BusinessDay 14 Nov 2018 by BusinessDay

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Nigeria’s railway ambition suffers setback as GE pulls out of $2bn deal MIKE OCHONMA & LOLADE AKINMURELE igeria’s ambition to revamp its old and dilapidated rail network and connect major economic hubs across the country has suffered a setback as GE has pulled out of the consortium that was going to invest $2.0 billion into the deal. “The development is in line with GE’s decision to exit the Transportation business from its portfolio” Babatunde Oso, GE Transportation leader in charge of Sub-Sahara Africa said in an emailed response to BusinessDay enquiry. General Electric had in May this year announced plans to cut down its business units. It announced a $11-billion deal to merge its transportation business with train equipment maker Wabtec, which resulted in GE exiting its transportation business, the unit that has been negotiating with the Continues on page 38

Inside Nigeria’s cocoa price rises 21% in three weeks, as flooding cuts output P. 2 I will no longer submit myself for trial – Dasuki P. 38

L-R: Rotimi Amaechi, minister of transportation; Vice President Yemi Osinbajo; Okechukwu Enelamah, minister, industry, trade, and investment; Audu Ogbe, minister of agriculture, and Babatunde Fashola, minister, power, works, and housing, at the Act Now town hall meeting in Abuja.

MTN, Airtel to apply for mobile banking licence Set up subsidiaries for this purpose MTN may launch mobile money service in Q2 2019 L

Jumoke Akiyode-Lawanson

eading telecommunication service providers, MTN Nigeria and Airtel Nigeria have shown major interest in operating in the financial services space and have formed subsidiary companies

in order to apply for a mobile banking licence as stipulated in the payment service banking

policy guidelines released by the Central Bank of Nigeria (CBN), BusinessDay can report.

Once granted a banking license, each of these telecom Continues on page 38

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The Enduring Partnership between the United States and Nigeria By Ambassador Tibor Nagy

his is the last day of my first trip to Africa as the Assistant Secretary of State for African Affairs. I spent most of my 32-year career as an American Diplomat on this continent, and I was fortunate to serve twice in Nigeria. As they say, old friends are the best friends. I am truly excited to be back in Nigeriaandtospeaktoyoutodayabout the enduring relationship between the United States and the countries of Africa, particularly Nigeria. The world, most especially Africa, has changed dramatically from when I became a diplomat in 1978. When I first set foot on the continent in 1978, there were no cellphones, no internet, few television stations, and to call back to America required booking a call days ahead to reserve one of the few international lines. Today, young Africans are as wired and plugged in as any of their global counterparts, and they aspire to the same goals - a quality education, a wellpaying job, a good house, and something left over to help their parents. Through modern technology, even people in the villages now know how much cassava or goats will sell for in the urban areas, so they can get better prices for their products. And if they have the cell phone number of their relative now living in Kano, Abuja, or Lagos they know how to reach them and remind them to send money home. In fact, all those advertisements by GLO mobile remind Nigerians that you truly have no excuse not to call your mother. The United States deeply values its long-standing partnerships with African countries. Across the continent, we face challenges together, from fighting corruption and combating terrorism to helping African nations create healthier, better educated populations with greater opportunities for their citizens. Through our programs like AGOA, PEPFAR, Power Africa, Feed the Future, and the Young African Leaders Initiative, we have walked side-by side with Africa for decades to open up the American market to African goods, to counter the scourge of HIV/AIDS, to bring electricity to rural areas, to help African nations become selfsufficient, and to empower the next generation of African leaders. This trip has been a phenomenal opportunity to see the impressive impact of those partnerships. It has also been a chance for me to highlight four key U.S. policy priorities: First, the United States promotes stronger trade and business ties between Africa and America. To achieve this, African governments need to increase transparency and fairness in their respective commercial environments to attract more business. Investors need a level playing field, predictable policies, and a dispute resolution process that follows the rule of law -- not who pays the highest bribe. America remains the world leader in international brands and American technology and expertise is second to none. And, American companies are eager to invest in Africa and they will bring technology, know-how and, above all, the desire to hire, train, and advance Africans into positions of responsibility. Sadly, as we all know, some other countries have not been willing to do this.

Second, we must harness the potential of Africa’s tremendous youth population to drive Africa’s economic growth and create real prosperity. Both during my first career as a diplomat and my second career in academia as Vice Provost for International Affairs at Texas Tech University, I had numerous interactions with young Nigerians. They were some of the brightest and most talented students I have met anywhere. The question to you is, “How do we harness that talent and entrepreneurial spirit of young Africans as a force for prosperity and stability?” Third, it is critical that we strengthen our partnership to advance peace and security across the continent. We do this through our security and development partnerships with African governments as well as supporting regional mechanisms like ECOWAS. We want to see Nigeria play a larger role in the region -- to use its decades of experience in regional peacekeeping and the recent trend of peaceful democratic transitions to influence the broader region toward a similar path. Fourth, I am here today to reinforce that America has an unwavering commitment to Africa. Our relationship has evolved over decades to one of cooperation, mutual respect, and transparency. Perhaps nowhere is the strength and breadth of the U.S.-African partnership more evident than here in Nigeria. Nigeria has Africa’s largest population and economy. It is a diverse and vibrant democracy on the world’s fastest growing continent. As Nigeria’s population becomes the third-largest in the world by 2050, our partnership will only deepen. I believe that a strong Nigeria is the foundation for a strong continent. As I focus my attention on increasing trade with and U.S. investment on the continent, Nigeria will be at the center of this effort. Nigeria is the United States’ second-largest trading partner in Africa, with over $9 billion in two-way goods trade in 2017. Hundreds of American companies already operate in Nigeria, and in 2017, U.S. investment stood at $5.8 billion. Recently, Nigeria has taken steps to develop more predictable economic policies and a more transparent justice system. However, greater international investment will only come with continued reforms. Nigeria has a wealth of smart, talented, and successful people. Take the story of Amal Hassan from Kano State, who is a Nigerian technopreneur and Chief Executive Officer of Outsource Global. Last year, the U.S. State Department and Fortune Magazine honored her as one of 16 female global business leaders to join the Women’s Mentoring Partnership. And, here’s why. In just the past two years, she expanded her workforce from 50 positions to more than 700, with 70 percent of the jobs held by women. Ms. Hassan’s vision is to establish world-class call centers that make Nigeria an outsourcing destination, in turn creating steady employment opportunities for Nigerian youth and women. •Full text of the remarks delivered by Ambassador Tibor Nagy, U.S. Assistant Secretary of State for African Affairs during a public lecture at Baze University, Abuja on November 9, 2018

•Continues online at www.businessdayonline.com

L-R: Trevor Akindele, chairman, Amazon Energy Group; Ibe Kachikwu, minister of state for petroleum resources; Olayide Williams, vice president, New Ventures, Amazon Energy Group, and Olayinka Oluwatimehin, group chief executive officer, Amazon Energy Group, at the just concluded 25th edition of the Africa Oil Week (AOW) in Cape Town, South Africa.

Nigeria’s cocoa price rises 21% in three weeks, as flooding cuts output ... Cocoa Association says production may fall 7% Josephine Okojie

he price of cocoa beans in Nigeria, the country’s second-largest export earner after oil, jumped 21 percent in three weeks, on fears that flooding that ravaged farms could cut output, forcing the industry to lower its output forecast for the year, officials, farmers and traders say. PricepermetrictonrosetoN700,000 ($2,282.36) from N580,000, as buyers scrambledforthebeans,astheindustry organisation said output for the year could fall by as much as seven percent on poor weather conditions. “The high incident of this year’s rainfall has cut down our 2017-2018 production by seven percent,” Sayina Rima, national president, Cocoa Association of Nigeria (CAN) said by phone from his farm in Ikom, in the South-South region. Nigeria currently ranks joint fifth with neighbouring Cameroon with 210, 000 metric tons production in the 2016-2017 season, accord-

ing to data from the International Cocoa Organisation (ICCO). The international organisation estimated Nigeria’s production to reach 240,000 metric tons in the 2017-2018 output. However, CAN fears that a decline in cocoa output could lead to a drop in the country’s position among the leading cocoa producing countries. Rima said that high humidity led to the outbreak of Black Pod, a fungus diseasediseases, this year and that the flood has made it difficult for farmers to sun-dry their cocoa beans properly. “The combination of these factors has led to a decline in our production when compared to that of last season,” Rima explained. These developments have led the surge in prices as exporters find it difficult to get enough quantity for export, Rima added. Farmers do not have adequate sunlight to dry their beans and this has resulted in the scarcity, Zacheaus Egbewusi, chief executive officer of Lagos-basedAgri-commodityInspection Limited, told BusinessDay by phone. Egbewusi said that farmers are un-

able to maintain the quality of their cocoa beans, as machine-drying , which is not easily available in most rural areas, reduces the flavour of the beans. Ademola Akinmulure, a cocoa farmer in Omioliyan village in western Ondo State, says he is yet to produce a third of the quantity he had by this time a year ago. “By this time last year, I had produced three tons of beans for sale, but this year’s main crop I am yet to even get a ton of dried cocoa beans,’’ he said by phone. “My cocoa pods got spoilt on the farm because I could not harvest it on time. I did not make anything from this year cocoa farming,” Akinmulure added. Nigeriahastwococoaharvestswhich include the smaller midcrop from April toJune,andthemaincropfromOctober to December. The main crop, which produces bigger bean seeds, normally accounts for about 70 percent of Nigeria’s cocoa output while the midcrop accounts for the remaining percentage. At the international market, a metric ton of cocoa was sold at $2,186 as at the time of writing.

Ilorin, UI, FUTA, UNAAB offer better return on investment for graduates KELECHI EWUZIE

niversity of Ilorin offers better return on investment for graduates. The Nigerian Graduate Report 2018, prepared by Stutern in partnership with budgiT and Jobberman has shown. The report identified that a student from University of Ilorin can earn the total academic tuition fee more than 13 times in their first year of full-time paid employment. Average annual salary for graduates from University of Ilorin according to the report is N883,922.89 while the average academic tuition for the university is N64,307.50. Also, University of Ibadan graduates will earn an average of N1,064,510.71 average annual salary while the average academic tuition stands at N87,002.50. Other institutions listed in the

report with better return on investment for graduates includes: Federal University of Technology, Akure with an average annual salary for graduates of N 1,038,614.90 and an average academic tuition of N96,000.00. University of Agriculture, Abeokuta with an N 9 17,495.75 average annual salary and average academic tuition of N108,750.00; Federal University of Technology, Minna’s graduates attracts N 1 ,010,994.30 average annual salary while the average academic tuition is N 1 24,300.00 Ahmadu Bello University, Zaria attracts average annual salary N 939,995.00 forgraduateswhile average academic tuition is 119,700.00; University of Lagos attracts N 883,938.17 while tuition is N 115,750.00; Obafemi Awolowo University, Ile-Ife attracts N912,469.90 while N126,746.43 is the Average academic tuition. Nnamdi Azikiwe University, Awka with N 737,995.20 annual salary, N 135,150.00 Academic tuition

and University of Nigeria, Nsukka with N 993,328.13 average annual salary and N 199,942.43 average academic tuition complete the list of top 10 universities with better return on investment offer for graduates. Olufemi Bamiro, a professor of Mechanical Engineering told BusinessDay that managers of higher education institutions need to run programmes that are relevant to the needs of industries and to ensure such programmes provide the necessary skills to their students to facilitate their eventual employment. He observes that the involvement of professional bodies from business and industry sector in the provision of state of the art facility will help students to be exposed to the practical aspects of their studies, and provides them with a direct contact with industry.

•Continues online at www.businessdayonline.com

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Solid minerals contribute N43.2bn to government revenue in 2016 - NEITI report HARRISON EDEH, Abuja

… as FG, states, LGs share N9.9bn

olid minerals sector contributed N43.22 billion to government coffers in 2016, reports the Nigeria Extractive Industries Transparency Initiative (NEITI). A breakdown of the figure shows that taxes collected by the Federal Inland Revenue Service (FIRS) accounted for N40.38 billion or 93.43%, while fees collected by the Mining Cadastral Office stood at N1.15 billion or 2.66%. The Mining Inspectorate Department (MID) recorded N1.64 billion as royalty payments, an increase of 30.15% over the N1.27 billion reported as royalty payments in 2015. These are some of the highlights of the 2016 audit report of the solid minerals sector released Tuesday by NEITI. The audit was conducted under the EITI principles and standard reconciled payments made by mining companies in terms of taxes, royalty and rents against receipts

of such payments by relevant government agencies. From the report, issued by Orji Ogbonnaya Orji, director, communications and advocacy, total minerals production for 2016 was 41.87 million tons valued at N34.09 billion, representing 33% increase on the N25.56 billion reported in 2015. However, tax collection and payment of other fees for 2016 reduced by 32% when compared with the figure of N63.98 billion for 2015. The report further disclosed that while 651 extractive companies made royalty payments in 2016, only 56 companies that met the materiality threshold of N3 million and above were considered for reconciliation. The companies that met this threshold accounted for 86.87% of the total royalties paid. On state-by-state minerals production, Ogun State contributed 33.49% to the total production to top the table, followed by Kogi State with a contribution of 19.7%, while

FCT came third with 6.20%. From the report, minerals production by companies shows that three companies - Dangote Cement plc, West African Portland Cement plc, and United Cement Company of Nigeria Limited (UNICEM) contributed 70% of total production in 2016. This shows that the cement sub-sector is still dominant in solid minerals production activities. Further analysis of production by minerals types shows that limestone was the most produced mineral and accounted for 49.35% of the total solid minerals production in 2016, followed by granite with 31.32%. The least contributions were made by gypsum, iron, talc and amethyst with 0.1% each. The report also revealed that the solid minerals sector’s contribution to exports in 2016 stood at N11.16 billion, representing 3.38% of the N330.01 billion for non-oil exports and 0.13% of total export of N8.53 trillion.

Christian Business Fair kicks off in Lagos

he second edition of the ‘Christian Business Fair,’ organised by the Catholic Young Adults Association (CYAA) of our Lady Mother and Queen Catholic Church Badore Ajah, will hold from November 15 to 17, 2018, at Our Lady Mother of Perpetual Help Catholic Church, Addo Road, opposite Thomas Estate, Ajah. This year, the fair will welcome about 100 exhibitors from all over Lagos and surrounding areas, and nearly 5,000 visitors. It will be a showcase of a wide range of products including food products, household items, electronics and a variety of services from home and industrial cleaning to schools, interior designs, architecture, builders and land developers, and so on.

With increasing accessibility and reliance on phones and the internet, it is important that SMEs learn to leverage this huge virtual market space and on technology to promote their businesses and become more efficient and cost effective. This is why this year’s theme – ‘Leveraging ICT for SME Development in Nigeria’ is quite apt, said a statement from the organisers. The goal is to help introduce small businesses to the latest techdriven solutions to boost production and improve business efficiency, the statement added. As the former president of the CYAA and the founder of the Christian Business Fair, Francis Ugokwe said during at the maiden edition, “Christianity is Love in action and this

is what the Christian Business Fair represents. We have created a platform for empowering and promoting Christian Enterprise.” The current president, Ijeoma Ibuaka, also said, “The focus on Christians is not to disenfranchise other religions but to effect positive change, beginning from our circle of influence. We hope that we will continue to grow till we are big enough to reach out to everyone.” Major Highlights of this year’s fair include: Exhibition and Networking – The #CBF2018 provides the opportunity to meet with Christian entrepreneurs and to interact with nearly 100 business owners and 5,000 potential clients. It is a platform to enable business owners grow their client base.

MSMEs operators in Lagos commend government’s financial inclusion initiative KELECHI EWUZIE

icro Small and Medium Enterprise operators in Ikotun, Igando and Ile Epo markets in Lagos State have commended the Federal Government financial inclusion initiative aimed at boosting profitability at the grassroots level. They say the National Social Investment Programme scheme by the Federal Government would greatly improve the fortune of local traders in the state. Jide Akanni, a butcher at Old Epo Market, applauds the gesture but pleads for more loans, saying it would help to boost his businesses, with as

much fund as possible made available to him. Akanni says it took the arrival of TraderMoni officials in the market for him to be convinced that it was real, adding that having been registered and his account credited, he now believes the scheme is real. According to Akanni, “When they say TraderMoni, I always thought it was one of these political gimmicks. But today, I am convinced it is real. If I can repay the initial loan given, I have been assured of prompt increased money.” Yemisi Babalola, a salt trader in Ikotun Market, expresses readiness to invest the money in her trade, saying

although she would love the money to be increased, she is nonetheless going to make judicious use of the initial fund to qualify for more loans. Earlier, Vice President Yemi Osinbajo, while interacting with the traders, said after he launched the Federal Government’s N10,000 interest free loans, otherwise known as TraderMoni, the objective of the scheme would be defeated if traders do not repay the loan to secure more from Federal Government. “This is one initiative this administration has put in place to address the plights of those at the grassroots. To help you grow your businesses and make lives meaningful to you and your families.

