BusinessDay 14 Aug 2018 by BusinessDay

news you can trust I **TUESDAY 14 AUGUST 2018 I vol. 15, no 117 I N300

Banks say NCC hurting 9mobile with delayed sale T

Businesses scramble for cash as Nigeria’s lending rate highest in SSA ODINAKA ANUDU

No capex spend since 2014

Airtel becomes biggest beneficiary

HOPE MOSES–ASHIKE & ENDURANCE OKAFOR

igerian banks owed by the telecommunications firm 9Mobile say they feel let down and confounded by the undue delay in completing the sale of the firm to the successful bidder Teleology which is being promoted by well-respected pioneer CEO of MTN Nigeria, Adrian Wood. The deal is being held back by the failure of the regulator, Nigerian communications commission (NCC) to issue a Continues on page 34

Inside People are exercising power without authority – Peterside

hirty-seven million small and medium businesses (SMEs) in Africa’s most populous country are scrambling for cheap funds to expand operations, but lending rates remain among the highest in sub-Saharan Africa. Nigeria’s monetary policy rate (MPR), which is a benchmark interest rate in the country, is 14 percent. Deposit money banks lend as high as 30 to 35 percent, according to BusinessDay checks. The monetary policy commitContinues on page 34

L-R: Wise Letsa, financial manager, The Trust Hospital, Ghana; Obinna Mugboh, member of faculty, Lagos Business School; Chris Ogbechie, professor of strategy, Lagos Business School; Claire Omatseye, president, Healthcare Federation of Nigeria, and Oscar Vetsi, teaching assistant, Management Development Institute (MDI), at the opening of the Lagos Business School (LBS) and Management Development Institute (MDI) programme (funded by Johnson and Johnson) for Health Leaders and Managers in West Africa to improve national healthcare priorities and systems in Lagos.

NNPC, Seplat sign pact to deliver 3.4bscfd of gas by 2020 HARRISON EDEH, Abuja

SEC fails Corporate Governance rules on financial accounts T

P. A6 & A7

National Assembly to shelve P.2 emergency sitting

Iheanyi Nwachukwu, Oghogho Edosomwan & Cynthia Ikwuetoghu

he last time the Securities and Exchange Commission (SEC) Nigeria published its annual financial reports was in 2013, a development which contravenes

aided by the Federal Government’s delays in taking critical

he Nigerian National Petroleum Corporation (NNPC) and Seplat Petroleum Development Company (SPDC) have signed five agreements to expedite the development of a project aimed at delivering about 3.4 billion standard cubic feet of gas per day by 2020. The corporation said the agreement is part of efforts to

Continues on page 34

... withholds financial statements for 5 years ... We can’t publish unsigned accounts – Uduk

the provisions of Corporate Governance Codes, BusinessDay investigations show. This development is rather

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National Assembly to shelve emergency sitting OWEDE AGBAJILEKE, Abuja

ndications emerged on Monday that the emergency sitting of the National Assembly to consider the N242 billion 2019 elections budget may not hold. Although there is no official communication from the Senate leadership on the matter, lawmakers contacted for comments on the issue simply claimed they have not received invitation for any special session. Last week, both chambers of the National Assembly had indicated that it may reconvene plenary either Tuesday or Wednesday this week to consider the 2019 election budget of the Independent National Electoral Commission (INEC). This followed a meeting of the National Assembly leadership with top management of the Commission last week. Findings by BusinessDay revealed that the special sitting was aborted because many lawmakers have travelled for Hajj in addition to the fact that other lawmakers have travelled out of the country for the holiday. “The request by President Muhammadu Buhari is not just a single line item that would just require a one day sitting. It will involve a variety of committees that would work on the budget including the Appropriations, Finance, INEC and other Ministries, Departments and Agencies (MDAs).This is different from a situation whereby the President is asking for an increase in the size of the budget through a change of benchmark. The assignment required in respect of that letter from the President is not something that can be done in one day,” a source revealed. According to him, the National

FMDQ Close

Everdon Bureau De Change

Assembly cannot achieve anything even if it reconvened for a sitting this week because the request has to be passed to the Committees and the Committees have to meet with MDAs. “Besides, there is another issue that has to do with the constituency projects. The letter is requesting the lawmakers to remove funds from their constituency projects and use the same to fund INEC. Remember that the Constituency projects are not one line items in the budget. You can’t imagine how long it would take the Appropriations Committees to sort out that issue with the MDAs,” another source said. Also confirming the development, another lawmaker further said: “Reconvening the National Assembly will not really work. It would mean that you want to keep the lawmakers around for the next one month, which defeats the idea of the annual recess. The letter by the President is not just requesting for an increase in benchmark, which can be handled in one day through Senate or House resolution. Treating the letter by the President will take two to three weeks,” he said. Sources close to the National Assembly further stated that the logistics of securing a quorum of either the Senate or the House was becoming more difficult as the recess lasts longer. “Many of our colleagues have travelled for Hajj. Many are in their constituencies battling the challenges of re-election. If you check even with the APC right now, they can’t get up to 30 Senators and next week is Sallah, Arafat is on Monday and you will have holidays. A number of people have travelled. It is not practicable to reconvene now,” the source added.

Buy

Sell

$-N 364.50 367.50 £-N 487.00 497.00 €-N 420.00 430.00

Foreign Exchange

Market Spot ($/N) 3M 0.07 I&E FX Window 362.20 CBN Official Rate 306.05 11.61

Currency Futures ($/N)

fgn bonds

Treasury Bills

0.04 13.03

0.50

10 Y 0.00

20 Y 0.00

14.49

14.47

14.17

NGUS OCT. NGUS JAN. NGUS JUL. 30, 2019 24, 2019 31, 2018 0.00 362.23

0.00 362.68

0.00 363.58

Nigeria still unprepared for life after oil Emeka Ucheaga & Omobola Adu

he contribution of the crude oil sector to gross domestic product in Nigeria grew from 7.34 percent in Q4 2017 to about 9.61 percent in Q1 2018. Although the contribution of the crude oil sector to gross domestic productinNigeriaisbarely10percent,Crude oil still contributes about 60 percent of governmentrevenue.Theneedtodiversify national income away from oil was more visible in 2016 than in other years after the economy entered a recession andsufferedacurrencycrisislargelydue to the crash in crude oil prices. The Economic Recovery & Growth Plan (ERGP) 2017-2020 was introduced by the government as a medium term plan to put the economy back on the trajectory of sustained economic growth and diversify the economy from oil dependence, yet the very little successes and been recorded for the latter objective. The rebound in economic growth

ANALYSIS in 2017 was largely oil driven according tonumerouseconomists.Furthermore, as at Q1 2018, crude oil and natural gas accounted for 76.3 percent of foreign exchange earnings. The country is already in the middle of the implementation phase of the ERGP as the project ends in 2020 but delays in the passage of the national budget for 6 months in both 2017 and2018throwsintoquestiontheability for the project to deliver as promised. Many oil producing countries including Nigeria have created Sovereign Wealth Funds to help the country invest in infrastructure, power, technology and industries to increase the national wealth for future generations. In investing, fund size is everything since investment income can only be a portion of the volume of funds invested. While the Saudi Arabian Public Investment Fund is expected to control around $2 billion after the initial public offering of Saudi Aramco and Norway Sovereign Trust Fund is estimated to be around $1 trillion, Nigeria’s Sover-

eign Wealth Fund is the smallest of oil producing nations with just around $1.5 billion under management. This lack of investment in the sovereign trust fund today will negatively affect the wealth of future generations and also limit the country’s ability to invest in sectors that could transform the economic landscape in Nigeria and truly diversify the economy. Still, Nigeria can continue to leverage its vast oil fields today to produce wealth which could be invested for tomorrow. ERGP estimates that by 2020 Nigeria’s oil production will be 2.5 million barrels per day. While the International Energy Agency sees oil demand rising more than 10 percent to 103.5 million barrels a day by 2040, based on BusinessDay estimates assuming a daily production of 2.5 mbpd and proven reserves of 28.5 billion barrels remain constant, Nigeria will have fully depleted her oil by 2049 which leaves Nigeria with no oil rent even if oil demandcontinuestorisebeyond2040.

•Continues online at www.businessdayonline.com

Naira shows resilience as Turkey fuels EM currency rout ... CBN turns net seller in I&E window LOLADE AKINMURELE

he Nigerian naira is perhaps the only emerging market currency to have been spared from the ongoing volatility of the Turkish Lira which is dragging down a wide host of other emerging market currencies from the South African rand to the Russian ruble. The Morgan Stanley Capital Index (MSCI) Emerging Markets currency index fell to a year low Monday, led by an 11 percent slump in the Lira as a stand-off between Turkey and the United States showed little signs of abating. The South African rand was down 9.4 percent while the Mexican peso fell 2.4 percent. The Russian ruble retreated more than 6 percent last week, its worst week since the 2015 oil price crash, and was down another 0.2 percent Monday. The Indian Rupee has since dropped to a new all-time low as a result of the “risk off” atmosphere across global markets. The naira is however not sharing in the currency rout across emerging markets, at least for now, as the exchange rate at the Investors and Exporters window has been relatively stable at around N362 per US dollar all year, gaining 0.03 percent to N361 Monday, according to data obtained from trading platform, FMDQ.

“The naira is one of the best performing and most stable emerging market currencies this year and that stability reflects the fact that the naira is a peg and the peg enforcer (which is the Central Bank) has the ability to keep the peg where it is, due to the strong growth in FX reserves,” said Wale Okunrinboye, head of research at Lagos-based Pension Fund Administrators, Sigma Pensions. “This reflects a firm fundamental picture, given where the oil price is, which has pushed the current account back into surplus,” Okunrinboye said. “So while there has been some pressure, the CBN has been able to meet it fairly comfortably,” he added. A benign outlook for current account surplus this year, which rose 21 basis points quarter on quarter to 4.8 percent of GDP in the first quarter of 2018, remains positive and also underpins positive near-term assessment of macroeconomic stability. Nigeria’s external reserves fell marginally to $46.6 billion as at August 10 and has shed about a billion dollars since April, according to CBN data. Traders say the central bank has upped dollar supply in the market to avert any sharp decline in the naira triggered by waning autonomous dollar inflows.

•Continues online at www.businessdayonline.com

L-R: Abu Ejoor, executive director, Commercial, BEDC Electricity plc; Agron Kamberi, representative of USAID; Ashok Acharya, chief technical officer, BEDC Electricity, and Ernest Edgar, chief state head, Delta State, at the commissioning of a bucket truck donated to BEDC by USAID under the Power Africa project held at the corporate head office, Benin City.

Tariff from gas pipelines to fund $2.8bn Ajaokuta, Abuja, Kano gas project ... as China banks give condition for funding Olusola Bello

ctivities leading to the proper take off of the $2.8bn Ajaokuta-Kano pipeline project are in top gear as a new financial arrangement has been secured for the project. The project is now to be financed through a forward sale agreement, an arrangement which will ensure that the entire tariff on gas pipelines nationwide would be collected into an escrow account and be used to pay contractors doing the jobs, an industry source told BusinessDay. The initial plan of getting some financial institutions in China to provide funds for the project failed because the institutions contacted, BusinessDay learnt were demanding for a sovereign guaranty from the federal government before they would put money down.

Confirming this development, Ndu Ughamadu, group general manager, public Affairs division of the NNPC however told BusinessDay that the pipeline project is still contractor financed. “The issue of tariff is to commence repayment of the loan pending when the gas pipeline will commence generating its own revenue to pay back,” Ndu said. With the new funding arrangement, it means that money being paid as tariff by all those using gas pipelines across the country is going to be used to finance it. Having secured this funding arrangementthesourcetoldBusinessDay that the front end engineering and designs (FEED) for the project has started. The Nigerian National Petroleum Corporation (NNPC) plans to extend its major gas pipeline infrastructure to

connect various parts of the country got a major boost when it signed contracts for the engineering, procurement, construction, commissioning and financing for two lots of the Ajaokuta - Kaduna - Kano (AKK) gas pipeline. Described as the single biggest gas pipeline project in the history of oil and gas operation in Nigeria, the singing of the contract between the NNPC and a consortium of indigenous and Chinese companies was initially supposed to be a 100 per cent contractor financing model for the 40 inch by 614km gas pipeline . The $2.8 billion AKK gas pipeline is amongthreeuniqueprojects-theEgina $15 billion, Bonga $10 billion, expected to gulp up to $40bn of investments to revive Nigeria’s gas infrastructure.

•Continues online at www.businessdayonline.com

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NEWS Foreign dry-up shows up in FX market Transparency activists reject $82.5bn deficit in ECA, demand merger into SWF as activity dips to 8-month low … no change between Jonathan, Buhari on ‘illegal’ withdrawals LOLADE AKINMURELE

he average daily turnover in Nigeria’s spot foreign exchange (FX) market between banks and their clients fell 30.6 percent to an eight-month low of $223.7 million in July from $322 million the previous month, as the impact of softer foreign inflows into Africa’s largest economy extends to its currency market. According to data compiled by BusinessDay from FX trading platform, FMDQ, the average daily turnover for July is the lowest since November 2017 ($223.4m) and represents a 36 percent decline from when deals hit a twoyear peak of $367 million some four months ago in April 2018. The decline is as a result of softer foreign inflows into the country, which is expected in a typical pre-election year, according to Wale Okunrinboye, head of research at Lagos-based Pension Funds Administrator, Sigma Pensions. “Across both equity and debt, foreign interest is receding, but beneath that, are also structural underpinnings like lower flows to Emerging Markets,” Okunrinboye said. “However, we are having it worse due to soft foreign appetite for naira assets ahead of the elections,” he said. Despite the foreign capital reversals from Nigeria on the

back of rising interest rates in the US and domestic political tensions, the naira has been relatively stable and is one of the best performing emerging market currencies. The exchange rate has hovered between N360- 363 per dollar this year at the Investors and Exporters window, gaining less than one naira to close at N362 per dollar in the week ended August 10. Meanwhile, the CBN official rate rose by N0.05 to close at $/N306.00, indicating a 0.02% depreciation when compared to $/N305.95 recorded the previous week-ended August 3, 2018, while in the Bureau de Change (BDC) market, the exchange rate remained unchanged to close at $/N360. “Stability reflects the fact that the naira is a peg and the peg enforcer (which is the CBN) has the ability to keep the peg where it is due to the strong level of the external reserves,” one trader told BusinessDay. Nigeria’s external reserves stood at $46.8 billion as at August 8, according to the central bank data, with higher global oil prices providing an helpful boost over the past one year. Brent crude, an international benchmark, has gained 8.6 percent this year alone and was trading at $73 per barrel as at Friday August 10, more than double the average price in 2016. “This reflects a firm funda-

mental picture, given where the oil price is, which has pushed the current account back into surplus. So while there has been some pressure, the CBN has been able to meet it fairly comfortably,” another trader said. Higher oil prices usually spurs positive investor sentiment about Nigeria, but this time things are different, with the 2019 presidential elections barely six months away. The 2019 election looks set to be one of the most tightly contested general elections since the return to democratic governance, as the opposing People’s Democratic Party (PDP) seeks to return to power after defeat in the last general elections to the All Progressive Congress (APC) snapped a 16-year rule. This has taken a new twist following the recent coalition by the PDP and 38 other political parties to field a single candidate to pose a formidable challenge to the incumbent. More than fifty lawmakers and two state governors have quit the APC in the past two weeks, with the vast majority switching allegiances to the PDP. Both parties have struggled with internal divisions but the mass defections seems to be breathing new life into PDP which ruled since the end of military rule in 1999, prior to President Muhammadu Buhari’s election in 2015.

IGNATIUS CHUKWU

xperts and activists working under the Musa Yar’Adua Foundation have rejected the alleged deficit of about $82.5 billion in the Excess Crude Account (ECA) in the past 10 years, saying what was happening under Goodluck Jonathan and Olusegun Obasanjo is still happening under Muhammadu Buhari in terms of unauthorised withdrawals. The Abuja-based group has also called for a review of the Niger Delta Master Plan and immediate implementation to replace the economy of the oil region before oil would run out. This is as the group also warned that unless Nigeria adopted total transparency in withdrawal from the ECA, the loss of over N10 trillion in the past 10 years would mean that Nigeria stands the risk of losing even more in the next decade. In a startling survey presented by Aisha Haruna, an economist, the foundation noted that Buhari’s administration withdrew 52

percent from ECA without it showing in the only place required by rule for it to be recorded, the Federation Accounts and Allocation Committee (FAAC). Before Buhari, she said the ECA was expected to receive $187 billion but was less by $82.5 billion, leaving a mere $2.5 billion or 49 percent withdrawn outside the rules. She said though the Buhari regime withdrew very little but the percentage was high too, showing that if much were saved, much would also have been withdrawn without due process. The right way of withdrawing, she stated, was for all extra to be saved and then request for withdrawal to be tabled and recorded in FAC so that other two tiers of government that also have a share in the ECA would be accommodated. The panel said in Port Harcourt that allowing unapproved withdrawals would create room for fraud, adding that the rule must be followed. Some of the reasons given for withdrawing from the ECA under Jonathan were given as fight against Boko Haram while

same reason was given by the Buhari administration when she said $1 billion was unilaterally withdrawn. As a way out, the foundation, through the coordinator, Amara Nwankpa, in a press briefing, called for immediate halt to unauthorised withdrawals and a merger of all the financial stabilization funds including the ECA under one account, the SWF. The coordinator said the SWF was more difficult to withdraw from and yields interest to the federal government. An expert, Andrew onyeanakwe, debunked the fear that saving at a low rate in the SWF while borrowing at higher rate to run the budget may not be sound financial thinking. He said the SWF would generate profit, which he said the Federal Government could depend on instead of loans. Another expert, Jide Ojo, said diversification of the oil industry to maximize profit would reduce need to break into ECA or the SWF. He said Nigeria was simply exporting jobs by relying on crude oil alone.

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All is not well with Nigeria

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

hose who are familiar with how madness begins to manifest in a person will tell you that no man becomes mad in just one day. Madness follows a sequence. Of course psychiatrists and those who work in the mental health area can easily notice when a patient goes through the stages or sequence. But for ordinary folks like us, we also sometimes notice this sequence more so when the subject is closely related to us. Signs of mental illness may start with the subject being unusually moody which could represent depression or in some cases the subject may become unusually aggressive and hyperactive called hyperactive disorder. If the subject is subjected to treatment at these early stages, psychiatrists tell us, the mental health can be corrected but if not, the situation could deteriorate. Soon the subject begins to neglect his personal hygiene and then may begin to speak incoherently similar to what is called psychotic disorder. I am told that even at this stage the situation can still be remedied if urgent medical attention is sought and the patient can be persuaded or compelled to take the prescribed medicines. When this is not done, the patient may leave home and begin to walk about aimlessly. Soon he may begin to tear his dresses and could even begin to inflict injuries on himself. At this point, he may be said to have become schizophrenic. Again those who heal mental people tell me that even at this stage something can

NOJEEM ADETUBERU Adetuberu sent this piece from Lagos

n the past, the usual approach for most smokers willing to quit used to be the use of alternatives such as nicotine gum, nicotine patches, inhalers, tablets, among others, mainly as medical aids. Perhaps, due to the limited efficacy of such alternatives, interest and conversation around tobacco health reduction have, over time, intensified among global health authorities and other stakeholders. In this regard, the tobacco industry has been able to harness technology in a bid to responsibly address the concerns of stakeholders about the impact of smoking on human health. The industry has taken advantage of improvements in technology to champion the adoption of electronic cigarettes as an alternative to tobacco smoking. Electronic cigarette, commonly called vaping or e-cigarette, is a handheld device that simulates the feeling of tobacco smoking. It works by heating a liquid to generate an aerosol, commonly called a ‘vapor’ that the user inhales. The product is widely believed to be relatively safer than regular cigarettes since it contains no tobacco,

still be done to save the situation. But when the subject goes down to removing his clothes completely and arrives at the market place (particularly on Eke or Nkwo market days) the situation is regarded as very grave and at even at this near end stage, there remains a slim chance of reversal. However if the subject finally dances to the music played in the market place by both visible and invisible drummers and singers, the matter is declared hopeless and the madness fully grown . In Igbo it is called “araocha”. Only a miracle can now reverse the madness. Our country Nigeria has been going through the rites of insanity in the last couple of years and somehow we have failed to take remedial actions to restore the nation to sanity. One of the earliest visible signs came when some guys decided that book was evil (Boko Haram) and then began to attack churches, bombing, killing and maiming innocent civilians. When they were done with churches, especially in Abuja, some parts of the north-central and north eastern Nigeria, they began to attack mosques, kidnap school children and seize large swatches of land, driving the occupants into refugee camps (called IDPs in Nigeria). What is the problem? What do they want? Up till now, nobody can tell for sure. Psychologists and psychiatrists tell me that when people begin to act in bizarre manners and you can not relate their actions to remote or immediate causes, then insanity is a probable diagnosis. Subsequently herdsmen who over the years plied their trade all over Nigeria and moved around with bows, arrows and sticks, then began to move around with automatic AK 47 guns and started murdering people, some in their sleep and others in their farms, the madness took a new turn. Soon some guys called marauders began to invade villages in the Zamfara and later Sokoto areas of the northwest, killing and

Tuesday 14 August 2018

Our country Nigeria has been going through the rites of insanity in the last couple of years and somehow we have failed to take remedial actions to restore the nation to sanity

maiming. When they were asked what the problem was, no answer. And yet, everyday, a new village is invaded and human beings slaughtered. If this is not madness, then what can it be? Hitherto in the Niger Delta (South South & Parts of the SE) we have seen signs of bipolar disorder- mood swings. Now there is peace and all of a sudden war. Pipelines are broken and oil workers kidnapped, some killed and the flow of crude oil and refined petroleum disrupted. Promises are made and broken and the cycle repeated. Clear manifestations of insanity! As they say, madness comes in different forms. While we were still wondering how to handle the madness happening in the northeast, north-central, parts of the northwest, manifested in the daily wasting of human lives without any justifiable reasons, and the cyclical eruptions in the Niger Delta, we ran into political madness. Actually the earliest signs were unrecognized until the signs of obsessive compulsive disorder (OCD) manifested. The APC government moved from anxiety disorder to full blown schizophrenia when Bukola Saraki and Ike Ekweremadu became Senate President (SP) and Deputy Senate President (DSP) respectively. They first accused them of forgery and took them to court, then took Saraki to the Code of Conduct Tribunal and when all these did not work, they sent EFCC after them and their families and followed with accusing everybody that opposed

the government of murder-Dino Melaye, Shehu Sani, Bukola Saraki and Abdulfatah Ahmed. Which normal government run by normal people will do everything to demonize its 3rd ranking citizen accusing him of corruption, perjury, armed robbery and murder in succession. Very abnormal! A few weeks ago we woke up to watch drama, the type displayed by the madman on his way to the market. The homes of the SP and DSP were barricaded by security operativesmainly the DSS and Nigeria Police. For what reason? No one could actually tell. After a while the siege was lifted. The scene then moved to the National Assembly where the ensuing madness was in full display. Senators and Honourable members were dancing like excited school children. Why? Well for the ostensible reason that some of them have crossed carpets, a phenomenon that is becoming normal in Nigeria. This act then stirred the adrenaline in the psychotic nation and the dance in the market place went full blown. As the world watched our nakedness, eight members of the Benue State House of Assembly out of thirty were given security cover to go and take over the House. They claimed to have impeached the speaker and went on to serve impeachment notice on the Governor of Benue State. As they sat to impose the will of the minority over the majority( 8 vs 22), Nigeria’s police force still under IGP Ibrahim Kpotun Idris and the Department of State Security services (DSS) then under DG Lawal Daura , prevented anybody else including the assembly staff from having access to the premises. When they finished the dance, they were escorted by the security to safety and the House of Assembly shut down. Very abnormal! As the madness raged, one Senator Akpabio, immediate past PDP Governor of Akwa Ibom State and until very recently the Senate Minority leader jumped into the fray, crossing the carpet against the run of play and apparently against the tide. It takes a

good dose of mental abnormality to swim against the tide or commit what a friend called ‘political suicide’. While he was concluding this abnormal mental feat, we took off our clothes and the macabre dance ensued. On Tuesday August 7 2018, the DSS then under DG Lawal Daura took over the premises of the National Assembly and cordoned it off. About 100 DSS operatives wearing masks and fully armed, linked themselves, forming a chain. They refused the legislators and staff of the National Assembly from having access to the chambers and offices. Why? No one could tell correctly. Many voices, similar to that of a madman who hears many voices and does not know which one to follow. One voice said it was to allow the APC Senators effect leadership change, another said it was to embarrass President Buhari, another said it was in support of Senator Saraki and yet another voice said it was to prevent bloodshed! One female legislator, Boma Goodhead who arrived early confronted the DSS guys, looked them on the face and asked them to shoot her. This was a full confirmation of the madness that has befallen our nation. Is it normal for a completely sane person to look at a hooded armed man and dare him to shoot. Madness comes in different forms! But how come we have allowed this madness to continue to deteriorate by the day? How come we seem to have ignored all the signs? How come we have ignored all the good counsel, recommendations and prescriptions of all the National Conferences & Regional declarations-Pronaco, 2005 National Political Conference, 2014 National Conference, the Southwest Ibadan Declaration, the South-South Asaba declaration, the South east Awka declaration and the middle belt Makurdi declaration? Perhaps dementia has also set in. Let’s then pray fervently for a miracle.

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E-cigarettes: A forward-thinking response to old challenges does not involve combustion and the vapour that is inhaled is devoid of any harmful constituent of tobacco smoke. Remarkably, it also gives the same pleasure derived from smoking conventional cigarettes. E-cigarette is the product of years of extensive research by tobacco companies into safer alternatives to conventional or regular cigarettes. It is a testament to the efforts of the tobacco industry towards tobacco harm reduction. The National Institute for Health and Care Excellence (NICE) defines tobacco harm reduction as “reducing the illnesses and death caused by smoking tobacco among people who smoke and those around them.” Tobacco harm reduction involves the use of alternative sources of nicotine as a replacement for smoking and has proven to be another choice for smokers. There is a consensus between regulatory and medical authorities that the product is relatively safe. Research has shown that more and more people are beginning to turn to e-cigarettes to enjoy the same pleasure as they would with the regular cigarette. Action on Smoking and Health (ASH) estimates that 2.9 million people in Britain are said to have adopted e-cigarette. The trend

is gradually catching on in sub-Saharan Africa. Interestingly, in Nigeria, there is a rising popularity of the product among smokers, especially regular callers at hotels, clubs and bars. These locations, as well as shopping malls and stores, are notable sales points for the product. There is also a growing awareness of the product among the general populace. Public Health England (PHE), for the first time, in August 2015, officially recognized e-cigarettes as less damaging to health than smoking tobacco. PHE said that, “Vaping is safer than smoking and could lead to the demise of the traditional cigarette.” The health body noted further that, on “the best estimate so far, e-cigarettes are about 95% less harmful than tobacco cigarettes and could one day be dispensed as a licensed medicine in an alternative to anti-smoking products such as patches.” PHE’s position was backed by the British Government’s Chief Medical Officer, Dame Sally Davies, who also made a case for the products’ regulation: “I want to see these products coming to the market as licensed medicines. This would provide assurance on the safety, quality and efficacy to consumers who want to use these products as quitting aids, especially in relation to the flavourings used, which is where we know least

about any inhalation risks.” Also, in February 2018, the PHE called for the stocking of hospitals with e-cigarettes for sale to patients and permission of vaping in private rooms as part of the UK National Health Service (NHS) “smoke free” efforts. The NHS bosses had proposed that smoking shelters should become “vaping lounges” for less risky e-cigarette use. Prof. John Newton, a leading expert from PHE, advocated for the sale of e-cigarettes in hospital shops and rehabilitation centers after the result of a new review of e-cigarettes was published by PHE, detailing evidence undertaken by leading independent tobacco experts. The review indicates that vaping poses only a small fraction of smoking risks. Furthermore, switching completely from smoking to vaping leads to substantial health benefits, which include substantially reduced levels of measured carcinogens and toxins. In addition, e-cigarette may possibly contribute to people quitting smoking for up to 20,000 quits annually. This view is corroborated by a number of medical research associations and academies in the United Kingdom such as Cancer Research UK, the British Medical Association and the Royal College of Physicians, as well as

a major US science body, the National Academies of Sciences, Engineering, and Medicine. The United Kingdom has been very supportive of e-cigs as smoking-cessation tools, and the product has been proven to contribute to improved quit success rates as well as an accelerated drop in smoking habits across Britain. PHE recommends continuous monitoring and regulation of use, especially among young people, noting that the use standardized methodology must be top priority for regulators and the manufacturers. The pattern of purchase should also be closely monitored, particularly purchases made via the internet, as well as the age of customers. These should be monitored and enforced. With all these aligning, e-cigarette will indeed become the future of smoking. Wherever the pendulum swings in the debate, what is paramount is that as much as consenting adults are within their rights to make personal choices such as smoking, it is still the responsibility of the government to regulate and control the consumption of the product and ensure public health safety is secured.

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[#StopTheKillings] Would foreign banks be beneficial for Ethiopia? (4)

RAFIQ RAJI “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Do foreign banks help? hat has been the actual experiences of countries that allow foreign banks to participate in their financial services sector, African ones especially? International banks have been pulling out of Africa lately. Some of the reasons include a realisation that local banks have a greater edge. Another is how shallow most African markets still are. Trade finance was the main draw for the increased interest of foreign banks up until the global financial crisis in 2007-08. When commodity prices slumped, however, it became writ large how susceptible most African economies

LAKIN THIBIEBI

he Niger Delta region for many years was a centre for violence, communal clashes and militancy. It took a negotiated and sustained intervention for the government to purchase relative peace in the region. Until the now taken-for-granted relative peace, the region was characterised by youth restiveness, militancy and constant inter- and intra- communal clashes. Serenity was scarce and cordial business-host community relationship was scarce. Oil revenue dwindled due to the constant attacks on oil installations. The impact of these events was felt by the multinationals, the nation and the international community at large. Since then, the government had come to realise the importance of concerted efforts at sustaining peace and stability in the region. It is widely acknowledged that youth restiveness is a major hindrance to peace and progress anywhere, and especially in the Niger Delta region. Youth restiveness is a direct consequence of high unemployment and non-engagement. This has been the lot of the highly endowed Niger-Delta region. The people are divinely blessed with unquantifiable natural resources, especially the major one for Nigeria, crude oil that has sustained the country for decades. Yet they are subjected to a paradoxical level of penury. In the midst of abundant natural resources are a people living in abject poverty – highly fuelled by the greed and corruption of the leaders both at the state and national levels. There are no jobs for the teeming youths; the few jobs available are claimed

remain to the volatile commodity markets. With problems of their own, international banks began to roll back their African operations to what they deemed to be more realistic levels. And quite frankly, foreign banks were a little surprised by how hard it was to beat local ones. That said, some remain firmly in place; more agile operations are the norm, though. The few global banks, which seemed determined, are treading carefully nonetheless. In November 2011, JP Morgan, an American bank, started offering some services in South Africa and announced it planned to open representative offices in Nigeria and Kenya. That chief executive Jamie Dimon was still talking about JP Morgan’s plans for Kenya in January2018, seven years after, speaks to the mixed case for international banks in Africa. Credit Suisse preceded JP Morgan in South Africa, setting up an office in Jan 2011. Barclays also moved its Africa headquarters to the continent from the United Arab Emirates in 2012, buying a controlling stake in ABSA, a South African bank; albeit its optimism was shortlived: it recently sold the African business. Another was China’s ICBC, opening an office in South

Research suggest foreign banks do not always help the financial development of poor countries. According to an IMF working paper in 2006, in countries with more foreign banks, credit to the private sector and access to credit in general tend to be lower Africa in November 2011. What was the major attraction? Developed economies were either in recession or growing very slowly and yields were extremely low or negative. But here was a continent with more than 1 billion people, with millions unbanked and much more under-banked. Adding to that, it seemed Africans were beginning to prosper: a supposedly growing middle class was much vaunted. But the main driver for most global banks’ resilience about their African vision was a desire to hold on to all of their clients’ businesses in every part of the world.

