, the CPC responding to several consumer complaints and queries on its social media platforms has said that it would take appropriate action against Multichoices’s non-compliance with the Order. It stated, “The Issue of contempt will be handled appropriately. Consumers who are unsuccessful in renewing subscription in compliance with the order of the court are advised to kindly send an email to multichoicecompliance@cpc. gov.ng.” So far, there have been a barrage of emails to this effect. Below, are a few of these cases reported by consumers online:

The Director General, Consumer Protection Council, Babatunde Irukera (M) after the Court’s sitting on Monday.

L-R, Former NBA President, Augustine Alegeh, SAN, Senate President, Bukola Saraki, and NBA-SBL Chairman Seni Adio, SAN

“Good day, pls be informed that DSTV is still collecting the NEW price increase for subscription. I went to renew today at their Head office in VI, and they collected 6,800 for compact. Pls intervene. Thank you.” – Gabriel Edemayibo “I just did a renewal on my DSTV now and I was charged the new tariff. It seems MultiChoice has its own rule superior to Nigerian Court orders.” – Darley O.O. “NBC should just sanction them

with a fine like NCC does to telecoms.“ - Teriba T.A.O “I think we have had enough extortion called service. Time for Pay Per View.” -Real Consult “DSTV has not reverted to status quo! They are still charging the new rate, now that the issue is before a judge I feel it is a violation of court process for DSTV to continue to charge the new rates.” - Zuwairat Asekome

NCC, CPC Commence joint inquiry against telecoms sector

he Nigerian Telecommunications Commission (NCC) and the Consumer Protection Council (CPC) on Monday September 10th, 2018 commenced a Joint Regulatory Inquiry into consumer issues in the telecommunication industry by the NCC and CPC. Representatives of both agencies disclosed that the joint inquiry, which is in further partnership with relevant security agencies, commenced on account of incessant and continuing dissatisfaction and complaints by consumers, as well as in response to a resolution of the Senate of the National Assembly requiring investigation and remedial measures of vital service issues and grievances by consumers. Speaking at the formal inauguration of the Joint Investigative Committee, the Director General of the CPC, Babatunde Irukera stated that this was the right thing to do. “It promotes regulatory collaboration and all round protection. It also ensures regulatory clarity and eliminates possible multiple regulatory approaches to similar issues. This is good for industry and operators as well as investors always appreciate such clarity and stability,” he said. According to him, the move is consistent and complimentary to the Federal Government’s commitment to Ease of Doing Business and the Economic Recovery and Growth Plan, which he said prioritises people, establishes firm but clear regulations that protect the citizens, and promotes business and investment. Also speaking, the Executive Commis-

Babatunde Irukera, Director General, Consumer Protection Council (2nd from Left) in a chat with the Executive Commissioner, Stakeholders Management, Nigerian Communications Commission, Sunday Dare (2nd from Right) at the formal inauguration of a Joint Investigative Committee at the NCC headquarters in Abuja.

sioner, Stakeholders Management at the NCC stated that the development was a very vital one with respect to protecting consumers and ensuring that the telecommunication industry remains robust and continues its leading role in Nigeria’s economic growth and expanding prosperity to citizens. His words, “Indeed, the telecommunications industry has become one of the most vital to our economy, and in particular inclusiveness for a large and vast nation such as ours. “As such, it is a matter of utmost importance and urgency that we pay the appropriate attention to growing the industry and protecting consumers. These two crucial objectives are not mutually exclusive. At the end of the day, we are regulators, and operators in the industry have a unified mutual objective, and that is to ensure service that consumers are happy with, and happy to pay for,” the NCC officer said. Both NCC and CPC have also said that the joint committee intends to stay abreast

of all related issues to ensure enhanced operations and customer satisfaction. The scope of the investigation includes service quality, service issues such as call masking, unsolicited subscriptions, difficulty with unsubscribing to billed value added services, and transparency in billing with respect to clarity, data roll over, disclosures about real consumption, deductions for value added services and other key telecommunications services. The agencies further disclosed that a team of operatives have been assembled to discharge this assignment and both institutions are looking forward to the cooperation of consumers, operators and other stakeholders, particularly with providing information as may be, and when necessary that could be relevant to the subjects of the inquiry. Expected outcomes from this inquiry are better services, more transparent charges and increased customer service responsiveness by telecommunications operators.

have mattered much how keen the SBL was and remains in working with the Office of The Presidency and, in particular, His Excellency, The Vice President and PEBEC Secretariat, and the leadership of The 8th Assembly of the National Assembly and, in particular, His Excellency the Senate President and The Rt. Honourable Speaker of The House of Representatives, if the Executive and Legislature were not already enthusiastically pre-disposed to collaborating with the NBA-SBL. Amongst some of the “firsts” that we recorded was

seamlessly across borders on a daily basis. Yet in our jurisdiction, globalisation of legal services remains a highly contentious subject, as we continue to grapple with ‘best practices’ and issues of encroachment. Is this a conversation your administration is willing to have/drive and if so, to what end? We are already part of this conversation and the discussion is ongoing. What I will add for now, is that it behooves members of the law profession to continue to

It is also a distinct honour to serve as Chairman on a Council comprising of exceptional legal practitioners who have already demonstrated a predisposition for sacrificial service to the Bar and, indeed, the society at large the birthing of NASSBER – a formalized and integrated working relationship amongst the Legislature, private sector and the law profession. This collaboration is ongoing, and we will continue to work hard towards delivering even more palpable and transforming results to further enhance doing business in Nigeria. While on this subject, I believe it is fitting to publicly applaud the lawyers and law firms that have worked on these initiatives. They have done so by making enormous personal sacrifices including providing all manner of resources, pro bono! They have also done so in a most collaborative and congenial manner. I really salute each and everyone of them and their respective firms for their invaluable contributions. We say that the world has become a global village with businesspersons transacting

develop themselves and, most importantly, become subject matter experts as opposed to generalists. The welfare of the younger lawyer has always been a critical issue for the leadership of the Bar and the Section, and the last SBL administration, which you were a part of, paid particular attention to this. Should young lawyers hope for more under your leadership? What would you say to them on a final note? Absolutely, the professional development of young lawyers will remain a fulcrum of the objectives of this Council. The Section has already made great strides in terms mentoring, continuing legal education and, equally important, broadening the Section’s reach to young lawyers across the country, and we intend to continue these initiatives.

Thursday 13 September 2018

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LegalBusiness PERSPECTIVE FIRS Memo on WHT Credits Utilization: What Misgivings?

n internal memo of the Federal Inland Revenue S er vice (FIRS) dated July 25, 2018 and captioned “Re: Circular on Withholding Tax Utilisation and K-Card Update Key Deliverables” (Memo) has become public knowledge. The Memo directed all Tax Controllers and State Monitors to issue to taxpayers, a letter in a template captioned “Overpayments/Withholding Tax Confirmation/Reconciliation for System Upload” (WHT Reconciliation Notice). Each WHT Reconciliation Notice is to be accompanied by a withholding tax (WHT) usage request sheet (Request Sheet). On receipt of the WHT Reconciliation Notice, the taxpayer is to complete the Request Sheet and go to its relevant FIRS office for a review, reconciliation and sign-off, by the taxpayer and the FIRS, of both the Request Sheet and a journal adjustment voucher (JAV). While the Memo required that that the sign-off of the Request Sheet and JAV be completed by August 30, 2018, the WHT Reconciliation Notice gives the taxpayer 15 days from the [date of ] WHT Reconciliation Notice to fill the Request Sheet and attend the FIRS office with relevant documentary proofs, for joint review and sign-off. The WHT Reconciliation Notice states that failure to comply with its directive will foreclose all options of the taxpayer for reconciliation and the taxpayer will have to accept the FIRS’ position. The Memo states that all utilization requests for WHT credits that have exceeded 3 years must be audited by the FIRS’ management. In this brief, we undertake a review of the underlying issues and legal implication of the Memo and WHT Reconciliation Notice on the rights of the taxpayer in Nigeria’s WHT/income tax system. Administering WHT in Nigeria: The Confusions The concluding 16 words of the Memo gives an insight into, perhaps, the overriding intention of the FIRS; the need for Nigeria’s foremost revenue agency to understand and plan for WHT claims on its future revenue collection projections. We provide some context to this intention. Save in the case of WHT expressed by law to be a final tax (WHT as Final Tax or WaFT (please note that the use of “WHT” in this brief excludes WaFT), WHT collected by Federal and State revenue authorities in Nigeria are ordinarily debit entries until reconciled with the final income tax position of the taxpayer. This statement derives from the very nature of WHT on the Nigerian income tax system. WHT is a system for the advance collection/payment of income

tax; it is not the income tax, but a system for its collection/payment. The WHT received by the tax authority is a payment on account in respect of income tax. Save for its express statutory recognition, it is a pre-payment. Revenue authorities should not consider WHT receipts as revenue until the income tax position of the tax payer is established and exceeds or equals the WHT collected. Thus, when the revenue authority projects the income tax it is due to receive, it should set off such projection with the value of WHT receipts in its possession. Given this context, it appears that the FIRS is currently unaware of its exact total WHT receipts, hence the Memo and WHT Reconciliation Notice. In WHT administration, the taxpayer is the party/payee whose monies have been deducted by the payer and paid over to the tax authority. The payer is a statutory agent of the tax authority and would be liable to the tax authority if it fails in its statutory obligation of deduction from the payee and remittance to the tax authority. The monies in question is the payee’s potential income tax. The tax authority as principal and payer as agent stand on one and same side of the divide in ensuring that the payee, who stands on the other side, gets duly credited for monies deducted from it and remitted to the tax authority. The taxpayer/payee plays no part in the remittance side of the transaction. Nigeria’s tax laws place

no obligation on the taxpayer other than its right to set off monies deducted on account of WHT from its final income tax position. This fact is far from current reality in light of events such as the Memo and WHT Reconciliation Notice as they require the taxpayer to come forward to prove its WHT credit position, otherwise it stands the risk of losing its objective WHT credit position to a probably subjective FIRS position. The unfairness to the bleeding taxpayer is further exacerbated by the fact that it is not called upon to establish the provable monies that have been deducted from it by the FIRS’ agent, the payer, rather it is called upon to establish the WHT Credit Notes in its possession. As will be seen from the next header, WHT Credit Notes are documents/ instruments issued by the FIRS to confirm the monies received by the FIRS from the payer on account of the taxpayer. WHT Credit Notes do not recognise monies that have been deducted by the FIRS’ agent - the payer, but not remitted to the FIRS. Legal Considerations for the Intended New Order: Giving the foregoing context, we wind down this brief with 4 distinctive tax law and practice issues that the Memo and WHT Reconciliation Notice throw-up: Section 61 of the FIRS (Establishment) Act 2007 (compiled as Cap. F36, Laws of the Federation of Nigeria 2004) (FIRS Act), empow-

ers the management board of the FIRS to, with the approval of the Minister of Finance, make rules and regulations that are necessary or expedient for giving effect to the provisions of Nigeria’s income tax laws, among other tax laws. No WHT-focused regulations have been made since the commencement of the FIRS Act. The last WHT-focused regulations in Nigeria was made in 1997. The 1997 WHT Regulations for corporate and personal income taxes currently do not speak to the realities of WHT administration in Nigeria. For example, neither of the Regulations provide for the much vaunted WHT Credit Notes. All the Regulations require is that the payer, upon deduction of WHT form the taxpayer/payee’s monies make available a WHT Receipt to the payee – Regulations 3(1). To claim WHT credit, all the payee is required to do is, submit to the FIRS, the WHT Receipt issued by the payer – Regulations 3(2). There is no requirement to provide to the FIRS, WHT Credit Notes issued or issuable by the FIRS, to satisfy a claim for WHT credits. The wordings of the 1997 WHT Regulations shields taxpayers from unscrupulous payers who deduct and do not remit WHT. All the taxpayer/payee needs to have is its WHT Receipt as issued by the payer. The taxpayer’s right crystallises at deduction and collection of its WHT Receipt. It is not required to wait for the payee’s remittance or the FIRS’ issuance of WHT Credit Notes for it to assert its rights to its deducted monies. Obviously, today’s WHT administration practice is a far cry from these legal statements. The FIRS should either bring the current realities to conform with ascertainable Regulations by issuing new WHT Regulations (with the Minister’s approval) or conform with the express wordings of the 1997 WHT Regulations. “Rule of Law” could not be better defined. The period limited by both the Memo and WHT Reconciliation Notice for a taxpayer to make its WHT credit claim conflicts with the income tax laws which graced taxpayers with 6 years to make income tax claims against Federal and States’ Revenue Services. See generally Section 91 of the Companies Income Tax Act, 1979 (as amended and compiled as Cap. C21, Laws of the Federation of Nigeria 2004; and Section 84 of the Personal Income Tax Act, 1993 (as amended and compiled as Cap. P8, Laws of the Federation of Nigeria 2004). The statements on time limitation in the Memo and WHT Reconciliation Notice will not stand has they have no legal foundation. Assuming without conceding that the FIRS is within its lawful powers to issue the WHT Reconciliation Notice, the WHT Reconciliation Notice can in such circumstance

only bind taxpayers who were duly served with one. We are aware that a great number of taxpayers who have WHT credit positions are, as at date, yet to receive the WHT Reconciliation Notice. The intentions of the Memo are not good as against all taxpayers in Nigeria, but only those who were duly served a WHT Reconciliation Notice. The Memo’s statement that any request for the utilisation of WHT credits exceeding 3 years will attract an audit by FIRS’ management throws uncertainty in the face of taxpayers who may have previously been audited by the FIRS for the relevant years of assessment for which the WHT credits relate. Does the Memo’s statement suggest another round of field audit or will the previously undertaken audit, especially when concluded, suffice? This raises the practical issue of “unending audits” for taxpayers. In our view and given the current realities of FIRS’ unending audit processes, this approach may not be efficient deployment of efforts and resources both by the FIRS and taxpayer. The FIRS has to come up with newer and more efficient audit processes for dealing with its time-costly tax audits. Conclusion Save for the mismatch in law in practice, the intentions behind the Memo and WHT Reconciliation Notice appear genuine and should ordinarily be applauded by all that are working towards an efficient WHT system in Nigeria. However, and in the absence of Regulations which validates the statements of rights and obligations in these documents, the FIRS will be infringing on the rights of taxpayers where it attempts to foreclose their rights to their WHT credits if they were to fail to fill and submit their Request Sheets before August 30, 2018 or within 15days of the [date of ] WHT Reconciliation Notice. Rather than the current objectionable approach, the FIRS is implored to work on adopting more sustainable approaches in managing WHT credit notes documentation or usage. A functional WHT credits repository or even a WHT-focused platform for the trading of WHT creditsrelated instruments at premiums or discounts is strongly recommended. In the immediate, the FIRS should jettison its August 30, 2018 or 15days deadline and seek a more collaborative approach in dealing with the inefficiencies of WHT administration in Nigeria.

Bidemi Olumide, Oyeyemi Oke & Ifureuwem Udofa AO2 LAW.

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NBA assumes watchdog role over state of Osun Sets up committee to monitor forthcoming election in the state

he President of the Nigerian Bar Association (NBA) Paul Usoro, SAN, has announced the appointment of an ad-hoc committee, to monitor the Osun State Governorship election scheduled to hold on the 22nd day of September 2018. In a press release dated Monday September 10, 2018, the President disclosed the constitution of a “nine-man team’ made up members of the association from various states other than Osun, to monitor and report all situations regarding Osun State elections. The statement which was sig n e d by Pre si dent rea d, “Pursuant to the scheduling of the Gubernatorial Election for Osun State by the Independent National Electoral Commission (‘INEC”) for Saturday, 22 September 2018, the Nigerian Bar Association (“NBA”) has, in conformance to its traditional watchdog role, constituted a 9-person Team made up of the following members of the Association to, amongst others, monitor the Election.” The team chaired by Tawo E. Tawo, SAN is expected to report about the outcome of the election as representatives of the NBA. Members of this committee (team) are, Tawo E Tawo, SAN from Cross Rivers State, Chairman; Olalekan ThanniLag of Lagos State, Member, Abiye Tam-George of Rivers State, Member; Ato Bulus of Niger State, Member and Saliu Jimoh of Kwara State, Member. Others are, Abibat Delayo

Paul Usoro

Oriekun of Oyo State, Member, Olanrewaju Obadina of Ogun State, Member ; Mukosolu Okafor of Imo State, Member and Liman Salihu ofKogi State, Secretary. The team mandate includes, monitoring and reporting on the conformance of the electoral processes to all relevant and applicable laws and regulations as well as the standard of electoral freeness and fairness that was observed by all the relevant stakeholders during and in the course of the Election. The president in the release, stated that “The team’s assignment would be complete upon the submission of its Monitoring

Report to the President of the NBA within two weeks of the announcement of the Election result by INEC or so soon thereafter as the President may direct. “In carrying out its assignment, the Team is mandated to liaise with INEC and other authorized and credible elections monitoring teams, including but not limited to international organizations and monitoring teams.” In closing, the president thanked the Chairman and Members of the committee, for accepting to serve the Association in this capacity and assure that we do not howsoever take their sacrifice for granted.

