BusinessDay 14 Aug 2019 by BusinessDay

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news you can trust I **WEDNESDAY 14 AUGUST 2019 I vol. 19, no 371 I N300

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Failures of past trade agreements hold lessons for AfCFTA Analysts point to CET, EAC, SACU, others round 2015, Nigeria firms were optimistic that the Common External Tariff (CET) would remove barriers to free trade and enable them double their exports in the West African region. It was an agreement among 15 Economic Community of West African States (ECOWAS) member-countries targeted at pushing intra-regional trade beyond 12-15 percent. The assumption was that West African nations would adopt common tariff lines to remove barriers to entry. Four years down the line, the CET has become a failure as each of the signatory countries adopted different tariff lines and various levels of protectionist policies, thereby breaching the original agreement reached among West African countries. “There were many countries that resorted to self-help,” Segun Ajayi-Kadir, director-general, Manufacturers Association of Nigeria (MAN), said in an interview with BusinessDay. “We did not negotiate the

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Buhari asks CBN to halt forex for food importation ...despite floundering agricultural productivity CALEB OJEWALE & HOPE MOSES-ASHIKE

t N236.33 billion and 6.4 percent of total importation in the first quarter of 2019, Nigeria’s agricultural imports have for years highlighted the country’s difficulty in producing enough food for the country’s 190 million population. Yet, President Muhammadu Buhari has directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange for food importation, even though the country continues to rely on importation for virtually every food item, especially grains such as wheat and proteins such as fish. The country has so far been unable to create an enabling environment that will offer a competitive advantage in production, such that importing is not considered

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Inside L-R: Mitchell Elegbe, founder/GMD, Interswitch Group; Chuma Ezirim, group executive, retail and e-business, First Bank; Francis Gbenga Shobo, deputy MD, First Bank; Folashade Femi-Lawal, head of card business, First Bank, and Mike Ogbalu, divisional CEO, Verve, at the Verve Global Card Launch in New York.

process properly, so we were left with incapacity to impose the kind of tariff needed to support our industrial aspiration,” he said. The CET created a number

of complications, with finished medicines from ECOWAS countries entering into the West African market at zero duty while raw and packaging materials came in at 5 percent to 20 percent tariff.

This is one clear example of a failed past free trade agreement which must point lessons for Nigeria and the rest of Africa as the African Continental

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Obaseki is my brother, ‘rift’ created by people for their interest – Oshiomhole P. 2

Wednesday 14 August 2019

BUSINESS DAY

news Nigeria’s low health insurance penetration threatens universal coverage, economy, experts warn …NHIS to cut counterpart payment for government workers to 5% ...to delist non-compliant HMOs, hospitals GODSGIFT ONYEDINEFU, Abuja

igeria’s inability to make efficient its health insurance scheme and expand it particularly to the informal sector is affecting the country’s health indices and will continue to keep it far away from attaining Universal Health Coverage (UHC). Experts are worried that after 59 years of independence, Nigeria still ranks low among the World Health Organisation (WHO) member nations – yet, the National Health Insurance Scheme (NHIS) on which has been heaped the burden of enhancing access to quality and affordable health care for all Nigerians covers just less than 10 percent of Nigerians after 14 years of its establishment. The NHIS scheme which only came into force in 2005 had a major target of providing universal coverage for all Nigerians by 2015, but it has not been able to ensure citizens have access to health care services as many die daily of curable ailments, aside from huge medical costs and losses to medical tourism. Over 90 percent of Nigerians are not in the insurance scheme, according

to available figures. Runcie Chidebe, executive director of a cancer fighting organisation, Project PINK BLUE, regretted that the greater percentage of Nigerians are the informal sector operators who also are major drivers of the economy but, unfortunately, have not been incorporated into the health insurance scheme. “Nigeria cannot have a healthy economy if the major contributors are not healthy,” Chidebe told BusinessDay. Quoting the International Monetary Fund (IMF) report in 2017, he said the Nigerian informal sector accounted for 65 percent of Nigeria’s GDP but is still neglected in the scheme. He regretted that Universal Health Coverage cannot has remained a hard nut because the Nigerian government has failed to make health insurance a priority. “It is a shame that we live in a country where vehicle insurance is mandatory, but health insurance is not. What is our priority – to protect the vehicles or people driving the vehicles?” he queried.

Nigeria needs 3.3m fresh jobs yearly to maintain record-high 23% unemployment rate …manufacturing, construction, professional services strategic to job creation OLUWASEGUN OLAKOYENIKAN

or Nigeria to keep its unemployment rate stable at recordhigh 23 percent, assuming this was desirable, the country would need to create at least 3.3 million jobs every year. Keeping the unemployment rate stable would help the country avoid exacerbating joblessness and absorb new labour market entrants. But Nigeria struggled to create only a fifth of this number of jobs in the last four years. What is desirable, though, is for Nigeria to drastically reduce its current rate of unemployment, which climbed to 23.1 percent in the third quarter of 2018, from 8.2 percent in 2015. Creating 3.3 million jobs annually means Africa’s largest economy would need to revert to the private sector by attracting more foreign direct investments (FDI), the Nigerian Economic Summit Group (NESG) stated in its latest report. “At the moment, Nigeria’s private sector does not have the capacity to absorb the rapidly increasing unemployed population in the •Continues online at short term,” the NESG said. Nigeria’s jobless rate emwww.businessday.ng barked on an upward spiral in 2015 after a decline to 6.4 percent a year earlier, a development which followed a 36 percent dip in FDI inflows to $1.45 billion in 2015 from $2.28 billion. In the last four opportunity to meet with years, Nigeria was able to atmy brother and with people tract an average FDI of about I have worked with,” Oshiom$1.17 billion each year. hole said. Since 2017 when oil-deHe added that it was unfortunate that the media liked creating factions for their own gain. Also speaking, Obaseki noted that the visit to his predecessor was not unusual, FRANK ELEANYA saying that he decided to espite a burgeoncelebrate Sallah with his ing tech ecosystem former boss. with startups that He said the visit was to have amassed milcelebrate Edo leaders just lions of dollars from investors as the former APC national around the world, Nigeria chairman, John Odigie-Oyestill failed to make the top gun, was celebrated by the three innovative leaders in state earlier in the day. sub-Saharan African in the “There is nothing unusual latest Global Innovation Index about this meeting; today is (GII) 2019, compiled by the Sallah and we have just finWorld Intellectual Property ished celebrating with the forOrganisation. mer APC national chairman, South Africa, Kenya and Chief John Odigie-Oyegun, in Mauritius claimed the top three Benin City, and we decided to spots, coming first, second and come here to celebrate Sallah third, respectively. The most with my predecessor,” Goverinnovative countries were meanor Obaseki said. sured by research and developHe added that people who ment (R&D) and patents. think there was a rift between According to the report, him and his predecessor global R&D expenditures have should stop thinking.

Obaseki is my brother, ‘rift’ created by people for their interest – Oshiomhole IDRIS MOMOH, Benin

ational chairman of the All Progressives Congress (APC), Adams Oshiomhole, has said that the alleged rift between himself and his successor, Governor Godwin Obaseki, is the creation of people with personal interest, describing Obaseki as his brother. Oshiomhole said this on Monday night while receiving Governor Obaseki, who led members of his cabinet to celebrate the Eid-el-Kabir Festival with his former boss at his Iyamoh residence in Estako West Local Government Government Area of the state. Speaking to journalists after a closed-door meeting which lasted for about an hour, Oshiomhole said the meeting was not unusual as he was in constant touch with Governor Obaseki. “From time to time, we have always been meeting. It is not an unusual visit, the meeting afforded me the

R-L: Ebenezer Onyeagwu, group managing director/chief executive, Zenith Bank plc; Ben Ayade, governor, Cross River State, and Dennis Olisa, executive director, Zenith Bank plc, at the bank’s visit to the governor to further infrastructural development partnership with the state government, weekend.

pendent Nigeria emerged from its economic recession, not only has the growth been sluggish but also only a few sectors triggered the expansion, further undermining the country’s capacity to create enough jobs to meet the growing number of labour market entrants. Out of about 4.8 million Nigerians who entered the country’s labour market between 2015 and 2018, about 635,000 jobs were created within the period, indicating only a job was available for every 8 people who joined Nigeria’s economically ac-

tive workforce. While there seems to be no end in sight for the country’s soaring jobless rate, the challenge could be resolved through private sector expansion and industrial growth, according to the research arm of NESG. For instance, in 2018, 13 out of the 19 major sectors contributed positively to GDP growth. Out of these 13 sectors, only 6 sectors accounted for 90 percent of GDP growth during the period. Meanwhile, comparable data from Indonesia show

that the top 6 sectors contributed 72 percent to the country’s GDP growth in half-year 2018, leaving room for the remaining 11 sectors. “The GDP data for Nigeria show that there are many sub-sectors such as metal, iron and steel, and electrical and electronics, that contribute almost nothing to GDP growth, yet these sectors have the capacity to create jobs and meet the needs of consumers both in the local and export markets,” it stated.

•Continues online at www.businessday.ng

Nigeria missing as SA, Kenya take spots on most innovative African countries

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been growing faster than the global economy, more than doubling between 1996 and 2016. In 2017, global government expenditures in R&D (GERD) grew by about 5 percent while business R&D expenditures grew by 6.7

ANALYSIS percent, the largest increase since 2011. “Never in history have so many scientists worldwide laboured at solving the most pressing global scientific challenges,” the authors of the report noted. Nigeria has arguably the highest number of tech entrepreneurs on the continent. In a March 2018 report, GSMA categorised Lagos as the larg-

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est tech hub in Africa by sheer number of startups popping up at different corners of the state. In terms of attracting investment, the country is among the top three. So far in 2019, 11 Nigerian startups have joined a list of 44 firms on the continent that have raised a cumulative $450 million between January and July this year. Nevertheless, the Nigerian government’s near neglect of research and development has ensured that the chasm between academia and the growing tech industry continues to widen. This largely accounts for the country’s no-show in the global innovative index despite the strong showing of African peers in the report. @Businessdayng

According to the report, out of the 18 innovation achievers identified in the GII 2019, six (the most from any one region) are from the sub-Saharan African region. Kenya, Rwanda, Mozambique, Malawi, and Madagascar were singled out for being innovation achievers at least three times in the previous eight years. R&D in Africa is mainly funded by the public sector, with significant proportions of financing in many countries coming from international funding. Challenges that limit private sector investment include unstable political environments, poor governance and corruption.

•Continues online at www.businessday.ng

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Successful savings products promote lending in microfinance SMALL BUSINESS HANDBOOK

EMEKA OSUJI

avings, which promote liquidity, are vital to the survival of a microfinance institution. It is often the case that microfinance institutions (MFIs) pay scant attention to mobilising savings due partly to the nature of the operating environment, the seeming drudgery in deposit mobilisation and the perceived multiple challenges associated with savings programmes. But almost always, as their operations expand, service providers find that keeping pace with demand for credit requires a stable flow of savings. The first rule in savings product design is to make sure that the deposit instrument is appropriate to local needs. This requires a clear understanding of the conditions in which the client lives, and the nature of their economic activities. This is where market research becomes important. Many operators do not value on market research, because they are either not quite sure of the value it brings or, quite often, they do not have the capacity to carry out such studies. However, it is advisable for operators to engage the market and understand where the clients are coming from while designing deposit products. Luckily they do not have to do the research themselves. There are professionals who can read and interpret any market today.

Again, there must be proper market segmentation. Operators often do not realize that the market, no matter how simple it may appear, is not usually homogeneous. There must be variety in the products on offer so as to respond effectively to the liquidity requirements of different kinds of markets and clients. Appropriate mix of deposit and savings instruments must therefore be provided to capture the differing circumstances of clients. Surely, this calls for intimacy with, and appreciation of, the operating environment of both the institution and its clients. To be able to offer a good mix of deposit products, operators must properly segment the market and adequately reflect the seasonality and liquidity differences of all segments of the market. Unfortunately, the conventional foolishness (not wisdom) is for an operator to open shop and lend to all manner of people. The result is what we are talking about today in very low tones – non-performing accounts. The disdain for research and, sometimes, knowledge in general, is a national challenge that is reflected even at the highest level of leadership in our country. Many of us believe that theory is “grammar” that adds little or no value, while practice is everything. The result is that we find it very hard to accept costs that may arise from any effort to inquire and understand the theoretical underpinnings of what we do. Unfortunately, those who change the course of history through inventions or innovations would confirm the fact that no successful practice is devoid of sound theoretical foundations. Many of the failed programmes of this country did so because we went into them without an analysis of the “what ifs” and “supposings” that interrogate processes and reveal possibilities ahead of implementation. To make

us accept the cost and patience entailed in research and development should be a worthwhile national project. A successful savings product design begins with an understanding of the existing savings services or opportunities available to clients in the informal sector. This will reveal the limitations of such existing services and the new product would simply attack those shortcomings. Studies in the Far East and South America have shown that voluntary savings are more successful than group savings. Voluntary savings has contributed to the growth of some of the leading microfinance institutions in the world. Both Bank Rakyat Indonesia (BRI), probably the oldest and most profitable bank in Indonesia and Grameen Bank, the flagship of microfinancing, all place serious value on voluntary savings and market research as a precursor to the launch of their services. Many of the MFIs in Nigeria that became micro-commercial banks did so because they had the wrong idea of the business into which they got. They looked in the wrong place for clients and when they found none they went for the customers of regular commercial banks. The result, expectedly, is the regular breach of single obligor lending limits and a mirroring of the failed conduct of commercial banks – misplaced overhead expenses, high staff and infrastructure costs and undue profit orientation leading to finagling with clients’ accounts. Many banks are now learning that they can no longer continue to steal client’s money by spurious charges as the courts will give back every kobo wrongly taken from customers. Many operators, perhaps due to poor knowledge of the business, introduce savings products in all branches at the same time. This may not be the

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…the conventional foolishness (not wisdom) is for an operator to open shop and lend to all manner of people. The result is what we are talking about today in very low tones – nonperforming accounts

optimal approach. A lot of leakages occur when savings mobilisation is democratised in all the branches. Some seasoned operators therefore prefer to do pilot savings schemes on savings products. Such pilot schemes normally review the acceptability of the scheme, value addition to clients, security of funds, particularly handed over to officers, as they travel from the client through the account officer to the bank. Furthermore, savings products must take account of the need for liquidity. People save for emergencies as for other reasons. In that regard, there is need for a mix of savings products reflecting different levels of liquidity – liquid, semi-liquid and time deposit products. Interest rates on savings should be attractive enough to provide both financial incentive and risk premium to savers. For commercial MFIs, especially those operating in competitive markets like Nigeria, this should reflect in rates that are slightly above the prevailing market rate to provide a risk premium and a financial incentive to savers. On the other hand, and as a reward for their work, operators may exclude from interest payment, savings account balances that fall below a certain minimum. This action has two possible effects. It incentives the clients to save rather than withdraw their money, and helps the operator to cover the administrative costs of managing such accounts. These are some of the features of a successful voluntary savings programme. In all, operators must not neglect the need for deposit mobilization because of its relative drudgery compared to fixed deposits. At the end of the day, financial intermediation is not complete until surplus and deficit unit have a handshake. Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emekaosujii

Braced for the global downturn

t’s the calm before the storm. Last week’s market volatility was ostensibly triggered by the US-China trade conflict turning into a full-blown currency war. But at heart, it’s about the inability of the Federal Reserve to convince us that its July rate cut was merely “insurance” to protect against a future downturn. As any number of indicators now show — from weak purchasing managers’ indices in the US, Spain, Italy, France and Germany, to rising corporate bankruptcies and a spike in US lay-offs — the global downturn has already begun. Asset prices will undoubtedly begin to reflect this, and possibly quite soon. China may have temporarily calmed markets by stabilising the renminbi. But we are in for what Ulf Lindahl, chief executive of AG Bisset Associates currency research, calls “a summer of fear.” He expects the mean-reversion in the Dow that started in January 2018 to turn into a bear market that lasts a decade. It’s an opinion based on data, not on emotion. There have been only 20 months since 1906 when the Dow’s deviation from its trend line has been 130 per cent or more, as it is today. Those periods cluster rather frighteningly around the years 1929, 1999 and 2018. “US equities are at the second most expensive period in 150 years,” says Mr Lindahl. “Prices must fall.” I don’t think it’s a question of whether we’ll see a crash — the question is why we haven’t seen one yet. After all, there

are plenty of worried market participants, as best evidenced by the $14tn horde of negative-yielding bonds around the world. When this many are willing to pay for the “security” of losing only a little bit of money as a hedge against losing quite a lot, you know there’s something deeply wrong in the world (full disclosure — most of my own net worth is now in cash, short term fixed-income assets and real estate). My answer to the question of why we haven’t yet seen a deeper and more lasting correction is that, until last week, the market had been wilfully blind to three things. First, the fact that there will be no trade deal between the US and China. Both sides are desperate for one but China will only do a deal between equals. Donald Trump is psychologically incapable of accepting this — his entire history demonstrates his need to feel that he has crushed the other side. It’s a pathology that will only increase as the market goes down. We’ve all known this for some time. But I think fear of what Mr Trump might do has been masked in part by algorithmic trading programs that buy on every dip that results from his erratic actions. This has diminished any lasting signal about the unsustainable current market paradigm. Now, by allowing the renminbi to slide briefly after Mr Trump labelled Beijing a currency manipulator, China has shown that if the US president tries to play tough rather than play fair, it will take down the

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US markets and suffer whatever pain may ensue. It’s a new reality hard for anyone to ignore. In short, the Thucydides Trap is for real. In lieu of some big shift in US foreign policy post 2020 (one that none of the major Democratic candidates has yet articulated) the US and China are now in a multi-decade cold war that will reshape the global economy and politics. Meanwhile, the Fed’s decade-long Plan A — blanket the economy with money, and hope for normalisation — has failed. There is no Plan B. That’s why gold is in demand, some hedge funds are putting up cash-out barriers, traders are shorting some investment grade bonds deep in negative yield territory, and we are poised to see the reversal of the last 10 years of capital inflows into US equities and the dollar. Mr Lindahl believes the US currency is now 25 per cent overvalued against the euro. The Fed will undoubtedly try to paper over all this with more rate cuts. But as another savvy strategist, Dave Rosenberg of Gluskin Sheff, has pointed out, “the private sector in the US is choking on so much debt that lowering the cost of credit . . . won’t cause much of a demand reaction.” As he wrote recently, the term “pushing on a string” was first coined by Fed chairman Marriner Eccles in March 1935 to describe the bank’s inability to create demand via easier monetary policy. It didn’t work then, and it won’t work

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RANA FOROOHAR

now. You cannot solve the problems of debt with more debt. And central bankers, well-meaning and desperate as they might be to offset the damage caused by an erratic US president, can’t create real growth; they can only move money around. At some point, the markets and the real economy must converge. I think that point is now. Capital expenditure plans are being shelved. Existing home sales are dropping, despite lower mortgage rates. And perhaps most tellingly, American consumers are cutting both credit card balances and their usage of motor fuel, as Gluskin Sheff points out — two things that are uncommon at any time, let alone in the middle of the vacation season. A summer of fear indeed.

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COMMENT Nigerian elite, where art thou? CHARACTER MATTERS WITH DAPS

DAPO AKANDE

don’t think I would be wrong to say the majority of human beings, no matter the nationality, would like to be counted among the elite. Just as I know too that most of those who regularly read this highly respected newspaper are distinguished members of the elite. Even if my educational background is the only thing one goes by, as small as I am, I too could be said to belong to this privileged group. Show me a right thinking individual who wouldn’t want to fall into the category of those who make things happen. What a wonderful company to be in. Kindly permit me to ask one simple question though: As elites who make things happen, who do most of us make things happen for? Before we go any further, let me provide few definitions of the word. One definition, by Encarta World English Dictionary says it’s “a small group of people within a larger group who have more power, social standing, wealth or talent than the rest of the group.” The American Heritage Dictionary says, “A group or class of persons or a member of such a group or class, enjoying superior intellectual, social or economic status.” Another defines the elite as, “citizens that disproportionately control a society’s economic wealth, political power and philosophical influence”, and adds that these include student,

labour and religious leaders. Going by these definitions, it is obvious you don’t have to be Dangote before to be regarded a bona fide member of the elite. My angst with the Nigerian elite however, myself included, is that we have failed to effectively lead our society, a responsibility which our privileged position bestows upon us. History tells us that most mass movements which resulted in positive social change were actually led by members of the elite and not the downtrodden, as one may otherwise have expected. In societies the world over it is generally common for the masses to take their cue from the elite. It however takes an elite in the mould transformational leader and not a transactional one to subsume his personal interest under that of his nation. The transactional leader’s motivation is always tied to what’s in it for him. But unlike the transactional leader who barks commands at his people and subordinates, the transformational leader leads by example and inspires his people to want to be better and to do better. In the last couple of years, we’ve had a few demonstrations or marches to bring to the attention of our government the dire economic situation and the pervading sense of hopelessness within the nation. One of the two I will refer to never took place. Both were inspired and led by members of the elite. The first was the one organized by our very own musical legend, Tuface, endearingly known as Tu Baba. This one never even took off as the police claimed there was a security report that hoodlums would hijack the planned peaceful protest and take advantage of it to cause mayhem. Tuface had to cancel at the eleventh hour and who could blame him? If anything had gone wrong during the march the whole thing would have been on his neck.

Shortly after this no security report was given to deter the campaigns of members of the ruling party. And I personally witnessed one, as a bystander, where all hell was let loose! The second is even still a current issue. It’s the one convened by Sowore to register the displeasure of his group with the poor state of governance. A day or two before the D-day he was arrested on charges of treason because the name he gave his march contains the word “revolution”. I’m not a lawyer therefore I will not attempt to argue about the legality of this. I am a little confused though. More than about five years ago the party currently occupying the Presidency used the same word quite openly when campaigning to oust the incumbent government at the time, via the ballot box. Those who used it then felt it was perfectly okay but no longer think it’s permissible when a protester against their government uses it. And oh! Before I forget, no-one was arrested back then. In Sowore’s case, the police also insist the demonstration was illegal because the demonstrators failed to obtain a license. It’s funny because I can’t remember the police ever preventing a pro-government rally for the same reason. Hmmm...food for thought. Suffice to say, both of these aforementioned conveners are comfortable enough to afford just about any good thing life has to offer but they put self aside and decided to loan their voice to the voiceless. Never have the words of the revered Dr Martin Luther King sounded more true. “In the end, we will remember not the words of our enemies but the silence of our friends.” I’m in agreement with those who say it’s sometimes wise to put aside the messenger and instead focus on the message, which is why I deem it

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My angst with the Nigerian elite however, myself included, is that we have failed to effectively lead our society, a responsibility which our privileged position bestows upon us

appropriate to quote the infamous leader of the Confederate army during the American civil war, General Robert E Lee. He once remarked that, “fortune and social prestige were not given to the members of an elite mainly for their enjoyment; they were given to make them heroes.” And as if to buttress this, Professor Vincent Anigbogu of the Institute for National Transformation went on to say that, “Nigeria will never be great or truly develop until her elites champion a moral crusade that will establish in every strata of the society the principles and virtues of responsibility, integrity, compassion and excellence.” Responsibility, Integrity, Compassion and Excellence (RICE), I daresay say, are the hallmarks of the elite. As I bring this discussion to a close, please permit me to go spiritual as I quote Apostle Paul who in 1 Timothy 6:17-19 admonished thus: “Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.” We cannot all take to the streets because we want to make a difference but what excuse do we have not to begin in our own little corner? Changing the nation...one mind at a time.

Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Moscow, Hong Kong and the liberalism of the streets

ccording to Vladimir Putin, Russia’s president, “the liberal idea has become obsolete”. Maybe so. But illiberalism does not seem to be doing so well either, to judge from my recent visits to Moscow and Hong Kong. Between them, Russia and China represent the major geopolitical and ideological challenges to western liberalism. But both countries are facing public protests that undermine their governments’ claims to stability, efficiency and public support. In response, both the Russian and the Chinese governments have retreated into self-serving paranoia, alleging that mass protests in Moscow and Hong Kong are being orchestrated by foreign enemies. To be sure, there are significant differences between events in the two cities. First, there is a question of scale. The biggest single demonstration in Hong Kong brought around 2m people on to the streets; the weekend protest in Moscow, the largest yet, drew a crowd of around 50,000. The Russian police also resorted to violence and mass arrests much earlier than their Hong Kong counterparts. And while Moscow is Russia’s capital and the seat of state power, Hong Kong has a semi-detached status within China and its own identity. Nonetheless, arriving in Moscow a week after leaving Hong Kong, I was struck by the parallels. First, there is the sheer courage of the protesters. Last Thursday, I met Lyubov Sobol, a 31-year-old lawyer, who was in her fourth week of a hunger strike staged in protest at be-

ing banned from standing in elections to the Moscow city council. Ms Sobol now walks with difficulty, but was still arrested on Saturday to prevent her taking part in the latest demonstration. She had predicted accurately that, despite mass arrests at previous demonstrations, this weekend’s protests would be the biggest yet, and would spread to cities outside Moscow. She believes that “Moscow has changed, Russia has changed and people are demanding political representation.” The bravery of the Moscow protesters reminded me of the students and young professionals I met in Hong Kong. They know that arrest and imprisonment could blight their futures, but keep turning out at demonstrations. The youth of the protest movements is noticeable. As one veteran Moscow liberal put it to me: “I’ve been to every anti-Putin rally for years and normally I know everybody — but I’ve never met these kids.” In Hong Kong, polls suggest that anti-Beijing sentiment is strongest among the young. Both movements have a leaderless, internetbased quality, which makes them hard to control. In Hong Kong, the demonstrators have adopted a slogan from the martial arts legend Bruce Lee, “be water”, to encourage protesters to avoid static and predictable tactics. In Moscow, the arrest of almost the entire circle around Alexei Navalny, the most prominent opposition leader, has not stopped the protests. The grievances of the protesters about phoney democracy are also strikingly similar. The

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Moscow demonstrations were triggered by the authorities’ decision to ban all independent candidates from running in city elections this September. Many in Hong Kong believe a turning point was reached in 2016, when elected politicians were banned from the city legislature for disrespecting a loyalty oath to China. Both Hong Kong and Moscow also demonstrate how protests can morph from a single grievance into a much-wider movement. In Hong Kong, the initial trigger was the introduction of a bill to allow extradition of criminal suspects to mainland China. But when the bill was suspended, demonstrations continued, with protesters demanding fully democratic elections. In Russia, Ms Sobol says the controversy over the Moscow elections underlines a wider point: “Society has learnt there is no way any positive change will happen in Russia, under the system headed by Putin.” The dilemmas faced by the authorities, as they consider whether to respond with repression or concession, are also similar. Both courses can backfire. In Russia, liberals were encouraged in June when they forced the release of Ivan Golunov, an anti-corruption journalist arrested on trumped-up charges. In Hong Kong, the government’s partial climbdown on extradition may have actually galvanised the protests. But the alternative path of repression stokes the sense of injustice that persuaded people to take to the streets in the first place. In both Moscow and Hong Kong, one of the main demands of demonstrators has become the release of

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GIDEON RACHMAN

people arrested at previous protests. In both places, the tactics of government and protesters are influenced by the knowledge that this is not the first time demonstrators have taken to the streets. Hong Kong experienced the Occupy movement of 2014, while Moscow witnessed mass anti-Putin demonstrations in 2012. Those previous movements eventually burnt themselves out. That may have persuaded the Russian and Chinese governments to play for time now. But, as protests continue, the risks of violent repression are clearly rising. Whatever happens, the return of prodemocracy protest to Moscow and Hong Kong suggests that the liberalism that Mr Putin scorns is like a recurrent fever. The fever may respond to the “treatment” meted out by the police, but it will come back. Perhaps the authoritarian idea has become obsolete?

Wednesday 14 August 2019

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A looming food crisis calls for a rethink of national security

nchecked insecurity in Nigeria is threatening fo o d s e curity and making it difficult to diversify the economy. Millions of Nigerians, mostly in the north, face acute food shortage. Farmlands across Nigeria are increasingly becoming battlefields due to kidnapping, bandit attacks and other violent clashes. Smallholder farmers who brave the odds daily are uncertain if they will make it home alive. Some big farmers who have invested millions are weighing their options to abandon their farms, several others have suspended operations. Farmers in Borno, where the threat of Boko Haram remains a clear and present danger, have relocated to the camps for internally displaced persons, while those in the villages live in fear and dare not venture to their farms. Over a week ago 17 farmers were killed on the same at

three different locations. At the peak of the lean season last year, three million people in the three states most affected by Boko Haram insurgencies were reported to lack food Marauding insurgents, bandits and kidnappers interrupt the farming season, make roads to farms unsafe and disrupt markets were farm produce are bought and sold. Consequently, it is estimated that 22.7 million Nigerians in the north are at risk of a food crisis if the state of insecurity worsens. Ironically, the security situation in Nigeria is unlike that of Yemen, the Republic of Congo, Afghanistan, Syria and South Sudan. Yet Nigeria is ranked along with them as countries expected to face the most severe food crises in 2019, according to the 2019 Global Report on Food Crises. The country was ranked among the top eight countries that saw many of its citizens go hungry last year. In 2018, 5.3 million Nigerians in 16 northern states experienced acute food crisis.

That millions are facing, and more will face, severe food shortage in a country with over 82 million hectares of arable land, a young and large population, a tropical climate and soil that supports vast array of crops is scary. What is scarier is how insecurity and a food crisis are treated as unrelated challenges – a teeming unemployed and hungry youth population is a ready army of bandits, kidnappers and insurgents. Unemployment is churning idle hands at an alarming rate. It breeds insecurity. Insecurity is disrupting farming and discouraging investors. Agriculture is seen as the one-way ticket to diversifying the economy. But insecurity is threatening this aspiration. If farmers, farmlands, roads and markets are unsafe the vast non-oil income expected from agriculture will remain just that, an expectation. It will make nonsense of all the incentives (and billions of naira) the central bank has laid out for

the 10 commodities identified as potential foreign exchange earners and job generators. After the first oil shock in 1973, President Richard Nixon announced plans to wean the US off foreign oil and declared energy independence a national security. This thinking informed the decision of who was appointed to head the military and became the preoccupation of every Secretary of State and Defense. The US began to see geopolitics through this lens. It spurred research and development in the ivory towers and in the oil industry. Until eventually, fracking – the technology that extracts oil trapped in shale formations – was invented and has made the US one of the largest oil producers in the world. It is reckoned the impending food crisis may be a few months away. The looming food crisis can be averted but it requires a totally different approach to national security. And national security, as it is considered today in the country, is not about the President sleeping well at night.

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Nigeria: A nation in moral turpitude

FRANKLIN NGWU

riving into Ikota shopping complex in Ajah area of Lagos some weeks ago, I ran into a young man, Anthony, of about 40 years old crying and making a frantic phone call with a passionate appeal to the supposed receiver of his call to have mercy and help save his bleeding and dying wife! Gripped by his very distressed look and call, I enquired more and with a most captivating display of desperation and frustration, he mumbled that he needed about N60, 000.00 to save his wife that just gave birth and was bleeding to death! Your wife will not die! She will live and see her grandchildren! Only God understands and truly appreciates what we women undergo in the effort to raise a family and please our husbands, a welldressed and matured woman almost crying with Anthony beseechingly said while offering him about N5, 000.00. With such indirect affirmation of the Anthony’s sincerity, I and my friend offered our own support. His display of gratitude was spectacular and most reassuring, an award winning scene of a very grateful heart! He promised to pay back within a week upon receipt of his salary and collected my account and mobile numbers.