Why should a client be allowed to go to another bank for its African business and risk losing it in the process, it was reasoned. It proved to be dearer than planned: The clients did not necessarily do frequent transactions for and with their African subsidiaries. Or better put, the volume of transactions was not so much that they could not be undertaken from the banks’ hub branches, a central African location or both. Research suggest foreign banks do not always help the financial development of poor countries. According to an IMF working paper in 2006, in countries with more foreign banks, credit to the private sector and access to credit in general tend to be lower. Consequently, there is also usually slower credit growth. The paper argued foreign banks tend to be more beneficial to advanced countries. Thus, the Ethiopian government’s caution is not entirely out of place. However, there are documented benefits for poor countries as well. Arguments in favour range from better economies of scale and supervision, more advanced technology, greater perception of safety by depositors, and lower corruption. Of course, with regards to corruption, there have been cases lately about the

susceptibility of foreign banks too. But in general, these are the exceptions and not the norm. “Several studies find that foreign banks in lower income countries (LICs) lend predominantly to the safer and more transparent customers, such as multinational corporations, large domestic firms, or the government.” This remains largely the case. And when the specific case of African countries is explored, other studies still find that to be the case. Still, it is argued local banks become more efficient from copying the practices of their foreign competitors; by the adoption of better technology and banking practices, for instance. So, the Ethiopian case, when opened up, is not likely to be any different. • The author, Dr Rafiq Raji, is an adjunct researcher of the NTUSBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation. This article was specifically written for the NTU-SBF Centre for African Studies

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Why SNEPCO supply base must remain in Niger Delta by a minute population through a survival of the fittest struggle. However, few companies and facilities domiciled in the region have managed to employ the youths and sustain the peace. Some of such facilities are the Onne Port and the Onne Oil and Gas Free Trade Zone – the largest in the world. Onne Port is perhaps the only functional port in the eastern region. The other ports including Calabar, Warri and Port Harcourt are all in a near-comatose state. Onne Port has remained alive and proved that public private partnership is a veritable means to manage Nigeria’s port system. The Free Trade Zone, on the other hand, has become a destination of choice for multinationals operating in the Niger Delta region. And the patronage of these companies has improved the capacity to provide employment for the teeming youths of the region. In essence, it is an interwoven cycle that benefits all parties – the companies, communities and government. In the same vein, it is a relationship that can be highly consequential by one party’s disconnection or disaffection. Hence, the eyebrows the decision by Shell Nigeria Exploration and Production Company (SNEPCo) to relocate its supply base out of the zone has raised. A statement by some concerned employees of SNEPCo was recently circulated in the media informing the public of an impending decision of the company to relocate from the Onne Oil and Gas Export Free Zone in Rivers State to a new base in Lagos. In a swift reaction, the spokesperson for SNEPCO, Bamidele Odugbesan, denied the alleged relocation. “The base will continue to be utilised by the Shell Petroleum Development Company of Nigeria

Limited (SPDC), operator of the SPDC Joint Venture for SPDC Joint Venture operations. SNEPCO’s operations are in the Bonga Field 120 kilometers off Nigerian coast in the Gulf of Guinea and our operations staff and contractors work offshore in Bonga,” he said. However, he also conceded that “SNEPCo, which has been making use of SPDC’s logistics supply base operated in Onne, is trying to develop its own alternative supply base in Lagos. SNEPCo is not planning to relocate any of its operations from anywhere to Lagos.” The feeble reaction from the company has been unsuccessful in dousing the brewing tension the news has elicited. The decision has already generated disaffection amongst the youths of the region towards the company. In a peaceful protest, youths under the umbrella of Onne Youth Council (OYC), expressed their grievances and total condemnation of the move, urging the company to rescind its alleged plan. The youths also revealed that the planned relocation could lead to the loss of more than 5,000 direct and indirect jobs. The Paramount Ruler of Onne Community, John Dennis Osaronu, has also joined in the call for SNEPCO to reconsider the decision to relocate its supply base to Lagos because of the consequences on the people, the community and the entire Niger Delta region. There are many perspectives to examining the plan to relocate. It can be examined from a strictly economic perspective – impending job loss and impact on the Onne Free Trade Zone – and it can also be viewed from the security perspective – implications for peace and stability in the region. Whichever perspective analysts choose, it is undeniable that executing the alleged plan has wide implications for the Onne Oil and Gas Free

Trade Zone, the Onne Community, River State, Niger Delta region and the country at large. There is a truism that organizations are corporate citizens and should be treated so. It is therefore important for the company to consider other stakeholders outside its internal system in arriving at a decision such as this due to its wide-ranging impacts. Whilst the underpinning motive for the alleged decision may have some business advantages for the company either in the immediate or long term, its overall consequence on Onne Free Trade Zone and the entire region should attract equal consideration. More so, as a foremost oil and gas company in Nigeria that has operated in Onne for more than 20 years, the planned relocation may also serve as impetus for other companies in the Zone to follow suit. And when this is encouraged the eventual consequence is a drastic drop in business activities in Onne. This does not only affect the country in terms of revenue loss, it will also lead to job loss and increase in unemployment in an already volatile region. As a case study for other Niger Delta communities, Onne is practically built on the going concern of the companies in the area, especially the Onne Free Trade Zone. This suggests that any challenge faced by Onne Free Trade Zone will directly impact the employment of youths in the community. And the issue has the potential of escalating from a community issue to a regional concern within the shortest possible time. The government clearly cannot afford a huge population of idle youths at this point in an already volatile region. It is too much of a risk to ignore. It also sends a negative signal that Shell and its subsidiary SNEPCO may not really be

interested in ameliorating the plights of people in the Niger Delta region; rather it portrays the company as one willing to suck the region without committing to its people. Issues like this reinforce the perception in some quarters that the government and the multinationals do not really care about the Niger Delta region, a position that was pushed forward by the Ijaw People’s Development Initiative earlier in the year. More so this alleged decision is coming at a time when Niger Deltans are demanding for multinationals to relocate their headquarters to the region. Whereas that call was amplified by the Vice President, Prof. Yemi Osibanjo during one of his visits to the region, it has now become a major demand by the leaders of the region. However, this latest alleged decision is potentially capable of injecting a negative dimension to the relatively peaceful atmosphere of unending discussions for stability. Ultimately, whilst it is difficult for external powers to determine how a company is run, it is only appropriate that Shell pays attention to the responses that have greeted this decision and act accordingly. Observers have been left in disbelief on what could have informed the alleged decision considering that Onne is considered as one of the best managed ports in Nigeria and the Onne Free Trade Zone, which is the largest in the world, has continue to surpass expectations. More so, the Onne people have been friendly and receptive to companies operating in their community in an exemplary manner.

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Tuesday 14 August 2018

The risk of having a Minister of Finance that can be blackmailed

here has been an almost deathly silence since July 7 when P r e m i u m Ti m e s broke a story that the Minister of Finance, Kemi Adeosun may have forged her National Youth Service Corp (NYSC) exemption certificate. The online paper alleges that even though Adeosun finished her tertiary education at the age of 22, she got an exemption certificate from the NYSC in 2009 when she was not entitled to one. The law setting up the NYSC makes it mandatory for all Nigerians who finish their tertiary education before the age of 30 to undergo the oneyear youth service programme, which is aimed at helping foster the country’s integration across multi-cultural lines. But the NYSC has issued an official statement claiming that Adeosun applied for an exemption certificate. They did not state on what grounds she applied for an exemption certificate even though in the same statement they claim to be investigating how she purportedly got the exemption certificate she currently carries. There are various grounds that one can apply for an exemption certificate from the NYSC. The most commonly used is if a graduate from a Nigerian or

foreign tertiary institution graduates when he or she is older than 30 years at the time of graduation. Also, graduates that have served in the Armed forces, DSS, or Nigeria Police for more than nine months at the point of graduation can also apply for exemption. Nigerian or foreign graduates who have also received national honours at the point of graduation can also apply for an exemption. Nigerians who did their tertiary education on a part time basis can apply for an ‘exclusion’ certificate since they are not eligible to participate in the scheme. It is very difficult to see from the condition set above where Adeosun fits in. Obviously, she does not qualify for exemption based on any of the criteria set by the NYSC law. To put it bluntly, Adeosun should not be presenting an NYSC exemption certificate to any public or private institution. If she has one, then it is very difficult to argue that the certificate is not fake or forged. It is therefore baffling that the NYSC claims that it is still investigation an obvious case even after a past director general of the NYSC have come out to say categorically that there was no way that she could have been issued an NYSC exemption certificate. Since the allegation was published, Adeosun has neither refuted nor confirmed the allegation. Interestingly the Department

EDITORIAL ADVISORY BOARD

of State Security (DSS), which screens all ministerial nominees before they are cleared by the Senate has also not made any statement about the issue. Is it an admittance of guilt that they failed to do a thorough vetting of the minister? The Police has also been silent despite a clear case of criminal allegations of forgery being made. Even of more concern has been the uncharacteristic silence from the National Assembly on the allegations being made against the Minister. The National Assembly has not called for a probe or a public hearing on the allegations. This silence from the National Assembly is even more worrisome considering that the Premium Times publication has also accused them of using the information on the minister to blackmail her. The National Assembly has not come out to officially deny that they have been blackmailing the minister to release funds to them. The silence of all the key organisations that should investigate the allegation about the minister is really worrying. Why are they silent? Is the silence borne out of the need to protect a colleague or is it inspired by the more dangerous prospect that they have seen a loophole to get their hands on the country’s treasury? Adeosun is the country’s treas-

ury keeper. She determines and signs off on how and what cash is released to various ministries and parastatals. In any part of the world, her position is very influential and powerful. It is therefore very dangerous to have anyone vulnerable to blackmail holding the position of Minister of Finance. That vulnerability could be exploited by crooked individuals into misappropriating or even embezzling public funds. Ministers of Finance are usually of the highest form of integrity. The allegation hanging on Adeosun head has obviously dented her integrity. Sadly, she has not come out to restore that integrity. It is important that if she cannot restore her integrity that she be relieved of her position, and this is mainly for her sake and that of the country, so that she does not become susceptible to further blackmail. Besides, it does not speak well of the country that a Minister of Finance with unresolved ‘forgery allegations’ is seen representing the country at international forums. It is the kind of situation that does not instil confidence in global counterparties. Integrity is a valuable commodity in the global financial community and right now, the minister does not have much of it to hang onto, unless she can satisfactorily clear allegations of forgery that hangs on her.

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Tuesday 14 August 2018

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Advertising Academy becomes recurring bait for AAAN Presidents

MTNF unveils 3rd phase of ‘What can we do together’ initiative

…Ikechi keys in to trend as industry watches Stories by Daniel Obi Media Business Editor

ike politicians, the long planned academy of Association of Advertising Agencies of Nigeria (AAAN), has become recurring bait in the agenda of subsisting presidents. Every new administration promises to get this on stream but at the end, it just doesn’t take off fully. Twenty two years after the advertising body approved the establishment of advertising academy aimed to produce top rated professionals for the advertising industry; the academy is yet to become operational and the subsisting presidents have always made it their agenda with all the seriousness. Ikechi Odigbo, the new president of the association was not left out in this trend of promises to ensure the academy takes off. When he took over the mantle of leadership of the body recently, Ikechi said following the “huge investments that have been made to ensure take off of the Advertising Academy, the new leadership will ensure that the academy becomes operational during its tenure” Ikechi’s statement is not totally different from those before him. Rufai Ladipo who served for one term in 2011 had in that year said that the business plan of the academy had been completed, discussed and agreed by the Advertising Academy’s Board. “We have also engaged a consultant to facilitate the commencement of the academy. The registration has been completed and we are awaiting the Academy’s certificate and other relevant documents from the Corporate Affairs Commission”. After Ladipo tenure, then entered Bunmi Oke, the for-

mer ED of 141Worldwide who fought hard in the industry dominated by men. When Kelechi Nwosu, the CEO of TBWA stepped in as president, he equally promised that all the loose ends have been tightened as he picked March 2016 to launch the long awaited academy. He made frantic efforts to ensure this but it never materialized perhaps due to various circumstances and lack of proper structures. In May 2016, Kayode Oluwasona, the erstwhile Managing Partner/CEO of Harmonee Concepts Limited replaced Nwosu as president at the association’s 43rd Annual General Meeting held in Uyo, Akwa Ibom State. Kayode concentrated more on bringing the Association closer to internal and external stakeholders and strengthening its positioning among sectoral bodies in the industry. He also attempted to re-energise and bring fresh thinking and innovations in the industry. Notably, Kayode ran the first ever training programme on the platform of the academy and inaugurated the Academy Board, headed by the Vice Chairman of Troyka Holdings Limited, Jimi Awosika. He commenced a comprehensive review of the Academy’s structure and

operational strategy in order to address identified lapses, which were threatening its functioning and sustainability. But it is still a surprise that all these are still being done 22 years after the conception of the academy. The new President of association, Ikechi Odigbo, who is the CEO of DDB Lagos, has equally made the academy his cardinal objective promising to ensure take off of the Advertising Academy during his tenure. He equally said that professional training programmes will be reviewed to further align with requirements for APCON certification and bridge gaps in the quality of content and delivery. In addition, Odigbo said the body will initiate and pursue collaborative relationship with relevant educational institutions such as O2 Academy, universities and reputable organisations like Miami Ad School, Google as well as Facebook to ensure greater subscription to the training programmes of the association and deliver up-to-themoment, beyond advertising trainings. The academy was an effort by the over 80-member association, to provide and equip individuals in the advertising profession on creative

delivery, and meeting communication needs of clients, especially in the ever evolving environment. What this means is to give hope to clients who are thirsty for more high quality creative work . It is also designed to be a “first class advertising education and leadership development institute- a one stop center for skills acquisition and a citadel of learning that will guarantee academic and professional excellence, through continuous sharing of knowledge and ensuring integrity in the conduct of business while building strong leaders and a steady pool of first class advertising professionals.” According to the association, the idea to set up such institution is also, perhaps to train those who want to create a career path for themselves in advertising, for skills acquisition, and also an avenue to organise leadership training for professionals in the marketing communication industry but the promises upon promises by subsisting presidents on the academy have not come to fruition. The full functioning of the academy has dragged but the industry is now watching to see whether Ikechi Odigbo administration will be different to fulfill the industry aspiration.

n fulfilling its commitment to improve the quality of lives in communities, MTN Foundation, the social investment vehicle of MTN Nigeria has launched the third phase of the “What Can We Do Together” project, an initiative geared towards developing grassroots communities through collaborative effort. Reaching over 10 million Nigerians, the first two phases of the campaign, have seen 400 communities in 347 local government areas benefiting from the initiative with 40 communities receiving 500KVA transformers; and another 40 communities receiving 650ft boreholes, a statement said. “The first two phases also saw the supply of medical equipment to 80 primary healthcare centres; provision of school furniture sets to 174 schools, and household supplies and equipment to 66 orphanages in different communities in

Nigeria”. The third phase of the campaign is set to begin, and as usual, the foundation said it plans to enlist the support of Nigerians in order to meet the objective of the initiative. To nominate a community, nominators are required to text ‘MTN Foundation’ to the short code 321, and respond to subsequent questions with ‘MTNF (space) answer.’ Nominators can also fill an online form via http://foundation.mtnonline. co m/do-together Speaking on the flag-off of the third phase, the Executive Secretary, MTN Foundation, Nonny Ugboma in a statement said, “At MTN Foundation, we are committed to improving the quality of lives in our communities. It is a mandate we are working steadfastly on and we believe that Nigerians deserve the best. Working with them to achieve this common goal will help make lives easier, better and brighter.”

Pay TV Price: StarTimes to crash subscription by September 1

tarTimes has concluded arrangement to reduce subscription fee for its classic bouquet from N2,600 to N1,900 from September 1, this year with the inclusion of Ebony Life TV, ST Nollywood Plus, Fox and ST Kids to the bouquet. The pay-TV company also declared a one month free access for all its subscribers starting from August 1 to 31 on all decoders, irrespective of subscription status to ensure customers have access to

1, all StarTimes subscribers will enjoy more entertainment for less. With the addition of new entertainment, movies and kiddie’s channels. We are aware of the economic challenges faced by many Nigerians and have resolved to allow them watch all our new channels for free this August and reduce our subscription rate come September 1” The company added that it seeks to enrich the lives of its customers across the various territories where it operates.

its new channels, available on the classic bouquet. Kunmi Balogun the company’s Public Relations Manager said in a statement that “This reinforces our commitment to ensuring that our customers enjoy the best for less.” “Starting from September

“We are constantly looking for new ways of delivering more value to our customers with the best local and international entertainment. We want to do our bit with this offering to ensure customer satisfaction”

APCON recognises CEO, 37 others for long service, hard work

EO of Advertising Practitioners Council of Nigeria, APCON, Ijedi Iyoha was among the 38 staff of the establishment recognized last weekend for their long service and hard work to the council. Iyoha was a pioneer staff of the council, having com-

menced her career in 1992 as assistant education/training officer. Since then, Iyoha who has Masters Degree in Mass Communication from Lagos State University in 2005 has held various positions until last late year when she became the CEO of the council. To all the awardees, she

said that the council recognized hard work as it is not easy to stay long in an organization. Iyoha enjoined all the staff to be more dedication to the establishment. In her statement, the chairman of the award organizing committee, Onyebuchi Martha reiterated that the awardees have served

APCON in various capacities ranging from 10 to 25 years. “This award is for their dedication, tenacity and hard work”. She said that the last award was organized four years ago. Some of the dignitaries present at the award include former registrars, Bello Kankaroffi and Bel Molokwu.

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‘Businesses can only win when they evolve’ Daniel Obi

d a p t o r D i e, that is the single most important rule in business, X3M Ideas, a marketing communication agency based in Lagos emphasises. It maintains that regardless of the industry, businesses must evolve to remain relevant. According to the firm, this is even more important in the new media industry where technology is ever evolving pointing out that the way content is being consumed now is not how it was consumed few months ago.

Narrating the secret to its success recently, according to a statement, it said it wants to share this ideal with all of Africa. “We believe that the Dinosaurs were great creatures in their time, top of the food chain, giant predators that no other could challenge, but then something changed, the earth began to change and they needed to evolve. Some dinosaurs succumbed to the changing tides, understanding that this was the only route to survival. They evolved and became Dragons. The others who were late to the evolution party had no choice but to become preys to the larger,

fire breathing creatures”. Discussing the reasoning behind such a massive PR stunt, X3M C.E.O, Steve Babaeko spoke in the statement of the lesson managers can take from the prehistoric times - “We like to believe there is a lot to learn from the dinosaurs. How could a creature so powerful become extinct? While the reasons why these dinosaurs erased off the face of the earth is open to interpretation, we are of the school of thought that they got devoured by bigger, better equipped creatures - Dragons. These creature who also were dinosaurs evolved and took over and the dinosaurs who couldn’t, or rather, didn’t evolve became prey. Hence the mantra, Adapt or Die.” Today, the Dinosaurs represent most agencies and media houses who are still stuck up on old ways, refusing to embrace technology, social media, or the changing tides in media either out of ignorance or doggedness. “This is the most ideal depiction of modern business landscape and we have come to spread the message - Adapt or die. The success or failure of Nigerian businesses is hinged on their ability to evolve. “When we started 6 years

ago we knew what we wanted to do but we always kept an open mind of how we could evolve with the ever changing business landscape. Both from a business and creative standpoint, we always give room to adapt, room to evolve.” - said Babaeko. “We at X3M, have gone through great lengths to make our point and it isn’t just about the message, the execution too highlights how controlling the narrative is different now compared to just a few years ago. Some of the channels that would have been previously considered when doing a PR stunt are now obsolete. Back in the day, print was the medium of choice to spread information. Now print gets its news from social media”, he further said. Olasunkanmi Atolagbe, X3M Ideas, Group Head, HR/Admin echoed X3M’s shape shifting strategy. - “we know the business we’re in but sometimes we forget to continually learn. We get caught up trying to run a business that we forget to study the industry. Steve has been doing this for a long time, he has seen it all, from the era of Print, to Tv, to social media. He knows how the industry has evolved and how its consumers have adjusted accordingly. An ad

that would have been brilliant 5 years ago may strike a wrong cord now. This keen eye for observing trends and adjusting accordingly is what has set X3M apart.” He a d vi s e d co nte nt provider, business owner, or consumer, to must stay ahead of the game, anticipating changes and adjusting strategies to allow business thrive. “It’s not easy to predict the future of media. Technology often plays a huge part in these changes. It also isn’t easy to adapt but nobody said being successful was going to be easy. If there is a trick to it, it is being grounded enough to understand that tomorrow is never given. Once you become safe in the achievements that you have and refuse to continually innovate, you will be left behind as the game evolves.” . After numerous awards, after stunning numbers in revenue, and a hugely impressive clientele including some of Nigeria’s biggest brands, X3M remains the foremost player in Marketing communications industry in Nigeria because according to the firm, it is constantly evolving, constantly winning. So our message to African Businesses is simple - Adapt or Die, the firm said.

Tuesday 14 August 2018

Shoprite unveils first brand ambassador in Nigeria

hoprite has unveiled a renowned chef, Tolu Erogbogbo, who is better known as Chef Eros as the first ever brand ambassador in its 13 years in the country. The self-taught chef, who started selling chicken seasoned with spices to his fellow students whilst studying for degree at International Business Management, said “If you want to cook like a chef, shop like a chef.” Erogbogbo whose culinary journey began in school said in a statement that his creativity, originality and attention to detail is what truly set him apart. “Part of being a chef, is to know how to entertain, that’s why I choose Shoprite,” said brand ambassador. With a total of 25 stores, Shoprite Nigeria offers consumers a world-class shopping experience through its core business promise of everyday low prices. Through this new partnership with Shoprite Nigeria, Chef Eros now aims to put Nigerian food on the world map: “Our country has much to offer in terms of tastes and variety. It’s up to us to let the rest of the world know this” he said.

SPAR Nigeria to reward consumers with Spectranet rewards final batch of car, other gift items in its 30th anniversary winners in w/cup promo SEYI JOHN SALAU

PAR Nigeria, a hypermarket retail store is celebrating its 30th anniversary in the Nigerian market with a “Scratch and Get Free Gifts” promo for shoppers across Nigeria. The promo which is open for the month of August will be rewarding consumers with a new car and over 750 gifts items. John Goldsmith, head of marketing, SPAR Nigeria, in a statement said the retail outlet is delighted to have been in Nigeria for thirty years. “We have enjoyed the support and the patronage of Nigerians and we are reciprocating these good gestures through this Scratch and Get Free Gifts Promo.

“The promo which will run throughout the month of August at all SPAR outlets nationwide guarantees a gift for every shopper whose spend in any of our stores is N5,000 and above. There are over 750 different types of products as giveaway, these includes Nissan Almera Saloon car, Televisions, washing machines, Gas cookers, Fridges, Laptops, Perfumes, Wines and Spirits, Bags, SPAR Gift cards and so much more,” said Goldsmith.

SPAR Nigeria is a part of the global retail chain originating from Holland. SPAR international has given the master franchise of the SPAR brand to Artee Industries Limited for its operations in Nigeria. The hypermarket brand takes cognizance of the various kinds of shopping missions and adapts its products and services in respect of choice, quality, service and value to translate the entire shopping experience for Nigerians.

s part of efforts to deepen consumer appreciation, foremost internet services provider, Spectranet 4GLTE has rewarded the final batch of winners in its 2018 World Cup promo. Out of 5,978 eligible subscribers, 216 subscribers eventually emerged as winners in a transparent draw observed by representatives of lottery regulatory bodiesNational Lottery Regulatory Commission and Consumer Protection Council. Elizabeth Lekwuwa emerged as winner of the star prize, Trip to Dubai. 5 customers comprising Sandra Igene and Yemi Oyedun were rewarded with Unlimited Data for 1 year. Obinna Anokwute, Diran Onifade and John Basil were among 10 subscribers reward-

ed with 42” LED TV just as 200 subscribers were handed the privilege to choose either 7GB Data or Bluetooth speakers for purchasing Spectranet devices and subscribing to data plans within the duration of the promotion-June 1st to July 31st, 2018. Tagged ‘Connect &Win Big’, the promotion drummed support for Nigeria’s male national team as they jostled for honours at the 2018 FIFA World Cup. Prior to the final draw, 216 winners emerged from the first draw thus bringing the total number of winners to 432. One of the many winners, Obinna Anokwute who responded to phone calls that he won a 42” TV set adjudged Spectranet as the best broadband company in Nigeria just as he commended brand

for keeping the promise to reward subscribers who purchased modems within the period of the promotion. Speaking at the draw, Head of Marketing Spectranet 4GLTE, Mike Ogor said, “The World Cup comes with a unique kind of enthusiasm and excitement. We tapped into this feel to make our customers happy even as they enjoyed the moments of the tournament. Our fast and reliable connectivity to things that matter made this possible. “This draw brings the Connect & Win Big Promo to a conclusion. New and existing subscribers participated in the promotion. Right from the onset, we ensured that the promotion was as transparent as possible whilst engaging relevant lottery regulatory bodies.

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Dizengoff canvasses deployment of smart solutions to tackle security issues

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Co m pa n y n e w s a n a ly s i s a n d i n s i g h t

Jaiz Bank set to disburse $20m SMEs loan Onyinye Nwachuk wu,

igeria’s foremost noninterest commercial lender, Jaiz Bank Plc has announced that it will disburse the $20 million, secured from the Islamic Development Bank (IDB) for NNigerian Small and

Medium Enterprises (SMEs) before the end of the year. “We have finished all that we need to tidy up and conditions precedent to the agreement and have lined up our customers who want to benefit from the facility. We will disburse the entire fund or at least a substantial part of it before the end of the year”, Jaiz bank managing direc-

tor (MD), Hassan Usman told the press in Abuja, on Thursday. The bank’s financing deal with the IDB was sealed in April this year and covers sectors such as industry, communications, technology, health, manufacturing, agriculture among others. At the press meeting, Usman also announced that

the Bank has expanded operations to many states and that their target 40 branches across the country, before the end of the year. “In terms of the reach, we are looking at opening more branches. Last year we had only two branches in Lagos. We have added two more. We are looking at opening more in the South, especially,

L-R: Acting President Yemi Osinbajo; Chantelle Abdul, managing director, Mojec International Limited, and Mojisola Abdul, chairman, during the official visit of the Acting President to Mojec International Limited and inauguration of its Meter Box and other plastics factory in Lagos. Pic by Olawale Amoo

UN, Alibaba say Africa ripe for e-commerce opportunities MIKE OCHONMA

here are very strong indications that across Africa, the effect of ecommerce platforms flanked by payments, logistics, tourism and big data partners, are beginning to lift local economies. This is the submission of e-commerce giant Alibaba’s Business School and the United Nations Conference on Trade and Development (UNCTAD), which co-hosted the Netrepreneurs: The Rise of Africa’s Digital Lions conference, in Johannesburg, South Africa. According to sources from the two institutions, it said; “Entrepreneurs are at an inflection point. With Internet penetration, Smartphone ownership and e-commerce skyrocketing, entire industries will be completely remade as new ventures emerge and compete with foreign firms and conventional businesses,” said Alibaba Group VP Brian Wong. Entrepreneurs can be the catalysts for change and enablers for inclusive economic growth. With e-commerce, for example, global access to

products is possible, inclusive financial services can be offered, and farmers can sell their own produce, he added. According to Alibaba, if African entrepreneurial talent and energy can be channeled by a conducive environment created by policymakers, educators and investors, new businesses will offer goods and services that solve problems, create value and provide opportunity for people across the African continent. “These actors can choose to pursue traditional development, or they can leverage emerging technology and skills to leapfrog interstitial industrial modes to create something productive, efficient and unique to Africa,” it added. However, it is necessary for policymakers to create an environment where digital technologies are promoted. Most African countries do not have e-commerce or digital trading policies, while having a lack of proper cybersecurity measures; therefore, a lot needs to be done before e-commerce will kick off on a large scale in Africa, she noted, adding that technology should not be used to rush to catch up to global trends, but rather to solve local

problems. Out of the 1.3-billion people in Africa, there are 453-million Internet users (35 percent Internet penetration). There are 28 countries with less than 10 percent Internet penetration, including Ethiopia, the Democratic Republic of Congo and Tanzania. “The need for collaboration between policymakers, investors and educators has never been higher. Strategic thinking and a focus on long-term outcomes for Africans is vital to fully harness the power of the Internet, which will launch new industries, solve problems and increase quality of life,” said Alibaba. The company added that small decisions now can shape decades of economic realities, and the more all parties can communicate, the more these outcomes may be optimised. During a panel discussion at the event, Mara Corporation founder Ashish Thakkar noted that, with the African continent being host to six of the ten fastest-growing economies, and with 85 percent of the African population being under the age of 35, now is a ripe time to invest in African digital economies.

the South West before the end of the year,” the MD said. “ Yo u n e e d s y n e r g y around the branches so that you reduce the overall costs of a branch. If you have a lone branch in the SouthSouth in Port-Harcourt, for instance, that is not very economical. What we are doing is to get to a level of threshold of activities before we open branches in the South East. We know the market is waiting for us there. We bank people from that part of the country through the nearest branch”, he explained further. Having been licensed by the Central Bank of Nigeria licensed as a national bank in 2016, Jaiz bank now looks to becoming a regional player. “Important thing is that we do very well in this country. When we grow to a level that we are happy with , the expectation is that we will move to the region are create more partnerships to become regional players,” Usman confirmed. On Infrastructure funds, Usman noted that requests for such financing has been

low but that Jaiz bank has investing heavily in the federal government’s Sukuk bond which particularly conforms with its ethical requirements. He assured that the Bank will continue to commit to dealing with credible customers and investments and will not participate in any infrastructure funding that negates the Islamic principles. He also gave the assurances of the management to only work with partners in order to make such funds available on request. Speaking on the challenging Non-Performing Loans (NPLs) in the industry, Jaiz Bank boss said that the institution even though not immune to the impacts of the country’s tough economic situation, has not suffered much of the problem, due to its business model. “No over-heating of the balance-sheet because of the nature of what we do,” he stated. “We don’t compound interest. When it comes to recovery, the collateral is near the facility itself”.

NPF Microfinance Bank servicing 400,000 customers nationwide Hope Moses-Ashike

fter twenty five years of successf u l bu si n e ss i n Nigeria, NPF Microfinance Bank Limited now has close to 400,000 customers across the country. The share capital of the Bank Limited which also has risen by 599,900 percent from N500, 000 made of 500,000 ordinary shares of N1.00 each to N3 billion ordinary shares of 50k each. The bank commenced business on August 20, 1993 in Lagos, having obtained a provisional license to operate as a community bank on July 12, 1993. The bank converted from its community bank status, to a national Microfinance bank following the directive of the

Central Bank of Nigeria (CBN) to all community banks. Presently, the bank has 28 branches across the country with close to 400,000 thousand customers of which 70 percent constitute its primary constituency, immigration, prison, custom, while 30 percent are from the public micro small and medium enterprises (MSMES). Akinwunmi Lawal, managing director/CEO, said NPF Microfinance is engaged in business of microfinance banking and has emerged as one of the leading microfinance banking in the subsector. The bank intends to grow its business to all the states of the federation in the coming year using technology to reach numerous customers. H e said the bank intends to also touch all sectors by

granting financial support to MSMEs in manufacturing and agricultural sector as well as its value chain. Lawal said customers can also access the CBN Micro Small and Medium Enterprise Development Fund (MSMEDF), Development Bank of Nigeria (DBN) and Bank of Industry (BOI) loans through the bank. “Professionalism, integrity, customer focus, excellence and loyalty have been our core values and hallmark over the years”, Akinwunmi said at a press conference in Lagos. As part of activities marking the 25 years anniversary, the bank will embark on fitness walk and sports in Lagos, a visit to motherless baby’s home in Lagos, IDPS camp in Maiduguri and Benin City, and a thanksgiving/ gala night in Lagos.

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COMPANIES & MARKETS Dizengoff canvasses deployment of smart solutions to tackle security issues Josephine Okojie

gainst the background of increasing security concerns across the country, Dizengoff Nigeria has canvassed for the implementation of preemptive strategies with the adoption of smart solutions to secure lives and properties in Nigeria Dizengoff physical security experts during a press chat in Lagos expressed this view while x-raying challenges of securing facilities and homes amidst growing safety and security concerns across the country. “Securing the environment has moved away from traditional sur veillance methods and foot patrols which waits for incidents or

crime to break before intervention. Security in the digital age is more preemptive. It is a deliberate design which focuses on potential challenges in the environment beginning with awareness,” Guy Rabinovich, general managercommunications technology, Dizengoff Nigeria said. “Physical security as it relates to securing facilities weather in the corporate or domestic environment is highly professional and specialized. Security for different vectors in this digital era is technology driven, beginning for instance with the use of smart systems that are capable of providing awareness about what’s happening in the environment real-time. “An effective security design should include smart surveillance solutions like smart camera systems and

alarms as a first step. These are devices that are specially designed to monitor the environment with the capability of providing real-time awareness and a head start to mitigate potential threats effectively”, Rabinovich said. He disclosed that design is critical in deploying security systems for public spaces, while explaining that valuable information can be gotten from a surveillance camera. He added that it is necessary for security outfits to take into consideration the location of installation in addition to certain features that must be present in the cameras like its resolution, coverage area and light adaptability which are all decided at the design stage. Rabinovich further explained that the complexity of modern security challenges

requires that the country is able to do more especially for security in public places such as the airports for which require top security protection. He also called for the use of analytics which adds intelligence to security system that can immediately alert operators in cases of abandoned objects, entrance into unauthorized zones, loitering and detection of unusual behaviors that could constitute security risk. In his submission, Antti Ritvonen, chief executive officer, Dizengoff Nigeria, however, counseled organisations to involve professionals in security planning. He identified the noninvolvement of professionals in security planning as the missing link in security failures in most organizations and domestic environments.

Indigenous technology stakeholders call for subsidy in food processing, feeds equipment IDRIS UMAR MOMOH, Benin

ndigenous technology development stakeholders have advocated active promotion of local content policy in the manufacturing of strategic basic equipment in food processing, feeds, drugs, vaccines and other goods through subsidies, grants and other incentives by the government. The stakeholders made the called at the end of the just concluded 4th LAPO Institute Conference on Microfinance and Enterprise Development with the theme, “Indigenous Technology and Value Chain Development”, in Benin-City. The stakeholders include academia, policy makers, key players in the Microfinance industry, researchers, governmental and non-governmental organizations, texhnocrats, entrepreneurs, regulators and other relevant bodies. In a 12-point communique signed by the conference chairman, Mike Obadan and chairperson , conference planning committee, Christiana Okojie respectively and made available to newsmen, urged governments and financial institutions to emulate the Asian Tigers who have liberalized funding for the development of local technology. The experts noted that administrative bottlenecks delay access to funding opportunities for industrial growth and development.