New Silks for BOSAN pre-swearing-in induction

he Body of Senior Advocates of Nigeria (BOSAN), will on Thursday September 13, 2018, hold a Pre-Swearing-In Induction Ceremony for newly elevated Silks (Senior Advocates) on the recommendation of the Chief Justice of Nigeria (CJN), Hon. Justice Walter Samuel Nkanu Onnoghen. The first of its kind, the ceremony for new senior advocates is a full day programme which begins at 9:00am with four sessions and several facilitators to discuss significant topics on Ethics and Professionalism in the Practice of Law at each of these sessions. Speaking about the event, themed, “Legal Ethics and Professionalism in the Practice of Law”, BOSAN administrator, Dayo Akindipe, disclosed that the objective of the induction programme was to provide a forum for the distinguished members of the Inner Bar (Senior Advocates) and the Bench, to orientate the new Silks on their leadership role in the profession, professional

ethics and conduct, expected of them in the discharge of their duties to the Clients, the Court and the Society. He said, “The Body of Senior Advocates of Nigeria, will also provide information to these new senior advocates on the decorum and code of dressing for members of the Inner Bar; the History of the Body of Senior Advocates of Nigeria; activities of the Body including, quarterly meetings, annual lecture and dinner, mandate of committees and sub-committees

Thursday 13 September 2018

of the Body, and other relevant information about the Body.” Scheduled to facilitate these sessions are, Hon. Justice Amina Augie, CON, JSC, Hon. Justice Mohammed Garba Lawal, JCA, Hon. Justice Abdu Aboki, JCA, Chief Wole Olanipekun, OFR, SAN, Joseph Boderin Daudu, SAN, Chief Awa Kalu, SAN, Funke Adekoya, SAN, Abubakar Balarabe Mahmoud, SAN and Professor Fabian Ajogwu, SAN The programme is scheduled to end at 5:00pm.

Content of Falana’s letter to DSS boss

emi Falana, human rights lawyer, has asked Mathew Seiyefa, acting director-general of the Department of State Service (DSS), to release the names of 294 detainees in custody of the service. In a letter to Seiyefa on Tuesday September 11th, 2018, Falana accused the DSS of impunity, saying the detention of the suspects for over two years amounts to infringement of their fundamental human right. The letter reads in part: “I thank you for acceding to my request by releasing some of the persons who had been detained for over two years without trial. However, I have confirmed from the detainees who have just regained their freedom that not less than 294 others are still being held in dehumanising and degrading conditions in the underground cells located in the headquarters of the State Security Service at Abuja. “As no person can be legally detained beyond 48 hours without a court order in any part of Nigeria under the current democratic dispensation you will agree with me that the detention of the 294 persons in the custody of the State Security Service for over two years is the height of official impunity as it constitutes a gross infringement of their fundamental right to personal liberty guaranteed by section 35 of the Constitution of the Federal Republic of Nigeria, 1999 as amended

Falana

and article 6 of the African Charter on Human and Peoples Rights (Ratification and Enforcement) Act (Cap A9) Laws of the Federation of Nigeria, 2004. “In order to put an end to such prolonged detention of citizens without trial I have requested the Chief Judge of the Federal High Court to designate Judges to conduct a monthly visitation of the detention facilities of the State Security Service and other law enforcement agencies in line with the provisions of section 34 of the Administration of Criminal Justice Act, 2015. “However, in exercise of my right under the Freedom of Information Act, I hereby request you to avail me of the names of the 294 detainees and and the particulars of the criminal offences allegedly committed by each of them. “In case any of the detainees has been charged with any offence in any court of law you are also requested to supply the details of the cases and the trial courts.” Sambo Dasuki, former national security adviser, and Ibrahim Zakzaky, are among the suspects in DSS custody.

Legal Considerations in Renewing Licenses and Leases in the Nigerian Petroleum Sector Continued from Last week

he DPR assesses the production profile and production growth plan to ensure that sound reservoir management practice is adhered to for optimal maturation of the asset.Other checks conducted by the DPR include; review and assessment of compliance with payment of all applicable royalties, concession rentals and other statutory payments. Economic evaluation of both surface and subsurface assets of the block taking into cognizance the remaining reserves and possible cost of future development, using standard industry methodologies for valuing oil and gas assets to determine the lease renewal bonus payable by the leaseholder. It is worth mentioning that a five percent net present value of the asset was approved to be charged as a renewal bonus. It is also important to note that Section 25 (1) of the Petroleum Act provides that the Minister also has the right to revoke an oil mining lease under certain circumstances, thereby implying the renewal of a license or lease is not as of right. Conclusion – Powers of the Minister to Refuse a Renewal Recently, there has been a lot of debate on the Minister’s discretion to grant renewal of leases and

licensees under the Petroleum Act. This issue emanates from the assertion that the oil companies which have had their application for renewal refused were unfairly dealt with by the Minister. As earlier stated, although the holder of a lease under the Petroleum Act has a right to seek renewal, the Minister is not obligated to grant an application for same. The Minister’s powers to renew or revoke a lease, though hinged on certain conditions, still leaves a lot to the Minister’s discretion. In support of these, the Petroleum (Drilling & Production) Regulation 1969 as amended in 2001 acknowledges this discretion by the use of the word ‘may’ in relation to the Minister’s right to renew leases and licenses. In fact, it is the wide extent of the Minister’s powers that led to clamors for the passage of the Petroleum Industry Governance Bill of 2017, which the President vetoed on Wednesday August 29, 2018. The President’s refusal to assent to the Bill was reportedly hinged on the fact that the Bill would whittle down his powers as Minister of Petroleum Resources and those of the Minister of State for Petroleum Resources.w

Mojisola Olugbemi Managing Partner Stark Legal

BUSINESS DAY

Thursday 13 September 2018

Harvard Business Review

Global Business Perspectives CONNEC TING

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TIME

Why curiosity matters: The business case for curiosity

ost breakthrough discoveries and inventions throughout history have something in common: They are the result of curiosity. The impulse to seek new information and explore novel possibilities is a basic human attribute. New research points to important insights about curiosity as it relates to business. Cultivating it at all levels unlocks a wide range of benefits: — FEWER DECISION-MAKING ERRORS: In my research I found that when our curiosity is triggered, we are less likely to fall prey to confirmation bias (looking for information that supports our beliefs rather than for evidence suggesting we are wrong) and to stereotyping people (making broad judgments, such as that women or minorities don’t make good leaders). — MORE INNOVATION: In a field study INSEAD’s Spencer Harrison and colleagues asked artisans selling their goods through an e-commerce website several questions aimed at assessing the curiosity they experienced at work. After that, the participants’ creativity was measured by the number of items they created and listed over a two-week period. A one-unit increase in curiosity was associated with 34% greater creativity. — REDUCED GROUP CONFLICT: My research found that curiosity encourages members of a group to put themselves in one another’s shoes and take an interest in one another’s ideas rather than focus only on their own perspective. That causes them to work together more effectively and smoothly: Conflicts are less heated, and groups achieve better results. — MORE OPEN COMMUNICATION AND BETTER TEAM PERFORMANCE: Working with executives in a leadership program at Harvard Kennedy School, my colleagues and I divided participants into groups of five or six, had some groups participate in a

task that heightened their curiosity and then asked all the groups to engage in a simulation that tracked performance. The groups whose curiosity had been heightened performed better than the control groups because they shared information more openly and listened more carefully. Despite the well-established benefits of curiosity, organizations often discourage it. This is not because leaders don’t see its value. In a survey of more than 3,000 employees I conducted, 92% credited curious people with bringing new ideas into teams and organizations and viewed curiosity as a catalyst for job satisfaction, motivation, innovation and high performance. It takes thought and discipline to stop stifling curiosity and start fostering it. Here are five strategies leaders can employ: 1. HIRE FOR CURIOSITY: IDEO, the design and consulting company, seeks to hire “T-shaped” employees: people with deep skills that allow them to contribute to the creative process (the vertical stroke of the T) and a predisposition for collaboration across disciplines, a quality requiring empathy and curiosity (the horizontal stroke of the T): Empathy allows employees

to listen thoughtfully and see problems or decisions from another person’s perspective, while curiosity extends to interest in other people’s disciplines, so much so that one may start to practice them. To identify potential employees who are Tshaped, IDEO pays attention to how candidates talk about past projects. Someone who focuses only on his own contributions may lack the breadth to appreciate collaboration. T-shaped candidates are more likely to talk about how they succeeded with the help of others and to express interest in working collaboratively on future projects. To assess curiosity, employers can also ask candidates about their interests outside of work. Reading books unrelated to one’s own field and exploring questions just for the sake of knowing the answers are indications of curiosity. 2. MODEL INQUISITIVENESS: In 2000, when Greg Dyke had been named director general of the BBC, he spent five months visiting the BBC’s major locations, assembling the staff at each stop. Employees expected a long presentation but instead got a simple question: “What is the one thing I should do to make things better for you?”

Dyke would listen carefully and then ask, “What is the one thing I should do to make things better for our viewers and listeners?” Dyke used their responses to inform his thinking about the changes needed to solve problems facing the BBC and to identify what to work on first. By asking questions and genuinely listening he also highlighted the fact that when exploring new terrain, listening is as important as talking: It helps fill gaps in our knowledge and identify other questions to investigate. 3. EMPHASIZE LEARNING GOALS: It’s natural to concentrate on results, especially in the face of tough challenges. But focusing on learning is generally more beneficial to us and our organizations. A body of research demonstrates that framing work around learning goals rather than performance goals boosts motivation. And when motivated by learning goals, we acquire more diverse skills, do better at work, get higher grades in college, do better on problem-solving tasks and receive higher ratings after training. 4. LET EMPLOYEES EXPLORE AND BROADEN THEIR INTERESTS: Organizations can foster

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curiosity by giving employees time and resources to explore their interests. In the 1930s some employees of Olivetti, Italy’s first typewriter factory, caught a co-worker leaving the factory with a bag full of iron pieces and machinery. They accused him of stealing and asked the company to fire him. The worker told the CEO, Adriano Olivetti, that he was taking the parts home to work on a new machine over the weekend because he didn’t have time while performing his regular job. Olivetti gave him time to create the machine and charged him with overseeing its production. The result was Divisumma, the first electronic calculator. Divisumma sold well worldwide in the 1950s and 1960s, and Olivetti promoted the worker to technical director. 5. HAVE ‘WHY?’ DAYS: “Why?” is ubiquitous in the vocabulary of young children, who have an insatiable need to understand the world around them. They aren’t afraid to ask questions, and they don’t worry about whether others believe they should already know the answers. But as children grow older, self-consciousness creeps in, along with the desire to appear confident and demonstrate expertise. By the time we’re adults, we often suppress our curiosity. Leaders can help draw out our innate curiosity. Organizing “Why?” days, during which employees are encouraged to ask that question if facing a challenge, can go a long way toward fostering curiosity. Under Toyota’s 5 Whys approach, employees are asked to investigate problems by asking “Why?” After coming up with an answer, they are to ask why that’s the case, and so on until they have asked the question five times. This mindset can help employees innovate by challenging existing perspectives. Maintaining a sense of wonder is crucial to innovation. The most effective leaders look for ways to nurture their employees’ curiosity to fuel learning and discovery.

BUSINESS DAY

C002D5556

Thursday 13 September 2018

FEATURE The new buzz on work-life Damilola Akinduro and Njideka Enetanya Manager & Senior Consultant, People Services, KPMG in Nigeria

ork-life balance remains a topic of interest in the field of rewards. Some believe that the term work-life balance is the allocation of equal amounts of time to paid work and nonwork activities. Also, the term “work-life balance” implies a separation of work and life and seems to imply that the two worlds are not meant to collide. Employees now view this concept as archaic and unachievable, and this has increased pressure on employers and reward practitioners to come up with winning integrative initiatives, to meet employees changing expectations. This article covers the history and evolution of worklife balance, strengths and weaknesses of the traditional work-life initiatives, the new work-life balance and its associated downsides. History & Evolution of Work-Life Balance The term work-life balance may have been coined as a result of the concerns and desires of women to raise a family, whilst also having meaningful careers. Recent studies by the UK Office for National Statistics have shown a rise in the percentage of female workers over the past 40 years relative to their male counterparts. However, changes in the workforce have not only been in terms of demographics, but also globalisation and fluidity in movement across various regions. The resultant effect has lead to a change in expectation in terms of work-life balance. The evolution of work-life balance is illustrated below:

A Case for Review In addition to the weaknesses of the traditional work-life initiatives, the case for change borders around the fact that work-life balance implies that employees’ life should be on hold during the conventional “8 to 5” work hours and viceversa, thus creating a sense of competition between work and life. Also, typical work-life propositions cannot possibly address all employee groups or categories. For instance, the core areas of employees’ life which

they wish to “balance” may be sports, entertainment, and other personal interests, which may differ from an employer’s proposition. The New Buzz on Work-Life The new phrase is “work-life integration,” where professionals have to blend what they do personally and professionally. Work-Life Integration is an approach that allows more synergies among all areas that define “work” and “life”. Millennials have started to embrace this paradigm shift. Most people now try to attend to personal matters while at work and vice versa. With the help of technology and social media platforms, people can easily interact with the outside world, whilst at work. Trending work-life integration initiatives hover around flexibility in location, as discussed in the table below: Possible Downsides to Work-Life Integration • Stress related issues may not be solved, integrating work and life • The boundaries between family and career may be further blurred • Risk of “workaholism” • Lack of trust between employer and employee may stifle execution of initiatives Conclusion Today’s professionals are not only interested in intellectually challenging work, but also in finding work environments

that are flexible enough to accommodate personal life needs and interests. To attain an edge in talent recruitment and retention, organisations have to recognise that meeting the wide range of

needs from employees across their various life stages can be achieved through work-life initiatives. This can be a strategic business tool for win-win outcomes in the current competitive business environment.

However, the success of work-life integration programmes is dependent on creating an atmosphere of trust, with the responsibility for work-life integration shared among all related parties.

Thursday 13 September 2018

C002D5556

BUSINESS DAY

GARDEN CITY BUSINESS DIGEST MAN exhibitions: All eyes on ALCON power sector fabrications IGNATIUS CHUKWU & FORTUNE OKORIE

IGNATIUS CHUKWU & KELECHI ANOZIE

he Manufacturers Association of Nigeria (MAN) in Port Harcourt for Rivers and Bayelsa states has since the past three years introduced a novel, annual MadeIn-Nigeria exhibitions in Port Harcourt but the 2018 edition attracted big weights. One of the latest revelations is ALCOn Nigeria Limited which showcased new hopes in the power sector with fabrications in low voltage instruments. ALCON, formerly Med Construction, has its head offices at Trans-Amadi, but has a fabrication yard located at Woji (30 square meter work area for marine jetty and 43,000 sq meter area), all in Port Harcourt, while they have a branch office in Ikeja Government Reserved Area (GRA) in Lagos. The company which has spent over 35 years in Nigeria now boasts of about 2,500 workers with 40 expatriates, rendering engineering, procurement, construction, installation and commissioning services in the oil &gas and construction sectors. According to its CEO, Uba Obasi, the company is known for its capability to deliver on time highly complex projects to various clients without compromising on quality and safety all within the stated budget. Its fields of activity goes through the oil and gas (upstream, midstream, and downstream) sector. It also has the power sector from generation, transmission to distribution. There is also the

SDN, UK government, partner to create agric option to oil bunkerers

infrastructure sector plus industrial plants. The company says it pays very big attention to quality, safety and environment with an established quality assurance system to plan and control all activities affecting the quality of their products or services provided. Their HSE policy ensures that the safety and wellbeing of workers are never compromised in the quest for excellence. This may account for the high number of man hours of no lost time, injury or death. The company has executed or is executing 130 projects in Nigeria. In the last 13 years the company has handled construction of Afam Gas receiving facilities at Okoloma, Rivers State (2005), was awarded NLNG green banding in HSE, SPDC Gbarain security of supply (SOS) phase one (2015); the Soku NAG compression facility installation project,

and the Woji fabrication yard rehabilitation and expansion (2016). In 2017, ALCON had the EPIC development of outstation permanent accommodation at Nun River in Bayelsa State, and in 2018 had the Azura 459mw open circle gas turbine power station project near Benin City in Edo State. It also has done the NLNG Residential Area Type 3 apartment blocks phase one. According to Obasi at the exhibition, its new foray is in low voltage division; having secured the status of ABB-authorized low voltage panel builders with 3,500 sq meter low voltage assembly plant at ALCON Base. ABB is short for ASEA Brown Boveri, a Swedish-Swiss multinational corporation with headquarters in Zurich specialising mainly in power, robotics, heavy duty equipment, and more. Now, ALCOn manufactures ABB-enclosures for automation

and distribution (from 630A to 6300A); main low voltage panel, synchronized panel, main feeder, and switch gears. It also handles the ABB enclosures for automation and distribution from 63A to 630A. Sub-main low voltage panel, change over panels, distribution boards, consumer unit. It has ABB low voltage motors, drives, soft starters, motor starters, direct online contactors, over load relays, meters and others. It boasts of din rail products for protection, monitoring and control relays, mcbs, mccbs, and acbs, switches, and change over systems. ABB process automation systems, measurements systems, control systems. ALCON plans to unveil its sensitive centre in Port Harcourt in a couple of months to show the technical world what it can do since its 35 years of hard work in Nigeria and the oil region.

oon, oil bunkerers (artisanal refiners) may opt out and invest their energies in agric products, all thanks to f u n d i ng by th e Un i te d Kingdom and the initiative of an organization known as Social Democratic Network (SDN). SDN said it recently conducted a research and found that the burgeoning artisanal oil industry in the Niger Delta has encouraged instability in the regional environmental health and stability. The report found that many persons were propelled into the illicit industr y through a lack of alternative livelihoods. Now, SDN, with funding from the UK Government, seeks to test and showcase viable alternative livelihoods in the Niger Delta by undertaking agricultural pilot projects, according to Florence Keyamba, the programmes manager. The fo cus is said to be on swamp rice in the creeks which would be i m p l e m e n t e d w i t h e xparticipants of the artisanal oil industry, building on research and engagements which indicate p ro d u c t i ve a l t e r nat i ve

livelihoods can remove actors from the industry, and deter new entrants. “An o th e r p i lo t p ro j e ct seeks to reduce the barriers of land ownership, access to capital, and low interest credit to commercially viable initiatives developing in the Niger Delta”, she stated in a statement made available to BusinessDay. The NGO said a team of agricultural specialists will test and compare the results of the rice grown in 12 separate plots of land across six hectares and report to inform future varieties and inputs to maximise return on investment and make this a viable livelihood alternative for communities living in the creeks of the Niger Delta. SDN says it is working with Alluvial, a private sector provider, to reduce the risks and barriers to 100 smallholder and unemployed farmers, using different methods to maximise crop yields over 200 hectares. She said: “The results of thes e pilot projects are expected to indicate t h e p o t e nt i a l o f t h e s e innovative approaches to d e l i ve r c o m m e rc i a l viability, quality employment, and to alleviate some of the dr ivers of conflict and instability in the region.”