My friend suggested that we should further help him and even make him a friend as appreciative Nigerians like him are few. To all the suggestions on subsequent assistance, I totally agreed and even added more! Bros, shine your eyes, this is Nigeria, another friend who has been on the ‘street’ more than me quipped when I narrated my afternoon encounter. Alas as he predicted, so it turned out to be. Anthony called me two days later and after thanking me again for the help, lowered his voice and informed me that he lost his wife the previous day to which I commiserated with him. A week later, I was in Ikeja for a function and two of the invited guests coincidentally narrated the same experience. One description perfectly fit Anthony while the other description followed his script. When I recounted what I heard in Ikeja with my two friends, they reacted differently. The one who also helped Anthony was visiting Nigeria from the UK and was too shocked; he cut short his trip and returned to the UK. He realized that he might have been severally duped in many supposed helps he offered while in Nigeria. My more ‘streetwise’ friend laughed and demanded for a bottle of wine as payment for his earlier and future consultancy services. He invited his niece, a student in one of the universities in Lagos who further opened our eyes and ears on the current moral turpitude of our society. She explained that many young girls now have a dedicated mobile number which they freely give to any available young/old man they encounter. On get-

‘

Imagine a situation such as the Zamfara case where traditional and religious leaders now connive with criminals to kill, maim and destroy our society, all in pursuit of money

ting up to 100 male contacts, the girl will send a well scripted save our soul (SOS) message for financial assistance of any amount to all her contacts. She maintained that on average, about half of the contacts will respond with an average credit of N5, 000.00 from each of the boys/men. This will give about N250, 000 and above for fifty respondents or N500, 000 for 100. She further explained that new recruits are strategically pursued by the girls after every round of appeal and collection which happens every three months on the average. In a year, you get about N1million to N2million, not too bad I guess, she asked and laughed! As she wanted to explain another ‘transaction’ as she interestingly describes them, her uncle demanded a second bottle of wine which I agreed but postponed to the end of the month when I receive my credit alert. Driving home in deep bewilderment, I beckoned on God to come and help us! We are talking about our future mothers and fathers, the leaders of today and tomorrow! A situation where young men are comfortable to dupe with fake child deliveries and deaths of their wives is sad! While youths of other nations are innovating, making positive contributions, changing their society for the better, majority of our youths are innovating ways to cheat, exploit and exponentially increase our moral turpitude. God have mercy! While we lament of the state of our dear country, actions and inactions of our government are further shocks. How do we explain soldiers killing three policemen that went to arrest a

kidnap kingpin in Taraba state? How do we explain a despicable situation where our police stations and courts are markets for selling and buying of justice and injustices? Imagine a situation such as the Zamfara case where traditional and religious leaders now connive with criminals to kill, maim and destroy our society, all in pursuit of money. The Great Wall of China conceived by Emperor Shi Huang in the 3rd century is still regarded as a construction and military defense masterpiece. Built to the admiration of most Chinese to prevent entry of Mongolians and Barbarian nomads into China, it was believed that it will enhance peace in China with the regular invaders cut off. Interestingly, during the first 100 years after its completion, China was invaded thrice without the invaders breaking or climbing the wall. On each of the invading episodes, they bribed the guards and entered through the doors. While our leaders may be under the illusion that they are protected from the immense insecurity, deceit, unemployment, extreme poverty, absence of social trust pervasive in Nigeria, it is important that they appreciate that where there is no good character and trust, there is no security. And with no character, trust and security, there will be no sustainable business and economic development. Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mailfngwu@lbs.edu.ng,

What does a Johnson Premiership mean for Brexit?

oris Johnson assumes office as Prime Minister at a fractious time for his party and country, with the Conservative Party’s working majority in the House of Commons (with the support from the Democratic Unionist Party) now just two and a number of pre-emptive ministerial resignations before he took office setting a defiant tone among rebellious MPs within the party itself. Despite this, Johnson looks set to avoid an immediate challenge to his authority in Parliament and is being given a chance to pursue his Brexit strategy. However, beyond his objective to achieve a “do or die” Brexit on 31 October 2019, there has been much speculation during the Conservative leadership campaign about what that strategy would be once he takes office. The first step of Johnson’s strategy appears to be to seek to renegotiate the Withdrawal Agreement achieved by his predecessor, Theresa May, before the current Brexit deadline of 31 October 2019. The focus will be the infamous backstop arrangements, which Johnson declared on 16 July 2019 - cannot form any part of Brexit deal negotiations. However, the EU has repeatedly rebuffed such a proposal, stating that negotiations on the Withdrawal Agreement have concluded and cannot be re-opened. This leads to the second step of Johnson’s Brexit strategy, threatening the EU with a no-deal Brexit. All sides of the Brexit debate, including Johnson himself, recognise this would be an uncertain and potentially disruptive outcome for both the UK and the EU. However, Johnson, and those who supported his leadership bid, claim that the

threat of no-deal is necessary to force the EU back to the negotiating table and in order to be successful, the threat must be credible. Supporters of this strategy also point out that it is unlikely to have the desired result until closer to the deadline. What is the likelihood of a no-deal Brexit - and can it be avoided? Although it is not Johnson’s preferred outcome, some are concerned that if the attempts to renegotiate a deal with the EU is unsuccessful, Johnson might feel dutybound to follow through with his promise and pursue a no-deal Brexit on 31 October. Some politicians in the UK remain firmly against a no-deal Brexit, and have been taking the necessary steps to prevent it from happening. This has stoked fears among some that Johnson’s Administration could seek to frustrate any efforts to prevent a no-deal Brexit, by suspending Parliament shortly before the UK is due to leave the EU, and exclude MPs who want to avoid a no-deal Brexit. On 18 July 2019, a majority of MPs voted to introduce measures into law that will make suspending Parliament more difficult. However, with or without the suspension of Parliament, MPs alone will not be able to prevent a no-deal Brexit. The legal default position, as a matter of both EU and UK law, is that the UK will leave the EU with or without a deal at 11pm on 31 October 2019. Therefore, the only available means of avoiding no-deal are for: the UK and the EU to agree a deal that is subsequently ratified and implemented in UK law by Parliament before 31 October 2019; the UK and the EU to agree an extension to the Article 50 period

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beyond 31 October 2019; or the UK to revoke its notification of its intention to withdraw from the EU under Article 50 of the Treaty on European Union. The only means of avoiding a no-deal Brexit that is entirely in the UK’s control is to revoke its Article 50 notification. All other means require the cooperation of the EU – which is not guaranteed. If a Johnson Government wishes to pursue a no-deal Brexit, can it be stopped? The only guaranteed means of doing so would be for MPs to vote down the Johnson Government in a no-confidence vote. Notwithstanding the latest vote in Parliament, which could be interpreted as a signal of intent by some MPs. It is still unknown whether (and when) a sufficient number of Conservative MPs would be willing to bring down their own government - risking a General Election and a possibly Labour Government, to prevent no-deal. However, if they do, a new administration ould need to be established either to revoke Article 50 or to request an extension to the Article 50 period before 31 October 2019 otherwise, the UK could still leave the EU with no deal, and perhaps no government. The incoming EU Commission President, Ursula von der Leyen, has stated that she would be open to a further extension of the Brexit deadline “for a good reason” - which certainly includes a General Election or Referendum. What should businesses be doing to prepare for no-deal? The above analysis suggests that the threat of a no-deal Brexit is real and will persist, in

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ANDREW EATON all likelihood, until the very last days before 31 October 2019. Many companies had already developed a no-deal contingency plan in advance of the original 29 March 2019 Brexit deadline, including securing alternative transport routes, stockpiling products and moving licences to holders in the EU27. These plans should be revisited and updated, and if not already in place – they must be developed. Many companies did not have enough time to implement all of the actions before the March deadline. This creates a new opportunity for businesses to prioritise what still needs to be done before the end of October, in order to safeguard business operations as far as possible in the event of a “no-deal” exit. Businesses also need to urgently reengage with a new team in Government – as there is no surety that prior engagements will carry through. The tone of such engagement may also need to change to reflect the new administration’s Brexit priorities. As the clock ticks towards D-day, businesses need to engage with key Member State capitals which could be influential. Andrew Eaton is of Hogan Lovells

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Sesame shows high export potential as demand rises JOSEPHINE OKOJIE

s Nigeria explores opportunities to earn substantial dollars through the non-oil export, sesame seeds could play a vital role, as global demand for the crop continues to rise. Data from the National Bureau of statistics shows that sesame was the most exported agricultural commodity in the first quarter of 2019 with a total value of N40 billion worth of the crop exported to Japan, China and Europe. Stakeholders say the export numbers are an indication that the sesame seed production has the capacity to grow and earn the country huge foreign exchange and create hundreds of jobs in the country as long as the government draws a master plan for the sub-sector, as it has done in rice. “Sesame has a lot of potentials. It has both commercial and medicinal value and oil extracted from the seeds is better than every other seed oil,” Mutairu Mamudu, national president, Sesame Farmers Association of Nigeria told BusinessDay in a telephone response to questions. “It is 100 percent free of cholesterol and that is why the demand for it is very huge both locally and internationally,” said Mamudu. He noted that the country is still not exploiting the full

potentials of sesame, urging the government to encourage more investments in the value chain of the crop. Sesame seed has numerous health and industrial benefits and is widely used for baking, medicine, cosmetics and animal feeds. It also has high oil content of between 44 and 60 percent. Considering its numerous health benefits and the growing preference for organic foods, the demand for the commodity has continued to grow and this is positive for Nigeria. It remains in high demand abroad by pharmaceuticals and industries that produce soap, shampoo, lubricant, paints, cosmetics and vegetable oil. A popular women’s body lotion Neutrogena’ is made from sesame oil. Credit rating giant, Agusto &Co. in a report highlighted the

export potential of the crop to reach N120 billion per annum if the country can boost local production. S esame seed is Niger ia’s biggest agricultural produce exported to Japan. It is considered as one of the world’s oldest oilseed crop that has the highest oil content than any other seed. Currently, Nigeria is the largest producer of sesame seeds in Africa, and the third largest in the world, with about 580,000 tonnes produced in 2017, according to an industry by Financial Derivative Company (FDC). The oil extracted from the seed is used in making vegetable oil and for medicinal purposes for treatment of ulcers and burnt. The stem as well as the oil is used by cosmetic industry in the production of soaps and other beauty products.

Mamudu who was earlier quoted stated that a kilo of sesame is sold for N400 while a metric ton is sold for N400, 000 at the farm gate. Sesame is mainly grown in the northern region of the country. While sesame remains key agricultural export commodities in Nigeria, the products like other agri-commodities are traditionally exported in unprocessed form which creates a loss in value addition. Th e re f o re, t h e re i s n e e d f o r i n c re a s e p r i vat e s e c t o r investments in sesame processing and this will require investment in processing facilities. Currently, the country has only three functional processing plants for sesame seeds - two in Kano and one in Lagos with a combined estimated processing capacity put at 300 tons, indicating that

each has a production capacity of 100 tons. The poor number of functional processing plants has affected the quality of the seeds, as most seeds are processed manually and exported raw, attracting poor pricing from the international market. But w ith ade quate processing and good quality, the country’s sesame seeds will begin to attract premium price. In addition, the country needs to boost its production of the crop by increasing its average yield per hectare that is currently put at 0.8MT compared to China’s 1.5MT per hectare. Experts in the subsector call for increase government focus on the crop and a development of a Master Plan for the industry as it has done in rice, to boost revenue and foreign exchange of

ECOWAS, ActionAid call for massive investment in agric VICTORIA NNAKAIKE, Lokoja

he Economic Organisation of West Africa States (ECOWAS) and ActionAid Nigeria have called for massive investments in the Nigeria’s agricultural sector to feed its rapidly growing population. The both organisations acknowledged President Buhari for signing the African Continental Free Trade Agreement (AfCFTA) and also call for investments in rural infrastructural and export promotion for the country to take advantage of the opportunities in the agricultural sector. They also made a call for early released of the 2020 agricultural budgetary allocation to support coordination of the sector and knowledge building of the CAADP/MALABO performance

indicators. “The gains made by the sectors MDAs as mentioned in commendations should be sustained and improved upon in the 2020 agricultural budget, the GES should be retained and the budget should be increased to address the inputs gaps experienced by smallholder farmers, especially women,” Mohammed Shehu, chairman, Ministry of Agriculture, Kebbi State. “For 2020 and subsequent years, agriculture budgeting and other policymaking processes strategy for involving and mainstreaming the concerns of smallholder farmers should be developed,” Shehu said. He added that leaders of women farmers associations and other smallholder farmers’ vulnerable groups such as those www.businessday.ng

living with disabilities as well as CSOs should be invited to budget preparatory meeting before the release of budget call circulars. “There should be political will to allocate as least 10 percent of annual budget to the agricultural sector in line of the Maputo benchmarks for agricultural investment. Buffer funds from sources such as natural resources and climate funds may also be considered given the strategic importance of the sector,” he said. He advised that given the time bound of farming activities, agricultural budget must be released on time fully to enable farmer plant in due season. Stakeholders present at the signing of the communiqué stated categorically that

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s i n c e w o m e n a n d you t h s are not homogeneous groups, their budget lines should be separated to ease implementation, monitoring and evaluation, adding that the ERGP succession plan should equally adopt provision and recognition of food as a human right issue as contained in the APP. They also call for more investment in the National Centre for Agriculture Mechanisation (NCAM) to enable local fabrication of simple farm machines and promote the use and adoption of mechanisation in the country. The stakeholders also disclosed that there is a need that FMARD and relevant state ministries and NSAs continue to engage CAADP/ECOWAP/ NAIP in all the processes, adding @Businessdayng

that the government should create a budget line that would sustain the implementation of the consultative meeting annually. They maintained that there should be synergy between the National Bureau of Statistics and other related bodies to develop tools and mechanism for planning and developing gender responsive budgeting and disaggregated agricultural data for better sector performance. The stakeholders also called for effective biennial reporting by Nigeria to Africa Union Heads of States and governments in line with the Malabo Declaration and commitment of 2014, saying it will strengthen citizens’ participation toward 2020 agriculture budget responsive which will give room to food security and wealth creation.

Wednesday 14 August 2019

BUSINESS DAY

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Investing in cucumber, watermelon production JOSEPHINE OKOJIE

n spite of the present challenges in the Nigerian economy, opportunities still abound locally in key sectors such as the agriculture and manufacturing. Cucumber and watermelon production in Nigeria are one of those opportunities that still needs to be explored. Nigeria has comparative advantage in the production of vegetables with huge demand locally and internationally. Apart from huge demand for consumption, cucumber serves as by product for the cosmetics industry in the production of facial toners, body lotion and other beauty products. It can be grown across the 36 states of the federation

including the Federal Capital Territory. It takes

an average of three months to grow cucumber and

Cross River exports 80,000MT of cocoa annually, says CAN …spend N400, 000 on transportation to Apapa port MIKE ABANG, Calabar

anyo Ojong, national vice president of Cocoa Association of Nigeria (CAN) Paul has said that Cross River State exports over 80, 000 metric tons (MT) of cocoa beans annually. Manyo who is also the managing director of PAMAO and Associate Nigeria Ltd and vice chairman of the State Technical Management Committee on Cocoa made this known at the first Calabar Business and Private Sector Forum with the Theme, ‘Making Calabar the Hub of Import and Export in Nigeria’ Organized by the Nigeria Private Sector Alliance (NIPSA). “For the past fifteen years, CAN has been encouraging increase production of cocoa by supporting farmers with hybrid seedlings,” he said. “More private investors are investing in cocoa production in the state. Youths are now getting involved in cocoa producing also,” he further said. Most farmers noted that most smallholder farmers in the state have a holding of less than 2.5 hectares used for cocoa plantation. He said cocoa initially accounted for nearly 70% of the nation’s export earnings in the 70’s, which provides income to the Federal Government as well as host communities, and created employment for

Nigerians. He called for the dredging of the Calabar port at regular interval to enable larger vessels come into the port to decongest the Apapa port. Eta Ndoma Egba, president of the Calabar Chamber of Commerce, Industry, Mines and Agriculture in his opening remarks said the chamber has been at the forefront in advocating for the capital dredging of the Calabar port channel. This he said will remove the draft limitations as well as the sizes of vessels that can call at the port. He commended Bright Flow Logistics and (NIPSA) for organizing the forum as it ties with the chamber’s objectives of facilitating a friendly business environment and making the state a competitive trade and investment destination. In a welcome address, Anie Iton, the convener of the

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First Calabar Business and Private Sector Forum said the objectives of the forum is to sensitize stakeholders on existing business opportunities in the state. “It is my conviction that Calabar business environment is capable of creating jobs and wealth for our citizens and significantly contributes to GDP of the country; I have been around for quite some time to witness how the lives of our people turn positively, while our state economy improved when vessels discharged in Calabar” Emmanuel Etim, state trade promotion advisor, Nigeria Export Promotion Council, Calabar said his agency over the years have been advocating for the promotion of export base commodities. He said the event is timely as there is need to have a zero oil economy and less dependent on oil revenue as a source of foreign exchange.

watermelon. More water is required to grow cucumber

than watermelon and both vegetables can be grown everywhere. National demand for vegetables is put at 5.13 million metric tonnes, according to data obtained from the Federal Ministry of Agriculture and Rural Development. Tips for one hectare The soil must be tested to know the soil condition. Cucumber does not grow well with soil areas that are highly acidic. There are additives that neutralises PH value in a soil. The next step is to get quality seeds. “Seeds are very important in cucumber production because of climate change it is good to look out for varieties that can produce in both drought and wet season,” Afioluwa Mogaji, CEO,

X-Ray Consulting Limited told BusinessDay. Varieties such as Murano, Darina and Pickings can produce in both dry and wet season. An average of 700kg of NPK and urea are needed per hectare to achieve optimum yield. Also, the market timing should be well understood and the peak period for cucumber is September when the demand is very high and prices are very attractive. According to Mogaji who is popularly called AfricanFarmer cucumber requires less water application during the vegetative stage and more water during the fruiting s t a g e. He s t at e d t hat Watermelon production and water application is the reverse of cucumber.

Investing in floating fish feeds production OLUMAKINDE ONI

gricultural development can be equated to the process of expanding the capacity of the farm people and resources within the Agricultural sector in such a way that the sector will be able to play an effective role in accelerating the national output through supplying their total economy with food and fibres appreciably faster than the population growth adds new mouths to feed. Establishment of Fish feeds production factory is seen as one those endeavours that can contribute substantially to Agricultural development by providing job opportunities, qualitative food (protein) and income for the populace. Fish feeds constitute more than 70% of the input in fish farming. It is therefore an important input. Every effort must be made to encourage investment in fish feeds production. The project is seen as one of the opportunities for fish farmers to diversify and at the same time reduce the cost of feeding their fishes as the establishment of fish feeds factory will bring down feeding costs as against buying ready-made

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ones from shops. Technical information Fish Feeds Production involves procurement of ingredients such as maize, groundnut cake, starch, palm oil, fish meal. The ingredients are milled to the powdery form and mixed together in a recommended proportion with water to make it marshy. They are later fed into the pelleting machine for the purpose of getting them into pellets. The pellets are later taken to the dryer for the purpose of drying. Effective equipment and production processing will guaranty the floatness of the pellets in the pond. The more pellets can float on ponds, the better. To e s t ab l i s h t h e p ro j e c t, you need to get a good site, procure and install the machine including the utility items. This is followed by procurement of raw materials and project take-off. Serious minded @Businessdayng

investors can assisted to successfully set up the project. Cost implication

N Pre-Investments: 100,000 Accommodation (Rental) : 500,000 Plant & Machinery : 3,000,000 Utilities/Working Capital : 2,000,000___ Total N5, 600,000

Profitability The plant has the capacity of producing 200 tonnes of Fish Feeds per annum. Net profit of N300, 000 can be made on every tonne of feed produced. This translates to net income of N60 million per annum. This is another feasible and genuine means of livelihood for Nigerians. Author’s Contact : 08023058045, olumakindeoni2@yahoo. com

Wednesday 14 August 2019

BUSINESS DAY

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Wednesday 14 August 2019

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COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

Bank stocks at 52-week lows signal opportunities for growth investors …GTB slides to N26

OLUWASEGUN OLAKOYENIKAN

nvestment opportunities abound for equity investors on the Nigerian Stock Exchange (NSE), even as the bearish sentiment bedevilling the performance of stocks has failed to spare major lenders. Three of Nigeria’s five biggest banks as well as two midtier lenders slumped to their cheapest price level in more than a year. Guaranty Trust Bank Plc, Nigeria’s biggest lender by market value, lost 5.36 percent of its value to close at N26.50 last week. This is the bank’s cheapest market price since May 5, 2017, but there are chances it would reach N41.73 over the next 12 months, translating to a total return of at least 25 percent, according to analysts at Lagos-based investment house, Afrinvest Securities Limited. Nigerian big banks are extending their services into the personal loan space in a quest to improve profitability, grow retail loan books and boost Africa’s largest economy, a move capable of stirring up produc-

tive activities in the economy, according to Taiwo Oyedele, an economist at PricewaterhouseCoopers (PwC). A thriving economy is capable of restoring investor confidence, particularly offshore players who place a high premium on banking stocks thereby creating wealth for growth investors who are forward-looking. Zenith Bank Plc, Nigeria’s second-largest bank by total assets, fell some 10.66 percent to N16.35 per share, while the parent company of the country’s oldest bank, First Bank of Nigeria Holdings Plc (FBNH), declined 11.61 percent to N4.95 during the week. These prices were the lowest since May 2017. Similarly, tier-two lender Ecobank Transnational Incorporated Plc was down 9.38 percent to N7.25, while Fidelity Bank Plc plummeted 1.96 percent to N1.50. Besides Fidelity Bank which Afrinvest’s analysts advised a cautious positioning owing to its unfavourable upside potential, the remaining four stocks considered got BUY ratings and are expected

to deliver total minimum returns of 25 percent each over the next 1 year. According to Afrinvest, Zenith Bank would probably appreciate to N30.52 in the next one year; FBNH, N9.89; Fidelity, N1.76; while Ecobank, N25.17. In a similar vein, analysts at Meristem Securities Limited rated the stocks BUY in their latest stock recommendation note to clients, albeit a Buy rating at Meristem indicates the stock would most likely deliver at least 10 percent this year at current market price. Guaranty Trust Bank is expected to hit a target price of N38.55 this year; Zenith Bank, N27.78; FBNH, N8.27; Fidelity, N2.32; while Ecobank, N10.85, the analysts projected. Since the start of this year, Nigerian banking stocks have lost as much as 22.74 percent of their value, thereby underperforming the broad index which plunged 13.12 percent. Checks by BusinessDay show Guaranty Trust Bank, Zenith Bank and Fidelity Bank were yet to release their half-year financial performance as at Tuesday, August 13.

Meanwhile, Ecobank declared a 15 percent surge in after-tax profit to N59.59 billion with non-interest income taking 53 percent of its gross earnings for the period against 47 percent share it accounted for a year earlier, while Loan-to-deposit ratio (LDR) weakened to 58 percent

from 61.6 percent. FBNH noted it was determined to achieve its asset quality objective after it wrote the entire non-performing loans (NPL) of Atlantic Energy in the first half of 2019, reducing its NPL ratio to 14.5 percent from 25.9 percent recorded in the end-year 2018.

FBNH’s LDR stood at 48.7 percent at the end of the period under review. “Single digit NPL ratio to be achieved through a combination of loan growth, restructuring, recovery and write-off,” the lender said in the 2019 half-year presentation to investors and analysts.

L-R: Ayo Stuffman, MD/CEO, VAS2Nets; Kazeem Busari, director of Glo Currency; Tunji Oyebanji, COO, Glo Currency, UK; Obiageli Arinze, product manager, FCMB, and Grateful Agbechoma, business operations manager, VAS2Nets, at the launch of Paymenta in Lagos

TELECOM

MTN Nigeria, South Africa drive Group’s revenue to 2-year high in H1 ...posts 8% rise in PAT ENDURANCE OKAFOR

TN Group’s firsthalf 2019 revenue jumped 15.48 percent spurred by a combined 62 percent contribution from Nigeria and South Africa. The Johannesburg-based mobile-phone company reported a revenue surge of R9.8 billion from R62.78 billion in the first six months of 2018 to R72.50 billion in the corresponding period 2019. This represents the group’s highest first-half revenue since the R79 billion in H1 2016. “We had a good first half, reporting solid financial results, good commercial momentum and encouraging strategic progress,” Rob Shuter, MTN Group President and CEO, said. “We saw growth of 12% in

adjusted headline earnings per share, which is the first time that we have delivered growth in this measure in recent years. Our service revenue grew just below 10% and EBITDA just above 10%, both on a constant currency basis,” he added. This is as MTN Nigeria has been added to the MSCI Nigeria Standard Index and therefore MSCI frontier. With this new addition, MTN Nigeria now joins nine other Nigerian companies on the index. The telecom giant will be 0.8percent of MSCI frontier and 12.9percent of MSCI Nigeria (standard index). The MSCI Nigeria Index is designed to measure the performance of the large and mid-cap segments of the Nigerian market. With 9 constituents, the index covers approximately 85 percent of the Nigerian equity universe.

In the period under review, MTN Nigeria reported a revenue growth of 29.54 percent from R17.23 billion in H1 2018 to R22.32 billion in H1 2019, while MTN South Africa recorded 5.81 percent increase in the same period. Thus, both units contributed 30.66 percent and 30.89 percent respectively. With an 8.95 percent revenue contribution , MTN Ghana reported 16.94 percent growth in its revenue from R5.55 billion in H1 2018 to R6.49 billion in the corresponding period of 2019. A dive into the H1 financials of the telecommunication company revealed that the group earned most of its revenue from Network services. This contributed R52.43 billion to its revenue from the R45.24 billion it reported a year before. Revenue from interconnection and roam-

ing at R7 billion in H1 2019 was the next highest source of revenue. This was closely followed by Network services. Within the six-month period, MTN posted profit after tax (PAT) of R5.29 billion, a 7.74 percent growth from the R4.91 billion it recorded in the corresponding period of 2018. However, the company’s net finance costs was up 92.7 percent from R3.67 billion in 2018 to R7.08 billion in H1 2019 The African telecommunication giant said its earnings before interests, taxes, depreciation and amortization rose 10 percent. According to the figures, MTN grew its subscriber base by 7.7 million in the first six months of the year to reach a total of 240 million subscribers. Also, the number of active data users grew by 3.5 million to 82 million and its 30-day active Mobile Money users grew

by 2.4 million to 30 million. “Our continued focus on the customer experience has seen us record brand NPS’ leadership across more than 50percent of the portfolio, with 12 markets now leading. That contributed to MTN being named the most valuable South African brand in the Brand Finance South Africa 50 report and the most admired African brand by Brand Africa 100,” Shuter said. MTN is now about six months into a plan to raise about R15 billion ($1 billion) from disposals to help pay down debt, which increased to R70.1 billion in the first half. The carrier is also seeking to add Ethiopia to its 21 markets, with a potential auction to new licences to take place by next year. Meanwhile MTN Nigeria was last month granted superagent licence by the Central

Bank of Nigeria (CBN) to enable the industry player join forces with other financial technology companies to deepen financial inclusion in the country which has one of the highest exclusion rates in the continent. The move by the Telco to set up a Finetch subsidiary is in line with plans to acquire a licence to operate as a Payment Service Bank (PSB). According to industry sources, the Y’ello Digital Financial Service is part of the Central Bank of Nigeria’s requirements for obtaining a PSB licence. Recall, MTN, along with Airtel, Globacom, 9mobile and ntel, had pledged to deepen financial inclusion in 30 months by collectively reaching 90 million Nigerians through the deployment of over one million airtime agents as mobile money agents.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Wednesday 14 August 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

LOGISTICS

Red Star’s net income rises by most in 7yrs as freight, logistics segment shine ISRAEL ODUBOLA

hareholders of Red Star Express Plc now have a course to smile given the stellar performance the Lagosbased cargo-generating and logistics company delivered in the three months through June 2019. The company’s net income rebounded by some 21 percent, the highest profit growth since 2012, to N131.4 million in first quarter (April-June), after dipping 7 percent last year. At its recently-held 26th Annual General Meeting (AGM) which held in Lagos, shareholders approved a final dividend of 43 kobo per share equivalent to N253 million payout. Also, directors’ fees were pegged at N5.37 million for the period ending March 31, 2020. Among the resolutions passed at the AGM were plans to institute an Employee Equity Benefit Scheme for Executive Directors, in which the board have been empowered to allot such number of shares from the unissued shares of the company to the scheme. The surge in proceeds from freight and logistic segments

gave turnover a single-digit boost of seven percent in the review period. Turnover grew to N2.52 billion in the review quarter from N2.35 billion a year before. While cash realized from freight and logistic grew in excess of 20 percent, the company’s business pillar, courier, up some 9 percent to N1.4 billion from N1.29 billion reported last year. In spite the upward trend in production, operating and borrowing costs, and even tax expense, Red Star Express Plc saw a slight improvement in profitability. This was evidenced by 58 basis points increase in net margin to 5.3 percent and N4 jump in earnings per share. The company, in a bid to expand operations across West Africa, ventured into cargo General Sales Agent Services (GSA) about two months ago. A move it says would help connect passenger baggage and packages from an airport to another at faster rate. Its managing director, Sola Obabori said sometimes in June, that part of the company’s targets in the current financial year is to partner operating airlines locally and

internationally to strengthen its cargo services. As at June 30, 2019 total assets of Red Star Express Plc is valued at N5.53 billion, with trade receivables accounting for some. A dive into its books revealed the company is owed N2.3 billion by debtors, in which N203 million are classified as doubtful. Total liabilities in the review period stood at N2.63 billion with about half of the figure being short-term obligations to creditors. Red Star Express Plc provides air express, transportation, warehousing and other supply management services. Shares of the company traded last at N4.76 on the Nigerian Stock Exchange (NSE). It has returned some 13 percent gain to investors since January outperforming the equity benchmark gauge that has lost 12 percent. Recall in November 2018, the logistic firm widened presence to Burkina Faso via Red Star Burkina Faso Office, to carry out pick-up and delivery of time-sensitive and timedefinite shipments within the West African nation.

L-R: Uche Unigwe, sales director, Nigerian Breweries Plc; Olamide Adedeji, music artiste/ Goldberg brand ambassador; Emmanuel Oriakhi, marketing director, Nigerian Breweries Plc, and Odunlade Adekola, Nollywood actor and Goldberg brand ambassador, at Ariya Repete 2019 Final in Lagos, as Goldberg unveiled its new look.

L-R: Frank Aul, immediate past president, Securities and Exchange Commission, Multi-Purpose Cooperative Society; Mary Uduk, acting director-general SEC, and Andy Morkah, CEO, Property Vault Limited, at the grand breaking ceremony for SEC Court in Abuja. Pic by Tunde Adeniyi.

MORTGAGE

Omoluabi bank grows profit by most since 2017 SEGUN ADAMS

fter a dip in performance last year, Omoluabi Bank saw significant improvement as it grew profit by the most since 2007, helped by improvements in interest and similar income, and turnover. The Osun-based mortgage lender saw profit increase by 37.7 percent to N62.65 million for mid-year 2019 period. Omoluabi in 2017 had recorded a 39.2 percent surge in profit but bottom-line faltered -1.4 percent last year. In 2019 half-year period, turnover increased by 8 percent to N247.14 million compared to N227.91 million a year ago. This was facilitated by a 13.7 percent rise in turnover noted in the second quarter. Interest and similar income earned by the bank in the six-

month period was N105.04 million, 63.23 percent more than N64.35 million made in 2018. Even though interest expenses increased sharply by some 34 percent, the net interest income of the bank rose 74 percent in the period under review. Fees and commission income slowed in the period to N17.58 million, 18.84 percent less than the bank noted last year. Given that there was no fees and commission expenses in the half-year, net fees and commission income reflected only changes in inflows. Other operating income was down 11 percent yearon-year but total operating income improved some 6.34 percent to N223.67 million, the same value as net operating income given there was no credit loss expense in the period. Total operating expenses

trended lower to N161 million, down 2.3 percent in 2019 halfyear. Omoluabi’s profit in the period rose to N62.65 million or N1.25 per share unit from 91 kobo in the corresponding period of 2018. Omoluabi is a primary mortgage institution that is regulated by the Other Financial Institution department of the Central Bank of Nigeria (CBN) The core business model of Omoluabi involves residential and commercial mortgage financing as well as construction finance among other services. Omoluabi is the first-listed firm on the Alternative Securities Market of the Lagos bourse, with Morgan Capital Securities Limited and Osun State & Local Government as major investors with 83 percent shareholding.

Evbuowman George (l), winner GAC Saloon car; Funmi Sanni (m), marketing director, Dangote Cement Plc; Ufort Dorothy, non-executive direcror, Dangote Cement Plc, and Momoh Alli (r), winner of GAC Saloon car, at the win big in the Dangote Bag of Goodies National Consumer Promotion Star Winner Presentation in Benin City, Edo State.

Stakeholders call for enhanced forex regulation to combat fraud GBEMI FAMINU

takeholders in the forex business and capital market have called for the regulation of the forex market to help to combat fraudulent activities prevalent in the industry and to protect industry players. Maxwell Odum, Chief Executive Officer of MBA Forex and Capital Investment Limited, said at a conference over

the weekend that by using institutional mechanism to drive a profitable Foreign exchange in the country and with government regulation in the market, Nigeria may be set on its pathway into drastically reducing unemployment and its increasing poverty level. He added that if the market is regulated internally and investors’ are assured of security by the government regulatory body, it will boost the investors’

confidence in the market. “We want the market regulated because we want those in FOREX trade to follow the right path, not getting their hands burnt because a lot of fraudulent activities are going on in FOREX market and has made many people to become sceptical about the industry,” Odum said.

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Wednesday 14 August 2019

BUSINESS DAY

BANKING SANEF: Addressing challenges of financial agent networks stories by HOPE MOSES-ASHIKE

here is a saying that ‘a problem shared is problem solved’. There are lots of problems or challenges confronting financial services agents or money agents, which Shared Agent Network Expansion Facility (SANEF) is currently addressing. Some of the problems have to do with network issues; customers not disclosing their information, cultural, religious and security challenges, cost of agent set-up for Bank Verification Enrolment (BVN) enrolment. Others include education and awareness; N100 agent remuneration/incentive and internet infrastructure for enrolment synchronization, among other issues. As part of efforts to address these problems, SANEF plans to engage with regulatory bodies for favourable policies and conducive environment for growth as well as appropriate pricing for all stakeholders- super agents, agents and consumers. SANEF is a project powered by the Central Bank of Nigeria (CBN), Deposit Money Banks (DMBs), Nigeria Inter-Bank Settlement Systems (NIBSS), licensed Mobile Money Operators (MMOs) and Shared Agents with the primary objective of accelerating financial inclusion in Nigeria. It started as a project in February 2018 but was incorporated as a company in January 2019. SANEF is an intervention to widen and deepen financial access points and services for

the purpose of increasing financial inclusion to 80 percent by 2020. The company plans to provide support to super agents, banks and other stakeholders to acquire agents in the six geo-political zones, to accelerate and simplify BVN enrolment, introduction of basic products and special account with benefits designed to attract the unbanked, and to Drive Financial Literacy and Campaign awareness via Print, Radio, Social media, and Community engagements. Also, SANEF is currently embarking on quarterly financial services agent forum, which is a

LAPO Microfinance Bank raises share capital by 75%

... as Ehigiamusoe advocates refinancing structure for MFBs

APO Microfinance Bank Limited has raised its authorized capital by 75 percent from N2 billion to N3 .5 billion by the creation of 3 billion additional ordinary shares of 50k each, ranking Paris passu in all respects with the existing ordinary shares of the company. With this increase, the bank would have raised the number of its shares from 4 billion to 7 billion. Ede Osayande, chairman, disclosed this at the eighth annual general meeting of the bank held on Thursday in Lagos. The chairman at the meeting announced a 30 kobo dividend payment, which was approved by shareholders. “What therefore is going to shareholders obviously is minimal and the reason it is 30 kobo is the fact that our share capital in LAPO is small”, said Godwin Ehigiamusoe, managing director/CEO. He said the bank intends to open up to private investors, especially institutional investors that can add value to LAPO in addition to bringing fund to LAPO, value in terms of their experiences in other jurisdiction, are able to bring value to the bank’s operations, and its governance processes. “Our expectations are that we continue to do what we do to ensure we meet the demands of our clients and potential clients for loan and secondly to be a bale to deliver some good returns in terms of financial performance”. In 2018 we disbursed N137 billion to support Micro and Small Enterprises (SMEs) and targets N154 billion for the same reason in the current year.

Ehigiamusoe explained that there is a huge gap between the demand for finance or credit by people at the bottom end that the owner of micro and small business and the available. “So, as a Microfinance bank committed to supporting that end, our major operation is providing credit. We prioritise giving loans to those businesses. We are also regulated; we can also mobilize deposit but our commitment right from the time we were an NGO, we have always been committed to providing loans to owners of MSME”. The business environment has been quite challenging for all businesses not only for Microfinance banks, he noted. “Despite that we did our best to deliver our superior financial performance and it is for that reason we are able to provide that dividend for investors,” he said. According to him, in spite of the challenges in the economy Nigeria has huge potential for Microfinance in the sense that there is a very large population of people and these people are exceptionally very enterprising therefore there is need to support the sector. More importantly, he said, it is desired of everyone to ensure that loans to this segment of society come cheaply or cheaper than what it is now. Some solution to that is the need to have a refinancing structure or institution in Nigeria that will be able to provide low-cost funds to Microfinance banks who will therefore use such fund for onlending. The implication therefore is the ultimate user that is the borrower will access funds cheaper than what they do now. www.businessday.ng

platform organised in conjunction with EFInA to bring together top agents of various agent network providers to discuss recent happenings in the agent networks space that is impacting their business. The forum will also serve as a platform to provide basic agent business training for agents; introduce agents to potential partners/opportunities. The information which will be shared at the forum serves to enable stakeholders take full advantage of opportunities to move agent networks in Nigeria to the next level. The forum will provide opportunity to discuss and resolve obstacles to the growth and development of agent networks and highlight regulatory requirements for the industry. This initiative which has already commenced in Lagos in July will be executed in the six geo-political of the country and would last till December this year. At the of financial services agents forum held in July 30, 2019, in Lagos, Ronke Kuye, CEO, SANEF, said the company is meant to achieve 250,000 agents by the end of 2019 and 500,000 agents in the six geo-political zones by the end of 2020. She said the company was collaborating with relevant stakeholders including the super agents, banks, agents the police and others towards achieving the financial inclusion target. “What we intend to do is to have a forum like this every quarter where we meet with our agents to discuss the progress we have made so far, the products that we are pushing out there. We also discuss the way forward into achieving the financial inclusion target for 2020,” Kuye said.