They, however commended LAPO Institute for building the capacity of 5,484 beneficiaries in the areas of Microfinance and Enterprise Development and for disbursing the sum of N4.5million as thesis support to 29 indigent postgraduate students undergoing various programmes in Nigerian universities. The communique said, “the conference noted that the wealth of indigenous knowledge and technologies in Nigeria presents unique opportunities for innovation to occur, for local economic transformation and growth to be realized and global competitiveness enhanced if well developed and harnessed”. It noted that there must be a conscious funding collaborations and synergy between the public and private sectors to promote investments in research and value-chain development. The communique which identified poor funding as a albatross underscored the critical role of science and technology, research and innovation in the country’s quest for development. It however, called for deliberate, practical and concerted efforts, coordinated by the government, using the instrumentality of its agencies to develop local technologies through the development of science and modern technology, with a view to producing products that can meet international standards as well as enjoy increased local patronage.

Pharmaceutical research institute earns ISO certification with USAID support L-R: Lana Loyinmi, head contribution & bond redemption, National Pension Commission; George Onekhena, deputy commissioner, finance and administration, NAICOM; Yetunde Ilori, director general, Nigeria Insurers Association; Bala Zakariya’u, past president, Chartered Insurance Institute of Nigeria and chairman of occasion, and Adebayo Adeleke, managing director, Lancelot Ventures Ltd, during the 3rd annual national conference of the National Association of Insurance and Pension Correspondents (NAIPCO) on The Role of Stakeholders in Developing Insurance and Pension Sectors in Lagos . Pic by Pius Okeosisi

ADB president calls for emerging agriculture technologies to optimize farmers’ output

he President of the African Development Bank Group, Akinwumi Adesina, has made an urgent call to give farmers across the continent new technologies with the potential to transform agricultural production. Adesina said the technology transfer was needed immediately and that evidence from countries like Nigeria demonstrated that technology plus strong government backing was already yielding positive results. ”Technologies to achieve Africa’s green revolution exist, but are mostly just sitting on the shelves. The challenge is a lack

of supportive policies to ensure that they are scaled up to reach millions of farmers,” Adesina said during a keynote speech delivered at the 2018 Agricultural and Applied Economics Association (AAEA) Annual Meeting held in Washington, D.C August 5, 2018. Adesina cited the case of Nigeria, where policy during his tenure as the country’s Minister of Agriculture, resulted in a rice production revolution in three years. “All it took was sheer political will, supported by science, technology and pragmatic policies...Just like in the case of rice, the same can be said of a

myriad of technologies, including high-yielding water efficient maize, high-yielding cassava varieties, animal and fisheries technologies,” Adesina said. The African Development Bank is pointing the way to how this can be done, and is currently working with the World Bank, the Alliance for a Green Revolution in Africa (AGRA), and the Bill and Melinda Gates Foundation to mobilize US$ 1 billion to scale up agricultural technologies across Africa under a new initiative called Technologies for African Agricultural Transformation (TAAT). TAAT is taking bold steps to

bring down some of the barriers preventing farmers from accessing latest seed varieties and technologies to improve their productivity. “With the rapid pace of growth of the use of drones, automated tractors, artificial intelligence, robotics and block chains, agriculture as we know it today will change,” the President said. “It is more likely that the future farmers will be sitting in their homes with computer applications using drone to determine the size of their farms, monitor and guide the applications of farm inputs, and with driverless combine harvesters bringing in the harvest.”

HARRISON EDEH, Abuja

harmaceutical Research and Development Institute has earned International Organisation for Standardisation (IS0) certification for quality control with the support of the United States Agency for International Development (USAID) support. The USAID deputy mission director, Erin Holleran, made the presentation to minister of state for health, Osagie Ehanire, from the ISO for quality control on behalf of a laboratory operated by the National Institute for Pharmaceutical Research and Development (NIPRD). The NIPRD facility, which is responsible for pharmaceutical research and development of local phyto-medicines in Nigeria, is the fourth laboratory in Nigeria to be certified by ISO – an independent international standard bearer – for quality assurance and first non-regulatory laboratory in the country to receive the certification.

“USAID has long supported the Nigerian pharmaceutical manufacturing sector to ensure it meets international best practices,” Holleran said at the ceremony. “We hope that this accreditation will open up new opportunities for research into quality medicines and increase public confidence in the medicines manufactured, prescribed, and sold in the country,” USAID said in a statement, weekend. The support is the latest example of USAID’s contribution to maintaining the quality of medicines in Nigeria. Nigeria is among 35 countries that receive technical and financial assistance to regulatory authorities to safeguard the quality of medicines, with a particular focus on treatment of malaria, HIV/ AIDS, and tuberculosis. The accreditation will not only avail Nigeria with the capacity to improve the quality of medicines it produces, but also enable it carry out research and develop local medicines in accordance with internationally accepted standards.

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COMPANIES & MARKETS Roadmap to Nigeria’s gas driven economic diversification STEPHEN ONYEKWELU

igeria has been described as a natural gas basin with some deposits of oil, however Nigeria’s domestic gas market is underdeveloped and corollaries of this is that gas commercialisation and utilisations remain low. For many years, Nigeria has conducted itself such as to be called a resource cursed country. The resource curse is a paradoxical situation in which countries with an abundance of non-renewable natural resources experience stagnant economic growth or even economic contraction. The resource curse occurs as a country begins to focus its entire production means on a single industry, such as mining, in Nigeria’s case oil and gas and neglects investment in other major sectors. As a result, the nation becomes overly dependent on the price of commodities, and overall gross domestic product (GDP) becomes extremely volatile. Additionally, government corruption often results when proper resource rights and an income distribution framework are not established in the society, resulting in unfair regulation of the industry. The resource curse is most often witnessed in emerging markets following a major natural resource discovery. How can this be reversed? To help convert this resource curse status and move towards becoming a more productive economy, the Society of Petroleum Engineers organised its annual human capacity building in Lagos, which was followed by the Nigeria Annual International Conference and Exhibition (NAICE). The overall theme of this year’s conference was ‘Diversification of the Nigerian Economy – The Oil and Gas Industry as an Enabler.’ Without the oil and gas sector, Nigeria’s diversification effort will hit a cul-de-sac. However, the oil and gas sector has been dwarfed by poor funding because loans from traditional sources such as commercial banks have dried up. Alternative sources of financing are needed. Finding alternative financing model Nigerian oil companies need alternative funding schemes including contractor financing, insurance funds, private equity, pension funds among others to get financing for new projects in an industry

where lenders have become weary and wary. In exchange for some of the funds, operators have been offering equity participation, profit sharing and various crude for payment schemes supported by the Nigerian National Petroleum Corporation (NNPC) which provides guarantees that gives the lenders confidence. For instance, the contracting financing model with Schlumberger has a win-win element to it, but this would not have been possible without the support the joint venture partner, the Nigerian National Petroleum Corporation. Without this confidence to the contractor it would never have been possible. Nigeria needs over $20bn in new financing to ramp crude oil production to 2.5million barrels per day (bpd) but with local banks exhibiting low appetite for lending to the sector due to high nonperforming loans estimated last year to constitute about 40 percent banks NPLs , local players say they are being forced to task their brains for new solutions. In June, Nigerian National Petroleum Corporation (NNPC), FIRST Exploration & Production (First E&P) and Schlumberger signed a tripartite agreement for development of the Anyala and Madu fields under OML 83 and OML 85, offshore Nigeria at the cost over $700m. Under the agreement, Schlumberger will contribute the required services in kind and capital for the project development until first oil. The joint project team will leverage the technical expertise of Schlumberger and the extensive local knowledge of the partners. Globally the oil and gas industry is evolving with talks about more prolific technologies that will displace hydraulic fracking, the impact of electric cars, move to low sulphur content which will render all of NNPC’s refineries obsolete, but poor policy, weak fiscal terms and corruption continues to destroy value from the sector in Africa’s largest crude oil producer. With alternative sources of finance, Nigeria needs to rapidly develop the domestic gas market. Developing domestic gas market The quickest way to diversify Nigeria’s economy is by developing its domestic gas market. To develop a viable domestic gas market, 5 billion standard cubic feet (scf) of daily gas supply will be needed, according to the

Nigerian National Petroleum Corporation (NNPC). Gas is a big source of economic diversification. It can transform agro based industries and boost food production through the use of fertilizers. But to attract the needed investment, there is need for fiscal terms that incentivise investors. Some companies have supplied gas but have not been paid. There is also need for fiscal terms that encourage small and medium term projects. Investors have stayed away from Nigeria’s domestic gas market due to opacity of fiscal terms, lack of functional gas infrastructure and high entry barriers, which have in turn kept the market underdeveloped and impacted gas utilisation. To reap the benefits of a gas driven economic diversification, Nigeria needs to build gas infrastructure. An initial phase of about 2,500km of gas pipeline infrastructure was planned to be completed by the end of 2018. This target, when achieved, will boost investor’s confidence in natural gas market in the country. For incentives, the NNPC have stipulated variable gas prices for different sectors of the economy to drive investment inflows and competitiveness. There is one gas price for power, one for industries and another for industries that use gas a feedstock to manufacture fertilizers and petrochemicals. In this sense a Nigerian fertilizer manufacturer should be able to compete with other fertilizers makers around the world. To reach this target of developing Nigeria’s domestic gas market, huge upfront infrastructure spending is needed. The oil and gas sector needs $20 billion to $30 billion annually to maintain production. Other pipelines that need attention include: expansion of the Escravos-Lagos Pipeline System (ELPS) from 1.1 Bscf/ day to 2.2 Bscf/day. The Trans Nigeria Pipeline Project (TNPP) needs to be completed. TNPP aims to connect the gas pipeline systems in Nigeria to create an interconnected system that will provide flexibility and better management of gas supplies. The framework of this system is an integration of the three gas pipeline systems: Obiafu-Obrikom-Oben (OB3) system with a flow capacity of 2.0 Bscf/day, the CalabarAjeokuta-Abuja system with flow capacity of 3.0 Bscf/day, and the Abuja-Kaduna-Kano system.

Business Event

Adesola Adeduntan, managing director/chief executive officer, First Bank of Nigeria Limited (3rd r) flanked by some FirstBank customers, Ayo Daniyan (l); Mayowa Daniyan (send l); Onyejekwe Nnaemeka (3rd l); Nicholas Okonkwo (2nd r), and Safiyanu Faisa (r), at the FirstBank Voice of Customer held with the Retail Youth segment in Lagos recently.

L-R: Sesan Sulaiman, executive director, Call To Love Initiative; Abdulrasheed Onibudo, chairman, Nigerian Red Cross Society; Wunmi Benson-Ajila, founder/CEO, Call To Love Initiative; Olakunle Lasisi, branch secretary, Nigerian Red Cross Society, Lagos, and Olubunmi Ajila, managing director, Chutes & Ladder Limited, during the “Making A Difference With Education” Summer Camp organised for Children by Call To Love Initiative in Lagos

L-R: Zatur Hassim, specialised Nutrition Director, FrieslandCampina WAMCO; Bartholomew Brai, national president, Nutrition Society of Nigeria; Yetunde Adefolahan Odejayi, permanent secretary, office of the deputy governor, Lagos State; Ore Famurewa, corporate affairs director, FrieslandCampina WAMCO, and Adebunmi Adekanye, permanent secretary, ministry of education, at the Peak456 ‘Drink Move Be Strong Pre-School program launch in Lagos

L-R: Tunde Aina, chief operating officer, StarTimes Nigeria; Justin Zhang, chief executive officer, StarTimes Nigeria, and Eghosa Erhumwunse, national director, SOS Children’s Villages Nigeria, during the singing of memorandum of understanding between StarTimes and SOS Children’s Villages Nigeria in Abuja.

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Nigeria Customs Service sees 45% revenue increase with Blockchain technology Aber T Benjamin is the Assistant Comptroller General, Modernisation at Nigeria Customs Service (NCS). In this exclusive interview with Jumoke Lawanson and Ifeoma Okeke, he talks about the benefits alluded with piloting Oracle’s Blockchain Cloud Service to provide the NCS with a trusted platform for the full automation of Customs Excise Trade business processes and procedures that improves transparency by allowing Nigeria Customs to document and track products that are manufactured locally, right from the source of licensing and permits for manufacturing, to distribution and point of sale. Nigeria Customs Service (NCS) has deployed an early adopter version of Oracle’s blockchain cloud service, how has this impacted NCS services? he successful completion of Oracle Blockchain-asa-Service Proof of Concept (POC) shows that the entire business environment of Nigerian Customs can be migrated to Blockchain, to automate as many customs processes as possible, creating transparency and predictability.

base, and goods produced in Nigeria. In addition, it will help control the manufacturing industry, and create standards for global competitiveness; as well as regulate illegal manufacturing of products not fit for trade and consumption. This technology is not just about improving one organization, but will help build global trust for Nigerian Businesses, irrefutable data on goods manufactured in the country thereby, creating a favorable environment for investment.

How much of NCS’s processes have been fully automated? Nigerian Customs has a proven track record of successful implementation of ICT projects in collaboration with Partner Government Agencies in the trade chain, currently, the Service has commenced the implementation of e-customs project to establish a Digital Paperless Customs Administration and we will continue to work in partnership with other government agencies, financial institutions and businesses to ensure wider adoption of Blockchain technology, potentially even into Economic Community of West African States (ECOWAS). Technology is seen to be disrupting several industries across the globe; do you see the adoption of Oracle’s blockchain cloud service displacing some jobs in the Nigerian customs? I see Blockchain technology displacing legacy systems and adding value to the existing manual business process of the Nigeria Customs Service. Making such manual business processes to be automated using the current new technology thereby establishing transparency, trust and creating new opportunity for knowledge and more job roles. How would the adoption of this

Aber T Benjamin

technology that enables full automation of customs excise trade business be of benefit to local manufacturers who are looking to import goods? With the deployment of this technology, the crave for imported goods in Nigeria will gradually reduce, assisting local manufacturers have information relating to the goods they produce, including the quality of such products (creating standards) easily available to the global market, thereby attracting new clients globally and increase export instead of import, which will eventually bring about balance of trade for the Nigeria economy. Adopting this technology is a move in the right direction; however, are there plans for the NCS to migrate its entire business environment to blockchain to eliminate smuggling activities? Yes, the adoption started with the proof of concept (POC), this was a deliberate approach to test the tech-

nology and its process in terms of operational value and reliability. After a successful implementation and satisfaction of the solution value benefits for the Excise, Free Trade Zones and Incentive department, the blockchain technology will then be adopted into the entire business process of the Service. How did the NCS collect and account for revenue, collect data and secure Nigeria’s borders prior to the adoption of this technology? We piloted Oracle’s Blockchain-asa-Service to provide Nigerian Customs Service with a trusted platform for the full automation of Customs Excise Trade business processes and procedures that improves transparency by allowing us to document and track products that are manufactured locally, right from the source of licensing and permits for manufacturing, to distribution and point of sale. An automated Excise will enable Nigeria to have reliable statistical data of its manufacturing

Would this adoption of blockchain technology reduce cost of excise duty to businesses and manufacturers and further boost international trade operations? The adoption of Blockchain technology will reduce the cost of doing business, every business will be done online in a trusted digital distributed ledger environment, it will reduce person to person contact, pervades corruption, eliminate unnecessary travelling and cost, all information regarding production process in Excise trade from raw materials to final products will be made available to everyone, thereby, ensuring trust and boosting international trade for made in Nigeria goods. Since the deployment of this technology to curb corruption, have you seen significant increase in revenue? If so, how much? With Information Communication Technology (ICT), NCS have been able to improve revenue collection from about 195,000,000 USD per month to over 280,000,000 USD. It is expected that once the Excise Trade Automation on Blockchain is fully completed, NCS will see a revenue growth increase of about 50%.Technology brings about inclusive understanding of all parties involved in that business process or service, and when it comes to the

business process of Government the transparency attributed to this technology will instantly make it difficult for corruption to survive. Corruption survives where there is a lack of knowledge and understanding of policies, business process and procedures especially where this is not made transparent to all parties involved. Are there specific trainings given to staff on the need for storage of data in the cloud and the use of this technology? How many of your staff has been trained since the deployment of the technology? The training is ongoing, and currently we have about 25 officers involved in the initial pilot stage, trained by Oracle. The capacity building will increase as the final implementation progresses. With data stored in the cloud, are there plans for the NCS to frequently release figures and easily accessible data to show trends of Nigeria’s supply chain and trade activities on a global scale? Yes What drove NCS’s decision to adopt Oracle’s blockchain cloud services rather than any other cloud solution available today? Oracle offers an easy way to adopt Blockchain leveraging its cloud service which is scalable, fully managed and can be easily integrated with our existing system.NCS chose to embrace Blockchain Technology which is different from the adoption of cryptocurrency, because we believe Blockchain will help drive transparency and trust in our Excise trade by providing irrefutable data on goods manufactured in Nigeria. It will also drive investment in goods manufactured in Nigeria because trusted information on all products will be available on the platform.

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E-mail: jumoke.akiyode@businessdayonline.com

Feedbackhall launches digital platform for service, product evaluation Stories by JUMOKE AKIYODE-LAWANSON

eedbackhall, a newly launched website has been created for Nigerian consumers to review and comment about real life experiences with any service provider or with products in order for other consumers to learn and be able to make more informed decisions about certain products and services. The online platform also allows for producers, as well as service providers, to take into consideration, customers feedback to positively affect development process. Speaking at the launch of Feedbackhall in Lagos on Thursday, 9 August, 2018, Catherine Chiugo Kanu, Director and Founder of Feedbackhall said that the aim of the website was to encourage consumers to share feedback, either positive or negative, in order to help consumers and to encourage producers to use the feedback to develop user-cantered innovative products. “As a producer or service provider, you cannot produce optimum products or deliver best in class services if you do not have a clear idea of what

L-R: Tunde Popoola; MD/CEO, CRC Credit Bureau Limited; Greg Jobome; executive director, Access Bank and chairman, CRC Credit Bureau Limited; Toyin Olaiya; chief risk officer, FCMB, and Miguel Llenas; managing director/CEO, Dun & Bradstreet Credit Bureaus, at the 2018 CRC Credit Bureau industry forum held in Lagos recently.

your customers like and what they do not like. Feedbakhall believes that its aims have a mutual relationship, because as consumers give feedback, service providers and producers are encouraged and can up their game,” Kanu said. Pat Utomi, who was the Chairman of the occasion told BusinessDay that “the introduction of an independent consumer feedback platform is apt, especially at a time when civil society has not done enough for consumer

protection.” Utomi said “consumer protection needs part of activism from the media and other organised groups to help those complaining to find their voices and getting realistic feedback is critical for competiveness.” As part of the services on the feedbackhall website, other people, once registered, can make comments on reviews to vote it down or up, users can update but cannot remove comments from the website and consumer

reviews are posted immediately. The website automatically aggregates ratings and selects best products in each category. Delivering the key note address, Babatunde Irukera, Director-General, Consumer Protection Council (CPC), Mr Babatunde Irukera, said that information is key in the protection of consumers and producers’ rights. Defining the platform as the one stop choice for processed information, Irukera who spoke on; “Information

as a tool of accountability” said that the consumer space in Nigeria has been abused for such a long time and so it has become necessary to use technology to ensure full disclosure to consumers and to improve consumer rights. Osita Aboloma, DirectorGeneral, Standard Organisation of Nigeria (SON), who was represented by Mathias Bassey, said that SON will ensure partnership with Feedbackhall to further promote the protection of the rights of consumers and producers. Kanu, who said that the company is currently working on ensuring maximum security for checks and balances on the website, so as to avoid deliberate witch-hunting by competitors in the same market, noted that the vision of Feedbackhall is to build and sustain a reputation as the largest and most reliable online review community in Africa. “We are working on ways in the back end to pull down malicious and deliberate attacks on companies and products by competitors because we want any information gotten on this website to be genuine and reliable,” she said while answering questions from the audience.

Software to transform credit risk management process in Nigeria

redit Risk 360 – one of the most robust credit risk management software solutions is said to revolutionise the process of credit risk management and create respite for credit risk managers in Nigeria’s financial sector in terms of helping to modernise, integrate and digitise the enterprise risk management process right from origination to repayment. The new 360 software was recently re-vamped and launched by FinTrak Software, a global Information Communication Technology (ICT) organization that provides technology and business solutions to banks and other financial institutions across Africa. Speaking at the launch, Bimbo Abioye, group managing director of FinTrak Software said, “with the Credit Risk 360 software, valuation history can be tracked easily and notifications gotten on the go, this is

due to the mobile functionality of the software. Financial instruments automated valuations such as stocks, shares and bonds can be integrated in this software, making it an all-round tool for credit managers and bankers.” “With the Credit Risk 360 solution, credit risk managers in and financial institutions would enjoy ease of credit processing such as, mobile loan origination, credit documentation, credit appraisal, loan reporting, credit rating, approval, credit monitoring, loan restructuring and loan impairment. The application can be defined as all in one, hence the name “Credit Risk 360”, Abioye added. Industry watchers have lauded the application and defined it as a game changer in the credit and risk management ecosystem. Presently, the solution is being deployed in one of the foremost and biggest financial institutions in Ni-

geria. This is a testament to the resilient and robustness of the software that was developed in Nigeria. Chris Sualeze, core banking and credit implementation lead at FinTrak said that “this software addresses all the deficiencies and also limits errors in credit processing and management. The architecture

of the solution is highly flexible; this makes it mobile adaptive in this age of mobility; bank executives need not carry their laptops around as they can work with the solution on their mobile devices on the go. The Credit Risk 360 Solution is highly parameterized. Implementation of two factor authentication,

Bimbo Abioye, group managing director of FinTrak Software

data encryption and other security features embedded in the solution makes it one of the most secure risk management software in the market.” FinTrak says it embedded a feature in the software that sends periodic notifications and alerts, ensuring that clients and customers aren’t left out. Customers get periodic alerts from banks on the need to fund their accounts and meet up with their loan obligations. Apart from electronic alerts to customers having roles to perform on any transaction, customers are able to initiate loan requests and get feedback on time. Credit Risk 360 software fully integrates bank processes and workflows such as account opening and mandates, credit rating, loan schedule, collateral management, online/real time credit documentation and a host of other services. Also, the software is available in various languages.

21st Century Technologies attains multi-tier cloud security standard

he multi-tier cloud security (MTCS) standard for data centres, just secured by 21st Century Technologies in addition to its other relevant certifications has rightly positioned the company as the most certified data centre in Africa. With this new milestone, 21st Century Technologies data centre has eight top certifications which include; Payment Card Industry Data Security Standard (PCI DSS) which certifies the data centre to process payment card information, ISO 9001 for Quality Management System, ISO 27001 for Information Security Management System, ISO 20000 that certifies the Data Centre for Service Management System, ISO 22301 that certifies the data centre in Business Continuity Management System , ISO 14001 that certifies the data centre for Environmental Management System , ISO 18001 for Occupational Health and Safety Management System and MCTS - Multi–Tier Cloud Computing Management System. MCTS standard describes the relevant cloud computing security practices and controls for public cloud users, public cloud service providers, auditors and certifiers. Recognizing security risk requirements differ from users to users, different control measures are specified for different levels of security requirements in this multi-tier model. Wale Obadare, chief operating officer, Digital Encode- 21st Century Compliance Advisory Consultant, said that the Multi-Tier Cloud Security (MTCS) Standard is the world’s first cloud security standard that covers multiple tiers of cloud security. “It can be adopted by Cloud Service Providers (CSPs) to meet different cloud user needs for data sensitivity and business criticality.” Wale Ajisebutu, managing director, 21st Century Technologies, said that 21st Century Technologies Data Center is Tier IV designed allowing all active capacity and distribution components to be concurrently maintainable. “This allows preventive and corrective maintenance activities to be carried out without service downtime. Sufficient power and cooling capacity are available to simultaneously support the load on one path while performing maintenance or testing on the other. Multiple power generators and backup power ensure that uptime guarantee is achieved.

BUSINESS DAY

Tuesday 14 August 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Rise to the challenges of leadership, Osinbajo tasks youths Stories by KELECHI EWUZIE

cting President, Oluyemi Osinbajo has called on next generation of leaders to rise up to the challenge of leadership and build a country they would be proud of. Osinbajo observe that contrary to the popular cliché that young people are the leaders of tomorrow, the time for them to showcase themselves as leaders is now, especially given the strength of their number in Nigeria’s population demographic. Speaking at the 30th Biennial Conference of the Student Christian Movement (SCM) of Nigeria held at the Cathedral Church of the Good Shepherd, Enugu, he reminded the youths of the critical role they have to play in Nigeria’s renaissance,

adding that youths have more critical responsibility of influencing the environment around them so as to engender viral attitudinal and economic change. According to him, “We often make the mistake of thinking that nation building is the role of political leaders alone. Leaders in Nigeria, both elected and appointed are less than 5,000 and according to statistics, young people constitute 60 percent of our country’s population today and in about two years, this statistic will be 65 percent. This means that if there is a critical segment that already holds the mantle of leadership in Nigeria, it is our young people,” He said. He also reminded the gathering that there is no excuse for any young person to continue thinking that he is waiting to become a leader, adding that “you are already

L-R: Olaposi Williams, deputy CEO, OVH Energy; Oyakhire Solomon Tolulope, Winner, OVH Energy Prodigy 2.0 series ‘So you think you can write’; Huub Stokman, CEO, OVH Energy and Mamadou Sow, chief finance officer, OVH Energy during the announcement of the Prodigy Series 2.0 Writing Competition winner at its head office in Apapa.

Greensprings School deepen entrepreneurial skills among students

s part of Greensprings School’s campaign to encourage growth mindset in students, with an aim to enable them become more innovative in solving global problems; the Year 10 Business Studies students of Greensprings School have launched a business outfit called the GreenyG Mini-Mart Enterprise. GreenyG Mini-Mart is a one stop shop for items ranging from stationeries to snacks and fresh fruits etc. It is located at a strategic part of Lekki for easy access to the boarding students. It is the first of its kind by Greensprings School students.

The GreenyG Mini-Mart was set up by the students to meet the needs of students, staff and parents as well as honing the entrepreneurial skills of the children. Bola Kolade, Head of School, Lekki campus while speaking at the launch of the enterprise, said children can achieve greatness if they are provided with the right environment, sometimes all they need is a reminder that, their future lies in the choices they make. Kolade said that the students took part in the Schools Enterprise Challenge, a project which is aimed at promoting entrepreneurship among students. She further

explained the process they underwent to birth the enterprise: “After carrying out market research with potential customers and analysing their competitors the “student-preneurs” as they are called, set up the GreenyG Mini-Mart enterprise”. Helen Brocklesby, director of Education, Greensprings School while responding to a question about how the enterprise will be sustained, said “aside other measures, we encourage our parents to support this project by visiting the GreenyG mini-mart whenever they are on campus.” Brocklesby stressed the need to cultivate and maintain a culture of entrepreneurship in Africa, stating that when it comes to the promise of growth in Africa, progress has become less a question of what can be achieved – and more of a question of what can’t we achieve? “In achieving this, we at Greensprings School look forward to producing the next generation of thought leaders and business executives in Nigeria and Africa at large” she added.

leaders now.” Ifeanyi Ugwuanyi, governor of Enugu in his address called for a spiritual renaissance among young people in Nigeria as a certain means of imbibing the culture of love and enterprise capable of sparking off significant and measurable changes in the national social and economic landscape. Eric Igbalo, President of the Student Christian Movement drew the attention of Osinbajo and Ugwuanyi to a new campaign launched by the Movement, which is said is targeted at national moral, political and economic renewal. Ta g g e d “ R e n e w o u r World,” the campaign, done in partnership with an international organisation, TEARFUND, is designed to deliver Nigeria and the world from behavioral decadence and other forms of deviant behaviors.

Prospective PhD student wins OVH energy prodigy series competition

olulope Oyakhire, a prospective PhD student at Stanford University has emerged winner of the 2nd edition of OVH Energy Limited Prodigy Series writing competition themed “So You Think You Can Write” Oyakhire’s entry came first out of the 1,024 entries received from candidates. His entry was adjudged to have the catchiest title for an article, boasts of strong content originality, coherent arguments well-marshalled and highly relevant to the subject topic. His submissions were replete with straight-to-thepoint examples, proffering simple yet achievable business solutions. Huub Stokman, chief executive Officer, OVH Energy Marketing Limited while speaking at the event held at its Apapa Office in Lagos said the winner represents the very best and brightest among the contenders. According to him, “His essay explores contemporary themes with maturity, intelligence, and depth. We are proud of him and the thousands of other young writers who entered the competition

this year from all around the Country”. He said the prodigy series expresses the vision of empowerment through education, adding that the company is excited to be conducting this creative writing competition once again. “The quality of the entries this year was exceptional, and all of us at OVH Energy would like to extend our congratulations to the winners”, he said. “As a business, this writing competition is one of the features of our thought leadership programme, which aims to promote learning and creative writing opportunities for young people”, therefore, the objective for us is two-pronged – to stir creative minds towards developing and enhancing their constructive and cognitive thinking skills, and as a thought catalyst platform for proffering pragmatic solutions to prevailing business issues”, he added. Jahman Anikulapo, external judge and promoters of the Lagos Book & Art Festival (LABAF) commended the organisation for this noble venture as its contribution to boosting literary enthusiasm amongst the Nigeria youth.

He said: “The OVH Energy Prodigy Series project is a laudable initiative, with inherent objective of motivating the culture of critical, innovative thinking among the youths. It will also help to encourage young ones to become more engaged with issues in their socio-economic, political and cultural environment.” Tolulope Oyakhire who is also a first class graduate of Chemical Engineering from the University of Lagos said producing a well-crafted work of writing requires a lot of intellectual and mental exertion. Oyakhire for winning bagged a cash prize of 500,000 and will have his entry published in one of the national dailies, expressed his sincere appreciation to OVH Energy, the organisers of this noble initiative for creating this platform to reward creativity and skill. The “So You Think You Can Write” writing competition is part of OVH Energy Prodigy Series – a thought leadership programme designed foster creativity and innovative thinking amongst the Nigerian youth.

BUSINESS DAY

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EDUCATION

Tuesday 14 August 2018

INSIGHT

Effective teaching and learning for all-round development OYIN EGBEYEMI

n what many view as the “old-school” teaching method, focus seems to be largely on the ability to absorb information as it is given; and academic excellence is measured based on this. Pupils who excel through this method are usually those who are able to take in information, quickly etch it into their brains without processing it extensively, and then spit it out during tests and examinations…or in simple term “Those who have mastered the skill of cramming”. As a result of their ability to cram, it would appear as though these students are more academically sound than those who may not be as conversant with the skill or may not view it as their ideal

method of learning. In some schools and homes, poor classroom performance is a punishable offence. So through this old school style many, albeit clever would return home with poor results, ready to suffer the consequences of their perceived inability to excel. However, if we take a critical look at the children around us, there are many who may have difficulty learning though a rigid and instruction-based approach. These are children who may be teased by their peers, sometimes by their teachers and in some cases even by their parents, for this inability to comprehend what is being taught or to pass examinations. Now, imagine how embarrassing it is for a young child who falls victim to this, especially one who is not exposed to an environment that boosts his or her self-esteem. At the early stages in life, children may not have built enough self-awareness to es-

tablish when something is wrong with their ability to learn optimally. So it is up to schools, teachers and parents to observe these children carefully and detect why some are indeed slow learners or why a certain teaching method may not be suitable for a particular child. It could be that some children are lazy and need to be motivated or may not be getting the required support from their environment at home. Others may actually genuinely have a learning disability. Back in my days at primary and secondary school, I was initially not aware of anyone who was identified to have had learning challenges. There were however, a few people who were constantly on that list of poor performers, and when one of them moved abroad to continue school, she was discovered to be dyslexic. From then on, she got the required support to put her through school and eventually gained admission into one of

the highest-ranking universities in the world. Learning disabilities were detected in the western world since as early as the 1800s, and it is quite impressive to see that now in Nigeria, we are beginning to identify them as real issues and pay closer attention to our children rather than ostracise those who may have otherwise been viewed as slower learners. Now, what about the cases of those who have talents in other areas, the Gifted and Talented children? In the past, at some schools in our environment, being talented was not necessarily “cool” especially if this talent did not agree with what was popular amongst peers or to teachers and school management. As a result, those who may have had such special skills may have hidden them from their peers and the world; or even worse, some would have given up exploring them further and would never know

having scored 62% in the first round and 49% in the second round. Esigbone Omagbemi Ferdinand of Roshallom International Secondary School, Lagos came third after scoring 60% in the first round and 47% in the second round. Akachi Ezeigbo, chief examiner said that after a painstaking scrutiny, we adjudged only four as suitable for invitation to the second stage of the competition, which is basically a confirmatory procedure to verify the integrity of the original submission. According to him, “The

content and structure of the four entries, we must say, are just sufficient to enable the candidates to score grades within the ‘B’ range. The implication of this is that the verve, creativity and imagination that we have seen in past performances are beginning to whittle down, even though enthusiasm to take part continues to rise”. According to Ezeigbo, “The entries for 2018 are characterised by the usual infractions such as confirmed incidences of plagiarism or direct lifting of materials from Internet repositories,

L-R: Onitilo Deborah, Ashley Davidson, Akachi Ezeigbo, the chief examiner, Esigbone Omagbemi and Fagbemi Semilore Ireoluwa, winner of the 15 edition of Mike Okonkwo National Essay Competition

development, they develop organizational and time management skills from juggling their academics with other activities; social and teamworking skills from interacting with others outside their classrooms; and many more. These skills cannot be taught through learning in a classroom through instruction; they are developed in a more passively through exposure to different environments and activities. The importance of individualised focus and all-round development in the education of our children cannot be over emphasised. It is imperative that we continuously take these into consideration so that we give our children the best educational experience such that they develop into highly effective adults. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

The future of education

Mike Okonkwo national essay competition announces winners

rganisers of the 15th Mike Okonkwo national essay competition for Secondary School students have announced winners of 2018 edition. After a careful selection process, Deborah Onitilo, a student of New Chrisfield College, Ikorodu Lagos emerged as the overall winner having scored 63% in the first round of the competition and 52% in the second round of the competition. Ashley Davidson of Vivian Fowler Memorial College for Girls, Ikeja came second

where these talents could have taken them. One of the main issues with this other side was the lack of focus on extra-curricular activities in Nigeria, although interest in this is beginning to boom. What the educational system needs to focus on is importance of becoming a wellrounded individual who is involved in activities other than studying and cramming and can learn to process information optimally. Additionally, important life skills cannot be developed through studying for and excelling in examinations alone. The beauty of having a well-planned curriculum, which also places great focus of the method of teaching as well as a sound extra-curricular programme, is that it presents the opportunity for children to learn certain skills that they would need later in life in an environment where they are comfortable. Apart from the core talent

Uwaye Soetan copying from textbooks and other printed sources, proven cases of collaboration among candidates and evidence that candidates might have received help from either of their teachers or parents. The infractions are easily detected because the candidates use language above their educational stations. In many cases, we verified originality of entries by conducting a simple Internet check and found many containing significant portions of existing works. For coming top in this year’s competition, Onitilo Deborah of New Chrisfield College, Ikorodu Lagos will get a cheque of N100, 000, a personal Laptop, a trophy, a plaque, while the school gets three sets of Computer and a printer. Ashley Davidson of Vivian Fowler Memorial College for Girls, Ikeja, Lagos who came second will go home with a cheque of N75, 000, a plaque and the school will get two sets of computer and a printer. For emerging the third position in this year’s competition, Esigbone Omagbemi Ferdinand of Roshallom International Secondary School, Lagos will go home with a cheque of N50, 000, a plaque and the school gets a Computer set. The other winner will get a consolation price of N20, 000.

any people ask what the future of education is. They want to know why Nigerian education has fallen from its former glory and if there is any hope for the future. Long before formal education in Nigeria, children were taught culture, crafts and values. Then came Islam, which took over the larger part of Northern Nigeria. By the time the Christian missionaries came with the idea of schools, it was a herculean task trying to get natives especially the converted Muslims to embrace the idea. Education came with a foreign culture and the Christian religion; traditional Nigerians couldn’t relate with it. Soon enough, the dividends were evident in the lives of our first leaders, Chief Obafemi Awolowo, Nnamdi Azikiwe, Sir Abubakar Tafawa Balewa and other scholars. Education did enjoy progress; with the oil bloom, the government took over missionary schools and begun to provide schools for its citizens. The government made primary education available and compulsory for all and continued to explore ways to get everyone to school as the larger population, especially the northern area, still remained uneducated. Government changed hands and successive governments differed in the values they attributed to education.