Banana sellers now robbed at gun-point in Elelenwo, as Devil’s perfume hits Ph

Port Harcourt by Boat With IGNATIUS CHUKWU

er banana spot on Station Road in Elelenwo is always attractive because the young woman seems choosy. She goes for the best that is not assisted to ripe with chemicals and carbide. That does not mean that she is a millionaire by any standard. She sells her bananas and groundnut to make a living and looks for no one’s trouble. Two

days ago, some boys hit her umbrella stand. They ordered her to surrender all her money. They later took her phone. To the bad boys, that is chivalry. They must be feeling high and big for successfully robbing girl selling bananas. Done, they went left, hit a woman selling peppersoup in a bacha (make-shift zinc shop). They pointed their gun and collected all the sales. Before the Elelenwo elders placed a curse on bad boys raiding daily, the robbers were robbing from shop to shop every evening. In one particular incident, they came with Keke (tricycle), stopped in front of a shop at Number 41 Station Road where they sell wines, entered her shop, pointed a gun, and asked her to stay still while they packed a big full (Ghana Must Go bag) and zoomed off. Now, they seem to be

back. Some shop owners sold off and zoomed off, but those with strong mind (courage) stayed back. Some provided indirect security or got hold of some arms and showed interest in selfdefence. Everybody will not roll for you. This time, the boys have resorted to soft targets; women and old traders. Thus, this week, we look at two deteriorating scenarios concerning what boys do these days in PH. The first is that the curse placed by Elelenwo elders at the peak of daily stick-ups and robbery of shops seems to fade. Now, the boys are back on the streets, this time, banana sellers and pepper-soup joints are enough for attention. Already, most shops are empty in Elelenwo, a community after Eleme Junction, the entry point to Port Harcourt from Aba. The traders have fled.

Probably because it is a gateway or get-away community in PH, many hit and run boys operate there. If in doubt, ask the Elelenwo DPO. He will tell you it’s a daily battle. Houses are growing empty by the month because the street roads are bad (rotten) and bad boys are everywhere. They harass ladies going to church and raid shops daily. They have major clusters such as Railways Hub near Mary Gold College and at up side of Station Road. Last time, a boy going to evening church activity was stopped along with a girl returning from work right at the Railway Crossing. The boy quickly obeyed and handed his two phones over, but the girl loved her phone dearly and paid dearly with a bottle smashed into her lovely face. Blood said the rest. People came and washed her face in pains. How-

ever, God has spoken. Few months later, two of the bad boys were killed in different armed robbery operations. For their victims, their laugh came last. Also, security operatives raided the place few weeks back because some assassins who killed an NDDC worker were traced their and captured. Meanwhile, the Devil now has a perfume line. This column early this year alerted our people after a security seminar about the emergence of a perfume that knocks off anybody who inhaled it. It is now rampant. They hawk at traffic jams too. It does not knock the victim off but stupefies them. They would now do whatever they were told. When the effect wears off, they would never recall anything that happened to them. We thought it was a joke until last week when

my driver closed at about 8pm and boarded a cab at Fire Service Bus Stop at Mile One Park. They called for Aba Road N50k and Eleme Junction N100. This was half the price. My driver said the moment he sat down at the back, he lost consciousness. He woke up the next morning, with hands tied to his back in an uncompleted building close to the last roundabout that goes to the PH International Airport. He heard screams in other parts of the empty building, she says. How he eventually escaped after cutting the rope with cement block is another story, his clothes gone to pants. We are still in shock. The matter is getting serious and closer. Nobody is safe anywhere now. It’s time for neighbourhood watch or we all be either dead or on the run.

BUSINESS DAY

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Thursday 13 September 2018

Investing in Rivers State Charles Beke: How MAN helped to restore Port Harcourt as investment destination … the challenges ahead Ignatius Chukwu

Introduction hen Charles Beke, took over as chairman of the Rivers/ Bayelsa branch of the Manufacturers Association of Nigeria (MAN) with headquarters in Port Harcourt four years ago, many wondered if the growing fortunes of the Association in the axis would be sustained, let alone be improved upon. Four years later, the CEO of Eastern Wrought Iron Limited, at the 34th Annual General Meeting (AGM) in his farewell speech, unveiled an endless list of feats, the way it was a few years back when he took over from the high mobiliser and woman empowerment activist, Ekama Emilia Akpan (now national vice president of MAN for the south-east) who is also about to exit that office. Actions that turned PH around for investors Beke, a one-time commissioner of trade and commerce in the state, reeled out some of the achievements that underlined his term in office. Chief among them is the introduction of Made-In-Nigeria exhibition series that now goes with the AGMs, a model that has been adopted by the national body. He said this was because most Nigerian hardly knew that the best products in the market are made in Nigeria and if the campaign for governments to buy Nigeria must be taken seriously, it must go hand in glove with exhibitions to prove a point. His tenure also brokered strong partnership with the Institute of International Trade and Development in the University of Port Harcourt and thus played key roles in the World Trade Day celebrations organised by the institute in the past two years. Beke’s time has also just introduced another novelty, the CEOs/ MDs Pre-AGM Dinner. They also introduced what they call well structured training programmes for MAN member-companies and non-members. MAN in Rivers/Bayelsa also reported raising the bar in building better relationships with federal and state government ministries, departments and agencies (MDAs), commercial banks, the media in Port Harcourt and other business relationships. To achieve these feats, it needed to strengthen its secretariat on Danjuma Drive in TransAmadi to operate as “a vibrant well-equipped secretariat that attends to the needs of members and interfaces with government agencies on behalf of members in resolving teething and general challenges”. Furthermore, a 14-member

Charles Beke, outgoing MAN chairman, Rivers/Bayelsa

council was re-energised to be more proactive in taking far-reaching decisions that have brought the association to more into the limelight as the leader Organised Private Sector (OPS) member. The MAN Portharcourt chapter also closed ranks with the national body and state governments (especially Rivers State under Gov Nyesom Wike). The steady advocacy led to better government attitude towards manufacturers in Port Harcourt and better ways of collecting taxes from the private sector. This must be why Beke openly commended the Rivers State Government (also Bayelsa) for what he called constant infrastructure upgrade, centralisation of revenue collection by the states’ internal revenue services, tackling insecurity by remarkably investing in security to protect lives and investments, generating avenues for job creation for teeming youths through micro-financing, consistent efforts to end the menace of cultism and criminality in the states, rebuilding the confidence of investors in the states, reduction of multiple taxation, and promotion of the rule of law. He said: “These credible policyactions envisioned and improved the industrial landscape and we are hopeful that they will be sustained”. Beke and his MAN always worked closely with the Frank Jacobs-led national MAN, such that the national president was often in Port Harcourt and attended almost all the Portharcourt AGMs. Much was also achieved at the national level. In an earlier interview, Beke

had told BusinessDay thus; “We have taken MAN here to new heights, from the heights our predecessor took it to. We have brought more companies in, we created more awareness with the state government. We have opened more discussions with the state governments here, our income has tripled.” He gave clear indications on what the challenges were; “We are industries and what concern us are financing, accessing funds, Customs issues, etc, not about showcasing. We are mounting MadeIn-Nigeria exhibitions yearly, just to prove to the society our capacity to produce reliable goods.” Strategies: MAN under Beke won its battles often with advocacy and diplomacy with deep contacts in government but also bared its fangs when need be. For instance, when it felt that government charges were unnecessarily high, it held an extra-ordinary general meeting in September 2016 and took what it considered to be far-reaching decisions demanding harmonisation of levies to avoid over burdening the manufacturers. It also demanded to be part of tax review and that government must show them the official account where all agreed taxes must be paid by members, and not to any tax agent or parastatal. MAN went ahead to mention the particular taxes it was ready to pay and how much. This seemed to shake the arms of government to their bones; seeing that the manufacturers knew their rights and the channels. This immediately brought sanity to the revenue system in the

state and opened the gate for persuading fleeing companies to head back to Port Harcourt. After his first year in office, Beke told BusinessDay his council managed to insulate the manufacturers from the political turmoil that enveloped the state, due to many election reruns. He also said the OPS had monitored all parties’ campaigns closely, and were thus able to know that every promise made by the Gov Wike administration had been attended to, especially efforts to attend to his economic agenda; roads to ports, Trans-Amadi road repairs, electricity boost, etc. He said: “These show that the government is working to meet the promises. We have still been tasking him on multiple taxes but he has promised to act as soon as the system stabilises. This is what has been driving away investors. MAN has also contributed some equipment and vehicles to the police as our own part. The governor plans to create an industrial haven. He has been working where it has to do with the industries. We can see a light at the end of the tunnel.” Challenges; Despite the huge achievements, there seem to be many challenges too. For instance, Beke and his team fought to get the full gazette of the Rivers State government taxes and amounts but this has not been released. He had lamented at the start of his tenure, that the efforts had been on since the days of Olusegun Obasanjo. The best he has achieved is that harassment of manufacturers has stopped or reduced. It is not clear if tax harmonisation would ever be achieved in the state. The next difficult issue is getting Bayelsa State to become conscious of manufacturing. Despite many trips there, the administrations that come and go in Creek Haven (Yenagoa) seem to have other things on their minds. This has made it difficult to hold any AGM in Yenagoa. Next is the lethargy of some high-impact manufacturers in Port Harcourt over considering a lookin at MAN. It may interest many to know that the best dredge manufacturing company in Nigeria is located in Port Harcourt but not in MAN. The best gas manufacturing companies to power schools, markets, clusters, etc, are also in Port Harcourt but not in MAN. There are two major manufacturing clusters in the city outside the Trans-Amadi layout; they are in Shell and in Onne Oil and Gas Free Trade Zone but they hardly take a look at MAN. Bringing them may be the focus of the new chairman, but will it be an easy task? Harassment by youth bodies and general violence in the state may also be a challenge that MAN

must grapple with. Beke and leaders of the OPS hardly accept that the case of Rivers was high but there may be no denying the obvious. Despite this, Beke revealed what he tells investors when they meet outside the state: It depends on the kind of investors wanting to invest in Rivers State. If it is in the oil and gas sector, we would let them know that this is the hub and centre of raw materials. We also would let them understand that the government here has relatively created the enabling environment to operate in the state in the area of security. That is what a lot of people are afraid of because it has been blown out of proportion. “What I tell investors I meet outside Nigeria is, do people go to invest in Afghanistan and they answer yes. We know Afghanistan is a trouble zone. So, why would anybody not come to invest in Rivers State? “All we need do is to educate investors and show them the peace that is here, we show them the Greater Port Harcourt where Government is ready to give land to any investor. There are also tax holidays to attract the would-be investors. One other disincentive is double taxation. People suffer without enlightenment. I have said it time without number and the governor has repeated it that most of the issues you hear about are caused by the finance officials of the private companies who want to dupe their companies. “They go to the tax officers and demand for various demand notices so they could extract more from their companies and they share. “Most of these foreign companies are duped by the local officers working for them, who threaten them that, ah, this is how they do it here. The state is not so hostile with taxes. No, the state is not harsh to investors.” Request & Conclusion; Bowing out at the AGM, Beke, who strongly promised to be attending council meetings to pour his influence and experience to help MAN said; “Let the governors always reach out to MAN when policies that have direct bearing on the manufacturing sector and the overall economy are being designed, as we have the wealth of experience and we have demonstrated commitment to work with government in developing a viable economy and make Rivers and Bayelsa states the reference destination for investors in Nigeria. We also request that members of the association be put on government boards, so as to bring to bear their expertise and experience in growing the states, as is done at the federal level and in some other states. I hereby call for support to move the two states forward, to eschew violence and to show discipline.”

Thursday 13 September 2018

C002D5556

BUSINESS DAY

NEWS Uncertainty clouds DisCos operations as... Continued from page 1

ducing ATC&C losses.

However, the expected level of annual loss reduction has not happened. Analysts say investors who got the assets were unprepared, and investments needed to replace dilapidated assets did not materialise, as they could only meter about 10 percent of their customers three years into the privatisation exercise. “If we take into consideration that, after five years of privatization, there are still people and businesses who do not have power or enough power, common sense and public interest demands that we must not resist ordinary people, small businesses like shops and markets from seeking alternative sources of energy,” Babatunde Fashola, minister of Power, Works and Housing said in a directive to the Nigerian Electricity Regulatory Commission (NERC) in July, borne out of displeasure at DisCos’ service. The DisCos in response insist that the government has not been forthright in meeting its own obligations. “The government too has not fulfilled its own obligation in the performance agreement and it has not addressed these challenges which have impacted our operations negatively,” said an official of one of the DisCos who pleaded anonymity in order not to jeopardise future discussions with government.

The DisCos accuse the government of reneging on key areas of the performance agreement, including allowing a cost reflective tariff regime, a debt-free book upon acquiring assets by DisCos as well as the provision of N100billion annual subventions for two years to bridge the gap resulting from the inadequate retail price of electricity. Much to their displeasure, DisCos have not been allowed to raise the retail price of electricity due to political concerns that it may draw the ire of Nigerian’s who are already suffering from poor power supply. Government ministries and departments owe billions in electricity debts and DisCos accuse the regulator of being partial and unfair. Two sources in the DisCos confirm that there are moves by the Bureau of Public Enterprise (BPE) to reset the privatisation programme but they are uncertain about what this will entail. “The BPE has not officially communicated to us what they are planning to do, but we have heard them talk about resetting the whole privatisation arrangement,” said one source. Fashola had assured it is neither his intention nor that of Government to take over the business of the DisCos. He said in July, “On the contrary, it is Government’s desire to see DisCos thrive and flourish in a competitive environment,” adding,

“In the period when they are not yet ready, willing, or able, life must go on and we must find solutions and substitutes as we have seen in other sectors,” he said justifying granting licenses to minigrid operators to operate in areas allocated to DisCos. Meanwhile, NERC says it is embarking on deep reforms including carrying out forensic audit of DisCos to determine their income as well as true costs, and setting up an Information Technology system that will monitor revenue collection in real time and also show how money is spent. The regulator is proposing to tackle debts by government agencies through metering and deducting electricity bills after appropriation has been disbursed. It also recently enacted a regulation to allow private investors provide meters for customers and NERC was directed by Fashola to introduce a competition charge in a bid to assuage the fear by DisCos over losses that are likely to be incurred by the introduction of the eligible customer declaration. “This is not a time to trade blames, because there is enough to go round; rather it is a time to reiterate everybody’s responsibility and urge all of us to brace up, to do what we are obliged to do, which is to serve the people,” Fashola had said. The DisCos say they want to be carried along with whatever reforms are planned for the sector in a bid to improve power supply.

Umaru Ibrahim (2nd l), MD/CE, Nigeria Deposit Insurance Corporation (NDIC); Uche Olowu (2nd r), president and chairman of council, Chartered Institute of Bankers of Nigeria (CIBN); Seye Awojobi (l), registrar/CEO, and Deji Olarewaju, national treasurer, during the council’s visit to the NDIC Management at the Corporation’s Head Office, Abuja.

Stocks fail to rise on oil rally, worst among... Continued from page 1

-15.56 percent year to date.

Brent crude oil price touched $79.65 on Wednesday. It is up 19.1 percent year to date and 46.8 percent in the past year. The Nigerian All Share Index fell again on Wednesday by 3.46 percent, sending the index tumbling to 32,292 points, the lowest since July 2017. Other OPEC nations have fared far better than Nigeria as the correlation between their equity market and crude oil prices has held firmly this year despite an emerging market selloff which has caused some oil rich nations to struggle in recent months. Qatar Exchange Index (+17.21%) and Abu Dhabi securities market general index (+12.19%) which are the benchmark equity indices in Qatar and UnitedArabEmiratesrespectivelywere the top performing markets among OPEC top producers. Saudi Arabia which is the largest crude oil exporter among the OPEC countries saw the TaduwalAllShareIndexup5.66percent this year as the rally in crude oil prices has helped the country gradually recover from economic recession. The only other OPEC nation that recorded a decline in market returns this year is Iraq which has struggled to repair the country and boost investors’ confidence after many years of war.

The Iraq stock exchange general index has returned -5.2 percent this year. Traditionally, the Brent crude oil price has been a signal for predicting future changes in the stock market performance in Nigeria. This is because rising oil prices leads to strong economic growth in oil dependent countries. Also an oil price rally helps shore up the foreign external reserves of the oil rich countries which boosts investor’s confidence in the economy and markets. Analysts opine that the correlation between oil price and the Nigerian stock market is driven by the notion of better foreign exchange liquidity in the Nigerian market and the ease of foreign investors to leave the market at their convenience. Oil sales is the major supplier foreign exchange for the Nigerian government therefore, higher oil prices mean increased supply of dollars to its Apex bank. Unfortunately, the oil rally this year has not translated to equity gains in the Nigerian market. Investors’ confidence in Nigeria has been truncated due to increased political tensions and regulatory sanctions on some of the biggest companies in the country. Meanwhile oil prices rallied towards its highest level this year yesterday, after a drop in U.S. crude inventories by 5.3 million barrels last

week and as the prospect of the loss of Iranian supply added to concerns about balancing demand and supply. Brent crude futures rose up 58 cents on Wednesday at $79.64 a barrel and briefly broke above $80. U.S. crude futures rose $1.15, or 1.7 percent, to $70.40 a barrel. “While we aren’t explicitly forecasting Brent to rise to $100 a barrel, we see real risks of this happening. The fact that much higher supply is already needed from the likes of Saudi Arabia - and the low levels of spare capacity remaining - leave the global system highly vulnerable to any further significant outage,” Gordon Gray, HSBC’s global head of oil and gas equity research told CNBC. TheUnitedStateshasalsosurpassed Russia and Saudi Arabia to become the world’s largest crude oil producer based on preliminary estimates in the United States Energy Information Administration’s (US EIA) Short Term Energy Outlook published yesterday. According to the US EIA, in February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999.