Meanwhile the CBN has reiterated its support, not just through implementation activities, but also through policy and operationalization of research outcomes into financial inclusion. Speaking at the forum, Joseph Attah, head, financial inclusion secretariat, said the commitment of the CBN and the government is immediately evident, unequivocal, and irrevocable. Represented by Paul Oluikpe, assistant director, finance development; he said the CBN continues to demonstrate its commitment to SANEF and its activities and objectives through providing complementary support, using its multi-stakeholder platforms, activities, coordination and engagements. Such key activities include financial literacy programmes, financial inclusion state steering committee activities, outreaches and sensitisation, account opening weeks planned across 36 states of the federation, the peer educator programme which would see youth corps members posted to financial institutions and local governments to drive inclusion. All of these he said will ride and utilise the agent networks and platforms to fulfil their activities. “As a policy institution, the CBN would ensure that it advances policy positions that enable and smoothen the spread of agent networks across the country, as this is mutually beneficial for all and sundry,” Attah said. SANEF Bank Verification Number (BVN) enrolment is currently at 40 million. Gbekeleoluwa Nubi, of NIBSS said the SANEF (BVN Enrolment) Project commenced in February 2018 and went live on August 1 2018. The financial inclusion rate currently stands at 63.6 percent.

Sterling commits 10% of loan portfolio to Agriculture … Unveils summit for Africa

aving committed 10 percent of its loan portfolio to agriculture, Sterling Bank Plc plans to further strengthen the sector, the most important sector of the African economy. Consequently, the bank will bring together policy makers, development agencies, international financial institutions, and value chain players on the continent through Agriculture Summit Africa holding in Abuja from 5th to 6th of September 2019. The international summit themed “Agriculture - Your Piece of The Trillion-Dollar Economy” seeks actualization of the $1 trillion African agribusiness economy dream by 2030. More than 50 percent of the world’s fertile and unused land estimated as 450 million hectares is in Africa. Bukola Awosanya, group head, agric finance and solid minerals at Sterling Bank, said ‘’Agriculture productivity in Africa is low and a source of concern in the sector that account for 60 percent of the continent’s labour force and 75 percent of its domestic trade. And the creation of a single African market with over 1.2 billion people through the Continental Free Trade Area (AfCFTA) treaty is not without possible adverse impact on the sector’s growth which calls for a pan-African agriculture summit.’’ “Sterling Bank has been at the forefront of

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Nigeria’s agricultural transformation agenda which seeks commercialization at scale nationwide through focus on value chains where the country has comparative advantage. This market-led transformation driven by strategic partnerships is stimulating investment, creating new jobs, wealth and food security. It is imperative that this same model is adopted across the 54 countries that now make up the single African market to improve productivity, guarantee food security and ensure a future of shared prosperity for all Africans,” Awosanya disclosed. She added that the international summit would foster an integrated approach to agricultural value chain transformation on the continent while also facilitating intra-African trade. It will also unveil current agricultural trends, innovations and opportunities for private and public-sector investment and participation in Africa. Last year, Sterling Bank brought together smallholder farmers, input suppliers, agro processing entrepreneurs, development finance agencies, policy makers and captains of industry through a technical workshop on the agriculture value chain in Abuja. The workshop which focused on co-creating a sustainable Nigerian economy through rural agricultural enterprise was chaired by Nigeria’s former Minister of Agriculture, Chief Audu Ogbeh. This year’s agriculture summit is a more ambitious attempt to discuss issues that will propel Africa to attain her full potential in the Agriculture sector. A thought leader and preferred lender by players in the local agriculture value chain, Sterling Bank has the enviable record of being the first commercial bank to lend under the Central Bank of Nigeria (CBN) and Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) led Anchor Borrower Programme (ABP) with over 22,000 small holder farmers as beneficiaries.

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Wednesday 14 August 2019

BUSINESS DAY

Wednesday 14 August 2019

BUSINESS DAY

VICTOR OKORONKWO

CEOINTERVIEW

GMD, Aiteo Eastern E & P Company Ltd

Interview with Private Sector Leaders

‘A market-reflective pricing framework should come to full effect in Nigeria to incentivise investors into the gas sector’

Aiteo, an indigenous independent oil and gas company, has blazed uncommon trails in the sector. The company was recently crowned Upstream Oil & Gas Company of the Year 2019 at the maiden BusinessDay’s Nigerian Business Leadership Awards. Victor Okoronkwo, GMD, Aiteo Eastern E & P Company Ltd, highlights how the company maintains leadership in the industry despite challenges and some policy changes needed to open up the sector to investors. He spoke to STEPHEN ONYEKWELU. Excerpts:

indly tell us about your organization and operational profile The Aiteo Group was rebranded from Sigmund Cummenecci, an Oil product supply and trading company founded by Nigerian entrepreneur, Benedict Peters in 1999. The Group has grown to become a Pan-African integrated energy-focused conglomerate with interests in Oil and Gas, Electricity generation, Mining, Agriculture and Real Estate. Aiteo Eastern E&P Company Ltd (AEEPCO) was founded in 2014 as a special purpose vehicle, SPV to participate in the SPDC competitive bid divestment exercise. The Aiteo Consortium emerged the preferred bidder for OML29 and the Nembe Creek Trunk Line (NCTL), having fulfilled all selection criteria including but not limited to assessment of its technical and financial capacity, KYC as well as comprehensive integrity and due diligence checks. Consequently, Aiteo Eastern E&P Company Limited acquired the 45percent equity holdings of Shell, TOTAL and AGIP in both assets and is currently the Operator of the NNPC/AITEO JV. The acquisition was through a combined offshore and onshore syndicated loan arrangement from eight financial institutions including six Nigerian deposit money banks- the first of its kind in the nation’s history. The acquisition won the Oil and Gas Deal of the Year award 2016 by The Business Year Review. The NCTL, is a 117km pipeline with 600,000 bbl/day design capacity which currently transports crude to the Bonny Crude Oil Terminal from four other injectors in our operating region. Aiteo leadership is largely Nigerian. At takeover of the operatorship of the assets from the previous operator, Aiteo was able to ramp up production from about 25Kboepd to over 90kboepd within 18months and at the same time increased the NCTL availability from ca. 60percent to over 80percent within the same period. Our current thrust is geared towards production ramp-up, leveraging on operational efficiency, work-over and well intervention to further increase production to 125,000 bpd in the medium term. This expansive mandate will have a profound ripple effect in the Nigerian energy sector as professional skills from indigenous workers and contractors are employed to deliver results, enabled by technology. The knowledge and income transfer to indigenes in the sector cannot be over-emphasized. How much contribution do you see of indigenous players in the exploration and production sector? Divestment exercises in recent years as well as license bid rounds have witnessed increased participation of indigenous companies in the Exploration and Production sector, with attendant rise in indigenous contribution to about 10% of the national production, according to NNPC Report. The contribution by indigenous players is expected to rise to over 30percent buoyed

see in the oil and gas space to make it more competitive? Many indigenous companies incurred huge debt in the acquisition of oil assets, which invariably means that they are subject to heavy debt service payments while ensuring they operate the asset optimally to derive maximum returns for all stakeholders. It is also important to note that many of the assets acquired at the time were overpriced given the reality of crude oil prices and hence, that creates an extra burden on these indigenous players. Without proper cushioning, some of the indigenous players will find the operating environment harsh and their inability to meet their maturing obligations will thereby threaten their business continuity. It does not promote national pride when indigenous companies are set up only for them to fail in the face of adverse upstream business environment; we have reiterated severally in the past, the need for Nigerian players to gain critical mass in the full spectrum of upstream value chain for knowledge and technology transfer, now that this dream has come to reality, the suasion is on the Federal Government to provide conducive operating environment for indigenous players to thrive. Remember, the indigenous players do not have the same financial might, asset diversification, global reach, etc. Additionally, their cost of funds are much higher than IOCs, therefore a conscious effort by government to help cushion effects will help indigenous players greatly to consolidate their position in the oil and gas upstream sector of the Nigerian economy. Creating an enabling environment for indigenous operators to thrive rather than the ‘sink or swim approach’ is more sustainable and will ensure that these players are aligned with and contribute to the FGN’s production and reserve growth targets. While I understand the FGN’s drive towards revenue targets, the focus should also be on value preservation and growth which will lead to increased activities in the sector to spur growth and stimulate sustained economic expansion.

by the recent targets set by the new GMD of NNPC, Mele Kyari to increase national production to 3 million barrels per day and grow the country’s crude oil reserves to 45 billion barrels by 2023. The Federal Government is well aware that exploration and production activities of indigenous companies (especially in the FGN’s JV basket of onshore, swamp and shallow water) would prove critical to the successful achievement of these targets, hence, FGN is more than ever before ready to offer necessary support to enable indigenous players thrive. The attainment of these targets has huge implications in terms of investments with resultant impact of employment opportunities for skilled and unskilled indigenes, which will prove to be a veritable vehicle of partnership with host communities. What are some of the challenges that when eliminated would increase the ability of indigenous players to become more profitable? While it is clear that indigenous players may not be as resilient in their Exploration & Production business portfolio diversification, compared to their IOC counterparts as a result of inherent concentration risks of their assets, they have their sights set on achieving such excellence through portfolio diversification and operational efficiency that will increasingly cement their position and increase profitability. However, one of the biggest challenges threatening business profitability and continuity in the upstream operating environment is crude theft. According to the Nigerian Natural Resource Charter (NNRC) commissioned report, Nigeria lost about N3.8trn in 2016 (over 50% of the country’s budget for that year) and N995bn in 2017 due to crude theft. Securing critical, national oil and gas infrastructure should be treated as a matter of national security. Asides the financial losses oil companies and the Federal Government suffer from these thefts, the crime brings with environmental degradation due to the pipeline leakages and proliferation of illegal crude refineries. These also negatively impact communities within the region. Oil theft, a.k.a illegal bunkering and pipeline vandalism have resulted in significant loss of the nation’s revenue as well as the revenue and cashflow of indigenous companies who, like the Federal Government, also have huge debts to service. Therefore, oil theft remains an issue for the indigenous producers. In additional there are several reform initiatives that need to be finalized to enable additional investments, the Petroleum Industry Bill (PIB) remains a key one. How are you dealing with challenges posed by infrastructure deficits in the gas space? Like the saying goes, a nation without infrastructure is like a body without anatomy. Today, inadequate infrastructure in Nigerian and on the African continent is holding back Nigeria’s prosperity and Africa’s economic growth. Gas infrastructure development is critical to harnessing www.businessday.ng

Nigeria’s huge gas reserves (the largest gas reserves in Africa). Power generation is easily one aspect that could benefit immensely from proper gas infrastructure since the country’s power plants currently suffer from lack of feedstock. Putting the power generation debacle in perspective, according to the EIA 2017 report, total installed capacity of electricity in Sub-Saharan Africa was about 96 gigawatts (GW) in 2015 with South Africa accounting for half the capacity, compared with 325 GW in India and 1,519 GW in China. In fact, world bank 2018 Africa Pulse report indicated that installed generation capacity in Sub-Saharan Africa excluding South Africa is approximately one-third of the installed generation capacity in Brazil. In fact, the lack of affordable and reliable power is cited by investors as the number one constraint to doing business in Nigeria and Africa at large. Consequently, as a company we are taking strides to harness investments in sustainably ramping up our gas production to about 300 mmscf/d. In-

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digenous operators are currently at the forefront of domestic gas supply, contributing 53percent of Domestic Gas Supply requirement with further capacity growth potential to 80percent. The key infrastructure deficit in Nigeria is primarily on the nation’s gas transmission backbone. Thankfully, NNPC has identified this and made the gas transmission backbone a priority project by undertaking the OB3 Gas Pipeline, the AKK pipeline, the looping of the ELPS, among others. Successful completion of these projects will help to unlock our gas potential within the local economy. The producers will be saved from point to point pipeline construction and will focus on tie-ins to these transmission systems. Projects like these are the bedrock for the sustainable solutions we need in addressing our gas infrastructural shortcomings. The Federal Government plans to sell down its stake in joint ventures assets, what is your take on this? The FGN Equity Sell down initiative has been on the cards from the 2017 Economic Recovery and Growth Plan, whereby the Federal Govern-

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ment seeks to improve its revenues with the commencement of the restructuring of its participation in Oil and Gas Joint Ventures by reducing its interest to about 40%. This initiative is expected to help fund budget deficit and reduce government’s exposure to cash call obligation. According to NNPC report of December 2018, Total export crude oil and gas receipt for the period December 2017 to December 2018 stood at $6.06bn. Out of which, the sum of $4.56bn was transferred to JV Cash Call as first line charge and the balance of $1.50bn was paid into the Federation Account. In my opinion and from a National Content Development perspective, the FGN sell down, if implemented properly, is surely a welcome initiative as it ensures increased indigenous participation in Exploration and Production in Nigeria. Revenues generated from the sell down would certainly benefit the Nigerian economy as it would not be subjected to capital flight as was conversely the case during the equity divestment of the IOCs. What policy changes would you want to

as a company to evolve seamlessly with the global energy transition. In Nigeria the most popular source of renewable energy is solar due to the abundant sunshine we have. However, we need to begin to structure a sustainable regulatory framework to encourage the penetration of solar into the national energy mix. Gas pricing has been a major challenge? What do you see as a fair marketdriven price for natural gas? Frankly, I couldn’t agree more on this note. However, gas pricing is an element in the cocktail of issues that we need to deal with to enable natural penetration into our economy. Even though Nigeria is the 9th largest Natural Gas Resource holder in the world, our country is facing an energy crisis. The key challenge to gas business viability in Nigeria hinges upon our approach in harnessing the abundant gas resources to accelerate the pace of national development and industrialization drive. I believe that full monetization of our abundant Natural Gas by way of Gas exports on the one hand and domestic gas utilization in gas-to-power, gas-based industries such as fertilizer, methanol, other petrochemicals as well as transportation initiatives on the other hand will further propel the FGN’s economic diversification agenda in line with the Economic Recovery and Growth Plan (ERGP). The chasms we have to make the gas to value chain both profitably and sustainable include – solving the immediate liquidity issues in the sector, the non-cost reflective electricity tariff, payment securitization, infrastructure deficits across the value chain, foreign exchange volatility, etc. It is worthy to note that gas supplied to

NLNG is unprocessed gas, whereas the requirement for domestic gas requires significant additional capital investment to meet the pipeline specifications. Overall, I believe that a market reflective pricing framework should come to full effect in Nigeria to incentivize investors into the gas sector. I also advocate that pricing for natural gas should reflect the increasing demand for the resource in Nigeria and capital requirement to actualize that. The peculiarity of the Nigerian domestic gas market (which the power sector represents its largest off-taker) is that we have a situation where demand pre-existed supply, which indicates huge potential opportunity once the gas infrastructure gap is closed up. The FGN through the NNPC is working assiduously to bring to reality the 7 Critical Gas Projects which will ensure the achievement of the 3.4 bcf/d domestic market supply of gas in the near future in Nigeria. Your thoughts on being crowned BusinessDay’s Nigerian Business Leadership Awards, Upstream Oil & Gas Company of the year 2019. We are elated that the consistency and integrity of our human and technological resources leadership in the industry are continuously being recognized and rewarded by credible developmental media like yourselves. We will continue to push all boundaries of legal enterprise and human endeavor to ensure that Aiteo continues to advance the future of Africa’s energy security in a sustainable way which empowers all our stakeholders. We dedicate this award to the distinguished management and staff of Aiteo and our inspirational founder and global Chief Executive, Benedict Peters.

Are you looking at renewables or refining in the medium or long term? The global energy transition is towards a low carbon intensive scenario and this means Renewables. Major markets for petroleum products (China, India, Europe, etc.) are realigning their energy policies and economic dynamics in favor of low carbon intensive sources. However, despite the dominance of fossil fuels, I think Renewables continue to gain market share within the global energy mix.However, this growth can only be accelerated by technological, behavioral change and environmental considerations. The enabling technologies are dominated by battery technology and Photovoltaics (PV). These technologies are also becoming economically competitive in comparison with conventional energy sources. We are well aware of this trend and are constantly scanning the global business landscape and evaluating our business portfolio to ensure we are well positioned www.businessday.ng

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Wednesday 14 August 2019

BUSINESS DAY

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ACFTA: Nigeria needs manufacturing, competitive market to benefit from $2.3bn economy AMAKA ANAGOR-EWUZIE

s Nigeria joins other African countr ies to sig n the African Continental Free Trade Area (ACFTA) agreement, the country must deepen its manufacturing sector and integrate into competitive market to benefit from the opportunities inherent in the $2.3 billion economy provided by the agreement, stakeholders say. Hassan Bello, executive secretary of the Nigerian Shippers’ Council (NSC) said at a recent transport lecture held in Lagos, that Nigeria needs to become a productive and manufacturing society to benefit from ACFTA. Bello, who noted that ACFTA provides member countries with market with about 1.3 billion population and $2.3 billion economy, said that African countries like Nigeria needs to brace up for the competition and a free economy devoid of pro-

Hadiza Bala Usman(l), managing director of the Nigerian Ports Authority (NPA) presenting a plaque to Roland Ewubare (r), chief operating officer, Upstream, Nigerian National Petroleum Corporation (NNPC), during a working visit to the Corporate Headquarters of NPA in Marina, Lagos recently.

tectionism. Noting that the current state of the nation’s transport sector would place the country in a disadvantageous position when the implementation of ACFTA begins, Bello pointed out that Nigeria needs to have an overall view of the

world economy, and to see how it can integrate into the African economy in a competitive mode. “Government is aware that the Nigerian transport environment is harsh as it is. The first thing is to realise that the sector is harsh and the government

has realised this, and it is taking deliberate steps to make sure that the environment is less harsh,” he said. According to him, Nigeria must rebuild its infrastructure to reduce cost of production and to give the nation an edge during the

implementation of ACFTA agreement. “We are exploring how Nigeria can fit into this and grow its economy based on trade, production, efficiency and infrastructure. We are talking about transport infrastructure and energy. These are two very important things that we have to concentrate on,” he said. Mansur Ahmed, president of Manufacturers Association of Nigeria (MAN), said in a different forum that it has become a necessity that government at all levels continue to work with the private sector to strengthen and deepen as well as broaden the manufacturing sector. This, he said, has become more significant now that Nigeria with other 53 African countries, signed agreement to open up Africa in order to create a one strong market. Mansur, who said the agreement may present some level of risks to some sectors of the

economy, insisted that Nigeria’s manufacturing sector must rise up to the tremendous opportunities provided by AFCTA. “Indeed, there are opportunities but we need to focus on what we need to do to tap from those opportunities. Nigeria is one of the few countries in Africa that has the building blocks to become a hub for manufacturing. It is my hope that members of MAN will rise up to these opportunities and that governments at all levels will collaborate with us in this crusade to ensure that in the next three years manufacturers will achieve their targets,” he said. He further called on government to go beyond the signing of the agreement to consult with critical stakeholders and ensure to incorporate into the implementation process, the inputs of all stakeholders so as to provide opportunities for the Nigerian people and the economy.

APM Terminals launches solutions to improve truckers experience in 10 ports LCCI seeks change of import AMAKA ANAGOR-EWUZIE

etermined to aid truckers in planning their visit to the Port, APM Terminals will be testing a number of initiatives across 10 key terminals (yet to be listed) to improve truckers’ experience. The initiatives were developed using APM Terminals’ I-cycle (Improvement Cycle) methodology used companywide to deliver an industryleading customer experience. Pundits believed that Nigerian ports managers need to borrow a leave from this by developing some of these automated solutions to ease congestion on port roads and terminals caused by chaotic movement of trucks in and out of the ports. The project commenced in 2018 after the management interviewed more than 200 truck drivers and discovered that truck drivers and dispatchers need clear, relevant, and timely information around picking up containers to help them plan their days/ trips to the terminal as efficiently as possible. As a result, experts from

various APM terminals developed a number of solutions that were tested with a group of truck drivers and dispatchers during a Design Workshop held in Port Elizabeth, USA and the solutions include. Terminal alerts via text or email At selected terminals, operational issues are being announced via an alert message on the terminal’s website. As of September 2019, truckers will be able to sign up to receive these alerts via text message or email. “This enables truckers to proactively adjust their schedule and gives them a clearer understanding of any delays,” says Fran Ohlheiser, client services manager at APM Terminals Los Angeles. He said the company is also working on increasing the number of terminals with live gate cameras available, so that drivers can see the status at the gate real time. Other initiatives geared towards reducing delays at the gate have also been introduced. For example, APM Terminals Gothenburg now www.businessday.ng

text or email their truck drivers in advance to warn them that their terminal documentation is due to expire. This prevents unexpected delays at the gate. Advanced notification of truck-turn-times Each terminal has identified opportunities to offer greater transparency around queue and truck-turn-times within the terminal. At APM Terminals Los Angeles for example, these are displayed on information boards along the 1.5mile approach to the terminal. At Gothenburg, expectations are managed by displaying estimated truck turn times at the gate. APM Terminals is currently developing an online solution to display real-time waiting and turn times at each terminal on the website. Also, trucker care agents have been appointed at the pilot terminals to provide information to truckers in case of unavoidable delays and work to limit the delay as much as possible, hand out refreshments and ultimately to provide the drivers with a sounding board to voice their frustrations and concerns.

Giving truckers a voice “This level of emotional recognition for having this structurally in place should not be underestimated,” explained Catherine Hunt, gate operations manager at APM Terminals Port Elizabeth. “Initial feedback from drivers has been extremely positive. Sometimes it’s not operationally feasible to move a piece of equipment from one congested area of the yard to service a single driver, but it is possible for us to apologize, and ensure that drivers know they are valued customers and their business and time matters,” she said. To assist Trucker Care Agents, for example, APM Terminals Port Elizabeth launched an automated iDashboard to provide gate and yard staff with a breakdown of transactions for the next 120 minutes. This enables agents to locate drivers with longer transaction times. At APM Terminals Valencia and Spain, agents currently visit truckers who have been waiting more than 70 minutes. They are using the feedback provided to prevent future delays.

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trading policy from CIF to FOB

he Freight Forwarders Group of the Lagos Chamber of Commerce and Industries (LCCI) has called for a change in Nigeria’s Import Trade Act from Cost Insurance and Freight (CIF) to Free on Board (FOB). Las Alli Shobande, deputy chairman of the group, said recently that this would draw more shipping lines to establish in Nigeria as freight rates would no longer be paid abroad but in Nigeria when the cargo arrives. According to him, it is the usual practice in advanced countries, adding that if the federal government changes the trade policy, importers would only pay for cost of the

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goods abroad while freight rates would still remain in Nigeria and would be paid in Naira. “We want government to look into our Import Trade Act because if goods are brought on FOB, and we start paying for our Letters of Credit on FOB basis, shipping lines would come to Nigeria,” he said. He said the present arrangement forces Nigerians to pay much because it is the suppliers that negotiate the freight rates for Nigerian importers. “If we hold the freight back, we will create business here in Nigeria because freight companies would be forced to talk to local companies in Nigeria.”

Wednesday 14 August 2019

BUSINESS DAY

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Why Nigeria leads in Port State Control implementation in W/Central African region AMAKA ANAGOR-EWUZIE

ecently, the Abuja Memorandum of Understanding (MoU) on Port State Control (PSC) for West and Central Africa Region, the apex regional treaty on PSC, released its 2018 report, showing the inspections on vessels that called the ports within its member states. The report stated that among the 10 member states that recorded numerical increase in Port State Control inspection in 2018, Nigeria stands out with 636 inspections on vessels, showing 82 percent rise when compared with 350 inspections carried out in 2017. It further revealed that the number of ship calls in Nigerian ports grew by 23 percent from 9,073 ship calls in 2017 to 11,171 ship calls in 2018. With the report, analysts believed that Nigeria, tect the nation’s maritime through its apex maritime assets and environment by regulatory body, which is the building capability under Nigerian Maritime Adminis- the deep blue sea project. tration and Safety Agency It invested in meeting the (NIMASA), has upped its international requirement game in maritime adminis- of inspecting at least 15 tration through consistent percent of foreign vessels reforms and enforcement of entering the nation’s waters. NIMASA has also intenquality standards on vessels sified inspection of ships calling Nigerian Ports. Nigeria, they say, is be- calling the ports to ensure coming conscious of global compliance with internabest practices by showing tional conventions, and this determination to rid the na- has not only helped to earn tion’s waters of substandard Nigeria the top Abuja MoU’s vessels, with the ultimate ranking, but has also helped to reduce the number of SHIP AGENT aim of ensuring safe mariS/N substandard vessels coming time domain. 1 DONG BANG GAINT NO 1 STAR to 2the country. BLUE 2 DONG BANG GAINT BLUE STAR This development, no NO 3 PALEISGRACHT BLUESTAR In addition, the agency doubt, will afford Nigeria 4 PARKGRACHT BLUESTAR serious ARUNA HULYA BLUESTAR the5required capacity to be- is beginning to pay 6 GUO RUI BLUESTAR capaccome a competitive player attention to building 7 SEASPAN SANTOS COSCO ity through training of Port 8 SPYROS V CC. NIG in the global maritime space 9 CUCKOO HUNTER CC. NIG State Control Officers to and put her in league of 10 JPO VIRGO CC. NIG equip them with the needed maritime investment 11 ALS APOLLO desCC. NIG capacity for inspecting ships 12 SINOWAY VI GMTS tinations. 13 AKOUR II GOLDEN BusinessDay findings in Nigeria. 14 RHONE MAERSK MAERSK For instance, Nigeria 15 thatMAERSK MAERSK show NIMASACHENNAI has since 16 KOTA SEGAR PIL through NIMASA has acthe17last three years engaged KOTA SELAMAT PIL quired special mission airKOTA SEJATI PIL in 18 deliberate efforts to pro19 20

KOTA SAHABAT SUNRISE RAINBOW

than 4.36 percent recorded forcement duties,” he said. He however promised in 2017,” the report stated. Abuja MoU is the legal that Nigeria through NIMAdocument under which SA will remain unwavering countries in West and Cen- in its commitment to safety tral African region agreed and innovation in line with to develop and implement global best standards, dea common mechanism for spite the challenges. “The Port State Control activities. Agency has no intention The MoU, which was of taking any shipowner established with the man- out of business ; rather date to harmonise PSC we are here to assist ship procedure and practices operators by creating a of all the countries in the comfortable shipping enregion, is saddled with the vironment.” Peterside however responsibility of eliminating substandard shipping warned that NIMASA will operations from ports in not fail to clamp down on erring operators and ships the region. It also aims to ensure in order to safeguard the maritime safety, security, Nigerian maritime domain protection of the marine for the good of all. Mfon Usoro, secretaryenvironment from pollution, and to improve the general of Abuja MoU, statworking conditions of ship ed in the report, that there crew, as well as facilitate has been an increased regional cooperation and level of professionalism exchange of information among PSC officers (PSCOs) and inspection, which among member states. Member states of Abuja has resulted in noticeable MoU include Angola, Benin, decrease in reported alCape Verde, Republic of legations of unprofessional Congo, Ivory Coast, Gabon, practices of PSCOs. According to her, the craft, telecommunications on the Survey, Inspection Ghana, Guinea, Liberia, Nigadgets, and 17 interceptor and Certification Transfor- geria, Senegal, Sierra Leone, analysis of the MoU’s pervessels. The agency in con- mation Programme, which South Africa, Sao Tome and formance between 2010 and junction with the nation’s helped to fulfill the nation’s Principe, Guinea Bissau, 2018 indicated an unbroken improvement by membersecurity services has set up obligations under the In- The Gambia, and Togo. nations’ administrations of Other countries in the rea Command and Control ternational Convention on Centre with armoured ve- Standards of Training, Cer- gion that are not full mem- the MoU in every aspect of hicles and standing military tification and Watchkeeping bers of the MoU include Port State Control (PSC). She said the MoU has Equatorial Guinea, Demoforce to deal with criminali- for Seafarers (STCW). ties at sea. Meanwhile, the report cratic Republic of Congo, seen commitment among Recall that upon as- further showed a significant Cameroon, Mauritania and member-states to rid their waters of substandard ships, sumption of office, Dakuku rise in number of vessels Namibia. improve the standard of Dakuku Peterside, direcPeterside-led manage- with deficiencies as 727 welfare of shipboard officers tor-general of NIMASA, who ment of NIMASA rolled out vessel deficiencies were 5-pillar reform strategies recorded in 2018 as against described the improved and crew, and stem the polin 2016. They include Sur- 587 vessel deficiencies in PSC inspection in Nigerian lution of the region’s waters. Usoro however called on ports as the fruits of some of vey, Inspection and Cer2017. VESSELS EXPECTED AT LAGOS PILOTAGE DISTRICT the recent reforms initiated member states to maintain tification Transformation “SOLAS related defiPORT TONNAGE/UNI EXP E. T. A LENGHT CARGO REMARK T Programme; Environment, ciencies ranked the highest by the Agency, said Nigeria the momentum in order DAN. REF 3783.604MT 18/08/19 was able 136M G/CARGO to eliminate operations of to achieve this feat Security DAN. and Search and among member states with REF 3000MT 20/08/19 146M G/CARGO substandard vessels and following the continuous inDAN REF 169M G/CARGO Rescue Transformation Pro- 3500MT 52.54 percent- while16/08/19 the DAN. REF 3195MT 20/08/19 vestment 169M invest in sustainable blue in the acquisitionG/CARGO gramme; Capacity number of ship GDNL Building 44655MT - detentions 10/08/19 188M B/SUGAR economy. equipment.G/CARGO DAN. REF Initia-13108.75MT 30/08/19 155M and Promotional decreased to 14- from 16 de- of enforcement APMT 740FCL 12/08/19 260M CONT The Abuja MoU on State “The excellent record tives; Digital Transforma- 650 tentions recorded in14/08/19 2017. APMT FCL 261M CONT Control was signed at a by Nigeria on PSC CONT APMT 15/08/19 posted 261M tion Strategy; and Structural 700 In FCL total, the performance FCL 20/08/19 inspection 265Mwas the result CONT Ministerial Conference orand CulturalAPMT reforms, which 600 percentage inspection by APMT 600 FCL 22/08/19 260M CONT ganised by the Internationof recent transformational ENL 18/08/19 190M G/CARGO entails changes to work 19405MT member states- for year unABTL 53727MT 10/08/19 initiatives 197M al Maritime Organisation introduced byB/WHEAT ethic and attitude of staff. der review stood at 4.79 perAPMT 350FCL 20/08/19 250M CONT (IMO) and held in Abuja by NIMASA. We have been able With mind set on improv- 350FCL cent, which is still far below APMT 16/08/19 249.12M CONT 16 West and Central African to make vessels available for APMT 500FCL 09/08/19 212M CONT ing Abuja MoU’s ranking of 500FCL the target of 15- percent for APMT 14/08/19 212M CONT States on October 22, 1999. officers to carry out their enNigeria, it intensified action the region but slightly more APMT 520FCL 17/08/19 212M CONT

PIL APMT 540FCL 24/08/19 UNIION MARITIME GDNL 45,000MT 15/08/19 MOTOR VESSELS AWAITING BERTH AT LAGOS PILOTAGE DISTRICT

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MARITIME SONIA MARITIME CHALLENGER GUO SHUN SEASPAN LEBU NAVIOUS DEVOTION RHL CONSTANTIA MSK COPENHAGEN BOMAR MILIONE ALS JUNO

PACIFIC A DORODCHI NAVE TITAN MARICA

ALRAINE ALRAINE BLUE STAR CC. NIG CC. NIG LANSAL MAERSK MAERSK MAERSK

TONNAGE/UNI

EXP

INTERSHIP REHDORS WHITE WATERS A.C.J N.O.J P.W.A N.G.B S.B.M S.F.M B.O.P F/W

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CONT B/GYPSUM

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ENL 10521MT ENL 1052MT DAN. REF 2500MT APMT 650FCL APMT 600 FCL APMT 715FCL` APMT 420FCL APMT 500FCL APMT 450FCL MOTOR TANKERS AWAITING BERTH

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212M 190M

8984.8MT 38000MT 59041.33MT

ATLAS COVE JETTY https://www.facebook.com/businessdayng NEW OIL JETTY PETROLEUM WHARF APAPA NIDO GAS BOUY SINGLE BOUY MOORING STANDARD FLOUR MILL BULK OIL PLANT FISHERY WHARF

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Wednesday 14 August 2019

BUSINESS DAY

cityfile NSCDC officer kills student in Bayelsa Samuel Ese, Yenagoa

Nigerian Security and Civil Defence Corps (NSCDC) officer has allegedly shot and killed a 100 level student of Niger Delta University (NDU), Bayelsa State at Amassoma last weekend. Eyewitness account said the security officer was trying to free his rifle when it went off discharging three bullets into the deceased identified as Obinna, a student of Chemical Engineering at about 10.30pm in the

Efeke Ama area of Amassoma on Saturday. The victim was immediately rushed to Tantua Hospital where he was confirmed dead while the security officer was taken into custody by the Divisional Police Officer (DPO) of Amassoma. Some sources alleged that the security officer was in the company of other police officers at a popular bar known as the Usual Karaoke Bar when his gun failed and resulted in the unfortunate incident.

Police nab 100 robbery suspects in Lagos JOSHUA BASSEY

LAWMA workers packing heap of refuse in Apapa during the clean-up exercise on Monday.

Waste: LAWMA gains access to Apapa JOSHUA BASSEY

he Lagos Waste Management Authority (LAWMA) is making inroads into Apapa after several months of fruitless struggle to access the ports environment due to the activities of container-laden truck and petroleum tanker drivers, who blocked the roads and bridges leading into the area. It is, however, not certain how long LAWMA would sustain its current efforts, as the truckers, drawing from past experiences, can suddenly resurface on the roads and bridges, thereby making them inaccessible again to LAWMA officials and their waste compactors. The agency is advantage of the respite being currently experienced in Apapa, as the truckers have reduced their occupation of the Ijora-Apapa Bridge, a major entry route into Apapa.