The percentage of the budget ascribed to education fluctuated from 0.53% to 17.59%, non actually reaching the 26% mark of the total budget prescribed by UNESCO. The implication of this is that teachers’ salaries and benefits are adversely affected. Payments don’t increase in similar proportions as other industries, payments are irregular and in some cases, teachers go unpaid for long periods. Infrastructure is inadequate; schools lack science and technology laboratories and power to make it work. Training and advancement of teachers’ careers are not defined, teachers are not provided with continuous professional development plans, hence they are short changed in their ability to move with the rapid development trends in education. Outstanding educators and students also do not get enough recognition for their effort. Instead, corrupt politicians celebrate their loot and promote unscrupulousness as against noble values, the influence of which has caused many to discount the benefits of quality education and adopt short-cut means to success. The unattractiveness of schools, leads to brain drain and opens the profession up to mediocrity. Schools are flooded by teachers, whose only desire to be in education is the lack of a better option. Uwaye Soetan is director Fantasia Education Partners and Fantasia City School. Convener, School Leaders Association.

Tuesday 14 August 2018

C002D5556

BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Environment

Data analytics is way forward for downstream sector firms - energy360 DIPO OLADEHINDE

n order to survive the numerous challenges facing the Nigeria downstream sector, firms must take advantage of the huge opportunities in data analytics in order to maximize profit and remain relevant in the volatile oil and gas sector experts have said. According to Abayomi Elebute CEO of energy360 Africa Limited, a retail technology company providing services for the oil industry, firms operating in the downstream sector must embrace data analytics as it helps to monitor and reflects on business activities such as pump activities, tank movements, payments and so much more. “Data analytics provides business insight by allowing downstream firm have pricing insight, know what price point will draw customers, increase profitability

L-R; Bayo Ojulari, managing director, Shell Nigeria Exploration and Production Company; Bello Rabiu, chief operating officer, Upstream of Nigeria National Petroleum Corporation; Jude Amaefule, vice chairman/ CEO, Emerald Energy Resources; and Chikezie Nwozu, outgoing chairman, Nigeria Council of the Society of Petroleum Engineers, after a panel Session at the SPE Annual Conference and Exhibition in Lagos … on Wednesday

and also provides insight to what customers want at their preferred point of purchase,” Elebute said. Elebute said with Data analytics, downstream firms can adapt new ways to sell

based on how customers are buying and also have marketing insights which is based on delivering personalised promotions and optimization marketing spend. “Data analytics provides

We will ensure JVs, PSC partners don’t run excessive bills - NNPC OLUSOLA BELLO

he Nigerian National Petroleum Corporation (NNPC) has said it is making efforts to ensure that Joint Venture (JV) and Production Sharing Contract (PSC) partners do not run excessive bills at the expense of the nation. Maikanti Baru group managing director of the corporation explained that apart from the establishment of an efficiency unit in the corporation to ensure value for money across all operations, NNPC had also done a lot in renegotiating contracts as well as benchmarking costs in keeping with international best practices, adding that the effort had yielded significant results in terms of reduction in the cost of crude oil production per barrel in the Industry. Also responding to a question on why the Production Sharing Contract (PSC) agreements had not been reviewed for a long time despite clauses in the agreements that stipulate periodic review, Baru disclosed that a Presidential approval had been secured and that a committee would be set up soon to carry out the review. He, however, disclosed that in the absence of a com-

prehensive review, NNPC had looked at projects on a project-by-project basis and raised observations which some of the partners had taken permission to present before their managements. Maikanti Baru, gave the clarification to members of the Senate Committee on Petroleum (Upstream) who were at the corporate Headquarters of the corporation in Abuja on an oversight visit. He also told them that NNPC has been faithfully remitting all revenues accruing to it to the Federation Account. A release by Ndu Ughamadu the group general manager, group Public affairs dvision of NNPC, stated that Maikanti Baru, said allegations of non-remittance of funds had become a recurrent decimal over the years, occasioned in part, to the nature of the corporation’s operations which involved credit lines requiring constant audit and reconciliation. “While the process of audit and reconciliation of accounts is on, a lot of accusations of short payments and non-remittances are usually traded, we endeavour to keep our cool on these allegations because we know that we remit whatever is due to the Federation Account”, he explained. Further putting the issue

position to provide services for firms operating in the downstream sector which will protect their revenue and improved margins through elimination of losses as a result of fraud and leakages. “energy 360 analysis provides optimise business process for firms and real term visible accessibility to tanks data, pump data, station data even across to depot and terminals monitor data remote,” ceo of energy360 said. energy360 also ensures real time holistic view of operations, revenues and red flags across all stations as it also provides automated replenishment, forecasting and reducing the risk of fuel scarcity. Founded in 2017 and active in over 60 stations; energy 360 remain committed to developing business technology solutions that will connect, analyse and optimise business processes that will ensure maximum profitability.

NCDMB to commercialize top undergraduate engineering projects

in perspective, Baru stated that such allegations usually arose from disagreements over expenses borne by the corporation on behalf of the Federal Government. Speaking earlier, Senator Omotayo Alasoadura, Chairman of the Senate Committee on Petroleum (Upstream), who led members of the committee on the oversight visit, said the committee would like to have a month-by-month crude oil production figures for the past two years and crude prices for the period. He called on NNPC to fully cooperate with the Senate in providing input on the fiscal component of the Petroleum Industry Reform Bill and the other segments of the Bill coming up for public hearing next week at the National Assembly. “We have just come to fulfil another part of our mandate, which is to oversee what NNPC is doing. It’s not a mission to harass anybody, it’s for us to understand each other, give advice, as nobody is a sole repository of knowledge. Everybody knows that Baru is very knowledgeable in the Industry, but he can’t know everything, even people who don’t know anything about the Industry may have useful ideas that can be of help”, the committee chairman said

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

new and improved control measures for firms with real time visibility of operations at stations, terminals and depots ,” Elebute, said. The company top shot further said that there are

untapped potentials in social media as technology is crucial for survival with recent gradual explosion of data. “Most of the downstream firms current data with necessary assumptions can be used to predict transaction patterns such as customer sales, replenishment planning, gross margin.” “Change is constant and rapid as 64 percent of business managers have seen their decision window shrink in the last 12 months while 52 percent of business professionals need to make data-driven decisions within one day,” Elebute ceo of E360 Africa said. Over the years the downstream sector of Nigeria’s oil and gas industry is bedeviled by plethora of challenges, which have virtually wiped out the margins of the oil marketing and trading companies, as well as other importers of petroleum products. energy360 said its is well

he Nigerian Content Development and Monitoring Board (NCDMB) will partner the Council for the Regulation of Engineering in Nigeria (COREN) and the Committee of Deans of Engineering and Technology of Nigerian Universities (CODET) to develop and commercialize the best engineering projects completed by undergraduates in the 2017/2018 academic session. Simbi Kesiye Wabote, e x e c u t i v e S e c re t a r y o f NCDMB, made the commitment on Tuesday at the 27th Engineering Assembly organised by COREN in Abuja. He spoke after the announcement of the top three individual and group engineering undergraduate projects in the country by the Committee of Deans. The top three prizes for Best Individual Engineering Projects went to Egbe Gabriel Tobi and Nsionu John Udoka both from Covenant University Ota, Ogun State and Omoseyi Aaron Tolu of the Federal University of Technology Akure (FUTA).Similarly, students of the Federal University Oye-Ekiti, University of

Nigeria Nsukka (UNN) and Enugu State University of Science and Technology (ESUT) clinched the top three awards for the Best Group Engineering Projects respectively. The top three Best Graduating Students in Engineering emerged from the University of Nigeria Nsukka (UNN), Covenant University and Federal University of Technology Akure (FUTA) while the prizes for Best Academic publication went tostudents of the University of Nigeria Nsukka and Michal Okpara University of Agriculture, Umudike, Abia State. These competitions involved the 49 COREN accredited universities in Nigeria and the contestants went through departmental and faculty levels, with the top three from each university competing at their various zone before the final selectionthat was held at the sidelines of the COREN Assembly. Announcing the Board’s supp or t to the CODET Aw a rd s, w h i c h h e d e scribed as a great initiative, Wabote said, “NCDMB would work with the Committee to reconvene the

winners and go through the projects with a view to develop and commercialize them,” adding that “part of our mandate is to enhance research and development. As part of our contribution, we will support them through the development stage of the findings they have put together.” The Executive Secretary also announced the endowment of annual prizes for the Best Research Publication by any Engineering Undergraduate. He also procured 300 copies of the authoritative book, “Professional Engineering Practice” to be donated to the Universities. Wabote commended the current COREN leadership, particularly the President, Engr. Kashim Ali for restoring professionalism to the engineering sector and organizing a successful COREN Assembly. He noted that the Board had recorded numerous achievements in the oil and gas industry and would achieve much more if the agency’s mandate were extended to other key sectors like power, Information Communication Technology (ICT) and construction.

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

BUSINESS DAY

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Tuesday 14 August 2018

Energy Report

Competency among indigenous oil servicing companies attracts American accreditation ...as MG Vowgas gets ASME accreditation OLUSOLA BELLO

ompetency among Nigerian oil servicing firms is growing and attracting international accreditations, especially from American institutions, providing room for greater global competiveness and access to big ticket projects in country and offshore. Acquiring those accreditations emboldens them to launch out and compete for jobs outside Nigeria without fear of being seen as lacking competency to do the jobs. Some of the companies that have been accredited by the American Society of Mechanical Engineers (ASME) stand tall among the local fabrication yards in the country because they are now qualified to go to Europe, America and Australia to mention a few, to get jobs in the oil and gas industries in those area. Companies that have achieved such feat in the country are not many. There are six companies in the country that are in this category. These include MG Vowgas limited, Nestoil, Dorman long, NigerDock and Globe Star. Getting accredited by ASME is a

Demo Vessel

show of the confidence international organisations has in respect of the quality of works or jobs Nigerian companies can do. Of all these companies, MG Vowgas Limited has a unique experience in getting accredited in the sense that it is the only indigenous company without any technical partner or expatriates to get accredited. All those that worked towards getting the accreditation are Nigerians. The new status creates job opportunities as this puts the company in good standing to secure more

projects from both oil and gas operators and even beyond the industry. With a sound technical presentation and the recent addition to its profile, companies that would need the services of the MG Vowgas would have their confidence reinforced in its ability to carry out jobs in the area of fabrication of pressure vesels and other industrial needs to the desired quality and standards. Generally, the accreditation reassures clients that the companies so accredited have been tested and that if the job is given to them they

would do it according to specified standards. From the design to the material list there are simple procedures that must be followed using the ASME manual, aside from this there is a third party that is called authorised agency which must certify the processes. The agency is authorised by ASME board which gives them stamps and also certificate to regulate whatever the companies that get the accreditation are doing. MG Vowgas limited is now an internationally acclaimed manufacturer of

pressure Vessel which is very critical to the operations of oil and gas companies. It also has the capacity to build boilers that can be used by power plants, breweries, refineries and Beverage companies. Another important dimension to this is that the company can also fabricate Dish head press that no company in the country has ever done. Most time Dish head press are imported and configured into pressure vessel after they must been fabricated in- country. This is in addition to the welding technology that is automated that company has acquired. According to Godwin Izomor, group managing director of MG Vowgas limited, “Nigerians must believe they can make it. I believe that Nigeria will be great because we have what it takes but the support of the government is needed and this can only happen by putting in place infrastructure, security and electricity. According to certificate of authorisation which was signed and authorised on June 29, 2018 and which was presented to MG Vowgas Limited by the National Board of Boiler and Pressure Vessels Inspectors states thus: the named company is

These two factors drive today’s oil markets …Iranian sanctions, trade U.S.-China trade war

STEPHEN ONYEKWELU

ith estimates of $90 per barrel before the end of 2018, the bulls have gained upper hand in oil markets of late but the bears lurk on the side-lines, experts say. Jeff Currie, head of commodities research at Goldman Sachs said August 09, in an interview with CNBC that a bull case can still be made for oil markets amid global trade tension created by the United States of America’s led trade war with China. “The bull case for oil and liquefied natural gas remains in place” Currie said. The driving factor behind this renewed bullishness is the re-imposition of sanctions on Iran that threaten to significantly impact Iranian exports. While this bullish sentiment is certainly justifiable, there are also plenty of bearish catalysts looming over markets that should not be ignored. The most important of these catalysts is the possibility of an all-out trade war between China and the U.S., an outcome that is very much plausible. Oil prices in the

coming months are likely to be influenced most heavily by these two contrasting factors – with Iranian sanctions sending prices up while trade war escalations sending them down, oilprice.com, an online oil industry journal reported. The U.S. and Iran saga has had a grip over oil markets for the last three months. Oil prices spiked in May, when Trump announced that he was imposing sanctions on Iran and exiting the Joint Comprehensive Plan of Action (JCPOA). Now, as the first round of sanctions goes into effect, the relationship between Iran and the U.S. has become increasingly strained. The second round of sanctions, which is going to focus on the energy sector, will have a much higher impact than the current round. According to different estimates, sanctions could take anywhere from 1.5 to 1 million barrels out of the market. This combined with the recent worries about spare capacity and the ongoing tension in the Arabian Peninsula (between Yemeni Houthis and KSA) may well drive prices towards the much-hyped $90 mark. Nigeria might benefit from the bullish oil market if July level production is sustained.

Nigeria’s crude exports rose in July, for the first time in four months as Shell lifted export restrictions on key Bonny Light grade, vessel tracking data obtained from the Bloomberg Terminal show. Total July exports, excluding Akpo, rose to 1.64m barrels per day (b/d) versus revised 1.61m b/d in June. Akpo condensate shipments, rose to 123, 000 b/d versus 95, 000 b/d in June. Combined crude and condensate exports rose to 1.762m b/d from revised 1.688m b/d. “This is a natural consequence of three factors, I will say. There is relative peace in the Niger-Delta, that is, militancy has abated. A corollary of this is that there has been no major pipeline damage or declaration of force majeure. The third factor is pure market dynamics. Oil prices hover around $70 per barrel and this is driving supply” Ayodele Oni, Energy Partner at Lagos-based Bloomfield Law Practice said in a phone interview, earlier. However, with the risk of instability in the Niger Delta still present, and the damaging effect this entails on the region’s oil production, Nigeria adds more supply concerns to an oil market already saturated with instability.

If Nigerian production decreases to 2016 levels, this development could compound with the above outlined risks, in addition to political risks in other producers to cause a substantial price increase. While there is certainly a possibility of a more than one million bpd decline in Iranian oil, there are some who suggest the decline will be significantly less than that. It is important to note that India and China account for almost 50 percent of Iranian oil exports between them and likely have the ability to boost their imports. The second major factor to watch in today’s oil markets is the ongoing trade war between China and the U.S. President Trump recently escalated this trade war with a second round of sanctions on $16 billion worth of Chinese products. China has said that it will retaliate with $60 billion of its own tariffs and has made it clear that it will not back down. It is generally accepted that trade wars are bad for the global economy, and the oil market is no exception. Oil prices tanked 3 percent in a single day after Trump announced the $16 billion tariffs. As these tariffs con-

tinue to escalate the impact on oil markets will likely grow. Shan Saeed, Chief Economist at IQI Global, Malaysia and APEC region, is very bullish on oil and sees it at $100, claiming that “Geopolitical risk and tight supply constraint have given oil prices a new head to stay on the bullish course. Understanding geography is a real virtue for sophisticated investors”. On the demand side he added that “demand for oil would touch 100 million barrel per day by Q-3/2019.” The influence of sanctions on oil prices, however, is subject to the response of China, India, the EU and Iran itself. Bulls may well have an argument, but they lack any sort of certainty when it comes to quantifying the impact of sanctions. The outcome of the trade war by comparison, is quite certain: lower oil prices. It is this certainty that might give oil bulls pause for thought as the end of the year looms. While other factors such as inventory figures, rig count, global demand and supply will continue to shape oil markets, it is the abovementioned major factors that are going to have a significant and sustainable effect.

authorised by the American Society of Mechanical Engineers ASME) for the scope of activity below in accordance with the applicable rules of the ASME Boiler and Pressure Vessel Code. It expires on June 29, 2021, The use of the certification marks and the authority granted by the certification of authorization are subject of the provision of the agreement set forth in the applications. Any construction stamped with the certification mark shall have been built strictly in accordance with the provision of ASME Boiler and Pressure Code. Godwin Izomor said the Nigerian Content Development and Monitoring Board (NCDMB) should identify Nigerian companies that are doing well and ensure they are given jobs. He said the company cannot continue to borrow from banks to pay salaries about 50 per cent of ZabaZaba and Bonga Southwest projects he said should be handled by indigenous companies. To help the NCDMB achieve $14 billion planned to be retained in the country in the next 10 years using local resources to develop local content in country, indigenous companies must also be given the necessary support, he said.

NNPC GMD, Total , stakeholders set for energy Conference 2018

he Group Managing Director, Nigerian National Petroleum Corporation (NNPC) ,Dr. Maikanti Kachalla Baru , Deputy Managing Director, Total E&P Nigeria, Ahmadu-Kida Musa, President, Petroleum Club, Godswill Ihetu and other industry stakeholders will lead discussions around emerging issues in the oil, gas and power sectors at the Association of Energy Correspondents of Nigeria’s (NAEC) Annual Conference 2018. In a statement signed by Sebastine Obasi, general secretary NAEC, the conference will hold at the Eko Hotel and Suites, Lagos, on Thursday 16th August 2018 by 9am. with the theme “PIGB: Emerging Issues and Concerns”. This year’s conference has two panel sessions. The first session is titled: “Regulatory issues in oil and gas industry.” While the second panel session is titled: “Impact of good governance in achieving power sector efficiency.” Captains of industry, organised private sector, legislators, as well as other stakeholders in the energy power sector will be in attendance.

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BUSINESS DAY

In association with

How real estate activities in H1 2018 impact on families, economy … CBN, states, investors in aggressive push to raise housing supply Stories by CHUKA UROKO

m i d to tt e r i ng growth, slow and fragile recovery of the economy, the real estate sector in the first half of this year (H1 2018) witnessed some sort of activities that cut across its various sub-sectors, recording what analysts have described as ‘cautious progress’. The various sub-sectors, including residential, retail, office, hospitality and industrial, experienced stabilisation of rents, revival of some suspended projects and the commencement of new ones, in contrast to H1 2017. One way or another, these activities impact positively on families and economy. Prices of building materials have dipped or remained constant year-on-year. A new report on the real estate market performance in H1 2018 by Northcourt Real Estate says, however, that this is expected and understandable, given that foreign exchange rates have stayed fairly stable for about 12 months and is also readily available coupled with the quantitative easing of headline inflation from almost 19 percent in January 2017 to 11.13 percent in May this year. Of all the various sub-sectors, activities were more upbeat in the residential subsector where the Central Bank of Nigeria (CBN), state governments, estate developers and sundry investors engaged in different levels of partnerships and collaborative efforts to increase housing supply and encourage demand. Of significant note is the giant stride by the Ogun State Property and Investment Corporation (OPIC) on local content in housing delivery. “As part of efforts to boost the country’s economy and create direct and indirect job opportunities for Nigerians through the patronage of made in Nigeria goods and services, OPIC is now offering prospective buyers of all its housing units, houses constructed with 80 percent

locally sourced inputs”, explained Ayo Ibaru, Director, Real Estate at Northcourt. Apart from the job opportunities created, the prices of the houses have been reduced considerably as the local building materials used are a lot cheaper than the imported ones. Through this, individuals and families are being empowered, making them able and ready to contribute to economic growth. To foster housing provision, the Central Bank have selected 34 mortgage banks and four commercial banks to increase access to housing finance for low-income earners. Ibaru explained that these selected banks will benefit from a $15 million Housing Micro-finance Fund and a $10 million Technical Assistance Fund. Furthermore, the CBN engaged the Mortgage Bankers Association of Nigeria (MBAN), the Nigeria Mortgage Refinancing Company (NMRC), Federal Mortgage Bank of Nigeria (FMBN) and Nigeria Deposit Insurance Corporation (NDIC) to launch the Uniform Mortgage Underwriting Standards for the informal sector. The implication of this is that operators in this sector of the economy are now being

brought into the mortgage net, such that as opposed to what obtained in the past, these people, mainly through cooperatives, can access housing finance through mortgage. In another public-private partnership effort, the Kaduna State government entered a partnership with Sterling Bank to launch a ₦5-billion fund aimed at providing mortgages at single-digit interest rates. Beneficiaries are required to make security deposits of between 15 to 30 percent of the value of the houses but would be expected to liquidate mortgages within 10 years. This is in addition to the foundation laying for 600 housing units, a five-star hotel and two shopping malls in the state. The United Nations Development Programme (UNDP) also completed 608 housing units in Borno State as its contribution towards rebuilding areas destroyed by Boko-Haram. This is as a 72unit housing project under the National Housing Programme in Jigawa state attained 80 percent completion. “In all of this, jobs are being created, every inch of the way, for artisans, skilled and unskilled labourers, and building industry professionals.

Houses are being provided for public sector workers and a major social problem is being solved with positive impact on the economy”, noted Michael Jideofor, a builder and real estate analyst, in a telephone interview. The ministry of power, works and housing will also be engaging 20 local contractors in Sokoto to construct an 80-unit housing estate worth N1.3 billion. The Edo State government started the construction of 1,800 housing units in partnership with MIXTA Africa, a property development company with projects spread across Africa. Completion is expected by Q4 2019. Within this period, property values remained linked to location, infrastructure availability, perceived levels of security and historical antecedents. This was evidently the case in the ‘Garden City’ of Port Harcourt. The federal government-owned Trans Amadi Gardens was in fair demand. High vacancy rates have been a major feature of the residential property market even after the exit of recession in the second quarter of 2017. But, there has been a little improvement. Lagos

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Renewed efforts at building confidence in mortgage banking expands ADR frontiers

hen the Central Bank of Nigeria (CBN) recently set up an Alternative Dispute Resolution (ADR) platform/Financial Ombudsman for the mortgage banking subsector which will be resting on a sub-committee on Ethics and Professionalism, the mission was quite clear. The apex bank which regulates and also supervises the operations of mortgage banks in Nigeria was in renewed efforts at building public confidence as well as engendering soundness and stability in the mortgage banking sub-sector. The new platform is aimed to ensure settlement of disputes between mortgage banks and their customers on one hand and among the mortgage banks on the other. Obviously, the new move has expanded the frontiers of ADR which is already gaining ground tremendously as no one wants to go to court ordinarily and also because court cases or litigations are not only expensive, but also leads to frustration and damages relationships. Exponents of mediation as an alternative dispute resolution platform argue that if business is about making money and creating values that lead to growth of the business, anything that could impede that growth should be discouraged. ADR is a process that works and is recognized by the justice administration system. Disputants are therefore, encouraged to take their cases out of court and resolve them through mediation because the time they spend in court is part of their bottomline which should be used in growing their businesses. “Why be embroiled in court in a process that damages relationships,

where only one side wins, when there is a process that supports business in terms of timeliness and ensures win-win solutions to old or bitter fights and also ensures a mutually beneficial outcome?”, says Osarieme Ezekiel, managing partner at Oakwell Partners, a commercial law firm in Lagos. The CBN’s ADR subcommittee which is a self-regulatory body, has the Chartered Institute of Bankers of Nigeria (CIBN) complex as its secretariat. Seye Awojobi, Registrar/CEO of CIBN, commended the establishment of the subcommittee, describing the development as “a noble initiative”. Awojobi, who also doubles as the secretary of the sub-committee, called on mortgage bank customers and the banks to take opportunity of the platform, which is free, to resolve their disputes with the banks and among themselves respectively. The membership of the sub-committee includes representatives of the CBN, the Nigeria Deposit Insurance Corporation, CIBN, Haggai Mortgage Bank Limited, Abbey Mortgage Bank Plc, Mortgage Bankers Association of Nigeria (MBAN) and Imperial Homes Mortgage Bank Limited. He enjoined mortgage banks to set up a Complaints Desk to handle customers’ complaints, as only the cases the banks are not able to resolve would be brought before the Sub-committee for adjudication and settlement. Also, “the Sub-committee will not handle cases which had already been reported to and handled by the regulatory authorities or cases before the court. Furthermore, it will not entertain cases that are more than six years old in line with Statute of Limitation Act”, the CIBN boss explained.

BUSINESS DAY

Tuesday 14 August 2018

Workers in focus as FMBN scales up affordability with rent-to-own housing scheme Stories by CHUKA UROKO

he launching of the rent-toown housing scheme which the board of the federal mortgage bank of Nigeria (FMBN) gave approval for recently is aimed, above other considerations, to make housing more affordable for Nigerian workers who, ordinarily, cannot build or buy homes from their income. The scheme is another strategic move by the apex mortgage bank designed to make homeownership more accessible and affordable for Nigerian workers. It is also an innovative affordable housing product which provides an easy and convenient payment plan towards homeownership for workers. Unlike similar schemes promoted by private sector operators which demand higher interest rate for shorter repayment tenor, the FMBN scheme is designed in a way that makes it possible for workers to move into FMBN homes as tenants, pay for and own the properties through monthly or yearly rent payments spread over a period of up to 30-years. To further increase affordability, the properties will also attract a single digit interest rate of 9 percent on the price of the property on an annuity basis. The product will cover properties with the maximum value of N15million. Unlike the rent-to-own scheme operated by the La-

gos State government which targets all civil servants in the state who are first-time home buyers, the FMBN scheme targets workers nationwide but mainly those who are contributors to the National Housing Fund (NHF) and will be implemented in phases. About 3,000 houses are planned for the pilot phase. Housing affordability became a big issue in Nigeria when government stopped direct involvement in housing delivery, such that large scale developments like the Shagari low cost housing at the federal level and the Jakande low cost housing in Lagos State have become history. But to deliver on the re n t- t o - o w n h o u s i n g scheme, FMBN will be partnering with reputable estate developers for the construction of quality, cost-effective housing stock nationwide. Payments for

the houses will be domiciled with the Central Bank of Nigeria (CBN) through the Treasury Single Account (TSA). Properties planned for the rent-toown scheme are existing estates that are funded by FMBN nationwide and non-funded estates. “ T h i s r e n t- t o - o w n scheme is yet another ground-breaking initiative of our bank that is targeted at increasing access to affordable housing by Nigerian workers who fall into the low-medium income brackets”, explained Dangiwa Ahmed, the managing director/chief executive officer of FMBN. Continuing, he said, “the rent-to-own housing product is designed to make sure that any worker who collects a salary should be able to live in his own home and pay conveniently over periods as long as 30-years. This is a massive relief especially

given how little workers earn. I am delighted that we have successfully added this product to the many other initiatives that we have made possible to make homeownership a lot easier for Nigerian workers”. He commended the federal government for its commitment to the development of housing and for the continued support for the ongoing reforms to re-position FMBN on the path of efficiency and impact. Dangiwa added that the implementation of the scheme would totally eliminate the burden of equity contributions by workers for housing loans, complement the existing products of the bank by widening the home ownership bracket, increase housing stock, and help the bank to utilize abandoned estates that are to be transferred to the scheme.

ITB’s post-tensioning broaches innovation in construction for reinforcing concrete

rowing sophistication and advancement in construction and engineering have given rise to innovations and new techniques in the construction industry. One of such innovations is post tensioning which is a technique for reinforcing concrete, reducing the occurrence of shrinkage and cracking by strengthening concrete with high-strength steel strands or bars called tendons. Introduced into the Nigerian construction industry by ITB Nigeria Limited, leader in integrated engineering and construction solutions, post tensioning technique comes as a unique solution in the global construction industry. The technique is a form of pre-stressing where the stressing of the tendons is done after pouring and setting of the concrete, thus the name, post tensioning. It has numerous advantages over standard reinforcing steel as it allows construction that would otherwise be impossible due to either site constraints or architectural requirements to be achievable. “At ITB, we constantly strive to improve the quality of our work, elevate levels of client satisfaction, and most

importantly contribute significantly to the advancement of the Nigerian construction and engineering community. “Our introduction and use of the post-tensioning techniques will guarantee premium quality structures, ensure flexibility of layout and servicing, lighter structure, and lesser construction time’’, Ramzi Chidiac, managing director, ITB Nigeria Limited, assured in a statement in Lagos at the weekend. Gabby Haddad, a post tension expert/Civil Engineer with ITB Nigeria, affirmed, urging clients and potential homeowners to consider and opt for this technique. “If we are to grow the construction industry and build structures of world class standards, it is important that we innovate and adopt new technologies. “We are glad to be the pioneers in Nigeria having deployed the technology since 2003 on the Sapetro Towers project, Victoria Island Lagos. We have other landmark projects across the country and with further improvements in ongoing projects. Posttensioned slabs tend to have longer life span, concretes are held more tightly and cracks are eliminated”, he explained.

How real estate activities in H1 2018... Continued from page 25 showed slight improvements with its Mainland strongholds recording low vacancy rates. In Yaba it was only 3 percent; Surulere, 4 percent, and Magodo Phase II, 5 percent. “These were the lowest vacancies of the nodes considered”, Ibaru disclosed, adding, “the more cosmopolitan areas of Victoria Island, vacancy rates were higher at 35 percent; Oniru, 37 percent; Lekki, 39 percent and Ikoyi 40 percent, as affordability remained a central consideration. Flexibility also featured in many residential areas with some landlords willing to offer

monthly or quarterly rents”. Abuja’s city centre saw high demand for low cost 1 and 2-Bed apartments while that of 3 to 4-Bed houses saw a drop in demand due to the weakened purchasing power of the average residents. High tenement rates, waste management and water bills contributed to the reduced interest. However, to increase the housing supply in the FCT, the Federal Government is to partner Zvecan Consulting and a Chinese firm, Wengfu Company Limited, to build 5,000 housing units under the Federal Integrated Staff Housing (FISH) programme.