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comment Small Business handbook

Emeka Osuji Dr Emeka Osuji School of Management and Social Sciences Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

perators in the microfinance industry recently woke up to the news of an increase in the capital base of the different categories of microfinance banks in the country. The news was conveyed through a circular issued by the apex bank – the CBN. While the directive came with all the shock that naturally attends such regulatory actions, it cannot be said to be totally unexpected. Everyone saw it coming. Perhaps, the only surprise in it was the magnitude of the increase. Over the past several months, there have been calls for the further protection and strengthening of the banking sector in general and the microfinance industry in particular. The calls were for some reform measures that should include, as of necessity, an upward review of the capital bases of the various categories of microfinance banks. The decision to review upwards, the capital base of the operators was finally conveyed in October, 2018. Considerably mixed reactions have since dogged the action. Weshall attempt here to bring out some facts that we believe will assist stakeholders in understanding the action of the apex bank, in this regard. Prior to the recent review, the three categories of operators in the microfinance industry namely, the

Character Matters with Daps

Dapo Akande 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

any of us resort to breaking the proverbial bank in a bid to give our children the finest education possible, and so we should. As loving parents we naturally want the best for them. Our desire is that they fulfil their potential by becoming the best they can be. We want them to excel academically, get the best jobs, establish the most successful companies, shine in their professions, be elected governors or even president. And why not? But is that where it should end? Is that all it should be about? If all of our children without exception pass out of secondary school with straight “As” and graduate from university with 1st class degrees is that enough to guarantee a bright and

Wednesday 14 November 2018

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Understanding the changing capital requirement in the microfinance industry Unit, the State and the National licensees, had regulatory capital of N20million, N100million and N2billion, respectively. Much of these have been impaired by losses, given what we know about the Non-performing Loans of the sector. The new capital requirement for Unit MFB is N200million while State MFBs are required to have a capital base of N2billion. National MFBs will be capitalized to the tune of N5billion. Some of us may remember when the capital requirement for commercial banks was about N6million. Now you need N5billion to operate (rich people’s kind of money to operate poor people’s bank). Some are wondering why. The normal trends in the discussion of higher capital bases for financial institutions have almost always hinged on two issues: the need to protect the industry in order to avoid financial crises of the types witnessed recently, not only in Nigeria but across the globe. The other angle to the debate is usually on the need to understand that higher capital base has some costs it imposes on the financial sector and its stakeholders. For one, banks are likely to cut down on lending while charging more for loans. They are also likely to reduce payments they make on deposits, as part of the necessary steps they could take to maintain an acceptable level of return on the larger capital base needed to be employed under such new capital regimes. In other words, there are the twin issues of a sectoral and general macroeconomic stability, on the one hand, and the economic costs arising from deteriorated lending conditions and other impacts on banking services

‘

Regulators are … encouraged to be even more vigilant when banks are highly capitalized than when they are not, because that is when many of the ‘off balance sheet’ transactions that sink banks are likely to be procured

’

occasioned by the capital increase, on the other. There is therefore a need to competently balance these effects, when considering hikes in bank capital. That job is not easy. The importance of capital in the affairs of a financial institution has long been established. It is the shock absorber of the bank and comes handy to meet some of the liabilities in case of trouble. It is important to know however, that the capital requirement generated by market conditions and outcomes, differs from regulatory capital. This is also well embedded in the books on capital structures. Determining the amount of capital suitable for financial institutions is not a piece of cake. Economists have, over the years, been studying this problem. The basic model from which most research on capital structures depart is the Modigliani-Miller (M&M) model, developed in 1958, proposing that in a frictionless world of full employment, a

firm’s capital structure does not affect its value. The presence of varied degrees of risk among banks makes it somewhat unrealistic for them to have a common capital requirement. This probably one of the arguments, especially by the smaller operators, against uniform hikes in capital. However, it is not easy to compute the capital needs of banks on an individual basis. While certain factors tend to reduce market determined capital requirements, others tend to raise it. For instance, tax considerations tend to reduce market determined capital requirements while the expected costs of financial distress tend to raise the requirement. Also, transactions costs and asymmetric information problems may either raise or lower the capital to be held by a financial institution. Similarly, deposit insurance or safetynets tend to shield bank creditors from the full consequences of the risks taken by their banks. This also tends to reduce market determined capital requirement for banks. Thus, regulatory capital requirement does not respond effectively to the perceived differences in the risks carried by individual banks. It is therefore difficult to set precise capital ratios that reflect bank risks. Given the highly risky market of the MFBs and the state of health of many, the regulators have a good reason to enhance their capacity to withstand shocks, by raising their regulatory capital needs. A simple risk-based ratios may not solve the problem of reducing risk. First, the capital in the numerator of the ratio may not control for the incentive for moral hazards, which is hard to measure. Besides, the risk in the denominator (risk assets) is

imprecise and hardly corresponds to actual risk inherent in the embedded facilities, and also may be subject to manipulation. In order to minimize bank risk, therefore, capital requirements are often set much higher than they would have been, if capital ratios were to be set at their precise levels. One of the problems of setting high capital requirements, which operators may consider too high above their needs as some do in the present case, is that it may encourage more risk-taking (higher risk appetite, due to a kind of money illusion or wealth effect). This increases the risk of failure among operators. It has even been suggested that this kind of behaviour was one of the reasons at the root of the crash of 2008. On the other hand, very high capital requirements also tend to lead regulators astray and into the error of thinking that they could look away from the ball and be fine, because the large capital base would provide operators a good cushion against losses. They forget that the operators themselves may be in the same error, lowering their guards and demonstrating more financial rascality, when they perceive themselves as super capitalized. Regulators are therefore encouraged to be even more vigilant when banks are highly capitalized than when they are not, because that is when many of the Off Balance Sheet transactions that sink banks are likely to be procured. As for the increase in capital requirements, I believe it offers operators the needed tonic to be better grassroots bankers rather than the mimicry of commercial banks they tend to be.

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Education revealed... Part 3 prosperous future for our dear nation? Or is our attitude, “to hell with the nation, let my child just make it”. At my boarding school, just as it was at any typical British public school, (what we call private school) team sports was played four or five days a week; whether it was rugby, football, hockey, cricket, rowing or others. These took the form of training sessions and mock matches for those who played for the school teams. Each term of the year had its predominant sport where the school teams had their calendar of inter school matches laid out and firmly fixed before the term even began. So we knew which teams we would play and when. If I remember correctly, we played seventeen inter school matches during my last rugby term. That was over a three month term. These matches took place either on a Wednesday or a Saturday and sometimes both. So you can deduce from this just how much of an integral part of school life sports was. Especially team sports. There was always far more emphasis on team sports than individual disciplines. And there’s reason for this. The only days we weren’t compelled to play was on Sundays and

one other day of the week when we had to participate in other equally important activities. At my school we had three activities to choose from and most schools had the same three, pretty much. One was the Combined Cadet Force (CCF), a second was Outward Bound and the third was Social Services. CCF was essentially military training which inculcated discipline, a spirit of service and a sense of patriotism. Of course we wore the full uniform. Outward Bound, as one site puts it, “is a non-profit, independent experiential learning organization, serving schools in 33 countries. Outward Bound programs aim to foster the personal growth and social skills of participants by using challenging expeditions in the outdoors.” Another says, the “successful completion of your course demands trust, mastery of skills, fitness, confidence, tenacity, leadership, initiative and compassion. The promotion of these qualities, and the discovery of what’s in you, is the purpose of Outward Bound.” I couldn’t have put it better myself. Social Services on the other hand was an entirely different exercise which called for some slightly different qualities. Participants would visit old people at their homes to assist them in whichever way was required. Chores

could vary from cleaning up their home and generally helping around the house to carrying out their weekly shopping for them. Heck, at times it may be to just accompany them on a walk while having a friendly chat. Remember, their culture is so different to ours. Many of these elderly people live on their own without the support system, extended family which we take for granted, provides. Many may not have seen their siblings for years, not to talk of cousins and so on. With this in mind you may now begin to understand why the weekly visits to them by those involved in the Social Services activity was something these aged folks often looked forward to. This noble activity, much like the other two, instilled a gentle spirit to serve, compassion and two essential sister virtues required of a good leader, patience and tolerance. Of course, not all of these elderly people were sweet and cuddly. Some were as grouchy as they come. On an Outward Bound camping trip to Dartmoor, known for its vast expanse of heathland and frighteningly strong winds, in just one day we went through three climatic changes. Lovely sunny weather as we trekked through its national park famously inhabited by the Dartmoor wild deer; dreary

weather with grey clouds, heavy winds and pelting down rain as we marched with trepidation across the notoriously uneven heathland, careful not to break an ankle, literally in the middle of nowhere. This must have been 1984 or 1985, so long before the advent of mobile phones. If you injured yourself there, for want of a better term, you were screwed. Each group was made up of four fifteen or sixteen year old boys. No masters (teachers). With only our compass and maps to guide us to our rendezvous. The only time we spent with the two masters who accompanied us on the trip was from each evening, at our agreed meeting points, till early the next morning, when we set off from camp. Anyway, by evening and stretching through the night, we endured the merciless battering of relentless, gusty and howling winds coupled with snow blizzards, as we struggled to keep our flimsy tents pinned to the ground. Note: The rest of this article continues in the online edition of Business Day @ https://businessdayonline.com

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comment Character Matters with Daps

KENNETH AMAESHI Amaeshi is a policy analyst and full professor of business and sustainable development at the University of Edinburgh, United Kingdom. He tweets @kenamaeshi

he dominant view in most countries is that firms are excessively involved in tax avoidance. The odd thing is that tax avoidance, which is also known as strategic tax planning (a more appropriate business expression), is not illegal. Tax avoidance simply means adhering to the letters and not necessarily to the spirit of tax laws. As such, it is deemed wise and rational to take advantage of loopholes in tax laws and systems, where such exist. In order to take advantage of the system, businesses usually employ an array of experts – ranging from lawyers, accountants, to lobbyists – to help them implement creative tax strategies. Some law and accounting firms have dedicated and lucrative services to this tax avoidance market. In their view, strategic tax planning can be a real value add to any firm that does it well. Framed as such, it becomes a source of competitive advantage and a very attractive proposition to many business leaders and shareholders. Hence the popularity of strategic tax planning. Obviously, strategic tax planning, as tax avoidance, will have negative implications for tax compliance and tax revenues. That is why tax regulators, collectors, and administrators do their best to discourage firms from being too innovative with their tax arrangements in order to enhance compliance and

YINKA OLAITO Olaito is a communications and media specialist

frica’s media landscape has come of age. Given where it all began, we cannot but say there have been a couple of improvements when compared to what obtains today. The only challenge is that the media narrative is still being dominated and controlled by the advanced or western media. Africa’s stories had not enjoyed the kind of attention one expects. The simple conclusion one can draw is he who pays the piper dictates the tune. Africans had long awaited a change in its media narrative but it is obvious not much can change until Africans take the drivers’ seat of their own media. Africa Foundation For Young Media Professionals, a non-profits media skill development, is doing a pioneering work in this business of changing the media narrative in Africa. This piece therefore brings to bear some of its challenges. Despite these challenges its sees a new day and more determined to pursue its goals. The aim of documenting this is to serve as knowledge reservoir

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Tax accountability matters! increase tax revenues. Some regulators have gone as far as asking firms to discuss any innovative tax practices they conceive before implementing them. This way, the degree of information asymmetry, which is at the foundation of tax avoidance, could be minimised. Hence, the emphasis on business taxation is heavily skewed towards ways to enhance compliance, minimise tax avoidance, and eradicate tax evasion. Tax compliance has its benefits. Beyond increasing tax revenues for the government, it has also been argued to be a good way to build democracy. In other words, taxation helps to restore the link between politics and citizenship. Through such, democratic processes and institutions are strengthened for societal progress. In addition, the quest for enhanced tax compliance can lead to better information and data management systems and enhance ancillary and complementary services such as better policing and strengthened legal systems, for example. These are often referred to as positive spill-over effects of enhanced tax system. Whilst compliance should be encouraged, it becomes difficult to realise in a system characterised by low trust and weak enforcement mechanisms. This is usually the case in most developing economies, where the formal institutions of democracy and capitalism are usually at their worst. Low trust regimes often lead to low tax morale. Weak enforcement mechanism often leads to low tax compliance. This leaves most countries in this situation in a double tragedy and brings to the fore the often challenging question of the egg vs chicken conundrum. Unfortunately, it is not a case of either high trust or better enforcement mechanisms; the two need to be pursued simultaneously, but how? Our ongoing study on tax compliance in Nigeria confirms that the

‘ We suggest that one way to address the challenges of low tax accountability is for the government to set up a tax accountability desk that will be in charge of communicating and publicising how tax revenues are spent

’

country experiences both low tax morale and low tax compliance. Although the government agencies – especially the Federal Inland Revenues Services (FIRS) – have invested a lot in aggressive compliance infrastructure, there have been some minor progress; however, tax revenues are still very much suboptimal. This finding supports the view in the literature that tax enforcement infrastructure needs to be complemented by enhanced tax morale. Otherwise pursuing one and not the other comes across as a futile effort to clap with one hand. Unfortunately, most governments in Africa seem to be in this trap. One way to raise tax morale is for the government to be seen to be transparent and accountable. Citizens need to know how tax money is used and spent. They need to feel the dividends of tax. In other words, tax needs to pay! But oftentimes, tax accountability is the missing part of the jigsaw. From our

study, also, the citizens have a very poor perception of the government in relation to tax accountability. It is like pouring money into a bottomless pit. They often argue that they pay taxes and are still their own “local governments” – i.e. they still provide those amenities their taxes should have provided for them if well spent. Some argue that the government cannot be trusted with more money until the government is able to make better use of oil revenues. But why does low tax accountability persist? A possible and straightforward answer to this question coming from our research finding is the low capacity in the public sector to deal with tax accountability. In other words, the current structure does not have a place for tax accountability. The FIRS Act, for instance, only mandates it to raise tax revenues. Beyond that, it cannot account for how tax revenues are used. The ministry of finance and the ministry of budget and planning appear to be silent on this – perhaps due to capacity constraints. Another reason advanced by interviewees of our research is corruption. They simply think that the government is terrified by accountability and would rather keep mute about it because of the corruption that goes on in government. Whether this is true in reality or not is a different matter, but the perception is as strong and as real as it can be. Unfortunately, this lack of trust due to low tax accountability will continue to impede and undermine tax compliance if not addressed. We suggest that one way to address the challenges of low tax accountability is for the government to set up a tax accountability desk that will be in charge of communicating and publicising how tax revenues are spent. The other suggestion is for tax revenues to be earmarked for development goals. For instance, the government can have a 10 year plan where one of the Sustainable Develop-

ment Goals (SDGs) could be identified a year ahead as the target of the following year’s tax revenues. Where and when these commitments are fulfilled over the suggested period, it would be a very good way to build trust and restore the social contract between the citizens and the government. Beyond these options, the economic elites can also volunteer to ask for tax transparency and accountability. It is argued that they provide the largest share of tax revenues in most countries. So, it would not be out of place for them to demand for transparency and accountability. Whilst corporate social responsibility is on the rise in Nigeria, tax compliance and demand for tax accountability on the part of businesses and their leaders can contribute to strengthening taxation and democratic institutions in Nigeria. The Nigerian Economic Summit Group (NESG) now has a fiscal policy committee, which is a development in the right direction. Hopefully, this committee would be able to galvanise business leaders and economic elites in Nigeria to make their taxes work for them. There are obvious risks harboured in this suggestion, but where danger lies, also lies the saving power, according to Holderlin, a German poet. And he who comes to equity must come with clean hands. Herein lies the taste of the pudding, for business and economic elites, so to speak!

• This article is from a study on “How to minimise tax avoidance and enhance tax compliance in Nigeria” led by Professor Amaeshi and fully funded by the International Centre for Tax and Development (ICTDhttp://www.ictd.ac/) of the Institute of Development Studies (IDS- http:// www.ids.ac.uk/), United Kingdom.

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Repositioning Nigeria, Africa’s media narratives for others. It is no longer news, Africa Foundation For Young Media Professionals’ major objective is focused on the next generation of media practitioners across Africa beginning with Nigeria. Students of media and communications need a new perspective, direction in their training. ‘Gown and town’ experience must be balanced if Africa must achieve significant progress. In doing this, there must also be a level of hard work on what we have now: present crops of media professionals, so they can help in the process of shaping the right future for Africa’s media landscape. While the non-profits ultimate operations’ environment is Africa with Nigeria as the starting point. Here are some of the challenges faced in Nigeria. Government’s commitment must change, if media narratives in Nigeria and Africa at large must change. Government at all levels need to change its commitment to funding media infrastructure, policy and engagement. When speed is required, a carefree commitment

will not suffice. Media training institutions’ leadership, at present our observation and experience with media institutions where students are trained show some of the leaders: teachers, lecturers, faculty or whatever names they are called must embrace a new level of attitude. It is obvious, the challenges in our learning environment can be overwhelming. But it is clear leaders in media training institutions can also do a lot of damage to the quality of future media practitioners that are being trained now. Leaders of media training institutions need to see the big picture despite the challenges. Other stakeholders, like ours, are partners in progress. The moment some hear a non-profits wants to help in building capacity of the students, the first impression is such non-profits had gotten funding from somewhere and therefore they need ‘a piece of the cake’ otherwise the efforts will be frustrated. Another known challenge is the learners’ attitude. Here we still have a long way to go. Attitude of many learners towards developing right skills necessary for the future can

really be discouraging. Quite a number of media and communications students do not see any need to put in all the efforts required. Many need to be pushed. There is also a sense of entitlement we feel from some these students. Some of the students have the mentality the society owes them so much before they can be what they have to be. They must appreciate real success begins with a level of personal sacrifices. Unstable school calendars, 70% of Africa Foundation For Young Media Professionals’ activities are focused on the next generation of media and communications practitioners who are students across campuses in Nigeria and Africa. Progress is hampered by unstable school calendars, strike actions by lecturers and other important associations that can help us move faster. Anyone or organization coming into this field must be ready and prepared. When schools are on strike, making progress will be difficult. In few instances, when school resumes after strikes, exams will commence immediately. This implies a longer

waiting time. We do hope as we move around Africa, we can achieve more. Funding, of course a good stew is a product of good investment. Not much can be achieved without it. Since Africa is a huge market, not many nonprofits can move faster without a level of support. A good advantage Africa Foundation For Young Media Professionals has is its board of advisors who are some of the best and known media professionals in Africa. These advisors are spread across all the major regions. They have unalloyed support and commitment to this initiative in their various countries across Africa. So supporting the initiative will be a win-win for any organizations. But despite the challenges, Africa Foundation For Young Media Professionals is poised to make the difference. Its first long term goal is 2025. By that time, it hopes its engagement will have produced a few Pulitzers winners and ensure Africa’s media landscape has become a reference for the world to copy.