•Continues online at www.businessdayonline.com

APC, PDP ignore gloomy economic outlook... Continued from page 1

on the political outlook of the country as predicted by a report by global banking giant HSBC

and the research arm of the The Economist, the Economic Intelligence Unit (EIU). While the PDP praised the insinuation from the report that it is likely to win the 2019 national elections, the APC condemned the reports. However, both parties were silent on their plans on how the country could overcome the gloomy economic outlook predicted by both reports no matter which party comes to power in 2019. The HSBC in its reported stated that “A second term for Buhari raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.” But in the view of the EIU, while they expect that the PDP will win the 2019 elections, they also noted that they also expect that even if the PDP wins, the new administration would struggle against the same policies like the current Buhari administration. The EIU expects whatever new administration is in place in 2019 to struggle to push through critical reforms in the oil and gas sector, exchange rate reforms, while the budget will continue to be dominated by recurrent expenditure. In reaction to the report by the HSBC and the EIU, the PDP said it confirms its position that Nigerians across board have rejected President Buhari ahead of the 2019 presidential election. The party hinged its position on what it called Buhari’s abysmal failure and deception of the All Progressives Congress (APC) in the last three years. A statement issued by Kola Ologbondiyan, PDP National Publicity Secretary noted that Nigerians are fed up with President Buhari mainly due to the incompetence and unprecedented corruption in his Presidency, resulting in the ruining of the once robust economy, with attendant mass job loss, ravaging hunger, starvation and disease as well as escalated insecurity, with documented mass killings, violation

of human rights and daily bloodletting in various parts of the country. “Moreover, the finding by the two bodies that a second term for President Buhari will worsen our nation’s economic and security woes is a position also held by Nigerians across board, hence their determination to rally on the platform of the repositioned PDP, withourarrayofverypopularPresidential aspirants, to vote him out in 2019.” But as expected, the APC issued a statement yesterday criticising The EIU and HSBC. Yekini Nabena, APC Acting National Publicity Secretary in a statement on Wednesday said the contents of the EIU and HSBC reports are nothing but the usual doomsday prophesies about the Nigerian nation which has serially proved false, deceptive, unreliable and tendentious. Nabena urged Nigerians to once again regard these ‘expert analysis and prophesies for what they are and dismiss them accordingly, and that they should remember similar prophesies and analysis about the political situation in Nigeria made some years back by similar Western institutions. He noted that, it was prophesied that the Nigerian federation would collapse in 2015, resulting in some ethnic nationalities going their separate ways but nearly four years after the doomsday prophesy, the Nigerian federation rather than collapse is waxing stronger, with the President Buhari administration striving to unite the country and consolidate positively on the strength of our diversity. “We hasten to ask why it is only negative results and implications that The Economist, HSBC and similar institutions always analyze and prophesy about Nigeria. Are they blind to all the gains and positive impact the APC administration is making in relation to ongoing economic reforms, fight against corruption, infrastructure drive, counter-insurgency and the campaign to repair our badly-eroded value system in the country?” The APC Spokesman queried that, “if the economy, security and social life of Nigerians will not improve in the so-called emerging post-Buhari administration in 2019, what is the import of this prophesy?” Sources in the business community say it would have been great if both parties stated how they will go about stimulating growth post 2019 in their response to the EIU and HSBC report.

Court documents show MTN paid taxes... Continued from page 1

government departments in Nigeria since its inception in 2001

and the figure includes an amount of N1.439 trillion paid to the federal inland revenue service, FIRS. Others include N74bn to various state boards of internal revenue in Nigeria, N482bn paid to the Nigerian communications commission (NCC) as well as N126bn paid to the Nigeria customs service and N6bn paid to various local governments as well as N37bn paid to other federal government departments such as FRCN, NBC, CAC and ITF. These facts are contained in the court papers filed by MTN in its case against the attorney general of the federation as well as the central bank of Nigeria. The court papers have been reviewed by Business Day correspondents. In seeking to establish its case, MTN said, “in the performance of its regular statutory functions, the Federal Inland Revenue Service (FIRS) has conducted tax audits on MTNN over the years, including specifically, in respect of the 2010 to 2015 years of assessment. All issues arising from such audits have been resolved, and

the unresolved issues are currently the subject of an action pending at the Tax appeal tribunal.” MTN said it has on several occasions received awards from relevant authorities and professional bodies including “Best corporate tax payer in communication”awardedtoitbyFIRS. MTN is in court to stop the attorney general of the federation and the Central Bank from pursuing allegations of illegal repatriation of dividends as well as claims of non-payment of taxes and duties brought against it by the two government agencies. The case was filed in the Nigerian high court on Monday 10, September 2018; about two weeks after the company received a letter from the Central Bank of Nigeria (CBN), asking MTN Nigeria to return $8.1 billion for illegal dividend repatriation. This was followed by a notice from Abubakar Malami, the Attorney General of Nigeria; asking MTN Nigeria to pay US $2 billion of tax relating to, inter alia, import duties, VAT and withholding taxes on foreign imports/payments over the last 10 years.

•Continues online at www.businessdayonline.com

34 BUSINESS DAY NEWS

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NIRSAL, others develop framework to cut down $8.9bn farmers’ post-harvest losses ONYINYE NWACHUKWU, Abuja

he Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), working with other major agriculture sector stakeholders in government and private sector has developed a framework that would tackle the bottlenecks in the country’s agricultural haulage system and cut down the $8.9bn estimated farmers’ post-harvest losses. The model, known as the Secured Agricultural Commodity Transport Corridor (SAT-C) is an innovative system for fixing the key challenges facing the transportation of agricultural produce and products across the country, Aliyu Abdulhameed, Managing Director, NIRSAL said on Tuesday in Abuja. NIRSAL’s objective for developing and proposing the SAT-C model is to address the bottlenecks in the movement of agricultural produce, and consequently reduce

wastages resulting from late evacuation of particularly perishable produce from the farms, Abdulhameed said, speaking during a technical session on the project. The implementation of SAT-C is envisaged to reduce the prices of food commodities, enhance food security and increase the contribution of the Agriculture Sector to Nigeria’s Gross Domestic Product. Abdulhameed said, “About $8.9 billion is reportedly lost through post-harvest process and we are talking about the entire system in terms of storage on the field, primary storage, primary processing, transportation and delivery to the end market before it goes to the retail system. “The job we have under the SAT-C model which we want to adopt is to see how we can bring down that loss which in some cases, practitioners say takes up to 70 percent of food produced and bring it down to 10 percent or less. “You can im-

agine what saving $8.9 billion losses can do to the producers in the rural areas. It means that the net gain will come back to their pockets, consumers will buy food at lower prices because the inefficiencies would have been removed.” In attendance at the session which held at NIRSAL’s head office in Abuja were representatives from the Federal Ministries of Agriculture & Rural Development, Trade & Investment and Transport; Nigeria Export Promotion Council (NEPC) and the Nigeria Investment Promotion Council (NIPC). Also present were representatives of the Joint Tax Board (JTB), the Federal Inland Revenue Service (FIRS), National Union of Road Transport Workers (NURTW), Nigerian Governors’ Forum (NGF), Association of Local Governments of Nigeria (ALGON), National Drug Law Enforcement Agency (NDLEA), Nigeria Security and Civil Defence Corps (NSCDC), UNDP, FEDex Express and others.

Thursday 13 September 2018

Prudential Zenith life insurance expands in Lagos, Abuja MICHEAL ANI

rudential plc announced its entry into the Nigerian market last year with the launch of Prudential Zenith Life Insurance and the formation of an exclusive partnership with Zenith Bank plc. In line with this agreement, the company commenced sales of life insurance in select branches of Zenith Bank in Lagos from 21st May 2018. In a further statement issued yesterday, the company announced that it will be expanding its sales operations into an additional 68 branches of Zenith Bank plc in Lagos and 40 branches in Abuja. This brings the total number of Zenith Bank branches where customers can sign up for Prudential Zenith Life’s insurance products to over 170. Prudential Zenith Life is committed to providing Nigerians with an array of affordable insurance products designed to meet their protection and savings needs. Below are additional Zenith Bank locations for Lagos

and new branches in Abuja where customers will be able to buy products: Acme Road Branch, Aromire Branch, Allen 2 Branch, Awolowo Way Branch, Olowu Branch, Oba Akran 2 Branch, Computer Village Branch, Ipaja Branch, Gowon Estate Branch, Redemption Camp Branch, Admiralty Way Branch, Lekki, Ozumba Mbadiwe 2 Branch, Adeola Odeku 2, Head Office Annex 2, Lekki Expressway 2 Branch, Ahmadu Bello Way Branch and Sanusi Fafunwa Branch. Others are: Adeyemo Alakija Branch, Idimu Branch, Dopemu Branch, South West Ikoyi, Moloney, Herbert Macauley, Ikorodu Road Branch, Lagos Central, Creek Road Branch, Abalti Barrack, Aguda, Lawanson, Itire, Lekki Expressway, Ikota Branch, Marine Road, Trinity 2, Warehouse Road 2, Apapa Road (Oyingbo), Aspamda Trade Fair Complex, Coker Branch, Old Ojo Road Branch, Trade Fair Branch, Satellite Town Branch, Isolo Road Branch, Bolade Ohodi Branch, Charity Oshodi Branch, IdiOro Branch, Matori Branch,

Palm Avenue Branch, Isolo Branch, Akute Branch. The other branches in Lagos are: Ojokoro Branch, Maryland Branch, Tejuosho Branch, Muri Okunola Branch, Ligali Ayorinde Branch, Broad Street, Yabatech, Agege Motor Road Branch, Aluminium Village Branch, Sango Ota 3 Branch, Abule-Egba Branch, Oke Arin 2, Agbara Branch, Badagry Branch, Akowonjo Branch, Idumota, Mobil Road, Int’l Airport Terminal Branch, Seme Branch. The Abuja locations are: Ahmadu Bello Way Branch, Asokoro Branch, Kubwa Branch, Maitama 2 Branch, Zuba Branch, Eagle Branch, Gwarimpa Branch, Herbvert Macaulay (Wuse IV) Branch, Jabi Branch, New Wuse Branch, Transcorp Hilton Branch, Bwari (Main) Branch, Court of Appeal Branch, Dutse Alhaji Branch, Sultan Abubakar Way Branch, Central Business District Branch, Adetokunbo Ademola Branch, Silverbird Galleria (CBD) Branch, Aminu Kano (Wuse 2) Branch, Gwagwalada Branch.

Apple launches new set of iPhone XS, XS Max, XR DIPO OLADEHINDE

L-R: Godwin Omene, chairman; Ayoshile Kuforiji-Kehinde, company secretary, and Colm Doyle, chief operating officer, all of Global Spectrum Energy Services Plc, during the company’s annual general meeting in Lagos, yesterday. Pic by Pius Okeosisi

DSS, King Ateke stop Rivers youth’s invasion of SNEPCO Base AMAKA ANAGOR-EWUZIE

massive protest planned by the Rivers State Youth Federation at the Supply Base of Shell Nigeria Exploration and Production Company (SNEPCO) in the Oil and Gas Free Zone, Onne, was stalled by the intervention of former Niger Delta warlord and the Amanyanabo of Okochiri Kingdom in Okirika Local Government Area of Rivers State, His Royal Majesty, King Ateke Tom and the director, Department of State Security Services (DSS) in the state. The protesting youth had gathered in their hundreds in Onne early Wednesday

morning and were about marching to the SNEPCO Supply Base when the royal father and DSS director intervened, prevailing on them to allow dialogue before the planned protest. Saviour Patrick, national president of the Rivers State Youth Federation, was subsequently invited into a meeting with the duo to discuss the grievances of the youths. According to Patrick, the group is protesting plan by SNEPCO to relocate its Supply Base from Onne, Rivers State to Lagos; a move which he said will lead to significant job loss in Rivers State. The outcome of the meeting was unknown as at press time. Recall that

last month, more than 1,000 youths under the aegis of the Onne Youths Council (OYC) staged a peaceful protest at the SNEPCO Supply Base, asking the company to rescind its decision to relocate the base from the free zone to the Lagos port. Philip John Tenwa, president of OYC, who led the peaceful protest, said the planned relocation will lead to the loss of more than 5,000 direct and indirect jobs. The protesters carried placards with various inscriptions condemning the planned relocation of the SNEPCO Supply Base and also requested relevant authorities to intervene in the matter.

t its annual September event, Apple introduced three new iPhone models iPhone XS, iPhone XS Max and iPhone XR. The new models are successors to last year’s iPhone X, iPhone 8 and iPhone 8 Plus. As rumors anticipated, the new models ditch the home button in favor of the iPhone X’s edge-to-edge display with face ID facial recognition replacing the touch ID fingerprint scanner. All three phones have the company’s faster A12 Bionic processors and are water resistant. Storage will start at 64GB on all models, with other options available including a 256GB option

for the top XR phone and a 512GB option for the top XS line. The iPhone XS and iPhone XS Max are the two premium iPhones and direct successors to last year’s popular iPhone X. Similar to the iPhone X, the iPhone XS has a 5.8-inch OLED display. The XS Max can be equated to a “Plus” sized device, packing a supersized 6.5-inch OLED screen into a phone that is roughly the same size as Apple’s previous Plus devices, which had 5.5-inch screens. Apple says battery life on the iPhone XS will be 30 minutes longer than the iPhone X’s, while the larger XS Max will last an hour and a half longer than the iPhone X.

NDIC calls for stronger ethical standard in banking industry HOPE MOSES-ASHIKE

he Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, has stressed the need for effective collaboration between regulators and operators in the banking system for the establishment of sound ethics and professionalism in the banking industry. He made the call during the courtesy visit by the Executive members of the Chartered Institute of Bankers (CIBN) led by the President and Chairman of Council, Uche Olowu. The NDIC Boss lamented that instances of abuse of extant regulations and ethical standards impacted negatively

on the confidence in the banking industry and the entire financial system in general. He cited the recent involvement of some deposit money banks in illegal forex transfers as a wake-up call for better corporate governance and ethical behaviour by the banks. Speaking further, the MD/ CE assured the CIBN President of his resolve to strengthen collaboration with the institute in the enforcement of good corporate governance among banks as well as the promotion of high ethical standards and professionalism. He stressed that it was the primary responsibility of regulators to uphold strict compliance with international best practices and ethical standards in order to

promote effective risk management and sound corporate governance in the banking industry. This is in line with the Corporation’s drive towards protecting depositors and enhancing public confidence in the financial system. The CIBN President and Chairman of Council, Uche Olowu attested to the recognition of the NDIC Academy by the International Association of Deposit Insurers (IADI) as a world class institution in providing capacity building for the banking industry. He said this recognition and the CIBN’s active collaboration with the Corporation to entrench ethical standards is a key driver towards effective service delivery in the industry.

Thursday 13 September 2018

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NEWS

Auditors express ‘adverse opinion’ on RT Briscoe’s going concern status BALA AUGIE

he recent verdict by external auditors of R.T. Briscoe Nigeria Plc is that the firm is technically insolvent. The beleaguered firm has been struggling, due to uncertainty bothering on its inability to settle obligations, deteriorating working capital, receding revenue, and recurring losses. The car dealer’s external auditors- KPMG professionals- expressed an “adverse opinion” on the consolidated 2017 financial statements. “In our opinion, the Company requires capital injection to enable it continue as a going concern, and as it the date of our report, the Company is yet to secure the required funding to enable it settle its outstanding obligation and to finance its working capital requirement,” said auditors at KPMG. “We believe these events or conditions, individually or collectively cast significant doubt on the Group or Company’s ability to realize its assets and settle its obligation in the ordinary course of business,” said the auditors. The basis of the adverse opinion was when the auditors said the preparation of

Traders bemoan effects of 8-day rain on businesses in Lagos SANDRA BIDEBE OKOYE

raders in Lagos have bemoaned the 8-day rain on their businesses as those who spoke to BusinessDay complained of poor sales in the last two weeks because of the downpour which usually starts from the early hours of each day till late in the evening. For eight days, Lagos, Nigeria’s commercial nerve centre, witnessed what many described as a torrential downpour that literally shut down business activities and made commuting to work for office workers a nightmare. Most businesses, especially private sector operators, are still counting their losses. Kofo Anna, a trader in Alaba-Suru market in Ajeromi-Ifelodun area of Lagos, described this year’s rain as the worst in recent time. According to her, the downpour was not heavy, but the consistent drizzling from morning till night prevented customers from coming out to buy goods; “My sympathy goes to traders that sell perishable goods,” Anna said.

the consolidation and financial statement on a going concern basis was inappropriate. “In our opinion, the consolidated separate financial statement should reflect adjustment to reduce the value of assets to their recoverable amount and to provide for any further liabilities that may arise,” added the auditors. According to the 2017 audited financial statement of RT Briscoe, total liabilities of N13.65 billion, exceeded total assets of N7.61 billion. This resulted in a negative shareholders fund of N 6.04 billion in the period under review. Negative shareholder equity on a company’s balance sheet is a red flag that should prompt potential investors to take a closer look before committing their money. RT Briscoe has negative retained earnings of N9.90 billion, which means it has recorded more losses than profit for a period of time. With a 55.40 drop in sales, 37.35 percent decline in gross profit, and a N2.67 billion finance cost, a loss after tax of N3.16 billion was unavoidable. It will be recalled that in 2016, a Federal High Court sitting in Abuja had frozen the account of RT Briscoecomprising of Briscoe Foods, Briscoe Motors, Briscoe

Properties, over indebted of N2.50 billion to Diamond Bank. Diamond Bank had extended the credit facility to the firm to help solve working capital problems, but the loans didn’t seem to salvage the local distributor’s worsening financial health. In 2016, Ford Motor Company ended its association with RT Briscoe, while reinforcing its partnership with rival Coscharis Motors Limited as the country’s sole official Ford distributor. R.T Briscoe and other car dealers like Leventis, and UAC enjoyed high patronage as automobile sales surged following the period after independence in 1960. Assembling of cars only commenced in the 1970s when Federal Government entered partnership with French company Peugeot to set up Peugeot Automobile of Nigeria (PAN) in Kaduna. But the economy slumped in the early 1980s as sectors such as manufacturing, automobile and textile industries recorded huge loss. Moreover, the severe dollar shortage brought by a precipitous drop in crude oil price that saw the country slip into its first recession in 25 years dealing a great blow to car dealers.