Opportunity for developers as demand for short-let apartments, room nights rises

recently conducted piece of research into an emerging player in the commercial real estate space indicates that the need for short-let apartments has maintained an upward trend in spite of the challenging economic environment. This increased demand has spurred savvy business operators to accelerate their expansion plans in 2018 by seeking out strategically located residential buildings or vacant apartments in prime areas to be converted into short-let apartments to meet the flexible needs of people who require

such accommodation. Rethinking and re-ordering of priorities by multi-national corporations who now prefer to keep their expatriate workers in short-let apartments instead of full-scale residential accommodation is a major driver of this rising demand. “One factor that has led to the increase in this sector is the upsurge in demand by corporates who would rather pay for short-let apartments for their expatriate staff as opposed to paying annual apartment rentals”, Erejuwa Gbadebo, CEO, International Real Estate Partners (IREP),

confirmed. Another major driver of this new trend is tourism, especially religious tourism which is growing in multiples in Nigeria with people looking for ‘miracle’ trooping into major cities, especially Lagos, on daily basis. The new trend, therefore, presents investment opportunity for real estate investors and developers. The rental range for shortlet apartments is wide and depends on the quality, branding, unit size and location of the offer. Rents can go as low as NGN 25,000.00 for a studio apartment to as high as NGN 140,000.00 per day

for a 3-bed apartment. “The commercial outlook for short-let apartments remains attractive in light of positive market fundamentals, expansion possibilities and strong levels of profitability. We believe this market presents unlimited opportunities and is a sector likely to spur increased investor interest”, Gbadebo posited. At global level, the hospitality industry is said to be one of the world’s largest. A new report estimates the value of the industry to be in excess of $7.6 trillion in 2016 and is expected to reach $11.5 trillion by 2027. 32 percent of

projects under development in Africa are in the Western countries, currently home to just 7 percent of the existing supply. Most of these projects are in Nigeria, primarily in Lagos and Abuja, where projects spend longer in the pipeline phase than in most other African countries. The new report notes that the economic recovery in Nigeria saw the number of room nights sold in Lagos increase by 17.6 percent with the tourism sector contributing $2.2 billion to the state’s GDP in 2017. Despite the security challenges in many quarters, ho-

teliers continue to consider Nigeria an important market for the West Africa region, seeing that supply remains grossly unrepresentative in comparison to population and perceived demand. Across the nation, more infrastructure projects were awarded to Asians firms, increasing the number of Chinese consultants, workers and family members who need to shuttle between home and Nigeria. This also increased the demand for hotel accommodation, guesthouses and relaxation spots, creating investment opportunities for space providers.

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FEATURE Steering tech-preneurship revolution in Edo Funding to Nigerian tech start-ups in second quarter of 2018 outpaced that of first quarter by 800 percent. Interestingly, 75 percent of the funding went to financial technology firms (FinTechs), making payments seamless and faster. Edo State has keyed into this space through its Edo Innovation Hub, writes Osa Victor Obayagbona.

he rise of investment inflow into the Nigerian tech space goes to show the potential in the sector and would point a discerning leader to the vibrancy of Nigeria’s burgeoning tech ecosystem. Not only are tech companies such as Google, Uber, Facebook, Amazon, Microsoft valued as some of the biggest companies in the world, their continued incursion into the Nigerian tech space and their investment in building local capacity are signs of good things to come. In his resolve to deliver on his campaign promises, particularly the pledge to deliver 200,000 jobs to the people and create wealth in the process, Governor Godwin Obaseki is not one to overlook the potential in the unfolding technology revolution in Nigeria. In July, Vice President Yemi Osinbajo commissioned the Edo Innovation Hub, located at the Institute of Continuing Education (ICE), in Benin City. A project that provides a space for tech innovators to birth their tech-powered solutions, the hub leverages a mix of conducive business environment, business support services, and training from technology heavyweights such as Google, Facebook, Andela, Oracle, among others, to provide a space to nurture and drive innovation. At the launch of the tech Hub also known as Edo innovates, Governor Obaseki said, “The innovation hub would serve as a facility for training youths in the state and it would also serve as a centre for follow-up training for youths who are participating in similar training programmes organised by the state government through its skills development arm popularly known as EdoJobs. “Services on offer by the firms include an incubation and pre-incubation programme, acceleration programme, business clinics and co-working facilities. The Innovation Hub is equipped with thousands of computers supported with high-speed internet connectivity.” Also, the Vice President, who commissioned the South-South Innovation Hub, located in the Edo Innovation Hub, said the facility would give young and old people opportunity to provide solutions to everyday problems. Explaining that the innovation hub was targeted to grow the state’s economy as well as that of the South-South region, the Vice President charged the people of the zone to take advantage of the facility to end youth restiveness. He further urged the youths to come up with innovative ideas, saying the country needed to grow technologically to meet up with modern-day trends and compete with developed nations. Hub as Haven for tech-powered solutions Ever since its launch, the Edo Innovation Hub has become a beehive of activities, as hundreds of resident have undertaken training in Artificial

Cross section of youths at one of the labs in Edo Innovation Hub, recently launched by Vice President, Yemi Osinbajo, at the Institute of Continuing Education (ICE), Benin City, Edo State.

Intelligence, Data Science, Coding, Python Programming, Solar power engineering, among others. Emmanuel Usoh, commissioner for wealth creation, cooperatives and employment, said, “The hub accommodates over 25 technology companies, including Google, Cisco, Microsoft and Oracle.” The state government intends to solve youth unemployment through the hub, Usoh said, noting, “It will offer youths unique opportunities to discover their talent in the use of technology, improve these skills and promote innovation. “Individuals and groups who own small businesses in the state and intend to transform their businesses in line with global standards can acquire innovative skills at the hub.” Explaining that repurposing the ICE showed a strong resolve to promote innovation, he said, “Edo State intends to become a case study in Nigeria on how public facilities can be transformed for effective use. This is why the governor refurbished the former Institute of Continuing Education (ICE) into an innovation hub. The world has become a global village, where technology is key to transforming the society for the better. That is the direction this government is going.” Prototype training: Python, data science programming Less than two weeks after the Vice President commissioned the Edo Innovation Hub, Curators Academy, one of the partners at the hub, commenced training on Python, Data Science, and other programming tools. Ukinebo Dare, special assistant to the governor on job creation and skills development, said the Curators Academy opened its laboratory for Edo youths to acquire on-demand

tech skills. For her, “Beginners and intermediate classes would be held on Python and Data Science programming for youths who were part of the boot camp held when Vice President Yemi Osinbajo launched the Edo Innovation Hub.” She said, “In preparation for this class, the laboratory is now open for people who are interested in learning Python and Data Science programmes. “Those who were trained during the launch of the Edo Innovation Hub are practicing, working and using the knowledge and tools to improve their skills. This kicks off a one-year partnership where 600 young people in Edo will be trained as tech entrepreneurs and tech experts, participate in international competitions and get jobs globally in the tech space.” Now open: Co-working spaces, workstations The Hub has also opened its doors for entrepreneurs in the state and environs to take opportunity of its coworking spaces and other facilities to drive innovations. The Edo Innovation Hub is arguably one of the best equipped and furnished spaces to run a start-up company in Southern Nigeria, Dare said. She said, “We are excited to be opening up the Edo Innovates cluster to budding entrepreneurs in Edo State and environs. We are open to working with them, providing the enabling environment to nurture their start-ups, and training and other benefits of a co-working space.” She noted that some of the services provided in the hub include virtual office, shared desks, dedicated desks, private office and serviced office, all of which have access to services such

as mail handling, electricity, business support, workshops and trainings, and networking opportunities. Impact and sustainability plan Less than four months after commissioning, the Hub has proven critics wrong and is coasting to resounding success, with its impact being felt by youths in the state. The facility has trained not less than 724 entrepreneurs and its operators, EdoJobs, has drawn up a sustainability plan that will see the private sector drive activities at the cluster. Dare, who is also head, EdoJobs, said, “The facility houses the SouthSouth Innovation Hub, which has two halls; it also has five separate training rooms, six fully-furnished co-working spaces, four rooms with hundreds of computers, offices, conference rooms, outdoor workspaces, among others.” Of the 724 entrepreneurs, who have been trained, she said, “200 females are being trained by Microsoft and Tech4Dev; 32 persons participated in LinkedIn MeetUp sessions to build a vibrant business community and leverage networking for local and international businesses; 49 budding app developers participated in Curators University’s Artificial Intelligence boot camp; 23 developers were trained by Hotels.NG on coding and app development.” Others, according to Dare, include “Makers Academy, which trained 40 students on robotics; Pan Atlantic University’s Enterprise Development Centre trained 59 entrepreneurs on entrepreneurship and innovation; Siemens, Impact Hub conducted prehackathon orientation for 25 aspiring entrepreneurs in the power sector while Microsoft took 50 teachers on Basic Digital Literacy for Teachers.” She said the sustainability plan is

to ensure that the private sector takes the lead in the growth of the state’s technology ecosystem, adding that trainings and business incubation would continue at the facility. She disclosed that the state government’s effort has received a boost from the private sector actors in the state, noting that ATC Nigeria donated three fully equipped ICT centres for training in Benin, Irrua and Ekpoma. She explained that this would deepen the penetration of tech-driven development across the state, while a good number of the firms at the hub have expressed interest in long-term partnership with the state government. Then comes the competition After the launch of the hub, the Hack Edo Series, a multi-dimensional initiative to identify and incubate the best ideas that tackle problems of power generation and distribution faced by individuals, businesses and the digital ecosystem, was birthed. A N3.5 million prize money is up for grabs for the best ideas in the state that will tackle power generation and distribution challenges. The Hack Edo Series is being organised in partnership with Impact Hub and Siemens Nigeria, the EdoJobs boss said. “Through a series of practical Hackathons, the Hack Edo series aims to equip young Nigerian innovators with the skills necessary to make impact in their various communities,” she said. The series is intended to increase the number of individuals taking action on socio-economic issues, build a collaborative community that tackles issues and identify the best ideas that will be supported through the incubation phase at the hub. The Hackathons will catalyse highgrowth start-ups within the state, support development of ventures from ideation to commercialisation and promote job creation and economic development, he said. “This will drive and ensure the increased adoption of local technology by government, corporates and development agencies across Edo State and Nigeria, strengthen and raise the standard of start-ups in the region and deliver positive social impact in communities and to people across the region,” she said further.

BUSINESS DAY

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Tips & Talking Points

Harvard Business Review TALKING POINTS Strength in Co-ops 75,000: Mondragon Corporation, a Spanish multinational, is the world’s largest industrial federation of worker cooperatives with 75,000 employees around the globe.

Presenting in English when it isn’t your native language

+ African Farming Holds Strong 65%: The African Development Bank reports that 65% of the continent’s working population is employed in the agriculture sector. + Low Stakes 10%: An estimated 10% of Americans holds equity stakes in the companies where they work. + Fast Growth 225 million: Smart speaker adoption is up worldwide: Analysts predict that ownership will reach 225 million by 2020. + The Race to Innovate 2 years: Nokia launched touchscreen technology on its smartphones two years before Apple’s iPhone.

To make networking less exhausting, bring a talkative colleague

f you aren’t a native speaker of English, giving a presentation in the language may be very stressful. Using the right approach can help. Take extra time to prepare your delivery, and practice more than you think you need to. Yes, your PowerPoint slides matter, but rehearsing your presentation out loud matters even more. Start your presentation by speaking slowly, and articulate your words carefully and confidently. This will help listeners acclimate to your voice, which is important in the first minute or two. (If you’re anxious about having an accent,

don’t worry — everyone has one, including native English speakers.) As you continue speaking, pause often. Pausing will give listeners a chance to comprehend your message, and give you a break. To make sure they understand you, you can ask a question: “I know that I am making sense to myself in [your native language]. How am I doing in English?” Your goal doesn’t have to be to speak perfect English. Instead, focus on presenting with confidence.

(Adapted from “3 Tips for Presenting in English When You’re Not a Native Speaker,” by Deborah Grayson Riegel.)

etworking can be good for your career, but introducing yourself to a roomful of people can also be draining. The next time you attend a conference or professional happy hour, consider bringing along a co-worker to help. The two of you can divide and conquer, meaning you’ll each talk to different people and then share notes. That way you’ll both expend less energy while still gathering a large number of contacts by the end of the night. Choose a colleague who is more extroverted than you and who gets excited by socializing with others. Come up with a plan for who will talk to whom. And remember that it’s OK to take a break during the event to restore your energy. Even if it’s just a few minutes long, it might give you the boost you need to get back to making small talk.

(Adapted from “How to Keep Networking From Draining You,” by Jordana Valencia.)

If you need to be invited to that big meeting, prove it Stop dominating the conversation in your meetings When you’re looking for a job, focus on the process

e often try to cut d o w n on the number of meetings we have. But sometimes you need to get into an important meeting. To prove you should be in the room, be proactive. Start by thinking objectively about why you weren’t invited. Was it an oversight, or an intentional decision by the meeting organizer? Ask yourself what unique contribution you can make to the discussion. How will you advance the goal of the meeting, and how can you make that clear to the organizer? Then assess your work style. You may have been left out because of the way others perceive

you — perhaps you aren’t seen as a good listener or collaborator. Consider asking your peers for feedback on how you act and then making the necessary shifts so that others can appreciate what you bring. Once you’ve taken these steps, you’ll be in a better position to secure that invitation.

(Adapted from “How to Get Yourself Invited to Important Meetings,” by Nina Bowman.)

hen you’re leading a meeting, it’s tempting to hold the floor. After all, you called everyone together, right? But no one wants to go to a meeting where one person talks the whole time, and you’re unlikely to get what you need from the group if you’re delivering a monologue. To keep yourself in check, try three tactics. First, make notes and stick to them. Give yourself a time limit, and condense what you have to say into that amount of time. Second, send the agenda around in advance. Tell people whose opinions you respect that you are

W hoping they will speak up, and then call on them during the meeting. Third, use a round-robin format, where you go around the room and everyone has an opportunity to talk. Some people will pass, but at least they were given the chance — and didn’t have to interrupt you to get a word in.

(Adapted from “How to Run a Meeting Without Talking Too Much,” by Art Markman.)

h e n you’re applying for jobs but aren’t getting them, it’s easy to feel desperate. But don’t lose your confidence — it’s a key trait that hiring managers look for. To keep desperation at bay, shift your focus from the outcome you want (“I need a job!”) to the process you’ll use to reach it (“Here are the specific steps I’ll take”). Check for job openings and apply for positions that suit your experience. Attend networking events to get to know potential employers. Talk to friends and colleagues to find out who’s hiring. And take classes to improve your skills. Keeping your attention on these small-scale goals will ease your

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frustration and help you feel productive, especially if finding a job takes longer than expected. And many of these tasks are things you need to do after you get hired as well, so you’re laying the groundwork for your future success once you do land a position.

(Adapted from “Stay Confident During Your Job Search by Focusing on the Process, Not the Outcome,” by Art Markman.)

Tuesday 14 August 2018

C002D5556

BUSINESS DAY

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

May and Baker Plc: Sky high profit margins validate focus and market penetration strategies …..Net income surges 540 percent in HY 18 BALA AUGIE

ay & Baker Nigeria Plc is a Nigeriabased company, which is involved in the manufacture, sale and distribution of human pharmaceuticals, human vaccines and consumer products. The Company’s operating segments include Pharmaceuticals, Beverage and Foods. Its Pharmaceuticals segment is involved in the production and sale of human pharmaceuticals and human vaccines. Its Beverage segment is involved in the production of beverage drinks, including bottled water. Its Foods segment is involved in the production of package foods, including noodles. The Company offers pharmaceutical products for antidiabetics, anti-hypertensive, anti-infectives, anti-malaria, analgesic, cough and cold, multivitamin and anxiolytics. Its anti-diabetic’s products are sold under Diatab and Diamet brands. Its anti-hypertensive products are sold under Cardovasc Retard and Ramitace brands. Its food products are sold under the Mimee brand. Its beverages sector is engaged in the bottling of Lily brand of table water. The drug maker recently released its six month results for the period ended June 2018, showing improvement in profit, margins, sales and working capital. Bumper return on investment awaits shareholders of May and Baker as the Federal Executive Council (FEC) has rectified its 12 year agreement with the pharmaceutical firm for local vaccine production. The production of vaccines is expected to give impetus to sales while contemporaneously trickling down to the bottom line in form of higher profit and share price appreciation. There are indications that the pharmaceutical firm may increase dividend payment to shareholders, thanks to a sure in distrbutable profit. Net income surges 540 percent on improved contribution from segments

The drug maker released its six month June 2018 result showing a surge of 539.95 percent profit after tax to N601.37 million from N94.86 million the previous year. Similarly, profit before tax spiked by 178.78 percent to N388. 90 million in June 2018 from N139.59 million as at June 2017 while earnings before interest and tax (EBIT) was up 23 percent to N587.24 million as against N452.24 million the previous year. The growth in profit was largely driven by a reduction in finance cost, a drop in production and administrative costs and an item of N336.92 million, being income from discontinued operation. Following shareholders’ approval at the Extraordinary General Meeting in November 2017 and approval by the Securities and Exchange Commission (SEC) in February 2018, the foods division of the business ceased operations and was subsequently disposed in April 2018. The profit of N336.92 million derived from the disposal relate to the excess of proceeds over the

carrying amount of the assets at the date of disposal and the incidental expenses thereto. May and Baker has been able to use increased sales in generating higher profit while utilizing shareholder’s resources in generating higher profit. Increased efficiency, better cost management and improved business operations are responsible for the record profit margin. Gross margin increased to 32.82 percent in the period under review as against 30 percent the previous year. This means the drug maker earns 33 kobo on the Naira in gross margin. Net margin increased to 13.04 percent in the period under review as against 2.21 percent the previous year. A 13 pecent profit margin indicates the company earns 13 kobo, or N0.13, in profit for every Naira it collects. EBIT Margin increased to 12.74 percent in June 2018 from 10.12 percent as at June 2017. May and Baker’s cost control mechanism has paid off as

it spent less in producing each unit of product amid a tough and unpredictable macroeconomic environment. Cost of sales ratio reduced to 67.51 percent in June 2018 from 70 percent the previous year.The lower the ratio the more efficient and profitable a firm. Cost of sales reduced by 0.96 percent to N3.09 billion in the period under review from N3.12 billion as at June 2017 Sales were up 3.13 percent to N4.60 billion in the period under review from N4.46 billion the previous year. Business segmentation analysis showed that the performance of the company was driven by its core pharmaceuticals business, which saw 22 per cent growth in sales during the period. The company recorded improvement in sales in all its principal geographical business areas of Lagos, West, East and North. The phamarceutical firm has a favorable leverage ratio, which means it is less susceptible to financial risk despite money spent on its aggressive expansion plans.

Time interest coverage ratio is 2.80 times operating profit, which means the company can meet its interest expenses obligation. The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest on its outstanding debt. The interest coverage ratio may be calculated by dividing a company’s earnings before interest and taxes (EBIT) during a given period by the company’s interest payments due within the same period. The lower a company’s interest coverage ratio is, the more its debt expenses burden the company. When a company’s interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. 1.5 is generally considered to be a bare minimum acceptable ratio for a company and the tipping point below which lenders will likely refuse to lend the company more money, as the company’s risk for default may be perceived as too high. May and Baker’s debt to equity ratio (D/E) ratio fell to 41.18 percent in June 2018 from 74.15 percent the previous year. This means the company has reduced the level of debt financing for its assets relative to equity in its capital structure. Total borrowings (short and long term) reduced by 26.01 percent to N1.82 billion in June 2018 from N2.46 billion the previous year. The drug maker could magnify dividend payout to shareholders as its distributable profit surged by 534.14 percent in the period under review “It is noteworthy that the company achieved higher turnover in 2018 despite the discontinuation of a significant arm of its business responsible for about 20% of turnover in 2017,” said Nnamdi Okafor. “These result have again demonstrated the long-term sustainability of the company’s growth strategy and the continuing efficiency of its world-class pharmaceutical manufacturing complex in Ota, Ogun State,” said Okafor. According to him, the re-

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)

sults showed that the group’s core business can sustain long-term value creation for shareholders even as it continues to explore additional opportunities for expansion of the core healthcare business in Nigeria and beyond. Experts are upbeat that the gradual economic recovery, the relative flexibility in the foreign exchange market will spur May and Baker and its peer rivals to growth. Nigeria’s gross domestic product expanded 1.95 percent in the three months through March from a year earlier, according to latest report from Abuja-based National Bureau of Statistics. The introduction of the Investors’ and Exporters’ (I and E) Window by the central bank and a rebound in crude oil price helped the country exist its first recession in 25 years as firms can now access to foreign currency to import raw material and equipment to meet production. “Our many growth initiatives are paying off and we are happy that the results have proved us right. With improvement in macroeconomic environment, we will continue to improve on our performance with a view to creating greater value for our shareholders,” Okafor said. He noted that the impending commencement of operations of Biovaccines Nigeria Limited and ongoing efforts to turn the company’s world-class manufacturing facility in Ota, Ogun State, into a hub of pharmaceutical manufacturing in West Africa hold great prospects for the group. May & Baker Nigeria holds the majority equity stake of 51 per cent while the government holds 49 per cent equity stake in Biovaccines Nigeria Limited, the company set up for the purpose of May and Baker Nigeria-government partnership in domestic vaccine production. Okafor said the company remains focused on improving its financial structure through injection of additional equity funds adding that stronger balance sheet and streamlining the company’s activities along its core area of healthcare will put it in a position to deliver higher profits in the future.

BUSINESS DAY

C002D5556

Tuesday 14 August 2018

Live @ The Exchanges Top Gainers/Losers as at Monday 13 August 2018

GAINERS Company MOBIL

Market Statistics as at Monday13 August 2018

LOSERS Opening

Closing

Change

Company

Opening

Closing

Change

GUINNESS

N94

N90

-4

FLOURMILL

N24.6

N24

-0.6

UBA

N9.45

N9.15

-0.3

VOLUME (Numbers)

ASI (Points)

5,410.61

DEALS (Numbers)

3,120.00

N176

N180

INTBREW

N32

N33.45

1.45

UACN

N13

N14

ETERNA

N6.55

N7.2

0.65

OANDO

N5.55

N5.25

-0.3

VALUE (N billion)

STANBIC

N49.35

N50

0.65

DANGSUGAR

N15.5

N15.3

-0.2

MARKET CAP (N Trn

160,433,891.00 2.214 12.928

Multiple accounts: CMC extends forbearance deadline to December 31

Mutual Benefits eyes N2bn from Rights Issue

Stories by Iheanyi Nwachukwu

he acting Director General of the Securities and Exchange Commission (SEC), Mary Uduk has enjoined investors in the capital market that bought shares with different names to regularise their accounts in order to get the benefit of their investments. This is even as the Capital Market Committee (CMC) has extended the forbearance period to December 31, 2018 to enable investors regularise their accounts. Uduk spoke at a press briefing after the Second Capital Market committee Meeting in Lagos. The meeting is a periodic gathering of stakeholders in the Nigerian capital market to discuss capital market related matters. The event, which was well attended by stakeholders in the market, including the chairman of the House of Representatives Committee on Capital market and Institutions, featured presentations by various Market Technical Committees, Self-Regulatory Organisations (SROs) and other stakeholders. According to Uduk,

L-R: Sola Ephraim Oluwanuga, chairman Conference Planning Committee Chartered Institute of Arbitrators (CIArb Nigeria) and Mary Uduk, Ag. director general Securities and Exchange Commission, SEC, during a meeting between SEC and CIA in Abuja

“During the banking and insurance sector consolidation between 2004-2007, there were a lot of issues in the primary market because the banks or insurance companies came to the market to raise funds and during that period, because a lot of people were coming to the capital market for the first time, they saw the capital market as a place where they can make a lot of money so a lot of them bought shares in different names. “Today those shares are not in the system, because If you are unable to identify yourself prop-

erly those shares cannot be properly captured in the system. We are saying come and regularize that situation and get back your shares which are being warehoused somewhere. There is absolutely no punishment attached to it, the SEC is not punishing anybody, we just want such individuals to come and regularize that transaction between now and 31st December 2018. “The objective of doing that is that it will increase liquidity in the market because the shares are just there no trading on them, not only that, the investors can-

not claim their dividends too and that increases unclaimed dividend. Let them come and regularize so that there will be increase in trading of those shares and they will also claim their dividends so that the balance of unclaimed dividends will also go down”. Uduk also said the meeting agreed that in addition to the physical delivery of Annual Reports and Accounts, the existing pilot exercise of electronic distribution by Public Companies should continue, while efforts are made to enlighten shareholders and obtain their relevant e-mail addresses.

…on basis of 1 for 2 utual Benefits Assurance Plc is hoping to raise N2billion from its ongoing Rights Issue which opened August 6, 2018. Till September 14, 2018, the company offers to its existing shareholders 4billion ordinary shares of 50kobo each at 50kobo per share on the basis of one new ordinary share for every two ordinary share held as at the close of business on October 31, 2017. At Mutual Benefits Assurance Plc 22nd Annual General Meeting, its chairman Akin Ogunbiyi reassured the shareholders of the company’s commitment to sustainable growth, in line with its 5-year strategic plan. The 2017 financial year revealed a 15.6percent growth in gross premium to N14.04 billion from N12.14 billion in 2016, which puts the Company among the league of top Nigerian insurance companies. Net benefits and claims grew by 53.9percent from 2016’s figures. The significant growth in gross premium and better management of resources made

2017 a turnaround year for the company. Ogunbiyi said “Both shareholders’ funds and policyholders’ funds are represented by the right portfolio mix of short and long-term investments”. The biggest improvement was the N1.02 billion profit that was declared as against the N1.35 billion loss recorded in 2016. At the announcement of the proposed dividend payment, the reaction of the shareholders present at the AGM was positive. The company has demonstrated its commitment to shareholders through the payment of N160 million for the 2017 financial year. The Chairman reiterated that the payment of the dividend would mark the beginning of consistent dividend payments to its shareholders. The shareholders expressed their support for the capital raise of the N2 billion rights issue intended to increase the Company’s shareholders’ funds -strengthen its capital base, deepen capacity to underwrite risks, upgrade its information technology and enhance its working capital.

Ndanusa, Akande, Ohuabunwa, others join Pearl Awards Board

EARL Awards Nigeria has announced the appointment to its Board of Governors, notable personalities from corporate Nigeria including Suleyman Ndanusa; Nike Akande; Sam Ohuabunwa; Olufemi Awoyemi; Toyin Sanni and Abimbola Olashore. The Board was reconstituted as part of efforts to strengthen its governance and enhance the performance of the Awards Project towards the realisation of its ob-

jectives and to further contribute meaningfully to the growth of the capital market and by extension, the nation’s economy, according to a statements signed by Olalekan Adekoya, Secretary, Board of Governors, PEARL Awards Nigeria. The new Board members are top flight and respected Professionals whose wealth of experience span the capital market and the financial sector of our economy. Suleyman Ndanusa was Director General,

Securities and Exchange Commission (SEC) and also served as Chairman of Board of SEC between 2013 and 2015. Prior to that, he was the Managing Director/CEO, Spring Bank Plc and served as a Non-Executive Director of UAC of Nigeria Plc. Ndanusa was Past President/Chairman of Council, Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN). A Fellow of Chartered Institute of Stockbrokers and also a Fellow of Institute of Directors, Ndanusa

holds a B.Sc degree in Economics and obtained an MBA from Ahmadu Bello University, Zaria. He also holds a Ph.D Degree in Management from University of San Juan, United Kingdom. He is currently the Group Managing Director/CEO, Global Mandate Consulting Limited. Nike Akande was the Immediate Past President, Lagos Chamber of Commerce & Industry (LCCI). She was Nigeria’s first female Minister of Industry after she was

appointed twice in December 1997 and August 1998. She was a delegate at the 2014 National Conference as well as member of Nigeria Vision 2010 and Vision 20:2020. She is a board member of Union Bank of Nigeria and PZ Foundation. She also serves as the director of the National Insurance Corporation of Nigeria and the Nigeria Industrial Development Bank. On 8 December 2015, she was appointed Chairman of the NEPAD Business Group Nigeria

A recipient of the African Federation of Women Entrepreneur Award, she was conferred as an Officer of the Order of the Niger (OON) in 2003 and Commander of the Order of the Niger (CON) in 2014. Akande holds a B.Sc in Accountancy from the North-Western Polytechnic (now University of North London) after graduating in 1968. She is also an alumnus of the Harvard Business School and the International Institute for Management Development

Tuesday 14 August 2018

C002D5556

BUSINESS DAY

STRATEGYBRIEFING

IDEAS THAT POWER High PERFORMANCE

Great sales people do not translate to a great sales department BRIAN REUBEN

ow is your sales doing? There are three answers I can expect: very well, still pushing, not well. I meet with several senior business executives in several industries every year and I usually get such answers ‘in confidence’. No executive talks about how lousy his/her sales is, they only talk about how great it is when it’s doing great(and even when its not). But as every executive stands in the shower each morning, one thought that keeps him/her company is, ‘what do we need to do to capture maximum value from our efforts?’ And capturing more value is a function of a well articulated and executed strategy. That’s thesame thought that bothered a dejected man whom Bruce Burton, American advertising legend talked about. The man was a sales manager reputed for writing winning sales letter. But he lost his job and was at the verge of committing suicide. Burton led the man to a window and began, Look out there at those buildings ” Barton said, Offices of people All filled with people who have goods to sell and most of whom don’t knowhow to sell them ” You say you can write sales letters.This is your great chance to prove it.Write those people a letter that will sell them the idea that they need you to help them sell their goods.The man accepted the challenge. Six month later his earning were over $25,000 a year! The question is how did

such a great sales man loose his job? Did his company file for bankruptcy? How could that happen with such a great sales man? Well the answer is that great sales people does not translate to a great sales department. And by the way ‘a great sales department’ on its own is a pretty big term that may need to be broken down. A great sales department is one which its policies, culture and behavior are in alignment with the strategic direction of the whole organization. That’s dealing with the sales department that does the right things as against doing things right. A confusion between efficiency and optimization plagues many sales efforts. But while sales efficiency initiatives — like CRM, training, and KPI dashboards — improve your corporate engine horsepower. Sales optimization decisions — like aligning sales tasks with business strategy, customer selection, and sales force deployment across opportunities — set the route which the company takes. Like the aphorism, “If you don’t know where you’re going, any road will take you there.” But if you’re going in the wrong direction, getting there faster is not the solution. According to a report by Boston Consulting Group, doing the right things such as targeting high-value customers and deploying sales resources with strategically-appropriate criteria, have more than three times the impact on revenue growth than doing things right. The implication is that effective allocation of available sales resources can be a strategic asset and a leverage

for more profitable growth. At the core of sales effectiveness is an effective sales culture. Having a productive sales culture is the effective way to harness the potentials of your sales people and put their ability to the best use. My research shows that effective sales organisations focus on building four important capabilities as the framework for building a productive sales culture. Strategy and planning: there are two things most companies do wrong here. The first is a siloed approach to strategic planning irrespective of their go-to-market approach which often spans the whole organization. Secondly the planning process often takes four to five months. While this is going on, business has to go on, sales people have to keep working based on their individual capacity rather than what the company strategy should direct. This is why survey of 1,800 executives more than half (53%) of the respondents said their employees don’t understand their company’s strategy. Customer targeting and cost of service: All customers are equal but some are more equal than the others. This principle is what underlies prioritizing customers so as to make real the crucial “scope” component of a coherent strategy — i.e., decisions about the customer segment to target. Geography, frequency of order and order size dramatically determines the cost of serving customers. Many capital costs are embedded in cost-to-serve differences which affects

your return on investment. Sales efficiency efforts usually do not take capital cost into consideration. If this cost is not measured sales people will simply chase after competing price proposals. When sales people focus on price and volume and are rewarded based on that, sales resources cannot be optimized. This also expose the business model and ultimately profit to risk. Performance assessment and reviews: successful organization take assessment and review very seriously. Consider Toyota, when they reorganized their performance evaluation system although Toyota usually develop their system themselves, they had to seek the help of outside consultants who worked with them for three years to develop a new process. That’s how seriously they take review. Yet many sales managers tend to treat reviews as cursory, drive-by conversations that are mainly about compensation, not evaluation and development. Reviews are where strategy is revealed and emphasized. It is where sales behaviours are defined and data applied to customer interaction.

Sales capacity and resource allocation: sales productivity depends on the capacity of the sales people and how much they can do to reach target customers. Since doing the right thing is the key to high performance, resources should be effectively allocated towards sales optimization efforts like customer selection, and sales force deployment across opportunities. Evaluating sales with the expenseto-revenue ratio can shed light on the relative cost efficiency of selling activities, but not (by itself) on their cost effectiveness, which is a more complex relationship between selling costs, revenues, profit margins, and customers acquired through one or another means of organizing sales resources. While big data can be a great way of evaluation, they are not an end on their own. High performing companies understand that data are not just numbers; they are a way of viewing reality by the people who should use that data. And sales people will ignore analytics that they can’t apply to where they live: in daily encounters with customers.

Brian is an author, advisor to business leaders, keynote speaker and an entrepreneur. He has trained and advised senior executives at renowned organizations including Africa Reinsurance Corporation, UAC, United Securities Limited, BusinessDay among others. Brian is the Director of BusinessDay Training and sits on the board of a number of organizations in Africa.

This Page Is Open For Sponsorship, for details call 0708 234 5251.