…as new mgt deploys street sweepers In the last two weeks, officials of the agency have been evacuating refuse and sand long accumulated on the bridge. The street sweepers armed with brooms and packers, were sighted again on Monday, August 12, taking advantage of the light traffic, occasioned by the public holidays declared by the Federal Government to mark this year’s Eid-el-Kabir. Muyiwa Gbadegesin, Managing Director/CEO of LAWMA, who was out in the street alongside the agency’s management team, to supervise the exercise, lamented the blockade of the roads by trucks, but added that the agency was sparing no efforts in restore sanity to the degraded environment. According to Gbadegesin, the clean-up is in furtherance of the executive order on zero tolerance for reckless waste

disposal, recently signed by Governor Babajide SanwoOlu “You will recall a few weeks ago the governor issued an executive order and we started the clean up exercise from Orile all the way down to Badagry expressway, as you are aware Apapa has been a major problem area, it’s been difficult to access this location. So we are here to monitor the ongoing clean-up exercise of the Lagos metropolis which is in furtherance of the executive order of the governor. “We have to seize this opportunity of Sallah break because traffic will be a little free today, we decided to come here to embark on massive clean-up of the axis, the LAWMA workers are all over the place clearing the silt and waste accumulated over several years because the area has been abandoned,” said Gbadegesin.

The MD urged the residents to support the cleaner Lagos initiative and stop indiscriminate dumping of waste by embracing the habit of bagging their refuse. They should also make sure they have a waste bin at home. We don’t want people dumping their waste by the roadside because this can put us at the risk of epidemic outbreak.’’ Recall that the agency began massive waste evacuation in the Lagos-West district which comprising Agege, Ikeja, Badagry, Ojo, Ifako-Ijaiy in compliance with the executive order. Specific areas also touched include Lagos State University and Okokomaiko axis with the deployment of mechanical shovels, bulldozers, excavators, sweepers, walking floor trailers, and long chassis tippers in the effort to arrest the waste menace in the state.

Abia to prosecute illegal levy collectors GODFREY OFURUM, Aba

bia State government has warned market unions to desist from imposing illegal levies on their members, as government will bring its full weight against any person caught in the act. The state government decried the imposition of between N100,000 and N250,000 on traders of Ekeoha Market (Aba Shopping Centre) Aba, by their leaders for the construction of access road and other projects in the

market. The state governor, Okezie Ikpeazu in a statement by Onyebuchi Ememanka, his media aide, stated that at no time did government approve any such levy or met with the market unions on the subject matter. He declared the said levies illegal and urged the general public and traders of Ekeoha Shopping Centre, in particular, to ignore the notices issued by the leadership of the market. The governor directed the traders association to immediately withdraw the demand www.businessday.ng

notice already issued to the traders and as a matter of urgency, refund any such levies already collected from any trader in this regard. Ikpeazu reassured traders in all markets across Abia and all business owners of his administration’s commitment to providing an environment that enables their businesses thrive. “The Abia State government is saddened at this brazen display of illegality and impunity by the leadership of the Ekeoha Shopping Centre Traders Association through the imposition of this illegal levy on traders and

issuance of demand notices to that effect, with deadlines for payment. The government of Abia State shall not stand by and watch a group of traders hiding under the leadership of markets, institute a regime of illegality in our markets through the imposition of unauthorised levies on traders. “Government makes it abundantly clear that it will deal decisively with any person or group of persons, by whatever name called, that attempts to make our markets uncomfortable for traders,” it said.

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he police in Lagos have arrested 100 armed robbery suspects on Mile 2-Badagry Expressway between January and August, 2019. Mohammed Ali, Deputy Commissioner of Police (DCP) in charge of operations, Lagos command, disclosed this on Monday. He spoke in reaction to public complaints about incessant armed robbery on the Mile 2-Badagry Expressway. Ali said that the command’s security strategies in the state were still in place, yielding positive results. According to him, at peak periods, all Area commanders and divisional police officers are to monitor traffic situation under them, with a view to decongesting traffic and checking criminals operating during such period. “Our major challenge on the Badagry expressway is the bad road and the articu-

lated vehicles and tankers parked on the road from Mile 2. They are not helping security matter on that road. “The tankers blocked the expressway. Heavy traffic is built up daily and that attracted robbers to operate. Yet our men are moving round to secure members of the public on that road. Our monitoring men are all in different parts of the metropolis,’’ he said. According to him, we have officers sent out from morning till night for traffic control to compliment other traffic officials and monitor black spots on motorcycles, patrol vehicles and foots. Ali also debunked the allegation that the police always looked other way when some military personnel and their wards were involved in robbery on the Badagry expressway, particularly around Ojo area of the road. “No one is above the law, even if you are a uniform person,” he said.

Anambra community raises alarm over brewing crisis

he people of Nando town in Anambra East local government area of Anambra State have drawn attention of the state government to possible breakdown of peace following alleged moves by some persons to overthrow its duly elected town union leadership. The community said this on Monday a communiqué issued after its meeting of with the traditional ruler, Igwe Chinedu Nwakonuche with his cabinet and chairmen the eight villages in Nando and the youth group in his palace. They said the meeting was to address the accusations by some people of Abube-Agu village that Ignatius Aghadinuno the President-General (P-G) of Nando, sold part of their land to herdsmen or other persons. They claimed persons were already collecting a list of names which they intend to present to govern@Businessdayng

ment as members of caretaker committee after they must eased the duly elected Aghadinuno-led executive out of office. The monarch and the council disowned such moves, noting that it was capable of throwing Nando into perpetual anarchy and chaos while passing a vote of confidence on the Aghadinuno-led executive committee. In t h e i r re s o l u t i o n s made available to newsmen in Awka, they said the allegations were fabrication by group of individuals from Abube-Agu who wanted to impose their selfish will on the entire Nando community. According to the communiqué, signed by the monarch, Igwe-In-Council and chairmen of the eight villages in Nando, the P-G was not in any way indicted in the crisis in Abube-Agu village and therefore, innocent of all allegations emanating there from.

Wednesday 14 August 2019

BUSINESS DAY

PENSION today

In Association With with contributions from

More work needed to increase uptake of micro pensions – say’s operators

ension fund operators in Nigeria say they have a lot of work to do to enable effective takeoff and acceptance of micro pension by the informal sector

through the grassroots, noting that the approach of marketing and persuading Nigerians to join the scheme differs from other schemes. “We, as operators, knew from the onset that the approach of using agents to market micro pension plan will not work

awareness, the number of contributors will grow. According to hi, operators have invested heavily in micro pension scheme, by getting the needed information technology infrastructure, as well as manpower to mobilise new pension contributors

‘

We, as operators, knew from the onset that the approach of using agents to market micro pension plan will not work because of its nature. So, don’t expect to see our agents in the market places marketing micro pensions

‘

workers. They say that the major work is bringing confidence into the system to encourage participation and uptake as many people have a lot of doubt and fear when new things are introduced. One of the operators who did not want his name mentioned, said “remember that the scheme is voluntary, which means you do not have any means to compel anyone to take the product, unlike the formal sector scheme, which is contributory by employer and employee and made compulsory under the law.” According to the operator, “you and I, are aware that not a lot of people these days will want to deal with government because of declining confidence and when you tell them that micro pension is backed by government, they look at you and laugh”. Ronke Adedeji, president, Pension Fund Operators Association of Nigeria reviewing the micro pension project recently , said “We have a lot of work in our hands, and that is to bring confidence into the system”. Adedeji said effort must be made to convince customers that this is not one of those schemes that you hear about today, and tomorrow you don’t hear about it again. She said that the regulator is passionate about this, and so is vigilant about branch operations of PFAs to ensure that service delivery is to standard. Wale Odutola, head, Branding Committee of PenOp noted that the pace of registration of participants in the micro pension scheme is still very low compared to the Contributory Pension Scheme (CPS), adding that, the nature of micro pension scheme and its voluntary nature mean the pace of growth would be slower than the CPS that was made compulsory by law. He stated that though operators envisaged this but pointed out that as time progresses and more people become aware of its immense benefits through increased

because of its nature. So, don’t expect to see our agents in market places marketing micro pensions, the PenOp leadership said. The nation’s pension industry will need to create the needed awareness and education to bring in an estimated 36.8 million population that are currently excluded from any form of financial services, to realise its 80 million informal sector access target, analysts have said. President Mohammed Buhari at the launch of the Micro pension Scheme in Abuja recently said the scheme targets the significant majority of Nigeria’s working population who incidentally operate in the informal sector. With an estimated 80 million people working in the informal sector of the economy, the Micro Pension Plan would take care of participants from various informal sector workers including market women, members of the National Union of Road Transport Workers, and members of textile, garment and tailoring associations, among others, the President had said.

Diamond Pension Fund Custodian Limited with contributions from

1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com www.businessday.ng

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

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Wednesday 14 August 2019

BUSINESS DAY

insurance today

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Recapitalisation seeks to close widening gap on premium flight …oil and gas, energy sectors most affected Modestus Anaesoronye

he ongoing recapitalisation in the insurance industry targets to close the widening gap in the retention capacity of local insurers, which has lead to huge premium flight into the international market. Experts say the ceding of premium to international market was as result of both financial and technical capacity shortages within the local market, particularly in the oil and gas, and energy sector risks. Pius Agbola, said the capital base of an underwriter is of great importance in determining how much risks it can retain. He noted that a large proportion of the local risks are presently ceded outside because of low retention capacity. According to him, NAICOM has continued to Approve in Principles (AIP) requests to allow risks that should have been retained locally taken abroad over low capacity. I believe strongly that the increase in capital base would definitely increase retention capacity of the underwriters, he said. In a table recently released by NAICOM showing the retention capacity of local underwriters and what was ceded abroad, it was revealed that out of an estimated N64.59 trillion naira ‘sum assured’ in oil and gas, and energy risks generated from Nigeria, N16.90 trillion were ceded abroad, while about N37.69 trillion were retained locally.

L-R: Sunday Thomas, acting commissioner for Insurance/CEO, National Insurance Commission (NAICOM); Eddie Efekoha, president, CIIN; Olola Olabode Ogunlana, doyen of the Insurance Industry; and his wife Kehinde Ogunlana; Richard Borokini, director general CIIN during the 60th Anniversary Gala Night of Chartered Insurance Institute of Nigeria held in Lagos.

The sum insured is the amount of money that an insurance company is obligated to cover in the event of a covered loss. The amount is dependent on the premium price paid for the insurance coverage. The breakdown shows that NNPC’s consolidated insurance package with $99.58 billion sum insured, was shared at 78 per cent

CIIN launches compendium, chronicling its 60-years of human capital development Modestus Anaesoronye

raining arm of the industry, The Chartered Insurance Institute of Nigeria (CIIN) has chronicled its 60 years of existence with launch of a compendium detailing its contribution to human capital development in Nigeria. Eddie Efekoha, president, CIIN in his speech during the Institute’s Gala-Night to mark its 60th anniversary said the Chartered Insurance Institute of Nigeria was established in August 1959 and charged with the general duty of determining the standards of knowledge and skills to be attained by persons seeking to become registered members of the Insurance profession in Nigeria. Efekoha said the Institute remains committed to carrying out its major duty of catering for the manpower needs of the insurance Industry, having produced today 3,335 associates and 212 fellows. With a charter status in February 1993,

the CIIN has continued to provide a platform for industry excellence and remains a rallying point for insurance practitioners and stakeholders nationwide. Also major for the institute is the establishment of the College of Insurance and Financial Management to enhance manpower development in the industry. Efekoha while thanking the founding fathers and past leadership of the Institute, assured that as the 49th President of the Institute, I assure you on behalf of the governing council that we will ensure that the Institute continues to retain its pride of place within the Insurance Industry in Nigeria and beyond. “We will encourage and involve our young professionals in the affairs of both the institute and the industry. Mentor them on the values of professionalism, integrity, ethical conduct, which you, our elders, hold very dear to your hearts such that in another sixty years from now they would look back and say that they have neither disappointed you nor themselves.” www.businessday.ng

locally and 22 per cent abroad, amounting to $77.67 billion (local) and $21.91 billion (abroad) respectively. Chevron Nigeria Limited, energy package insurance, sum insured of $14.31 billion, was shared local $10.73 billion, foreign $3.57 billion; Mobil Production Nigeria Limited, energy package/Physical Damage and O.E.E,

sum insured, $14.09 billion, local, $9.86 billion, foreign $4.23 billion; Lafarge HOICIM, Combined property damage/business interruption and public liability, sum insured, $564.88 billion, local intake, $388.24 billion, foreign $176.64 billion. Dangote Fertilizer, Construction/Erection, all risks and third party liability, sum insured, $1.12 billion, local, $0.672 billion, foreign, $0.44 billion; Sahara Power (Egbin Power Plc) (Combined Property Damage/ Machinery Breakdown/Liability Terrorism/ Political Violence cover Policy $3.17billion; $1.43billion locally, $1.74billion foreign. Yinson Production (Energy Package, War and Terrorism Inclusive) having $1.24billion sum insured was shared $484.8 million local and $715.2 million foreign. StarDeep Water Petroleum Limited (Energy Package) sum insured $3 billion, distributed as $2.25 billion local and $750 million foreign. Dangote Refinery (Construction/Erection All Risks, Third party Liability, Owners Plant Delay in Startups) with sum assured of $6.7 billion, and distributed as $1.54 billion for local market and $5.16 billion to foreign market. Aviation Refueling, refueling liability insurance) with sum assured of $1 billion; $103million local and $897 million foreign; and Centre for Energy Research and Trainings Affiliated to Ahmadu Bello University ( Third Party Nuclear Liability Insurance sum assured $7.01billion; $3.01million local and $6.97 billion foreign.

Sovereign Trust Insurance extends rights issue Modestus Anaesoronye

ollowing the approval from the Securities and Exchange Commission, SEC, Sovereign Trust Insurance Plc has extended its Rights Issue offer closing date which opened on Monday, June 24, 2019. The Rights Issue which ought to have closed on Wednesday, July31, 2019, has now been extended to August 16, 2019. According to the official statement made available to the Press by the Spokesperson for the organization, Segun Bankole, the extension of the Rights Issue was necessitated to allow Shareholders ample time to subscribe fully to the offer. He said such unique opportunity does not come that often which was what informed the decision of the Management to request for an extension in the closing date of the Rights Issue offer. Consequently, the Management enjoins all Shareholders of the company to take advantage of this extension in date to fully exercise their rights as that will guarantee the consolidation of their ownership in one of Nigeria’s very dynamic and forward-looking underwriting firm. The company, more than ever before, is poised to take the insurance business to a greater height as it gravitates to the next phase of its growth agenda. A total of 4, 170,411,6488, (Four Billion

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One Hundred and Seventy Million, Four Hundred and Eleven Thousand, Six Hundred and Forty-Eight units of ordinary shares at 50 kobo each have been placed on offer for existing shareholders at 50kobo per share on the basis of one (1) new ordinary share for every two (2) ordinary shares of 50kobo held in the company as at the close of register on January 15, 2019. The Management has also appealed to all shareholders who may be having one challenge or the other in getting their Rights Issue Circular to get in touch with Meristem Registrars or seek advice and consultation from their respective stockbrokers and other professional advisers as the case may be. Olaotan Soyinka, managing director of the underwriting firm, has also reiterated the fact that the company has set a growth agenda which is aimed at positioning the insurance company as one of the top players in the industry, particularly, in the oil and gas sector where it has developed very unique expertise and professionalism over the years. He also called on the company’s Shareholders to lend their support to the Rights Issue with the new date extension. He said the actualization of the set objectives of the growth agenda of the company remains sacrosanct. He equally noted that the company is committed to creating exceptional value to all its Shareholders.

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Wednesday 14 August 2019

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

Understand insurance consumers for increased penetration – Doyen charges operators Modestus Anaesoronye

he Doyen of Insurance Industry, Olola Olabode Ogunlan has charged operators to continue to develop themselves, by not just understanding their own products but also the business and products of those they insure. “When you go out to market insurance, let us try to speak to the customers in the language they understand, that is the only way we can be successful and increase our sales”. Ogunlana, chairman of SCIB Insurance Brokers Limited and oldest insurance operator in Nigeria made the remarks during the industry Gala Night, to mark the diamond Jubilee anniversary of the Chartered Insurance Institute of Nigeria. Ogunlana who also was

conferred with Doyen of the Industry by the CIIN said understanding the people we insure is the only way we can increase sales and deepen insurance penetration. Doyen who was grateful for the conferment, implored insurance operators to continue to work assiduously to take their pride of place in the financial services industry, noting that in the 50’s banks were owned by insurance firms. He noted that insurance was yet to reach its expected standard in the financial services industry, urging the leadership of the industry bodies to work harder and take the industry to its rightful place. Olola Olabode Ogunlana, B.A. (Hons), M.A., M.B.A. is a Chartered Insurance Practitioner. He was the first Nigerian Managing Director of the National Insurance Corporation of Nigeria. In

L-R: Segun Omosehin, managing director/CEO, Mutual Benefits Assurance Plc; Akin Ogunbiyi, chairman, Mutual Benefits Assurance Plc; Subomi Adebero, company secretary; Femi Asenuga, director, Mutual Benefits Assurance Plc during the 23rd Annual General Meeting of the company in Lagos.

1975 Ogunlana set-up SCIB Nigeria Insurance Limited, which is a highly successful insurance broking and consulting firm. Olola Ogunlana was born in Ogere-Remo, Ogun State

Universal Insurance CEO confirms resumed trading on shares Modestus Anaesoronye

en Ujoatuonu, managing director/ CEO of the Company has confirmed resumed trading on the company shares following lifting of the suspension by the Nigerian Stock Exchange. Ujoatuonu said follows the Company’s submission of its Audited Financial Statements, and pursuant to Rule 3.3 of the Default Filing Rules, which provides that: “The suspension of trading in the Issuer’s securities shall be lifted upon submission of the relevant accounts provided the Exchange is satisfied that the accounts comply with all applicable rules of The Exchange. According to the company, dealing members of the Exchange has been duly notified by the authority that the suspension placed on trading on the shares of Universal Insurance Plc was lifted t Wednesday, 7 August 2019. He further stated the Company has been able to increase the numbers by growing premium income by over 130 per cent from N700 million in 2017 to over N1.6 billion in 2018. “We have developed a fullfledged retail unit with requisite qualified personnel to

man it and also expanded our marketing unit,” he added. “Universal Insurance Plc has, over the past five years, sustained its momentum in terms of profitability, cutting edge customer services, innovative products designs tailored to meet special needs of its teeming customers and prompt claims settlement.” Recently the Company embarked on total restructuring and re-engineering of its operations and developed a full-fledged retail unit with

requisite qualified personnel to man it. To drive its expansion and growth strategies, the company in addition, expanded its marketing team engaging highly qualified hands in both core marketing and retail units. Universal Insurance Plc has also expanded its E-platform. The Nigerian Stock Exchange (NSE) on August 7th 2019 lifted the suspension placed on the trading of shares of the Universal Insurance Plc.

and brought up by his parents (his father was a schoolmaster). Olola Ogunlana is a life-long learner and following a 50-year long and highly successful career as

AXA Mansard mobilise experts on benefits of breast feeding to mark global week

X A M a n s a rd , a member of AXA, the global leader in insurance and asset management joined in the observance of the just concludedWorld Breastfeeding Week. World Breastfeeding Week is observed in more than 120 countries around the world between August 1 and 7 every year to encourage breastfeeding and improve the health of babies around the world. To commemorate World Breastfeed-

L-R: Motunrayo Oyemade, founder of Wives of Mothers; Chinny Obinwanne, founder of the Breastfeeding Doctor and The Milk Booster represented by Ifunanya Obinwanne; Olatokunbo Otitoju, group head retail business, AXA Mansard Health Limited; Omowunmi Adewusi human resources director and company secretary at AXA Mansard; and Aanu Soyoye, head of underwriting, Pricing and Enrolment at AXA Mansard Health Limited at the AXA Mansard World Breastfeeding Week Breakfast Session/Masterclass at the company’s head office in Lagos. www.businessday.ng

a chartered insurer, he has returned to school many times: to an Italian academy to study painting; to Oxford University’s summer school for a Creative Writing and Poetry course;

as well as for Bachelors and Masters degrees in English Literature at Buckingham University. Since his retirement from active insurance work, he has devoted much time to the study of Yoruba culture and language. Whilst studying in the U.K, Olola Ogunlana had discussions with the academic community on how best to translate the rich Yoruba folklores into English to appeal to an international audience. The result are the two recently-published books – The Quest for Rare the Leaf and Other Yoruba Tales and Yoruba Love Series – in which, Olola Ogunlana translated centuries-old Yoruba oral folklore into English, thereby making it more accessible to a global and modern set of readers. Olola Ogunlana is also a former chief commissioner of Boys Scout of Nigeria.

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ing Week 2019, the company held a breakfast session/ masterclass for woman at its head office in Lagos. The event served as an avenue for the company to meet with various women from different works of life, engage them and educate them about breastfeeding. Topics covered include ‘Health benefits of breastfeeding’, ‘Making lactation easier’, ‘How health insurance can benefit mother and baby’ amongst others. Speakers at the event included Motunrayo Oyemade, founder of popular Instagram platform – Wives and Mothers); Chinny Obinwanne, lactation consultant and founder of popular Instagram platforms, The Breastfeeding Doctor and Milk Booster, who was represented by Ifunnanya Obinwanne, a breastfeeding advocate; Omowunmi Adewusi, HR director and company Secretary at AXA Mansard; Olatokunbo Otitoju, group head of Retail Business at AXA Mansard Health Limited and Aanu Soyoye, head of underwriting, Pricing & Enrolment at AXA Mansard Health. ‘The importance of breastfeeding cannot be @Businessdayng

over emphasised seeing as it not only has various benefits for a baby, it also contributes to the wellbeing of the mother’ said Tope Adeniyi, the CEO of AXA Mansard Health Limited. ‘Breast milk is the ideal food for babies. It contains all the necessary nutrients for a baby’s healthy growth, contains antibodies that help protect babies against illnesses such as pneumonia and diarrhoea and it is linked to the prevention of Sudden Infant Death Syndrome (SIDS); it is also readily available and cost effective.’ According to the World Health Organisation (WHO), only 40 percent of infants under six months are exclusively breastfed worldwide. About 820, 000 child lives would be saved every year if breastfeeding were scaled up to universal levels. In developing countries, an exclusively breastfed baby is 14 times less likely to die in the first six months than a non-breastfed child. Nonbreastfed babies have a 10 times greater risk of death from diarrhoea, and 15 times greater risk of death from pneumonia compared to infants who are exclusively breastfed.

Wednesday 14 August 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

You just lost your temper at work. Now what? PATRICIA THOMPSON

et’s face it, work can be stressful. Whether the stress comes from your boss, your co-workers, or your workload, the pressure can get to be too much. After one particularly frustrating meeting, you blow up at a colleague and lose your temper. You might just want to chalk it up to a bad day and move on, pretending that nothing happened. But others likely won’t be so quick to forget. As Roy Baumeister wrote in his classic article “Bad Is Stronger Than Good ,” negative experiences are processed more thoroughly than good ones, and negative impressions are quicker to form and harder to get rid of than positive ones. To recover from something like this, you’ll need to approach the situation with humility and intention. Here’s how to proceed: BE HONEST WITH YOURSELF. The first step is to take an honest look at yourself. Was this a one-time experience, or is this something that you’ve done on multiple occasions? If losing your temper is truly not the norm for you, people who have an established history with you will likely see it as something that was caused by situational factors. In that case, a sincere apology may be enough. However, if it’s something you do on a regular basis, you’ll have a much steeper road ahead of you in terms of rehabilitating your reputation. APOLOGIZE. Ideally, you’ll do this as soon as possible after the occurrence, so you can lessen the amount of time that others might be stewing about it and discussing it with colleagues. According to research by Roy Lewicki, Beth Polin, and Robert Lount, effective apologies have six components: — An expression of regret — An explanation of what went wrong — An acknowledgment of responsibility — A declaration of repentance — An offer of repair — A request for forgiveness

The researchers found that the more of these components included, the more favorably others responded to the apology. However, not all aspects of the apology were equally important. They found that the most critical component was acknowledging responsibility. Therefore, when you apologize for your blowup, own what you did. Don’t rationalize or make excuses. Be sincere in admitting that your behavior was wrong. The second most important component of the apology was the offer of repair. Therefore, explain what you’re going to do to make up for it. For instance, if you blew up publicly at someone, you could make sure to apologize to them, and then apologize in the next meeting when all parties who witnessed it are together. Or, you could explain the steps you’re going to take to avoid having that happen again in the future. For example, if you notice that you tend to get testy when your days are over-scheduled, you can make a commitment to doing a better job of managing your workload, or taking more breaks. If you have a tendency to get defensive, you might choose to give others permission to gently point out when you’re being less receptive to their perspectives. Or, if you really have a hard time managing your temper, you could

promise to work with a coach to develop strategies to help you to gain greater control over your reactions. Then, make sure to do it. After all, if you keep exhibiting the same behavior over and over, your apologies are going to become meaningless. FIGURE OUT WHAT TRIGGERED YOUR BLOWUP. To reduce the odds of losing your temper in the future, you’ll want to identify the factors that contributed to it. Do you need to do a better job of managing your stress overall? Do you tend to lash out when you feel attacked or vulnerable? Are there specific people who frustrate you? Were there personal issues that trickled over into work that made you more on edge? For example, if you realize that you get upset when you feel others are attacking you, you can shift your perspective and recognize that diverse opinions help teams solve problems more effectively. If you notice that your emotions can get the best of you in a tense moment, you can practice deep breathing when you feel yourself tensing up, so that you can calm your body and think more clearly in the moment. BE CONSISTENT. If you want others’ perceptions of you to shift, you’ll need to demonstrate a more even temperament on a consistent basis. This is impor-

tant, because due to confirmation bias, we tend to be more likely to recognize others’ behaviors that confirm our beliefs about them, as opposed to those that are at odds with them. What this means is that if you’re seen as a hothead, people will be much more likely to notice the one time you shouted and cursed at your colleague, as opposed to all the other meetings this week when you were jovial and charming. Although it might not seem fair, it’s what you’ll need to do to change others’ perceptions of you. FOCUS ON RELATIONSHIPS. When you have built strong relationships with those around you, they’ll be more likely to forgive the occasional misstep. In my consulting work with individuals in organizations, it’s not uncommon for me to hear co-workers being much more willing to excuse the odd blowup from a colleague with whom they’ve built up a lot of social capital. It’s essential to take the time to build genuine relationships with others. As Socrates wrote, “The way to a good reputation is to endeavor to be what you desire to appear.” As such, once you’ve lost your temper, your goal shouldn’t just be to change others’ perceptions of you; your goal should be to adjust your underlying character, so that the reputation you’re

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striving to achieve, will be a reflection of who you truly are. BE PATIENT. Finally, although you may have moved on quickly from the incident, others may not have. Therefore, even if you’ve been on your best behavior for weeks, realize that it may take more time for others to believe the changes you’re exhibiting are real. I once worked with a client who had difficulty managing her emotions at work. After getting over the shock of receiving feedback that she was seen as rude and volatile, she took it upon herself to change those perceptions. She used active listening techniques, focused on building relationships, started a mindfulness practice and worked on better managing her stress in general. She was making great strides, and feeling proud of herself as a result of her development. However, one month later, she came to our session frustrated. She wasn’t sure that anyone’s view of her had changed. This was discouraging to her, given all of the earnest effort that she had been putting into her professional growth. Still, she kept at it, and a few months later, received feedback suggesting that others were appreciating her new approach. Just as I noted that you’ll need to be consistent with your new behaviors, you’ll also need to be patient. If people have been experiencing you one way, it will likely take some time for them to a) notice that you’ve changed your behavior and b) believe that it’s a permanent change. Therefore, try not to get frustrated if it takes longer than you would like for people to recognize the changes you’re making. Keep it up, and they’ll start to notice. The reality is, recovering after losing your temper at work can be a challenge. Although transforming others’ perceptions of you isn’t always an easy task, with consistency, focus and patience, it can definitely be done.

• Patricia Thompson, Ph.D., is the President of Silver Lining Psychology, a corporate psychology and management consulting firm.

Wednesday 14 August 2019

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

Great mentors focus on the whole person, not just their protégé’s career RICK WOOLWORTH

CONNECTING spiring leaders need more and better mentoring than they’re getting today. According to a recent study, more than 75% of professional men and women want to have a mentor, yet only 37% have one. What’s more, most mentors are too narrowly focused on career advancement. The vast majority of the literature on the subject focuses primarily on how mentoring is practiced in the workplace and how organizationwide programs are administered. There is remarkably little analysis or advice on how to mentor the whole person, extending beyond the career to include discussions about behavior, values, relationships, parenting, finances and even spiritual life. But in my experience as a Wall Street executive for 35 years, and now as the president of a nonprofit dedicated to helping leaders establish intergenerational relationships, I’ve learned that a holistic mentoring approach can be dramatically more effective than one focused solely on career development. Mentoring the whole person takes more effort, time and

thought. Here are some practices for doing it well: — SHARE YOUR STORIES: When I meet with a younger person for the first time, I say: “Tell me your story. Start at the beginning and take your time — 20 or 30 minutes. I may ask a few questions, and everything you say will be confidential between us. Then, when you’re finished, I’ll tell you my story if you want me to.” (They always do.) This exercise shows you’re

truly interested in understanding your mentee, not just in dispensing professional advice. — ASK GREAT QUESTIONS: Effective mentors develop a storehouse of probing questions. Examples include: What keeps you up at night? Can you see yourself being stimulated and fulfilled on your current career path for the next five years? What do you do to “reboot”? Who has been most influential in your life?

— START WITH THE END IN MIND: Perhaps the most important question you can ask a mentee is: How do you personally define long-term success? An effective way to unpack this question is to say: “Imagine that tonight there is a party honoring you on your 80th birthday. Write down five brief things you would like family and close friends to say about you.” — TEACH THEM HOW TO FISH: My most valuable mentor

was Bob Buford, a cable television entrepreneur. At one stage in my career I was struggling with a difficult boss, and I was hoping Bob would tell me what to do. Instead, he asked a series of questions that enabled me to identify the real issue and create a course of action on my own. Bob was teaching me how to fish by not providing the fish. — UNPACK YOUR MENTEE’S ‘TOOLKIT’: Most younger people have limited self-awareness about how they are uniquely “wired.” Ask your mentees to take advantage of personal-assessment tools such as StrengthsFinder , Myers-Briggs, the Enneagram personality assessment and Johnson O’Connor’s aptitude tests. — REMEMBER THAT MOST OF MENTORING IS ‘CAUGHT, NOT TAUGHT’: How you serve as a role model is as important as your face-to-face meetings. By mentoring the whole person and not limiting your conversations to career matters, you will have a much greater impact on your mentees. The effects will be felt by them — and everyone they influence — for years to follow.

• Rick Woolworth is the president and a co-founder of Telemachus.

3 Traits of a strong professional relationship Identify the five relationships that have the most influence on your success. For each relationship, ask yourself three questions: — Have you and your colleague discussed and agreed on a clear purpose for your relationship? — What type of relationship (transactional, interdependent or transformational) is most appropriate?

DARIN ROWELL CONNECTING esearch shows that your ability to empathize with, connect with and influence others in the workplace is a pivotal skill. In my work with leaders across industries, I’ve seen people struggle with how to build relationships. I recently worked with an executive who had been asked to lead a major change initiative in her company. She described how developing three traits — a shared relevance, an understanding of the type of relationship needed and a commitment to pursuing it even when times get tough — shifted how she interacted with her colleagues. “Once we had a common vision of how the relationship was important to us both, it made it much easier to remain intentional — the interactions seemed to just flow more naturally,” she said. Everyone can cultivate powerful relationships using these traits. Let’s look at them more closely: — A CLEAR PURPOSE: Leaders must develop the confidence and the skill to discuss and establish a clear basis and intent for their relationships. Having a shared understanding of why the relationship matters provides a critical foundation that can be built upon and used as a touchstone when difficulties inevitably arise. — AN UNDERSTANDING OF

— How does commitment or the lack of commitment show up in the relationship? Once you’ve reflected on your relationships, consider which ones need work. Are there specific actions you can take to strengthen the relationship? Are there conversations you need to initiate? Taking the time to strengthen your weaker relationships will help you deliver strong results, even in difficult circumstances. • Darin Rowell is the founder and managing partner of FrontierX Global. THE TYPE OF RELATIONSHIP NEEDED: It’s helpful to think about relationships along a spectrum. There are transactional relationships, where a minimum level of interaction, interdependence or familiarity are at play. There are interdependent relationships, which involve shared goals, shared knowledge and mutual respect. And there are transformational relationships, in which each person needs to be willing to hold the other accountable to higher standards, even when www.businessday.ng

it’s uncomfortable. — A COMMITMENT TO PURSUING THE RELATIONSHIP EVEN WHEN TIMES GET TOUGH: Powerful relationships are robust and resilient despite their bouts of discord and disagreement. Each person must be mindful of the relationship’s overall significance and willing to give the other the benefit of the doubt. The executive I quoted earlier found value in discussing how to handle future conflict with her col-

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leagues. Once they agreed on the type of relationship they would cocreate, they focused on how they would stay committed, even during disagreements. “We started with the assumption that at some point we may get sideways on an issue,” she said. “So rather than waiting until that happened, we went ahead and discussed how we would handle future disagreements. I think that talking through this up front left us both feeling like we had established a much stronger foundation.” @Businessdayng

Wednesday 14 August 2019

BUSINESS DAY

TRANSPORTATION Motoring

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ANAMMCO rolls out first set of Dongfeng trucks

Inset: Cross section of dignitaries during the first roll-out of ANAMMCO/DONGFENG heavy duty trucks and articulated vehicles at ANAMMCO factory in Emene, Enugu state. MIKE OCHONMA Transport Editor

NAMMCO, Nigeria’s Commercial Vehicles Company recorded yet another landmark achievement when it rolled out the first commomerative batch of Dongfeng trucks assembled from the auto assembly plant located at Emene last Thursday in Enugu, the capital of Enugu state. The roll out of the Dongfeng trucks came shortly after directors of the company, representative of Bureau of Public Enterprises (BPE), representatives of states that owns share in the company and some customers of ANAMMCO ended an inspection of on-the-spot assembly processes of the trucks under the completely knocked down (CKD) regime. The dawn of a new edge in logistics solutions to construction companies and others engaged in other engineering and agricultural solutions to be provided by ANAMMCO was the end result of series of strategic discussions between ANAMMCO; Nigeria’s commercial vehicle company and Dongfeng Commercial Vehicle Company (DCVC) in a move

to boost returns on investment for prospective buyers. Dongfeng trucks are the lethe leading truck brand in China founded in 1969 with an annual production of approximately 200,000 trucks. The company is noiw expanding globally and now has a strategic production and distribution pact with ANAMMCO; a foremost commercial vehicle manufacturing company established in Nigeria in 1977. BusinessDay checks reveal that ANAMMCO has the production capacity of 7,500 trucksand 1000 buses per-annum and with this strategic re-alignment, production and distribution pact has activated a Nigeria sales and service networks under ANAMMCO sole franchiseship for the Dongfeng trucks. In an exclusive chat with BusinesDay, Maduabuchukwu Okeke, managing director and chief executive of ANAMMCO, said that Dongfeng range of trucks which comes in different applications of trucks, tippers and flat bed trailer platforms are strong, reliable and aredesignedforoptimumperformance and have low operating costs with a comfortable in cab environment. According to the ANAMMCO chief executive, ‘’Our product range

which takes Nigeria’s bad road conditions covers heavy and medium duty trucks for long haul, regional and local districbution; construction, mining and off-road operations’’. Prior to the official launch into the Nigerian market, all of the Dongfeng trucks are tested in both laboratories and under real life conditions such as road simulations, crash testing, fatigue analysis, noise monitoring, fuel economy and emission monitoring, etreme heat and cold temperature tesing from +70 to -40. Dongfeng trucks have invested in creating Asia’s most advanced testing facility pack, and its product endurance is built into every part and major component. ‘’From cabs to chassis and drive line, every care has been meticulously taken to ensure that the that our trucks carry on working and earning higher revenues for those companies that invested resources to acquire the services of the trucks for a very longer period and years’’. The ANAMMCO CEO said. ANAMMCO in line with its tradition of excellence since it was set up as an auto assembly plant over 40 years ago guarantees its customers of ample availability of Dongfeng

genuine spare parts and robust aftrsales service support. ANAMMCO is strategically located at the Emene Industrial layout along the Akanu Ibiam International Airport road, Enugu. Its main line of business is assembly and production of commercial vehicles like trucks, buses and utility vehicles, from 5 tons payload and above. Over the years, the company has produced over 30,000 units of commercial vehicles for the Nigerian and West African markets. Industry followers are of the view that ANAMMCO vehicles are significantly at the forefront of road mass transit and haulage services in the country. From the very popular and successful L911 truck, the company developed and introduced various trucks and bus models over time and market watchers believe that, as a well known name in auto assembly with an eye on higher quality products, the company will not settle for less because of the that high standard it has been associated with over the years. This same temaplate company sources say will be replicated with the Dongfeng trucks that will be churned out from ANAMMCO, Emene, Enugu.