Visionscape files statement of defence, counterclaim to suit filed by aggrieved Ex-employees

isionscape has filed its Statement of Defence and Counterclaim to the suit filed by the aggrieved ex-employees of the Company. It has denied all allegations of unlawful termination of employment without payment of their entitlements and prayed the Court to dismiss the said Suit, which is entirely unmeritorious, vexatious and frivolous without any basis or foundation whatsoever. In addition, Visionscape has filed a counter claim for defamation. In the course of the protest and public interviews, the Defendants to the Counterclaim made various defamatory statements calculated to disparage the Counterclaimant in the estimation of right thinking members of the society. These defamatory statements made by the Defendants to Counterclaim

are to their knowledge untrue, derogatory and totally unnecessary. The said ex-employees were hired for a fixed term of ONE year only, to supervise the street sweepers within their areas of designation. However, sometime in March 2018, the scope of Visionscape’s business activities was reviewed. As such, street sweeping operations were removed from scope of work of Visionscape and same was transferred to the Lagos State Government. Consequently, the positions of the ex-employees became redundant. Their contracts were terminated in accordance with their contracts of employment. They were fully remunerated as contained in their respective contracts of employment and were given all their entitlements. No outstanding emoluments are due to them.

CHANGE OF NAME

CONFIRMATION OF NAME This is to notify the general public that Oladejo Felicia Omowum and Arinloye Felicia Omowumi on refers to same and one person. All former documents remain valid. Osun state government and general public should take note.

I, formerly known and addressed as Williams Adebola Eunice now wish to be known and addressed as Akinniyi Adebola Eunice. All former documents remain valid. General public please take note.

BUSINESS DAY

Thursday 13 September 2018

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BUSINESS DAY

FINANCIAL TIMES

Trade wars: China fears an emerging united front

Dyson electric car plant site complicated by trade war Page A3

Page A4

World Business Newspaper

EU parliament votes to rebuke Hungary Forint falls on risk of sanctions against Budapest over alleged breaches of EU law MICHAEL PEEL, MEHREEN KHAN AND VALERIE HOPKINS

ungary’s Viktor Orban suffered a stinging rebuke from his European political allies on Wednesday when the EU’s parliament voted for the first time to censure his country over possible breaches of bloc rules and values. An official tally showed 115 EPP members voted against Mr Orban, with 57 backing him and 28 abstaining. The backers and abstainers included many central European MEPs, plus a sprinkling from big western European countries including Germany, France, Spain and Italy. Angela Merkel, the German chancellor, and Jean-Claude Juncker, European Commission president, also weighed in on Wednesday, warning against growing nationalism — and a deterioration in the rule of law that some see as an existential threat to the EU. Heather Grabbe, director of the Open Society European Policy Institute, said MEPs across the political spectrum had taken a “historic stand in defending the EU’s democratic values and the rights of its citizens”. George Soros, the Open Society institute’s founder, has been a target of Mr Orban’s government as it has tightened control since his return to power in 2010. MEPs voted by 448 to 197 to back a report to the parliament, written by a Dutch Green MEP, that accused Hungary of threatening the rule of law by hampering press and academic freedoms, cracking down on NGO funding and denying rights to minorities and migrants. The ballot cleared the two-thirds majority needed to trigger further action against Hungary, meaning that it was supported by a significant num-

ber of European People’s party MEPs — the largest group in the parliament. In a sign of the changing political climate, Manfred Weber, the German head of the EPP group, said before the vote that he would back action against Hungary. Mr Weber has previously been cordial towards Mr Orban, congratulating the Hungarian premier publicly in April for his landslide reelection win. Mr Orban is facing a separate but related battle with some EPP members who want to expel him from the group. Zsuzsanna Vegh, an associate researcher at the European Council on Foreign Relations think-tank, said the parliament vote would not end “democratic backsliding” in Hungary — but it was a watershed moment because of the rift it opened within European conservative politics. “However, he tries to frame it in practical terms, the loss of the vote and the fact that he lost the backing of EPP, allies with whom he has been negotiating and working and who have been protecting him for the last eight years, is a failure for the prime minister and his strategy,” Ms Vegh said. Earlier on Wednesday, Mr Juncker used his annual State of the Union address to warn that the commission would “resist any attack on the rule of law” and was “very concerned by developments in some of our member states”. In a separate speech, Ms Merkel attacked nationalism and said European elections next May would turn on how Europe handled stark divisions in areas such as migration — opposition to which is a crucial plank of Mr Orban’s appeal. “It’s very clear — if Europe simply says that we’ll isolate ourselves, and we don’t deal with the things that happen in our region, then that’s going to end badly,” Ms Merkel said.

Putin says men accused of Skripal attack are ‘civilians’ Russian president says men not ‘criminal’ and urges them to tell their stories to the media

HENRY FOY AND DAVID BOND

ladimir Putin said the two men accused by the UK of being Russian spies who staged a nerve agent attack in Salisbury were ordinary citizens with “nothing criminal” about them, as he dismissed Britain’s allegations against them. British authorities last week said Alexander Petrov and Ruslan Boshirov were agents of Russia’s GRU military intelligence agency and charged the two men with the

March attack on former double agent Sergei Skripal. Moscow has always denied playing any role in the incident, which inadvertently killed a British woman. On Wednesday, Mr Putin told an economic conference in Vladivostok that Russian officials had found the two men, who Britain said were using aliases, and urged them to tell their stories to the media. “We of course checked who these people are. We know who Continues on page A2

EU parliament backs overhaul of digital copyright rules Draft plans would force internet companies to pre-filter uploaded content MEHREEN KHAN

he European Parliament has backed draft proposals that could require internet platforms like YouTube and Facebook to pre-filter uploaded videos, images and music, bringing to a close one of the fiercest lobbying wars in Brussels over a revamp of copyright rules. MEPs in Strasbourg on Wednesday voted in favour of updating rules designed to give authors, publishers and musicians more rights to get paid for their content in the digital age. The vote — which was approved by 438 votes to 226 — paves the way for MEPs to open negotiations with EU governments about a final text to update copyright rules. The vote came after lawmakers

decided in June to give themselves more time to come up with a position following a fierce lobbying battle that has pitted content creators — like Sir Paul McCartney — against internet freedom campaigners, such as Wikipedia founder Jimmy Wales. Under a re-drafted version of the rules, the smallest platforms will be excluded from obligations to prefilter user uploaded content. Julia Reda, a German MEP and critic of the filtering obligations, said the new version made only “cosmetic changes”. “This law leaves sites and apps no choice but to install error-prone upload filters” said Ms Reda. “Anything we want to publish will need to first be approved by these filters, and perfectly legal content like parodies and memes will be caught in the

crosshairs.” Another controversial part of the text — called a neighbouring right — will force Google and others to pay news websites for hosting hyperlinks to their content. Critics say it is a “link tax”. Axel Voss, a centre-right German MEP in charge of finding a compromise in parliament, said it would help save Europe’s creative industries and media organisations. “I am convinced that once the dust has settled, the internet will be as free as it is today, creators and journalists will be earning a fairer share of the revenues generated by their works, and we will be wondering what all the fuss was about,” he said. The rule changes will only be finalised after they have been agreed with EU governments.

Juncker vows to turn euro into reserve currency to rival US dollar Plan comes amid international concern over Trump’s use of dollar as sanctions weapon MEHREEN KHAN AND JIM BRUNSDEN

ean-Claude Juncker has vowed to turn the euro into a global reserve currency that could rival the dollar as part of the EU’s drive to reduce its financial dependence on the US. In his last “State of the Union” speech to MEPs in Strasbourg on Wednesday, the president of the European Commission said it was an “aberration” that the EU paid for more than 80 per cent of its energy imports in US dollars despite only 2 per cent of imports coming from the US. Most of the dollar-denominated imports are from Russia and the Gulf states. “We will have to change that. The euro must become the active instrument of a new sovereign Europe”, said Mr Juncker, whose five-year tenure as commission president is due to end next year. He also called on member states to end divisions that hampered the EU’s ability to pull its collective

weight on the international stage. “It is time to put an end to the state of a sorry spectacle of a divided Europe,” Mr Juncker said. “Our continent deserves better”. A senior EU official said the commission’s initiatives would include encouraging the European Central Bank to promote the use of the single currency. The move reflects Europe’s concerns at how US President Donald Trump has moved to weaponise the dollar as an instrument of foreign policy to punish American rivals. The White House has threatened European companies with exclusion from the US financial system for defying tough new sanctions against Iran. Some EU diplomats say the rift over the 2015 Iranian nuclear deal, which the US has abandoned but which the Europeans want to preserve, is a “salutary lesson” about the dominance of the dollar. The EU said this year it would switch from dollars to euros to pay for

Iranian oil imports. Germany’s foreign minister proposed last month that the Europeans should set up a rival international payments system to preserve the nuclear accord with Tehran. It may be difficult to promote the euro in a dollar-dominated global economy. The ECB has maintained that it is “neutral” on the single currency’s international role as a reserve currency. But European diplomats said the Bank of England’s record holdings of its foreign currency reserves in euros were a sign of the growing confidence global investors have in the single currency. “The euro cannot be neutral any more,” added the senior EU official. Mr Juncker’s push on the euro is part of a wider drive to get EU governments to face the international community as a single bloc, as he warns that the current requirement for unanimity in foreign policy decisionmaking is undermining Europe’s credibility.

BUSINESS DAY

C002D5556 Thursday 13 September 2018

NATIONAL NEWS

FT Putin says men accused of Skripal attack are....

Christine Lagarde rules herself out of race for top jobs in

Continued from page A1 they are, we found them,” Mr Putin said, in his first comments since Britain charged the men. “There’s nothing particularly even criminal about them, I assure you. We’ll see soon. “I hope they will come out themselves and speak about themselves. It will be better for everyone,” he added. “They are civilians of course. I would like to appeal to them so that they hear us today. They will come somewhere, to you, the mass media.” A spokesman for British prime minister Theresa May dismissed Mr Putin’s comments and said the UK and its allies stood by the assertion that the two suspects were Russian intelligence agents. “We have repeatedly asked Russia to account for what happened in Salisbury in March and they have replied with obfuscation and lies. I can see nothing to suggest that has changed,” he said The Russian government has previously responded to the British charges the GRU was involved by accusing the UK of “manipulating information” and demanded it agree to a joint investigation. Mrs May has said the attack “was almost certainly approved . . . at a senior level of the Russian state”. Mr Putin’s matter-of-fact statement mirrors the response to the British allegations by Russian media outlets in the week since the results of the UK’s investigation were published, and bears similarities to the aftermath of the killing of Alexander Litvinenko, a former Russian spy assassinated in London in 2006. Andrei Lugovoi, a former KGB agent who the UK accused of killing Mr Litvinenko, was made a member of parliament a few months after Britain charged him with the crime, and he frequently appears on national television and news outlets to discuss UKRussia relations, including the Skripal case. On Wednesday Russia gave a briefing on Salisbury to 50 other member countries of the international chemical weapons watchdog the OPCW at The Hague, using the forum to once again dismiss the UK’s claims that Moscow was behind the Skripal attack as “absolutely absurd”. Speaking to TV reporters after the meeting Russia’s representative to the OPCW, Alexander Shulgin, also echoed Mr Putin’s invitation to the two suspects last week charged by Britain to come forward to tell their version of events. “Let’s see what will be their narrative,” said Mr Shulgin. “They are invited to come out then we will see and we will judge. This will be very useful to show Russia has nothing to reproach itself. “The question is still the same — to whom does the crime benefit? It’s absolutely absurd to think Russia is staging some kind of operation. It’s surrealistic. “We hope the British will give up this megaphone diplomacy. The main evidence they are using is not working and we invited everyone’s attention [at the meeting] to the many discrepancies in the UK’s position.”

IMF head dismisses speculation over European Commission or European Central Bank roles

JAMES POLITI, SAM FLEMING AND ALEX BARKER

Jeff Sessions: Trump’s loyal aide and punching bag Attorney-general draws president’s ire despite scrupulously enacting his agenda KADHIM SHUBBER

eff Sessions was once part of Donald Trump’s inner circle, as the first senator to endorse the property mogul’s campaign when few others thought he could win the White House. But as attorneygeneral, he has been a punching bag for the US president. Their relationship has been remarkable for the public nature of their largely one-sided feud. Although Mr Trump has denied deriding Mr Sessions as “Mr Magoo” or describing him as “mentally retarded” and a “dumb southerner” as was claimed in Fear, a new book about the president by Bob Woodward, he has made clear that he has no time for the man who once stood firmly by his side. Mr Trump has hounded Mr Sessions on Twitter for recusing himself from the Russia investigation, a move he believes led to the appointment of Robert Mueller, the special counsel, in May 2017. At the time, Mr Sessions tried to resign after being berated by the president, according to Reince Priebus, the former White House chief of

staff, who recounted the episode in a book by author Chris Whipple. The president has been blunt: if he had known how things would turn out, he would have chosen a different attorney-general. The rift has come to define Mr Sessions’ time in office, even as he delivers the president’s conservative policies on immigration, policing and religious rights. Although he has largely suffered the criticisms in silence, he has twice taken the unusual position of publicly rebuking the man who could fire him at any moment, first in February and then again last month. “He’s basically said, I’m going to do my job until the president fires me. There’s something admirable about that given the challenges he’s faced,” said Cameron Smith, who served as counsel to Mr Sessions on the Senate judiciary committee. Talk of Mr Sessions’ dismissal has renewed in recent weeks as the midterm elections in November approach. Last month, in an interview with Bloomberg, Mr Trump declined to say that Mr Sessions would be in his job after November. In addition, the wall of Repub-

lican support for the attorneygeneral in the Senate, which has been a formidable obstacle to any attempt by the president to replace him, has begun to crack. Senators Lindsey Graham and Chuck Grassley have said they would be open to confirming Mr Sessions’ successor. If he departs, the attorney-general will leave behind a legacy that is emblematic of the compromise Republicans have made in working with Mr Trump. He enacted the president’s policies but also attempted to defend an institution under near daily attack by Mr Trump. “He thinks it’s important to defend the institution he leads,” said Ian Prior, the former principal deputy director of public affairs at the justice department under Mr Sessions. Mr Sessions and Mr Trump remain closely aligned on policy matters, particularly immigration. A sign of Mr Sessions’ influence is the role of Stephen Miller, a protégé of the attorney-general who has driven the administration’s hardline immigration stance as one of the longest-serving White House aides in the Trump administration.

Tech start-ups bear the brunt of US tariffs on China Hardware entrepreneurs say levies of up to 25% could be ‘death knell’ for inventions RICHARD WATERS

he price of a new “smart home” controller from US start-up Brilliant just went up $50 — even before it went on sale. The three-year old company joined the race to create intelligent home devices last week, launching a wall panel that combines a light switch with things such as music controls and a microphone to talk to Amazon’s Alexa smart speaker. The White House’s latest round of threatened tariffs on imports from China — where the device is manufactured — led the company to push the price up to $299 at the last minute, to absorb the expected costs. Brilliant hopes the typical customer will buy five of the panels for their home, says Aaron Emigh, chief executive, adding $250 to the cost of an installation. In the technology industry, hardware start-ups face some of the longest odds for success. Until they reach high enough volumes to strike better deals with suppliers and support the costs of brand marketing it is hard to make the economics work, and profit margins are notoriously low.

“When you’re in hardware, a 25 per cent tariff can be a death knell to your business,” says Nate Kelly, a supply chain expert who now heads TrackR, a company that makes Bluetooth devices. The lack of a financial cushion or a diversified set of products means many companies will not be able to “ride this out for six months or a year”, he said. The White House said earlier this summer that it plans to slap US tariffs of up to 25 per cent on a list of $200bn worth of annual imports from China. With the formal comment period over, the new levies could come any day. Many consumer electronic products are on the list, including those in new markets such as smart home devices and “wearable” electronics, like smartwatches. The impact is not limited to startups. At the end of last week, Apple said that it expected to pass on import levies on products such as its AirPod headphones and Home smart speaker to consumers — a warning that brought a tweeted riposte from Donald Trump, who told the company it should shift production to the US instead.