32 BUSINESS DAY NEWS

C002D5556

Tuesday 14 August 2018

Traders decry low patronage, as rent stays high Oil steady as emerging market woes dim demand outlook CHINWE AGBEZE

raders in government built major markets in Lagos are experiencing harsh times in their businesses owing to high rent, which has affected them tremendously leading to record low sales. ‘‘I’ve been struggling to sell my goods since I moved into this shop last year,’’ Simeon Udechukwu, a retailer at Tejuosho Shopping Mall, says, ‘‘Most times, I go to the streets to look for customers.’’ Teju Ayoola, a retailer who deals in beddings and curtains, faces similar challenge as he says buyers prefer to shop from street retailers. ‘‘Those who sell outside the shopping complex have more customers. They did not pay for shops; so, their goods are cheaper than ours,’’ he says. ‘‘If we sell at the same price, how are we going to make profit after paying so much for shops?” he asks. BusinessDay recent survey at Tejuosho Shopping Mall, Alade New Mall, and The Arena markets in Lagos shows that the cost of the malls has shot up by 40 to 100 percent in the last two years owing to the activities of investors. At Tejuosho Shopping Mall, about 70 percent of the over 1,000 shops are unoccupied four years after

the complex was commissioned. ‘‘70 percent of the stores are empty, but they belong to investors who bought 20-30 shops earlier. I don’t think the management has any,’’ says a management staff at the shopping complex, who craved anonymity. Findings also reveal that the stores are going for as much as N800, 000, as against N350,000 a year ago. However, this depends on the retailer’s bargaining power. It was found that the management serves as a gobetween the investors and the retailers. Investors buy shops at the complex at N6.9 million (on a 25-year lease) and resell at N8 million. These racketeers in turn let the shops at N800,000 even when the rent was just N350,000 one year ago. It was gathered that the 70 percent empty shops in Tejuosho Shopping Complex was owned by these racketeers, who do not even do business in the complex. ‘‘Those that cannot afford to pay for the shops anymore because they are not making gain, are moving out,’’ says Udechukwu, ‘‘And we were told that the rent is going up to N500,000 from next year.’’ At Alade New Market, the complaint was the same. ‘‘Some days, I don’t sell a single item. This is unusual,’’ says Bimpe Alade, who retails cosmetics at the market. ‘‘The

price of the shop should be reduced before more people move out because business is very dull,” she advises. Olajumoke Idowu, secretary of the market, had earlier told BusinessDay that 20 percent of the 474 shops were yet to be taken. ‘‘Before the market was demolished, the traders paid N6,000 monthly for rent, but upon demolition, they were moved to the new market where they were asked to pay N150,000 and, N2,000 for service charge,’’ Idowu said. She disclosed that those that leased the shops were renting for twice the price, which is N300,000.‘‘The economy has been down, and the stores are expensive. That’s why people are not renting,’’ she said. At Nigerian Army Shopping Complex, the price of shops went up to N350,000 from N250,000 in 2015. But, early birds who leased the shops are renting for N500,000. ‘‘We hiked the rent because of the high cost of providing satisfactory services to our tenants such as refuse disposal services, security and electricity,’’ Bright Osakwe, executive assistant, Arena Shopping Mall told BusinessDay. The traders appealed to the Lagos State government to reduce the high cost of shops.

il prices were steady on Monday as trade tensions and troubled emerging markets dented the outlook for fuel demand, although US sanctions against Iran pointed towards tighter supply ahead. Oil prices were mixed with Brent was up at $72.73 a barrel, while US crude added 5 cents to $67.68. Benchmark Brent crude oil was steady at $72.71 a barrel by 1130 GMT US light crude was to $67.33. Oil prices edged lower, with Brent crude was at $72.72 a barrel and US crude was at $67.33. This is news one hour after the above news on oil. The report on oil shows gross inconsistency on oil report. Analysts maintain oil is sup-

posed to have arrived at $100 by now if not for perverted language used in its report. Turkey’s financial crisis has raised the risk of contagion throughout emerging economies, dragging down South Africa’s rand, Argentina and Mexico’s pesos as well as the Russian rouble. It has also dented emerging market stocks while curbing growth and the outlook for oil demand. This is compounding worries that a deepening trade war between the United States, China and the European Union will squeeze business activity in the world’s biggest economies. Hedge funds and other money managers reduced their bullish positions in US crude futures and options in the week ending August 7, data from the

US Commodity Futures Trading Commission showed on Friday. Phillip Futures said that hedge funds had cut bullish bets on oil because of “rising production levels from OPEC and the United States.” In spite of the cautious mood in oil markets, bullish sentiment found some support from expectations that US sanctions against Tehran would restrict Iranian crude exports, tightening global supply. The US has started implementing new sanctions against Iran, which from November will also target the country’s petroleum sector. Iran is the third-largest producer in the Organisation of the Petroleum Exporting Countries, behind Saudi Arabia and Iraq, pumping 3.65 million bpd in July, media data show.

NSE: All-Share Index drops further by 0.13%

i g e r i a n St o c k E xchange (NSE) commenced trading for the week on a bearish note with the All-Share Index dropping by 0.13 percent. The News Agency of Nigeria reports that the index shed 46.19 points or 0.13 per cent to close at 35,399.28 compared with 35,446.47 posted on Friday. In the same vein, the market capitalisation, which opened at N12.941 trillion lost N18 billion to close at N12.923 trillion following the dominance of the bears. Guinness recorded the highest loss to lead the lag-

gards’ table, dropping by N4 to close at N90 per share. Flour Mills trailed with a loss of 60k to close at N24, while Oando dropped 30k to close at N5.25 per share share. United Bank for Africa also depreciated by 30k to close at N9.15, while Guaranty Trust Bank was down by 20k to close at N38.80 per share. On the other hand, Mobil Oil led the gainers’ table, gaining N4 to close at N180 per share. International Breweries followed with a gain of N1.45 to close at N33.45, while kobo, UACN added N1 to close at N14 per share. Eterna Oil garnered 65k to

close at N7.20, while Stanbic IBTC also increased by 65k to close at N50 per share. United Bank for Africa was the most active stock, trading 30.59 million shares worth N288.38 million. It was followed by FBN Holdings with an account of 14.04 million shares valued at N134.94 million, while GT Bank traded 13.87 million shares worth N536.91 million. Zenith International Bank traded 12.42 million shares valued at N291.55 million, while Transcorp sold 9.92 million shares worth N11.43 million.

Port Harcourt Disco struggles with N10.2bn electricity debt

Acting President Yemi Osinbajo (4th r), in a group photograph with top industry stakeholders when he toured the Egina FPSO integration yard at LADOL Free Zone, Apapa, Friday. With him are (L-R): Musa Kida, deputy managing director of Total (E&P); MD of NPA, Hadiza Usman; chairman of LADOL, Ladi Jadesimi; HMoS (Trade and Investment), Aishat Abubakar; chairman/CEO, Inter Energy Services, Duran Fawibe; managing director, Shell, Bayo Ojulari, and managing director of LADOL, Amy Jadesimi.

Mechanisation to boost Nigeria rice production JONATHAN ADEROJU & FAMINU OLUWAGBEMISOLA

ice is one of the most consumed meals in Nigeria, and has consumption rate of 32kg per capita per annum. Its consumption has increased by 4.7 percent in the last decade, almost four times the global consumption growth, and has reached 6.4 million tons in 2017, accounting for 20 percent of Africa’s consumption. According to PricewaterhouseCoopers (PwC), it has been estimated that increasing the mechanisation rate in Nigeria from 0.3hp/ha to 0.8hp/ha can double rice production to 7.2 million tons if the current stock of

machinery is tripled, as against its current state over the next 5 years. As of 2011, rice accounted for 10 percent of household food spending, and 6.6 percent of total household spending. Rice production in Nigeria reached a peak of 3.7 million tons in 2017. Mechanisation is the process of changing from working largely or exclusively by hand or with animals to doing that work with machinery. Nigeria’s mechanisation gap provides numerous openings for investment across the agricultural value chain. To attract the required investment, the government needs to create an enabling environment that ensures mechanisation is profitable. In terms of priorities, the government should concentrate on addressing challenges around

land tenure and ownership, providing rural infrastructure and extension services, and ensuring incentives are transparent and accessible to all investors. Adequate rice production is central to global food security, as it is a common food consumed by over 50 percent of the world’s population; it provides 19 percent of global human per capita energy and 13 percent of per capita protein. Aside being relied on as a major source of food, rice has also contributed to employment as its production cuts across 144 million rice farms, mostly smaller than 1 hectare. It is a predominant staple crop in Nigeria, produced in over 18 of 36 states. Production of the commodity has increased at an annual average of 3.7 percent over the

past decade, reaching 3.7 million tons in 2017. Nigeria is currently producing between 5.8 million and 6 million tons. The increase in economic growth as a result of the oil discovery has raised per capita incomes and consumption; the focus on the oil sector has led to the neglect of the agriculture sector, resulting in slower growth in production. Studies have shown that mechanisation plays an active role in the promotion of rice production. According to a study conducted by Sultana et al 2015, the study analysed the drivers of increased rice production in five sub-Saharan African countries, including Nigeria, farmers who ploughed with a tractor increased their production by 51 percent relative to those who utilised manual methods.

ort Harcourt Electricity Distribution Company (PHED) has urged both the federal and state governments to pay the N10.2 billion electricity bill they owed the company. A statement issued by PHED’s manager of corporate communication, John Onyi, on Monday in Port Harcourt quoted the company’s CEO, Naveen Kapoor as demanding the payment of the debt. It said Kapoor made the appeal when officials of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) visited PHED’s headquarters in Port Harcourt. “PHED is dissatisfied over non-payment of electricity bills owed by various categories of customers that amount to over N138.5 billion as at the close of business in July 2018. “Out of this figure, the Federal and states Ministries, Departments and Agencies (MDAs) are indebted to PHED to the tune of over N10.2 billion. “Our premium customers, otherwise known as Maximum Demand and NonMaximum Demand, who are mostly residential customers are owing N13.7 billion and N115.2 billion, respectively,” he said. Kapoor said aside the debt; the company was losing over N3 billion annually through diversion of electricity and outright meter bypass by some customers. He said the company was also worried over the attitude

of some customers, who erroneously believed and insisted that electricity was free for those who hailed from oil producing areas. According to him, noncost reflective tariff, nonimplementation of minor tariff review and regulatory uncertainties in the industry had affected the company’s revenue and operations. “If this trend continues unabated, it would further plunge the company into serious financial difficulties. It is a known fact that non-payment in any business is a killer. “We appeal to NACCIMA to use its good offices in the various ministries to influence the federal government in settling the prolonged outstanding MDAs debt. “We also appeal to our Maximum Demand customers to pay their bills as at when due. Making these payments will enable the company to invest more in its network,” he told NACCIMA. Kapoor said in spite of challenges, the company had installed over 300,000 electric meters to homes and workplaces in Akwa Ibom, Bayelsa, Cross Rivers and Rivers states. The PHED boss said the company had also installed 23 “critical feeders” spread across the four states of its operations to improve electricity supply chain to industries. “Additionally, the company has started enumerating its customer’s database as part of plans to end estimated billing of customers and improve service delivery,” he added.

33 NEWS

Tuesday 14 August 2018

BUSINESS DAY

Lessons from infrastructure... Continued from back page

L-R: Tola Bademosi, co-founder/chief strategy officer, Lagos Digital Academy (LDA); Dotun Babatunde, managing director of LDA; Marie Chidi Okorie, business development manager of LDA; Bunmi Oke, chief executive officer, Ladybird Limited, and Kunle Shittu, co-founder/chief marketing officer of LDA, at the press conference and official launch of Lagos Digital Academy in Lagos.

Lessons from infrastructure... Continued from back page elite is using ride-hailing apps such as Uber and Taxify and ordering takeaway food and goods online. In Ivory Coast, Standard Chartered has launched its first digital-only retail bank, saying it will use the west African country as a testing ground for digital services worldwide. Even more important for the leapfrogging argument is the impact that mobile technology is having on the countryside, where six of every 10 Africans live. Starting in Kenya, with the 2007 launch of Mpesa — Safaricom’s mobile money transfer and payment service— much of Africa is experiencing a revolution in financial inclusion. Tens of millions of previously unbanked people like Mr Ng’usilo can now transfer money to relatives or pay for goods by pressing a few buttons on their phone. “The mobile handset in the hands of an ordinary African has become the symbol of leapfrogging,” CalestousJuma, the Kenyaborn former chair of the innovation for economic development executive programme at Harvard’s Kennedy School, wrote shortly before he died last year. “The mobile revolution has given hope to Africans that they too can be dynamic and innovative players in the global economy.” The spread of mobile money — now used by an estimated 690m people, of which half are African, according to GSMA — forms the digital backbone for a host of other services. In cities and towns, small businesses can advertise online and collect payments by phone. In

the countryside, there has been a rapid spread of payas-you-go solar-generated power in which customers buy electricity with mobile money for as little as 50 cents a day and panels are deactivated remotely if payments stop. In the village of Sahabevava in north-east Madagascar, several hours down a bone-jolting road to the nearest town and far from the nearest electricity grid, Lydia Soa, a farmer, is the proud owner of a solar panel. It produces enough power to light her home — good for when the children do homework — power a boombox and, of course, recharge her mobile phone. Africa accounts for 16 per cent of the world’s population but has only 2.8 per cent of its power generation capacity, according to the World Bank. Only 37 per cent of people in sub-Saharan Africa have access to electricity, leaving some 600m in the dark. However, according to an industry report, 73m households, mostly in African countries, had access to off-grid solar power by 2017. This rapid spread, which has enabled remote parts of Africa to jump from having no electricity straight to green power, is the quintessence of the leapfrogging argument. If technology can leapfrog landlines, banking and electricity grids, say enthusiasts, surely it can impact all industries and all areas of life. Keun Lee, professor of economics at Seoul National University, has studied how technological advances can jump-start development. In the late 1990s, he says, South Korea’s Samsung used the shift to digital television technology to overtake Sony, its Japanese rival, which had dominated the analogue market with its Trinitron range of TVs.

“When a new technology or paradigm emerges, everyone starts on the same line, so latecomers are not behind,” he says. “Forerunners are the last to switch to new technologies,” he adds. Mr Lee, who advises the Rwandan government on its ambitions to make the tiny central African country a digital hub, says technological shifts give the likes of India, Brazil and some African economies the chance to skip ahead. “African countries used to use kerosene as a source for lighting, but they can bypass grid-based electricity and go straight to solar-based electricity.” Few would dispute that, either by piggybacking off technologies developed in the west or through their own innovations such as mobile money, countries in Africa and elsewhere can compress development. Britain took 150 years or more, via an industrial revolution that harnessed water, wind and steam power, to move from an agricultural to an advanced economy. Japan achieved the same transition more quickly and countries such as Singapore, Taiwan, South Korea and China have taken just a couple of generations to leap from poverty to middle- or high-income status. The leapfroggers’ definition of technology tends to focus on the digital revolution and the power of “shiny new apps”, in Ms Lunga’s phrase, to transform society. However, Robert Gordon, an economist at Northwestern University, says the greatest gains in productivity were made not through the internet and mobile phones, but in technologies that we now take for granted: indoor plumbing, roads and steam power.

If Mr Gordon is right, then skipping over those developments and moving straight to what a World Economic Forum conference held in Rwanda in 2016 called the fourth industrial revolution would see Africa miss out on the most significant gains in productivity — and therefore growth. Indeed, for all the hype about leapfrogging, Africa’s growth rates, particularly in per capita terms, have rarely reached the sustained double-digit levels that transformed lives in north-east Asia. Bill Gates says lots of the technology that is changing lives in Africa was developed in the past. Yet now it can be adopted in some of the remotest places on earth. “By the time what I call ‘technology’ gets out to the village, the community healthcare worker is doing a simple injection, or you’re swallowing the pill or planting the seed,” he says. Mr Gates, whose Bill & Melinda Gates Foundation contributes billions of dollars to spreading such advances, says the relative ease of dissemination allows countries to catch up faster, particularly in health. “We have things like vaccines that we do a fairly good job at getting out to every child in the world,” he says. Hans Rosling, the Swedish health expert, cited Vietnam as the “most drastic” example of compressing development. “Vietnam today has the same health as the United States in 1980, and the same economic level as the United States in 1880,” he said. Some leapfrogging claims smack of “solutionism”, the idea that technology can fix even the most intractable of problems. Africa, according to sceptics, demonstrates equally the

provide enough for further investment, maintenance, and replications. In the end, they are not sustainable. The second argument in favour of broader economic strategy and consideration for optimal transport policy is necessary also because while the borrowing is increasingly in foreign currencies, the receipts for their use are in Naira. This introduces interest rate and currency risks for the repayment of these loans. As I conclude, let me mention here that Time Economics, the consulting firm I work for recently carried out a research into the potential of the Textile and Leather Clusters in Aba, Abia State. The research was funded by the Policy Development Facility of Department for International Development (DFID), UK. In our study, we found out that the three

main constraints to increasing their productivity are isolation from the global leather and textile value chain, which can be overcome by foreign investment; reliable electric power; and the infrastructure for connecting and transporting these goods out of Aba. Despite the large amount of goods that Aba exports to other West African countries, over the years, no government has made a determined effort to build a world-class infrastructure that takes care of the trade routes from Aba to the West African countries and beyond. Though our analysis did not delve into the cost of building such infrastructure and whether it would pay for itself, anecdotal evidence suggest that will pay for itself over time. In any case, it is such analysis that should drive infrastructure investment and not political considerations. I thank you.

limitations of technological solutions in the absence of good government and basic infrastructure. Developments in agriculture and health show both the potential and the shortcoming of technology. Take farming, which employs more than half of Africa’s adult population. Across the continent, tech-based solutions are addressing a crisis of low productivity. In Ghana, Cocoa Link delivers information to farmers via text message, dispensing practical advice and market prices. In Kenya, Twiga Foods, an online marketplace, uses technology to disintermediate thousands of wholesalers and ensure a transparent market for farmers. Grant Brooke, Twiga’s chief executive, says the greater certainty provided by mobile-based technology can help farmers raise yields. Yet flashy apps cannot hide a basic truth. African farming yields are stuck in the 19th century. The majority of farms have no irrigation, no government help with seed or fertiliser, no access to market and hazy ownership rights. Farmers do not bother to grow crops that, in the absence of refrigeration, would rot before they reach the consumer. Only 44 per cent of rural Kenyans and 32 per cent of Ethiopians live within 2km of an all-season road, a metric that former Prime Minister MelesZenawi considered more critical than GDP in determining development. Health is another example. Around the continent, technologists are seeking to solve a basic problem: lack of decent, affordable public healthcare. Babyl Health Rwanda, the subsidiary of Babylon, a UK creator of a “doctor in your pocket” app,

offers online consultations to villagers who live miles from the nearest clinic. Ms Lunga, whose Baobab Circle offers tele-consultations to hypertension and diabetes patients, argues that technology can fill a gap. “There are not enough doctors, there are not enough nurses,” she says. “That’s when you need AI to leapfrog that.” Yet, as with agriculture, innovations in healthcare smack of patching up failed systems. Many African governments are too poor, too badly organised or too busy lining their own pockets to provide decent healthcare for their people. If there is leapfrogging in health, it is when Africa’s wealthy skip over their own dilapidated systems to get treatment abroad. “No one can suggest that great technology is in any way a substitute for good governance,” says Mr Gates. “I certainly don’t think giving everyone computers helps their malaria or solves the problem of the teacher not being there or not having a schoolroom,” he says. CalestousJuma, the professor who was passionate about the power of technology to transform African lives, argued that leapfrogging cannot overcome bad leadership. He warned of “a faulty narrative that assumes Africa can leap into the service economy without first building a manufacturing base”. Although it was right to see “technological innovation as an essential driver of economic growth, and as the key to moving beyond the vagaries of commodity exports”, innovation depended on industrial development to build infrastructure and capacity. “That”, he wrote, “cannot be leapfrogged”.

34 BUSINESS DAY NEWS

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Banks say NCC hurting 9mobile with... Continued from page 1

certificate of no objection for the operating license of 9Mobile to be passed on to Teleology which came tops in a bid process that was championed by the Central Bank and NCC to revive the firm while keeping the creditor banks away from taking control.

Teleology holdings limited, the preferred bidder and new investor of 9mobile had before now, successfully raised and made ready its balance of $251 million which was paid into an escrow account about two weeks before the July 25, 2018 deadline date. This is in addition to the initial $50 million paid as a non-refundable deposit on March 21 2018, to show commitment on the sale in fulfillment of its buyer obligation but it is still unable to gain control as a result of what the banks call the “intrigues and unseen hands” bent on wrecking the ship. At separate interviews yesterday, several senior bankers from the consortium of banks blamed the NCC for its “inconsistency, a lack of commercial mindset and its failure to make good its commitment to join to protect jobs and subscribers at 9Mobile.” According to the CEO of one of the banks, “we are now not talking of a mere ordinary disappointment. The banks have been locked in a no man’s land and what is happening today is shameful for Nigeria, worse still to whom do you now complain.” The total size of 9Mobile loans outstanding to Banks of $1.2 billion was negotiated down to $800 million, of which $301 million was due to be paid by the new investor, Teleology. The $500 million balance of the outstanding debt is set to be restructured over an eight-year period, with a two-year moratorium. The firm 9Mobile generates revenues of N200 billion per annum, with

an EBITDA margin of 10 percent, according to data from investment Bank Renaissance Capital. “There has been no capex spend since 2014. 9Mobile needs to invest between $300mn- $450mn a year to remain competitive,” Renaissance Capital analysts led by Olamipo Ogunsanya, said in a recent note. “9Mobile has lost subscribers, its margins are under pressure, and lack of capital investment has made it less competitive than peers.” Teleology deposited the payment (part of which came by way of a funding support from AFREXIM Bank) into the escrow account after it successfully signed a share purchase agreement with the consortium of banks which in return committed to obtaining a certificate of no objection for deal from the NCC. The bank CEO who spoke to BusinessDay yesterday explained that at the much-publicized meeting of all concerned parties in Abuja at which the executive vice chairman, EVC of the NCC Umar Danbatta was present, the EVC agreed that he will issue the certificate of no objection the day the parties met the requirements. According to the CEO, “first the NCC said 9Mobile was owing it about N9bn in AOL charges, spectrum fees, etc, and that this debt must be settled. We said but that will be heavy handed given that other telecoms firms owe the NCC and it has not restrained them from carrying out their legitimate business. But so as not to present the regulator with a good excuse, the banks rallied, round working with 9Mobile and paid N6bn of that amount to NCC. The banks and 9Mobile also agreed with NCC on a credible plan for the balance. “When this was no longer the issue, the NCC suddenly came up with a demand to conduct due diligence on the buyers. But where was the NCC (which has a representative on the board of

9Mobile) when Teleology was shortlisted? Where was NCC when the share purchase agreement was signed? The CVs of the key officers of Teleology have been sent to NCC. “When this seem no longer to be the problem, NCC has now turned around to say, wait, 9Mobile you took us to court over the sale of Visafone spectrum to MTN, you must discontinue that case. The lawyers of 9Mobile have now presented to NCC a 9Mobile board resolution to this effect and filed a notice for the discontinuation of the case given that the courts are still on recess. According to the bank CEO, “when this ceased to be the issue, NCC has now come up with another excuse, and that is that 9Mobile has to pay its trade creditors like IHS, Huawei and Nokia. And we say yes 9Mobile is owing but it is a going concern and there is no company anywhere that does not owe. Even the NCC cannot say it is not owing anybody today.” The banks also agreed to share some of the funds they are expecting from Teleology with the trade creditors, once the 9mobile sale is concluded, however that has again failed to move the needle on the transaction. “The longer this transaction takes to mature, the lower the value of what they are acquiring,” said Bismarck Rewane, CEO of economics consulting firm Financial Derivatives. “We need 9 mobile to survive and we need it to be competitive, what we do not want is for the industry to become the nearest thing to a duopoly. That is not good for the consumers and the economy,” Rewane said. BusinessDay learnt that the central bank which restrained the banks at the beginning, now feels thoroughly embarrassed by the ugly turn of events. At 9Mobile, the usually calm and quiet CEO Boye Olusanya told BusinessDay he does not know why the transaction is being delayed.

•Continues online at www.businessdayonline.com

Tuesday 14 August 2018

SEC fails Corporate Governance rules on financial... Continued from page 1

market related decisions that could have saved the apex regulator’s image.

The last published financial report of the SEC was five years ago when Arunma Oteh was Director General of the Commission under the Board chairmanship of Suleyman .A. Ndanusa. Nigeria, as an economic entity, competes with other countries for investment capital; and investors will be attracted to where international standard and corporate governance codes are observed. As a regulator, SEC requires all public companies to submit: corporate governance score card; quarterly (unaudited) financial statements within a month of the end of each quarter; and annual audited financial statements within three months of the end of each financial year. On October 17, 2016, the Financial Reporting Council of Nigeria (FRCN) issued a three -in-one National Code of Corporate Governance (NCCG) which seeks to provide regulations on corporate governance as it relates to public, private companies registered under Nigerian law as well as Nigerian public entities. “The failure of one poorly managed financial institution can put the entire system in jeopardy. Accordingly, adherence to the principles of corporate governance is key to safe business and that is how sound system and financial stability can be achieved and sustained,” said Daniel Asapokhai, Executive Secretary/ CEO, Financial Reporting Council of Nigeria (FRC) in his presentation of the Nigerian code of corporate governance 2018. “Today’s domestic and international investors are likely to shy away from countries that do not:

guarantee investor right; provide for adequate corporate disclosures; and ensure sound Board practices.” Before his suspension, Mounir Gwarzo was a substantive Director General but his regime was without a constituted Board. Abdul Zubairu, who relieved Gwarzo also acted as SEC Director General before Mary Uduk, who is now the latest in the cycle of acting heads of SEC. Aside Oteh who was under the watch of SEC Board, other SEC DGs never had a constituted Board but were at liberty to spend the Commission’s money. This is an unimpressive development in Africa’s largest economy, analysts say. While many fault the Federal Government for its inability to take critical decision like forming a Board for the Commission, others say such lacuna encourages financial indiscipline, as evidenced in the allegations against a past DG, Gwarzo. “The accounts of the Commission are only signed by the Chairman of the Commission. The SEC is a very law abiding organisation and for us to be able to enforce our rules and regulations, we have to hold up ourselves and do the things that people want us to do,” Uduk said on the side-line of a press briefing after the Capital Market Committee (CMC) meeting in Lagos. “We cannot punish a company for not filing quarterly, half year and annual returns properly audited and the Commission will not do it. We cannot publish something (that is the accounts) that has not been signed. It is only the chairman of the board that has the right to sign the account and now we do not have a board,” she said.

•Continues online at www.businessdayonline.com

NNPC, Seplat sign pact to deliver 3.4bscfd of... Continued from page 1

bridge the projected mediumterm gas supply gap expected by

L-R: Agboola Dabiri, commissioner for youth and social development; Tunji Bello, secretary to Lagos State government; Ekuma Eze, country CSR manager, Nigerian Bottling Company Limited (NBC), and Toyosi Akerele-Ogunsiji, founder, Rise Networks, during the Mega Youth Conference held in commemoration of the 2018 United Nations International Youth Day in Lagos.

Businesses scramble for cash as Nigeria’s lending... Continued from page 1

tee (MPC) of the South Africa’s Reserve Bank met in March this year and cut interest rates by 25 basis

points. The current repo rate (central bank lending rate to commercial banks) in South Africa is now 6.5 percent, and the prime lending rate (lending rate to customers) is 10 percent. The Reserve Bank’s MPC had earlier cut the repo rate in July 2017 by 25 basis points from 7 percent to 6.75 percent. Similarly, Kenya Central Bank’s monetary policy committee cut the determining bank rate in late July to 9 per cent from 9.5 per cent.

BusinessDay gathered that Kenyans now borrow at an interest of 13 per cent (as against from 13.5 percent earlier) in line with the interest rate capping rule that limits lending rates to 4 percentage points above the CBR. Zambia is one of the emerging countries in SSA and its central bank cut benchmark lending rate by 50 basis points to 9.75 percent in February this year, citing lower consumer inflation and weaker economic growth, according to Reuters. In October 2017, the central of Ethiopia raised its benchmark interest rate to 7 percent from 5 percent. At least the benchmark interest rate of most SSA countries have remained single digit, barring few, meaning that

it is cheaper for businesses to access funds there than in Nigeria. The Central Bank of Nigeria (CBN) has held the MPR at 14 percent for the 11th time, due chiefly to high inflation rate. Inflation rate in June 2018 was 11.23 percent. Nigeria is facing a makeor-mar general election, which will see politicians spending huge sums on campaigns and vote-buying. Analysts see this as one of the main reasons why the CBN is reluctant to cut rates. A limited supply of naira is making it difficult for banks to lend to distributors and is hampering consumer demand and sales, Yaw Nsarkoh the managing director of Unilever Nigeria Plc said during an investor call last week.

•Continues online at www.businessdayonline.com

2020. The project, Assa North and Ohaji South (ANOH) gas development scheme, is one of the 7 Critical Gas Development Projects (7CGDP) which is aimed at boosting gas production and infrastructure development. Speaking at the event, Group Managing Director,(GMD) of the NNPC, Maikanti Baru, explained that a special purpose vehicle known as ANOH Gas Processing Company (AGPC) was being promoted by the Corporation and Seplat to develop, build, operate and maintain the ANOH Gas Processing Plant, with an initial capacity of 300 million standard cubic feet per day in Imo State. Represented by the Chief Operating Officer, Gas and Power, Saidu Mohammed, the GMD said in a statement issued on Monday that the corporation would do everything possible to ensure that the project was successfully delivered. He urged the AGPC to work hard and deliver the project on schedule, within budget and to specification, stressing that it was designed as worldclass gas processing plant with capacity to deliver between 3billion and 3.4billion standard cubic feet of gas daily. “Following the execution of Heads of Terms (HoT) by the Nigerian Gas Processing and Transportation Company (NGPTC) on behalf of the NNPC, Seplat and AGPC on December 19, 2017, the Steering Committee for the AGPC project has provided the leadership and broad guidance for the development and fi-

nalisation of the various commercial agreements required to underpin the project,”Baru stated. On his part, the Chief Executive Officer of Seplat, Austin Avuru, described the ANOH Gas Processing Plant as a landmark project which captures the essence of the gas infrastructure development initiative of the Federal Government as encapsulated in the 7 Big Wins and 12 Business Focus Areas programmes. He expressed confidence that AGPC would deliver the project within the next 18 months and achieve its objective of being a key gas supplier to both the domestic and export market. The MoU signed include: the AGPC Shareholders Agreement between AGPC, NGPTC and Seplat; AGPC Share Subscription Agreement between AGPC, NGPTC and Seplat; Wet Gas Sales and Purchase Agreement between, NNPC, Seplat and AGPC; Gas Sale and Purchase Agreement between AGPC and Nigerian Gas Marketing Company (NGMC); and Gas Marketing Agreement between AGPC and NGMC. The Nigerian Gas Processing and Transportation Company (NGPTC) and the Nigerian Gas Marketing Company (NGMC) are all Gas and Power subsidiaries of the Nigerian National Petroleum Corporation (NNPC) which is saddled with the responsibilities of managing the nation’s abundant hydrocarbon resources on behalf of the Federal Government. The agreements are an important precursor to the Final Investment Decision (FID) for the ANOH project which is expected in the fourthquarter (Q4) of 2018.

Politics & Policy Tuesday 14 August 2018

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BUSINESS DAY

My credentials will give me PDP presidential ticket - Makarfi I was also the national chairman of PDP. Among the aspirants, I am the only person that has the experience of managing the party at the national level. “I am not a starter and it is not because you entrusted me with the party that I now want to run. But with all that happened, I did not say PDP had done wrong to me, let me find shelter somewhere. I have stayed with you and will continue to stay with you.” The former senator, who added that he warned the party when they were about handing it over to Ali Modu Sherrif who run it aground, saying he was later, called upon to savage the party and build it to where it is today. He however, promised to restructure the country if nominated the party flag bearer and subsequently win the election. The presidential aspirant, who said he was a believer in restructuring, noted that except the country is structured “the cord that binds and holds us as a nation is threatened”.

IDRIS UMAR MOMOH, Benin

he imme diate past national chairman of People’s Democratic Party (APC), Ahmed Makarfi, on Monday said he had what it takes to deliver the party in the forthcoming presidential election. Makarfi, who spoke during his consultation tour to the Edo State chapter of the party in Benin-City, said he was not seeing the party’s ticket based on his position as the former National Chairman of the party but because he believes he is qualified and has what it takes to rule the nation. “I am not seeking presidential nomination because I was the national chairman. I was a leading aspirant in 2007, but I stepped down to work for the party. So, I am in the race because I believe I am qualified as other aspirants,” he said. According to him, “I was a governor for eight years and a Senator.

Makarfi

Obudu by-election, proof of acceptability - Agara MIKE ABANG, Calabar

chieftain of the People’s Democratic Party (PDP) and senatorial aspirant for the Central Senatorial of Cross River State, Chris Agara has described the recent victory of the party in the just-concluded Obudu State constituency as a proof of acceptability of the party in the state. In a press statement by his media aide, Agara attributed the victory of the party to good governance by Governor Ben Ayade of Cross River State to the people of the state. The PDP, last weekend, won the by-election for Obudu State

constituency. Announcing the result, the Returning Officer, Anthony Inyang, had said that the PDP candidate, Abbey Ukpukpen polled 12,712 votes to defeat the main challenger, Ishamali Bendebel of APC who scored a distant 4345 votes. Akwupufe John of African Democratic Congress, ADC, scored 114 while Awafang Clement of Mega Party of Nigeria polled 132 votes. The by-election was seen as a direct battle between Governor Ben Ayade who hails from the area, and three other Obudu-born challengers, most of whom are of the APC, who also have vowed to send the governor packing in 2019.