Toyota’s $10.13bn leads spending on Japan’s R&D …Honda $7.92bn, Nissan $5.06bn

apan’s auto industry is ramping up its investments in the area of research & development (R&D) investment to confront the oncein-a-century technological upheaval triggered by electrification, connectivity and autonomous driving. Automotive companies grabbed the top four slots for the greatest amount of overall R&D spending this year in a survey of Japanese companies published on July 23 by the Nikkan Kogyo business daily. Before this turn of events, this is a measurement that more recently has been heavily slanted to electronics and consumer goods companies. But this year, Japan’s biggest investor in the future was Toyota, with a research and development budget of 1.1 trillion yen ($10.13 billion) in fiscal year 2019, according to the Nikkan Kogyo.

Coming in second was Honda, which earmarked 860 billion yen ($7.92 billion).Nissan was No. 3 with 550 billion yen ($5.06 billion), and the Toyota-affiliated global supplier www.businessday.ng

Denso was the fourth-highest spender at 520 billion yen ($4.79 billion). Their spending outpaced that of Japanese high-tech firms such as Sony, Panasonic and Toshiba, which

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once set the global standard for electronic gadgetry and digital creativity. Automakers are boosting their R&D investment to bring some of that tech know-how in-house as they race to apply software systems and artificial intelligence to cars.Sony had the nation’s fifth-biggest R&D budget; Panasonic was number seven. Other automotive companies were well represented across the top tier of the 189 Japanese companies surveyed. Aisin Seiki which is also another Toyota Group supplier was No. 15, Mitsubishi Motors was No. 22, Mazda was No. 23 and Subaru No. 26. Measured in a different way, Denso took top honours in Japan’s auto sector. Denso spent the biggest chunk on R&D as a percent of overall revenue. Its budget represents 9.5 percent of sales, beating the other automakers and suppliers at the top of the list. @Businessdayng

VW partners business network to develop entrepreneurs

olkswagen has partnered with the Lionesses of Africa organisation to assist in developing their over 600 000 female entrepreneurs across 54 African countries. Statistics indicate that about 50% of start-up businesses in South Africa fail within 24 months due to a range of factors. Lionesses of Africa, a social enterprise organisation, empowers women entrepreneurs by providing free access to development programmes, mentoring programmes, business tools, digital media channels, community platforms and networking events. Lionesses of Africa, the largest all-female business network in Africa, help women to achieve their start-up dreams, while empowering them to generate economic prosperity. A key aspect of Lionesses of Africa’s success is the Volkswagen Lean In Breakfasts, which are a series of monthly networking events hosted around South Africa. At every event, inspirational speakers share their

own entrepreneurial journeys and offer valuable advice. The start-up journeys of these business women encourage fellow entrepreneurs to persevere through the trials and tribulations of starting a new business. This year alone, Volkswagen has hosted six Lean In Breakfasts which have been attended by over 600 entrepreneurs. At a most recent event hosted in Cape Town in July, Debbie Ncube, owner and founder of Eden All Natural Peanut Butter shared her inspirational start-up story, which she ended with, “at the very point that you want to give up, that’s the point where you become an entrepreneur”. According to Statistics South Africa, the unemployment rate in South Africa is 29%. In light of these worrying statistics, VW came on board, in an effort to support Lionesses of Africa’s in delivering impactful results for aspiring women entrepreneurs. “Entrepreneurship is crucial for job creation in South Africa and will have a tremendous impact on the country’s as well as Africa’s economic growth. As Volkswagen, we are excited to be part of this project, which not only applauds female entrepreneurs but also supports them in their pursuit of making a positive difference in their lives as well as in South Africa’s economy,” said Martine Biene, head of the Volkswagen Brand. In celebration of August being Women’s Month, Volkswagen will be showcasing a social media content series with the hopes of widening the business network in South Africa as well as generating further awareness for these businesswomen and their start-ups.

Wednesday 14 August 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

India’s car industry stalls as demand wanes

Commuters nightmare continues on S’East/S’South collapsed road network MIKE OCHONMA & REGIS ANIKWOJI, Enugu

orried by the horrifying reports of bad roads across the country, BusinessDay commenced a selected trip to some of the road networks across the country to assess the traveling experiences of Nigerians on the roads. First on the schedules of the road trips slated from now till the end of the year was a journey to Lagos to Enugu through the Onitsha-Enugu expressway. Clearly, travelling on road to many parts of South East and SouthSouth of of the country with the Ontisha-Enugu road as attest case is provides a very good case of a very important critical road corridor in terms of facilitating commerce and trade on the South East that has suffered many years of neglect. Yes, it can be seen that expansion and modernisation of the road has started, but this is half-way done as contractor handling the projected has stopped work. The experience to helpless road users is better imagined than experienced due to the bad condition of the roads. Along this stretch, commuters can only but have a smooth drive from the Onitsha head bridge all the

way past the Ogidi building materials market and midway, one would encounter a one-way traffic only on one side of the expressway up till the Nnamdi Azikiwe University, Awka. The 9th mile corner, part of the Enugu Onitsha road and Ugwuoba axis of the road are too bad that drivers can be kept for hours. The life of vehicles using the roads is not safe because of tear and wear. This also attributed to high cost of transport fares in the inter state routes. Shorty after this, commuters will begin to experience wear and tear both on their body and the body of the vehicles which in most cases forces drivers to divert towards the longer and narrower old road leading from the Awka intersection through the Oji River old road to Enugu. Thanks to Enugu state government that reconstructed old road from Enugu to Awka. Based on the pressure on the road many parts have gone bad. Our reporter got to Onitsha at 5.38 pm from Lagos, only to arrive Enugu at 8.47 pm, which is almost four hours. A distance that could take one hour in the zones, takes five hours. It is not believable but it is just the truth. This is because, most of the roads do not only have pot holes but also full of gully erosions that put the drivers and their passengers into great danger. For instance, travelling from Enugu to Calabar by road through Umua-

hia, under normal circumstances should not take more than three hours while going through Abakaliki should be less than that. But today, the road from Abakaliki to Calabar immediately after Abakaliki to Calabar is nothing but a traveller’s nightmare. The pot holes and erosions formed on the road do not allow the drivers free movement. From Itigidi to Calabar, a federal road that would ordinarily take about one hour journey can now take more than three hours many hours while from Umuahia to Calabar which suppose to take one or about two hours now takes about five hours. From Enugu to Umuahia has some areas worked on, while most of the parts are still posing great danger to motorists. Enugu-Port Harcourt road has the same bad story although some parts are being reconstructed. However, the cattle market Lokpanta in Abia state back to Enugu has a lot of challenges. The short distance from Oji River to Awgu neglected for along time still needs the attention since the contractor abandoned the road and the major parts of the road has not been attended to. These also contributed to not only killing a lot of Nigerians through multiple road accidents but also aids criminals who use the bad spots of the roads as traps to get innocent Nigerians.

ndia’s economic slowdown, the growing popularity of ride hailing apps and a liquidity crunch among non-banking lenders are all hurting the sector Meanwhile, stalling car sales in India have prompted dealerships to close down and factories to temporarily shut up shop amid the worst slump in almost 20 years, analysts say. “The biggest challenge that the industry faces is weak consumer demand,” says Rahul Agarwal, the director at Wealth Discovery, a stock broking firm based in New Delhi. “There are just not enough car buyers who are willing to buy a car right now. Subdued buyer interest has led to inventory buildup, production cuts and massive job losses in the auto ancillary industry.” More than 280 dealerships have shut down since the start of last year, according to the Federation of Automobile Dealers Association, a lobby group for the sector in India. India’s economic slowdown, the growing popularity of ride hailing apps and a liquidity crunch among non-banking lenders which had become a popular source of loans for consumers are factors that have dampened demand for cars. The car sector is considered a bellwether for the wider Indian economy - and those trends have also been worrying. Only last Wednesday, the Reserve Bank of India, in its bimonthly monetary policy meeting, lowered its growth projection for the current financial year to 6.9 percent, from its earlier forecast of 7 per cent. India has already lost its tag as the world’s fastest-growing major economy after GDP growth in the March quarter of financial year 2019 slipped to 5.8 per cent, government data show. Car sales in India in the quarter to June saw their sharpest fall in almost two decades, according to the Society of Indian Automobile Manufacturers (Siam). Its figures reveal that 712,620 cars and utility vehicles and vans were sold in the quarter, down 18.4 per cent on the same period a year earlier.

in May. Official data have revealed that unemployment in India hit a 45-year high of 6.1 per cent in the year to June last year. Amid the slowdown and reports of job losses, which include temporary positions at car factories, India’s major car companies have suffered dramatic declines in business. The country’s largest car maker Maruti Suzuki saw its passenger vehicle sales tumble more than 36 percent last month compared to a year earlier to 98,210 vehicles. Meanwhile, Honda’s sales in India fell 49 percent and Toyota’s sales last month were down 24 percent on a year earlier to 10,423 vehicles sold in India.

cent of global air traffic. Asia-Pacific airlines recorded a 5.4 per cent decline in demand for air freight in June compared to the same period in 2018. While the US-China trade war is an important

factor, it is not the only reason for the fall. Freight traffic within Asia has dropped more than 10 percent over the past year while air freight capacity increased by 1.8 percent over the same period.

The car industry in the country accounts for more than 7 per cent of India’s GDP and directly and indirectly employs 29 million people, according to Siam. “With no signs of an imminent and fast turnaround, the industry is staring at its worst slowdown, which has deep negative ramifications for the overall Indian economy. The current slump in the sector is a prolonged one and this is the 10th month of continuous decline”. ,” says Agarwal The malaise is so deep that car makers, dealers and parts manufacturers may have cut some 350,000 jobs since April, Reuters reports, citing an unnamed senior industry source. Unemployment is a worry for the country and Prime Minister Narendra Modi’s government, which was re-elected

Africa beats other regions on Asia freight route

… As global air cargo volumes continue to slide

frican carriers reported growth a 3.8 per cent increase in demand in June compared to the same month a year ago, as capacity rose 16.6 per cent. That makes Africa the best performer for the fourth consecutive month, IATA said. Route analysis shows that the Africa-Asia freight performance was strong, with volumes growing 12 per cent year-onyear. Middle East and Asia-Pacific carriers record sharpest declines in cargo volumes in June, International Air Transport Association says. Middle East carriers posted the sharpest declines in freight volumes globally in June as escalating trade tensions

added to an eight-month drop in global air cargo volumes. Regional airlines’ freight volumes fell 7 per cent in June compared to the same month a year ago as seasonally-adjusted demand continued to fall since late 2018, the International Air Transport Association (IATA) said in its monthly report. Freight volumes to Europe and Asia-Pacific were particularly weak, sliding 7.2 per cent and 6.5 per cent, respectively. “Global trade continu es to suffer as trade tensions - particularly between the US and China - deepen,” said Alexandre de Juniac, IATA’s director-general. “As a result, air cargo markets continue to contract.” Global trade growth is slowing www.businessday.ng

and business uncertainty is compounded by the latest tariff increases in the US-China trade dispute. Global air freight demand, measured in freight tonne kilometers (FTKs), declined 4.8 per cent in June year-on-year, making it the eight month of consecutive declines in cargo volumes. “Nobody wins a trade war. Borders that are open to trade spread sustained prosperity. That’s what our political leaders must focus on,” de Juniac said. The Middle East showed the sharpest drop in freight volumes, followed by Asia-Pacific, while Africa was the only region that recorded growth globally, according to IATA, which represents about 290 airlines comprising 82 per

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Wednesday 14 August 2019

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.’

Cadbury Nigeria Plc: Diversified product base bolster earnings ….records largest gross margin expansion among peers BALA AUGIE

uring the recession of 2016, consumer goods companies were grasping for breath from not being able to source dollars to import raw materials, plant and machinery to meet production. Consequently, some multinationals exited the country while some local producers closed shop. The plights of operators in the industry are mounting as a hike in fuel price and a high inflationary environment has dealt a great blow on consumer wallets. To further exacerbate the already anaemic situation of companies is the menacing gridlock at the Apapa ports that causes disruption in production.

Amid the torrid operating environment, Cadbury Nigeria Plc has been thriving, delivering a higher return to shareholders. The company’s strategy is a model for rivals to emulate and magnify earnings. In order to woo consumers, Cadbury redesigned and modified its products, while at the same time strengthening its distribution channels, so that products reach more customers across the country. For instance, Cadbury re-launched its iconic cocoa beverage drink, Bournvita, with a new improved taste, in with its consumers’ taste and preferences. Cadbury Hot Chocolate 3-in-1 brand, its treat portfolio, recorded substantial growth, driven by its unique offering. Diversified product base underpins revenue The consumer goods

Oyeyimika Adeboye, managing director, executive director, Cadbury Nigeria Plc

company released its half year (2019) result showing a modest growth in revenue of 10.14 percent to N19.45 billion from N17.55 billion as at June 2018. The improvement in revenue was driven by beverage sales (contributed 63.3 percent to revenue), climbing by 19.4 percent year on year (yoy) and confectionaries (contributed 26.2 percent to revenue) which improved by 15.1% yoy while intermediate cocoa sales (contributed 10.5 percent to revenue), falling by 27.3 percent. Cadbury’s cost control strategies have yielded fruit as its input costs are lower than inflation rate while it is spending less to produce each unit of product. Cost of sales increased by 3.87 percent to N15.31 billion in June 2019 from N14.74 billion in June 2018. The growth in cost of sales is lower than the 11.22 percent July inflation figure. The slight increment in cost is due to higher cocoa prices between April and July, a period when cocoa’s yield is seasonally low in

Nigeria as the company is fully reliant on local sourcing of cocoa for production of beverage. Total operating expenses were up 12.16 percent to N3.30 billion in the period under review as against N2.94 billion the previous year. The growth in operating expenses was driven by higher marketing and administrative expenses. Cost control drives margins Cadbury has managed direct costs attributable to projects more than rivals. For instance, its gross profit increased by 47.21 percent to N4.14 billion in the period under review. That compares w ith Nestle Nigeria’s gross profit expansion of 18.83 percent, International Breweries 11 percent, HoneyWell Flour Mills 6.82 percent, while Unilever, Dangote Sugar, Dangote Flour, and Nascon Allied Industries suffered gross margin contraction due to lower volume growth that crimped revenue. Cadbury’s gross profit

margin increased to 21.28 percent in the period under review as against 16.02 percent the previous year, thanks to improved operating efficiency amid a tough and unpredictable macroeconomic environment. The Nigerian consumer goods giant also recorded the largest gross profit expansion among peer rivals, and analysts expect that cost pressures will moderate in the second quarter, hence, adding impetus to future gross margin. Cadbury’s EBIT margin increased to 4.56 percent in the period under review from 1 percent the previous year, thanks to growth in net revenue, good cost control and strong productivity. Ne t ma rg i n s, w h i c h shows the extent to which a firm has turned each naira invested in sales into higher profit, increased to 3.44 percent in the period under review as against 2.41 percent. Operating profit stood at N888.77 million in the period under review, from a loss position of N105.63 million it recorded last year. P ro f i t a f t e r t a x wa s N669.93 million in the period under review as against a loss of N423.76 million the previous year. Cadbury has no debt in its capital structure, a low gearing position that gives it the leeway to tap the debt market for capital. Such capital could be used to fund future expansion plans such as the purchase of more equipment and acquisition of latest technology to bolster efficiency. Fixed asset turnover ratio has improved to 150.70 percent in the period under review from 64.60 percent the previous year. A higher ratio means the company has utilized its fixed assets in generating higher revenue,

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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profit, and increased return on equity. Cadbury’s shares are trading at price to earnings ratio of 10.0 times, which means its shares are attractive to investors that crave for a bellwether firm. The Nigerian consumer goods giant has a dividend yield of 2.35 percent as at Monday, as it continues to reward shareholders from distributable profit. It paid total dividend of N471 million for the financial year ended December 31, 2018, in line with its current efforts to create more value for investors. While Cadbury has been able to deliver higher returns to shareholders, it operates in a harsh and unpredictable macroeconomic environment. Consumer goods firms in Africa’s largest economy can no longer pass on high input cost to the already beleaguered consumers that have refused to open their purse strings. An increase in fuel prices and high inflationary environment dealt a blow on consumer wallets, leaving Nigerians impoverished. Post-recession, growth in real household consumption peaked at 3 percent in the final quarter of 2017, before falling to 1 percent in the second quarter of 2018. Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 dollars a day, as the country overtook India to become the world’s poverty capital. The road to higher margins and profitability for the firms appear to be increasingly uphill as economic recovery has been sluggish since the country existed a recession in the third quarter of 2017.

Wednesday 14 August 2019

BUSINESS DAY

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Wednesday 14 August 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Lack of identity, incentive are reasons for business exclusion - Dozie ENDURANCE OKAFOR

ccording to Uzoma Dozie, the last Group Managing Director of Diamond Bank, and Founder/CEO of Sparkle, a mobile-first platform focused on Nigeria’s retail sector, lack of identity resulting from low collaboration between various institutions in Nigeria and the lack of incentive are reasons for the country’s high exclusion rate. “To spur financial inclusion; one of the major requirements is identity. India was able to solve its financial inclusion problem through the introduction of the Pradhan Mantri Jan Dhan Yojana (PMJDY) system, which is used as a means of identity, and through that people could open bank accounts,” Dozie told BusinessDay at Sparkle head office in Lagos. To solve identity problem in Nigeria, founder said Africa’s most populous nation will have to find a way to bring all the data it has into one platform. “Nigeria Inter-Bank Settlement System (NIBBS) have data, then we have international passports, and we also

have driving licence. All the biometric data that we have are with different institutions, how do we bring them together and form one identity?” the CEO questioned. For a large number of the country’s population to be provided with identity, Dozie said “we would have to leverage technology, for millions of Nigerians to have means of identification.” The former Diamond Bank CEO revealed that Sparkle, the AI and Machine Learning Company is going

to play a role in deepening financial inclusion in Nigeria “The role will are going to play will be; making is easier for people to start their business, for the businesses to continue to exist and then we’ll partner with them to grow the business.” According to data by EFInA analysed by BusinessDay, Nigeria’s financial exclusion rate as at December 2018 stood at 36.8 percent, this translates to 36.6 million Nigeria adults who are outside the formal financial cycle.

At the current level, Nigeria has an inclusion gap of 16.8 percent away from the 20 percent target by the Central Bank of Nigeria to be achieved by 2020.To make the dream a reality, the apex bank would have to close that gap in less than five months. “So we are going to make it easy to do things right. Part of financial inclusion is financial literacy, so we are going to also deploy a lot of resources in communicating and educating the public. One of the reasons we were successful at Diamond Bank in penetrating markets, especially in getting the market women to drop their traditional savings system and come to the formal sector was through education,” Dozie assured. According to data by the World Bank, Micro, Small and Medium Enterprises (MSMEs) in Nigeria are estimated at 37 million, and are said to have a finance gap of $158.13 billion. Faced with several challenges, lack of identification prevents the businesses from having a bank account. Thus, lack of financial history daunt their chances of accessing credit especially when they are trying to expand, or fi-

nance their operations and growth, checks by BusinessDay revealed. According to Dozie, the lack of incentive to open a bank account is another reason why exclusion rate is high in Nigeria. “Why do I want to be financially included in Nigeria? What is the benefit, what is the incentive?” The founder added saying “beyond financial inclusion, there is also social inclusion; why do I need a bank account if I can’t afford?” According to Yele Okeremi, MD/CEO of PFS, Nigerians will remain financially excluded because they are financially disempowered. “We still have large population living below two dollars a day, how do you want to include them financially?” the CEO questioned. According to data by the National Bureau of Statistics (NBS) as analysed by BusinessDay, Nigeria’s economic growth rate since 2015 has remained lower than the country’s population growth rate of 2.6 percent While inflation figure for the month of June fell to a 11 months low of 11.22 percent, the figure, however, falls below the central bank’s

target range of 6 percent and 9 percent According to World Data Lab, a predictive analytics social enterprise, Nigerians living in extreme poverty crossed the 83 million mark in 2018, surpassing India’s number of extremely poor at 73 million. This means that almost one out of every two persons living in Africa’s most populous nation is now living in extreme poverty. This is despite India having more population at 1.35 billion than Nigeria, who population is about 201 million people. “Law makers need to come together and look at the regulatory landscape to know if there are laws that hinder inclusion, so it can be reviewed,” Dozie said. The CEO mentioned that, for example “today, you still need to do address verification, which is the Know Your Customer (KYC) policy. It is better to know the customer biometrically- If someone commits a crime today will they still go back to where they live? Information is still as soon as it is given out but where a person is and what he/she is doing is the correct one and with technology that can be done.”

NYSC approves posting of corps members to financial institutions as 80% inclusion deadline nears …expected to open 4.78 million new bank accounts in less than 5 months ENDURANCE OKAFOR

s the target year for achieving 80percent financial inclusion approaches, the need for concerted stakeholder effort has become apparent and the imperative to accelerate progress towards the target has heightened, hence the National Youth Service Corp (NYSC) has approved the posting of corps members to financial institutions. The Financial Inclusion Governing Committee had requested for a posting of National Youth Service Corps on its policy against posting corps members to financial institution and was granted approval, the Central Bank of Nigeria said in its Financial Inclusion Newsletter, released on Friday, 9th August 2019. Almost seven years ago, the central bank in collaboration with stakeholders conceived an ambitious target and as a result, it launched the National Financial Inclusion Strategy (NFIS), aimed at reducing the financial exclu-

sion rate of adult population from 53 percent in 2008 to 20 percent by 2020. According to the apex bank, the secured approval to post NYSC members to financial institutions is to support financial inclusion drive particularly to Women, Youth, Rural Areas, North and MSMES. “The approval which is strictly for account opening purposes for unbanked Nigerians would be for 2019 and 2020,” the lender said. The financial institution regulator added saying “affected corps members will undergo specific training on financial education and financial literacy to enable them undertake financial inclusion as a primary assignment in the service year.” Checks by BusinessDay revealed that before now, corps members were not allowed to serve in banks and other financial institutions since the ban by the Federal Government in November 2011. The then Minister of Youth Development, Malam Bolaji

Abdullahi, had announced the ban during his visit to the NYSC Orientation Camp in Paiko, Niger State. Reason being that corps members posted to the organization were used “to provide cheap labour.” For the central bank to achieve its 80 percent financial target, it would have to bridge Nigeria’s 16.8 percent inclusion gap in less than five months. According to the 2018 figures by EFInA, Africa’s most populous nation had 36.8 percent of its adult population excluded from the financial cycle, this translates to 36.6 million people but the apex bank plans to drive this down to 20 percent by end of the year. A dive into the data by the central bank revealed that joint 23,900 corps members are expected to be posted to the 4,752 branches of Deposit Money Banks (DMB), 898 Microfinance Banks and 7774 Local Government Areas (LGAs) across the nation. By December 2019, the corps members are also ex-

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pected to open 4.78 million new bank accounts; 3.8 million bank accounts by the 19,008 that will be posted to DMBs, 359,200 from the 1,796 that will be posted to MFBs and 619,200 from those that will be serving in LGAs. “The on-going peer educator Programme would be harmonized with the new strategy and those to participate will now be part of the financial inclusion Community Development Service (CDs) Group,” the apex bank explained. According to the lender, modalities for the implementation of the programme are being developed and it is set to commence in October 2019.The modalities would include the needed training, monitoring and incentives system to achieve the objectives. In a bid to aggressively and sustainably ramp up access to financial services to support low income earners and underserved and unserved population, the National Financial Inclusion

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Steering said it approved the conduct of an Account opening week across the geopolitical zones in the country. The approval was given at the 8th meeting of the National Financial Inclusion Steering committee which held on Thursday 25th July, 2019. The event will feature location of financial access points in commercial locations; massive publicity by radio and print media to ensure widespread knowledge and mobilization by State Government. The account opening week will promote and support poverty alleviation and economic development. Following the account opening drive, there will be financial literacy and education on savings, credit, insurance, capital market, product, pension and other services to ensure that there is active transaction in the new accounts opened. Recall that the apex bank had recently addressed a letter to Microfinance Banks informing them of a new @Businessdayng

target for the MFBs to ensure each of their branches each are able to open 774 new bank accounts per annum. “Consequently, all MFBs are hereby requested to implement the above resolution and disseminate same to all their branches (where applicable) to ensure concerted efforts towards achieving the overarching target of 80 percent financial inclusion by the year 2020,” the CBN instructed. In January 2019, the apex bank also unveiled a revised version of the National Financial Inclusion Strategy in which it projected that there would be about 500,000 mobile money/bank agents available to serve about 105 million adult Nigerians by the year 2020. The figure translates to about 476 agents per 100,000 adults. Less than five months to the projected deadline, financial institutions in the country have however enrolled a joint 65,753 mobile agents, data obtained from the Nigeria Interbank Settlement System (NIBSS) showed.

Wednesday 14 August 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

PRIVATE EQUITY DEALS IN 2019 MONTH

ACQUIRER/FUND MANAGER

ACQUIREE

SECTOR

JAN

ACCESS BANK

DIAMOND BANK

BANKING

200

JAN

CARLYE GROUP

WAKANOW

AVIATION

JAN

VecIs and AGL

LEVENTIS

CONSUMER GOODS

JAN

ADVANCED FINANCE and INVESTMENT GROUP (AFIG)

NEM INSURANCE

INSURANCE

JAN

COCA-‐COLA

CHI LIMITED

CONSUMER GOODS

JAN

CDC Group plc

CCAGF

FMCG/AGRIC

JAN

GeneraIon Investment Management (GeneraIon IM)

ANDELA

TECH

100

JAN

STAKE

AMOUNT ($ Million)

12 29% 100%

500

ABRAAJ GROUP

ABRAAJ group

FIN SERVICES

MARCH

SIEMENS LIMITED

DRESSER-‐RAND

AUTOMATION

600

MARCH

VEROD CAPITAL MANAGEMENT

DAYSTAR POWER

ENERGY/POWER

MARCH

COX VENTURES ET AL

FARMCROWDY

AGRIC

MARCH

LENDABLES

ONE FINANCE (OneFI)

FIN SERVICES

MARCH

QUANTUM CAPITAL

TEAMAPT

FINTECH

MARCH May

THEMIS Rise Capital, Adventure Capital, IC Global Partners, First MidWest

KINGLINE GoKada

POWER TRANSPORTATION

5.3

JUNE

Consonance Investment Managers

Mdaas

HEALTH

June

NORTFUND and FINNDUND

STARSIGHT POWER UTILITY LTD

POWER

June

BREAKTHROUGH ENERGY VENTURES, NORTFUND

ARNERGY

ENERGY/POWER

June

IGNITE INVESTMENTS and COMMODITIES

FORTE OIL

OIL

235.8

JULY

IDG Capital, Sequoia China, Source Code Capital

OPAY

TECH

InsuResilience Investment Fund

Royal Exchange General Insurance

INSURANCE

CANAL+

ROK TV

ENTERTAINMENT

OLAM INTERNATIONAL LIMITED

DANGOTE FLOUR MILLS

FMCG/AGRIC

JULY JULY AUGUST

100

331.3

inDriver makes route into Nigeria’s biggest commercial city ... users to determine the cost of their trips ... firm raised $10 million in 2018 MICHAEL ANI

nDriver, an international online ride-hailing service headquartered in New York has today launched in Nigeria’s commercial city, Lagos after years of observing the viability of the market. Africa’s most populous nation would be one of the five countries on the continent in which inDriver is having its footprint after the firm first launched in Tanzania around November last year. South Africa, Nairobi and Uganda are the other markets inDriver currently operates in. The firm promises to deploy innovative strategies that would make the ridehailing platform convenient by enabling users to independently set the prices for their trip, while drivers can choose the most profitable and convenient orders. “Until today, taxi services

in Nigeria did not leave any choice for local residents when it came to the cost of the trip as users were only offered to agree to the price specified in the application or on the taxi counter,” said Egor Fedorov, Chief Marketing Officer, inDriver. “inDriver came to change this situation. We want customers and drivers to independently and directly determine the fair and favourable price of each trip. Already today, residents of Lagos, using inDriver, will be able to make sure that the cost of travel can be significantly lower than the usual prices,” Fedorov said in a statement. Nigeria is Africa’s largest economy with a population of over 200 million, growing at an annual rate of 2.6 percent. Lagos is known to be Nigeria’s commercial hub and the fifth largest economy in Africa with a market that is more than four times its West

African neighbour, Ghana. As the biggest economy in the continent, hailing firms are increasingly expanding their operations into the West African nation to tap into the country’s increasing population that has been projected by the United Nations to reach 400 million by 2030, a figure which would see Nigeria become the third populous country globally. The ride-hailing business has seen increasing competition after American multinational transportation network, Uber, in July 2014 became the first to launch the innovative on-demand private driver application. Taxify followed suit and launched in 2016 while inDriver has joined the league. Since 2016, Uber has faced intense competition from rival firm Taxify both of which has fought to control a larger part of the market. Taxify has expanded operations into Benin, Ibadan,

Owerri and Abuja, while Uber is currently in only two cities in the country Lagos and Abuja. However, unlike both firms inDriver allows passengers to set their fare for their chosen route. Nearby drivers who receive notice of ride requests have three choices - accept the fare offered, ignore the offer or bargain for a higher price. Another unique feature is that drivers are not automatically assigned to riders. Once the counteroffers are in, passengers select the most suitable driver in line with what categories are most important to them fare, driver rating, estimated time of arrival or vehicle model. According to the firm, the app has the option to make the rides safer as passengers can share their GPS location and ride details in real-time from the app with trusted contacts. “The app’s real-time

deals model combats algorithms used by other ridehailing companies, which rack up prices because of peak hours, traffic and request history,” the firm said Operating in over 200 cities across 25 countries, the firm has about 26 million users under its platforms with about 300 million rides. For Nigeria, Lagos is the first city in Nigeria where inDriver has been launched as the company continually find better ways to explore in the market. Since entering the market, the firm has connected more than 6,000 drivers in Lagos, and dozens of new drivers are being registered daily, the firm said. At the initial stage after the start, inDriver will not charge drivers any commission. Travelling with inDriver can be done throughout Lagos’s city borders, the company said currently; one can pay for the ride only in cash, which allows to further

reduce the cost of the trip, as paying by card would increase cost through bank charges. The firm noted that it has been working in Lagos in test mode to collect first feedback. This week showed that prices became more attractive to passengers. Passengers using the app pay on average 20 percent less than with other services. For example, for a ride from Victoria Island to Elegushi Royal Beach Lekki, users paid just NGN 1100, from Shoprite Circle Mall to Chevron Drive Lekki NGN 400. In 2018 the firm raised about $10 million Series B funding to complement the $5 million Series A round that it raised in 2015 from Russian venture fund LETA Capital. Proceeds from the funding were used to expand operations into India, the USA and Canada, where it competed with Uber, Lyft and Ola Cab.

Verod hits $150m Fund III’s final target by interim close MICHAEL ANI

erod Capital Management has announced an interim close of Verod Capital Growth Fund III at $150m, Africa Venture Capital Association (AVCA) reported. The amount exceeded the size of the $115 million

Verod Capital Growth Fund II LP (Verod Fund II) that was closed in 2016. Similar to Verod Fund II, the investment strategy for Verod Fund III is to focus on small and medium scale enterprises in anglophone West Africa, with the aim of building a diverse portfolio across several fast-devel-

oping industries including light manufacturing, consumer goods and services, business services, agriculture, education, healthcare and financial services. Danladi Verheijen, Cofounder and Managing Partner of Verod Capital, said: “We are very grateful for the confidence of our

world-class set of investors in our team and differentiated value-creation strategy. We continue to attract an extremely high caliber set of investors and we look forward to working with them to support the growth businesses in our markets.” Verod Fund III is supported by a diverse group

of prominent global institutional investors and includes a mix of international fund of funds, asset managers, foundations, sovereign wealth funds, family offices and development finance institutions with extensive experience investing in emerging markets. The firm says it expects to hold a final

close later this year. Asante Capital acted as global fundraising advisor, Clifford Chance (UK), BLC Chambers (Mauritius) and Udo Udoma & Belo-Osagie (Nigeria) acted as legal advisers, while Trident Trust (Mauritius) will provide administrative services to Verod Fund III.