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Wednesday 14 November 2018

Meanwhile, the EFCC has remained largely ambivalent on the issue refusing to confirm whether it will investigate the matter of not. Even though the governor enjoys immunity, it does not prevent the EFCC from investigating the governor as was the case with so many other governors in the recent past. Much worse is the loud silence from the presidency who claims to be fighting a war against corruption. Since the videos started trending over three weeks now, the presidency hasn’t said a word about it in public. What Nigerians have been feed with are speculations; and not a few people have attributed the presidency’s silence to the politics of 2019. To be sure, Governor Ganduje is in the midst of a thick political battle to retain his seat as governor and wad off the so-called influence of his former boss and mentor, Rabiu Musa Kwankwaso who has moved to the opposition PDP and has vowed to dislodge the APC from Kano state. The President also got his largest vote from Kano state in the 2015 elections and governor Ganduje has again promised to deliver Kano’s over 5 million votes to the president in 2019. The silence of the president and the EFCC is in sharp contrast to the treatment of former Ekiti state gov-

ernor, Ayo Fayose, whose accounts were variously frozen by the EFCC and who was virtually encircled and kept under watch even while still governor. Immediately after the Ekiti gubernatorial election, which was won by APC’s Kayode Fayemi, EFCC was quick to tweet “The parri is over; The cloak of immunity torn apart, and the staff broken. #Ekiti Integrated Poultry Project/Biological Concepts Limited N1.3bn fraud case file dusted off the shelves. See you soon.” Like we have always maintained, it may be easier to create agencies to fight corruption. It may be easier to launch a media campaign against perceived corrupt officials or even make scapegoat of some, but until the government gets serious and shows absolute commitment to the fight against corruption regardless who is involved, such wars on corruption are bound to fail. As it stands, it will be difficult for the government to convince Nigerians that it is seriously out to fight corruption when the president ignores strong and credible corruption allegations against his party members and shouts and puffs about corruption allegations in the opposition. That will make the President both morally and temperamentally unfit to fight corruption.

Editorial Publisher/CEO

The Ganduje corruption videos

editor Anthony Osae-Brown

n scenes reminiscent of Nigeria’s Nollywood where videos are released in series, for the past weeks, series of videos have been trending online allegedly showing the Kano State Governor, Abdullahi Ganduje, purportedly collecting brides from contractors. The videos show a man stocking wraps of US dollars in his ‘babanriga’, a traditional cloth common in the northern part of the country. When invited by the Kano State House of Assembly to explain the videos, the publisher of Daily Nigerian, Jafaar Jafaar, who published the videos insisted the person on the videos is the governor, Ganduje. According to Jafaar, the said videos were recorded in 2017 after series of complaints from one of the contractors handling projects in the state, that Gnaduje allegedly collects kickbacks from him. According to the contractor, the kickbacks run up from 15% to 25% of each project carried out in the state. In one video, a man is seeing pocketing money, which Jafaar puts at $230,000. The alleged bribe collected is said to have run up to N750m due from N3bn contracts awarded in the state. “More than two years ago, a

Frank Aigbogun

DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua

contractor friend of mine complained to me that the governor had been receiving kickbacks, ranging from 15 to 25 percent, for every project executed in the state from contractors. “We then agreed to plant spy cameras on his Kaftan lapel so that he can capture the brazen act in hard evidence. He captured at least 15 clips, nine of which fully showed the governor’s face, body and hands collecting bundles of dollars”, Jafaar alleged. Ganduje has denied any wrong doing, insisting the videos either do not exist or were doctored. But Jafar maintained the videos are authentic and have been so verified by his technical team before being published. “In the case of the video clips in question, our in-house technical expert, the editor-in-chief and editorial adviser certified that the videos were original and not doctored contents.” He also added that “experts from Amnesty International, the British Broadcasting Corporation (BBC) and Premium Times also watched the clips and certified their authenticity before we went to press.” Governor Ganduje, on his part, has threatened the publisher and has even gone ahead to institute court actions against the authors.

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BUSINESS

Wednesday 14 November 2018

COMPANIES & MARKETS

DAY

GPPS showcases indigenous capability, unveils office complex

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

MANUFACTURING

Meyer Paint makes first profit since 2015 LOLADE AKINMURELE

eyer Plc has the N 3 1 6 million it earned from sale of assets, rent, use of facilities and debt recovery to thank for making its first profit since 2015. The Lagos-based Paints manufacturer and marketer saw profit climb nearly 600 fold to N280 million in the three months through September 2018, from a loss of N58.3 million in the corresponding period of 2017, according to the company’s financial statement published on the Nigerian Stock Exchange (NSE). Revenue of N239 million in the three months under review, means it had a profit margin of 117 percent, an indication of operations efficiency. The company’s stock

cl os e d at 55 kob o p e r share, Monday, where it has been since Wednesday Nov 7, according to NSE data. Shares are down 21 percent since the start of 2018. A five quarter-long economic recession in Nigeria slowed sales and ate into the revenue of Nigerian companies, including Meyer, but since the economy turned the corner in the second quarter of 2017, companies are starting to breathe easy. Meyer is one of six paint manufacturing companies whose shares are listed on the NSE. The company was incorporated in 1960 and listed on the NSE in 1979. In the past 56 years, Meyer Plc has undergone a series of corporate changes and rebranding. Formerly an offshoot of Hagemeyer Nigeria Limited, its name was rebranded to Meyer Paints in 1994,

UACN leads weekly gains as Mutual Benefits slumps most

following Dunlop Nigeria’s acquisition of majority shares in the parent company.

BANKING

Source: NSE, Business Day By 2003, Dunlop Nigeria Plc had divested its majority shares in the parent company, meaning that

Meyer Paints ceased to be its subsidiary. The current name, Meyer Plc, came to be in

2010 after a new set of core investors led by Citiprops Limited acquired controlling shares in the company.

CONGLOMERATE

NDIC links Skye Bank failure to insider abuse, malpractices GE walks away from $2.8bn Nigeria railway deal HOPE MOSES-ASHIKE

he Nigeria Deposit Insurance Corporation (NDIC) on Monday said the erstwhile management of the failed Skye Bank Plc. contributed to its failure by engaging in insider abuse, poor corporate governance and banking malpractices. The Corporation’s Risk Assessment and Forensic Investigation Reports identified various malpractices such as fraudulent false accounting, manipulation of accounting records to present false profits and ratios, unlawful loan and credit facilities, non-disclosure of directors’ interests and lending beyond the single obligor limit. Umaru Ibrahim, managing director/”CEO disclosed this at the opening ceremony of the Corporation’s, 2018 Sensitization seminar for Federal High Court Judges in Abuja. He said the NDIC and the Central Bank of Nigeria (CBN) are monitoring the investigations of law enforcement agencies instituted against the directors and management of the failed Skye Bank Plc to determine their culpability

in the failure of the bank. Ibrahim noted that the Corporation’s implementation of the bridge bank resolution option that established Polaris Bank Ltd that assumed the assets and liabilities of the defunct Skye Bank Plc, resulted in depositors’ unhindered access to their funds, the continuity of the operations of about 300 branches and the preservation of over 6,000 jobs. Speaking further, Umar informed participants that the Corporation has commenced the payment of insured deposits to depositors of the 153 Microfinance and 6 Primary Mortgage Banks whose licenses were recently revoked by the CBN. He noted that the Corporation performs this statutory mandate by its appointment as Liquidator through a Winding Up Order granted by the Federal High Court. Th e N D I C B o ss d escribed the collaboration between the Corporation and the Judiciary as a valuable engagement towards the development of the financial system and the effective implementation of the Corporation’s mandate. He said the seminar for Federal High Court Judges

with the theme “Challenges to Deposit Insurance Law and Practice in Nigeria” was specifically designed to address topical issues in Bank Supervision such as the regulatory framework of systematically important banks, the robustness of the legal system to facilitate criminal prosecution of Bank Directors and debt recovery under the Failed Banks Act. While commending the NDIC for its continued interactions with the Federal High Court through the s ensitiza tion seminars, the Chief Judge of the Federal High Court, Honourable Just i c e Ab d u l A . Ka f a rat i said the impact has been a deeper appreciation of the implications of the mandate and activities of the Corporation which has led to more proactive and accurate adjudication of cases brought b e f o r e t h e c o u r t s. H e expressed optimism that t h e b ro a d e n i n g o f t h e scope to include topical issues will further deepen the impact of the seminar towards addressing current regulatory issues in the financial system and the dispensation of more informed judgments.

LOLADE AKINMURELE

merican industrial conglomerate, General Electric Co. has pulled out of a $2.8 billion deal to revamp Nigeria’s rail system, as the global business is caught amid a sell-off that has seen shares tumble the most since 2009. Babatunde Oso, GE Transportation leader in charge of Sub-Sahara Africa, said “the development is in line with GE’s decision to exit the Transportation business from its portfolio. General Electric had in May unveiled plans to slim down the giant conglomerate, with an $11 billion deal to merge its transportation business with train equipment maker Wabtec. GE’s exit from the deal means Nigeria has missed a window to give its decrepit rail system a much needed facelift that would not have boosted economic activity and government revenue. For most of the last 15 years, the Nigeria Railway Corporation, NRC has not

had a single commercial freight contract. A significant amount of cattle and other agricultural goods come from the north down south while manufactured goods including cement and salt as well as imported goods and petrol move from the south to the north and none of that goes by rail. Since the start of the year, GE Transportation’s revenue has slid 8 percent while profit has dipped another 15 percent. The unit provided $4.7 billion of GE’s total revenue of $123.7 billion in 2016. Shares of the troubled industrial conglomerate continued their downward spiral on Tuesday, slumping as much as 6.88 percent as at 1p.m to dip below the $8 threshold. This follows a 10 percent rout on Friday after JPMorgan Chase & Co. analyst Steve Tusa warned GE’s deteriorating earnings and cash-flow outlook is colliding with an estimated $100 billion of net liabilities. In a deal hailed to bring Nigeria’s dead rail system back to life, the Federal Government and

a consortium of firms led by General Electric (GE), signed a $2.8 billion agreement for the revamp of the nation’s Western and Eastern narrow gauge rail system. The consortium comprised SinoHydro, a leading infrastructure construction services corporation, Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider. The first phase was supposed to be a $45 million worth rehabilitation work on a 1,800 kilometer Lagos-Kano narrow-gauge railway concession contract which includes light remedial civil and track repair works on the narrow gauge rail line. The deal was not supposed to cost Nigeria a kobo as the investment was to be covered by the consortium which received a sovereign guarantee that any certified investment made will be refunded if the concession does not get to financial close as envisaged.

BUSINESS DAY

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Wednesday 14 November 2018

Business Event

OIL & GAS

GPPS showcases indigenous capability, unveils office complex FRANK UZUEGBUNAM

ith local private involvement in the oil and gas sector of the national economy on the rise, Global Process and Pipeline Services (GPPS) Limited, wholly Nigerian Management owned company, is set to unveil its new office complex and operations base in Port Harcourt as it broadens its reputation as a frontline oil services company, showcasing Nigerian indigenous capability on land, swamp and offshore terrains. The new office complex and operations base due for commissioning on the 30th November 2018 in Port Harcourt Rivers State South-South Nigeria according to Obi Uzu, the company Managing Director, will further enhance GPPS operational efficiency for a superior service quality delivery in line with the highest industry standards and best practices and

in accordance with the tenets of ISO 9001:2015 with attestations pouring in for the young and dynamic company from such giants like Exxonmobil; Total, NLNG, Shell Companies in Nigeria just to mention a few. “GPPS uses the best of equipment to offer services such as pipeline cleaning, de-oiling, hydro-testing, pipeline de-watering, drying and nitrogen services to the oil, gas and power industry. She is also involved in pressure pumping, nitrogen pumping, fluid pump support, lube oil flushing and high pressure water jetting and blasting services”, said Obi Uzu, who has more than 26 years oil field experience in drilling operation (Sedco Forex), production technology (SPDC) and process and pipeline services (BJ Services) and supervised many successfully projects in Nigeria, America and UK. “Our new office complex and

operations base will further enhance our partnership with our clients to develop and maintain long-term relationships that adds value to their projects. Our dedicated teams are experts in our line of business with a track record of safely and efficiency in executing complex projects in challenging environments. Change is constant and that is why we are sensitive and flexible in responding to our clients’ demand; leveraging on the full strength of our brand, differentiated new equipment fleet and technical know-how”,Uzu added. GPPS is the only Nigerian company focused solely on process and pipeline services with major projects completed in the deep-water applications in her product service line and has attracted the best hands in the industry from the multinationals to work for her with an expansion plan into other West Africa and Sub-Saharan Africa countries.

L-R: Ali Wada Muhammed trainee; Mujtaba Abubakar Abba (Falakin Kano) representative of the Emir of Kano;Aishatu Sadauki, director, MTN Foundation, and another trainee Aisha Jibril Usman at the recently held MTN Foundation ICT and Business Skills Training in Kano State.

REAL ESTATE

How Proptech will drive real estate market growth CHUKA UROKO

hen real estate professionals and sundry stakeholders gather Thursday this week for the annual West Africa Property Investment Summit (WAPISummit), discussions will centre on property investment and the growth of real estate generally in the subregion. A major highlight of the summit will be the place of technology in real estate and how its deployment will make the sector in Nigeria more investable, and increase liquidity to drive greater home ownership.

The last couple of years have seen increasing role and use of property technology (Proptech) in real estate, creating opportunities for buyers and sellers alike, and leading to the growth of the market. “Proptech is slowly gaining momentum in developed markets, and we feel a developing market like Nigeria can learn and re-calibrate itself for seasoned investors,” Abdulhakeem Sadiq, Proptech pioneer, founder and chief executive officer of new market entrant, Zama, confirmed in a statement obtained by BusinessDay in Lagos. Proptech is a collective term

used to define startups offering technologically innovative products or new business models for the real estate market. Because of this, the market is already experiencing a wave of innovation, investment and entrepreneurial activity. Sadiq believes that the increasing role and use of Proptech is a boon for the regional real estate sector, adding that having spent years in research and development to refine the residential and commercial focused Zama platform, their multi-phase tech solution has the potential to enhance and shape the Nigerian industry drastically.

L-R: Nnanke Harry Willie, publisher/editor-in-chief, BrandPower magazine; John Ugbe, chief executive officer, MultiChoice Nigeria and Winner of the Youth Empowerment Through Access to Information and Thought Leader Par Excellence Awards and Ralph Okorocha, Partner, Alatta Nzewi Oyeka & CO during the 2018 brandpower golden icon awards held in Ikeja, Lagos.

APPOINTMENTS

Ekocorp appoints new CEO, COO CYNTHIA IKWUETOGHU

kocorp Plc has appointed Olusola Babalola and Ifeany Obiora as Chief Financial Officer and Chief Operations Officer, the Nigeria Healthcare Provider notified the Nigeria Stock Exchange (NSE) Friday, November 9. According to the company, the two Officers shall be in charge of the financial and operations management of the company alongside Ogunmokun, the Acting Chief Executive Officer (CEO) pending the appointment and resumption of a CEO. The reason for the appointment was however not stated in the notification sent to the exchange. The share price of the Ekocorp Plc was unchanged at N3.37 at the close of trading Monday and has been flat since 9th of June 2017.

Furthermore, the company’s turnover dropped by 1.2 percent to N1.12 trillion for nine months ended September 2018 from N1.13 trillion recorded in the same period in 2017. The company reported a loss before tax N66.1 billion during the nine month period ended September from its last year’s profit before tax of N166.6 billion. Likewise, loss after tax was also same as the loss before tax for 2018 from its profit (PAT) of N162.1 billion in nine months 2017. Olusola Babalola was formerly the Head, Finance & Account/Group CFO of Vitafoam Nigeria Plc where his major achievements include; refinancing a dollar denominated term loan granted to one of the group’s subsidiaries and, advising the Group on the restructuring of the operations of the business model of one of the subsidiary companies to make

it an FX- generating source for the group. At Matripax Consulting Limited, Babalola was formerly the Managing Director/CEO where his achievements include; helping to build financial models for the preparation of the annual budget for a newly restructured and recapitalised Mortgage bank, and giving advises various on cost reduction and continuous business improvement options. Ifeanyi Obiora has an undergraduate degree in Medicine from the University of Lagos, and a Master’s Degree in Business Information Technology from Middlesex University, UK. Obiora started his career in EKO Hospital as a Medical Doctor and moved into Management Consulting with Accenture. He also held Human Resources Management roles with ExxonMobil and UBA.

L-R: Isidore Ogunjiofor, managing director, Oriflame Cosmetics Nigeria; Vice Amir Mortazavi, president/head of Africa and Iberia, Oriflame Sweden; Inger Ultvedt, Sweden Ambassador to Nigeria, Ambassador, and Robert Af Jochnick, co-founder, Oriflame Sweden, at a press briefing by the Co-Founder on his visit to Nigeria, in Lagos.

International Breweries appoints Non-executive director CYNTHIA IKWUETOGHU

he Board of International Breweries has appointed Andrew Murray as a NonExecutive Director of the Company. According to the company’s notification last Friday on the NSE, Murray is currently the Vice- President, Finance for Anheuser-Busch InBev (ABInbev) Africa, leading the finance function across the ABInbev Africa Operations which

is based in Johannesburg, South Africa. The share price of International Breweries Plc remained at N33.55 at the close of trading on Monday and has remained at this price since 31st of October 2018. Murray was the Global Director ABInbev Mergers and Acquisition (M&A) based in New York with track record of handling transactions and Corporate disposals of different description and magnitude. He was also part of the

ABInbev’s focused group on Budgeting and Business Performance Optimization. Prior to joining ABInBev in 2013, Andrew worked at Bain & Company, a global management consulting firm for approximately 7 years. He holds a Bachelor of Arts (BA) in Mathematics and Economics from Williams College and a Masters of Business Administration (MBA) from The Kellogg School of Management (Northwestern University).

Vice President Yemi Osinbajo (r), Akinwunmi Ambode, governor, Lagos State (2nd r), with one of the TraderMoni beneficiary, during the TraderMoni inauguration at Oja Oba Market in Lagos

BUSINESS DAY

Wednesday 14 November 2018

CityFile Police arrest 56 suspected cultists in Anambra EMMANUEL NDUKUBA, Awka

ver 56 suspected cultists have been arrested by the police in Anambra State within the first two weeks of November. Haruna Mohammed, police public relations officer in the state, who disclosed this, said that 38 suspects have confessed and were charged to court, while 18 others are under investigation. He said that the state command special anti-cultism squad arrested the suspected cultists in various locations around the state. Mohammed said 13 suspects were arrested in Ogidi/Nkpor, 10 in Ihiala local government, seven in Awka and its environs, eight in Nawfia/Enugwu Ukwu and 11 in Ayamelum local government area. According to him, following the recent upsurge in cult activities in the state, the Commissioner of Police (CP), Garba Baba Umar had called for an immediate and aggressive manhunt of perpetrators including their sponsors.