Makarfi, who accused the APCled Federal Government of only targeting the opposition party members in its fight against corruption, opined that the level of corruption in the present government would be made open by the time the party takes over government in 2019. While calling on the party and the delegates not to choose a candidate based on money, but credibility and goodwill, he noted that past leaders have always won election based on credibility, integrity and goodwill which he (Makarfi) also has. He promised to address, the poor condition of roads across the country, tackle insecurity, economic challenge of the country, if elected. Responding, the state chairman of the party, Dan Orbih, assured that they would do the needful after listening to all the aspirants. He appealed to the aspirants to focus on issues and move away from running others down.

Wait until after Buhari in 2019 to contest, Akeredolu tells Nigerian youths YOMI AYELESO, Akure

overnor Oluwarotimi Akeredolu of Ondo State has promised to support the youth to take up all leadership positions in the country, but asked them to allow President Muhammadu Buhari to be re-elected in 2019. The governor, who described the youth as the future of the country, stressed the need to listen to the innovative ideas from the youth in order to drive the society forward with regards to the present day realities. G overnor Akeredolu, who spoke at the occasion of the 2018 Youth Day Celebration, held at

the state Cultural Centre, Adegbemile Akure, explained that the youth are more informed and enlightened in accordance with the modern realities. The governor charged the youth to contest for political positions in the country, adding that they must come up with new initiatives to challenge the status quo. “I will support you to take up leadership positions. I will encourage you with all my might if you want to make desirable change that will make our nation better “The older generation may not want to allow you because they will continue to dream dreams but you can beat them to it if

only you can see visions. With your vision and your intellectual capacity and innovative prowess, you will be the change agents, our country is yearning for,” he said. Akeredolu, who restated his support for the #NotTooYoungToRun law, however advised the youth to wait until President Buhari is through with his second term in 2023 before they contest for his office, so that they can inherit the solid foundation the President is presently laying. At the occasion, the governor was decorated as the grand patron of the National Youth Council of Nigeria (NYCN) in Ondo State by the state Chairman, Esther Owoeye.

Akwa Ibom government raises alarm over EFCC’s alleged witch-hunting moves ANIEFIOK UDONQUAK, Uyo

kwa Ibom State has raised the alarm over the decision of the Economic and Financial Crime Commission (EFCC) to freeze its accounts, describing it as unconstitutional and an illegality which it says can scare away investors. The Commission last week announced that it has frozen the account of the state government and later claimed that it has traced funds belonging to the state government to some accounts operated by some individuals. Speaking in an inter view, Charles Udoh, commissioner for information and strategy said it is

only the state House of Assembly and the auditor-general of the state that have the powers to find out how the finances of the state government are being disbursed. He said if the EFCC is used as a tool to witch-hunt political opponents, both local and international investors would look elsewhere, adding that it could spell doom for efforts of the state government to attract investors. “It is unconstitutional against all dictates of the law, the annual accounts of the state government area being published yearly, by freezing the account of the state government without any prior notice and without any due process,” he said. According to Udoh, if the EFCC

has frozen the accounts of two state governments in the last three weeks, it means that it could go ahead to do so to other states in the future unless it is called to order, saying that the allegations that Akwa Ibom government funds were traced to accounts belonging to individuals are false and unfounded. The commissioner called on the international community as well as investors to prevail on the Federal Government to act in accordance with the constitution and expressed worry that the decision of the commission if unchecked would have far-reaching consequences on the local economy. “The EFCC does not even realise

that Akwa Ibom is the highest oil producing state in the country and you can imagine the negative effect of freezing the accounts of the state government which would make it difficult for workers to be paid in time,” he said. Reacting to allegations by the commission that N1.2 billion was traced to 11 accounts belonging to the state government, Udoh described such allegation as false and without any iota of truth adding that the commission had no reason to have taken frozen the account of the state government without any notice or communication. “Every government has a brand identity, this government is known for its integrity and transparency,

any allegation of illegal use of funds is a fabrication of lies and falsehood,’’ he said He said the state government would not indulge in mudslinging and a campaign of calumny but would present facts on all issues saying that the will of the people would prevail at the end of the day while urging the people to eschew ethnic sentiments over the political development in the state. “We wish to state that this is a false allegation and a desperate face saving effort by the EFCC to justify the unlawful freezing of accounts of the Akwa Ibom State government which attracted widespread public condemnation,’’ the commissioner said.

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Cartoon Network looks for new animation talent in Africa

artoon Network invites African creators to submit their short-form comedy project in the first ever Cartoon Network creative venture run in Africa. In line with Cartoon Network’s strategy to localise content, the channel has announced the launch of a brand new initiative, Cartoon Network Africa Creative Lab, an African creative competition designed to bring innovative, local short form content to Africa through its channel, and digital platforms, while reinforcing the local relevance of the brand. In this groundbreaking move, the leading network in children entertainment industry, Cartoon Network is taking another bold step in addressing the gap in locally relevant content, which offers a viewing experience that resonates with its African audience. The initiative will encourage African talents: creators, writers, graphic artists, animation students ... in fact anyone who loves kids’ content, to explore their creative, animation and production talents and have the chance to produce a short-form animated comedy to make Cartoon Network viewers across Africa laugh out loud! Ayodele Eleba, CEO of Spoof Animation! and founder of Lagos Comic Con, says, “It’s actually a big

deal for Nigerian animators and studios having Cartoon Network invest in the local talent we have here. It says a lot about where African animation is now and that Africans consume animated content as well. I can’t wait to see the ideas that will be pitched this year and how it will in turn affect the further rise of animated content in Nigeria.” Mbuotidem Johnson, CEO of Basement Animation and chief coordinator and founder of Animation Nigeria, adds, “Cartoon Network’s involvement in Africa through the Cartoon Network Creative Lab initiative means more exposure and appreciation for African stories told by African animators and storytellers. This is a fantastic opportunity for the Nigerian animation industry to participate.” Entries for the Cartoon Network Africa Creative Lab will be open from June 7 until August 31, 2018 across the continent. African residents, aged 18 and over, or any Africanbased company, can submit their one-minute to three-minute creative short project which must fall in the comedy genre and fit with Cartoon Network’s values of random, irreverent, smart and contemporary humour. Editorial guidelines can be found on www.CartoonNetworkAfrica.com/CreativeLab.

Adewale Adeyipo, executive director/vice president, sales and marketing, CWG plc, congratulating Michael Subomi Balogun, founder, FCMB, on the launch of FCMB UK Limited in Lagos, recently.

Performance evaluation: Edo charges appointees Experts link 63% symptoms of heart failure to depression Ikechukwu Ogah, con- heart failure, occurs when on deliverables at half-year stocktaking retreat ANTHONIA OBOKOH sultant cardiologist, Uni- the heart muscle does not

overnor of Edo State, Godwin Obaseki, has charged senior appointees in his administration to adopt innovative solutions to solve problems in their various sectors in order to deliver on set goals. Obaseki gave the charge at the weekend in the Federal Capital Territory, Abuja, at the State Executive Council retreat, held to appraise the performances of handlers of the ministries, departments and agencies of government, in the first half of the year. At the well-attended event, commissioners took turns to bring other members of the Exco to speed on developments in their various ministries, sharing achievements, challenges and the strategies they adopted in dealing with the variables around their tasks. Setting the tone for the event on day one, the governor reinforced the vision of his administration and the

need for the handlers of the various sectors of the state, namely; education, infrastructure, health, agriculture, job and wealth creation, among others, to continue to review their processes and procedures to better serve Edo people and residents in the state. “We need to be more scientific in the way we approach our tasks because governance is organic. It is about enhancing the quality of life of our people and to do this, we need a robust bank of data on their locations, needs, yearnings and aspirations and their perception of what we are doing as a government,” Obaseki said. He harped on the need to deploy the right tools, best practice and regular self and team evaluation mechanism to constantly measure performance internally, as well as comparing notes with similar agencies from other parts of the world.

He said that while “much work is being done in the basic education sector, the other levels of education must witness as much reforms to sustain the tempo of ongoing transformation of the state’s education sector.” Former Vice Chancellor of Covenant University and educational administrator, Aize Obayan, who served as resource person on the session on education, took the Exco members through the conditions that must exist for a robust and reform-oriented education sector that will deliver quality manpower, highly sought after by industries. The event was rounded off with reassurances to push through the last half of the year with better outcomes. In attendance were commissioners, special advisers and other appointees of the Edo State government.

FG confirms discussion with 26 power firms seeking eligible customer status … says Discos must invest in infrastructure to absorb unused 2,000mw generated HARRISON EDEH, Abuja

inister of power, works and housing, Babatunde Fashola, on Monday said the Federal Government was already in talks with 26 power customers seeking to enjoy eligible customer status, which allows direct access of power to consumers from generation companies. The consumers seeking to enjoy eligible status are power consumers who consume up to 2mw and want to dissociate from power supply inconsistency from the distribution companies. “The purpose was, among others, to improve distribution side of electricity and facilitate better power supply to consumers who consumed up to 2mw and above,” Fashola said. Confirming this development at the 29th monthly power sector meeting in Minna, the Niger State capital, Fashola said, “From reports reaching

me, five industrial customers are now benefitting from the policy and taking their power directly from a Genco, who incidentally is our host today, Messrs Mainstream Energy Limited.” He said, “We also have a list of 26 industrial customers who are seeking to benefit from the policy, saying there was urgent need for Discos to invest in key infrastructure to ensure distribution of available energy to consumers, as “there is an unused energy in the region of 2,000mw in this category.” Speaking further on key interventions of the Federal Government to put the power sector on track, the minister said, “There is the N701 Billion Payment Assurance Guarantee.” According to Fashola, “It is a creation of the Buhari government to give comfort to investors in the generation side of the value chain that they will be paid for supplying power.” The minister noted further, “Since its implementation in

2017, recovery of payments by Gencos has increased from 20 percent to 80 percent, and power supply capacity has improved from 4,000mw to 7,000mw and there is an appetite by other players to participate.” In his remarks on Meter Asset Provider, he said, “This policy was introduced to address the meter supply gap, relieve the Discos of the financial burden of meters, allow entrepreneurs to take up this as a business and diversify the sources of meter supply.” He informed, “Some Discos have signed up to the Government-Supported fund of N37 billion and we will keep an eye on the progress of the initiative.” While giving updates on energizing education institutions and markets, the minister said, “These are government-led initiatives based on the rural electrification plan approved by the President in 2016 to provide access to power for rural dwellers and vulnerable members of our society.

ardiologists have linked about 63 percent symptoms of heart failure in patients to depression, saying more awareness will help to stem the rising incidence of the disease in Nigeria. One of the experts said untreated hypertension was a major cause of heart failure in Nigeria. Studies identify untreated hypertension as the commonest cause of heart failure, degenerative valvular disease as an emerging cause of heart failure, and coronary artery disease as a rare cause of heart failure among Nigeria Africans. According to the experts, heart failure impacts more than 60 million people worldwide, 1 in every 5 people over the age of 40 will develop heart failure in their life time and 1 in every 4 people diagnosed of heart failure that are 65 years old or older are re-hospitalised within 30 days of discharge.

versity College Hospital, Ibadan, said despite improvements in care of heart failure over the past 20 years, the prognosis of heart failure was still unacceptably high, even for patients with the best available treatment. “All heart failure patients, regardless of their symptoms are at high risk of dying. 76 percent of heart failure patients struggle to perform their daily activities and 63 percent report symptoms that are consistent with depression. “50 percent of all heart failure patients will die within 5 years of diagnosis,” Ogah said. According to Ogah, heart failure places a huge burden on patients’ life, leaving many unable to do simple task, frequent hospitalisation and higher mortality, which can place a huge burden not only on them, but also on their family and caregivers and the wider society. Heart failure, sometimes known as congestive

pump blood as well as it should around the body. Its signs and symptoms commonly include shortness of breath, excessive tiredness, coughing (or chronic cough), and leg swelling. However, the experts advise that person with heart failure needs to be close with their cardiologist or a physician that specialises in the disease of the heart, at least once in three months. According to Amam Mbakwem, consultant cardiologist, Lagos University Teaching Hospital (LUTH), Nigerians need the right information; need to be more aware, the government needs to sensitise the people more about dangers in heart failure in respect of their healthy living. “People diagnosed with the disease should keep a healthy lifestyle and visit their general practitioner regularly to check their uric acid, cholesterol level while continuing with their monthly medication,” Mbakwem said.

Concrete road cheaper, safer, stronger - Dangote

he AG-Dangote Construction Company yesterday urged government at all levels and engineers to switch over to rigid pavement for road construction, saying it was more affordable, durable, safer and stronger. Ahmed Mansur, Dangote Group’s executive director, stakeholders management and corporate communications, led a delegation of the Dangote Group at this year’s Engineering Assembly with the theme: “The Nigerian Built Industry: Building a Sustainable Structure with Allied Professionals.” Representative of the AGDangote, Tunde Jimoh, who made the appeal at the ongoing

Engineering Assembly of the Council for the Regulation of Engineering in Nigeria (COREN) yesterday in Abuja, said the maximum life cycle of flexible pavements known as asphalt road was about 20 years. Jimoh said the life cycle of a rigid pavement or concrete road was 40 years or more, saying, “The pavement type chosen depends on a number of factors which includes: Expected traffic wheel loads, load repetitions, cost of construction, maintenance, etc.” The AG Dangote is currently constructing the longest concrete road in the country located in Kogi State. The Obajana-Kabba road, he said, is a 43km concrete road project due to be commis-

sioned in December. He said the 24km Itori-Ibese concrete road had since been delivered. Jimoh, who is the company’s project manager, said it was set to deliver the dual carriage Apapa Wharf Road in Lagos this month. According to Jimoh, “This vision of the development of concrete roads in Africa is being shared by more Leaders and Governments.Theimplementationof concrete roads can revolutionise infrastructural development in Nigeria and Africa as a whole.” He added that the cost of maintenance of asphalt roads is higher four to seven times than concrete roads, saying the raw material for concrete can be locally sourced.

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Global crude oil demand to rise above million bpd next year ISAAC ANYAOGU with agency report

nternational Energy Agency (IEA) on Friday raised its estimate of world oil demand growth next year to 1.5 million barrels per day (bpd) from 1.4 million bpd, forecasting that much of this volume will come from non-OPEC oil output growth. In its monthly oil market report, the IEA also raised its estimates of the “call” on OPEC, or the need for OPEC crude, by 300,000bpd in 2018 to 32.3 million bpd, and by 500,000bpd in 2019 to 31.9 million bpd. However, following a strong first quarter this year it said world oil demand had grown by a mere 750,000bpd on the year in the second quarter, constrained by sharp price rises and currency depreciations, and highlighted “risks to the forecast from escalating trade disputes and rising prices if supply is constrained.” European oil demand fell 120,000bpd on the year in the second quarter as the stimulus from low prices ended, it said. By contrast, China and India re-

main “on course to grow solidly this year,” the IEA said. “Oil demand growth is expected to remain relatively subdued in Q3 2018 before rebounding in Q4 2018,” the report said. On the supply side, the IEA raised its estimate for growth in non-OPEC oil output next year to 1.9 million b/d, from 1.8 million b/d in its previous report. Growth will be led by the US, with a 1.25 million b/d increase, Brazil with an extra 350,000 b/d, and Canada and Russia each increasing output by 210,000 b/d. The IEA praised the global upstream oil industry for having managed to raise output while reducing its costs and improving its financial position, estimating the major oil companies had increased their oil and gas output by 11 percent since 2014, while cutting spending by 49 percent. “Overall, the upstream industry is looking decidedly healthier on higher oil prices, sustained cost reductions and improved finances,” it said. OPEC held its production steady in July at 32.18 million bpd, with Saudi Arabia produc-

ing 10.35 million bpd, the IEA said. Russia, OPEC’s partner in production cuts, increased its crude and condensate output by 150,000 b/d in July to 11.21 million b/d, the IEA said. “Although OPEC is producing at the highest rate since February, overall supply in July was down 930,000 b/d year on year due to sharply lower output from Venezuela, Libya and Angola,” it said. Iran’s output was the lowest since April last year at 3.75 million b/d as Europe reduced its Iranian crude imports and South Korea completely stopped its Iranian imports. But Iranian shipments to Asia overall crept up to 1.65 million b/d, and shipments to India reached a record 770,000 b/d, the IEA said. It said second-largest producer Iraq had raised its production by 200,000 b/d in July to 4.56 million b/d, with exports from the south of the country at a record high as Basra Light exports hit 3.54 million b/d, offset by subdued volumes through the Kurdistan pipeline to Turkey of 330,000 b/d.

Nigeria on course to being cyber security fulcrum in Africa JUMOKE AKIYODE-LAWANSON

igeria has qualified to represent Africa at the global cyberlympics competition, as two Nigerian teams of cyber security professionals from a group called the “NaijaSecForce” emerged African champions at the Olympics for ethical hackers and cyber security professionals around the world. NaijaSecForce and Ek0pwn3rs came first and second, respectively, and qualified to represent Nigeria and Africa on a global stage. Both teams also made it to the top 12 positions in the world in the online qualifying round of the competition having solved all the challenges from the prequalifying round. Global cyberlympics is a hands-on cyber security team competition that brings together the best ethical hackers from around the world to compete in a series of challenges such as forensics, penetration testing, cryptography, malware analy-

sis - capture the flag challenges. This year’s competition was full of intrigues as the participants were given hardened systems to break into and other complex tasks to complete within a 12-hour period. They defeated teams from other nations and the African region such as Egypt, Morocco, Kenya, Sudan, Ghana, etc., to cling the top spot in Africa. Judging was based on the speed at which systems were hacked, the number of vulnerabilities found, challenges solved or flags found and the techniques used to uncover and exploit them. NaijaSecForce team is made up of Rotimi Akinyele (team captain), Oluwaeseun Oyelude (PwC Nigeria), Funmipe Olofinlade (eSentry Systems), Eyitemi Egbejule (Python Software Foundation Fellow), Shuaib Oladigbolu (Ladoke Akintola University of Technology), and Rajesh TV (ENCODE). Ek0pwn3rs has in its team:

Abimbola Jaiyeola (team captain), Chinedu Onwukike (IBM, Canada), Chidi Obum (Cyberinfocts), Olalekan Ismail (Ladoke Akintola University of Technology), Oladipupo Oyediji (PhynxLabs), and Adetutu Ogunsowo (Digital Jewels). Both teams have been selected to represent Africa at the finals, holding on September 13, 2018 in Atlanta GA, USA. They will be competing with the winners from other continents and the top cybersecurity professionals across the globe. NaijaSecForce team is the brain behind NaijaSecCon – Nigeria’s foremost technical cybersecurity conference which holds annually. They are also the organisers of the annual Capture-The-Flag (CTF) ethical hacking competition for students of Nigerian tertiary institutions as well as the organizers of the monthly #NSCLagos meet-up – a monthly meetup for cybersecurity learning, education and awareness.

‘Collective prosperity calls for even, balanced development’ DANIEL OBI

overnor of Enugu State, Ifeanyi Ugwuanyi, has reiterated the importance of even and balanced development as one of the best ways to mobilise the people for collective societal progress while also quelling the constant cries for marginalisation. Ugwuanyi,whorecentlyspoke at the Government House Enugu during a town-hall meeting with the Oguiyi Nike and Umunevo Nike autonomous communities in the Enugu North Local Government Area of the state, noted that the cries for marginalisation in most parts of the country had their roots in the concentration of government projects in one area while paying little attention to other areas. Emphasising the commit-

ment of his administration to continue to reflect spread and balance in the infrastructure revolution currently going on in the state, the governor reminded the gathering that such a strategy also serves to tap into the comparative potentials of each section of the state with a view to building a morevirile,robustandallinclusive community of people. “Each and every section of this state has their peculiar potentials God has endowed them with. We cannot fully maximise these potentials and opportunities if, as leaders, we fail to take a holistic look at harnessing these opportunities and endowments for the uplift of the people and by extension, for the common good of the state,” he said. Whileappreciatingthepeople of the community for their disposition to peace, a development

he attributed as one of the planks of the prevailing safe and secure atmosphereinthestate,thegovernor called on the people to sustain their predisposition to peace, linking that to economic prosperity. “Peace and security provide the most fertile ground for a people to exploit the potentials of nature around them and profitably express their God-given talents and learned capabilities. A crisesprone environment, on the other hand,limitstherealisationofthese potentials, constraining growth and leaving power in the hands of a few strong men whose interests and intentions are against the common good,” he said, adding thatwiththepeacefulco-existence he has observed between the indigenous people of Oguiyi Nike and others, the Enugu capital city will continue to be economically viable.

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FINANCIAL TIMES Emerging markets hit as Turkey keeps investors on edge

Citadel converts $10,000 investment in 1990 into $1.3m

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World Business Newspaper

Turkish lira drops further despite central bank action

Erdogan lashes out at economic ‘traitors’ as currency crisis escalates Laura Pitel and Ayla Jean Yackley

he Turkish lira fell sharply on Monday even after the country’s central bank announced measures to shore up the financial system amid warnings of a deepening crisis. The beleaguered currency fell as much as 11 per cent to a record low of TL7.2362 to the dollar in early Asian trading. It later rallied, but was trading at about TL6.9 to the dollar in volatile European trading in the early afternoon, about 7 per cent lower on the session. Turkish stocks were also hit, with the BIST 100 benchmark index dropping 4 per cent, reaching its lowest level in US dollar terms since early 2009. The lira has been hit by an increasingly bitter dispute between Ankara and Washington, which has added to concerns about Turkey’s high inflation and its hefty current account deficit, as well as Turkish corporates’ foreign currency debt and the general direction of economic policy under President Recep Tayyip Erdogan. Amid signs of emerging market contagion, the South African rand briefly fell as much as 10 per cent to a two-year low on Monday morning. It was the rand’s biggest one-day drop in a decade. The Indian rupee slipped 1.1 per cent, while the Indonesian rupiah lost 1 per cent. European financial stocks also came under pressure. Spain’s BBVA shed 2.9 per cent, while UniCredit sank 2.2 per cent. Both banks own stakes in Turkish lenders. “The current level of the exchange rate has no economic foundation,” Mr Erdogan said in a speech on Monday, as he threatened to punish “traitors” for spreading rumours of capital controls. “Turkey has strong economic fundamentals and it will continue being robust.” Mr Erdogan, who has attributed the lira’s travails to a foreign “operation” and an “economic war” against Turkey, said the finance ministry and other authorities were taking the necessary steps “in the face of these attacks . . . We have taken cautious steps and we will take more steps.” He also promised the country

would not compromise on the principles of a free-market economy. The Turkish central bank earlier announced a package of measures including lowering lira reserve requirements for banks, to support financial stability after a bruising week for the currency. The lira has lost nearly 50 per cent of its value against the dollar this year. The central bank said cuts in socalled reserve requirement ratios, a capital buffer for banks, would free up as much as TL10bn ($1.4bn), 6bn in US dollars and the equivalent of $3bn in gold to be released into the financial system. A person familiar with the matter said the central bank had also signalled an incremental tightening of monetary policy by preparing to lend money at an overnight rate above the benchmark “repo” rate of 17.5 per cent. Reuters reported earlier on Monday that the bank was willing to provide lira liquidity at 19.25 per cent after opting not to hold its regular repo auction for the day. Mr Erdogan has repeatedly proclaimed his hostility to high interest rates, a stance that in the past has encouraged the central bank to raise rates through relatively opaque and complex means. But Mr Erdogan’s powers have increased since new provisions establishing an executive presidency came into force last month. The person familiar with the matter said he expected volumes to be very low at first because there was little demand for liquidity. There was no sign of the big interest rate increase that some foreign investors believe is needed to halt the currency’s slide. The chief prosecutor of Istanbul opened an investigation into “persons who are involved in actions that threaten social peace, domestic calm and unity, and confidence in the economy” with manipulative news and statements in the press and on social media, the state-run Anadolu Agency reported. CNN Turk said the interior ministry had opened a probe into 346 social media accounts after determining they had engaged in “provocative posts to shape perceptions”.

Trump’s tariffs prove tougher obstacle than China expected

Beijing leaders weigh likely effects of retaliation on domestic economy

Tom Mitchell

i Jinping’s administration has sought to stabilise China’s domestic economy, currency and stock markets, while also appealing to people’s patriotism

Oleg Deripaska offers sanctions relief plan to US Treasury

Oligarch proposes slashing his stake in En+ by shifting shares to VTB Neil Hume, David Sheppard and Henry Foy

leg Deripaska’s aluminiumto-energy group En+ has presented the final version of a plan to the US Treasury in a bid to free itself from sanctions, which threaten to sink the company and upend global metal markets. Under the proposal, which has been filed with the Office of Foreign Assets Control (Ofac), Mr Deripaska has agreed to reduce his holding in London-listed En+ to below 45 per cent from around 70 per cent currently, primarily through the transfer of shares to VTB, a Russian bank with close links to the Kremlin. The plan, which has not yet been approved by Washington, represents a major concession to the US following its unprecedented move in April to try to end Mr Deripaska’s ownership of London-listed En+, which controls Rusal, the biggest aluminium

producer outside China. While the involvement in the plan of VTB — a bank that is itself under US sanctions — may raise questions in Washington, people familiar with the proposal say it would only hold the En+ shares briefly until sanctions are lifted. At that point it would sell them into the market to cover loans it has made to Mr Deripaska, which he has struggled to service and repay since he was sanctioned in April. During the brief period VTB controls the shares, their voting rights would also be controlled by two US citizens appointed by En+. “This would be a really successful outcome for the US,” said one person with knowledge of the proposal. “They have given Deripaska a bloody nose and ended his control of the company.” Russia’s second-largest lender, state-controlled VTB is run by Andrei Kostin, who is also under US sanctions for his alleged links to Vladimir

Putin. VTB has been a key creditor to Mr Deripaska’s empire but said in May that it had ceased lending to the oligarch. The April sanctions, which targeted 24 Russian oligarchs, including Mr Deripaska, and political officials, were designed to punish Moscow for alleged interference in the 2016 US presidential election. Almost overnight, Rusal was cut off from global commodity markets and the western banking system, creating chaos in manufacturing supply chains from Ireland to Detroit. While the US has since allowed Rusal to continue trading, the sanctions are set to tighten again from October, essentially giving En+ two months to find a solution that is acceptable to the US Treasury. To head off any criticism of the proposal, which has been put together by En+ chairman Greg Barker, a UK peer, Mr Deripaska has made several other commitments.

Business Book of the Year 2018 — the longlist Reflections on the nature of capitalism dominate FT/McKinsey annual prize Andrew Hill

he ups and downs of capitalism — past, present and future — are addressed by many of the books in contention for this year’s Financial Times and McKinsey Business Book of the Year Award. The 15 titles on the longlist for the £30,000 prize include the forthcoming Capitalism in America, a sweeping and entertaining history of US economics and business by Alan Greenspan, former chairman of the US Federal Reserve, and Adrian Wooldridge. The book explores why the early dynamism of US capitalism seems to be fading, blaming both the rise of welfare paymentsand the instability of the financial system. Himself a central figure in late 20th and early 21st-century capitalism,

Greenspan sets a unique record with the longlisting of his book, due to be published in October. Not only was the former central banker longlisted once before (in 2007, for The Age of Turbulence) but also Sebastian Mallaby’s biography of Greenspan, The Man Who Knew, won the award in 2016. Accompanying Capitalism in America is Crashed, Adam Tooze’s recently published and exhaustive 700-page analysis of the global financial crisis, a decade on. As Tooze points out, the crisis laid the ground for the populist backlash obvious in the 2016 vote for Brexit in the UK and the election of Donald Trump in the US. Reviewing Crashed for the Financial Times, Martin Wolf called it a “detailed and superbly researched account”. The list includes a crop of books

about recent corporate controversies and scandals. Philip Augar makes a second appearance on the longlist, following The Greed Merchants (2005), with his latest title, The Bank That Lived A Little. Described by the FT as “brilliantly readable”,it recounts the rollercoaster recent history of Barclays and the difficulties of containing risks in global banking. The longlist adds to the bulging shelf of recent titles on hubristic over-reach. Oliver Shah’s merciless, profanity-strewn dissection of the tumultuous career of UK retail tycoon Philip Green, Damaged Goods, makes the cut. So does Bad Blood, John Carreyrou’s tale of the rise and fall of Theranos, the blood-testing firm founded by Elizabeth Holmes. The FT pointed out that Bad Blood was also a “blistering critique of Silicon Valley” and its “rotten culture”.

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NATIONAL NEWS

FT Trump’s tariffs prove tougher...

UBS trials Netflixstyle algorithms for trading suggestions

Continued from page A3 deliberations. The Trump administration had days earlier warned that they were considering taxing Chinese exports worth $200bn at 25 per cent — compared with a previously announced tariff of 10 per cent. In July the world’s two largest economies had formally started trade hostilities, when they slapped punitive duties on $34bn of each other’s exports. Chinese officials hoped their unwanted trade war with the US would pause there, at least for the summer. “Everyone has been surprised by Trump,” said one Chinese economist who is close to Beijing policymakers. “Most Chinese officials assumed that Trump was just trying to push the boundary but would eventually back off.” Mr Trump has instead pressed ahead with his efforts to turn up the heat on Chinese President Xi Jinping. The US is set to impose tariffs on a further $16bn of Chinese exports, which will be matched by Beijing. In the face of this unprecedented economic and geopolitical challenge, Mr Xi’s administration has sought to stabilise China’s domestic economy, currency and stock markets, while also appealing to people’s patriotism. In its most recent meeting on July 31, the Chinese Communist party’s politburo — comprising its 25 most senior officials — called for “stable employment, stable finance, stable foreign trade, stable foreign investment, stable investment and stable expectation”. Days later at the annual gathering at the resort of Beidaihe near the Chinese capital, politburo member Chen Xi urged a group of the country’s leading scientists to “keep a patriotic heart” and help China “independently control core technologies”. During the two months before the Politburo’s appeal for economic stability, the renminbi had fallen more than 6 per cent against the US dollar to a low of 6.85 — a huge move for the carefully controlled currency. Since the Politburo’s statement, the renminbi has stabilised. The country’s stock markets, which Mr Trump gleefully noted on August 4 had dropped more than 20 per cent this year, gained ground last week. China’s central bank also guided interbank lending rates to their lowest levels since the country’s stock markets crashed three years ago. In addition, it reimposed rules that make it more expensive to bet against the renminbi. Chinese officials must strike a balance between their determination to reduce financial risks and ensuring that economic growth does not slow too sharply in the face of Mr Trump’s onslaught. “The authorities have not given up on [reducing] risk, but they also want to support the real economy,” said Andrew Polk at Trivium, a Beijing consultancy. “The two may not be compatible.” Keeping the currency at less than Rmb7 to the dollar, which one prominent central bank adviser last week called an important “psychological barrier”, could prove expensive. “In an environment where growth continues slowing down and the China-US relationship doesn’t improve, holding at seven would just raise a lot of other issues,” said one currency strategist. “You would have to burn reserves, tighten capital controls and tighten monetary conditions, which runs against your current monetary policy.”

Tuesday 14 August 2018

‘If you liked that junk bond, you might like this’ Joe Rennison

P Launched by Ken Griffin, Citadel’s flagship Wellington fund has delivered annualised returns (after fees) of 19.1 per cent since inception © David Paul Morris/Bloomberg

Citadel converts $10,000 investment in 1990 into $1.3m Hedge fund’s annualised 19.1% return since inception outstrips Buffett’s Berkshire Hathaway Chris Flood

n investor with the foresight to have staked $10,000 in Citadel’s first fund when the Chicago-based hedge fund manager was launched by Ken Griffin in 1990 would now be sitting on a pot worth more than $1.3m. A $10,000 stake in shares in Berkshire Hathaway, Warren Buffett’s company, would have grown to $315,000 over the same period, while an S&P 500 tracker fund would have increased to $131,000 (including dividends but excluding fees). The hedge fund industry has attracted widespread criticism for its high fees and disappointing performance, but a small number of managers have achieved exceptional long-term returns. Citadel’s flagship multi-strategy Wellington fund has delivered annualised returns (after fees) of 19.1 per cent since its inception in 1990, according to information provided to the Financial Times by an investor in the hedge fund. Citadel declined

to provide performance data for this article. Growth for the Wellington fund has slowed over the past 18 months with annualised returns dropping to 13 per cent over the course of 2017 and to 8.79 per cent in the first half of 2018. Data compiled by HFR, the research group, show that hedge funds across all strategies produced returns of 8.6 per cent in 2017, dropping to around 1.5 per cent so far this year. Citadel came close to collapse during the financial crisis in 2008 and was forced to suspend withdrawals, a restriction that infuriated investors. Soon after, however, it was able to snap up positions that had soured for rivals and it established two new funds that contributed to its later success. High-frequency trading capabilities were developed from 2003 onwards under physicist Mikhail “Misha” Malyshev, who was later sued by Citadel after he left to set up his own company. Those highfrequency trading capabilities were established in 2008 as a separate

fund, Tactical Trading, which has delivered annualised returns of 21 per cent since then. Tactical Trading now focuses exclusively on equities and quantitative strategies after exiting from high-frequency trading in 2014. A global equities fund was established in 2009 which has registered annualised returns of 13.3 per cent since inception, with Citadel setting up a global fixed income fund in 2012. The global fixed income fund has delivered annualised returns of 10.4 per cent since launch. The performance of its funds has helped Citadel return a total of $28.6bn in net profit (after fees) to its clients, ranking it as the third most successful manager behind longerestablished rivals Bridgewater and Soros in the annual list compiled by LCH Investments. The leaders of these large hedge funds have aggressively invested in their trading and risk management capabilities, curtailing the opportunities to generate alpha (excess returns) for conventional mutual fund managers.