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

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

Wednesday 14 August 2019

BUSINESS DAY

tax issues 15% tax-to-GDP ratio possible on implementation of some initiatives – KPMG Iheanyi Nwachukwu

PMG has identified some initiatives that the Federal Government and State Governments should implement to improve the overall tax environment, saying that it will also help to achieve the government’s target of 15 percent tax-to-GDP ratio. At about 6.5percent, Nigeria’s tax-to-GDP ratio is one of the lowest in the world. While the achievement of the Federal Government stated objective in the Economic Recovery and Growth Plan (ERGP) may prove to be a Herculean task, the implementation of some identified initiatives will help make the Nigerian tax environment competitive, KPMG said in the third edition of its ‘Nigerian Tax Journal 2019’. The professional services firm provides audit, tax and advisory services including industry insight to help organisations negotiate risks and perform in today’s dynamic and challenging environments. Wole Obayomi, Partner and Head Tax, Regulatory and People Services, KPMG said in the May 2019 report that “the need for tax administrators to continuously adhere to the canons of taxation for efficient and effective tax administration cannot be overemphasised”. This, he noted is especially necessary to reduce tax controversies and disputes to the barest minimum. “Furthermore, the constantly changing economic landscape requires governments at all levels to develop frameworks that will pro-

vide a competitive tax landscape for business, effectively accelerate tax revenues, proactively curb tax evasion, and create opportunities for the country’s teeming population”, he added. According to him, “A situation where the last time the Companies Income Tax Act (CITA) and Value Added Tax (VAT) Act were reviewed was 12 years ago leaves much to be desired. Thus, there is an urgent need for government to reform our outdated tax laws to reflect current economic realities.” “An efficient way of doing this is to return to the practice of enacting a Finance Act soon after the passage of the annual Federal Budget through which our tax laws can be constantly reviewed in accordance with global best practices. Government must also be fiscally responsible by being accountable for the revenues gener-

ated and thereby win taxpayers’ confidence to improve voluntary compliance”, he stated. In the tax outlook section by Adewale Ajayi, Partner, Tax Energy and Natural Resources and People Services, KPMG, the firm asked to fix the teething problems that have plagued the deployment of technology in tax administration. “These include issues of frequent downtimes and the delay in rolling out electronic foreign currency denominated Withholding Tax (WHT) credit notes”, according to the professional services firm. KPMG had expected Government to extend the VAT exemption of commissions on Stock Exchange transactions Order, 2014, which elapsed on July 24, 2019 “pending when the Nigerian capital market will be sufficiently deepened.”

Government, according the professional service firm needs to finalise the draft Executive Order on the modification of VAT in the Nigerian electricity supply industry. “However, the scope of the Order should be expanded to include mini-grid operators, which act as both generating and distribution companies. Hopefully, the current dispute between the Nigeria Customs Service and the Renewable Energy Association of Nigeria on the applicable duty rate for solar power equipment will be resolved”, it stated. The firm wants Government to hold stakeholders’ consultation before finalising tax-related public notices, regulations and directives. The firm also urges Government to “Domesticate the Common Reporting Standard (CRS)-Multilateral Competent Authorities Agreement

(MCAA) to enable relevant tax authorities (RTAs) in Nigeria to automatically exchange tax information with tax authorities in participating jurisdictions. “Prosecute tax evaders that failed to take advantage of the VAIDS programme. This will ensure the credibility of future tax amnesty programmes, and serve as a deterrent to other taxpayers”. It wants government to implement an effective tax risk management process, “given the resource constraints faced by RTAs. This will help streamline tax audit processes, and enable RTAs to bring more individuals and informal sector players into the tax net”, according to KPMG. Also, the firm wants Federal Government to operationalise the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme, and partner with the private sector on other wellthought-through, developmentfocused tax incentives in critical areas like power, healthcare, and education. According to KPMG, Federal Government will need to enact critical legislation such as: the Petroleum Industry Governance Bill (PIGB); the other components of the Petroleum Industry Bill (that is the Petroleum Industry Fiscal Bill and Petroleum Host Community Bill); the Companies and Allied Matters Act (Repeal and Re-enactment) Bill, 2018; and the Omnibus Bill “that was developed by the PEBEC in conjunction with numerous private sector players and think tanks to amend obsolete and anti-business provisions in various, extant pieces of legislation.”

Disclosure of CEO Pay Ratio in the Nigerian Context Nneka Jethro-Iruobe

emuneration remains a key lever as companies seek to attract, motivate and retain talent, critical to the achievement of business objectives. A constant concern for every organisation is determining how much pay is competitive enough to reward and attract the best talent. Strongly linked to this, is the need to determine how rewards should be differentiated across grade levels / job roles. In some jurisdictions, the question on the magnitude of pay differentiation, further strengthened by the call for improved equality in wealth distribution, has birthed concepts like the Chief Executive Officer (CEO) Pay Ratio. This ratio is aimed at quantifying the difference between executive pay and pay for other employees within the organisation. It is assumed to have the potential to check excessive executive pay while enhancing equity and fairer distribution of company funds earmarked for remuneration. However, there are concerns whether benchmarking CEO Pay Ratio provides adequate information for broad-based pay decisions.

The US Securities and Exchange Commission (US SEC), in line with the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010, requires USquoted companies, with effect from January 2018, to disclose the ratio of their CEO’s pay to the median pay of all other employees (the CEO Pay Ratio). This disclosure requirement is part of additional corporate governance requirements around Executive remuneration. Regulators in the UK and Australia are also debating / considering adopting this requirement for CEO Pay Ratio disclosure. This continuous evolution in corporate governance requirements is aimed at improving the performance and sustainability of businesses. Countries keen on economic growth recognise how critical institutionalising corporate governance is to boosting Investors’ confidence. Complying with the CEO Pay Ratio disclosure requirement is an evolving conversation that is still fraught with challenges in the relevant jurisdictions. The challenges include the methodology for determining who the median employee is, what inferences / comparisons, if any, can be safely drawn across companies and industries on this ratio and justifying www.businessday.ng

the man-hours spent in computing this ratio. While regulators and other stakeholders refine this disclosure requirement, it is pertinent to note that a major driver of all forms of pay disclosure demand is the need to create structure around pay delivery, institutionalise pay frameworks that support objective and equitable pay delivery and check excessive executive pay. These pillars present a strong foundation for corporate governance in remuneration matters that is critical for business growth. Nigeria, as a developing economy, is edging up its alignment with global corporate governance practices as seen in the recentlyreleased Nigerian Code of Corporate Governance (NCCG) by the Financial Reporting Council (FRC) of Nigeria. The Code reiterates the shareholder say on-pay requirement for Director Remuneration and requires the Board of Directors to set Executive Pay. Furthermore, the NCCG requires an increased level of remuneration information disclosure, albeit lacking in specifications on the format of disclosure. Without specifications on the format for pay disclosure, Nigerian companies may continue to simply disclose generic ranges on the highest paid directors and total wage

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bill, leaving out the analysis of the pay. Disclosure of individualised pay breakdown is considered global best practice and a hallmark of corporate governance as it enables independent parties and stakeholders to determine / evaluate executive pay. As Nigeria evolves in its regulations on corporate governance, the question arises as to when and if companies will be required to disclose individualised executive pay, an input for CEO Pay ratio disclosure. The level of insecurity in the country raises concerns on the safety of executives should their remuneration information enter the public domain. While this remains a valid concern, Nigerian companies could begin adopting the guiding principles of defined pay structures and remuneration policy documents that support objective Executive pay determination and position a company as transparent and objective in its remuneration practices. Most companies have employment contracts but need to improve in developing and maintaining pay policy and pay structure documents. Objectivity, transparency and appropriate documentation of remuneration policies are foundational to pay disclosure and necessary for the insti@Businessdayng

tution of other corporate governance practices like regulations on quantum of pay. An example of pay quantum regulation is the European Union Capital Requirements Directive that stipulates a bonus cap for financial institutions, where variable remuneration is limited to 100 percent (or 200 percent with shareholders’ approval) of Fixed Pay. Well-articulated remuneration policy documents eliminate ad-hoc adjustments to pay / individualised, undocumented pay reviews and unexplained payouts which could compromise internal pay equity and create employee mistrust. Disclosure may not necessarily provide the basis for judging the appropriateness of pay packages. However, it supports the reasonability and affordability check in setting pay levels, which boost Investors’ confidence, support sustainable business and allow for increased economic growth. Regulators may, therefore, begin by requiring documented remuneration policies and pay frameworks as Nigerian companies grow in alignment with good corporate governance practices. Jethro-Iruobe is Manager Compensation and Benefits Practice, KPMG in Nigeria

Wednesday 14 August 2019

BUSINESS DAY

POLITICS & POLICY Bayelsa: I am best to be Sanwo-Olu transmits final list of commissioner, special adviser-designates next governor - Ikoli to Lagos assembly for screening INIOBONG IWOK

JOSHUA BASSEY

abajide SanwoOlu, Lagos State g ove r n o r, o n Tuesday, transmitted the final list of his cabinet nominees to the State House of Assembly. This is coming four weeks after the governor sent the first batch of the list to the lawmakers for screening. Thirteen Commissionerand Special Adviser-designates made the second list, which had already been transmitted to the legislature. A statement by Gboyega Akosile, deputy chief press secretary to the governor, said the second list had names of accomplished politicians and technocrats who “understand the current need of Lagos” and the development agenda of the governor. The governor’s media aide said the selection process was rigorous, because of the need to constitute the best team that would serve Lagos in line with the

Sanwo-Olu

Sanwo-Olu administration’s vision of delivering a citystate that will rank among the topmost liveable cities in the world. Those who made the sec-

ond batch are Oladele Ajayi, Oluwatoyin Fayinka, Yetunde Arobieke, Olanrewaju Sanusi, Joe Igbokwe, Bonu Solomon Saanu, and Kabiru Ahmed.

Others are Lola Akande, Anofi Olanrewaju Elegusi, Solape Hammond, Moruf Akinderu Fatai, Shulamite Olufunke Adebolu and Tokunbo Wahab.

Taraba lawmaker advocates for appointment of youths as Ishaku prepares new cabinet urged all the people to consider the plight of the students and the image of the state and not to drag ethno-religious differences into the centre of academic excellence.

NATHANIEL GBAORON, Jalingo

mam Imam, a member representing Jalingo in the Seventh Assembly, has called on Governor Darius Ishaku to commit more youths in his administration so as to experience more development in the state. Imam made the call during an interaction with newsmen in Jalingo on Tuesday in continuation of the Sallah celebration. The former lawmaker and youth ambassador noted that great percentage of the state’s population are youths but previous governments have paid little attention to the youth, giving rise to the high rate of youth restiveness in the state. “Let me use this opportunity to congratulate all the Muslim Ummah in this auspicious occasion and enjoin them to join hands with this government to move the state forward. “We have a precedence of recycling politicians in the state, leaving little room for youth to play key roles in government. This has been

s the Bayelsa State governorship election gathers momentum, one of the People’s Democratic Party (PDP) governorship aspirants in the race, Anthony George-Ikoli, has described his chances of becoming the flag bearer of the PDP and governor of Bayelsa State in the November election, as bright. Ikoli, a lawyer, said, “I ran a very successful law practice. I went into government and also proved my mettle. The other contestants did not manage any enterprise successfully. I am not intimidated by the curriculum vitae of other contestants. I think I am better. I think I am the best. When given the opportunity, the story would never be the same again. “I know what I can do. People know what I have done. The other contestants are afraid of me. They are afraid of my profile. I don’t see anyone that will make me panic or have undue anxiety. We are hoping that the party will give everyone a fair chance to contest. My chances are bright. From my interaction with all the stakeholders, I’m the candidate to beat. I am the next governor of Bayelsa State.” He spoke on Tuesday in Yenagoa on his vision for Bayelsa State and on the achievements of Governor Seriake Dickson and other issues in the oil rich state. He said he joined the gubernatorial race to change the narrative in the state, adding, “I was Attorney General and Commissioner for Justice in Bayelsa State and I think Bayelsa State deserves better. The current government has done fairly well. Bayelsa

State requires somebody with my level of exposure and attainment to build upon the achievements of the current government. “I have spent quite a bit of time diagnosing the issues. We need better and more access to education. The current administration has actually tackled it very well. There is need to sustain and build on that legacy. “There is need to empower the people. We need to build trust. We need to create an economy so that we don’t run to Abuja or depend on the Federal Government handout. I can make a huge difference. Considering my track record, what I did as Attorney General, there is evidence that with someone like me in office, the narrative will change dramatically for the better.” A grassroots politician, Ikoli praised DiepreyeAlameyeseigha, Goodluck Jonathan and Governor Seriake Dickson for their contributing to the development of the state. “History judges everyone. The current governor is on his way out. History will write his epitaph. Governor Seriake Dickson has done very well. He has raised the bar. It is for us to raise the bar even higher. Bayelsa State is unique. It is the heart beat of the Niger Delta region. It is also a homogenous Ijaw State. Anyone who governs Bayelsa is automatically Ijaw leader. “Dickson has done well in protecting the Ijaw nationality and projecting the Ijaw interest in the larger Nigerian context. He has reasons to be proud of his achievements in education, security, managing the resources of the state and infrastructure.”

Security: BMO thanks Nigerians, urges more support for troops SAMUEL ESE, Yenagoa

largely responsible for the high rate of youth restiveness and, consequently, insecurity in the state. As a youth ambassador, I call on our able and very considerate governor to consider more youths as he constitutes his cabinet. “This will not only take more youths off the streets, but it will ginger more youths to start thinking more productively, knowing that productivity pays. That is the only way to check youth restiveness and insecurity in the state. “Let me also use this opportunity to urge the Tiv and Jukuns to sheath their swords and embrace peace for our www.businessday.ng

common good. No one will ever win this fight. There are Tivs in Taraba, some occupying public offices just as we have Jukuns in Benue. We cannot run away from this. Let us build on our diversity for progress rather than retrogression”. Imam further said: “Taraba State deputy governor Haruna Manu has demonstrated that youths are not only very competent but that they have the capacity to be absolutely loyal and work for peace while bringing uncommon initiatives to administration”. The lawmaker lamented the security challenges that led to the closure of the Federal University Wukari and

he Buhari Media Organisation (BMO) has thanked Nigerians for their support to the security agencies in the fight against insurgency and banditry in the country. In a statement highlighting the “steady, impactful and strategic progress made by the Buhari administration in restoring peace nationwide”, the group called on Nigerians to support and cooperate with the security agencies in restoring internal security. In a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, the group noted that “The security architecture of the country has been re-jigged for optimal success as experienced in the various operations by the security agencies with the aim of safeguarding the citizens, as enshrined in

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the Constitution.” BMO posited that, “the government made significant military gains, reducing the number of Boko Haram attributed deaths from more than 5,000 in 2015 to less than 1,000 in the past couple of years. “There is no country that doesn’t have its own share of security problems. It is left for those who superintend the affairs of that country to take decisive actions that will effectively nip such problems in the bud. “Before President Muhammadu Buhari’s arrival, Nigeria was a theatre of the absurd. Ragtag armies of insurgents carved out empires by dominating every security apparatus in that area. People in the North-East and North-West were becoming accustomed to the sounds of bomb blasts. Right from his acceptance speech, President Buhari directed the military to redeploy @Businessdayng

their operational bases to Maiduguri. This underscored his desire for a more secured nation”. The group, while acknowledging that there can be no social or economic advancement where there is no security, said: “This government is not just focusing on security, but investing in peace-building, reconstruction, reconciliation, reintegration and socio-economic development of the people. “We use this medium to salute our heroic uniformed personnel for paying the supreme price for the stability of our dear nation, and commend our international allies for their immense support. “Terrorism isn’t something you defeat completely. Dislodging terrorists, reducing the rate of attack, and giving them a good platform for their annihilation is a good way to start”.

Wednesday 14 August 2019

BUSINESS DAY

news Failures of past trade agreements hold lessons... Continued from page 1

Free Trade Agreement (AfCFTA) knocks. The AfCFTA seeks to liberalise trade among African countries. It is targeted at a ‘borderless’ Africa, with an eye on a single market for goods and services on the continent. Experts believe it is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994 and a flagship project of Africa’s Agenda 2063, targeted at creating a single market for 1.2 billion people and exposing each country to a $3.4 trillion market opportunity on the continent. But the lessons from failed past trade agreements remain relevant for African countries as AfCFTA nears. In 1967, Kenya, Uganda and Tanzania agreed to form a new East African Community (E AC) and signed a number of protocols on free movement of goods and persons. According to Aloysius Uche Ordu, former vice president of African Development Bank, the agreement led to free movement of people within the community. “Intra-area trade grew significantly. Common services – universities, airlines, railways, and other infrastructures – arose,” he said. However, this agreement collapsed 10 years later due to political and ideological differences. While Kenya chased capitalist policies, Tanzania went socialist. Even after a re-launch in 2000, the protocols are almost broken down today due to border clashes which are expected to fuel trade war. For instance, Uganda-Rwanda border is closed, frustrating movement of goods between both countries while raising logistics costs. In 2010, Uganda, Kenya and Tanzania signed an agreement known as Common Market Protocol to guarantee free movement of labour, goods and capital across the countries. But customs of individual countries, rather than the protocols, dictate what comes in. On November 19, 2018, Ugandan agriculture exporters staged a demonstration at the southern border post of Mutukula owing to Tanzanian customs officials denying them opportunity to sell beans and maize in Tanzania for many months. “Several trade agree-

ments have failed in Africa because of absence of will to implement protocols,” Ike Ibeabuchi, CEO of MD Services Limited, a servicing and manufacturing concern, said. “Some are also a result of poor infrastructure and different levels of economic growth. Africa, especially Nigeria and South Africa, should look at the causes of these failures and guard against them,” he added. Perhaps, it is important for champions of AfCFTA to recall why Tanzania withdrew from Common Market for Eastern and Southern Africa (COMESA) in 2000 six years after joining. The East African country complained of loss of revenues due to lowering of tariffs and rising poverty rate. “Reducing tariffs to 100 percent was a threat for Tanzania because, according to trade policy review of 2000, Tanzania was heavily relying on revenues from trade tariffs and VAT,” Suleiman Hji Suleiman of the Shandong University, China, wrote in a paper. More so, the Southern African Customs Union (SACU) is failing due to outdated border checks which frustrate traders across the union. Archie Matheson, head of policy and analytics at Botho Emerging Markets Group, an Africa-focused investment consultancy group, said already-existing trade areas such as the EAC and COMESA still contend with several practical challenges around non-tariff barriers which must be addressed first as the AfCFTA will likely face similar issues. He, however, acknowledged that the AfCFTA will have a positive impact on the intra-African trade of goods and services. “It is vital that expectations of governments and businesses are managed, and that signatories have the patience to deliver a project over what will be a long time period,” he added. B a b a t u n d e Ru w a s e, president, Lagos Chamb e r o f C o m m e rc e a n d Industry (LCCI), however, said in Lagos that the upsides of AfCFTA outweigh downsides. “We maintain that the AfCFTA would improve trade among African c ount r ies a nd p rov ide opportunity for Nigeria to export to other African countries,” he said. www.businessday.ng

L-R: Christian Epps, Hollywood base lighting designer; Caroline Oghuma, executive head, corporate affairs, MultiChoice Nigeria, and Femi Odugbemi, academy director, MultiChoice Talent Factory West Africa, during the MTF Masterclass Series on Cinematography held at SuperSport Studio, Lagos, yesterday.

Buhari asks CBN to halt forex for food... Continued from page 1

cheaper than local production, as industry experts have noted in several instances. “President @MBuhari Tuesday in Daura, Katsina State, disclosed that he has directed the Central Bank of Nigeria to stop providing foreign exchange for importation of food into the country, with the steady improvement in agricultural production, & attainment of full food security,” wrote Garba Shehu, SSA, Media and Publicity to the President, in one of a series of tweets yesterday. The comments were the aftermath of a meeting where President Buhari hosted the All Progressives Congress (APC) governors to Eid-El-Kabir lunch at his country home in Daura. The president, according to the tweets by his spokesperson, had expressed the view that the foreign reserve will be conserved and used for the diversification of the economy, and not for encouraging more dependence on foreign food import bills. “Don’t give a cent to anybody to import food into the country,” Shehu quoted Buhari to have said. Ef f o r t s t o re a c h t h e CBN on this development were unsuccessful as Isaac Okorafor, director, corporate communications department of the apex bank, neither answered calls put across to him nor responded to messages sent to his phone. Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited, said the president’s directive may encourage local production of food items and generate employments provided Nigeria has the

capacity in the production of the food item. “However, it is important to note that there are some food items that Nigeria does not have comparative advantage of their production. And if Nigeria does not have a stock of these food items in place already, the prices of food items may go up,” Akinwunmi said. “More importantly, Nigeria needs to build competitive advantage in food production to ensure that we are able to feed ourselves,” he said. In reality, farm productivity in Nigeria has struggled to improve in recent years as despite intervention programmes by the government, insecurity and violent attacks on farming communities have wiped out significant portions of what should have been gains. At the same time, farm yields in the country remain among the lowest in the world. Even though more people appear to have been incentivised to take up farming owing to government’s increasing rhetoric, land under cultivation has increased in some places (where insecurity is not a deterrence), but actual productivity in terms of yield has not substantially improved. Infrastructure for the entire agricultural value chain has also implied many countries have an edge over Nigeria, and invariably, imported goods become cheaper. “Many of the countries where these things (i.e., agricultural goods) are coming from have built an infrastructure that makes it a lot cheaper (to produce). The cost of doing business in those countries is far lower,” said Emmanuel Ijewere, vice president, Ni-

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geria Agribusiness Group (NABG), told BusinessDay in an earlier report. “They have electricity, good roads and so on, so they already have an advantage over us.” The president, according to the statement, said some states like Kebbi, Ogun, Lagos, Jigawa, Ebonyi and Kano had already taken advantage of the Federal Government’s policy on agriculture with huge returns in rice farming, urging more states to plug into the ongoing revolution to feed the nation. However, as BusinessDay analysis of data in the Agriculture Promotion Policy released in 2016 has noted, Nigeria has a deficit across every type of food produce. In fact, Nigeria as at 2016 had a 20.14 million metric tonne deficit across 13 major crops and a 60 million poultry bird deficit. Three years later, with the rapidly growing population, and insecurity threatening farming activities in many parts of the country, this deficit would have increased substantially. According to the National Bureau of Statistics (NBS), in the first quarter of 2019, the trade in agricultural goods stood at N322.4 billion representing 3.9 percent of the value of total trade. The export component of this trade was valued at N86.1 billion. Compared with N97.3 billion recorded in the previous quarter, this represented a decrease of 11.89 percent, but indicates an increase of 17.5 percent when compared with Q1, 2018. In terms of imports, agricultural products were valued at N236.33 billion or 6.4 percent of total imports during the period under review. The major driver @Businessdayng

was Durum wheat (not in seeds) imported from the United States and Russia at values of N19.6 billion and N17.8 billion, respectively. Other drivers were Durum wheat in seed imported from Argentina (N18.7 billion) and the United States (N18.1 billion). Following wheat in the first quarter was Mackerel (Scomber scombrus, Scomber australasicus, Scomber japonicus) meat, herrings and other frozen protein food items. “We have achieved food security, and for physical security we are not doing badly,” Buhari said in the tweets by Shehu. However, 5.3 million Nigerians experienced acute food crisis in 16 states of northern Nigeria last year, as the country was identified among eight countries with the worst food crises in 2018, which accounted for two thirds of the total number of people facing acute food insecurity in the world – amounting to nearly 72 million people. This was the finding of the 2019 Global Report on Food Crises, which highlighted northern Nigeria as the driver of food insecurity, with the country in the league of eight countries expected to remain among the world’s most severe food crisis regions in 2019. As BusinessDay reported, things may improve, but they could also get worse, as an additional 22.7 million Nigerians in the north alone are at risk of food crisis if things do not improve. The number will increase dramatically when the southern regions begin to feel the pinch of insecurity more than being currently experienced, leading to an even worse decrease in food production.

Wednesday 14 August 2019

BUSINESS DAY

news Benin auto part dealers count losses as fire guts market IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

uto spare part dealers are counting their losses following inferno that destroyed their goods at Ewelu Motor Spare Parts Market in Benin City. The inferno said to have started about 11:30pm to the wee hours of Tuesday morning affected hundreds of stores. The parts of the market badly affected are Mercedes B enz, Mazda, Fo rd a n d Toy o t a p a r t s’ lines. Sp e a k i n g w i t h n e w s men, Ibie Augustine Osaretin, chairman, Motor Spare Parts Association, Uwelu branch, said the fire destroyed hundreds of shops worth millions of naira. “My store is also affected and was razed down. Some of my traders just came from the Onitsha and Lagos market, yesterday. We have lost hundreds of millions of naira and hundreds of shops were destroyed by the fire,” Osaretin said. Osaretin also lamented that the fire incident had compounded the low patronage they were witnessing due to bad roads leading to the market. While noting that majority aof traders took loans from microfinance banks to sustain the business, he,

however, called on the state government, local government authorities and wellmeaning Nigerians to come to their aid. Also speaking, Maxwell Festus, a Mercedes-Benz dealer, lamented that some traders lost goods worth N15 million. According to Festus: “ We are yet to ascertain what actually happened that led to the fire. We could not remove anything from our shops. “Many boys that just got freedom from their masters and open their shops. They are yet to repay the loans t h e y t o o k f ro m v a r i o u s banks.” Another trader, Daniel Okungbowa, who said he lost about N4 million to the incident, added, “This was not the first time the market was being gutted by fire.” He explained that the market was also gutted by fire two years ago and that it was not as serious as the one that just happened. He said the situation was however brought under control by the combined efforts of fire servicemen from the University of Benin and the Nigerian Army.

Discos suspension: Association assures speedy resolution

ssociation of Nigerian Electricity Distribution (ANED) says it is working with stakeholders in the power sector to address issues that led to the suspension of some of its members. Sunday Oduntan, executive director, Research and Advocacy, ANED -umbrella body of electricity Distribution Companies (Discos) -disclosed this in an interview with the News Agency of Nigeria in Abuja on Tuesday. Oduntan said the association had taken practical steps to address the issues that led to the disconnection of some facilities of its members by Transmission Company of Nigeria (TCN). “We will continue to work with all stakeholders in the industry. Our members will also continue to do their best to meet our obligations to the market. “However, we want people to realise that electricity is a utility which has to be paid for. “People must know that we have to pay to the transmission companies just as we also enjoin our customers to also pay to us,’’ he said.

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Oduntan explained that the disconnection of the Discos was a direct effect of liquidity crisis in the Nigeria power sector. “The liquidity crisis that we have, has brought about a very huge short fall in the market. This is making it impossible or difficult for market participants to meet their obligations. “In the case of Discos, we are under-selling our products because we are buying at a higher price than the price we are selling to electricity consumers. So, it has become difficult for us to pay our creditor. That is what is going on,’’ he said. In the last few weeks, suspension and disconnection orders had been issued against, Kano, Port Harcourt, Enugu, Eko and Ikeja Discos. The suspension order followed default of the “Market Conditions/Market Participation Agreements’’ by the Discos. TCN has, however, lifted the suspension on Enugu, Eko and Ikeja Discos after they complied with the agreement while Port-Harcourt Disco is still on suspension.

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L-R: Babajide Sanwo-Olu, Lagos State governor; Atiku Bagudu, chairman, Progressives Governors’ Forum/Kebbi State governor; Kayode Fayemi, chairman, Nigeria Governors’ Forum/Ekiti State governor, President Muhammadu Buhari; Aminu Masari, Katsina State governor; Ovie Omo-Agege, deputy Senate president; Nasir el-Rufai, governor, Kaduna State, and Godwin Obaseki, governor, Edo State, at the governors’ visit to the President in Daura, Katsina, yesterday.

Apapa: NPA to roll out electronic call-up system October JOSHUA BASSEY & ISRAEL ODUBOLA

ice-chairman of the Presidential Task Force on the Restoration of Law and Order in Apapa Ports Area, Kayode Opeifa, has confirmed the acquisition of the long-awaited electronic callup system by the National Port Authority (NPA). The system designed to regulate the inflow of container-laden trucks into the ports, according to Opeifa, will be rolled out before the end of 2019, possibly October. It will ensure that only trucks having genuine business transaction within the ports are allowed into Apapa from the Lilypond Terminal and other terminals. This is majorly aimed at decongesting the roads and bridge leading into the ports environment as a medium-term measure pending the completion of ongoing rehabilitation of the rail system believed would be the lasting solution to the Apapa gridlock and its consequential

economic losses. Opeifa spoke during a meeting of the presidential task team with Apapa Government Resident Association (AGRA), in Lagos, Tuesday. According to Opeifa, in addition to the expected introduction of the electronic call-up system, the ongoing rehabilitation of Liverpool road, Ring road and Apapa-Oworonshoki expressway, when completed, would add to further decongest the area just as he stated the resolve of the task team to sustain the current flow of traffic into Apapa. Opeifa, who was also a former commissioner for transportation in Lagos, explained that while the traffic situation had improved in Apapa, especially during the day, more needed to be done in the night. “Our mandate is to ensure law and order is restored in Apapa and create an efficient traffic management system that allows free movement of people, fuel and cargo,” he said. “You cannot prevent trucks

from entering Apapa. Shutting them off means loss of revenue for Nigeria as proceeds from ports is the third largest income source for the country, but we have a task to manage the situation in a such a way that we do not block the residents from exiting and accessing their homes,” he said. Chairman of AGRA , Ayo Shola-Vaughan, thanked the presidential task team for coming to the rescue of the port city, and noted that the meeting was convened to enable residents review the performance of the task team as regard sanitation of Apapa. “We organise this meeting because we want to hear from you to know if the task team has done a good job,” he said. A legislator representing Apapa at the Lagos State House of Assembly, Mojisola Beranda, disclosed that plans were under way by the Lagos State government to introduce Bus Rapid Transit (BRT) to Apapa through the Eric Moore corridor in Surulere. “The state government has proposed two routes for BRT.

The first route is from Alakija to Liverpool. Second route is from Eric Moore to Wharf Road,” Beranda said. In addition to this, plans, she said are also being made to revamp water transportation system in Apapa. “We have met with Lagos State Water Authority (LASWA) and stakeholders in the transportation sector on how to develop our water transport system, but one thing prolonging this initiative is that our jetties are below global standard,” she said. Mufutau Egberongbe, a legislator representing Apapa at the Federal House of Representatives, maintained that the task force is bedevilled with logistic challenges, saying proper funding will enable them deliver excellent results. “I advise that government should supply them with tracking machines and scanners to enable them monitor ships, carry out inspection, to ensure the ports are in good condition,” Egberongbe said.

NGO calls on DSS to release arrested journalist in Kaduna Adeola Ajakaiye, Kano

edia Rights Agenda (MRA) has condemned the arrest and continued detention of Ibrahim Dan Halilu, a journalist and former Political Editor of Daily Trust newspaper, by operatives of the Department of State Security (DSS) and called for his immediate and unconditional release from custody. Calling on the Federal Government to compensate Halilu for the brazen violation of his rights, MRA noted that he was arrested in the early hours of Monday, August 5, 2019, at about 2.30am by DSS operatives who raided his home in Kaduna and had since held him in custody in Kaduna, except for a brief period when he was reported to have been briefly released on August 6. MRA contended that the actions of the intelligence agency amounted to a breach of the Constitution and Nigeria’s ob-

ligations under international human rights Law. In a statement made available to BusinessDay, Edetaen Ojo, MRA’s executive director, said: “It is now over one week since Halilu was arrested and he continues to be held in unlawful and unconstitutional detention as no charges have been filed against him nor has he been arraigned before any court of law as required by Section 35(4) and (5) of the Constitution. We strongly condemn such arrogant violation of the Constitution and careless disregard for the rights of a citizen.” He said MRA learnt that after his arrest and while in custody, Halilu was asked to write a statement on his connection with Omoyele Sowore’s political movement that called for nationwide protests from August 5, 2019, under the hashtag “#RevolutionNow,” which he did, making it clear to the DSS that he had no link with either Sowore himself or with

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his political movement. According to Ojo, Halilu’s “offence,” for which he is now being punished by an agency that has constituted itself into a complainant, prosecutor, judge and jury, appears to have been sharing a social media post from Sowore’s political movement on his Facebook page in which he essentially criticised the government’s performance. He said: “The right to freedom of expression is a protected human right both under our Constitution and under international human rights law, and the right includes the freedom to impart information and ideas of all kinds through any media of one’s choice. It has not been shown that Mr. Halilu has done anything to warrant any restriction on his exercise of this right or that merits punishment. If there is any allegation or suspicion that he has, the proper thing for a government that appreciates the concept of the rule of law to do is to charge him @Businessdayng

before a court of law.” Ojo argued that the DSS had clearly been unable to charge Halilu before any court because it has no evidence linking him with the commission of any offence prescribed by Law but has chosen to punish him for criticizing the performance of the government, an act that cannot amount to a crime. Urging the Federal Government to prevail on the DSS to release Halilu from unlawful custody, he said: “We call on the Government and its security agencies to follow the path of constitutionality. Those who derive their authority from the Constitution and exercise their powers under it have a profound duty to strictly and scrupulously comply with its provisions, otherwise they may unwittingly destroy the basis of their authority and powers when ordinary citizens become motivated to follow their example and similarly cast aside the Constitution.

Wednesday 14 August 2019

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Ebola resurgence: NCAA advises Minimum wage: Group calls for Dangote Cement splashes N50m airlines to exercise high-level vigilance compromise between Labour, FG worth of gifts on customers in Edo IFEOMA OKEKE

ollowing the resurgence of the Ebola Virus Disease (EVD) in the Democratic Republic of Congo (DRC), the World Health Organisation (WHO) has declared the outbreak a Public Health Emergency of International Concern (PHEIC) in line with International Health Regulations (IHR). Consequently, the Nigerian Civil Aviation Authority (NCAA) has directed all operators, especially airlines operating regional and international flights into the country, to exercise a high level of vigilance. The directive was contained in a letter signed by the NCAA Director General and has since been sent to all airline operators. In the letter, NCAA directed that airlines’ Pilots in Command (PIC) of aircraft are to report to Air Traffic Control (ATC) any suspected case of communicable disease on board their flight in line with Nig.CARs 18.8.22.4. In case of a suspected case of communicable disease on board an aircraft, aircrew are required to fill the General Declaration (Gen Dec) and Public Health Passenger Locator forms in line with Nig.CARs 18.8.17.4 and 18.8.22.5, respectively. Thereafter, completed forms

are to be submitted to the Port Health Services (PHS) of the destination aerodrome. In a statement sent by Sam Adurogboye, general manager, Public Relations, NCAA said airlines are to ensure they have on board valid and appropriate number of First Aid kits, Universal Precaution Kits (UPKs) and Emergency Medical kits in line with Nig. CARS 7.9.1.11 and 7.9.1.12. “Airlines are to refresh the knowledge of their Crew members (flight deck and cabin crew) for improved and sustained proficiency in handling and communication with ATC of any suspected case of communicable disease on board. “In case of death of a patient, operating airlines should endeavour to contact Port Health Services for clearance before importing human remains into the country. “Airlines are to report to NCAA in writing any suspected case of communicable disease on board any flight. “Similarly, the Air Traffic Controllers (ATC) shall immediately communicate to Port Health Services (PHS) any report of a suspected case of communicable disease on board aircraft in line with Nig. CARs 18.8.22.4,” Adurogboye said. NCAA says it expects strict compliance and will collaborate with all relevant agencies to prevent the incursion of Ebola or any communicable disease into the country.