But start-ups are likely to be hit hardest, whether their products are made in China or they import components and do the final assembly work in the US. “Your resistor or diode is already costing you 10 times what you’d pay if you were Apple,” said Mr Kelly. Slapping a tariff on these higher prices will add to the pain, he said. Companies such as Brilliant face the extra challenge of trying to price their products in a way that will generate demand in new markets that have yet to establish themselves. For customers of these new gadgets, “it’s less of an economic decision and more of an emotional one”, said Philip Winter, chief executive of Nebia, a start-up that makes a technologically advanced $400 shower designed to save water. Early adopters may not be especially price sensitive, he said, but breaking into the mass market usually involves cutting the price, something that is now much harder. He estimates his company’s total bill for materials has already increased 5-10 per cent this year because of US tariffs on the aluminium it imports.

hristine Lagarde, the managing director of the International Monetary Fund, has ruled herself out of the race to secure a top job in Europe next year, saying she wanted to focus on her current job rather than lead either the European Commission or the European Central Bank. In an interview with the Financial Times, Ms Lagarde said she was a “bit annoyed and fed up” with the frenzied speculation around the successors to JeanClaude Juncker, president of the commission, and Mario Draghi, the ECB president — “where you are one of the potentials . . . and supported by so and so”. “No, no, no no, no no . . . I am not interested in any of the European — ECB, commission, da da da da da — jobs, no,” Ms Lagarde said. “I have a very important job here that I want to do and I’m not going to leave that beautiful vessel when there might be rough waters out there.” Europe is preparing for a comprehensive reshuffle of its top jobs next year, which may see new presidents appointed at almost all the main EU institutions. As speculation has mounted in Brussels, Ms Lagarde had been tipped as a possible contender to either replace Mr Juncker or Mr Draghi, even though she has no central banking experience. Ms Lagarde’s champions see her as an accomplished, levelheaded politician with a proven record of managing big institutions and cutting deals at the highest levels of EU politics. She would also be the first woman appointed to head the commission or the ECB. During her time as French finance minister and as IMF chief, Ms Lagarde built a close relationship with Angela Merkel, and was asked by the German chancellor in 2014 whether she would be interested in the commission job, said people familiar with the conversation. But this time around EU officials and diplomats have doubted whether Ms Lagarde, who served in the centre-right government of Nicolas Sarkozy, would secure the political support of French president Emmanuel Macron. The race for the commission is pitting Manfred Weber, the head of the centre-right European People’s party, against potential rivals such as Alex Stubb, the former Finnish prime minister, and Michel Barnier, the EU’s chief Brexit negotiator. In the race for the ECB post, two Frenchmen are leading contenders. One is Benoît Coeuré, a member of the ECB’s executive board, and the other is François Villeroy de Galhau, the governor of the Bank of France. But other candidates are also in the fray, including Klaas Knot, the president of the central bank of the Netherlands, and Philip Lane, president of Ireland’s central bank.

Thursday 13 September 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Dyson electric car plant site complicated by trade war Global tensions make decision ‘a lot more turbulent’, says chief executive Jim Rowan EMILY FENG AND PETER CAMPBELL

he chief executive of Dyson has warned that the global trade war will complicate its decision where to locate the company’s first electric vehicle plant. The group has shortlisted Malaysia and Singapore, where it already has production facilities, as well as the UK or China for the site as part of its £2bn project to break into the global car industry. However, global trade tensions have made the final decision on location and the sourcing of parts “a lot more turbulent”, Jim Rowan, Dyson’s global chief executive, told the Financial Times. About 35 per cent of Dyson’s components currently come from China, but it assembles its products in south-east Asian countries such as Malaysia and the Philippines. Mr Rowan said China would continue to be a major source of components for the car project, but added: “On the final assembly side, we’re looking at all the different options.” He added: “It’s actually pretty complicated because you have got to look at what’s the end market, what are the current tariffs, where do you think those tariffs are going in terms of import and export duties, where can you get scale.” Dyson’s warning comes days after Chinese carmaker Geely postponed a $30bn initial public offering of Volvo Cars, citing uncertainties flowing from the global trading environment. Trade relations between the US, China and the EU have shifted, with the US threatening to impose $200bn of tariffs on Chinese goods, on top of $50bn already in place. China has lowered its barriers to imported vehicles from 25 per cent to 15 per cent, although it has threatened to raise tariffs on cars from the US to a punitive 40 per cent.

Hakan Samuelsson, chief executive of Volvo Cars, this week said the outcome of the trade conflict was “really difficult to predict”. There has been fevered speculation over the location of Dyson’s potential automotive plant. Last month the company applied for planning permission to develop several testing tracks in Britain, at the site where the group is currently engineering the line of vehicles. But Dyson has also stepped up its presence in China, as it increases focus on the market that it expects to dominate the sales, and potentially production, of the cars. On Wednesday, the British engineering group launched three new home devices in Beijing, the first time a global product launch was held in China. “It’s a bit of a changing of the guard,” said Tom Bennett, Asia research and development head, noting that Japan has traditionally been the company’s dominant focus in east Asia. China contributed more than a quarter of the company’s revenue growth in 2017, putting it on track to eclipse Japan as Dyson’s secondbiggest market after the US, according to the company. Last May, Dyson opened its first China R&D centre in Shanghai, where nearly 50 engineers adapt Dyson product designs for the China market. The products launched on Wednesday are the first concrete results from the new lab: a purifying heater and robot vacuum are equipped with Mandarin language voice recognition software developed in Shanghai. The product launch is Dyson’s most aggressive move in China yet as it looks to take on domestic competitors such as Xiaomi, the Chinese tech company known for affordably priced consumer devices ranging from smartphones to water filtration systems.

Macy’s to hire 80,000 seasonal workers as it sees ‘strong’ holiday season Markets will face a much tougher conditions as the global economy slows MAMTA BADKAR

acy’s on Wednesday said it plans to hire 80,000 seasonal staff members, boosting hiring for its online operations, as it expects a “strong” holiday shopping season, even as Wall Street has reined in expectations for department stores in the current quarter. The Cincinnati-based department store said it plans to hire these workers for positions at its Macy’s and Bloomingdale’s stores, call centres, distribution centres and online fulfilment centres. The number was the same as the 80,000 it announced in 2017, although the company added an additional 7,000 workers in December due to strong traffic in stores. “Macy’s anticipates a strong and successful holiday shopping

season,” the company said. The company on Wednesday said about 23,500, or nearly a third of these workers, would be in its so-called direct-to-consumer fulfilment facilities, up from 18,000 last year, suggesting it expects growth in its ecommerce operations. Macy’s and other department stores have invested heavily in their online businesses to stave off competition from Amazon and other online rivals. Macy’s chief executive Jeffrey Gennette cited “strong consumer sentiment and good spending across all of retail” when the department store chain delivered a rosier outlook last month. However, Wall Street soured on the stock following its earnings results, which had jumped 66 per cent year-to-date in the run-up. Macy’s shares climbed as much as 2.3 per cent on Wednesday before trimming those gains to trade flat.

Dyson’s chief executive Jim Rowan said China would continue to be a major source of components for the car project © Reuters

Mercuria to provide $650m financing for Minnesota iron ore project NEIL HUME

ommodity trader Mercuria has thrown its weight behind plans to revive a large iron ore project that sits on one of the richest deposits of the steelmaking ingredient in North America. The Swiss-based group has reached an initial agreement to provide a $650m financing package to Mesabi Metallics Company, which is hoping to complete a 7m tonne a year mine-to-pellet plant project outside Hibbing, Minnesota — the boyhood home of Bob Dylan. In return, Mercuria would have

an option to buy a majority stake in the Mesabi, according to people with knowledge of the agreement. The deal marks the latest move by Mercuria to use its financial firepower to support cash strapped producers. It is also a bet that President Donald Trump will succeed with his plans to revive the US steel industry. The mine and processing facility on Minnesota’s Mesabi iron ore range was declared bankrupt in 2016 by its then owner Essar, the Indian conglomerate, which had spent nearly $2bn on developing the project. It was bought out of a bank-

ruptcy court last year by Chippewa Capital Partners and renamed Mesabi Metallics. Mercuria, one of the world’s largest independent oil traders, has in recent years pushed deeper in financial transactions and structuring as margins in its core commodity trading business have come under pressure. It has provided funds to Noble Group, the struggling commodity trader, and more recently Aegean Marine Petroleum, a troubled fuel oil company. Mercuria expects to complete the investment in the fourth quarter of this year, the people said.

Five factors to watch as Brent oil hits $80 a barrel Hurricane Florence is only one of many factors that could cause jitters ANJLI RAVAL

rent crude has surpassed the $80 a barrel mark, close to this year’s highs, with traders weighing impending sanctions on Iran’s energy sector, lower forecasts for shale production and a big hurricane approaching the US east coast. “Those of a bullish disposition currently have no shortage of ammunition. Yet they have been given a further helping hand by Mother Nature,” said Stephen Brennock at London-based broker PVM. Brent, the international benchmark, rose 99 cents to $80.07 a barrel on Wednesday — the highest since the intraday peak of $80.50 a barrel in May. US marker West Texas Intermediate increased $1.67 a barrel to $70.96. 1. Iran’s oil exports in focus Crude supplies from Iran are expected to take a hit as US sanctions come into effect in November, tightening the global oil market in spite of calls from US president Donald Trump to international producers to increase output. “Iran is increasingly becoming the preoccupation of the crude market,” said analysts at JBC Energy. An expected squeeze on crude flows was already taking shape, they said, with Iran storing crude onshore as well as on vessels. Alexander Novak, Russia’s energy minister, on Wednesday

warned that the sanctions would create “huge uncertainty” for the market, with it still unclear how many big consumers would curb their purchases to meet US demands. S outh Korea has already dropped imports to zero. Buyers in India and China, meanwhile, have begun to reduce their purchases even as both countries have said they will not submit to orders by the Trump administration. Although Opec kingpin Saudi Arabia and its partner outside of the cartel, Russia, have said they will lead increases in production to offset any losses from Iran, whose domestic production has been falling, the ramp-up has been slower than anticipated. Mr Trump has been keen to keep crude prices in check ahead of the midterm elections, fearful of any impact on domestic fuel prices. The US has also offered 11m barrels of oil held in strategic reserves for sale on to the market. 2. US shale production growth to slow Crude oil production in the US is expected to grow at a slower than anticipated rate in 2019, which comes at a time that questions are mounting about available global supplies. US crude output growth is forecast to moderate to 840,000 barrels a day, the US energy department said, down from a previous estimate of more than

1m b/d. Drilling in the Permian basin is slowing amid pipeline capacity constraints. Bullish sentiment was also fuelled by data from the American Petroleum Institute this week that showed a 8.6m barrel drawdown in US crude stockpiles versus forecasts for an 805,000 barrel decline. The US energy department on Wednesday also reported a much larger than expected draw in crude stockpiles. Inventories fell by 5.3m barrels compared to a forecast for a fall of 805,000 b/d. Hurricane Florence threatens US east coast 3. Hurricane Florence nears US coast Further propelling prices, is a big hurricane that is strengthening and approaching the coast of North Carolina or South Carolina, with more than 1.5m people ordered to evacuate their homes. Amid storm surge warnings, east coast petrol prices are expected to rise temporarily as motorists fill up their tanks in anticipation of the hurricane. But analysts say demand, in fact, could drop if fewer people are driving their cars. Anxieties that Florence could impact the Colonial Pipeline, which runs through the Carolinas and sends crude products to the north-east, have been dismissed, with analysts saying that it is deep underground and so will probably remain unaffected.

BUSINESS DAY

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Thursday 13 September 2018

ANALYSIS Jamie Dimon hands over more responsibilities to top lieutenants ‘I’m more like the coach now,’ says Wall Street’s longest-serving chief executive LAURA NOONAN AND PATRICK JENKINS

J Trade wars: China fears an emerging united front Beijing welcomed American disputes with Tokyo and Brussels but now faces isolation as G7 allies begin to co-ordinate policy TOM MITCHELL

s another fruitless round of China-US talks to avert a trade war wrapped up in Washington on August 23, foreign officials were arriving in the US capital for a potentially far more consequential meeting the next day. The occasion was an unusual trilateral forum that brings together trade officials from the US, EU and Japan. Their mission: to combat the allegedly unfair trading practices by unspecified “third countries”. When US trade representative Robert Lighthizer and his EU and Japanese counterparts announced their initiative on the sidelines of last December’s World Trade Organization meeting in Buenos Aires, they did not single out any one country for fostering allegedly “unfair competitive conditions caused by large market-distorting subsidies and state-owned enterprises, forced technology transfer and local content requirements”. But there was little doubt about the identity of the elephant in the room. As EU trade commissioner Cecilia Malmstrom said at the time: “There’s no secret that we think China is a big sinner here.” The trilateral gathering represents a potentially critical shift in the confrontation between Washington and Beijing. Chinese Communist party and government officials are confident they can cope with a fullscale trade war with the US, which increasingly feels like a foregone conclusion in Beijing. On Saturday, Chinese officials woke up to President Donald Trump’s threat to tax all Chinese exports to the US — worth more than $500bn last year — within months. On Sunday, they were greeted by a presidential tweet admonishing Apple to repatriate its China-based supply chain. What really keeps them up at night, however, is a potential coordinated assault by the Trump administration, EU and Japan on their unique model of Chinese “state capitalism” that has been integral to the country’s economic success over the past 40 years. In recent months the EU and Japan have joined forces with the US in WTO complaints against “forced technology transfers” in China through mandatory joint venture structures with local partners. “No country should require or pressure technology transfer from foreign companies to domestic companies through the use of joint venture requirements, foreign equity limitations, administrative review and licensing processes,” Mr Lighthizer, Ms Malmstrom and Hiroshige

Seko, Japan’s minster for economy, trade and industry, said in a joint statement in May. After a period when Mr Trump picked trade fights with any number of countries, Beijing worries that he has stumbled on to a more effective trade strategy that involves isolating China. “These sorts of moves make the Chinese very nervous,” says Eswar Prasad, a former head of the IMF’s China division who now teaches at Cornell University. Chart showing growing US trade deficit with China In private conversations, Beijing officials say they could not believe their luck when the US president this year simultaneously initiated trade actions against China, the EU, Canada, Mexico, Japan and South Korea. Mr Trump’s initial scattergun approach took a lot of heat off Beijing, which is supported by Brussels and Tokyo in a WTO suit challenging US tariffs on imported steel and aluminium. But since the now famous photo of Mr Trump squaring off against his G7 allies at their June summit in Ottawa, there have been signs that three of the world’s four largest trading powers may indeed combine forces to pressure China. In addition to Mr Lighthizer’s talks with Brussels and Tokyo, the Trump administration is working to solidify its recent trade truces with the EU and Mexico, and agree on a revamped Nafta pact with Canada. Many are sceptical that the US president will succeed in training his fire on China alone. “For that to happen, Trump would have to behave in a very different way,” says one senior European banker. “The Europeans don’t trust him — and they shouldn’t.” His recent threat to leave the WTO, the banker notes, is an example of the kind of erratic behaviour that could rupture any alliance with the EU and Japan, which prefer to work through the multilateral trading body. Mr Trump’s frenetic summer trade talks with the EU, China, Mexico and Canada have nonetheless added to the pressures building on President Xi Jinping, who a year ago was coasting towards a Chinese Communist party congress that confirmed his status as the country’s most powerful leader. “In 2017 the mood in Beijing was, ‘everything is going great’,” says one person who has met Liu He, Mr Xi’s economic tsar, and other top Chinese officials in recent weeks. “This spring they thought Trump’s tariff threats were a road bump. Now they know it’s not a road bump and even if Trump dies tomorrow, this problem is not going away. They also

realise they have trade problems with Europe.” When European Commission president Jean-Claude Juncker travelled to Beijing for a bilateral summit in July, he bluntly told premier Li Keqiang that he shared many of Mr Trump and Mr Lighthizer’s concerns about Chinese state capitalism. “His message to Li was we don’t necessarily like Trump’s methods, but it’s not like he’s imagining all this stuff,” says one person who sat in on a meeting between the two men. For its part, Tokyo has been pleasantly surprised by a Beijing-initiated rapprochement over the past year. According to one Japanese official, a recent spate of Chinese overtures are all “thanks to Trump”. The official adds: “Trump’s trade policies have been influencing China’s diplomatic stance.” But while prime minister Shinzo Abe is happy to seize on any opportunity to reduce tensions with Beijing, he is far more concerned about maintaining good relations with his US military ally. “China wants us to join their straightforward criticism of Trump’s trade policies, which we are of course very concerned about,” the official adds. “But we are also basically in total agreement with Trump’s viewpoints regarding market access and other [trade and investment] issues in China.” Whether the Chinese leadership is ultimately confronted by the US alone, or by the US, EU and Japan, is important for Beijing, especially as it continues a campaign against risky financial practices that have slowed investment and economic growth. Yet the Chinese have also begun to conclude that there is much more to Mr Trump’s trade threats than empty bluster. Mr Xi and Mr Liu have already been caught off guard. After more than a year of playing down the risks, the two men finally woke up in May to the fact that Mr Trump’s repeated threats to penalise China for alleged intellectual property theft and other unfair trade practices were not theatre. That month the US president contradicted his Treasury secretary Steven Mnuchin, who said a trade war between the two countries had been put “on hold”, by announcing his decision to impose punitive tariffs on $34bn-worth of Chinese industrial exports in early July. Mr Trump is now poised to authorise a third round of tariffs that will take the total value of affected Chinese goods to $250bn — about half of Beijing’s total annual exports to the US. “The Chinese should be worried about Trump,” says Steve Bannon, Mr Trump’s former political adviser. “They’ve never had to confront anything like this.”