Lagos lauds Peak, Nutrition Society for promoting child hygiene

he Deputy Governor of Lagos State, Oluranti Adebule has commended Peak 456 Growing up Milk and the Nutrition Society of Nigeria (NSN) on their continued effort in promoting healthy eating and active lifestyle habits in children and communities across the country. She stated this at the launch of the Peak 456 “Drink Move Be Strong” (DMBS) pre-school Programme that was held in Lagos last week. Speaking at the event, Adebule who was represented by the permanent secretary, office of the deputy governor, Lagos State Yetunde Odejayi and the Permanent Secretary, Ministry of Education, Lagos State, Adebunmi Adekanye, stated the importance of ensuring that children imbibe healthy eating habits from an early age for a positive impact on their well-being. “The future of our nation is dependent on the children we raise today. We need to ensure that our children receive the right nutrition and education to secure the socioeconomic and political well-being of our nation. Your intervention through this programme is a welcome development that will help many homes, families and children have access to the nutritional values and requirements for proper healthy living,” she said.

In 2017, Nigeria’s leading dairy company, Friesland Campina WAMCO piloted the Peak 456 DMBS PreSchool Programme in partnership with the Nutrition Society of Nigeria (NSN) to promote healthy eating and exercise among children in Lagos aged four to six years old. The results of the pilot were positive lifestyle changes in nutrition and exercise among teachers, pupils and parents. The partnership is in line with the FrieslandCampina WAMCO global project tagged ‘Drink, Move Be Strong’ school programme that will engage and educate school children on healthy eating and active living. This year, in Nigeria, the initiative has scaled up to include seven more locations namely Ogun, Ibadan, Benin, Enugu, Abuja, Kaduna and Kano, as well as Lagos, focusing on “eating healthy and staying active.” Speaking at the media briefing, the Corporate Affairs Director, FrieslandCampina WAMCO, Ore Famurewa, said: “From childhood, we form our eating and lifestyle habits and these habits have impact on us into adulthood. It is of utmost importance to inculcate in children from their developmental years a healthy lifestyle and behavior through education and modelling. “Schools play an important role in teaching children the importance of

adequate nutrition and developing good eating habits. An early start of making healthy choices as children will make it easier for them to keep up these habits as adults,” Famurewa said. Specialized Nutrition Director, Zatur Hassim, further emphasized the role of schools in the development of healthy children. “Children at the age of four to six years are influenced by teachers almost every day during the school term. Teachers need to be equipped with the right knowledge and tools to educate their pupils on healthy eating and active lifestyle. “The aim of setting up teachers’ workshop by FrieslandCampina WAMCO in partnership with Nutrition Society of Nigeria is to empower pre-school teachers with the right knowledge on child nutrition,” Zatur said. In line with this, the company gave out Peak 456 DMBS tool kits to support teachers in their classrooms. The teachers were equipped with nutrition knowledge to pass on to their pupils. In addition, teachers were taught the ‘Peak 456 Exercise Moves’ – a simple exercise routine synced to the Peak 456 song. To aid easy access to information on healthy eating and active lifestyle tips, the Peak 456 exercise routine is available on the brand’s Facebook page.

icking an investment may soon start to be more like choosing a TV show on Netflix or finding new music on Spotify. UBS is looking at applying recommendation algorithms to suggest trades to its asset management and hedge fund clients, similar to those used by a host of consumer technology companies. The move is in its early stages of development, with the task of reliably recommending interesting trades to investors posing very different challenges from suggesting a new indie band to listen to or what fresh comedy show to watch. Nonetheless, the broad theory behind the initiative is the same, as finance increasingly borrows from the innovations of Silicon Valley’s technology companies. Increasing cost pressure on banks, coupled with the rise of computer-powered market players, has pushed banks to boost investment in their technology and explore new ways to automate some of their core businesses. “Imagine what the world looked like when you watched television and had to scan through channels, whereas now it is not only on demand, it is presented to you so you easily find what you are looking for,” said Giuseppe Nuti, who heads up data science in UBS’s FX, rates and credit Strategic Development Lab. “That’s what we are trying to do for our clients, presenting them with a choice of likely, interesting trades.” Just as people once took recommendations for TV shows or new music from friends or industry critics, a bank’s clients have often listened to recommendations from trained salespeople. UBS is hoping to make this process more automated, taking inputs of a client’s previous trading behaviour to assess whether they might be interested in a specific transaction. And it’s not just for clients. The technology should help pinpoint investors that will want to buy something UBS is trying to sell, and vice versa. “A good sales person calls his or her client and goes over what they think will be interesting for the day,” said Mr Nuti. “We are trying to automate that. It means the job of a sales person, which in many ways has remained immune to the technology revolution, will likely change.” The algorithm is currently being trialled in the bank’s corporate bond trading business but there are hopes to roll it out to other asset classes as well. At the moment, recommendations produced by the technology are sent to salespeople to decide whether or not they should be passed on to clients, but over time the plan is to eliminate the middle man. The challenge is finding enough data to plug into the recommendation engine for it to produce reliable results, said Mr Nuti. Each new TV show watched, or song listened to, is indicative of the type of music or television that a person likes. But it is harder to group trades into similar themes, says Mr Nuti, because people execute transactions for very specific reasons.

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Emerging markets hit as Turkey keeps investors on edge South African rand, Indian rupee and Indonesian rupiah swept up in Turkish turmoil Roger Blitz and Emma Dunkley

merging market currencies were swept up in the turmoil gripping markets over Turkey on Monday, driving investors into havens. The Turkish lira at one point plunged a further 11 per cent in early Asian trading to a record low of TL7.24 to the dollar, and remained under pressure despite some relief from central bank measures intended to shore up liquidity for the country’s banks. The lira later pared losses to trade at TL6.90, still down 6.8 per cent but off its earlier low. In South Africa, the rand tumbled more than 10 per cent at one point, its biggest intraday drop in almost a decade, to a two-year low at R15.474 per dollar, but recovered to stand at R14.24 by the early afternoon in London. The Indian rupee weakened to just beyond Rs70 per dollar, before recovering to trade at Rs69.84. Th e In d o n e s i a n r u p i a h touched its weakest level in nearly three years, down more than 1 per cent to Rp14.625 per dollar, but recovered some of that to trade at Rp14.590. The rupiah’s fall prompted Indonesia’s central bank to intervene to support the currency, according to Reuters. “In terms of emerging markets risk in the longer run, I find this latest episode a little disquieting,” said Cliff Tan, east Asian head of global markets research at MUFG. “Those countries with current account deficits and places with political corruption — in these circumstances, people are looking for excuses to exit the market.” Contrasting with weakness in European and Asian bourses, US equities edged up in early trading, with the benchmark S&P 500 rising 0.3 per cent. European stocks were modestly lower in early afternoon trading, with the benchmark Stoxx Europe 600 falling 0.3 per cent. European banks with significant exposure to Turkey, including

Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas, all had early drops of 1 per cent or more. BBVA had traded down about 3.4 per cent by early afternoon, and UniCredit was 3.6 per cent lower. “Depending on how the situation proceeds, there may be somewhat significant capital and earnings implications for the most-exposed banks,” analysts at Deutsche Bank noted. But we do “not expect systemic implications and believe the impact should be broadly manageable for European banks”. The shift from riskier assets saw the yield on the benchmark 10-year US Treasury falling 1 basis point to 2.87 per cent, although the move was reversed as Wall Street opened. The dollar remained near its strongest level in 13 months. The euro dropped as much as 0.4 per cent to $1.1365 on Monday morning, but later erased much of that drop to trade at $1.1426. Mansoor Mohi-uddin, head of foreign exchange strategy at NatWest Markets, said sentiment towards the lira was “likely to remain fragile” unless Turkey undertakes more meaningful measures such as a “series of substantive rate hikes”. The lira has plummeted by more than 40 per cent this year, losing a fifth of its value over the past week alone, amid an intensifying dispute with US president Donald Trump. Investors also sold out of equities in Asia with Japan’s Topix index closing down 2.1 per cent, while China’s benchmark CSI 300 finished 0.4 per cent lower. Despite fears of contagion, analysts said Asia was generally wellplaced to cope. Trinh Nguyen, a senior economist for emerging Asia at asset manager Natixis, said emerging Asian economies had “ample foreign exchange reserves” relative to short-term debt, while many had current account surpluses that would support their currencies.

US stock futures flat as Wall Street looks to defy Turkey fallout Peter Wells

S stock futures were mixed on Monday morning, but broadly looked to withstand the unease around the economic and financial market turmoil afflicting Turkey. Concerns about Turkey, and the potential impact of any fallout on other emerging markets of Europe, finally got the better of Wall Street on Friday, leading US stocks to their biggest one-day drop in a month and the first weekly decline for the S&P 500 in six weeks. Futures for the S&P 500 were flat on Monday morning, while

those for the Dow Jones Industrial Average were down less than 0.1 per cent, and those for the Nasdaq 100 were up 0.2 per cent. Government bonds were weaker, though, reversing some of Friday’s rally. The yield on the benchmark 10-year US Treasury was up 1.2 basis points to 2.8714 per cent. Yields rise as bond prices fall. The dollar reversed gains, with the DXY index down less than 0.1 per cent at 96.323. The gauge, which tracks the greenback against a weighted basket of global peers, had been at a 13-month high today.

The lira has plummeted by more than 40 per cent this year and lost a fifth of its value against the dollar in the past week alone

Chinese central bank on sidelines in stability drive

Money market rates at multiyear lows after authorities move to support economy Javier Espinoza

hina’s central bank has taken to the sidelines, allowing a flood of liquidity to drive money market rates to multiyear lows as the financial authorities fall in behind the leadership’s entreaty to maintain economic stability. There are risks associated with such loose credit conditions — not least, muddying the message about reining in financial risk. However, the central bank will probably stay relatively inactive as policy is tweaked to fix some of the collateral damage caused by earlier de-risking measures, and as threats to the economy increase in the face of the trade war with the US. In the interbank market, which is the centre of Chinese bond trading and of borrowing and lending between financial institutions, several key interest rates have fallen to levels not seen since 2015. The market-driven seven-day deposit repurchase agreement rate, which is the most closely watched indicator of liquidity conditions in the system, fell to 2.3076 per cent on Friday compared with an average 3.2134 per cent in the first half of this year and 3.353 per cent in 2017. The PBoC lends these funds at 2.55 per cent, implying that — for the first time since February 2016 — it is

cheaper to borrow from the market than from the central bank. Conditions have changed abruptly since the end of July, when the Communist party politburo officially flagged threats to the economy and pledged to maintain stability and keep liquidity “reasonable and abundant”. As the costs of the government’s derisking campaign have increased, and as President Donald Trump has turned up the heat on the trade war, funding levels in the interbank market have been increased. The reserve requirement ratio has been progressively lowered by the PBoC, which also made an unexpected injection of a hefty Rmb502bn via the bank’s medium-term lending facility (MLF) on July 23. But the direct economic impact of these steps has been muted so far. Money market rates are at multiyear lows because funds are sloshing around the financial system rather than being put to productive work in what the government calls the real economy. A Friday statement from the China Banking and Insurance Regulatory Commission talked up the role of banks and insurers in supporting the economy, highlighting bank lending to infrastructure projects and to small companies. But private companies have also been hit by the government’s cam-

paign to rein in excess borrowing and bond yields suggest they are yet to benefit from the extra funding that has been added to the system. So long as the PBoC is under instruction to support credit growth, there is no incentive to remove much of this excess liquidity from the interbank market. Suspending operations The central bank runs daily open market operations to add or remove funding via reverse repos to meet its policy goals. But it has not conducted operations for 17 trading days in a row, the longest stretch since the first half of 2015. Maturing MLF funds this week will be a signal of the central bank’s intentions — it could allow all Rmb336.5bn to roll over, suggesting comfort with current market rates, or it could renew only a portion of the funding to signal there are limits to its appetite for loose conditions. Leaving borrowing costs too low for too long fuels speculative activity and risks worsening China’s debt problems. Government agencies face the seemingly contradictory challenge of delivering stable growth but also reducing excess credit as part of what the leadership has called a “tough battle” to rein in financial risk. Cheap money has already fuelled a sharp increase in overnight borrowing in the interbank market, something the PBoC has warned against in the past.

Campbell Soup: Canned heat The inheritors have their work cut out if they wish to keep company

anned soup was once as fine an industry to inherit as any other. Not any more. Campbell Soup has become one of the most beleaguered large food companies in America. Millennials are eschewing its processed food and retail consolidation is squeezing its profit margins. The company jettisoned its longtime chief executive in May. Now, activist Dan Loeb has arrived on the scene, agitating for a sale. Campbell’s heirs and heiresses have their work cut out. In the past two years, the company’s shares have fallen by one-third. In response to weakening soup sales, former boss Denise Morrison spent $6bn buying pret-

zel maker Snyder’s-Lance at a whopping multiple of 20 times ebitda, a cash earnings measure. Snacks have been a bright spot for packaged food companies and Campbell Soup already has wellknown brand Pepperidge Farms. However, the steep price has left Campbell with a total debt/ebitda level exceeding five times. Its dividend yield is approaching 4 per cent. The payout is keeping the stock from further collapse. Since Ms Morrison’s ousting in May, the board has been considering alternative strategies. The most obvious is a sale, but it would not be straightforward. JPMorgan estimates that Kraft Heinz, which is the name that comes up most often in the con-

text of potential buyers, could see its earnings per share jump 20 per cent in an all-cash, modest premium deal. But why would Kraft Heinz (or any company) be interested in buying a grab-bag business of soup, cookies, pretzels and carrots? Nearly half of Campbell Soup’s shares are owned by various descendants of founder John T Dorrance. Mr Loeb has teamed up with one family member, George Strawbridge. Together they own more than 8 per cent. If the rest of the family wants the company to remain in their hands they are going to have to step up their game just as their options are being reduced.

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Tuesday 14 August 2018

INTERVIEW

‘People are exercising power without authority’

Against the backdrop of recent developments in Nigeria’s political firmament, ATEDO PETERSIDE, erudite banker, corporate businessman and founder of Stanbic IBTC Bank Plc, in a terrific interview with Arise Television, deplored the excesses and desperation of some politicians, resulting in the siege on the National Assembly complex last week. He noted that the action sent negative signals to the investment community that Nigeria was not conducive for meaningful investments. He blamed such unfortunate incidents on the political scene on leadership failure. ZEBULON AGOMUO here brings to you excerpts from the interview.

he Executive-Legislature feud appears to be taking toll on the smooth running of government in the country; what is your take on this? I think it is partly caused by failure of leadership. Let’s get it very clear; if something is not working well, it is a reflection of the competence or skills the leaders have. It is true that the first experiment with the Senate and House of Representatives under President Obasanjo was tumultuous. You had Senate Presidents being removed all the time. But I think also, I am not recommending it anyway, some of them were removed efficiently; it was a well thought-out operation. The party was a large and dominant party and they knew what they were doing. What we have now is a little bit of people copying somebody else’s trait; with less competence and with less coordination between the various arms; almost at rivalry. You need an effective leadership to coordinate all that. The result is that, it looks as if various actors are going off from the tangent; trying wonderful things to create an impression or push their own agenda. The other thing I should add is that some of the things that people are trying to do now, copying what happened 15 years ago, is actually a lot more difficult to achieve today because some things have changed, which they are overlooking. You mentioned 2014 lockdown of the National Assembly. Between 2014 and today, 2018; can you imagine the impact of the explosion of the social media on Nigeria? In 2014, we were not getting live images on everybody’s phone through Whatsapp, etc. So, when people are copying an old game in a new environment and they are not skillful and knowledgeable enough to manage a new environment, it may backfire. From my own understanding as an observer, you can get away with locking down a number of addresses in Abuja; same all over the word, but there are three places you can’t lock down without the whole world paying attention in this age of social media. One is Aso Rock; two is National Assembly, and three, is probably, the Supreme Court. Now, locking down the National Assembly is like locking down the Capitol Hill in America. If you lock down Capitol Hill, you must

it makes people to question the quality of leadership in the country because the truth is that if anything goes wrong in the country, the blame should and must go to the leadership. It is like in a company; if any goes wrong there, it is the CEO that would be blamed. I have right to say that the problem is because the CEO of that company was unable to manage the company well; the buck stops somewhere. So, when something goes wrong in a country, everybody knows where the bucks stop. But the Acting President was very decisive in intervening… Yes, thank God for that, but the point I am making is that if things that are not supposed to happen, happen, I can still question the leadership of that company. That you now subsequently managed to arrest a bad situation still leaves open the inquest- how in the first place is it sensible to send gunmen with masks to go to the front of the National Assembly; lock out both

Atedo Peterside

have enough intelligence to immediately give a reason to the media– bomb scare, lone gunman running amok, or something that they can understand. But it is a little bit daft to lock down such a place and not have a story ready to explain your action. That’s why I say; that the people trying this kind of things are not intelligent enough to understand the weight of their actions or carrying out such actions without giving people a storyline that would make them understand that the world was not coming to an end. Do you know that there are some Nigerians who thought there was a coup; who thought, seeing masked armed men, a coup was on? That’s Nigerians; not even talking about

foreigners. By the time people in Australia see such pictures, they would be reporting that there’s a coup in Nigeria. So, the people who try these childish games soon realised that they are dealing with a monster way beyond their control. The plot was running away from them and so they were looking incompetent and disgracing the country. Let’s thank God that they were not skillful enough and knowledgeable enough at carrying out the whole plot, they were bungling like amateurs, thereby giving them a feedback that nobody needs this. Apart from the leadership mentality that you talked about; how did Nigeria degenerate to the point

that we are now seeing a siege to the National Assembly and all that? You know, when you say degenerate – it sends a scare to several places that probably those who laid the siege did not understand that it could get to so many places, so fast. Like I said, it’s local and international. The information was out there in a flash. I felt sorry actually for the poor security men, who looked very silly standing there with masks, and then somebody rebuking them; almost like live TV and the whole world watching them. It is so sad, but I felt sorry for such young men who were deployed on such a daft mission and they couldn’t even say anything or explain anything. It is degenerative also because

“If you are just sending signals to the whole world that we are not mature enough to resolve our differences using valid and proper channels, it may be dangerous. I am talking about perceptions”

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INTERVIEW the legislators and even the ordinary workers? It makes people wonder at the competence of the leadership. The kind of erosion here being the usurpation of power; not obeying the tenets of separation of powers is gradually affecting the economic fortunes of Nigeria. To what extent do you believe that? Listen, now that you mentioned economy. Of recent, Nigeria has made headline news for the wrong reasons with the economy. One, we became the country with the largest number of extremely poor people and two; we have become the country with the largest number of school-age children out of school. So, the whole world takes notice that Nigeria is now making news for the negative areas in the economy: Now, what they want to see is that we have a game plan that is responding to all these. Instead, what people see is incompetent leadership being displayed left, right and centre. This means that with those number I gave you on the economy, let’s tell the whole world we have a problem, but we want to see the competent leaders who are about to address that problem; But what we see, and available on the screen, are leaders who are distracted and involved in all manner of needless fights. Let me explain the needless fights. You know that they say a good General is one that has probably, not lost a battle; but people also say that a good General never lost a battle because he knew which battles not to fight. If Napoleon did not go to Russia, he would not have been defeated there. Perhaps, if Hitler did not go to Russia, he would not have been defeated. Now, some of these things we are seeing here, is that people are trying certain things but they don’t have the capacity and enough understanding that those things that they are trying is beyond them; and it is also complicated and a needless fight. So, what I am saying is that you should have enough intelligence to know some situations that you can-

Atedo Peterside

not change immediately and you just have to manage them, live with them and sort of neutralise them. But thinking that you can change everything at gunpoint is a mindset of people who have lost the plot. And these plots are still unfolding with the back and forth movements of politicians in the name of defections? It is possible that the large defection from the APC to the PDP got some people worried; and they began to try some desperate things. I have met two types of supporters within the APC. Interestingly, they come to diametrically opposite recommendations. The right hand side are those who believe that we don’t need to be perceived as people who are only efficient at trying to oppress the opposition and opponents and hounding them; we need to portray a better face; the other half is under the mindset that the way to stop all these defections and to make our opponents to be careful is to try to unleash the police on them. Oil and water don’t mix. That’s why I said it was a leadership failure because you cannot even sit down to articulate the best way to solve a problem; which battles do we not fight; which situation do we accept? When you misjudge all these things, you constantly embarrass yourself. It is like the populace is losing faith in the leadership; particularly if you look at the last election in Ekiti where money became the issue. May we know in your opinion if the people still have their voice or voices? When you said the people are losing faith in the leadership, what is really happening is that some people are being demystified. Sometimes, a leader protects his reputation if he was never put in charge completely. If you are in-charge, then the people get the chance to measure how effective you are. I think some people have been demystified. The whole world can now see that XYZ is in charge

and this is what we are now getting. Are these people good enough? Are these people the way forward? Is there a better luck somewhere else? Even within the same organisation; the same institution, the same party; can we do better? They’ll begin to raise these questions. Let me also explain that the dangerous aspect of what we are seeing is that it is clear that some people are exercising power without authority; that is when leadership is not effective enough to coordinate everything and to be on top of the game and know what everybody is doing. Even if you are running an institution of four thousand staff; for you to be an effective CEO, you have to be in control of all the whole units; force them to coordinate; you have to force them to a meeting; you have to have a hierarchy; you have to decide who is in charge of what? If you miss all those things and people begin to see actually that they can misbehave; that leadership is not good enough to even understand who is doing what wrong, people take advantage of such situations to misbehave. So, when people exercise power without authority we can finish up with unexpected consequences because they are doing things they wouldn’t do normally under a properly structured leadership. The poverty index of Nigeria among the poorest nations of the world; Nigeria is leading in poverty and all that; how would you reconcile this with what people describe as the excesses or otherwise of the EFCC’s freezing of accounts of two state governments arising from this political imbroglio? I think it is unfortunate and I think that we have to be very careful about such things. We shouldn’t send signals; it is about perception. We should not send signals that we are about to politicise every institution, including the EFCC. As soon as the Benue Governor defects, the EFCC found a problem with the security votes; as soon as something happens in Akwa Ibom, the EFCC wakes up. See, you almost bastardised the EFCC and you trivialise everything and making mockery of it. It is unfortunate, and it should stop. This is because it does not send the right signals to the investment community. People want to believe they are investing in a place that is not a kangaroo environment. People want to believe that there is some order that people follow and that people are doing things genuinely and correctly. If you are just sending signals to the whole world that we are not mature enough to resolve our differences using valid and proper channels, it may be dangerous. I am talking about perceptions. I am not saying that perhaps, nobody did anything wrong in any place; but for goodness sake. Some people even made a prediction that as soon as the Governor of Benue State defects that the EFCC would go after him; and it came to pass. The point I am making is that we have to be careful there, and I think we should hold all these institutions to account one by one – including the civil society. Let’s not pin everything on the boss of DSS and makes him seem as if he is a lone wolf or the only bad guy in the system. We should challenge

Atedo Peterside

everybody; ask them questions and make them render accounts. Again, like I have said, some of these things are about defective coordination and leadership. Defective leadership or lack of leadership seems to be affecting Nigeria’s budgetary provision, implementations and the rest. 2018 Budget was passed not long ago and another supplementary budget is before the National Assembly. What is really happening? Why are we not doing things right? It is because you are doing a number of things which are unaffordable. You talked about the budget being passed; in the budget, was there any provision for fuel subsidy? You are talking about N1.4trillion spent on fuel subsidy that is outside of the budget. People use terms like ‘Oh, it is under recovery by the NNPC’.What does that mean? Run a transparent budget. It is better to run a proper budget system. Budget for a subsidy; let us quantify it and approve it; and spend the money properly. In an attempt to do things under the table – it all sends the signal of a bunch of people who think we can bend the rules or we can do exactly as we please. It gets everybody worried. We know that those sums being squandered are unaffordable. You may say you are playing politics; but my point is that for goodness sake, it should have been budgeted. What does it cost to actually build a refinery? And the signal it also sends is that a situation where a political party (APC) swept the last elections; it makes people wonder that even when you have a party that swept everything, they cannot organise themselves very well to run an economy; to run security or to run the nation properly. It makes people wonder what happens the day you have parties that no single one has complete control – one controls the Senate; one controls the House of Representatives, and so on? But like I said before and am tired of saying

it that it is all about leadership and leadership failure. It is something we have to address very quickly and everybody has to speak up. What about followership? Yes, you see, that’s why I said everybody has to speak up. If I did not think there was a need for followers to speak up, I would not have been here. I would have stayed in my house. The reason I am here is to point out that it is also a shame if the people who are properly educated do not use their knowledge, experience, intellect to speak about life issues because it influences people. It influences good actors; it influences bad actors. Somebody has to tell people enough is enough; stop disgracing Nigeria. You can disgrace yourself because you don’t know what you are doing; but for goodness sake, there’s a minimum standard. I am happy that the Acting President stepped in on Tuesday and saved us from the ultimate disgrace. Do you think that this is capable of derailing our democracy? Is there a possibility? Well, I have said that if you have disparate units exercising power without authority you can finish up with unintended consequences. Is like a horse that soon realises that the rider does not know what he is doing and the horse takes control. So, the point I m making is that it leads to uncertainty and then you can easily get unexpected outcomes and that’s why leaders must take control. Key operations of the Executive and the Legislature are being affected by the rivalry; what is the way out? I have said something repeatedly that people have to understand that if you have a serious problem; of the type you described, in life, there are only three things you can do: one, you can do nothing; two, you can decide to fight over it or three; you can sit down and talk about it. So, you should be clever enough to sit down and talk. That’s all we ask of them.

BUSINESS DAY

Tuesday 14 August 2018

BUSINESS DAY

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NEWS YOU CAN TRUST I TUESDAY 14 AUGUST 2018

INSIGHT/INNOVATION Lessons from infrastructure investment in Roman and colonial times

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

ast w eek, I came across two very interesting research papers. The first, “Roman roads to prosperity: Persistence and Non Persistence of Public Goods provision” by Carl Johan Dalgaard, Nicolai Kaarsen, Ola Olssen and Pablo Selaya, all Danish economists, was the basis of a Washington Post story by Christopher Ingraham. The research traced the roads built during the Roman Empire across Europe and the Middle East and North Africa (MENA), for their implications on modern day prosperity. The roads were built nearly 2000 years ago, and were constructed on the basis of military strategies,

DAVID PILLING FT

wars, and conquests, rather than to facilitate trade. The authors found that the roads have driven economic development in Europe, but not in MENA. They demonstrated that the map of the roads showed how the pattern of economic development in the communities, regions and the countries has followed the construction of those roads. In the last week also, the Centre for the Study of Economies of Africa (CSEA), here in Abuja, invited me to their bi weekly seminar. In the seminar, Dr. Dozie Okoye, from Dalhousie University, Canada, presented a very interesting paper, co-written with Roland Pongou of University of Ottawa and Tite Yokossi of the Massachusetts Institute of Technology (MIT), which looked at the role of colonial railroad construction in Nigeria’s development. By the way, the railroads, which were built between 1878 and 1930, started to collapse after independence. The conclusions of the study are staggering. The study concluded that construction of railways had a

significant impact on development in the North but not in the South. One of the underlying reasons why the South did not benefit as much from railway construction was that, in the South there were other options such as sea travel, and thus railways in the south faced competition with sea travel. Conversely, in the North, there was virtually no alternative for moving goods out of the region. The other point was that there were already significant economic activities in the South, so the building of railways, rather than being the platform for economic development, like it was in the North, merely provided complementary and additional options for moving goods in the Southern region. Additionally, since the North was far from the sea, and railroads are competitive over long distances, the impact of railway construction in the South was not as significant as in the North because there were options, and because these options were cheaper than rail over short distances. The research also concluded that railroads

in the North led to significant increases in trade in the region, with double-digit growth in trade More so, it helped to divert trade from the Sahara to the coast in the Southern region. The policy implications are as staggering as the conclusions of the papers - optimal infrastructure investment mix cannot be determined without serious economic, social, and environmental analysis and evaluation. The construction of infrastructure such as roads, railways, and waterways should be based on thorough cost / benefit analysis, potential economic impact, and consideration for competitive analysis. Yes, building infrastructure is critical for economic development because it provides the platform for connectivity, trade, and increasing productivity. But the underlying point of these researches is that not all forms of transportation deliver the same results over the same period of time. This heterogeneous possibility, as demonstrated in these two important researches dictates that we

The argument is that the infrastructure development will pay for itself in the future. However, there is no economic evidence that back up the assertion that the infrastructure currently being built will be able to pay for itself. There are two peculiar reasons why we should be skeptical in the case of Nigeria today. First, unlike during the Colonial times, the current infrastructure drive, while good on its own does not contain any plan to generate the money used in their construction. Take the Abuja – Kaduna railway line for instance, it is currently subsidized, and provides no clear economic benefit that will be used to recover construction expenses. This is not an argument that these infrastructure investments should not be made but that the transport infrastructure that gets built should be based on broader economic considerations that are rarely made. This is especially true considering that the use of this infrastructure is subsidized and therefore does not Continues on page 33

African economy: The limits of leapfrogging ogy is seen as the key to leapfrogging. According to Miles Morland, a veteran investor in Africa, Nigeria in 2001 had 100,000 working landlines for a population then around 140m. When in that year, MTN, a South African telecoms company, bid $285m for a mobile operating licence, it esti-

otiogoNg ’usilo vividly remembers the first time he saw a car. It was the 1950s and Mr Ng’usilo, a hunter-gatherer from the Ogiek tribe in Kenya’s Mau forest, thought it was a “moving house”. These days, at 86, though he still tries to preserve a huntergatherer lifestyle, foraging for honey and secretly bagging the odd hyrax, he has moved with the times. He wears western clothes, buys food at the market and, like his younger relatives, uses a mobile phone. His story about the old days — which he recounts over sacred honey beer — is interrupted by incessant chirruping, not from birds but handsets bringing news to the forest from the city. The rapid spread of mobile technology in the developing world — especially in Africa, which has lagged behind most of Asia and Latin America in closing the income gap with the west — has given rise to the theory of “leapfrogging”. This has it that, in the words of a World Bank study, countries can make “a quick jump in economic development” by harnessing technological innovation. Some see in the power of technology an almost miraculous potential to solve problems that many governments, particularly

have to evaluate what gets built, how it is built, and how it is financed. It thus means that the determination of an optimal mix of intermodal transportation systems must take into consideration, not only the costs of building such infrastructure but also the opportunity costs of building them. Opportunity costs here refer to alternative transportation systems and the comparable impact of building the infrastructure in another location. In the current climate, we must also consider sustainability and environmental elements. So, permit me to digress a bit from the policy implications of these researches, and address some of our own current issues in Nigeria. It is generally agreed that Nigeria needs infrastructure for the purposes I have mentioned above – connectivity, driving up economic activities and increasing productivity by lowering costs. But the government claims it has continued to drive up national debt ostensibly for the purpose of building infrastructure (never mind that majority of the debt is directed at paying salaries).

444m

Recharging phones via solar power in South Sudan in Africa, have failed properly to address; poor health, poor schools, lack of roads, lack of electricity and lack of jobs. Last week Alibaba founder Jack Ma announced a $10m “Netpreneur” prize for young African tech entrepreneurs who, Mr Ma said, were “paving the way for a better future”. Ban Kimoon, the former UN secretary-general who will sit on the prize’s advisory board, articulated the huge claims being made of technology to help poor countries catch up — and even overtake — their richer peers. “With the rapid development of the global digital economy and the availability of tech-

Africa accounts for 16 per cent of the world’s population but has only 2.8 per cent of its power generation capacity, according to the World Bank

nology,” he said, “the next century belongs to Africa.” The term “leapfrogging” is often applied to Africa, though it is also used to describe a path supposedly being charted by India, which is said to have skipped straight to a technology-driven economic model without the intensive manufacturing phase that spurred growth in Japan, South Korea and China. As in Africa, India’s tech entrepreneurs are said to be succeeding where the government has failed. The author Gurcharan Das has said India grows at night “when the government sleeps”. The spread of mobile and digital technol-

gradually to close the gap on the rest of the world as handsets become more affordable. In Ethiopia, Transsion Holdings, a Chinese company, is already manufacturing handsets costing as little as $10 in an industrial park outside Addis Ababa. “Access to mobile phones is now virtually

73m

Estimated number of mobile phone service subscribers in sub-Saharan Africa by 2017

Estimated number of homes with access to offthe-grid solar power, shown above in Kenya

mated that no more than 15m Nigerians would ever own a mobile phone. Today, the country has 162m subscribers, according to Jumia, an online retailer. In sub-Saharan Africa as a whole, GSMA Intelligence estimates there were 444m unique mobile subscribers in 2017, a penetration rate of 44 per cent. That compares with a global average of 66 per cent, though in countries like South Africa and Nigeria, where nearly nine in 10 people subscribe, mobile phones are as common as in the US, according to Pew Research. Although mobile phone sales have slowed, many of the 50 countries in subSaharan Africa are expected

ubiquitous,” says Precious Lunga, a Zimbabwean neuroscientist who founded Baobab Circle, a health tech company that uses artificial intelligence to give consultations to patients in Kenya and Zimbabwe. “There are places where there’s still no running water, but you can stream a video,” she says. The spread of smartphones, which count for a third of all handsets in Africa, opens up the transformative possibilities of mobile technology still further, say technology advocates. In teeming cities such as Lagos in Nigeria or Dar es Salaam in Tanzania, both among the fastest growing in the world, a slice of the urban Continues on page 33

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