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ome nurses under the a e g i s o f Un i v e r s i t y Graduates of Nursing Science Association (UGONSA) have called for a compromise between the Federal Government and the Nigeria Labour Congress (NLC) over the new minimum wage. Speaking through their national secretary, Goodl u ck Nsh i, th e y sa id an amicable resolution of the disagreement would enable workers and government focus on their primary duties of forging the country forward in view of the enormous challenges. Nshi, who spoke with News Agency of Nigeria on Tuesday in Abakaliki, said they were of the view that though it was good to index m i n i mu m w a g e a ga i n s t cost of living, both the Federal Government and NLC should appreciate the fact that issues on minimum wage and standard of living, were knotty. They therefore called for a deeper understanding of the factors at play, which is necessary in finding a more encompassing solution to the impasse. They recalled that in the year 2011 when minimum wage was increased from

N7,500 to N18,000, the N18,000 amounted to $112 at the then exchange rate of N160 per dollar. “ To d a y , a t t h e r a t e o f N 3 6 0 p e r d o l l a r, t h e N30, 000 minimum wage amounts to $83. “Therefore, even with N30,000 minimum wage, it is understandable that there are still gross marginal wage deficits if wages in 2019 are compared with what they were in the year 2011 in US dollars. “This notwithstanding, it is also understandable that prices of commodities are higher today than they were in the year 2011. “On the other hand, the price of crude oil (which is the mainstay of our economy) has dropped from $110 per barrel that it sold in the year 2011, to around $60 per barrel in the year 2019. “This represents about 45% reduction in government revenue from what it used to be in 2011, when compared to what it is in the current year.” “These factors need to be considered by both Federal Government and the organised labour for the necessary compromise to be made to move the country forward,” they said.

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IDRIS UMAR MOMOH, Benin

angote Cement plc under its ‘win big in the Dangote Bag of Goodies consumer promo’ splashed gifts items worth N50 million on five lucky customers in Benin City, weekend. The items won are two GAC Saloon cars, a TV set and two refrigerators. The lucky five winners are Evbuowman George (car), Momoh Ali (car), Edigin Precious (TV set), Okwezi Azuka, and Ehigie Albert won refrigerator, respectively. Speaking during the presentation of the gifts, Ufort Dorothy, non-executive director of Dangote Cement, commended the winners for patronising Dangote brand of cement. Dorothy, who said Edo State was one of the major markets of the company, added that 50 trucks of Dangote Cement were deployed to the state daily. The executive director, who said there were lot of Dangote Cement customers in the state, assured that in the next promo exercise three cars would be given to lucky winners. Earlier, marketing director, Dangote Cement, Funmi

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Sanni, said out of the 43 cars to be won, nine have been won so far while 32 were yet to be won. Sanni, who said the promo exercise that started July 1, 2019 would end September 30, 2019, added that it had so far taken place in seven states. According to Sanni, we have so far visited seven states to give out cars and we still have a lot of cars to be won. “So, there are still more to be won. About 32 of them are to be won, and we expect customers to continue buying Dangote Cement, bring out the scratch card from it, scratch it and go to redemption centre to collect their gifts. “The monetary value of what we have given out in Edo State today cannot be less than N50 million,” she said. While describing Edo as the leader of cement marketing company in the state, she said, “Edo State is our market. We (Dangote) is 99 percent of the Edo State market share in terms of sales of cement.” She however implored people in the state to always buy Dangote Cement for their cement needs, noting that the company’s cement product was highly qualitative, affordable as well to benefit from the company’s life changing and value incentives.

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Wednesday 14 August 2019

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Tranos partners Toyota on LPG generators for telcos GBEMI FAMINU

ranos, Nigeria’s enclosure manufacturing firm, has collaborated with Toyota Motorstomanufacturegenerators that run on Liquefied Petroleum Gas(LPG)fortelecomscompanies to power their base stations across Nigeria. The move became necessary tocombatthetheftofdiesel,acommonproductthatiseasilystolen,at communication mast sites. JudeAbalaka,managingdirector, Tranos, announced this development in Lagos, recently. According to Abalaka, with regards to the security of telecoms equipmentattheirover20,000base stations across the country, Tranos has come up with innovations that will solve the theft challenges. It has been observed that the items mostly stolen at the communication sites were diesel and batteries. To address the diesel issues, Tranos introduced generating sets that run on LPG, which would eliminate the use of diesel completely.Secondstageoftheinnovation was ongoing and full production was expected in Q3, 2019. Partnering with Toyota in this regard, Tranos had ordered for the first set of production engines from Toyota. In respect to batteries, Tranos said it was designing battery cabinets that would include some security features that would make

it difficult for anyone to steal the items. Thistechnologywouldreplace whatisbeingcurrentlyusedwhere huge pillars and bars were built around batteries to protect them. With this technology, stealing batteries at telecom sites would be greatly minimised, if not completely eliminated. “We became aware that the telecoms operators were having certain challenges around their mast sites. So we decided to design a product that will address those challenges,” he said. By this development, telecom companieswouldnothavetoincur losses arising from the stealing of diesels at their various sites across the country. “With this, people can no longer bring jerry can in and steal gas the way they steal diesel,” he assured. For the past four years, Tranos has been making products for the telecom companies to address those challenges. Currently, about 12 percent of telecom sites in Nigeriaarebeingrunongeneratingsets from Tranos Company. At the moment, there are three of LPG generating sets currently running on different sites to testrun the efficacy of the products. If test proves successful, Abalaka hoped that in the nearest future, those running on LPG would replaceallthedieselenginesrunning at various telecom sites.

Kwara won’t be mortuary for abandoned projects – governor

… explains why Government House renovation’s not a priority SIKIRAT SHEHU

wara State Governor AbdulRahman AbdulRazaq says his administration would complete abandoned or ongoing projects in the state because ignoring them would amount to wasting public funds already sunk into them. AbdulRazaq, who was speaking through his deputy, Kayode Alabi, also said he inherited a decrepit Government House which he said reflected the general breakdown of infrastructure in the state, adding however that he has chosen to prioritise things that directly affect people’s welfare instead of embarking on rehabilitation of his own office when he assumed office on May 29. “As your Royal Highness may have noticed, the Government House we inherited needs urgent rehabilitation as many parts of it are just not fit for habitation. This is reflective of the general decay in public infrastructure statewide,”

he said on Tuesday when the Emir of Ilorin, Ibrahim SuluGambari, paid the traditional Bareke visit to the Government House. “In the circumstances we cannot in good conscience prioritise rehabilitation of my office to the neglect of urgent matters like lack of potable water, bad roads, unpaid gratuities, abandoned projects, comatose state media, especially Radio Kwara, resurgence of polio, stagnant education sector and striking workers, appalling healthcare system, and many more. “I’m glad to inform Your Royal Highness that all of these issues have received our attention since we came on board. We have also resolved not to allow Kwara become a mortuary for abandoned projects. This explains why we recently paid N350m to the contractors for the completion of the new State Secretariat Complex. We have also given similar assurances to contractors handling all road projects, most of which had been abandoned before we came

on board.” The Governor said his administration has started fixing three major water works across the three senatorial districts, namely the Asa Dam, Lafiagi Waterworks, and Igbaja waterworks, to make water available to the people of the state. He listed other steps he has taken to include the resuscitation of Radio Kwara, the commencement of fresh round of polio vaccination, resolution of the crises at and re-accreditation of the Colleges of Education, ending Kwara’s pariah status at the Universal Basic Education Commission with the payment of its N450m debt, payment of various counterparts funds in health sector and road construction, payment of N100m gratuities to pensioners, payment of running costs to government ministries after many years, and ongoing talks with federal and development agencies to develop the state. “Let me reassure Your Royal Highness that this administration has tremendous respect for

our traditional institutions. We see these institutions as partners in our effort to re-launch Kwara into national reckoning,” AbdulRazaq said. “To that extent, we will continue to support the institutions to deliver on their mandate as the custodians of our diverse cultures. In return, we urge the traditional institutions to support our programmes in the overall interest of our people and our effort to continue to keep Kwara safe for investments and socioeconomic stability.” The Emir, for his part, said this year’s Bareke was the first since the Governor was inaugurated and commended the administration for its strides. Sulu-Gambari called for tolerance, understanding and peaceful co-existence among residents of the state He prayed to the Almighty God to continue to strengthen the good bond between the Governor and his deputy, saying this would go a long way to promote unity and peace in the state.

NGF chairman to speak at maiden governor’s lecture, book presentation MIKE OCHONMA

overnor of Ekiti State/ chairman, Nigeria Governors’ Forum (NGF), Kayode Fayemi, is expected to speak at the maiden edition of Nigeria’s first-ever governors’ lecture and book release. The event, an annual agenda-setting platform for communication in governance, will hold next week Friday at the Centre of Excellence, Media and Technology, Department of Mass Communication, University of Lagos. According to Oscar Odiboh, an academic doctor and spokesperson of the governors’ lecture series and senior lecturer of Mass Communication at Covenant University, the annual event is designed by Nigerian communication scholars and practitioners to set new communication agenda in governance. It is also aimed at stimulating critical philosophical thinking and strategic application of communication practices to assist in sustaining excellence in governance in the country. At each lecture, a serving state governor will be speaking to a gathering of communication specialists, teachers, students, industry partners, government officials and the general public on issues relating to communication challenges in governance, image management, practical application of communication, strategic and tactical information deployment, crisis communication and tension management.

The university don explains that by virtue of his experience in communications and position as chairman, NGF, Governor Fayemi is ideally fit to deliver the maiden lecture titled “Excellence in Governance: Exploring a Synergy Between Think-Tanks and Communicators.” Fayemi will examine the connection between critical philosophical thinking and communication; and show the roles of professionals, strategic information managers, individually and collectively in moving governments towards achieving excellence. At the end of his lecture, he will set new communication agenda for connecting the government to the people. The book to be released at the lecture is titled “Introduction to Philosophy of Mass Communication for Higher Institutions” edited by Oscar Odiboh, Abiodun Salawu, a professor at North West University, South Africa, and Chris Doghudje, former chairman, Advertising Practitioners Council of Nigeria (APCON). The publication is a collaborative, interdisciplinary work in three parts of eleven chapters designed for students of mass communication and philosophy in Nigeria’s higher institutions. Expected at the inaugural lecture and book release are university vice chancellors, eminent professors, royal fathers and mothers; industrialists, chief executive officers of corporations and institutions.

L-R: Godwin Obaseki, Edo State governor; Adams Oshiomhole, national chairman, All Progressives Congress (APC), and Philip Shaibu, deputy governor, at the governor’s visit to Oshiomhole in Iyamoh, Estako West Local Government Area, Edo State.

Sahara Foundation restates commitment to driving inclusive education SEGUN ADAMS

s the world marks the 20th International Youth Day, Sahara Foundation, a vehicle for Sahara Group’s Personal and Corporate Social Responsibility (PCSR) initiatives, has reiterated its dedication to promoting inclusive education through formal and informal interventions. Sahara Foundation promotes the implementation of projects that drive sustainable development across its locations in Asia, Africa, Europe and the Middle East. Speaking on the 2019 United Nations International Youth Day 2019 themed, “Transforming Education,” Oluseyi Ojurongbe, manager, Sahara Foundation, says enhancing access to formal and informal education is critical for effective youth empowerment

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across the globe. He states Sahara Foundation plans to increase the scholarships awarded to underserved communities in Nigeria as well as projects targeted at empowering social entrepreneurs in Cote d’Ivoire, Tanzania and Ghana who are contributing to the sustainable development of their communities. “We remain committed to supporting young people by creating platforms that provide an enabling environment for the development of self-sustaining initiatives with a focus on capacity building, wealth creation and preservation,” Ojurongbe says. The International Youth Day is an awareness day designated by the United Nations to draw attention to cultural and legal issues surrounding the youth. This year’s edition is focused on making education

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more inclusive and accessible for all youths, including efforts by the youth themselves. The theme stems from Goal 4 of the UN’s 2030 Agenda for Sustainable Development, which is to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.” Sahara Foundation has over the last 15 years undertaken various projects to enhance education across several locations where it operates. The projects range from library upgrade, scholarship programmes for students in the north-east region of Nigeria, career counselling for teens in Singapore, to upgrade of classroom facilities in Ghana, renovation of the ICT Laboratory and donation of computers with internet access at the University of Juba, South Sudan. Other Sahara Foundation educa@Businessdayng

tion and youth-based interventions include: Partnership with Ashesi University on the Ashesi Innovation Experience (AIX) Programme for 200 teens across Africa over the past two years; Career Guidance and vocational skills training in Nigeria, Ghana and Cote d’ Ivoire; and Construction, upgrade and refurbishment of youth vocational centres in Nigeria, Ghana, Zambia and Tanzania The Foundation through its recent partnership with the United Nations Development Programme (UNDP) is making significant steps to promote access to clean and affordable energy which will in-turn improve societal wellbeing. It is also expected that the partnership will facilitate capacity building opportunities in renewable energy for youths across Cote d’ivoire, Ghana and Nigeria.

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Baywood Foundation, AU to push for increased youth’s participation in politics, governance KELECHI EWUZIE

etermined to amplify the clarion call for affirmative action on increased participation of youths in politics and governance across Africa, Baywood Foundation will in collaboration with African Union (AU) hold an interactive conference in Addis Ababa, Ethiopia. The conference is designed to be stakeholder-resonant and appropriately representative of the pan-African situation on this critical issue and create inclusive opportunities for youth to develop their intrinsic capabilities for future leadership roles. The two-day event scheduled for August 16 to 17, 2019, with the theme, ‘Back to the future-young people reimagining today’s politics’ will stimulate effective discourse that offers leadership development and a path to greater involvement in political governance for youths throughout Africa. Emperor Chris Ibe, founder, Baywood Foundation, observes that the African continent is riddled with presidents who have spent over 35 years in office and are aiming for 40 years or more. According to Ibe, “The statistics in this regard make for very sober reflection indeed. The consequences of this characteristic of African leaders have led to the gross socio-economic under-development of Africa, corruption, genocides and the

exclusion of many generations of youths from governance.” Ibe, in a speech while announcing the conference in Lagos, Tuesday, says beyond Nigeria, age limits are a common barrier to young people seeking political office in Africa. According to the International Parliamentary Union (IPU), globally, only 2 percent of lawmakers are under the age of 30, a figure even less in Africa, where only 1.2 percent of lawmakers/policy makers are 30 years or below. Indeed, high age limits explain the conundrum of aged Presidents on a continent that is home to the world’s ten youngest countries. This he says is totally unacceptable and a major constraint to youth participation in governance. While outlining the plans of the foundation to further change the narrative, Ibe states that an estimated 200,000 youths from diverse socioeconomic backgrounds, gender and academic disciplines under the auspices of the Baywood Foundation will from year 2020 participate in a special internship programme for a period of 12 months. He further says that during this period, the candidates, each of whom will undergo a strict vetting process prior to selection, would be placed in an internship role in a relevant institution such as a political party, legislative body, government agency.

Young Nigerians leverage tech to improve schooling experience STEPHEN ONYEKWELU

oung creatives from across Nigeria met in Abuja recently to design virtual solutions for issues surrounding the Sustainable Development Goalsfour(SDGs4)thatpromotes quality education. Some of the key solutions developed during the hackathon seriesincludedadeviceforreporting cases of abuse in schools and a peer review platform for teachers. Other notable tech solutions were an open-source data map showing the distribution of available infrastructure in public schools. A mobile app to teach visually impaired students on how to read and write in Braille. Others were Web Database for Unifying Academic Publications from Tertiary Institutions, a solar-powered charger to supply power to small learning devices in schools and social media advo-

cacy campaign against examination malpractice. The hackathon, which took place two months ago as part of the National Hackathon Series 1.0 themed “Building the Makers’ Movement,” presented a unique opportunity for young Nigerians from diverse backgrounds to collaboratively work together during the event, with each contributing the skills and knowledge required to achieve the desired results. Participants at this hackathon came from the traditional tech sectors - software and embedded systems design as well as non-traditionalsectorsincludingcatering, humanresources,fashiondesigning, visual arts, anthropology, and advocacy. Two previous hackathons have been held as part of the series. A wearables edition held in Ado-Ekiti in July 2018 built hardware solutions to SDG 3: Good Health and Well-Being. Shortly after, Kano played host to

the Internet of Things (IoT) edition, where participants built six solutionstargetingSDG16:Peace, Justice & Strong Institutions. Obasegun Ayodele, technical co-founder at Vilsquare, said, “This energy edition presented an opportunity for participants to harness the combined synergy from their individual skills, experiences and the resources available within the Makers’ Hub to produce results. ‘’As organisers of this noncompetitive hackathon, it gives us great satisfaction to see the amount of collaboration that goes into the work of our Maker teams, proving again that together we can do more. We look forward to sharing these solutions with relevant organisations within the education sector for scaling.” Viola Askia-Usoro, acting administrator,DigitalBridgeInstitute (DBI), who hosted the hackathon, said, “The quality of output from the National Hackathon Series 1.0

goes to show that Nigerian youth have the prerequisite creative abilities.Allthatisrequiredistodetermine an effective programme to hone and channel these exciting skills into productive results.” DBI is enthusiastic about supporting projects such as the NationalHackathonSeriesthatfoster unity among Nigerian youth and empower them with the necessary up scaling needed to position them to provide solutions that would move our nation forward. The National Hackathon Series 1.0 is a 2-year civic engagement programme jointly developed and implemented by Vilsquare Makers’ Hub, the social impact subsidiary of Vilsquare Global Resources Limited, a data science, and analytics firm and Meluibe Foundation, a NonGovernmental Organisation, which focuses on empowering women and youth through good governance, employment, technology and innovation.

Mojec, Ikeja Electric partner on customer sensitisation STEPHEN ONYEKWELU

ojec Meter Assets Management Company, a subsidiary of Mojec International Limited, West Africa’s leading meter manufacturer, in conjunction with Ikeja Electric, held a day sensitisation and engagement event to educate its customers within the Somolu Business Unit on the process of accessing prepaid meters manufactured and distributed by the company. Mojec International is one of the Meter Asset Providers (MAP) licensed by Nigerian Electricity Regulatory Commission (NERC) to provide and install meters to residents within their jurisdiction. The sensitisation event, themed “MAP Sensitisation,” held in Gbagada, Lagos, is part of the company’s drive to close the metering gap and put an end to estimated electricity billing in Nigeria. Present at the event were Folake Soetan, COO, Ikeja Electric; Mojisola Abdul, board chairman, Mojec International; Ms. Chantelle Abdul, MD/CEO, Mojec International and Mojec Meter Assets Management Company; Baale of Bariga, R.A Yunusa, representing the Oba of Somolu; representatives of partner banks and other key stakeholders.

In her opening remarks, the CEO Ikeja Electric, represented by Folake Soetan, explained that this event was put together not just to sensitise the electricity consumers but also to interact with them and get feedback on their customer experiences, as this would help to improve the services being offered. She further stated that, “acquiring a meter comprises of four major steps which include a Know Your Customer (KYC) phase, where details of the customer is captured, a survey of the customer’s premises is obtained in a bid to ascertain the appropriate meter type needed, this will then be followed by payment for the meter by the customer and then a provision and installation of the meter by Mojec International, one of our Meter Asset Provider (MAP)”. Also speaking at the occasion was Chantelle Abdul, MD/CEO, Mojec International and Mojec Meter Assets Management Company, who explained, “The aim of this event is to ensure that you, the customer, has access to quality and credible meters. We are confident to say that we have meters available and upon purchase through the necessary channels, our technicians will be deployed to install them. www.businessday.ng

L-R: Martin Ike Muonso, Africa regional co-coordinator, Baywood Foundation; Chris Baywood Ibe, founder, Baywood Foundation, and Gbenga Adebija, director-general, Nigerian-German Chamber of Commerce, at a press conference organised by Baywood Foundation and African Union, in Lagos.

Edo modular refinery to commence operation soon, DPR to inspect 6,000bp/d facility

do Refinery and Petrochemicals Limited, a project partly sponsored by the Governor Godwin Obaseki-led administration in Edo State and being developed by AIPCC Energy Limited at Ologbo, Ikpoba Okha Local Government Area of the state, will commence operation before the end of the year. The fabrication of 6,000 barrels per day (bpd) modular refinery has been completed and will be inspected by officials of the Department of Petroleum Resources (DPR) before it will be shipped to Nigeria. In a statement, Crusoe Osagie, special adviser to the Governor on Media and Communication Strategy, said the project was part of the state government’s efforts to transform Edo from a civil service state to an investment and

industrial enclave. He said the modular refinery project joins the growing list of ongoing legacy projects, which also includes the CCTEC Ossiomo Power Plant; the Benin Enterprise and Industrial Park and the Benin River Port. According to Osagie, “We are making progress on a number of projects aimed at transforming the state into an industrial hub. At the moment, work has reached advanced stage on the modular refinery project, which benefits from the governor’s smart investment acumen, through which he mobilised seed fund for the project.” Technical Director on the project, Mr. Tim Tian, said the refinery would get its feedstock (crude) from the Nigerian Petroleum Development Company’s (NPDC) facility – oil

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mining lease (OML) 111, near Benin City. He added that when operational, the refinery would produce from its feedstock 50 per cent of diesel (500,000 litres), 25 per cent of naphta (300,000 litres) and 20 percent of fuel oil (200,000) litres. Recall that the Edo State EXCO had approved the release of N700 million as redeemable preference shares (investment) in the Edo Refinery and Petrochemical Company Limited. He added that the venture “will create legitimate employment opportunities thereby reducing poverty, provide job opportunities for teeming youths in the communities, facilitate the establishment of a fabrication yard as proposed by the promoters, and create basis for expertise, professionalism and further training in the oil @Businessdayng

and gas industry.” The take-off of the Edo Refinery and Petrochemicals Company followed series of groundwork by the Obasekiled administration that led to the setting up of Edo Investment Scheme Limited, a Special Purpose Vehicle (SPV) to hold N2 billion investment funds in which the Ministry of Finance Incorporation (MOFI) and the Edo State Oil and Gas Producing Areas Development Commission (EDSOGPADEC), which are to hold shares of 20 per cent and 80 percent, respectively. It would facilitate the state’s investment in various initiatives across the oil and gas sector; petroleum exploration, drilling and filling station, sales and supply of gas, agro-allied products, petroleum and petrochemical products and other related businesses.

Wednesday 14 August 2019

BUSINESS DAY

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Wednesday 14 August 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

ALICE WOODHOUSE AND CHRISTIAN SHEPHERD IN HONG KONG

nti-government protesters forced Hong Kong’s international airport to suspend check-in services for the second day running on Tuesday, hitting the territory’s main airline Cathay Pacific as the Asian financial centre experiences its worst political crisis in decades. Cathay, Hong Kong’s flagship carrier, cancelled flights and advised passengers to postpone all non-essential travel because of the anti-government demonstrations, which have sparked fears Beijing might intervene directly in Hong Kong to halt the unrest. The airline has also come under pressure from China’s airline regulator after some of its staff were linked to the protest movement, a sign of Beijing’s growing readiness to make high-profile businesses choose between incurring the wrath of either the mainland government or Hong Kong protesters. Shares in Cathay, owned by the Hong Kong and London-based Swire Group, have dropped 7 per cent in two days. The broader Hang Seng index has lost 9 per cent so far this month amid a sell-off in Hong Kong-focused stocks and those at risk from political fallout from the protests. There were angry scenes and shoving matches in the airport

Cathay Pacific hit as protesters flood back into Hong Kong airport Luggage trolleys used to barricade departure gates and more than 300 flights cancelled

on Tuesday as protesters used luggage trolleys to barricade the departure gates and tried to stop passengers from going through. Hong Kong airport’s website showed more than 300 flights as cancelled.

What the Apple Card gets right, and wrong

he first thing to know about the Apple Card is that it is not really a card. To be sure, the tech giant’s firstforayintopersonalfinanceincludes a bank card, quintessentially white, titanium, minimalist in design and stripped of the 16-digit number found onmostcards.ButApplewantsusersto actually pay for goods using Apple Pay via an iPhone or Apple Watch. The “hardware”, if a credit card can be deemed as such, is mostly irrelevant. Apple even incentivises consumers not to use it, giving just 1 per cent cash back on purchases made directly with the card — versus 2 per cent when using its Apple Pay mobile payments system and 3 per cent for Apple purchases, including App Store payments. The product is being rolled out later this month in the US, but some early adopters and journalists had the chance to sign up last week. The process is simple, requiring just an iPhone, a driver’s licence and an OK credit score. Within minutes, users can begin buying stuff wherever contactless payment is accepted. No need for the card to arrive in the mail. The differentiator is the software, which in this case is the Wallet app. That is where the debts are tallied

and where Apple hopes to impress by bringing “transparency” to personal finance, in the manner of Monzo and Revolut before it. Among the main features is how the credit balance is displayed. If the cardholder owes, say, $7,000, but plans to pay off only $4,000 this month, Wallet will immediately do the maths and show how much the interest payments are if the remainder is paid over a few months or a few years. With a flick of the thumb, time is extended on a virtual dial, and the colour goes from a welcoming green to an alerted red as the interest charges rise. Apple says the feature offers unprecedented transparency and, unlike banks that make money when you stick to minimum monthly payments and get burdened with interest charges, Apple “encourages you to pay less interest”. Purchases also get colour-coded, similar to some personal finance apps, making it easy to tally up the cost of those Starbucks visits. Another feature is “daily cash”. In place of air miles or rewards points, which can be difficult to understand and fluctuate in value, Apple Card simply calculates the daily cashback payment and deposits it in the user’s account. A little grey box confirms, for each purchase, what cash reward was received. www.businessday.ng

overnight. “They are just kids. They have nothing better to do,” said another frustrated traveller. Cathay and Swire, which has roots dating back into colonial times, have come under sustained pressure from Beijing

Argentina elections: why investors believe Macri’s time is up Peso collapse after humiliating poll defeat bodes ill for reformist leader

Tech group hopes to impress users by bringing ‘transparency’ to personal finance PATRICK MCGEE IN SAN FRANCISCO

“Their problem is with the government, not with us,” said one angry passenger who declined to give his name. Ma n y p a s s e n g e r s c o m plained of changing flights four times and sleeping in the airport

and China’s airline regulator in recent days after its staff were connected to the demonstrations. ICBC, China’s largest stateowned bank, downgraded its rating on Cathay’s shares to a strong sell. Zhao Dongchen, analyst at ICBC, wrote that Cathay had a “PR crisis” after it was warned by China’s Civil Aviation Administration last week to suspend “overly radical” air crew. Since last Friday, Cathay has also been required to submit a list of all flight crew to the Chinese regulator for flights that will enter mainland Chinese airspace. The “vast majority” of Cathay’s routes cross mainland China, Mr Zhao said, arguing that a failure to comply with the CAAC’s demands would cause “irreversible damage” to the Hong Kong airline. Cathay said after market close on Tuesday that it had suspended a second pilot for misuse of company information and had begun internal disciplinary proceedings. It has already fired two airport employees and suspended another pilot for conduct linked to the anti-government protests.

BENEDICT MANDER IN BUENOS AIRES

fter a humiliating defeat in primary elections on Sunday, many pundits now assume that it is game over for Argentina’s President Mauricio Macri. The market’s verdict was clear: yet another collapse in the peso, reviving bad memories of last year’s currency crisis and suggesting that investors doubt the reformist leader’s ability to continue his bid to transform Argentina. Mr Macri received just 32 per cent of the vote while his populist rival Alberto Fernández won an unexpected 47 per cent, leaving the situation looking bleak for the ruling coalition. What can Mr Macri do next? Some political analysts and investors have written off the Argentine president as the leader of a lame duck government. That puts Mr Fernández in the odd position of looking like a president-elect without having been formally elected. Although Mr Macri has pledged to reverse the election result, claiming that he could make it to a second round run-off against Mr Fernández, few outside the government share that optimism. Gustavo Marangoni, a political analyst, warned that Mr Macri

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must concentrate on preventing the crisis from deepening. “The government must focus on guaranteeing governability from now until the end of the year,” he said. “The country needs the president to act like a president, and not like a candidate [aiming for re-election].” Since democracy returned to Argentina in 1983 two other nonpopulist governments have seen their terms cut short by economic crises; Mr Macri’s primary objective must be to avoid that fate. “That is what we have to avoid now,” said Mr Marangoni. “Macri must finish his mandate without an [economic] collapse.” Other key stakeholders including the opposition and the IMF, which bailed Argentina out to the tune of $57bn during last year’s currency crisis, also have a responsibility here, he added. So far the government has not announced any major cabinet or policy changes, but it is reported to be considering raising the floor for income taxes, a new line of loans for SMEs, broadening schemes for buying goods in instalments and measures to prevent hikes in petrol prices. Why were the primary elections so important? Sunday’s contest was hugely @Businessdayng

significant as the first accurate measure of nationwide political sentiment — as it turns out, no poll came anywhere close to predicting the result. This is despite the fact that all parties had already chosen their candidates internally, apparently rendering these elections obsolete. “The chances of reversing this result don’t exist — it’s impossible,” said Luis Tonelli, a political scientist who supports the government. The conventional wisdom was that if Mr Fernández was no more than five or six points ahead — a result that many polls predicted — that outcome could be reversed. But a gap of more than 15 points, as turned out to be the case, looks insurmountable. It looks as though Mr Fernández could meet one or other of the criteria for an outright victory when the first round of voting is held in October: he would need to get more than 45 per cent of the vote, or more than 40 per cent and a lead of 10 points over the runner-up. Even the combined support of all the other centrist and rightwing candidates — which amounts to around 13 per cent — would not be enough for Mr Macri to bridge the gap.

Wednesday 14 August 2019

BUSINESS DAY

NATIONAL NEWS

Germany confronts growing risk of economic slowdown Fears that manufacturing dip will hit jobs and services prompt stimulus debate MARTIN ARNOLD IN FRANKFURT

fter a decade of near-uninterrupted growth, Germany has shifted from being the powerhouse of the eurozone economy to lagging behind. Having narrowly escaped a technical recession last year, Germany is once more facing the threat of economic contraction as the prolonged weakness in its manufacturing sector shows increasing signs of seeping into services and consumer spending. The Bundesbank, and analysts polled by Reuters, expect that when the latest quarterly gross domestic product figures are published on Wednesday, they will show that the German economy shrank 0.1 per cent in the three months to June. That is a sharp reversal from its first-quarter 0.4 per cent expansion, and a notable underperformance compared with the 0.2 per cent second-quarter growth across the eurozone as a whole. Economists worry that a combination of turmoil in Germany’s carmaking industry, the escalating trade war between the US and China and the prospect of a disruptive UK exit from the EU could drag the world’s fourth-largest economy into its first recession for more than six years — defined as two consecutive quarters of negative growth. Last week a string of economic data releases laid bare the growing weakness in Germany’s exportheavy industrial heartland, which has long been the main motor of the country’s economic growth. German exports have fallen 8 per cent in the past year, while industrial production has dropped 5.2 per cent. “If companies expect the investment climate is going down they stop ordering components [and] reduce their stocks, so this can happen very fast,” said Ulrich Ackermann, head of foreign trade at VDMA, the trade body for machine manufacturers. “[It is] the first sign that the economy is declining. It is usually component companies that get hit first.” Germany’s reliance on manufacturing means its economy is suffering more than those in other European countries. For instance, French car production has proved more resilient in the past year than Germany’s, which is still being rocked by the diesel emissions scandal, and France’s economy is better supported by domestic demand. Several big German manufacturers have warned recently that the downturn is hitting their performance, including Continental, Bosch and Thyssenkrupp. Until now, however, many people in Germany have been insulated from the slowdown. Unemployment is near record lows and the housing market is booming.