amie Dimon is handing over more of the day-to-day running of JPMorgan Chase to his two most senior executives, in the clearest sign yet that he intends to step down when his contract ends in five years. JPMorgan named two co-presidents in January — Daniel Pinto, who runs the bank’s corporate and investment bank, and Gordon Smith, who heads its consumer banking arm — when Mr Dimon agreed to remain at the helm. Asked if he was leaving more of the bank’s management to Mr Pinto and Mr Smith, Mr Dimon, now 62 and Wall Street’s longestserving bank chief executive, told the Financial Times: “There’s a little truth to that.” “When you have Tom Bradys on the field, you let them be the quarterback and you can be the coach,” he said, referring to one of the two American football players to win five Super Bowl championships. “In many cases, I’m more like the coach now. That’s totally appropriate.” Mr Pinto, who is based in London, said: “Jamie is a great CEO but he’s human. He has a lot of external engagements, and he travels a lot. So essentially now we share among the three of us.” Mr Smith said he goes to Mr Dimon on issues “far more often than he’ll go to me”. “He understands and follows details, he gives feedback, and he checks and verifies things,” said Mr Smith. “It’s not a micro-management approach but if things aren’t

going well, he will be all over the problem, all over you — trying to fix whatever isn’t working.” Both Mr Smith, 60, and Mr Pinto, 55, are seen as potential successors to Mr Dimon, along with chief financial officer Marianne Lake, 49, who some now argue is the frontrunner, thanks to her youth and stature among investors. Several other potential successors — including Bill Winters, Standard Chartered chief executive, and Jes Staley, Barclays chief executive — have left JPMorgan during Mr Dimon’s 13-year reign. “Some we asked to leave, some I didn’t want to leave,” Mr Dimon told the FT in a wide-ranging interview to mark the 10th anniversary of the financial crisis. “Some wanted to try something else. Succession is 100 per cent up to the board, and the board wouldn’t allow me to force out a succession candidate.” Reflecting on the bank’s crisistime decisions, Mr Dimon said JPMorgan would “act for the good of the system” if asked again, despite his regrets over his bank’s crisis-time rescue of Bear Stearns, which resulted in JPMorgan paying big fines. “We took a lot of actions that had nothing to do with profit motive. We felt a responsibility to help the system,” he said. “We lent more than $80bn to Lehman after bankruptcy. The collateral was worth more than that, and we went through that collateral every single day; if positions lost money, we would be an unsecured creditor to Lehman.” The bank ultimately got its

Nascent signs of stability in Argentina lure bargain hunters Investors spot opportunities, despite the risk of a recession COLBY SMITH AND ROBIN WIGGLESWORTH

ust days after panic swept through Argentine financial markets, some investors see pockets of opportunity but they also face the difficulty of trading in an environment distinguished by the evaporation of price liquidity. Against this backdrop even small trades can move market prices sharply, making any substantial changes to a portfolio difficult to implement. While Argentine markets and many areas of emerging markets are never the most liquid, the dismal trading conditions have once again reminded fund managers that they can no longer rely on regulation-constrained banks to ensure markets function smoothly. This sudden deterioration of “liquidity”— a term for the tradeability of markets — has been a phenomenon across EMs this summer, according to Gene Frieda, a Pimco strategist. “We’ve had a series of idiosyncratic shocks, but the surprise is the magnitude of the moves.” Still, there are nascent signs of stability in the wake of the Argentine government’s announcement that it aims to eliminate its primary fiscal deficit by next year — the

gap between spending and income before taking debt servicing into account. The IMF’s promise to revise its $50bn aid programme swiftly has also helped stabilise markets. The Argentine peso has steadied around 37 per US dollar, the Merval stock market has bounced off its lows, and the dollar-denominated 10-year government bond yield has fallen from a high of nearly 11 per cent to about 10 per cent. Even the 100-year “century bond” issued at the peak of investor enthusiasm for Argentina in 2017 has found a floor above 70 cents, equating to a yield of 10 per cent. Hence some investors are looking for bargains. Hence some investors are looking for bargains. “I view this not only as a buying opportunity, but as the best buying opportunity in 16 years,” Jan Dehn, global head of research at asset manager Ashmore, said with an eye to Argentina’s 2002 devaluation. He cautions that the peso might take another leg down, given a recession is all but guaranteed to hit Argentina’s economy this year, but argues there has been an overselling of riskier EMs due to a misguided perception that the US dollar is set to strengthen indefinitely.

Politics & Policy Thursday 13 September 2018

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BUSINESS DAY

Benue Assembly suspends 3 council chairmen BENJAMIN AGESAN, Makurdi

enue State House of Assembly on Wednesday suspended three executive Chairmen of Local Government Councils (LGC) for misappropriation of funds and other offences. The State Assembly took the decision of suspending the chairmen during plenary which was held at the Old Banquet Hall of Benue Peoples House, Makurdi. The affected chairmen are Dennis Akura of Vandeikya LGA, Vitalis Uhaa of Gwer East LGA and James Okula of Ogbadibo LGA. The Assembly has been

put in a know of the chairmen’s wrong doings through a letter written to them by the Executive Governor of Benue State, Samuel Ortom through the Secretary to State Government, Tony Ijoho, demanding for the consideration of the Assembly to discipline the council chairmen as the law demanded following a due consultation from the Chief Judge of the State, Justice Adams Onum. The motion to suspend the executive chairman of Ogbadibo LGC, Okula and his deputy was moved by the Assembly committee chairman on Publicity, Paul Biam and was seconded by the deputy Speaker, Egli Johnson. However, the As-

sembly member representing Ogbadibo state constituency, Joseph Ojobo pleaded with the Assembly to temper justice with mercy by reducing the suspension period from 3 months to 2 months but it was over ruled. Me a n w h i l e, m e m b e r representing Konshisha state constituency, Richard Ujege moved the motion of suspending the executive chairman of Gwer East Local Government, Uhaa and was seconded by member representing Oju II, Mathew Ire. Also, the executive chairman of Vandeikya local government, Dennis Akura was suspended by a motion moved by the deputy Majority Leader, Sule Audu

Ortom

and was seconded by Joseph Ojobo representing Ogbadibo state constituency. Addressing newsmen after the plenary, the speaker Benue State House of Assembly, Titus Uba, explained that the council chairmen were not suspended because of their failure to defect with the governor to PDP but due to the complaint tendered by their councilors. They were suspended after due consideration by the Attorney General of the State. He said that the Attorney General invited the affected Chairmen for discussion and took the decision of suspending them after gaining facts from the allegations.

Bafarawa flays FG’s business deals with China Lagos APC crisis: Oki group petitions Oshiomhole ANIEFIOK UDONQUAK, Uyo

he former governor of Sokoto State and a presidential aspirant on the platform of the People’s Democratic Party (PDP) Attahiru Bafarawa has criticised the Federal Government over the recent business deals with China, saying it amounted to a mortgage of the country. The Federal Government recently obtained a loan of over $300 million from China and signed a deal worth over $10 billion during the recent Forum on China and Africa Cooperation Summit held in Beijing, China. “As a banker, you can see the dangerous terrain we are going for; going to China borrowing money which is very dangerous; we are being mortgaged. Therefore we are not going to allow it to continue. We are going to stop it,’’ he said. Speaking when he visited Governor Udom Emmanuel as part of his consultations, also promised to restructure the country if elected president during next year’s

general election said he should be held accountable if he failed to implement a restructuring programme. He lauded the achievements of the governor, saying he has been able to achieve that much because of his background in the private sector. “I was just going through pages by pages, almost 220 pages of your achievements. In Education, in Health and whatever you can think of to develop the state. “In just 3 years, nobody can believe what I have seen. Therefore, by your credentials, by the grace of God you are going to be above Akwa Ibom because you have fixed it and by the Grace of God in 2019, you will get another mandate which I believe by the Grace of God you are going to get it.” These are the attributes of a good leader, and his belief in God, Emmanuel will successfully reclaim the people’s mandate as governor in 2019,” he said. He counted himself lucky to be a member of the PDP presently, announcing that

should he be elected, he will move to end the years of neglect of the south-south part of the country. “I took my time, I took one week to go round and see South-South states by road, I went all round, I saw things by myself, I saw the roads by myself and you have every reason to complain that your people are suffering,” he said. Responding, Governor Emmanuel expressed belief that PDP will bounce back into power in 2019 and would redesign what will stand economically for the infrastructural development of the country. He said, he was optimistic of a very strong economic team that will understand the economy of Nigeria, know the direction and also plan for the population of the country. G overnor Emmanuel commended the aspirant for his painstaking efforts in touring the country, and putting up a blueprint of his plans for the country, describing it as a display of seriousness and sincerity.

… Kicks against recognition of Tinubu-backed exco he internal crisis rocking the ruling All Progressives Congress (APC) in Lagos State appears to be taking a different dimension, this is just as the Fouad Oki-led faction of the party yesterday petitioned the national chairman Adam Oshiomhole, calling for the recognition of his faction as the authentic APC State executive in the state. In a petition signed by the factional State chairman, Fouad Oki and Secretary Wole Oloye, a copy which was made available to BusinessDay, the group alleged that the June state congresses which brought in the Tunde Balogun-led state executives which is backed by the national leader of the party Asiwaju Bola Tinubu was illegal, stressing that the congress was conducted in 57 local government Areas and 377 Wards which was

contrary to the provisions of the constitution of the country and guideline of the party. The group further said that it was the duly constituted APC executive in the state, because its congresses were conducted in the 20 local government areas in the state recognised by the party guideline and the constitution of the country, warning of impending danger if the anomalies are not corrected by the Oshiomhole-led national leadership. “Our national Chairman, despite the refusal to accord us the recognition we deserve under the law, we know that you are aware of the fact that the validly elected party organs in§ Lagos State are the ones that led to the emergence of the undersigned as the State chairman of the party. “We also know that you are aware that as at the time of writing the instant letter, there are, at least, three cas-

es in court challenging the validity of the illegally held Ward, Local Government Area and State Congresses held in Lagos State on the basis of 57 Local government Areas and 377 wards contrary to the provisions of the Constitution of the Federal Republic of Nigeria, the Electoral Act, our extant Party Constitution and the Party Guidelines. For the avoidance of doubt, the cases are. “Therefore, there are no truer words than acknowledging that in Lagos State the Party is sitting on a keg of gunpowder. As things are, the conduct of the impending primaries may either diffuse or detonate this keg of gunpowder. “In this regard, any misstep in the conduct of primary elections may cause a total reversal of fortunes for the Party in the State. It is our sincere prayer that the Party will not come to ruins under your stewardship”.

governorship agenda and that he was not necessarily going to play party politics. Before the defection to PDP, he was believed to had wanted to defect to the African Democratic Congress (ADC) due to the presence of his political godfather and former President Olusegun Obasanjo. However, a source close to Creek Haven, Bayelsa State seat of government, are of the view that Governor

Dickson is not favourably disposed towards the idea of Alaibe coming to clinch the governorship after others had worked to sustain the party. The source said the former governorship candidate of the Labour Party in 2007 does not have any structure on ground presently which could work against him, though maintaining that he is a grassroots mobiliser. With the governorship

race in Bayelsa State still almost a year ahead, another source disclosed that he was also mulling ADC as a second alternative should the PDP refuse to give him the ticket. The governorship position is already zoned to Yenagoa and Kolokuma/Opokuma Local Government Areas where Alaibe comes from and has every chance of contesting the governorship on any other platform.

INIOBONG IWOK

Why Alaibe failed to defect to PDP SAMUEL ESE, Yenagoa

ne time Special Adviser to the President on Niger Delta Matters and Coordinator, Presidential Amnesty Programme, Timi Alaibe, was not present when the People’s Democratic Party (PDP) in Bayelsa State received defectors from the All Progressives Congress (APC) at the weekend. Alaibe, a former manag-

ing director of Niger Delta Development Commission (NDDC), was earlier expected to defect along with ex-state chairman of APC, Tiwei Orunimighe, but he was not present at the ceremony. BusinessDay gathered that Alaibe had first met Governor Henry Seriake Dickson over the development but was seeking reconciliation with former President Goodluck Jonathan and receiving his blessing

before formally defecting to the PDP. It was also gathered that while the former strong man of Opokuma politics was going about seeking reassurances from Jonathan, Governor Dickson gave Orunimighe the green light to defect along with his supporters. A reliable source told BusinessDay that Alaibe’s defection to the PDP was to enable him carry out his

BUSINESS DAY

C002D5556

Thursday 13 September 2018

Live @ the Stock exchange Prices for Securities Traded as of Wednesday 12 September 2018 Company

Symbol

Deals

Current Price

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 231,423.77 8.00 -8.57 157 46,154,893 UNITED BANK FOR AFRICA PLC 241,105.92 7.05 -2.76 174 6,340,179 618,510.93 19.70 -1.01 401 16,947,596 ZENITH BANK PLC 732 69,442,668 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 290,751.87 8.10 -7.95 300 22,604,387 300 22,604,387 1,032 92,047,055 BUILDING MATERIALS DANGOTE CEMENT PLC 3,578,506.56 210.00 -5.83 59 18,704,802 LAFARGE AFRICA PLC. 199,488.85 23.00 - 25 82,378 84 18,787,180 84 18,787,180 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 357,009.32 606.70 0.61 33 108,193 33 108,193 33 108,193 1,149 110,942,428 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 76,217.41 79.90 - 40 245,046 60,000.00 60.00 -0.08 11 113,141 PRESCO PLC 51 358,187 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,800.00 0.60 - 3 4,420 3 4,420 54 362,607 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,164.81 0.44 - 5 2,957 JOHN HOLT PLC. 225.71 0.58 - 1 720 2,111.93 3.25 - 1 1,000 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 43,899.83 1.08 -8.47 140 19,674,246 29,389.23 10.20 - 43 323,771 U A C N PLC. 190 20,002,694 190 20,002,694 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 13 31,780 ROADS NIG PLC. 165.00 6.60 - 0 0 13 31,780 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,079.48 1.57 - 12 200,031 12 200,031 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 24,014.43 9.00 - 0 0 0 0 25 231,811 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 2 51,000 2 51,000 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 14,093.09 1.80 - 7 32,337 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 192,753.69 88.00 - 30 65,689 INTERNATIONAL BREWERIES PLC. 275,067.58 32.00 -10.00 11 8,079,136 NIGERIAN BREW. PLC. 671,739.77 84.00 -4.55 101 314,037 149 8,491,199 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 42,000.00 8.40 - 15 47,943 DANGOTE SUGAR REFINERY PLC 170,400.00 14.20 -1.39 51 375,104 FLOUR MILLS NIG. PLC. 81,187.52 19.80 -7.91 72 516,288 HONEYWELL FLOUR MILL PLC 11,022.97 1.39 -8.55 29 1,574,657 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 0 0 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 - 26 201,194 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 193 2,715,186 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,655.10 9.40 -6.47 27 215,201 NESTLE NIGERIA PLC. 1,172,338.60 1,479.00 -0.40 144 521,819 171 737,020 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,346.01 3.21 -0.93 27 5,196,229 27 5,196,229 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,601.44 13.50 - 27 134,928 UNILEVER NIGERIA PLC. 268,866.25 46.80 - 28 131,174 55 266,102 597 17,456,736 BANKING DIAMOND BANK PLC 28,487.28 1.23 -8.89 48 4,234,808 ECOBANK TRANSNATIONAL INCORPORATED 339,466.70 18.50 -5.13 55 8,110,247 FIDELITY BANK PLC 43,751.94 1.51 -9.58 125 7,692,994 GUARANTY TRUST BANK PLC. 959,456.44 32.60 0.31 266 16,053,404 JAIZ BANK PLC 15,616.05 0.53 6.00 18 2,223,200 SKYE BANK PLC 8,466.98 0.61 8.93 79 5,783,893 STERLING BANK PLC. 41,746.11 1.45 -0.69 297 10,656,969 UNION BANK NIG.PLC. 147,059.80 5.05 -4.72 25 229,276 UNITY BANK PLC 9,117.68 0.78 -1.27 6 248,712 WEMA BANK PLC. 23,144.68 0.60 5.26 15 1,025,422 934 56,258,925 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,821.37 0.84 -6.67 57 5,552,974 AXAMANSARD INSURANCE PLC 24,150.00 2.30 - 2 5,100 CONSOLIDATED HALLMARK INSURANCE PLC 2,240.00 0.32 -8.57 1 100,000 CONTINENTAL REINSURANCE PLC 14,833.02 1.43 - 1 29,982 3,682.38 0.25 - 10 91,601 CORNERSTONE INSURANCE PLC GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 1 50,000 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 1 11,666 2,197.03 0.30 -9.09 9 715,515 LASACO ASSURANCE PLC. LAW UNION AND ROCK INS. PLC. 2,577.80 0.60 9.09 7 325,031 LINKAGE ASSURANCE PLC 5,600.00 0.70 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,160.00 0.27 -3.57 8 447,885 NEM INSURANCE PLC 15,841.51 3.00 -3.23 39 1,811,521 2,554.03 0.33 -8.33 15 526,006 NIGER INSURANCE PLC PRESTIGE ASSURANCE PLC 1,832.36 0.48 - 0 0 REGENCY ASSURANCE PLC 1,533.81 0.23 - 3 16,173 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 3,485.98 0.27 - 2 20,000 STANDARD ALLIANCE INSURANCE PLC. SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 3 152,272 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 1 2,984 UNIVERSAL INSURANCE PLC 4,320.00 0.27 -10.00 1 100,000 VERITAS KAPITAL ASSURANCE PLC 3,882.67 0.28 - 2 3,800 WAPIC INSURANCE PLC 5,353.10 0.40 -2.44 40 1,884,759 203 11,847,269 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,772.95 1.65 - 2 22,500