Cross section of traders line-up to access the 10,000 Naira TraderMoni By Federal Government Loan at Igando Market, in Lagos.

Flood: Amnesty Office lifts victims with N90m relief materials in N/Delta

he Presidential Amnesty Programme (PAP) has begun distribution of relief materials worth N90 million to some communities ravaged by flood in the Niger Delta. Murphy Ganagana, the special assistant (media) to PAP coordinator, Charles Dokubo, said in Abuja that the distribution which started on Monday, will last throughout this week. He listed items being distributed to include rice, beans, indomie noodles, groundnut oil, maggi cubes, tomatoes, detergents, bathing soaps, disinfectants, and medicals. Among the communities benefitting from the gesture are Bomadi, Oboro, Okpokunou, Esanma, Akugbene, Ogodobiri and Ezebiri. Others include

Ayakoromo, Tuomo, Ogbobagbene, Kpakiama, Obotebe, Ofonibeinghan, Gbekebo,Ogbeingbene, Patani, Aven, Kolowari and Gbaregolor, all in Delta. In Bayelsa, the communities benefitting are Adagbabiri, Odi, Trofani, Kaiama, Esampou, Zarama, Ogbeinbiri, Opuama, Ofunama, Shekelewu, Ogbudugbudu, Arogbo, Safa-Arogbo, Agadagba Obon, Ajakoroama and Opugbini. “The gesture is to provide succour for inhabitants of the affected communities who live in terrible conditions since their homes and sources of livelihood were affected by the flood,” said Ganagana. The PAP is meant for the people of Niger Delta, and whatever affects communities in the region affects us. “So far, we have spent N90 million on purchase of the relief materials we

Illegal tolls: Anambra steps up enforcement in markets EMMANUEL NDUKUBA

nambra State government is stepping up enforcement against illegal toll collection in markets around the state. Don Adinuba, the commissioner for information & public enlightenment, said on Monday that a number of criminally minded persons and groups have devised illegal methods to extort money from people in spite of measures by the government to make life better for the people. “Quite painful is the fact that the majority of victims of the extortions are the poorest in society. There is perhaps nowhere this unconscionable practice takes place as much as the markets in the state. These criminals collect levies unknown to the government. “Some of the tolls are called ground tolls, container tolls and wheel barrow tolls. Through these illegal tolls, importers, distributors and retailers are forced to pay huge amounts of money. “Worse, buyers of their products are compelled to part with various sums to cart them from one place to another, even when the goods are not transported in carts. This practice has led some people to seek to do business outside the state,” Adinuba said.

He added that the extortionists claimed that the tolls are obtained on behalf of the Anambra State government. “We would like to state for the umpteenth time that these tolls are not only illegal but also unconscionable. Even in the middle of the recent recession when various governments in Nigeria introduced different revenue generating schemes so as to meet their basic responsibilities, we never introduced such tolls.” According to him, Governor Willie Obiano rather introduced an economic stimulus package in a bold move to lessen the economic burden on the people. Adinuba affirmed that the cart pushers, often referred to as wheel barrow men, were among the first set of the most vulnerable members of society, to be exempted from paying not only taxes but all kinds of revenue to the government. “It is, therefore, heartless for any group of people in the market, or anywhere for that matter, to harass hapless citizens going about their legitimate business for payment of so-called government tolls. “Let it be emphasised that wheel barrow tolls, pitchers tolls, petty traders tolls, obstacle tolls, land tolls, container tolls and barrow tolls remain abolished by the government.

are distributing to various communities which include Ganagana said that some communities in Edo and Ondo States will also benefit from the distribution. Meanwhile, Aserifa Hope Torru, the traditional ruler of Kabowei Kingdom in Bayelsa State, has commended the Amnesty Office, for responding to the needs of the flood victims. “It is on record that we have had several flood disasters in the past; I remember what happened in 2012 and thereafter. This is the first time the Amnesty Office will share in our pain and take steps to ameliorate our plight. “This is commendable; I urge other public and private organisations to take a cue from what the Amnesty Office has done to give us succour,” the monarch said.

Ekiti threatens to proscribe transport unions RAPHAEL ADEYANJU, Ado-Ekiti

kiti government has threatened to proscribe the state chapters of the National Union of Road Transport Workers (NURTW) and Road Transport Employers Association of Nigeria (RTEAN) if the two unions continue to escalate violence in the state. Bisi Egbeyemi, the deputy governor, Ekiti State, gave the warning at the signing of peace accord by the leadership of the two transport unions, saying nobody would be allowed to disrupt the peace of the state. Oso Farotimi, chairman of NURTW and Rotimi Olanbiwonnu, chairman of RTEAN, led other officials of their unions to sign the peace accord. The peace agreement was sequel to a meeting held by the deputy governor with the representatives of the two unions on November 6 to find a lasting solution to violent clashes among their members. Egbeyemi said the full weight of the law will be visited on any union member caught in inter-union rivalry. The union members who signed the agreement under a convivial atmosphere pledged their commitment to the implementation of the terms in the interest of peace of the state.

Police re-arraign Badagry prince over fraud

he police in Lagos have re-arraigned Semasa James, the prince of Kweme Land of Badagry, Lagos in an Ikeja Special Offences Court for defrauding the estate of his late father, Oba Afolabi James. Semasa was initially arraigned on April 10 on a two-count charge of stealing and forgery. He had denied the charges and trial had commenced with two witnesses testifying for the prosecution. In the latest proceedings on Monday, Semasa was re-arraigned alongside Afolabi Kazeem, whom the Special Fraud Unit (SFU) of the Nigerian Police Force, alleged is an accomplice to the crimes. He is charged with stealing, forging of company resolution, fraudulent disposing of trust property and forgery. While Kazeem and the prince are jointly charged with conspiracy to defraud and cheating. The duo, however, plead not guilty to the seven-count charge. According to O. O Olabisi, the prosecutor for the SFU, the prince fraudulently converted N500 million property belonging to the late king between 2000 and 2017 in Lagos. “The defendant had in 2011, forged the resolution of a company called CAJ Industrial Enterprises dated November 28, 2011. “He had purported that the resolution was

signed by his father, who was one of the directors of the company, meanwhile his father had died nine years earlier on January 30, 2002. “The defendant had forged the resolution with the intent that it will be acted upon as genuine to the prejudice of any person,” he said. The prosecutor noted that Semasa fraudulently sold a property belonging to his late father’s estate to a private individual and illegally leased another property to Ecobank Plc. “On about November 2004, with intent to defraud, Semasa converted the property located at Plot 1440, Ilesanmi Street., Itire Road, Surulere belonging to the estate of his late father by selling the property to one Saidat Taiwo without approval. “On about July 2005 in Lagos, he fraudulently converted the property at plot 282 Ajose Adeogun Street, Victoria Island, Lagos by leasing it to the defunct Oceanic Bank Plc now Ecobank Plc,” the prosecutor said. Olabisi also revealed Kazeem’s alleged role as an accomplice in defrauding the late king’s estate. “Sometime in 2017 in Lagos, Semasa and Kazeem fraudulently tricked and cheated the beneficiaries of the late king of N150 million which was part of the proceeds of sale of a property located at Dideolu Estate, Victoria Island, Lagos,” he said.

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2019: I will rescue Nigeria from poor leaders, grow economy at 20% - Tope Fasua Presidential candidate of the Abundant Nigeria Renewal Party (ANRP) in the 2019 elections, Tope Fasua, expresses optimism that he has the potentials to rescue Nigeria from the vice grip of what he called poor leaders if he is elected President of the Federal Republic of Nigeria. In this Interview with Innocent Odoh, the trained economist reels out his economic blueprint anchored on revitalization of moribund industries, revival of infrastructure and poverty reduction through youth empowerment, which he says will grow the economy at 20% per annum. Excerpts: What motivates you to run for the office of the President of the Federal Republic of Nigeria? t is actually because of the urgency of now and the fact that Nigeria has been on the downward spiral and for too long we had trusted people to lift of the country but it seems it was never going to happen and in life one should learn that often times, when you expected some people to do something and it does not get done, you may need to do it yourself. So for me it a call to service because I am very much aware that many of the ideas that I have put forward have been very inspired. We have been putting on these ideas in newspapers, on radios, in interviews on TVs and it seems to be ignored. So I have a feeling that Nigeria is under some sort of vice grip of criminal entities and the only way to rescue Nigeria is to mainstream the idea that I have been pushing that have been ignored. That is the reason I am stepping forward. And again, perhaps by extension, the problem with Nigeria is not at the state level, local government level, it is not even at the National Assembly level, it is right there at the top. We need a vision to say what kind of people should we be, what kind of people do we want to be? This is because repositioning a country is not just a matter for economics it is also a matter of the social philosophy that the country should be running and all of these need to be affected in positive manner. As a trained economist, do you think that the problem of Nigeria is a question of the structure and system of the political economy that drives the country? The thing about economics is that anyone who purports to be an economist should be very versatile because we don’t study economics in ignorance of other fields. Economics according to Bernard King, deals in the arts and sciences at the same time, very comfortable with mathematics and also poetry and prose. You have to immerse yourself in sociology and social psychology and of course politics. Politics according to David Eaten is the authoritative allocation of values in a society, meaning who gets what, which is also the concern of economics, in fact more concern of economics especially at the macro level and at the level of development economics. It is very critical question as to

Tope Fasua

million of them out of poverty. Yes, it can be done; the point is that we have hardly ever prioritized that fact. If we prioritize that fact then we can actually begin to work towards that. So, the first thing is target those in poverty and see how to take them out of poverty. India is doing it presently, China has perfected it because by next year, they intend to zero poverty in China can you imagine that 1.4 billion people, no poverty. Part of what they are doing is targeting poverty in a précised manner. Chinese President is visiting those poor areas and documenting them. In China they have a file on every family even in the rural areas, where they will understand the real issues with the families and the communities. They just don’t spend money anyhow.

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I believe that we should be targeting GDP growth of between 15 and 20% per annum

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how we allocate our resources as a people given the population that we have and the mouth that we have to feed. So these are the core issues and I believe that a lot of our social issues are intertwined with our economic issues and to a large extent, if we are able to fix the economic issues, the social issues will unravel. The big problem with Nigeria is allocation of scarce resources. Ofxam came out with a report recently that says that Nigeria is the global capital of inequality. In the Commitment to Reduce Inequality of the Oxfam, Nigeria came 157 out of 157 countries surveyed meaning that this is the global headquarters of inequality meaning that inequality is increasing in Nigeria more than anywhere else in the world. It is a very pathetic situation meaning also that the politics has not been played right. Our politics is ensuring that just a few people get the majority of the resources by hook or crook. Those who are in politics they know themselves, those who are in top echelon of government they know themselves and their private sector cohorts with whom they gang together and consistently raped the country. But we can actually fix the economy and ensure that out of about 90 million people in extreme poverty in Nigeria now we can actually take 60

What the Nigerian government is doing is a sham, they take the $322 million Abacha loot and give people without documentation. We don’t know those you are giving the money, you said you are giving people money inside the market we don’t know who you are giving the money. You don’t have a right to spend money in that manner without documentation. We have not started yet; in fact I just pity Nigerians because Nigerians want more of this and what we are doing unwittingly is to confirm to those racists in the world that the Blackman cannot do well for himself, the Blackman cannot lead himself, the Blackman is primitive and wants to live in filth, want and hunger and we have the leaders to perpetuate that kind of mindset. Nigeria is never short of people with great ideas, the problem however, is the right structure to put the right people like you in place. You are contesting under the ANRP, a relatively known party. Do you have the clout to battle with the bigger parties such as APC, PDP? The truth is that we will actually not be playing their game with them, we will be changing the game, that is the only hope we have. When you talk about battling with them, the way they battle is with money. How did they get the money? By stealing from the people and this is what they have been doing for a long time now. The people in APC and PDP are discredited people. So we cannot fight them with money, however, what we do is that the places that we visit we will give them something. Nigerians are indeed poor such that N1000, N500 is a lot of money to most Nigerians. It is unbelievable. The problem is that Nigerian leaders have sinned against humanity and we are only trying to come and correct it. And we understand that the masses may not understand it but whether they understand it or not we have to keep moving on because we have to save the masses in spite of themselves. The campaigns will kick off on November 18, and there are indications that some political parties may coalesce to produce a consensus candidate under the Coalition of United Political Parties (CUPP). Is your party considering being part of that arrangement? I am not a spokesman for my party and cannot speak for them

alone being the chairman of the party. But what I know is that the last time we discussed, we are still open to such arrangement. However, we have to be extremely careful if we want to go into such coalition. We did not join the CUPP because we were very careful. As a presidential candidate, my vision is different from another person, the things I say on each sector of the economy, you will not hear them say it because many of them have not talked about it. And the reason most of them have not talked about it is that they allow their personality to interfere with their vision for the country. I am not thinking about myself. In this quest we have scenarios where people have started contacting foreign powers can you believe that? By the time you allow that you cannot see Nigeria from objective point of view. I am detached from that so that I will be able to proffer unique solutions. If we take the economy, industrial development and fight against corruption, how will you address these issues if you become President of the country in 2019? In the area of economy, which is my forte, I have this idea. I believe that we should be targeting GDP growth of between 15 and 20 % per annum. The previous leaders, the current ones and those who want to come back don’t have this kind of vision for this country. I believe that we are in the negative growth territory of 1.5% right now, inflation is about 11.2 % and population is growing at 3%. A country like India is growing at 8% and is projecting to grow at 8.5% up to 2022. So, on the economy we should prioritize taking people out of poverty not by giving them cash but by providing them jobs. So if you are talking about security, the best security is mass employment for the youth and the jobs are there even in the public sector. I am one of those that will tell that it is a fraud for us to say that our public sector is so large. No, our public sector is too small and it is too concentrated in state capitals, it is useless, it is ineffective and ineffectual in terms of delivering service to the people and it is too top headed and toxic and needs to be repositioned. We need to get people who are busy carrying files in Abuja and state capitals and take them back to the rural areas and give them remit, a schedule to deliver on Continues on page 18

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Politics & Policy

2019: UDP loses over 5,000 members to APC in Taraba

Bello commends NASS for FCT development

Nathaniel Gbaoron, Jalingo

inister of the Federal Capital Territory (FCT) Muhammad Bello has commended members of the National Assembly for their enormous contributions to the development of the Territory, saying their guidance and support have helped to ensure that the current FCT Administration succeeds in the discharge of its mandate. Bello, who gave the commendation when the Senate Committee on Public Procurement, led by Senator Andrew Uchendu, paid him an oversight visit in his office, said his administration holds the lawmakers in very high esteem for the role they play in achieving good governance. He noted that the information he received from one of the National Assembly Committees a month after he became Minister has continued to be part of the guiding principles that have helped to ensure that he succeeds as Minister of the FCT, stressing that the calibre and experience of the people in the National Assembly is unmatched anywhere else in the world. According to the Minister, “from the outside most people don’t really appreciate that the calibre and experiences of the people that we have in the National Assembly is unmatched anywhere. “To a very large extent, what I have been able to achieve in the last three years with my colleague

araba state governorship candidate of the All Progressives Congress (APC) Sani Abubakar Danladi on Saturday, received over five thousand defectors from the United Democratic Party UDP, and other political parties in the state to the APC in Jalingo. The defectors, who include Local Government and Ward Executives had previously left the APC and followed the former minister for Women Affairs Senator Aisha Jummai Alhassan to the UDP when she left the party in protest against alleged injustice meted on her by the national leadership of the APC. Danladi who received the returnees said that with the publication of the list of the party’s candidates for various positions, all issues and grievances arising from the recent primaries have been laid to rest and appealed to all party members to close ranks and face the task of delivering victory to the party in 2019. He disclosed that the party has already commenced the process of reconciliation by reaching out to some of the former governorship aspirants and that most of them have already responded positively to his entreaties. He emphasised the need for APC to take over the governance to save Taraba state from its present miserable situation of lack of development and disunity. “It is good that you have real-

James Kwen, Abuja

Danladi

ized your mistakes in time and have decided to return home in your numbers. Let me assure you that the task ahead of us is to enormous for us to be distracted by a UDP or anything else. With the publication of list of candidates, the issues surrounding our party primaries have now been resolved and we have already initiated the peace and reconciliation process. I can assure you that most of the former aspirants are ready to work with us to rescue our dear state. The future indeed is bright”, Danladi said.

Former secretary of the UDP Alhaji Adamu Aliyu Kata, who led the defectors, said they retraced their steps in the interest of the state and described UDP as a distraction from the task of rescuing the state and appealed to all party members who left for the UDP to return to APC because UDP has no future in the state. Our correspondent reports that the APC lost a lot of her members in the state who had followed the former minister of women affairs senator Alhassan to UDP when she left the APC in September.

here is because of the painstaking way we have been trying to achieve it point by point, based on the information your committee gave me”. Bello, who assured that the FCT Administration will continue to work closely with the lawmakers to move the capital city to greater heights, said officials of the FCTA will make available all relevant information, including physical visit to all the project sites that are under consideration to assist the Committee’s oversight work. Earlier in his remarks, Andrew Uchendu, Chairman of Senate Committee on Public Procurement, commended the FCT Administration over the organized manner it has gone about the discharge of its mandate. Uchendu said the Committee was on an oversight visit in line with constitutional provisions, to verify the status of the no objection certificates issued by the Bureau for Public Procurement to the FCT Administration, for three major projects, such as the construction of residents of principal officers of the National Assembly; the contract for waste management and collection services in designated areas of the FCT and emergency repair works and erosion control as well as some water supply infrastructure at some places in Abuja. He said the Committee intends to go through the relevant documents to ensure that there is full compliance with the provision of the Public Procurement Act as well as inspect the project site to ensure there is value for money.