“Services, the public sector and the housing market have all had strong growth,” said Klaus Günter Deutsch, head of research, industrial and economic policy at BDI. “So it doesn’t feel like a big problem because employment is still rising.” Yet he forecast this would not last long. There are already signs that the downturn is spreading: figures for growth in the services sector were revised downward last week. And the job market is slowing: only 1,000 jobs were created in June, well below the 44,000 average job growth in June over the past five years, while a succession of industrial companies cut workers’ hours in recent weeks. “The government is looking at this with concern as the economy is deteriorating faster than it had expected,” said Mr Deutsch. “I think the attention should now shift to fiscal policy.” While the European Central Bank is set to cut interest rates further into negative territory next month, becoming the latest central bank to loosen monetary policy, ECB president Mario Draghi has repeatedly insisted that eurozone governments should not rely on monetary policy alone to save the bloc from a prolonged period in the economic doldrums. “Germany is the cyclical bellwether of Europe and until there is a co-ordinated fiscal response across the eurozone, there is a risk that a German recession could prove recessionary for the whole block,” said Lena Komileva, chief economist at G+ Economics. If Wednesday’s GDP figures show Germany’s economy contracting, the pressure on the government to take more urgent fiscal measures is likely to increase. For the past decade, the German government has stuck to an ultra-prudent fiscal rule that prevents it from running budget deficits. Last year the budget surplus reached €58bn, its highest since Germany’s reunification two decades ago and equal to 1.7 per cent of GDP. Criticism of this “schwarze Null” rule is growing, especially as all of Germany’s public sector bonds are trading with negative yields, making debt issuance extremely cheap. “There are more structural weaknesses in the German economy that need to be addressed,” said Carsten Brzeski, ING’s chief economist for Germany. “You need investment in digitisation, infrastructure and education.” The drawback of infrastructure spending is that it may take years to have an effect. Instead, several economists argue Germany should consider cutting its corporate tax rate which at about 30 per cent is well above both the EU and OECD averages. “Tax cuts could help — I am in favour of this,” said Jörg Krämer, chief economist at Commerzbank. www.businessday.ng

A Trump supporter after the president spoke at a rally at the Williamsport Regional Airport, in Montoursville, PA on May 20 © Getty

Donald Trump must win over suburban women to clinch swing state

Republicans need to make crucial gains in three of Philadelphia’s four ‘collar counties’

LAUREN FEDOR IN PHILADELPHIA

icole Veith has become more reticent about her support for US president Donald Trump since pro-Trump signs were stolen from her front lawn and her husband’s car, which sports a “Make America Great Again” sticker, was vandalised. The 39-year-old mother of seven, who lives in the Philadelphia suburbs, does not drive the car in order to avoid confrontation. “People are just angry, angry, angry and mean, mean, mean,” she said. “It shouldn’t be a fight, to lose friends over stuff like this, to have family not talk to each other any more just because of politics.” As a life-long Republican, Ms Veith is increasingly outnumbered in the leafy, middle class suburbs of south-eastern Pennsylvania that were for decades considered strongholds for the GOP. After years of ceding ground, Republicans need to make gains here if Mr Trump is to hold on to Pennsylvania’s 20 electoral college votes in next year’s presidential election. Three of Philadelphia’s four “collar counties” — Bucks County,

Delaware County and Montgomery County — swung for Bill Clinton in 1992 and have not voted for a Republican presidential candidate since. And while Republicans held on to the remaining county, Chester County, through 2012, Mr Trump lost by a 9-point margin there to Hillary Clinton in 2016. The Democrats made historic gains in local elections in 2017 and in 2018 took four area seats in the US House of Representatives and more than a dozen seats in the state legislature from the Republicans. Now both parties are turning their attention to 2020. Pennsylvania is a swing state that Mr Trump won in 2016 by less than 1 per cent, or about 44,000 votes. Insiders say the suburbs could be the key to victory when the margins are so thin. Jay Howser, a Philadelphiabased Democratic strategist, said that given Democrats were likely to be “stuck in the basement” in rural, working-class parts of Pennsylvania where Mr Trump enjoyed high levels of support, the party’s presidential candidate would need to attract more suburban voters to win the state. “It is important that Democrats

nominate a candidate that aligns with suburban voters’ values, but also doesn’t scare their pocketbook,” he added. The Trump campaign has zeroed in on the area, with a message focused on the economy. Last month, the campaign launched its “Women for Trump” initiative at a casino in King of Prussia, a part of Montgomery County best known for its vast, high-end shopping mall. Speaking at the event, Lara Trump, the president’s daughterin-law who is married to son Eric, told attendees to ask their neighbours if they had more money and were paying less in taxes since Mr Trump was elected, before answering her own question: “The reality is that for a vast majority of Americans, the answer is yes.” The message is likely to be repeated nonstop between now and next year’s election, with the Trump campaign betting that suburban women will be more concerned about the economy than with the president’s divisive rhetoric or his hardline views on issues such as immigration and gun control — despite opinion polls showing the president is particularly unpopular among such voters.

US to delay some tariffs on Chinese goods Levies on some laptops, toys and clothing will start in December, not September JAMES POLITI IN WASHINGTON

he Trump administration said it would delay the imposition of 10 per cent tariffs on a series of consumer goods imported from China — including some laptops, cell phones, toys and clothing — until December, allowing retailers the time to import them without additional levies ahead of the holiday season. The reprieve from Washington

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was announced as China’s commerce ministry said Liu He, the vice premier, spoke with Robert Lighthizer, US trade representative, and Steven Mnuchin, the US Treasury secretary, by phone on Tuesday and agreed to have a further conversation in two weeks. Earlier this month, tensions flared up again between Washington and Beijing as the Trump administration threatened to impose 10 per cent tariffs on $300bn of new goods beginning on September 1, on top of the 25 @Businessdayng

per cent levies already in place on $250bn of Chinese imports. The US also labelled China a currency manipulator, further inflaming the situation. US equities rallied on news of the new direct talks and the reprieve from the US, after suffering big losses in recent sessions. The threat of tariffs on a whole new batch of goods threatened to cast a cloud over the holiday shopping season in the US, given that many of the targeted products are directly linked to consumers.

Wednesday 14 August 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Negative rates: investors go through looking glass to sub-zero yields Roughly one-quarter of the global debt market is trading at levels once thought improbable TOMMY STUBBINGTON

aking an investment that is guaranteed to lose money sounds like something that would cost you your job. But in bond markets, it has become a fact of life. Bonds worth $15tn — roughly a quarter of the debt issued by governments and companies around the world — are currently trading with negative yields. That means prices are so high that investors are certain to get back less than they paid, via interest and principal, if they hold the bond to maturity. They are, in effect, paying someone to look after their money. The spread of negative-yielding debt has raised profound questions about the extraordinary lengths central banks have gone to in a bid to revive the economy over the past decade. At the same time, bond markets’ journey through the looking glass has befuddled many investors. “Free money — it’s sort of an insane concept,” said David Hoffman, a bond portfolio manager at Brandywine Global in Philadelphia. “Having grown up in a very different world it’s challenging to navigate this.” Negative interest rates first

appeared in Japanese money markets two decades ago. Since the financial crisis, they have engulfe d g overnment b ond markets in Japan, Sweden, Switzerland, Denmark and the eurozone — all economies grappling with low inflation where the central bank has set interest rates below zero. Investors thirsty for yield have been forced to look elsewhere, ensuring the spread of sub-zero yields and dragging down borrowing costs everywhere. As a result, oddities now abound. Danish lender Jyske Bank last week issued a 10-year mortgage bond at an interest rate of minus 0.5 per cent, meaning homeowners are being paid to borrow. Meanwhile, Swiss bank UBS is planning to charge its super-rich clients for holding on to cash. Even large chunks of corporate bond markets now trade at subzero yields, including parts of the junk bond market (making a mockery of its “high yield” label). Emerging markets have not been immune either. Bonds issued by Poland, the Czech Republic and Hungary have joined the club. Investors are now eyeing what could become the negative yield revolution’s next frontier — the biggest bond market of all.

Vanguard ditches over two dozen stocks from ESG funds Murdoch media companies among those ‘erroneously’ included in ethical ETFs BILLY NAUMAN IN NEW YORK

private prison operator, a gun manufacturer and Rupert Murdoch’s media groups are among a number of stocks that have been thrown out of Vanguard funds created to invest in companies with strong environmental, social and governance records. The asset management giant said the companies were included “erroneously” in an ESG index designed by FTSE Russell, according to a letter to shareholders in the funds. The 29 stocks that are being ejected include gun manufacturer Sturm Ruger, private prison operator Geo Group, restaurant operator Yum Brands and pharmaceutical company GlaxoSmithKline. There was an “issue in the screening methodology used by our benchmark provider, FTSE Russell,” Vanguard said in the letter. Marketing materials for both funds say they “specifically exclude” companies that profit from adult entertainment, alcohol and tobacco, weapons, fossil fuels, gambling, and nuclear power — as well as companies that “do not meet standards of UN global compact principles” and fail on certain “diversity criteria”. But it did not elaborate on which specific criteria any of the stocks

failed to meet. The published methodology for the ESG index clearly disallowed weapons manufacturers such as Sturm Ruger. Mr Murdoch’s media companies News Corp and Fox have been no stranger to controversy and have been targeted by investors over governance concerns, but it was not clear why they had been excluded and both Vanguard and FTSE declined to comment. The indexing error affected the $544m Vanguard ESG US Stock ETF and the $386m Vanguard ESG International Stock ETF, which held the shares from June 21 2019, and August 5 2019. “In aggregate, these stocks represented a very small percentage of the holdings of the funds,” said Vanguard spokesperson Carolyn Wegemann. “We sincerely regret the error occurred. FTSE has since implemented additional oversight and controls to ensure thebenchmarkalignswithitsobjective.” A Financial Times report last month showed that the Vanguard ESG US Stock ETF held shares of multiple oil-industry companies despite claiming that it excludes the sector. Earlier this month, Vanguard updated its marketing materials with a footnote clarifying that the ETF’s exclusions are limited to companies that hold fossil fuel reserves. www.businessday.ng

SoftBank founder aims to create ‘ecosystem’ of companies Strategy of new ‘operating group’ is combination of venture capital and private equity TIM BRADSHAW IN LONDON AND KANA INAGAKI IN TOKYO

ozens of tech-company founders and chief executives will gather in Los Angeles next month for a private gathering that is elite, even by Silicon Valley standards. The price of entry: selling a stake in your company to SoftBank’s Vision Fund. The two-day event will mark the first time since the Japanese group’s $100bn investment fund was launched in 2017 that all the leaders of its portfolio companies have come together in the same place, at the same time. As SoftBank embarks on a new fundraising round of its own, to raise another $108bn for a second Vision Fund, the LA meeting is part of SoftBank founder Masayoshi Son’s ambition to create an “ecosystem” of companies that can collaborate to accelerate growth — and its own returns. The LA event is organised by a little-known team within the Vision Fund — the “operating group” of more than 30 former

executives working from SoftBank offices around the world to advise its portfolio companies on areas such as growth and international expansion. The operating group was founded just over a year ago and is led by Gerry Lopez, a former executive at AMC Entertainment, the movie-theatre owner, hotel chain Extended Stay America, and Starbucks. The strategy is an unusual combination of Silicon Valley-style venture capital and traditional private equity. Unlike PE firms, SoftBank typically owns a minority stake in Vision Fund companies. “This is not PE, so we can’t command like that,” said Mr Lopez. “This is companies working together because we make the right introduction to the right person at the right level in the company to his or her counterpart in another company.” Despite the Vision Fund’s focus on innovation, Mr Lopez himself has no background in the technology industry. Instead, he brings 30 years’ experience working at big consumer-facing companies, often backed by private equity, and then taking them public.

“Some of our younger entrepreneurs, they don’t know what the hell Sarbanes Oxley is,” Mr Lopez said, referring to the US accounting controls introduced in 2002. ‘This is not PE’ For many portfolio companies, the clearest benefit of being part of the Vision Fund is the fast ticket to global expansion. With a series of investments from SoftBank, Oyo, the fast-growing hotel chain founded in 2013, has expanded from its home market in India to China, US, Japan, Saudi Arabia, and 10 other countries. The group is on track to overtake Marriott as the world’s largest hotel group within three months, according to Mr Son. “Once the Vision Fund invests in a company, that company is poised to become a market leader if it isn’t one already,” said Navneet Govil, the Vision Fund’s chief financial officer. The growth is backed not only by Vision Fund’s immense capital. Joining the ecosystem means gaining access to SoftBank’s army of sales staff in Japan and local expertise through its investments in Yahoo Japan and China’s Alibaba.

Saudi Aramco deepens Indian ties with Reliance partnership

Deal brokered by Mohammed bin Salman and Mukesh Ambani comes at crucial time

ANJLI RAVAL IN LONDON AND BENJAMIN PARKIN IN MUMBAI

hen Saudi Arabia’s powerful crown prince Mohammed bin Salman visited India in February, he was greeted at the airport with a bear hug by Prime Minister Narendra Modi. But Mr Modi, in some ways, was a third cog to another relationship — the one between Prince Mohammed and Mukesh Ambani, chairman of Reliance Industries, that has culminated in Saudi Aramco’s plans to take a 20 per cent stake in the Indian company’s oil refining unit, which values the business at $75bn including debt.

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Prince Mohammed is renowned for making people wait for hours. But in a sign of how important their first meeting during the two-day trip to Delhi was, it was the Saudi royal who had to bide his time after Mr Ambani’s flight from Mumbai was delayed. “When the crown prince visited India, that’s when the deal was struck,” said one person briefed on the meeting who said Mr Ambani, Asia’s richest man, sought a direct relationship with the kingdom’s highest authorities. “The pair had chemistry and the establishment in India gave their blessing.” The tie-up would link the world’s largest oil exporter with the fastestgrowing energy consumer at a cru@Businessdayng

cial time. Saudi Arabia has turned to India after a series of crises engulfed the kingdom in a wave of international censure following the killing of journalist Jamal Khashoggi in October 2018, just as it seeks to showcase its credentials as a global investment heavyweight and destination for foreign cash flows — including the flotation of Saudi Aramco, the world’s largest oil producing company. In return India, which is preoccupied with its own energy security, has secured a long term oil deal when global supplies have been shaken by disruptions in Iran and Venezuela. It would also be one of the biggest foreign investments in the country’s history.

Wednesday 14 August 2019

BUSINESS DAY

ANALYSIS

Barr cites ‘serious irregularities’ at jail where Epstein died US attorney-general vows to pursue probe amid calls for inquiry into French connections KADHIM SHUBBER IN WASHINGTON AND VICTOR MALLET IN PARIS

he US attorney-general said there were “serious irregularities” at the jail where Jeffrey Epstein died at the weekend while awaiting trial on charges of sex trafficking underage girls. William Barr said at a conference in New Orleans on Monday that he was “angry” that the Metropolitan Correctional Center in New York had failed to keep Epstein alive. “We will get to the bottom of what happened, and there will be accountability,” said Mr Barr. His comments came as the fallout over Epstein’s case spread to France, where ministers and campaigners against child trafficking demanded an inquiry. “The American investigation has brought to light connections with France,” said Marlène Schiappa and Adrien Taquet, junior ministers for women-men equality and for solidarity and health, in a joint statement on Monday. “It therefore seems to us essential, for the victims, that an investigation be launched in France so that all can be revealed,” they said. Epstein died on Saturday morning in what the US Department of Justice has called “an apparent suicide”. An autopsy was carried out the next day, but a final determination on the cause of death has not yet been made, said Barbara Underwood, the New York chief medical examiner, in a statement on Sunday. His death has raised questions about conditions at the MCC, a notorious jail where defence lawyers and defendants have complained for years about the treatment of inmates. Last month, Epstein was found unresponsive in his cell with marks on his neck. He was placed on suicide watch but had been taken off again at the time of his death, according to a person familiar with the matter. He was being held in the MCC’s special housing unit, a secure area where inmates are kept separate from the general population.

Prison guards were supposed to check on Epstein every 30 minutes, but that procedure was not followed for at least several hours on the night of his death, according to the person. Epstein’s cellmate was removed on Friday and not replaced, the person added. The apparent procedure violations would have left him unmonitored on Friday night. The FBI and the justice department’s inspector-general are investigating the circumstances of Epstein’s death. Eric Young, national president of the federal prison workers union, said staff shortages at the MCC have meant that prison guards have been overworked, with cooks and other civilian workers drafted in to cover guard duty shifts. “This has been brewing for years,” he said. The criminal case against Epstein has been short-circuited by his demise, but lawyers representing his alleged victims have vowed to ensure his assets are used to compensate their clients. US prosecutors have pledged to continue to investigate any co-conspirators. “This case will continue on against anyone who was complicit with Epstein,” said Mr Barr. “Any co-conspirators should not rest easy. The victims deserve justice and they will get it.” In France, Innocence en Danger, a child protection organisation that campaigns against sexual abuse, called for an inquiry into allegations that underage girls were abused and that some of the perpetrators were French citizens. “Innocence en Danger has recently received confirmation from a reliable source that several victims of the prostitution ring created by Jeffrey Epstein and his accomplices also have French nationality,” it said. Epstein kept a luxury apartment on the Avenue Foch in the heart of Paris valued at $8.6m, according to financial disclosures he made in court. An address book said to have been stolen by his butler included the names of several contacts in the French capital.

Salvini tells Gere to take rescued migrants ‘back to Hollywood’ Actors criticise refugee policy after Italy turns away boat carrying 151 people HANNAH ROBERTS IN ROME AND MICHAEL PEEL IN BRUSSELS

talian interior minister Matteo Salvini has hit back at a bevy of celebrities who criticised his refugee policy, telling them to take the migrants “back to Hollywood”. Actors Richard Gere, Javier Bardem and Antonio Banderas spoke out on behalf of a migrant rescue vessel which is stranded in the Mediterranean with 151 people aboard. Italy has closed its ports to NGO boats since Mr Salvini, leader of the rightwing League, came to power last year as part of a coalition government. A stringent security law introduced by his government allows for any search and rescue vessels docking without authorisation to be fined up to €1m and their captains imprisoned. NGO rescue boats have made a series of attempts to dock in Italy and offload migrants recently, triggering a political storm when Italian authorities refused to let them land. The latest, the Spanish boat the Proactiva Open Arms, is floating in waters off the Italian island of Lampedusa after 10 days at sea. Mr Banderas said that conditions on board were “a horror”, while Mr Gere criticised the new security law for “demonising” mi-

grants and compared Mr Salvini to US president Donald Trump, lamenting “a generation of politicians who put their energy in dividing people”. In a video on the Open Arms Facebook page, Mr Bardem called on Spain to take the migrants, saying the NGO was doing “extraordinary and necessary work to save the lives of those who escape from unimaginable situations to give a future to their families”. Mr Salvini responded to the actors while on the campaign trail, where he was laying the groundwork for a widely expected election this autumn if he succeeds in his bid to force a snap election. Mr Gere, he said, should take the migrants to the US “in his private jet and support them in his villas”. Raffaele Marchetti, professor of international relations at Luiss University in Rome, said the actors’ criticism “could backfire”. “To [Mr] Salvini’s voters it looks like outside interference,” he said. “[Mr] Salvini can portray [Mr] Gere as a hypocrite who visits the boat for a few hours but then goes back to his millionaire’s villa.” Liam Patuzzi of the Migration Policy Institute Europe said Mr Salvini’s “frank and direct” language helped boost his popularity by presenting himself “as the defender of Italian sovereignty over external

forces — be it NGO boats, Brussels, foreign governments or, like in this case, internationally acclaimed actors”. EU countries have been deadlocked for years over proposals to bring in mandatory migrant relocation quotas that Mediterranean arrival states, including Italy, say are needed to spread the load fairly. France’s President Emmanuel Macron said last month that eight EU countries had agreed to take in rescued migrants in similar future situations. Mr Salvini derided the French leader’s initiative as a “flop” that had confirmed Italy would “continue to be Europe’s refugee camp”. Ursula von der Leyen, who is due to take over as European Commission president later this year, has showed some sympathy for Italy’s longstanding complaints that fellow EU members are failing to pull their weight. She told the German newspaper Bild last month that the asylum system needed to be reformed to “achieve more fairness and burden-sharing”. During a visit to Rome this month she signalled a possible wider rethink of the long-stalled current asylum reform proposals, telling reporters “a breath of fresh air” was needed to create a mechanism that was “effective and efficient but also human”.

Junior RBC analyst charged with insider trading Bill Tsai allegedly made profits of almost $100,000 trading on confidential information KADHIM SHUBBER IN WASHINGTON

junior analyst at RBC Capital Markets in New York has been arrested and charged with insider trading barely a year after joining the bank from college. The Manhattan US attorney’s office accused Bill Tsai of buying options in Electronics for Imaging ahead of its $1.6bn acquisition by Siris Capital in April. The private equity firm had used financing

from the bank to secure the deal. “His profits were not the result of trading acumen, diligent research, or blind luck, but rather, as alleged, the product of theft of confidential information from his employer,” said Geoffrey Berman, the US attorney for the southern district of New York, in a statement on Monday. Mr Tsai was arrested on Sunday and was due to appear in court on Monday afternoon. He allegedly made profits of almost $100,000 by buying call options www.businessday.ng

in EFI before the announcement of the Siris deal and subsequently selling them. The Securities and Exchange Commission also announced civil charges against the 23-year-old banker on Monday. He had interned at RBC in the summer of 2017 and joined the bank in July 2018 after graduating from NYU Stern School of Business, according to his LinkedIn. Mr Tsai could not be immediately reached for comment.

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The SEC said he had no known attorney. Mr Tsai was the student body president of the undergraduate business school at NYU Stern in 2018, according to his LinkedIn. In a 2017 interview posted on the school’s website, he was asked what advice he had for new students. “Hold on to your values. I think the biggest thing is that you learn so many things in school. That’s a beautiful part of the school, but it’s to figure out what you believe in. @Businessdayng

And then, when you meet all these people outside, you still stay true to yourself. You stay humble, you stay eager,” he said. The Department of Justice and SEC alleged he traded through a brokerage account he had failed to disclose to RBC in violation of its policies. A RBC spokesperson said Mr Tsai had been suspended: “RBC has a zero-tolerance approach to any breach of the law or our code of conduct. We have cooperated fully with law enforcement as it relates to this matter.”

Wednesday 14 August 2019

BUSINESS DAY

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Wednesday 14 August 2019

BUSINESS DAY

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Wednesday 14 August 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Friday 09 August 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 213,271.35 6.00 -0.83 108 3,636,180 UNITED BANK FOR AFRICA PLC 189,806.79 5.55 -4.31 137 8,047,119 ZENITH BANK PLC 513,332.67 16.35 -2.68 523 34,996,779 768 46,680,078 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 177,681.70 4.95 -1.00 138 2,006,002 138 2,006,002 906 48,686,080 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,666,441.21 131.00 1.12 85 1,051,118 85 1,051,118 85 1,051,118 BUILDING MATERIALS DANGOTE CEMENT PLC 2,811,683.72 165.00 - 39 30,985 LAFARGE AFRICA PLC. 241,616.93 15.00 4.53 68 767,967 107 798,952 107 798,952 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 288,337.83 490.00 - 6 145 6 145 6 145 1,104 50,536,295 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 49,603.32 52.00 - 24 46,027 PRESCO PLC 44,800.00 44.80 - 4 2,568 28 48,595 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 2 1,050 2 1,050 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,230.00 0.41 - 6 186,908 6 186,908 36 236,553 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 714.77 0.27 -6.90 3 156,713 179.01 0.46 - 1 5,500 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 35,363.75 0.87 -2.25 159 10,200,908 U A C N PLC. 15,847.13 5.50 -4.35 51 716,927 214 11,080,048 214 11,080,048 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 27,192.00 20.60 - 11 31,496 ROADS NIG PLC. 165.00 6.60 - 0 0 11 31,496 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,910.20 1.12 - 5 11,510 5 11,510 16 43,006 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,231.85 1.69 - 1 1,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 1 200 GUINNESS NIG PLC 90,681.85 41.40 - 37 63,458 INTERNATIONAL BREWERIES PLC. 103,150.34 12.00 - 5 499,326 NIGERIAN BREW. PLC. 399,845.10 50.00 - 28 79,646 72 643,630 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 103,000.00 20.60 0.49 67 941,640 DANGOTE SUGAR REFINERY PLC 118,800.00 9.90 -1.98 44 392,523 FLOUR MILLS NIG. PLC. 62,735.81 15.30 -0.33 71 897,975 HONEYWELL FLOUR MILL PLC 7,533.69 0.95 -5.00 13 302,100 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 37,092.14 14.00 - 1 50 UNION DICON SALT PLC. 3,321.07 12.15 - 1 10 197 2,534,298 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,345.48 10.30 - 22 42,282 NESTLE NIGERIA PLC. 1,006,673.44 1,270.00 - 33 2,638 55 44,920 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,366.12 4.29 - 6 35,390 6 35,390 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,822.86 6.00 - 23 415,910 UNILEVER NIGERIA PLC. 183,840.17 32.00 - 14 27,919 37 443,829 367 3,702,067 BANKING ECOBANK TRANSNATIONAL INCORPORATED 133,034.25 7.25 -1.38 44 1,320,921 FIDELITY BANK PLC 43,462.20 1.50 - 33 664,120 GUARANTY TRUST BANK PLC. 779,926.25 26.50 -1.49 149 129,236,394 JAIZ BANK PLC 11,196.41 0.38 -5.00 11 502,300 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 69,097.00 2.40 0.84 69 4,461,614 UNION BANK NIG.PLC. 196,565.08 6.75 - 16 69,604 UNITY BANK PLC 7,481.18 0.64 -8.57 8 596,953 WEMA BANK PLC. 23,144.68 0.60 5.26 25 1,490,294 355 138,342,200 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,366.03 0.63 -10.00 8 211,159 AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 4 104,950 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 -9.09 4 538,274 CONTINENTAL REINSURANCE PLC 14,418.11 1.39 9.45 10 813,295 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 2 70,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 2,636.44 0.36 - 4 71,555 LASACO ASSURANCE PLC. LAW UNION AND ROCK INS. PLC. 1,675.57 0.39 - 0 0 LINKAGE ASSURANCE PLC 4,160.00 0.52 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,458.00 0.22 - 3 116,100 NEM INSURANCE PLC 10,613.81 2.01 - 4 58,000 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,583.62 0.48 - 2 2,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 3 11,500 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 10 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 5,219.27 0.39 8.33 16 200,126 61 2,196,969

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 2,698.23 1.18 - 3 83,445 NPF MICROFINANCE BANK PLC 3 83,445 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,100.00 3.55 3.80 32 1,111,534 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 9.09 8 156,822 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 32,674.47 1.65 -1.79 34 3,031,861 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 STANBIC IBTC HOLDINGS PLC 390,165.07 38.10 - 12 7,988 UNITED CAPITAL PLC 11,400.00 1.90 4.21 78 4,289,044 164 8,597,249 583 149,219,863 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 1 31,325 1 31,325 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,388.62 4.50 - 2 521 GLAXO SMITHKLINE CONSUMER NIG. PLC. 9,925.77 8.30 - 2 453 MAY & BAKER NIGERIA PLC. 3,536.73 2.05 - 8 146,844 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,044.54 0.55 - 3 10,600 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 2 1,100 17 159,518 18 190,843 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 6 335,098 6 335,098 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 2 1,100 NCR (NIGERIA) PLC. 626.40 5.80 - 2 11,900 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 5 440 9 13,440 PROCESSING SYSTEMS CHAMS PLC 1,220.98 0.26 - 7 156,743 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 7 156,743 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,215,762.01 323.50 - 6 151 6 151 28 505,432 BUILDING MATERIALS BERGER PAINTS PLC 1,985.29 6.85 - 13 148,050 CAP PLC 17,325.00 24.75 - 14 86,189 CEMENT CO. OF NORTH.NIG. PLC 184,009.01 14.00 - 12 19,850 MEYER PLC. 313.43 0.59 - 1 100 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 1 10 41 254,199 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,747.66 1.56 0.64 17 1,158,557 17 1,158,557 PACKAGING/CONTAINERS BETA GLASS PLC. 29,873.33 59.75 - 2 1,210 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 1,210 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 60 1,413,966 CHEMICALS B.O.C. GASES PLC. 2,318.48 5.57 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 2 28,925 2 28,925 2 28,925 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 18 1,117,115 18 1,117,115 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,996.23 3.70 1.37 36 355,863 36 355,863 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 56,974.05 158.00 - 6 304,195 CONOIL PLC 12,248.25 17.65 - 20 79,790 ETERNA PLC. 3,390.78 2.60 - 19 251,400 FORTE OIL PLC. 22,142.18 17.00 1.19 77 1,047,502 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 0 0 TOTAL NIGERIA PLC. 38,977.11 114.80 - 25 15,409 147 1,698,296 201 3,171,274 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 100 1 100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,806.00 4.76 - 3 155 TRANS-NATIONWIDE EXPRESS PLC. 361.01 0.77 - 1 200 4 355 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 3,035.04 1.46 - 1 5,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 100 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 2 5,100 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 5 81,636 5 81,636 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 2 3,760 LEARN AFRICA PLC 1,080.03 1.40 - 8 35,291 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 1,000 UNIVERSITY PRESS PLC. 690.26 1.60 - 6 20,350 17 60,401

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BUSINESS DAY Wednesday 14 August 2019 www.businessday.ng

Rwanda: Where even poverty data must toe Kagame’s line ... An FT investigation reveals that some statistics could have been manipulated Tom Wilson in Nairobi and David Blood in London

n landlocked Rwanda, a small mountain state in the centre of Africa, strongman President Paul Kagame has overseen a miracle. From the ashes of a genocide in which some 800,000 people were killed in just 100 days, Mr Kagame has built a thriving economy, clamped down on corruption and lifted thousands of people out of poverty, official data show. Since he became president in 2000, growth in gross domestic product has exceeded 7 per cent a year, infant mortality has halved and access to education and healthcare has soared. In turn, the country has become a darling of the development community. The World Bank has committed more than $4bn to the country since the 1994 genocide and championed huge structural reforms in sectors including health, education and agriculture. Even as some exiled former allies have questioned the government’s economic performance and criticism of Mr Kagame’s authoritarian tactics has mounted, the World Bank’s support has continued. In the past decade, opposition parties have been squeezed out of the political system and dozens of regime opponents have been detained or died in suspicious circumstances. Mr Kagame was elected for a third term in 2017 with 99 per cent of the vote. In 2018, World Bank funding to Kigali more than doubled to a record $545m. Yet a Financial Times analysis of government statistics has found that the data look to have been misrepresented on at least one occasion, casting doubt on both the strength of the proclaimed economic miracle and the integrity of Rwanda’s relationship with its biggest donor. The Rwandan government says poverty has reduced progressively since 2001 in the country of 12m people. But according to an FT analysis of survey data published by the Rwandan bureau of statistics, poverty increased during at least one important period — the run-up to a referendum in 2015 that allowed Mr Kagame to extend his then 15-year rule for up to another two decades. Opposition politicians say the country’s poverty level is part of a much bigger deception over economic progress in which donors, keen to laud Rwanda as a success story, have become complicit. “(The government is) trying to convey that we are developing so they can hide what is really going on,” says Diane Rwigara, who was jailed for 12 months after she challenged Mr Kagame for the presidency in 2017. “When you come here as a visitor all is put in

People shop at a market in Kayumbu, Rwanda. FT analysis of Rwandan statistics shows rising prices meant poverty most likely increased between 2010 and 2014 © Corbis via Getty Images

place to impress you, but the reality is well hidden. You have to live it to believe it.” A small number of academics first challenged Rwanda’s poverty statistics in 2015, leading the country to revise its analysis in 2016 and the World Bank to publish its own response last year. The academics’ findings, some of which have been published by the Review of African Political Economy, are compelling, independent experts say, but have been drowned out by the strength of Rwanda and the World Bank’s comprehensive denials. However, the FT analysis of the survey’s more than 14,000 data points and interviews with academics shows that rising prices for Rwandan families meant poverty most likely increased between 2010 and 2014. Rwanda and the World Bank reject the FT’s findings, insisting their own calculations are accurate. “Rwanda’s performance in poverty reduction . . . is unequivocally real,” Yusuf Murangwa, directorgeneral of the National Institute of Statistics of Rwanda, says. Progress was further corroborated, he adds, by the positive trend in other areas including financial inclusion, the expansion of tax receipts and the results of the country’s demographic and health surveys. “None of that would have been possible if poverty had actually been rising, as alleged,” he says. Critics such as David Himbara, who was head of Mr Kagame’s strategy and policy unit until he fled the country in 2010 over what he says was his reluctance to massage official data, insist that poverty levels are just one of many manipulated figures in a regime where even statistics must toe the party line. “Every number for Kagame matters whether it is politics or economics, and that is the way he convinces the donors to look away from his repression and rather

concentrate on economic development,” says Mr Himbara, speaking from Canada, where he lives in self-imposed exile. “[The donors] can look away from the authoritarian side because he promises to deliver on the economy, so he has to keep showing that the numbers are great.” The NISR assesses poverty levels via a regular household survey that asks what a representative sample of Rwandans are consuming on an annual basis. The NISR then compares the costs of those goods to a national poverty line. The result of its fourth such survey was published in August 2015 as Mr Kagame was preparing for the referendum. Every assessment since 2001 had recorded a drop in the number of poor in the country and the government expected progress to be made again. The 2015 report did not disappoint. The proportion of the country living in poverty had fallen from 44.9 per cent of the population in 2011 to 39.1 per cent in

”

Rwanda denies that it has misrepresented the results. “The claim that poverty in Rwanda increased between 2011 and 2014 is wrong,” says Mr Murangwa

2014, it said. But the finding was immediately challenged. Measuring levels of poverty, like calculating other economic indicators, is a complex process in which different assumptions need to be made about factors ranging from the type and value of the products consumed by the population to how prices are likely to have changed over time and geography. On this occasion, Rwanda’s statisticians had decided to update the basket of goods used to calculate the poverty line for the first time since 2001. The adjustment was necessary, the NISR said, because of changes in how people were living and eating. While countries often update the way their poverty line is calculated, NISR did not initially make the same adjustments to the results of the previous survey, rendering the government’s comparison of poverty levels between 2011 and 2014 flawed, experts such as the Belgian academic Filip Reyntjens said. In response, Rwanda analysed the results of the survey again in 2016, publishing a new report in which it used a cost of living index to adjust the results of the 2011 study to 2014 prices. The result, Rwanda said, was the same — the poverty rate had fallen. “The key conclusion — that poverty fell substantially between 2010/11 and 2013/14 — is robust: it holds true,” Mr Murangwa said in the report. In fact, poverty had fallen by 6.9 percentage points, even further than first thought, he added. The FT analysis of the same data contradicts that finding, suggesting there has been a consistent attempt since 2015 to misrepresent the results. According to the FT calculations it is only possible to show a poverty decline of 6.9 percentage points if the mean value of the NISR’s cost of living index was 4.7 per cent. Put more simply, poverty could only have fallen by such a

large margin if average prices for the poorest 40 per cent of households increased by 4.7 per cent or less between January 2011 and January 2014. Four academics contacted by the FT say they believed prices in rural communities increased by significantly more than 4.7 per cent during the period in question and that it looked like a low estimation of price rises had been used to skew the results and imply a reduction in poverty that did not exist. Sam Desiere, a senior researcher at Belgium’s University of Leuven who has studied Rwanda’s poverty statistics, says average prices probably increased by at least 30 per cent between 2011 and 2014 based on his analysis of price data included in Rwanda’s household survey. That conclusion would imply that poverty increased by about 6.6 percentage points, according to the FT analysis. “The higher the inflation rate,” says Mr Desiere, “the more poverty increases.” Rwanda denies that it has misrepresented the results. “The claim that poverty in Rwanda increased between 2011 and 2014 is wrong,” says Mr Murangwa. The NISR later added that it was “inappropriate” to use a mean of the cost of living index to understand how it adjusted prices between the two surveys but declined to provide any further details about the rates it used. The subjectivity of the assumptions economists must make to estimate and compare poverty levels makes it very difficult to reach a definitive conclusion. But even Rwanda’s own consultants disputed the government’s view that poverty had declined. UK-based consultancy Oxford Policy Management was hired by the NISR to help it complete the poverty analysis in 2015, as it had done on each of the three previous surveys. OPM’s team found that poverty had increased by at least 6 per cent but the finding was rejected by the Rwanda government, according to a person familiar with the firm’s work for the NISR, who asked not to be named. With the constitutional referendum approaching that December, officials were under pressure to show continued progress and there was no way an undesirable increase in poverty could be tolerated, the person says. After weeks of debate over Rwanda’s proposed new methodology, OPM ended the contract and did not sign-off the final report, the person adds. OPM confirmed it was contracted by NISR in 2015 to help analyse the results of the survey but declined to comment further due to client confidentiality.

•Continues online at www.businessday.ng

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