Company

Symbol

Deals

Current Price

Trades

Volume

2 22,500 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 3 300 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 5,664.87 0.50 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 3 300 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,400.00 3.70 -1.86 49 982,815 32,350.25 5.50 - 38 2,364,576 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,684.34 1.60 -6.98 58 5,409,240 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND ROYAL EXCHANGE PLC. 1,234.89 0.24 -7.69 7 447,200 414,660.65 41.00 -8.89 75 1,100,684 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 16,800.00 2.80 2.19 45 2,303,354 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 272 12,607,869 1,414 80,736,863 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,065.94 0.30 - 7 283,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 7 283,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 9,000.00 6.00 - 0 0 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 17,101.03 14.30 - 26 113,414 MAY & BAKER NIGERIA PLC. 2,254.00 2.30 -2.13 10 239,525 1,174.02 0.68 -5.56 11 173,388 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 411.96 1.90 - 0 0 PHARMA-DEKO PLC. 47 526,327 54 809,327 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 1 1,000 381.11 0.77 - 0 0 TRIPPLE GEE AND COMPANY PLC. 1 1,000 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 0 0 0 0 1 1,000 BUILDING MATERIALS BERGER PAINTS PLC 1,898.34 6.55 - 7 20,454 19,845.00 28.35 - 19 219,304 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 34,998.48 27.85 -9.87 10 285,000 696.42 0.33 - 6 13,103 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 361.24 0.68 - 1 40,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 2,364.38 2.98 - 0 0 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 43 577,861 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,522.64 4.00 1.27 14 453,401 14 453,401 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 1 100 GREIF NIGERIA PLC 388.02 9.10 - 1 1,000 2 1,100 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 2 210 2 210 61 1,032,572 CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,440.42 0.23 4.55 52 6,186,704 52 6,186,704 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,157.06 5.00 -0.99 65 1,568,319 65 1,568,319 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,907.15 180.00 - 12 110,825 CONOIL PLC 16,863.04 24.30 - 12 33,532 ETERNA PLC. 7,890.08 6.05 0.83 21 278,812 FORTE OIL PLC. 24,616.89 18.90 4.42 64 546,328 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 1 2,940 TOTAL NIGERIA PLC. 64,407.29 189.70 - 23 16,946 133 989,383 250 8,744,406 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,212.76 5.45 - 1 2,500 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 0 0 1 2,500 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 8 38,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 2 70 51,302.73 6.75 - 0 0 TRANSCORP HOTELS PLC 10 38,070 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 848.60 1.10 - 12 73,506 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 3 1,041 UNIVERSITY PRESS PLC. 862.82 2.00 - 8 123,000

Thursday 13 September 2018

C002D5556

BUSINESS DAY

Live @ The Exchanges Top Gainers/Losers as at Wednesday 12 September 2018 GAINERS Company

Market Statistics as at Wednesday 12 September 2018

LOSERS Opening

Closing

Change

Company

SEPLAT

N603

N606.7

3.7

DANGCEM

N18.1

N18.9

0.8

NESTLE

GUARANTY

N32.5

N32.6

0.1

UCAP

N2.74

N2.8

CUTIX

N3.95

Opening

Closing

Change

ASI (Points)

N223

N210

-13

N1485

N1479

-6

STANBIC

N45

N41

-4

VOLUME (Numbers)

0.06

N88

N84

-4

VALUE (N billion)

0.05

CCNN

N30.9

N27.85

-3.05

32,292.79

DEALS (Numbers)

3,912.00 246,906,477.00 6.930

MARKET CAP (N Trn

11.789

NSE ASI drops below 33,000 points as sell-off persists …Stock investors lose additional N420bn …Dangote Cement, Nestle, Nigerian Breweries lead laggards Stories by Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) All Share Index (ASI) which tracks the performance of the Bourse dropped below 33,000 points after Wednesday’s trading session. The NSE ASI decreased by 3.46percent, pushing the Year-to-Date (ytd) return further into the negative zone of minus 15.56percent. Only 10 stocks gained as against 37 losers. The All Share Index closed at 32,292.79 points against the preceding trading day close of 33,449.17points while

Market Capitalisation closed at N11.789 trillion against previous day close of N12.212 trillion; implying that stock investors lost addition

N423billion. Dangote Cement Plc led the laggards table after its share price lost N13 or

5.83percent, from N223 to N210. Nestle Nigeria Plc declined from N1485 to N1479, down by N6 or 0.40percent. Nigerian Breweries Plc lost

FinTech: SEC says interested in protecting investors

n its desire to transition towards a technology driven capital market as well as protect investors, products in the capital market, the Securities and Exchange Commission (SEC) says it will soon come out with regulations that would guide such. This was disclosed by Mary Uduk, Acting Director General of the SEC during the presentation of a lecture by Ade Bajomo, Vice President FinTech Association of Nigeria, titled ‘Market Impact of the FinTech Revolution” in Abuja, Wednesday. Uduk, who also announced Bajomo as Chair of the Capital Market Committee on Fintech Roadmap for Capital Markets in Nigeria, said the SEC as the apex regulator of the Nigerian Capital market is interested in investments that Nigerians are making especially with the advent of digitalization. “If we will regulate this market and understand what is happening, we need our staff to understand the

rudiments of FinTech. Very soon the whole world will move to technology for regulation. Other jurisdictions have already gone far into it with some of them already amending their rules in that direction. “The International Organisation of Securities Commissions (IOSCO) is on it and there is a lot on it already all over the world and we can’t be left behind. We are very much interested in some of the most active areas of Fintech innovation like block chain technology, crypto currencies and how they affect investors” she said. She stated that as regulators of the capital market, it is the responsibility of the SEC to find out how such investments are going on and if they meet set standards because when investors lose money they will come back to the SEC adding “That is why we are seeking to understand what FinTech is all about to enable us regulate the market properly. Uduk recalled that dur-

ing the last Capital Market Committee meeting in Lagos, the Committee agreed to set CMC to set up a Committee to draw a Fintech Adoption roadmap for the Capital Market. The Acting DG alluded to the growing influence of Fintechs as she stated the need for the Capital Market to take advantage of the Fintech offerings in moving the Capital Market forward. She equally emphasized the focus of the Commission on capacity building, knowledge sharing, advocacy and collaboration with relevant entities. According to her, “the Capital Market needs to create an enabling environment that is attrac-

tive enough for Fintechs to innovate as the Market should engage actively with the new trend in technology and provide the adequate regulatory framework for proper adoption of suitable technology and that is one of the reasons why we have invited FinTech here today for this presentation” In his presentation, Executive Director Information Technology and Operations of Access Bank as well as Deputy President of FinTech Association of Nigeria (FinTechNGR) Ade Bajomo expressed the need for regulators to understand what FinTech is all about as that is where the world is moving to now. Bajomo said regulators need to know what to regulate, how to regulate it, protect investors as well as drive commerce as if they don’t regulate this properly, it could hinder the growth of Africa. “We have to get into the digital agility and understand that the old way of doing things will not work in this digital age.

N4 or 4.55percent, from N88 to N84; Stanbic IBTC Holdings Plc declined from N45 to N41, losing N4 or 8.89percent; while Cement Company of Northern Nigeria Plc declined from N30.9 to N27.85, losing N3.05 or 9.87percent. On the gainers table, Seplat Petroleum Development Company Plc stock price advanced from N603 to N606.7, up by N3.7 or 0.61percent; followed by Forte Oil Plc which increased from N18.1 to N18.9, up by 80kobo or 4.42percent. GTBank Plc stock also rallied from N32.5 to N32.6, up by 10kobo or 0.31percent; United Capital Plc rose from N2.74 to N2.8, up by 6kobo or 2.19percent; while Skye Bank Plc gained 5kobo

or 8.93percent, from N0.56 to N0.61. The volume of stocks traded increased by 63.87percent, from 150.67million to 246.90million, while the total value of stocks traded increased by 334.03percent, from N1.59billion to N6.93billion in 3,912 deals. Access Bank Plc, FCMB Group Plc, Transcorp Plc, Dangote Cement Plc and Zenith Bank Plc were actively traded stocks on Custom St reet. The Financial Services sector led Tuesday’s activity chart with 172.78million shares exchanged for N1.74billion; followed by Conglomerates with 20.003 million shares traded for N26million.

Standard Chartered Bank sends detailed letter to CBN refuting MTN CCI allegations

tandard Chartered Bank Nigeria Limited which recently received a letter from the Central Bank of Nigeria (CBN) imposing sanctions on the bank for alleged breaches of foreign exchange regulations in connection with certain foreign currency remittances, has responded to the allegations. “The transactions, some of which date back to 2001, were in respect of foreign currency remittances backed by Certificates of Capital Importation (CCIs) issued in favour of our client, MTN Nigeria Communications Limited.” The bank says it has sent a detailed and comprehensive response to the CBN on the purported infractions and has refuted all allegations of any wrongdoing. Standard Chartered Bank Nigeria Limited says it remains committed to ensuring that all

its processes and procedures adhere to the highest levels of corporate governance, controls and compliance with applicable laws of the jurisdiction, as in all countries where the Bank operates. Speaking on the matter, Dayo Aderugbo, Head, Corporate Affairs, Brand and Marketing, Nigeria said, “I would like to reiterate to our stakeholders that in Nigeria, as in all countries where Standard Chartered operates, we conduct, and remain committed to carrying on our business in compliance with all relevant laws and regulations. The Board and Management of the Bank hereby use this opportunity to advise its valued clients that the action of the Central Bank of Nigeria (CBN) does not impact their ability to engage with the Bank for their personal, business and corporate transactions.”

BUSINESS DAY

Thursday 13 September 2018

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I THURSDAY 13 SEPTEMBER 2018

Opinion

Institutions are key to development in Africa CHRISTOPHER AKOR Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

erhaps, the best advice to Africans on governance was the one given by former United States President, Barack Obama at a speech in Accra, Ghana in 2009 where he stated that Africa does not need strongmen but strong institutions. He traced the violent history and poor economic performance of the continent to failure of institutions. Sadly, his admonition didn’t cut any ice with Nigerians. They continued to believe in the possibility of a strongman coming

to fix the country in one go. That was largely the motivation for electing Muhammadu Buhari as Nigeria’s president during the 2015 elections. Buhari’s appeal, aside from his famed integrity, has a lot to do with his tyrannical past as a nononsense military dictator who could be brutal, bypass laws, if necessary, in dealing with corrupt people and in pursuance of the common good. He was seen as the Nigerian messiah! But as is often the case, reforms initiated even by the strongest of rulers run into the headwind of weak institutions and are sooner or later torpedoed by predatory public officials who thrive in the context of weak institutions. This explains the recursive nature of economic growth and progress in many sub-Saharan African countries. Of course, the problem starts with leaders who often refuse to act within set boundaries of acceptable conduct. Take, for instance, Yoweri Mu-

seveni of Uganda who has been in power since 1986. He ruled the country forcefully until 1996 when elections were held. However, nearing the end of his two five-year presidential term, he got a compliant parliament to remove the term limits in the

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Nigeria’s and Africa’s hope of escaping the poverty curse lies in the building of a capable state or strong institutions of restraints that will bring predictability to the system

constitution in 2005. Now, at 73, Museveni again got a pliant parliament to remove the last hurdle to his perpetuation in office - a presidential age limit of 75 - from

the constitution, allowing him to run for a sixth term in 2021. For their troubles, each parliamentarian was paid $8000 (29 million Ugandan shillings) to, in the words of parliament spokesman Chris Obore, “help them to consult with their constituents.” Expectedly, the growth and stability Museveni restored after long years of war and chaos is being reversed and the country is sliding into another dark era characterised by widespread corruption, human rights violation and inadequate public services. Haven refused to be bound by the constitution; he now finds it difficult to take action against senior officials implicated in corruption scandals. It does not matter that Uganda has one of the most comprehensive anti-corruption legislation in the world. Institutions just do not work in Uganda. In like manner, Nigerian leaders have refused to operate within the confines of the constitution. Although Obasanjo’s move to amend the constitution

to allow him run for a third term failed, it failed not because of the strength of Nigeria’s institutions but largely because of the diffused ethno-religious power blocs in Nigeria and their competition for, and rotation of power. Equally, president Buhari has not allowed the nourishment and development of institutions of restraints and prefers to govern with little or no checks on his powers. Under him, illegal detentions, extrajudicial killings by security operatives, disrespect and disregard of the judiciary and court orders, disregard for contracts and the parliament are still rampant. For instance, the Nigerian army, in December 2015, massacred over 347 members of the Shia sect – the Islamic Movement of Nigeria (IMN) - for allegedly blocking the convoy of the Chief of Army Staff, Lt.-Gen. Tukur Buratai. Till date, no one has been held accountable for the crime. Instead, the leader of the sect, Shiek ElZakzaky

together with his wife and other members, has been detained illegally and the president continues to disobey various court orders to release them. It is not surprising therefore that the president’s aides and close associates have run amok, disobeying and disrespecting institutions of governance in the country and even countermanding instructions of the president himself. Their body language is clear: They do not owe allegiance to anyone or institutions other than the president who appointed them, and since he is can no longer control them – either through ill health or incapacity – they simply do as they wish and the entire country lies at their mercy. Mimicry of institutions leads to only one outcome – stagnation or retrogression. Nigeria’s and Africa’s hope of escaping the poverty curse lies in the building of a capable state or strong institutions of restraints that will bring predictability to the system.

From accidental sischarge to accidental operations

IK MUO Ik Muo, PhD, Department of Business Administration OOU, Ago-Iwoye muoigbo@yahoo.com; 08033026625

n the past three weeks, we have been discussing the Charley-Boy republic where everything is possible. One of the symptoms of this queer republic is that people are no longer shocked or scandalized because, before the ink with which one bizarre incident is reported dries up, another, higher-order bizarre thing will happen. That was why Nigerians did not express shock and surprise when gentleman Ibe Kachikwu, Buhari’s Deputy in the Ministry of Petroleum (many have forgotten that PMB is the honourable Minister of Petroleum, who consequently reports to himself ) told the whole world that a contract for $25bn was signed, sealed and delivered by one young man called Kanti Bello, without reference to him( Kachikwu). Yes, I mean twenty five billion US dollars. At times, I don’t actually blame Nigerians for not reacting because in the above case, before Nige-

rians could recover from their daze, the executive whistle blower had started speaking in tongues! And that was where the matter ended; it became a DauraAPC family affair!(They learnt this family affair from PDP but they have even surpassed their teachers). In the past years, Nigerians have been used to series of accidental discharge by the police and other security forces. Very few of these discharges are really accidental and as shown in the case of APO 6, most of them are deliberate actions. Okada drivers, bust conductors and other ordinary civilians have been shot by police and other people armed with our money for failure to respond favourably to the forcible demand for settlement on the roadside. As the Amnesty International reported in 2009 in its 64-page report Killing at will: Extrajudicial and o t h e r u n l aw f u l k i l l i ng s in Nigeria, the Nigerian Police Force( or farce) is responsible for hundreds of extrajudicial killings and enforced disappearances every year and majority of these cases go un uninvestigated and unpunished and that is probably why such accidents and incidents continue to happen. Unfortunately, there is no certified report of these cases. But it is not a Nigeria only affair. In a 2017 report for CONCEALEDCARRY,

Jacob Paulson presented a comprehensive documentation of 300 cases of negligent discharges in the US, in a research that lasted two years, 2014-2016 However the reality of the case is that we have moved from accidental or negligent discharge by our security forces to accidental secur ity operations. An accidental operation is a new concept, which I have just discovered and developed. It is a security operation which is illegal, unauthorised or executed mistakenly/accidentally. It also includes operations carried out in daylight by identifiable policemen( not unknown policemen), which the police authorities denied being involved in. It is a simple and unimaginable concept with grave implications: police or security forces carrying out security operations mistakenly. In July this year, the Nigerian Police Force barricaded the residences of Senators Saraki & Ekwerenmadu. In this online real-time era, everybody all over the world saw the operations, live. But the Jimoh Moshood, the rudest and most audacious police spokespers on in my lifetime categorically stated that ‘there was no authorised deployment of Police personnel to besiege the residence of the Senate President or his deputy’

and that “The police personnel seen in pictures in the media were those in the convoy of the Senate President and others attached to him,” . In effect, Saraki barricaded himself and called the whole world to witness same! A few weeks later, masked operatives of the Department of State Ser vices barricaded the gate to the National Assembly complex, shutting out lawmakers and the staffers. We were all witnesses. This action was also declared anauthorised and in one of the rare acts of responsiveness, the DG of DSS, the very powerful Daura was asked to go and cool his hills in the DSS cell, where he had kept people like Dasuki and Jones Abirri! And just before the dust could settle, some overzealous policemen raided the house of the 91 year old Edwin Clark in search of whatever! And for the first time, Jimoh Moshood who literally told Governor Ortom to go to hell and who all along behaved as if he had everything wrapped up, went to beg! He also declared that the IGP was not aware and did not authorize the operation. Probably the IGP was so busy searching for IPOB members, perfecting the implication of Saraki in the Offa robbery and drafting charges against Melaye for attempted suicide, that he does not know who does what. Surpris-

ingly in this case, the police has been hyperactive. They had dismissed the junior operatives involved, “for the unauthorised, illegal and unprofessional misconduct in the search of the residence of Chief Edwin Clark in Asokoro, Abuja.” The fake whistle

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In the past years, Nigerians have been used to series of accidental discharge by the police and other security forces. Very few of these discharges are really accidental and as shown in the case of APO 6, most of them are deliberate actions

blower has also been paraded (and tomorrow, they expect me to give them a lead) and the IGP Special Tactical Squad (directly under the IGP as the name implies), which was implicated in the Clark debacle, has also been disbanded. Of course, I believe that this disastrous accidental operation was in a quest for the 5% whistle blowing

largesse and it shows the shallowness of our intelligence gathering, management and response. It also belies common sense that a squad under the IGP went on an operation without any authorization! Anyway, one day the Police will accidentally block the third mainland bridge, mistakenly close the Abuja Airport and accidentally set the Onitsha main market on fire in search of IPOB members. Well…all is well Other matters On 7/7/18, the Premium Times ‘authoritatively’ reported that our Finance Minister, Kemi Adeosun did not participate in the mandatory National Service, which therefore made it illegal for her to be in the Nigerian public ser vice. More than two months later, precisely on 10/9/18, the Presidency( who or what is this presidency?) informed Nigerians, through Garba Shehu, that the matter was under investigation! That is, in the past two months, the NYS C has not been able to ascertain whether it issued an Exemption Certificate to the young lady or not, though it was able to readily inform us that she applied for the exemption certificate. Well, this further validates Senator Sanni’s Deodorant-Pesticide hypothesis and is a quintessence of what can happen in a typical Charley-Boy Republic.

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