2019: I will rescue Nigeria from poor leaders, grow... Continued from Page 17 daily basis. The people in local areas don’t see anything good in government, no light, no water, no hospitals, no school, no teachers, no good roads. If you look at every sector there are different kinds of jobs that can be provided from those places. For example, the environmental sector is massive and can employ 2 million people and sustained them. The total number of staff in the federal government’s core services is less than 100,000 even if you add all of the parastatals including the states, the total number employed by government is just about 2 million people and the working population is more than 100 million. It means that if we are indeed 190 million and only 2% are in the public service, then there is a problem. I find out that the countries where you have very low percentage of the work force in the public service are failed countries. Go to Madagascar, Iraq, Yemen all of those countries have 3%. In the

real countries of the world even if you go to the capitalist countries, United States is 17%. 15 to 17% of every worker is employed by the US, in the UK it is 20-21%, in the OECD countries in general it is 21%. In places like Norway, the Scandinavian countries, 30-35% of workers are employed by government and what this does is that it takes government goods to the people. And as a country, the first thing you will have is to establish a minimum living standard for your people to say that any Nigerian no matter where they may be must never fall below this level and you set out apparatus of government to provide those things for them. In the northern parts of the country, there is desertification and trees need to be planted and tended. When the Korean War ended in the 50s, they planted more than 50 million trees and today those things are still there. In the South East of the country, there is a huge problem with erosion; some of these are going to take a lot of physical work to fix. In everywhere in Nigeria we have a problem with disposal of waste

management and so on. We have a problem with the maintenance of lawns and gardens and you have to put your people there and the youth of this country are actually waiting to solve the problem of this country including infrastructure problem. If you want to solve the energy problem go back to the Nigerian universities. Challenge them in the department of Electrical Engineering and send them to the villages by groups for projects. We can train 20 people from the University of Uyo and said let’s go to the villages and light up these villages. Now people talk about wind energy, biomass, sola and many of these things were put together by young people in other countries of the world and our youth can begin to catch up now rather than trailing behind by several hundred years. And we are always buying the products of other people’s innovation at very expensive rates. So if you want to solve energy and infrastructure problem go back to our youth. The products of agriculture research should be taken straight

back to our farms. In China what they did as part of poverty eradication was to partner with a private sector company. We can do that in Nigeria. We can get our Architecture and Engineering students to start green houses for agriculture and what we will do is to procure material for them and then they use their own ideas and ingenuity to perfect it. And equally with the roads construction, give them the coal and give them whatever materials they need. This will also put some money in their pockets. Let’s change the educational system away from theory into practical. So those are the kind of ideas I am talking about which you won’t hear from anywhere else. In my campaign I am going to concentrate on those who understand these big issues. The President Muhammadu Buhari administration said it is fighting corruption but his style has come under intense criticism. What is your opinion on that? While, Buhari is not fighting corruption, Buhari probably does not understand what corruption is

about and you can’t fight what you don’t understand. He is deliberately refusing to understand it because his style is to dodge behind and watch some of his people perpetrate corruption and they end up favouring him one way or the other. He thinks he is smart but he is not so smart and we are watching and the youth in this country understand exactly what is going on. You cannot say that you are not corrupt and you get to government only for you put all your family members there. That in itself is corruption and total unprofessionalism and if you are unprofessional there is no way you cannot be corrupt because it goes hand in hand. Nigeria has not defined corruption in holistic terms but more fixated on monetary corruption or what is called “Grand Corruption.” Buhari has not addressed his mind to corruption. The truth is that Buhari does not care about corruption because if he does he would have articulated some of these things. Some of us live here in Abuja; we interact with the civil servants and know what is going on.

Wednesday 14 November 2018

LegalPerspectives

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With

BUSINESS DAY

Odunayo Oyasiji

The principle of non Est factum

on est factum simply means “not my deed”. This principle serves as an exception to the rule that once you append your signature to a document then you are bound by the terms of the document. The principle as to being bound by whatever you signed was applied in the case of L’estrange vs. Graucobs(1934) 2 KB 394. In this case, the defendant in the process of selling a slot machine to the plaintiff made him to sign a document which makes the defendant not to be liable in case there is an issue with the machine. The plaintiff was not aware of that the foregoing terms was present in what he signed. The machine turned out to be a defective one. The court held that the defendant cannot be held liable on the basis of the terms of the agreement that was signed by the plaintiff. In Thoroughood’s case (1584) 2 Co. Rep 9a on the other hand, the principle of non est factum was applied. Mr Thoroughood is the landlord while Mr Williams is the tenant. Mr Williams owed ar-

rears of rent. It was the landlord’s intention to release him from the liability of paying the rent owed. In doing this, a document was signed by the parties. The document turned out to be one transferring the ownership of the property from the Landlord to the tenant. The landlord is an illiter-

ate but he made enquiry from the tenant on the content of what he was to sign. He was informed that the document was to cancel the arrears of rent. Mr Williams after ensuring that the landlord signed the document subsequently sold the property to another person. It was

held that the transfer to Mr Williams was void. This is because the landlord being an illiterate was misled to sign a deed of transfer believing he was signing a different document. Also, he enquired from the tenant with regards to the content and he deliberately misled him.

Difference between an order of court freezing an account and a garnishee order nisi

n order of court directing that a bank account be frozen simply means that there should be no transaction on the account. What a freezing order mainly targets is the paying out of money from the account. When subsequent deposits are made into the account the monies will be frozen too. A garnishee order on the other hand targets the

amount of money stated on the face of the order. If the money is in the account, then the bank is under the obligation to hold the money. If the amount that is in the account is not up to the amount on the face of the order then the bank is to hold the amount that is in the account at the time the court order was served on the bank. Subsequent deposits into the account will not be affected.

Meaning of Mareva injunction

areva injunction is an order of court freezing the assets of a defendant so as to prevent him from transferring the assets abroad or out of the jurisdiction of the court. This is to be in force pending the determination of the matter that is before the court. It is usually used in debt recovery cases. The Supreme Court of Nigeria in the case of A.I.C Ltd –v- NNPC (2005) 5 S.C (Pt. II) 60. stated that ‘’From the several authorities to which I have referred

above, it is manifest that mareva injunction applies in principle to a creditor who has a right to be paid the debt owing to him, even before he has established his right by getting judgment for it, if it appears that the debt is due and owing, and therefore there is a danger that the debtor may dispose of his assets so as to defeat it before judgment, the court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets.’’

Where there is money in excess of the amount stated by the order the owner of the account will have access to the amount that is in excess.

Also, where the amount is not up to what is on the order and subsequent deposits are made, the subsequent deposits will not be affected.

Why banks usually ask that you add your

ompanies and individuals do take loans for different reasons. However, it is common for banks to request for personal guarantee of the managing director of a company as part of documentation process for loans obtained by the company. Why do they do this? The main reason is to make the alter ego (director) of the company to be liable for the payment of the loan in a situation where the company fails. Ordinarily, a company as a legal person should bear the implications of failure to pay up its debt. The liability of the shareholders is limited to the amount they invested and cannot extend to their personal belongings. With the foregoing understanding,

the personal guarantee of directors of a borrowing company usually form part of the documents required for lending to the company. With their personal guarantee, the bank can go after them for the recovery of the loan. They bear secondary liability as directors. This provides additional security for the loan that was granted. It also forms the basis why the names of directors appears on court processes filed for the recovery of debt (at least companies can sue and be sued in their names). When you are giving personal guarantee for loans, have it at the back of your mind that you can be held liable in case the original party defaults.

It must be noted that for the plea of non est factum to succeed some elements must be present. The first is that there must be fundamental difference in what was intended and what the document accomplished. This means that the document must accomplish something totally different from the intention of the person that signed it. The second element is that there must not be element of laziness on the part of the person pleading non est factum. In essence, the party signing must be diligent enough to go through the content of what he is signing. If he is found to have failed in this aspect then the principle will not avail the person. In conclusion, it is essential that we thoroughly scrutinize the content of documents we append our signature to. Failure to do this in our day to day business transactions can cause a lot of damage. Often times, it is better to allow legal practitioners to read through agreements before signing them as they can contain terms that can only be properly interpreted by people with the knowledge of the law.

Meaning of deed of gift

deed of gift is a gratuitous arrangement transferring the legal ownership and physical control of a property. The person giving the gift is the donor while the beneficiary is the donee. It must be noted that the gift deed is not in exchange for any consideration or payment. It is purely gratuitous. There are different types of gifts- intervivos gift (gift given during the lifetime of the donor), gift Mortis Causa (made in contemplation of the death of the giver) and testamentary gift (gift given out in the will of a deceased person). A gift deed that is executed and delivered to the done is irrevocable except for some circumstances. The circumstances are – gift transferred with the intention to defraud creditors, where donor does not have the legal capacity to give out the gift, where the gift was fraudulently given out. Therefore, gift deed is a legal means of giving out properties while the donor is still alive. There have been situations where properties were shared by a rich father and deed of gift perfected while the father was still alive. This sometimes goes a long way to prevent disagreement after the death of the parents.

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Nigeria-Indonesia Chamber’s thrilling presence at the T rade Expo Indonesia 2018 22

Strategy for Ajaokuta’s survival 22

BUSINESS DAY

LASG Reaffirms Commitment to Attracting FDIs 23

Strategy: The US Southwest Airline sweet story Sun Tzu, a Chinese, tells you strategy is not planning in the sense of working through a to-do list, but that strategy requires quick and appropriate responses to changing conditions. SIAKA MOMOH brings you this piece on strategy and business, illustrating his discourse with cases from the industry, the aviation industry in particular.

ne thing you would want to draw on when faced with challenges in an organisation is strategy. You would want to think of what strategy to roll out to solve the challenges you are faced with. This piece is coming up as a lesson flag for business owners who currently have challenges with running their businesses. The airline industry in particular will benefit from the U.S. Southwest Airline case that is presented in the piece. In business parlance, strategy is the direction and scope of an organisation over the long-term, which achieves an advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholders’ expectations. In other words, strategy is about where the business wants to get to in the long-term, that is, business direction; about the markets the business competes in and the scope of the markets; about how the business can have an edge over other competitors in the markets; about what resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete; about the external environmental factors that affect the business ability to compete; about the values and expectations of those who have power in and around the business, that is, stakeholders. Southwest Airlines’ case The case of Southwest Airlines, the seventh largest airline in the United States by 1996, helps to illustrate how strategy operates in an organisation. The case is sourced from HEC School of Management, Paris. By 1996, this U.S. airline was outperforming all its major competitors in terms of growth and profitability. It was the only airline in the US to have consistently posted a profit since it was incorporated in the early seventies. Meanwhile, many other airlines had experienced very tough times, being restruc-

tured or had gone bankrupt. While Southwest was growing and thriving, such dominant airlines like PanAm, Eastern or People Express had gone out of business and, in 1955, all significant carriers lost money, except Southwest. Southwest priced its services significantly lower than most other airlines; it entered new routes with airfares at least 60 per cent below competition. Southwest operated very unconventionally. Though other airlines primarily made money with their business class, Southwest had chosen to a single class service, In addition, it did not serve meals on board and did not assign seats prior to boarding... Southwest did all its ticketing on its own, not making its seat available through computerised systems such as Apollo or Sabre (which charged a $2 fee by transaction). Travel agents received the standard 10 per cent commission, but had to contact the airline directly to book seats. As a result, only 55 per cent of Southwest’s seats were booked through a travel agent, in contrast to a 90 per cent average for the industry. While all other large airlines had switched

to the “Hub and Spoke” system in the early eighties, Southwest continued operating point to point connections, thus offering most of its passengers’ non-stop service from origin to destination. Most flights were short haul and lasted 65 minutes on average. Operating out of uncongested airports did, however, save an average of 20 per cent on flight time as a result of reduced taxi time and less in-air waiting. In addition, Southwest benefited from lower gate costs and landing fees at these secondary airports: $2.50 on average per passenger, compared to $6 to $8 at a major airports. Southwest operated homogeneous fleet of 150 Boeing 737 aircraft that flew an average of 1500 trips per day. These aircrafts had an average cost of $27 million and an average life of 20 years. Southwest’s fleet was one of the youngest in the industry. Southwest offered frequent service at all the destinations it served, usually eight or more one-way flights a day between two cities; in order to optimize the utilisation of their three gates; Southwest only operated out of airports where they could schedule at least

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20 departures a day. Mark in the market Southwest made a mark in the market. It became the US airline with the highest level of customer satisfaction. Industry conducted surveys revealed in particular that Southwest had the fewest customer complaints and unmatched record for on-time performance. In addition, Southwest was able to turn its aircraft around in an average of 15 minutes, when the industry average for this operation was 55 minutes. Turnaround time referred to the time between arrival at and departure from the airport gate; this period included the time in which passengers got on and off the plane, baggage was loaded on and off, the aircraft was cleaned, tidied up, refueled, provisioned with food and drinks and inspected. Low maintenance cost strategy In summary, Southwest’s strategy of low maintenance cost, on-time performance,

Continues on page 23

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Trade&Investments Matters

Nigeria-Indonesia Chamber’s thrilling presence at the Trade Expo Indonesia 2018 ‘The Nigerian delegation joined other representatives from over 150 nations at the Nusantara Hall, ICE-BSD City, Tangerang, Indonesia, for the opening ceremony which was officially opened by the President of the Republic of Indonesia, His Excellency Joko Widodo.’ SIAKA MOMOH

ike it was the case last year, members of the NigeriaIndonesia Chamber of Commerce and Industry (NICCI) led by its vivacious president, Ishmael Balogun, stormed this year’s 33rd Trade Expo Indonesia at Tangerang, Indonesia, between October 22 and 30, 2018. The Nigerian delegation was warmly received by a welcome party led by Mrs. Leni Wati, President of the Indonesia Africa Trade & Industry Association (IATIA). The Nigerian delegation joined other representatives from over 150 nations at the Nusantara Hall, ICEBSD City, Tangerang, Indonesia, for the opening ceremony which was

officially opened by the President of the Republic of Indonesia, His Excellency Joko Widodo. The Nigerian team on the first day of the event took no time to get down to business at the expo. Several members of the delegation engaged with international businesses and associations on bilateral partnerships, investment opportunities, joint ventures etc. The Nigerian delegation was prominent at the regional discussion Africa Sub Sahara meeting themed “Indonesian Economic Diplomacy to Africa” which was held on the sidelines of the expo. The event was also attended by the members of the Indonesian embassy in Nigeria, Indonesia Trade Promotion Center (ITPC) and many others.

The President of the Nigerian Indonesian Chamber of Commerce and Industry, Ishmael Balogun was one of the guests-of-honour at the intercontinental meeting which was held for countries in Sub-Sahara Africa. Nigeria’s Ambassador to Indonesia, His Excellency Hakeem Balogun held a meeting with the members of the Nigerian Indonesian Chamber delegation to the trade expo Indonesia at the Embassy of Nigeria Building in Indonesia, South Jakarta, Indonesia One of the day’s proceedings began with some members of the Nigerian delegation attending a private meeting with Indonesian pharmaceutical giants Dexa Medica. Pt Dexa Medica makers of Boska,

manufactures and markets pharmaceutical products to customers in various countries in the Asian and African region. It offers OTC products, such as immune system products, natural detox supplements, multivitamins for children, multivitamins and minerals for women, and pain and menstrual complaint products. Dexa Medica has been operating in Nigeria for several years. Investment seminar On the fringes of the Trade Expo Indonesia, the Nigerian delegation were present at the ‘Trade, Tourism and Investment seminar’ held at the Nusantara Hall at ICE - BSD City, Tangerang. The business gathering offered

the delegation the fantastic opportunity to connect and engage with specialists and industry leaders on global business opportunities in Indonesia and the world. In attendance were Indonesian state-owned organisations who advised on the process of doing business in Indonesia. Trade Expo Buyers Night The Nigerian delegation, after a long day of business, finally had a chance to unwind at the Trade Expo Buyers Night. The Trade Expo buyers night is an event for all participants of the expo to relax and witness first-hand the finest Indonesian music, cuisine, dance etc. Indonesian music band, The Soulful Band, performed to an elated crowd.

Strategy and Business

Strategy for Ajaokuta’s survival The strategy should be Ajaokuta playing in the primary sector, and the cold rolling mills in the secondary sector, with the primary feeding the secondary, writes SIAKA MOMOH

igeria’s 39-year plus old Ajaokuta Steel plant is a sprawling facility located in Kogi State that has gulped over $8 billion of public investment but lying prostrate – hamstrung by ownership changes – musical chair ownership changes, poor governance, incompetence, name it. Several attempts have been made to revive it to no avail. The Buhari administration has put in motion a drive to breathe life into the moribund plant. Abdul-Akaba Sumaila, a mechanical engineer who has taken a three-year leave of absence from Royal Dutch Shell Plc is administrator. He strongly believes he can do the magic. May be Sumaila is the messiah that has come to save stroke struck Nigerian steel. One strategy may help. What is this strategy? It is a hybrid of the primary and secondary steel sectors – a linkage between the primary and secondary wings of steel manufacturing. We will come to this later. First, let us have an overview of the lame duck steel industry we have had to date. The plan to develop the Iron and Steel Sector began with the Yakubu Gowon Regime with the formation of National Steel Development Authority (NSDA) in 1971. Basir Borodo, former president, Manufacturers Association of Nigeria (MAN), who has been a player in the Nigerian industrial sector for over 40 years, attested to this in an interview with this writer. Mandate The mandate of the Authority was essentially to develop the steel sector. What followed was the formation of various steel companies during the General Muritala Mohammed/Obasanjo Regime. These companies started realizing their potentials during the Shagari Regime. The companies include Ajaokuta Steel Company, Kogi State; National Iron Ore Mining Company Itakpe, Kogi State; Delta Steel Company Ovwian Aladja,

and lately, WEMPCO Steel Mill Limited, and several others, came in to fill the gap created by the failure of Ajaokuta and Co.

Delta State; Jos Steel Rolling Company, Jos, Plateau State; Katsina Steel Rolling Company, Katsina State; Oshogbo Steel Rolling Company, Osun State; National Steel Raw Materials Exploration Agency, Kaduna State; National Metallurgical Development Center, Jos Plateau State; and Metallurgical Training Institute Onitsha, Anambra State. A mouth-full, isn’t it? But they never realised their full potentials. Comparative advantage theory The Western World, through their Institutions, the World Bank and International Monetary Fund (IMF), amplified the story: Development of the Steel Industry in third world countries which includes Nigeria, to them is uneconomical and so should not be touched, should not be considered. They drew on the sham David Ricardo theory of comparative cost advantage that Africa should not develop Steel Industry but should export their raw materials to the metropolitan West and buy finished steel from them. The Soviet Union agreed to develop the Iron and Steel Industry for Nigeria; the civil works given to the West grounded it. Borodo corroborated this West’s sham stand when he recalled that some of his professors in Nigerian universities

(professors from the West of course) in sixties, said Nigeria should not consider having steel plants, that we were not right for it, “whereas they had steel plants in their own countries”. Ajaokuta steel plant project and the adjoining steel rolling mills are thus lame duck today. Ajaokuta has gone through many hands - The Ajaokuta plant was 90 percent built by Russia’s Tyazyproexport and designed to use local ore and imported coal. Nigeria signed a concession agreement in August with Ispat unit, Global Infrastructure Holding Ltd. to revive the uncompleted 1.3 million tonnes-per-year mill after the collapse of an earlier $3.6 billion 10-year deal with UK-registered Solgas Energy Limited. What we witnessed thereafter was the plundering of the plant’s machinery. The new strategy If Ajaokuta will not work, if the adjoining steel rolling mills will not fly, something has to work; something must take its place. A number of steel companies sprang up to fill the gap created by sick Ajaokuta. This had to play out. To do otherwise would have meant turning Economics on its head. The likes of African Steel Mills Limited, African Foundries Limited, Verod Steel Limited

PAN Steel Group Corporation’s $5bn investment In 2014, PAN Steel Group Corporation, China, decided to invest $5 billion in a new steel manufacturing plant in Nigeria. The company’s President, Mr Zhang Dade said in Abuja, that Nigeria’s good investment environment prompted his company to decide to invest $5 billion in the new steel plant that will produce 4-5 million metric tons of steel per annual. At the close of 2016, Nigeria’s steel sector got $100m Chinese investment through HongXing Steel Company Limited. According to the Iron and Steel Senior Staff Association of Nigeria (ISSSAN), Nigeria’s present steel production stands at about 300,000 tonnes per annum, while consumption is above 20 million tonnes per annum. Managing Director, HongXing Steel Company Limited, Mr. Feng Zheng Ke, said the company has invested $100 million to establish scrap and billet manufacturing plants in Nigeria to boost domestic consumption and export. All these are playing out in the secondary sector of the steel sector. Ajaokuta is a primary sector. The primary sector is steel manufacturing with iron ore as raw material, whereas secondary is cold rolling mill – importation of steel ingots and flat sheets which serve as raw materials; and recycling of steel scraps which African Foundries Limited specialises in. These are processed into various steel products. WEMPCO (and perhaps other cold steel rolling mills too) are set to change the story going by revelations at the commissioning of WEMPCO Steel Mill Limited by President Goodluck Jonathan at Ibafon, Ogun State. The WEMPCO Steel Rolling Mill is worth $1.5 billion and capable of producing 700,000 metric tonnes of steel annually. According to the company’s

group managing director, Lewis Tung, the production capacity of the steel mill represents 65 per cent of the 1.2 million of steel used annually in Nigeria, mostly imported. Tung said the mill, which would produce cold rolled (flat steel), would depend on imported steel billets for raw materials “until it could work out how to transport iron ore from Itakpe in Kogi State”. Thus government and private sector players in the steel industry have agreed the private sector which now plays largely in the secondary stage of steel manufacturing – cold steel rolling milling, will now show interest in backward integration. So, if Ajaokuta will not fly, the private sector steel manufacturers will fly. In fact, Yung said, “We realise that importing these products costs a lot of foreign exchange and we thought that since the raw materials are available locally, producing them locally will help conserve foreign exchange”. A challenge to Ajaokuta The challenge now is to make Ajaokuta work and let there be a linkage to the rolling mills. There are 15 in all. Basir Borodo said, “If you can get Ajaokuta right, WEMPCO and other rolling mills will benefit. The rolling mills and Ajaokuta should integrate. If Ajaokuta is left the way it is now for 5/6 years, the likes of WEMPCO will move and Ajaokuta will never be able to catch up with it.” Automotive industry If the automotive policy must work, steel manufacturing is central to it. Making the steel sector to work is therefore a task that we must religiously focus on. In summary, the strategy should be Ajaokuta playing in the primary sector, and the cold rolling mills in the secondary sector with the primary sector feeding the secondary sector. And this will translate to conservation of foreign exchange, creation of more jobs and boosting of the nation’s GDP.

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Trade&Investments Matters

LASG Reaffirms Commitment to Attracting FDIs

It is our hope that the governments at all levels would continue to address the issues of enabling environment in the country, especially as regards infrastructure. We need to do this in order to fully harness the huge enterprising resource of domestic and foreign investors for the diversification of our economy and the welfare of our people.’ EFETOBORE EKUGBE

he Lagos State Government has restated its commitment to providing the enabling environment to attract foreign direct investments into the country. The Governor, Lagos State, Akinwunmi Ambode, stated that the move is apt to earn the much needed foreign exchange for the State and the economy at large. Ambode who was represented by the Deputy Governor, Idiat Adebule at the closing ceremony of the Lagos International Trade Fair (LITF), said the Lagos State Government would leverage on the new opportunities and network generated from the just concluded Lagos International Trade Fair (LITF) to drive enterprise development and economic growth for the country at large. He expressed hope that the numerous trade experiences of the LITF would translate to increased GDP of the State, enhance social economic capital for its citizenry through the temporary jobs, new investments, business opportunities and networks that have sprung up over the last ten days. “Being the premier international trade Fair in Nigeria and the flagship of world-class trade and business exposition in the West African sub region, it is not surprising that the Lagos International Trade Fair is always an eventful experience for buyers and sellers, producers and consumers, business and governments both locally and internationally.

He however commended the Lagos Chamber of Commerce and Industry (LCCI) for its consistent hosting of the fair, while also calling on local and foreign investors to take advantage of the abundant investment opportunities waiting to be explored. “Our State is investor-friendly and with your partnership, we are committed to doing more,” he said. Also speaking at the event, the president, LCCI, Babatunde Ruwase, said despite the evident limitations of the business environment, infrastructure challenges and the state of the economy, the chamber was able to hold a successful fair, pointing out that the Nigerian business community and foreign investors have again demonstrated their confidence in the Nigerian economy. “It is our hope that the governments at all levels would continue to address the issues of enabling environment in the country, especially as regards infrastructures. We need to

do this in order to fully harness the huge enterprising resource of domestic and foreign investors for the diversification of our economy and the welfare of our people,” he urged. According to him, exhibitors and the chamber are faced annually with the challenge of construction of many temporary structures and rental of tents and other facilities for the fair, saying that most of these structures would be demolished or removed immediately after the fair. “The cost to us is unbearable. We have to provide virtually all the facilities from generators to mobile toilets. We seek your intervention in this respect,” he said.

BUSINESS DAY

Editor’s Note

trategy is about where the business wants to get to in the long-term, that is, business direction; about the markets the business competes in and the scope of the markets; about how the business can have an edge over other competitors in the markets; about what resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete; about the external environmental factors that affect the business ability to compete; about the values and expectations of those who have power in and around the business, that is, stakeholders. Our cover this month brings you what you need to know about business strategy, illustrating it with case studies. Like it was the case last year, members of the Nigeria-Indonesia Chamber of Commerce and Industry (NICCI) led by its vivacious president, Ishmael Balogun, stormed this year’s 33rd Trade Expo Indonesia at Tangerang, Indonesia, between October 22 and 30, 2018. How did it go? Our piece on Trade and Investment Matters tells it all. The Lagos International Tradefair 2018 has come and gone. It was an eventful, scintillating fair. Governor Akinwumi Ambode of Lagos State summarized it all, Said he at the close of the fair: “Being the premier international trade Fair in Nigeria and the flagship of world-class trade and business exposition in the West African sub region, it is not surprising that the Lagos International Trade Fair is

Siaka Momoh always an eventful experience for buyers and sellers, producers and consumers, business and governments both locally and internationally. Nigeria’s about 40-year old Ajaokuta Steel plant is a sprawling facility located in Kogi State that has gulped over $8 billion of public investment but lying prostrate. Several attempts have been made to revive it to no avail. The Buhari administration has put in motion a drive to breathe life into the moribund plant. Can he do it? Abdul-Akaba Sumaila, a mechanical engineer who has taken a three-year leave of absence from Royal Dutch Shell Plc is administrator. One strategy may help. Read the rest in the story on Ajaokuta steel. You are welcome on board. For advert placements, call Siaka: 2348061396410 or email siakamomoh@yahoo.com.

Strategy: The US Southwest Airline... Continued from page 21 direct flights less flight time, short turnaround time, low landing fee, low service costs and low booking costs brought about cost advantage and customer satisfaction. Thus Southwest’s strategy had all the features that make strategy a strategy. Promoters of a new Nigerian national carrier, Nigeria Air, now that Nigerian Airways has become moribund can learn from the case of Southwest Airline. Troubled South Africa Airline can do also. The defunct Nigeria Airways started off so well in 1958 but eventually crashed in 2003 as the Nigerian disease of mismanagement ate it up. Its business class seats were reserved for government officials and their cronies, girlfriends and families — most of whom flew free of charge. President Olusegun Obasanjo once lamented that Nigeria Airways had 32 aircrafts when he left office as military ruler in 1979. Twenty years later, only one aircraft was functional. He promised to revive the airline. But he could not. Oby Ezekwesili has written off Nigeria Air even before it is fully formed. Oby can be taken seriously given her pedigree. Dr. Ezekwesili’s service under OBJ spanned the period when five attempts at the floatation of a National Carrier (IFC’s Privatization of Nigeria Airways, Kema Chikwe’s Air Nigeria and Nigeria Global, Isa Yuguda’s Nigerian Eagle and OBJ’s

disaster called Virgin Nigeria) all failed. She has been reported to have opined that the government’s plan to invest US$300million to kick start Nigeria Air is a waste of public funds. Report has it that governmentowned South African Airways is hemorrhaging cash after six years of operating losses, including a loss of 5.6 billion rand, or about $428 million, in its most recent fiscal year. Moreover, while it’s a solid, safe airline, it has some outdated planes, such as gas-guzzling Airbus A340s, flying marginal or unprofitable routes. Yet it persists, relying on taxpayer cash it to keep it solvent. South African government has proposed at least 10 turnaround plans in the past two decades, said Sean Gossel, a professor at the Gradu-

ate School of Business at the University of Cape Town. But none has worked, not because the plans have been bad, but because there was little impetus to implement them, he said. “After decades of mismanagement, the airline has now reached a state where it is no longer a going concern,” Gossel said. Warri Mini Market’s case Far back in the late 1970s, this writer was manager, Warri Mini Market, retail outlet for wearing apparels and shoes based along Warri/Sapele Road, close to Ginuwa junction, Warri. This was before his university education. The shop was owned by Francis Omo Okotete, a traditional chief of the Agbarho clan who is now late. Chief Okotete was a University

of London-trained economist. Before Warri Mini Market, there existed an array of fashion shops in Warri. Warri Mini Market came with a bang. It came prepared with innovation, strategic planning and basic tools. One should not expect less from an economist who had had some stint with UAC-related companies and PZ, now PZCussons. First, it sourced its goods direct from Europe – UK and Italy, whilst the other shops, its competitors, sourced through second and third parties. So we had an edge in pricing. None of them advertised their products. We did. We had prime time jingles on the local radio and as such we were in every home. They didn’t have. Our merchandising was superb. Of course it had to be because Siaka, the shop manager, and his chief executive, travelled regularly to the UK and Italy and knew how the business was run in places like Marks and Spencer and others in their category. Warri Mini Market had stepped on toes for daring to rattle the market and we became a victim of the crude business environment. What one should expect under the circumstances in question was a counter competitive strategy. But what came instead was burglary – Warri Mini Market was burgled twice. But we were not deterred. We trudged on and succeeded. Manufacturers and art of war Again, one remembers quite well in

the early 1980s, as young man, fresh from the university, on NYSC primary assignment in the Sales Control Department of a leading consumer products manufacturer based in Lagos. Our team made regular trips to the major markets in cosmopolitan Lagos trailing competitors’ products, buying some off the shelf and taking them to our laboratory for analysis. What followed after this is your guess. It is a common practice in the industry. Strategy in war/business A close look at Sun Tzu’s The Art of War tells it all. The Art of War, written during the 6th century BC by Sun Tzu, a Chinese, is one of the oldest books on military strategy in the world. It is the first and one of the most successful works on strategy and has had a huge influence on Eastern and Western military thinking, business tactics, and beyond. Sun Tzu was the first to recognize the importance of positioning in strategy and that position is affected both by objective conditions in the physical environment and the subjective opinions of competitive actors in that environment. He taught that strategy was not planning in the sense of working through a to-do list, but rather that it requires quick and appropriate responses to changing conditions. For him, planning works in a controlled environment, but in a competitive environment, competing plans collide, creating unexpected situations.

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Wednesday 14 November 2018

In association with E-mail: insurancetoday@businessdayonline.com

L-R: Olalekan Alli, secretary to the State Government, Oyo State; Eddie Efekoha, president, Chartered Insurance Institute of Nigeria; and Mohammed Kari, commissioner for Insurance/CEO, National Insurance Commission at the 2018 edition of the CIIN Education seminar held recently in Ibadan.

Stories by Modestus Anaesoronye

takeholders in the nation’s insurance industry must create value in all facets of their operations and relationship with consumers to achieve the expected level of market penetration. During a panel discussion at the 2018 Educational Seminar

organized by the Chartered Insurance Institute of Nigeria (CIIN) held in Ibadan, the Oyo State Capital, stakeholders believe that only value creation can build interest, grow confidence and increase subscription. Yeside Oyetayo, rector, College of Insurance and Financial Management speaking on theme ‘Increasing Insurance Penetration Through Creation, Communication and Delivery of Value’ said insurers must create value,

communicate value and deliver value. Joseph Oladokun, speaking on claims perspective said value creation is not only settlement of claim but how impressive the process is. “Do not frustrate claim process, as satisfaction of the insured determines further patronage, that should be the hallmark of claim administration. He said repudiation is the last option in claim administration

and should be exercised with discretion. Pius Agbola, director, Inspectorate, National Insurance Commission (NAICOM) who spoke on regulatory perspective said value creation process in insurance required a good understanding and analysis of many elements of market premium, the enablers and other components that drive insurance businesses. “The enhancement of these values is the only guaranty of insurance penetration in Nigeria and the growth of the industry.” Lekan Oguntunde, said emerging technologies and innovations are beginning to transform the insurance landscape as they enable new ways to measure, control, engage with customers, reduce cost, improve efficiency, and expand insurability Oguntade called for collaborate, “look to all your partners, peers and competitors to, at the very least, learn from them and, at best, work with them on achieving something new or learn how to approach opportunities from a different perspective”. Eddie Efekoha, president, Chartered Insurance Institute of Nigeria (CIIN), had during a courtesy visit to the Olu Ibadan of Ibadan emphasized the importance of insurance in risk management, urging the royal father to encourage his subjects to embrace insurance because embracing insurance is the only true way through which the people can “Live with Freedom”.

FBN Insurance Brokers recognised for service excellence

he Nigeria Finance Innovation Awards has announced FBN Insurance Brokers as the Insurance Broker of the year, in recognition of her outstanding service, innovation and tireless

efforts in the industry.” Now in its fourth year, the Nigeria Finance Innovation Awards celebrates excellence, accomplishments, success, growth and innovation in the financial sector. It also seeks

to recognise financial organizations, Executives and stakeholders that work towards sustainability in those organisations. While receiving the award on behalf of the Management

of FBN Insurance Brokers, at a ceremony in Lagos, Emmanuel Nwaogwgwu thanked the organisers for the honour and restated the company’s commitment to superior delivery across measurable metrics.

onsolidated Hallmark Insurance Plc (CHI Plc) has recorded a revenue of N5.4 billion for the nine-months ended 30 September 2018. This figure represents an increase of 19.67 percent from N4.5 billion recorded for the same period in 2017. This is as contained in its unaudited results filedwith the Nigerian Stock Exchange (NSE). The result also shows an appreciable progress in investment activities as investment income grew from N611 million to N746.5 million in 2018 which represents 22 percent increase. Total assets of the company rose by 11.56 percent from N9.4 billionin 2017 to N10.5 billion. A profit before tax of N422 million was recorded during the period under review when compared with the N360m of the corresponding period of 2017, a growth of 17.24 percent Also, there was 13.30% growth in the Net Underwriting Profit from N836.9 million in 2017 to N948.3 million. Although it’s claims expenses rose significantly by 96 percent from ₦2.066 billion in 2017 to ₦4.057 billion, this was cushioned by the robust reinsurance arrangement in place. The claims expenses percentage increase reaffirms the company’s commitment to fulfilling its obligations to its customers through prompt claims settlement. Consolidated Hallmark Insurance has been consistent in compliance with the insurance industry and capital market regulations, with prompt filing of financials returns, remittance of taxes, and adherence to strong corporate governance practices. The company has also maintained a track record of regular dividend payments. Recently, CHI Plc unveiled its new transaction enabled website – www.chiplc.comand introduced additional online payment channels, including GTBank portal, Quickteller and Paydirect. All of these are to improve customers’ experience at the point of renewal. 2015

Stakeholders hinge deepening insurance penetration on value creation

CHI increases 9- months revenue to N5.4bn

Wednesday 14 November 2018

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Pension Today

BUSINESS DAY

In Association with

How and when to access your pension benefits

identification (i.e. driver’s license, national ID etc.); 2 passport photographs of the RSA holder; and a duly completed pension retirement withdrawal form from your PFA. Accessing benefits on voluntary or mandatory retirement An RSA holder can retire upon attaining the age of 50 years old in the federal public service or private sector organisation, and can opt for any or a combination of the following benefit options as allowed under the Act or in line with the regulations for the administration of retirement and terminal benefits: En-bloc payment - where RSA balance is less than N550, 000.00; A lump sum - the amount payable after sufficient provision have been made to procure a programmed withdrawal or an annuity that will produce an amount that should not be less than 50 percent of his/her annual salary as at the date of retirement. Requirements for accessing benefits at voluntary or mandatory retirement

includes: Official notice of retirement/exit from last employer; last pay-slip not less than three (3) months from the date of retirement (stamped and signed by employer) or any evidence of last annual remuneration; certified true copy of the retirement bond certificate (Public Sector Retiree); evidence of any accrued pension entitlements not remitted into the RSA (Private Sector/Self Funding MDA retirees); confirmation of any contributions owed by employer (Private Sector/ Self Funding MDA retirees); official evidence of the terms and conditions of employment (Private sector); a duly completed retirement withdrawal form with your PFA; two passport photographs of the RSA holder; completed programmed withdrawal agreement and retiree indemnity form (deposed to before a Commissioner of oath or Notary Public) or annuity form with a life insurance company; birth certificate/age declaration (Private Sector/Self Funding MDA retirees); and photo-

RC634453

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

copy of form of identification (i.e. Driver’s license, National ID etc.). Accessing benefits on retirement due to medical reasons An RSA holder who is retired on medical ground

‘

An RSA holder whose employment has been terminated or who has been disengaged and has not been in any form of paid/ gainful employment for a minimum period of four (4) months is qualified to apply for 25 percent of the balance in his/her Retirement Savings Account

‘

he Contributory Pension Scheme (CPS) under the Pension Reform Act 2014 establishes how and when an employee covered under the scheme can access his or her benefits. The scheme realised that, there are reasons that could make a contributor not to continue with his/ her contribution or where he/she is no longer alive. As provided in the Pension Reform Act 2014, the CPS identified five different stages in the lifecycle of an employee contributor upon which he or shecan access pension benefits through the Pension Fund Administrator (PFA). Industry experts in this article highlights the different stages and reason when a contributor can access his or her pension benefits and what is required of the contributor in terms of documentations. These stages includes: Benefits on temporary loss of job; Benefits on voluntary or mandatory retirement; Benefits on retirement due to medical reasons; Benefits of deceased RSA holder; and,a missing RSA holder (presumed dead). Accessing benefits on temporary loss of job An RSA holder whose employment has been terminated or who has been disengaged and has not been in any form of paid/gainful employment for a minimum period of four (4) months is qualified to apply for 25 percent of the balance in his/her Retirement Savings Account in line with the Regulations for the Administration of Retirement and Terminal Benefits. Requirements for accessing 25 percent lump sum after four months of unemployment/loss of job Includes:Application letter from the RSA holder; birth certificate or age declaration; letter of termination/ dismissal from the employer; photocopy of a form of

i.e. due to total or permanent disability either of mind or body will qualify to access full retirement benefits not considering his/her age and can opt for any or a combination of the following benefit options as allowed under the Act or in line with the regulations for the administration of retirement and terminal benefits: En-bloc Payment - where RSA balance is less than N550, 000; and a lump sum - the amount payable after sufficient provision have been made to procure a programmed withdrawal or an annuity that will produce an amount that should not be less than 50 percent of his/her annual salary as at the date of retirement. Requirements for accessing benefits on retirement for medical reasons includes: Certified true copy of a medical certificate issued by a properly constituted medical board or a suitably qualified physician;letter of notification of retirement issued by the employer also authenticating the medical certificate; last pay-slip not less than three (3) months after retirement (stamped and signed by the employer) or any evidence of last annual remuneration; certified true copy of the retirement bond certificate (Public Sector Retiree); evidence of any accrued pension entitlements not remitted into the RSA (Private Sector/Self Funding MDA retirees); confirmation of any contributions owed by the employer (Private Sector/Self Funding MDA retirees); a duly completed retirement withdrawal form from your PFA; two passport photographs of RSA holder; completed programmed withdrawal agreement and retiree indemnity form (deposed to before a Commissioner for Oaths or a Notary Public); photocopy of form of identification (i.e. Driver’s license, National ID etc.). Accessing benefits of a deceased RSA holder A beneficiary under a Will or an Administrator ap-

pointed under a letter of administration can access the deceased RSA in line with the PRA 2014 or the regulations for the administration of retirement and terminal benefits for:En-bloc payment of the RSA balance which may also include accumulated contributions (if any) and accrued pension benefits. Group Life Insurance will be paid in line with Section 8(1) of the PRA 2014. A missing RSA holder (presumed dead) The employer and/or next-of-kin shall notify the PFA of the disappearance of the RSA holder after a minimum period of 12 months. The next-of-kin shall provide a satisfactory means of identification which can be any of following:Current International passport; national identity card or; letter of confirmation of identity from his/her bank or notary public; Upon satisfactory identification of the next-ofkin, the PFA shall request for items (i) and (ii) and, if available, item (iii) listed below, which shall serve as adequate evidence that the RSA holder is missing:A police report confirming that the person has been missing with effect from the reported date, the circumstance of the disappearance and that the person has not been found after more than 12 months; letter of confirmation of disappearance from the employer (if in active employment at the time of disappearance) bearing the passport photograph of the missing person; newspaper publication announcing the disappearance of the person. Upon completion of sitting, the board of enquiry may declare the missing RSA holder as presumed dead. Subsequently, the beneficiary/next-of kin will be required to provide documentation for processing the deceased RSA holder’s benefits in line with documentation requirements for accessing the benefits of a deceased RSA holder.

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

BUSINESS DAY

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E-mail: insurancetoday@businessdayonline.com

Using insurance to reduce cost of treating critical illness - Old Mutual CEO Stories by Modestus Anaesoronye

ccess to quality healthcare is one of the most important factors for living a life of quality and one of the most critical human needs in the world today. After all, health they say is wealth and only a person in good health can create a successful enterprise. According to the World Health Organisation (WHO), access to healthcare is often times the lowest in Sub-Saharan Africa where residents have to pay out of their pocket for medical expenses. In Nigeria, the average spending on health per person is valued at $216 (about N78, 000) of which $159 (about N57, 000) is out-of-pocket and a paltry $35 (about N12, 000) coming from Government assisted healthcare management initiatives. Yet, the story is not getting any better, especially as today’s economic downturn and the resultant reduction in purchasing power have combined to make access to adequate health care a distant dream for Nigerians. Another study by the WHO shows that 90.2 percent of Nigerians cannot afford to pay for medications for their ailments. What this means is that, for the average Nigerian, an unexpected health challenge can cause major financial disruption leaving one with healthcare bills they often cannot afford. This problem can be further worsened if the ailment diagnosed is a critical illness, which globally involves very costly medicare, due to the extensive examinations, rare medications and prolonged complicated treatment process. Critical Illnesses are ailments that can have fatal or terminal effect on the human body. These ailments include; Stroke, Cancer, Heart Attack, Coronary Artery Disease, Hepatitis, Chronic Liver Disease, Chronic Lung Disease, Kidney Failure, Multiple Sclerosis, Paralysis / Paraplegia Muscular Dystrophy, Alzheimer’s Disease, Parkinson’s Disease, Brain Tumor, to mention but a few. The severity of a critical illness determines the extent of the comprehensive treatment process, hence, people are more likely to be worse hit financially, when they develop a critical illness. Those affected have to face reduced economic performance caused by low to zero productivity or job loss thereby preventing them from meeting their daily needs and commitments. One major evidence of how deep the huge cost of treating critical illness has affected Nigerians is the rising trend of individuals turning to online crowd funding to manage the huge bills. According to reports from popular online crowd funding website, GoFundMe, 1 in 3 campaigns through

Keith Alford

the website are for medical costs and there are over 250,000 medical campaigns per year raising $650 million (N235.3 billion) each year. One of the critical illnesses which has continued to affect the economic capabilities of Nigerians is Cancer. Arecent investigations revealed that 80 percent of cancer sufferers cannot afford lifesaving procedures due to the significant challenge of paying for medical bills out-of-pocket. Reports by the Nigerian Association of Nephrology also show that a staggering 25 million Nigerians (13.9 per cent of the 180 million people) have kidney related conditions. The most common being Chronic Kidney Disease; a condition which commonly affects relatively younger individuals, most of which are in the economically productive age group. What this means is that as these individuals battle to stay alive, they are at risk of facing financial difficulty as the illness limits their productivity and involvement in economic activities. But it is not all grim for Nigerians says Keith Alford, the managing director, Old Mutual Nigeria Life Assurance Company, an affiliate of Old Mutual Limited, one of Africa’s leading financial powerhouses with over 170 years’ experience. He admonished that these shocking reports and the fearsome outlook for critical illness in Nigeria - in terms of severe financial exposures - can be proactively mitigated through the financial protection which insurance policies provide specifically for critical illnesses. “We understand that close to 90 percent of Nigerians lack Health Insurance, leaving 9 out of every 10 Nigerians completely exposed to the huge and harsh financial impact of contracting any critical illness. We know that critical illnesses such as Cancer,

Heart Attack, Stroke, Kidney, and Liver diseases are eternally lurking in the corners and can spring on us without warning. Our desire at Old Mutual is for any patient who has any of the critical illnesses to concentrate his or her will power to full and speedy recovery rather than double the grief with the financial burden for the expensive treatment. The Old Mutual insurance cover for critical illnesses should be taking the responsibility for all the financial requirement, whilst the patient devotes self to the healing process. This is the least the every hardworking Nigerian deserves.” Indeed, Critical Illness Plan, which can also be referred to as Critical Illness Cover, is an insurance product in which the insurer (the insurance company) is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy. The implication is that if one is to be diagnosed with or undergoes a medical procedure for any of the specified critical illnesses that the insurer covers during the length of the policy, lump sum cash will be paid to take to take care of the medical bills. For the Old Mutual Critical Illness Plan, the Minimum entry age for this type of policy is 18 years while the maximum entry age is 67 years. While the ceasing age is 70 years, the policy term spans from 3-15 years. The cover amount ranges from a minimum of 500,000 to a maximum of 30,000,000 Naira. Alford opined that mainstream adoption of Critical Illness Cover remains the best weapon to be deployed against the deadly critical illnesses in Nigeria, as early access to the right treatment in known to significantly improve the chances of survival for the patients.

Radix Pension grows RSA by 450% in one year

adix Pension Managers, a Pension Fund Administrators (PFA) in the country has grown its Retirement Savings Account (RSA) from 4,000 to 22,000 in barely one year of operations under a new Board and Management. This represents a 450 per cent growth in the company’s RSA holders. Kunle Adeboye, managing director of the PFA, in a chat with journalists said the company, formerly trading as IGI Pension Fund Managers Ltd., and launched in October 2017, plans to close this year with a better outlook. He said the company is focused on providing good returns on investment and ensuring maximum safety of the fund under its management, in line with regulations of the National Pension Commission (PenCom). He stated that the company has been able to manage and invest both its RSA and Retiree Funds properly, such that its unit price has been growing steadily on a monthly basis. He stressed that the unit price of the company has been on the top table of unit prices of PFAs out of the 21 existing PFAs since they commenced business a year ago. He noted that they have hovered mostly between first and second and few times up to seventh position. He further stated that the company is working to be one of the top players in the pension space. “In the industry there are two things that are important to all stakeholders: the safety of pension assets

and the return on investment. For us at Radix, we are assuring our customers and potential clients of good return on investment and safety of funds alongside best-inclass customer services - dynamic and efficient administration of pension fund under management, prompt pension payments and excellent pension advisory. “We are doing a lot of things differently because we are a young and dynamic PFA. In one year of our operation, we have been able to grow our RSAs significantly. This is because we have people that have the experience and passion for the job. They have an understanding of why we are here, the kind of services we are rendering and the relevance of the service. We are talking about people’s future and joining them in planning for a better future. We have a brand itself that speaks to the youths in terms of most of the things that we do. We do a lot of online and social media sensitization and so all of these and many more put together have been assisting us to grow. “In terms of customer service, we are trying our best as much as possible. We have 24-hour service driven by our ICT capability, and this makes us to be more efficient. In today’s world, most people have access to phone and email. They are more aware through social media. We have the mobile app; these things were not there before the acquisition. But with the acquisition by Radix Capital Partners so many changes have occurred in the company.

STACO reaffirms commitment to professionalism

he Management of Staco Insurance Plc has denied allegation of infractions by the House of Representatives sub-committee on Capital market, and once again reiterated its commitment to professionalism being one of the core values of the organization. It also reaffirms its determination to ensure compliance with the Industry codes of corporate governance, stating that there is no iota of insider dealings in the company. “The inability of the Management to attend the meeting as scheduled by the House Committee was due to an unforeseen circumstances which was duly

communicated to the Sub-Committee.” We have attended similar meetings in the past and thus would not intentionally make off from attending the scheduled meeting, said BayoFakorede, acting managing director, Staco Insurance Plc The Management of the company confirms that it anchors her operations on high ethical standards which imbibes the principles of full disclosure, accountability, transparency and respect for stakeholders’ interest. This has been the manner of dealings with all regulatory authorities and the stakeholders at large, which are enshrined in regular fillings of all mandatory reports. To underscore this assertion, the Board of Directors of the company has always been at the fore front of laying down proper and good corporate governance with best practices and ensuring that there is compliance with both external and internal rules guiding the operations of the company. As a responsible corporate citizen, we want to assure all our stakeholders, the insuring public and the shareholders in particular that there investment is safe and intact with us.

BUSINESS DAY

Wednesday 14 November 2018

Shipping

Logistics

Maritime e-Commerce

Apapa gridlock: Experts tell FG to open up Tin-Can Port trailer park for use Stories by Uzoamaka Anagor-Ewuzie

orried by the persistent traffic congestion on roads leading to the nation’s seaports, port users have called on the Federal Government to open-up the trailer park located at the Second Gate axis of the Tin-Can Island Port to the shipping companies and truck owners to use. According to them, Rotimi Amaechi, the Minister of Transportation and the Minister of Power, Works and Housing, Babatunde Fashola need to synergise and allow shipping companies begin to utilise the trailer park as a container holding bay to reduce the number of trucks

A cross section of Vision Vijana agents conducting eye test for truck drivers in Kenya

APM Terminals, foundation partner to bridge visual, employment gap in Kenya

s part of its determination to expand Kenya’s trade and employment opportunities, APM Terminals in partnership with TwoBillionEyes Foundation, a nonprofit group has provided vision improvement glasses to truck drivers working at Great Lakes Ports Limited in Mombasa. APM Terminals, an integrated container logistics company working to connect and simplify its customers’ supply chains, has also created economic opportunities for some of Kenya’s unemployed youth.

Research shows that poor vision is a global issue affecting 2.5 billion people, while youth unemployment is a challenge across Africa, with Kenya posting a 39.1 percent unemployment rate, based on the United Nations Human Development Index 2017 report. Commenting on the initiative, Wouter De Gier, head of Safety, Environment and Performance Management of APM Terminals, said that APM Terminals is committed to creating meaningful impact to the communities where it operates. “We are delighted to col-

laborate with TwoBillionEyes to promote the importance of proper vision among our driver partners, in order to achieve safety on the road, as well as provide economic opportunities among the youths in Kenya,” De Gier said. On his part, Tito Okuku, managing director of the Great Lakes Ports Limited, APM Terminals Kenya said that uncorrected vision could derail its operations and compromise the business of its customers and trade partners. “We want to ensure that our driver partners see clearly so they can deliver customers

and trailers queuing on the port roads to have access into the ports. Bu s i n e s s Day u n d e rstands that the building of the trailer park project, which has been within the purview of the Federal Ministry of Power, Works and Housing, was initiated during the Goodluck Jonathan administration and has been delayed for several years. Michael Imonitie Ovien, a maritime lawyer and clearing agent said that container holding bays owned by shipping companies are filled to the brim, making it difficult to get containers out for export. Shipping companies and terminal operators, he said, do not have access to their containers to return them to the port due to the issue of bad roads around the ports.

SIFAX Group appoints Mariam Afolabi as executive director cargoes safely and on time,” Okuku added. The partnership resulted in a free eye check-up camp held from 27 August to 13 September 2018, benefitting 550 truck drivers, who ply the Mombasa roads. The vision testing made use of the 0.66 minimum Kenyan requirements for driving. Of this number, 14 percent or 77 drivers were fitted and issued with eyeglasses on the spot to improve their vision. Conducting the eye tests were eight unemployed youths branded as VisionVijana agents (Vijana means youth in Swahili).

IFAX Group, a multinational corporation with diverse interests in maritime and other logistics arms has appointed Mariam Abiola Afolabi as its new group executive director, compliance. Afolabi, a solicitor and advocate of the Nigerian Supreme Court, is a graduate of Law from the University of Warwick, Coventry, Eng-

NPA sees opportunities for terminal operators in trade fairs, exhibitions

ollowing the conviction that trade fairs and exhibitions holds great opportunities for the port industry, the management of the Nigerian Ports Authority (NPA) has directed that terminal operators would, going forward, be encouraged to participate in such upcoming events. A statement signed by Isah Suwaid, assistant general manager, Corporate and Strategic Communications of the NPA, stated that Hadiza Bala Usman, managing director while declaring open the “NPA

Special Day” at this year’s Lagos International Trade Fair, said that participation of terminal operators in trade fairs will help to promote the activities of concessionaires in the nation’s seaports. According to Usman, the presence of terminal operators in trade fair would not only enable them to showcase their activities to the numerous visitors participating in the fair but also educate them on their services. Under the current concession regime, Nigerian ports have 26 terminal operators

in charge of the six seaports in the country and they are responsible for the loading and off-loading cargo in the ports. Usman, who was represented by Abubakar Umar, port manager of Rivers Ports said that the Authority has started aggressive efforts aimed at attaining the ISO 9001 complaints and certification in the nation’s seaports. She said that the attainment of the ISO 9001 certification will improve the financial performance of the authority; ensure quick turnaround time, improved traffic and business

“Currently, most exporting companies are finding it difficult to secure containers for export from shipping companies. This is why perishable goods get trapped at the port, causing them to rot even before getting out of the country,” Ovien said. Tony Anakebe, managing director of Gold-Link Investment Ltd, who affirmed the need to open the Tin-Can trailer park for use, said that the gridlock has worsened due to the increase in the volume of activities at the ports. “The environment around Apapa port city is no longer conducive for seamless port operation. There is increasing volume at the ports but the man-hours lost on the roads by port users, container carrying trucks and operators, has been quiet disheartening,” he said.

process in the ports. She disclosed that the management has already directed all the relevant divisions and departments to ensure the NPA meets up with the identified critical requirements for successful attainment of the project. Earlier, Toki Mabogunje, deputy president of the Lagos Chamber of Commerce and Industry (LCCI) said that the primary objective of the chamber was to promote legislature or other policies affecting Trade Industry, Commerce and Agriculture.

Mariam Afolabi

land. She also obtained a post graduate degree (LLM with distinction) in International Maritime Law from the IMO International Maritime Law Institute, Malta. Afolabi’s professional experience spanned various tested legal firms, maritime and aviation companies like Kayode Sofola & Co; Skyway Aviation Handling Company Limited (SAHCOL); SIFAX Shipping Company Limited and the Nigerian Maritime Administration Safety Agency (NIMASA) among others. John Jenkins, group managing director, SIFAX Group, said Afolabi will bring her rich professional experience to bear on the operations of the company. “In the last few months, the company has been going through an operational restructuring geared towards repositioning for better service delivery and corporate reengineering. A lot of key appointments, promotions and transfers have taken place in this regard across most of our subsidiaries. We are not only strengthening important positions, but creating new ones that can bring greater operational efficiency,” he said.

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Wednesday 14 November 2018

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Banks poor credit administration pushing up NPLs Hope Moses-Ashike

he rising trend of Non-Performing Loans (NPLs) largely remain a challenge in the banking and financial sector of the Nigerian economy. The asset based soundness indicators showed that the Non-Performing Loans (NPLs) ratio had risen from 12.45 percent in June 2018 to a high of 14.70 percent, higher than the maximum 5 percent prudential requirement, compared to Turkey, South Africa and Malaysia with 2.8 percent, 3.1 percent, and 1.6 percent, respectively. The high NPL ratio may be connected with poor credit administration of the Deposit Money Banks (DMBs) as well as high interest rate in the economy, said Balami, Dahiru Hassan, member of the Monetary Policy Committee (MPC). Again macroeconomic challenges affecting the obligor’s cash flow, particularly

in the oil sector where credit concentration is high, may also have been responsible for the high NPLs ratio. “The good news is that about 82 percent loan loss provision has been made in the books as at August 2018. The liquidity ratio on the other hand has marginally increased from 46.09 percent in June, to a high of 46.68 percent in August, as against a minimum of 30 percent as required by the prudential requirement”, Hassan said in a statement during the last MPC meeting. The income and expense based result shows that banks’ return on equity and return on asset decelerated from 22.22 percent to 2.15 percent in June to 20.84 percent and 1.97 percent in August 2018, respectively. The ratio of interest margin to total operating income decreased from 70.15 percent in June to 69.01 percent August 2018, while the ratio of total operating cost to total operating income rose from 70.90 percent in June to 72.75 percent in Au-

gust 2018. The banking industry financial soundness indicators show a more robust banking industry if the four outlier banks are removed. The capital adequacy ratio of

17.88 percent is higher than the prudential requirement. However NPLs at 8.17 percent is still higher than the maximum of 5 percent required. The liquidity ratio improved from 48.58 percent to

a high of 49.44 percent in August 2018 but still lower than that of Malaysia (152.8%) and Turkey (71.5%), although higher than that of South Africa (31.9%). The CBN interven-

tion and regulatory policies should be intensified to address the problems of the four outlier banks. It should be noted that the average CAR for banks with international authorisation at end-August 2018 stood at 11.68 percent, while banks with national authorisation was 8.36 percent. Both fall below the prudential requirement. This was due to increase in risk weighted assets as well as payment of interim dividend. In his personal MPC statement, Edward Lametek, deputy governor, said the financial system has come under increased pressure in recent months, owing to a combination of adverse external and domestic conditions, manifesting in divestments in the equities market and rising NPLs. “Further tightening of the monetary policy stance may not be helpful at this time to the system. In the banking sub-sector especially, it could lead to asset re-pricing, increased operating cost and higher risk to asset quality”, Lametek said.

Access Bank provides discounted financing Fidelity Bank rewards customers at trade fair to women-in-business

n a bid to promote best practice and support women entrepreneurs globally to drive change, economic expansion, and advance communities around Africa, Access Bank Plc through the W Initiative has further deepened its relationship with female entrepreneurs in Nigeria. This is evident in the resultant benefits and testimonials from capacity building sessions and trainings from the W Academy, access to market as well as access to finance from the discounted financing product; The W Power loan for women-inbusiness. According to the World Bank, the rate of women’s

Faminu Gbemi

entrepreneurship in Africa is high – higher than in any other region. Dwelling on this discovery, the W Initiative, in 2018, facilitated several Womenpreneur Business Workshops in conjunction with the Enterprise Development Centre, Pan Atlantic University to facilitate better understanding of entrepreneurship, improve business skills and consolidate learning. Also, the W Academy partnered with subject matter experts to facilitate scores of networking and capacity building sessions that has given women an opportunity to be inspires, connected and empowered. The W Power Loan is a discounted financing

scheme introduced in July 2018, to bridge the financing gaps for women-in-business. With a primary focus on eight key business sectors, female entrepreneurs who need financing for business expansion, working capital or purchase of equipment can apply for the loan to a tune of N100million at an annual interest rate of 15 percent. Speaking on the purpose of Access Bank’s involvement in Women Entrepreneurship, the Head, Women Banking of Access Bank Plc, Ada Udechukwu said, “We are aware that SMEs in Africa are estimated to account for over 90% of all firms outside of the agricultural sector in the region.

idelity Bank last week celebrated its loyal customers at the Lagos International Trade Fair where it was able to also showcase its new account opening method with the use of a barcode. Nnamdi Okonkwo, Chief Executive Officer of Fidelity bank, who was represented by Chijioke Ugochukwu, executive director, shared services and products stated that despite the challenges and harsh business environment, Fidelity Bank has remained profitable, successful and has in fact improved their services by introducing a new method to open accounts

through the use of a barcode, of which fidelity bank is the first Nigerian bank to use this. She also mentioned that they have not been found wanting in fulfilling their corporate social responsibilities which include yearly promos and loyalty rewards schemes for their customers neither have they relented in helping small and medium-sized enterprises in the country access necessary aid and funds. Presently running the “get alert in millions promo” season 3 which focuses on improving their customers standard of living, the promo is expected to span for the duration of 6 months with a total of 110 million naira, alongside other consolation prizes. Babatunde Paul Ruwase,

the president, Lagos Chamber of Commerce and Industry, who was present at the event, commended Fidelity Bank for their continued support and effort over the years, both to the general public and the Nigerian economy, adding that more can still be done on the area high cost of credit and access with longer moratorium and tenure especially to the real sector with high employment elasticity. Speaking with Michael, a staff of Fidelity Bank, he said that it was a big day for the bank and would change some people’s lives and status, he said that today winners of the promo will be announced and awarded with their prize which includes millions of naira.

Wednesday 14 November 2018

BUSINESS DAY

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Wednesday 14 November 2018

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Experts want increased consumption of protein, vitamins to tackle malnutrition Stories by Josephine Okojie

coalition of nutrition experts has charged Nigerians on the need to improve on the intake of nutritional quality food such as proteins and vitamins to mitigate the level of malnutrition in the country. The experts who spoke at the just concluded nutrition fair say that urgent and coordinated efforts were needed to improve nutrition and end the country’s annual losses in GDP owing to malnutrition. They also reiterated the need to create more awareness on the importance of consuming nutritious food produce which is readily available. Paul Ilona, Country Manager, Harvestplus drew attention to the slow successes the country has recorded in terms of economic development and attributed the challenge in some measure to the negative effects of poor nutrition. “Nigeria must come together to scale up access to nutritious food for all households and households must start consuming nutritious food and as long as we continue to neglect nutrition the country will continue to face a lot of crisis,” Paul Ilona said. “Nutrition is an essential building block for growth and development, so reaching millions with more nutritious food should be a top priority for us

as a nation. Malnutrition will lead to increase pressure on national health budgets and a weak labour force,” Ilona adds. He added that the food fair was initiated to promote the production, marketing and consumption of nutritious foods, adding that the fair which is the largest platform in Nigeria that showcases business and opportunities in the food sector will also boost capacity and grow the agricultural sector. Ilona stressed that the number of

deaths and irreparable damage to the growth and well-being of children under the age of five and women were alarming, stressing that 30 per cent of children under-five years are estimated to be vitamin A deficient. “For instance, if you take vitamin A deficiency in Nigeria, 30 per cent of children under-five years are estimated to be vitamin A deficient. And a deficiency in vitamin A lowers immunity, impairs vision, and may lead to blindness and even death,” he said.

Nigeria losing FX as Mexico ban on Hibiscus export persists SEYI JOHN SALAU

igeria is set to lose $35 million (N12.6 billion) f ro m t h e e x p o r t o f hibiscus following the ban placed on Nigeria by the Mexican government, a major importer of the country’s flower. The media had earlier reported the lift of the ban on the country’s Hibiscus flower into Mexico, but the association of hibiscus flower exporters in Nigeria has debunk the news. The report, which was credited to the NAQS said that farmers of the flower are eager to commence export, while stating that the country has to take advantage of the opportunity provided to support the Federal Government’s diversification drive. However, AHFEN is of the opinion that the ban has not been lifted, even though it is hopeful that it would be lifted anytime soon. “The ban on Nigeria’s Hibiscus is yet to be lifted. The Mexicans gave

us a work plan and this work plan is what the Nigeria Agricultural Quarantine Service (NAQS) has been working with. The work plan is still in process; it is almost done but not yet,” said Tunde Lawal, president, Association of Hibiscus Flow er E xpor ters of Niger ia (AHFEN). “We hope it will be lifted soon. Now we are trying to organise how the product is planted, processed and harvested because in the years past, some products of low quality were found in some consignments,” Lawal said. According to AHFEN, Hibiscus is a major income earner for the country, with Mexico importing about 85 per cent of Nigeria hibiscus. Hibiscus is a versatile crop used for the popular zobo drink that can also be made for a list of byproducts. Hibiscus jellies, jams, fruit pastes, traditional medicines, teas, syrups and refreshing drinks can be found in almost every market stall in West Africa. In Nigeria, Hibiscus flower grows

nearly throughout the year, though its peak production is during the dry season of November to April. Hence, the association is concerned about the possible implications of the ban on the farmers and exporters. In 2017, Nigeria earned $35 million exporting 1,983 containers of hibiscus to Mexico, being the hub of southern and Latin America within nine months of that year. According to AHFEN, dried hibiscus flower are used in the production of hibiscus tea. The tea is a caffeine free herbal tea from a special type of hibiscus, called Roselle; the scientific name is Hibiscus sabdarifa. This tea is made out of the dried fruit part of Roselle, called calyx, which is red in colour and tastes like berries. “There are concerted efforts from the government, NAQS, and everybody involved to see the ban lifted; but there is a need to correct the impression that the ban has been lifted,” said Femi Akinwumi, the vice president of AHFEN

Speaking further, he said the food we eat is meant to add value to our system and that we need to increase the nutritional value of our local and traditional food. as it also adds value to the agricultural sector, providing employment through capacity building. He described the lack of essential vitamins and minerals as “Hidden Hunger,” adding that those who suffer from this situation are usually vulnerable to illnesses and infections. “In severe cases, hidden hunger can leave children blind, stunted, or with reduced intelligence quotient (IQ), and increases a woman’s risk of dying during pregnancy,” he said. He noted that promoting awareness about nutritious food in the country will also ease the unemployment rate, thereby creating opportunity for producers of nutritious food to increase production and employ more youths in their factories. Garba Abari, director-general, National Orientation Agency (NOA) in his keynote address, titled; ‘The Role of the National Orientation Agency in Supporting Government Policy of Promoting Food and Nutrition Security in Nigeria’ identified the dire need for robust and sustained public sensitisation on the importance and benefits of nutritious food, how to produce it and its implications for national growth and development. “We need proper understanding

and appreciation of the strong and inextricable nexus that exists between nutritious food, health, income and GDP growth, and the potential of this ultimately finding expression in national security, growth and prosperity for all,” Abari said. To stem the drift towards this trajectory, according to him, requires orientation and a change of attitude, which is one of the cardinal objectives of previous and the current edition of the Nutritious Food Fair. Nasiru Mohammed, directorgeneral, National Directorate of Employment (NDE), said it is pertinent to observe that the NDE has drawn up a template to key into the School Feeding Programme by planning to introduce Nutrition Secure Training Scheme (NSTS) in collaboration with the HarvestPlus Nigeria. “Besides this health benefit, this proposed scheme has the potential of creating massive rural employment, eradicating hunger and poverty, as well as reducing rural-urban migration, thus helping to achieve some of the Sustainable Development Goals,” Mohammed said. Samuel Odedina, provost, Federal College of Agriculture Akure (FECA) in an interview with Daily Independent said that the institution, which is the highest producer of vitamin A ‘garri’ in the country, is trying its best to ensure that the nutritious product is made available to Nigerians.

Senate commends NBMA on genetic modification lab

he Senate Committee on the Environment has lauded the National Biosafety Management Agency (NBMA) over its modern state-ofthe-art Genetic Modification (GM) detection and analysis laboratory. The senators made the commendation during a visit to the agency to tour the laboratory. Oluremi Tinubu chairman, Senate Committee on environment, in a statement made available to BusinessDay, said that the agency had in a short time of establishment,

achieved a lot in terms of equipment and performance. Tinubu who said the committee came to ascertain the level of performance for the two previous years of the agency’s budget, also commended Rufus Ebegba, the director-general and CEO of NBMA for achieving so much in a short period. Ebegba presented the 2017 and 2018 budget performance to the committee, noting that the essence of the GM detection and analysis laboratory is to ensure that Genetically Modified Organisms (GMO) are not allowed into the country without proper verification and authorisation. Presenting the budget, the director-general of the agency said that in 2017 about N244 million was appropriated, about N172 million and N172 million was expended. Rufus also said that for 2018, about N259million was appropriated, N26 million was released and N26 million has been expended so far. T h e e i g ht- ma n c o m m i t t e e promised to relate the progress and needs of the agency back to the National Assembly for onward action.

Wednesday 14 November 2018

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BUSINESS DAY

ag@businessdayonline.com

Ivory Coast sends delegates to understudy Nigeria’s agripreneur model Josephine Okojie

vory Coast, Africa’s largest cocoa producer, has sent a delegation to Nigeria to understudy the country’s agripreneur model spearh e a d e d by t h e Int e r nat i o na l Institute of Tropical Agriculture (IITA), as part of efforts to revamp its agriculture and address its growing youth unemployment, the international institution says. The 10-man delegation understudying the international institution’s Youth Agripreneur (IYA) model was led by Karitia Caulibaly, deputy director of cabinet, Ministry of Youth Employment. Caulibaly said the experience with the youths in Nigeria inspired her to embrace farming and that the delegation is in the country to learn and replicate the model in Ivory Coast. The team wants to get first-hand knowledge of IYA, as the country prepares to sign up to the African Development Bank’s funded program on youth in agriculture titled: ENABLE Youth. The IYA model is a job creation and mind-set changing program aimed at attracting young men and women to agriculture by exposing them to the opportunities in the

agriculture value chain, while at the same time providing training and mentorship to the youngsters. The IYA model was initiated in 2012 by the international institution to draw young people to agriculture. The initiative is currently being supported by the African Development Bank under the bank’s ENABLE-Youth program. Nteranya Sanginga, directorgeneral, IITA said the IYA model was

established as a means of creating a career path for unemployed young people in agriculture by training, coaching and mentoring the youths to embrace agriculture as an income generating option. He added that the successes recorded from the IYA model was recognised by other institutions including the AfDB and had been adopted for replication and expansion through projects like ENABLE-Youth.

Evelyn Ohanwusi, head of youth in agribusiness office in Ivory Coast, said the training received under IYA had transformed many young people with many of them migrating from being job seekers to job creators. Ohanwusi added that some of the young people had established independent agribusiness enterprises which are providing jobs for several other youths.

Also, Guy-Herve Pillah, youth coordinator, ENABLE while giving an update on the ongoing activities of ENABLE Youth program in that country said the team had selected sites that would serve as incubation centers for the beneficiaries of the program. “The renovation of the sites to suit the purposes of the program would commence in earnest,” Pillah added. The Cote d’Ivoire delegation also visited some IYA business spin-offs in Ibadan and Abuja. In Abuja, the team was delighted over the progress made by Onyeka Okaro, the chief executive officer of Yeka Farms. Giving a background into the start of the business, Okaro explained that during his incubation period between 2016 and 2017 at IITA, he saved money from the stipend earned to establish Yeka farm. “The training I had during my incubation period was sufficient as it was experiential. It was both on the field and practical in approach. The content was technical and covered business management and ICTs. I did not have an agricultural background when I joined the program but today, I run my farm myself. I hope this will inspire one more person to take up farming. I will use the new funds to expand my farm and diversify into fish smoking,” Okaro said.

Dutch firm to invest $400m in Kogi agricultural projects Victoria Nnakiaike, Lokoja

he Dutch African Agricultural Projects, a Netherlands company has finalised plans to invest N144billion ($400million) in various agro-allied projects in Kogi state. Bert DeJong, coordinator of the project disclosed this to Yahaya Bello, Governor of Kogi State that the team from the Dutch African Agricultural Projects were in the state to invest about $400, 000 in dairy ranch programme, milk production, onions, sesame seed and rice production among other agric projects in the state. He said that the team would place utmost priority on the needs of host communities, adding that 30 percent of returns from the project will be invested into social project that would add value to the lives of

the people in the host communities. DeJong also noted that 60 percent of the agricultural products produced in Nigeria waste away as a result of lack of adequate storage facilities, saying that the firm will be investing in storage facilities to address the issue of food wastages. He also explained that the project has the capacity to create 12,000 direct jobs for the people of Kogi state and another 25,000 to 30,000 indirect jobs for other Nigerians. Also speaking, Governor Yahaya Bello told the Netherlands team that its vision in the area of agricultural investment is in line with the state agricultural revolution, adding that the project was a welcome development and that his administration will support the team in all ramifications to make the project a reality. The governor assured the team that Kogi state is safe for investments of all sorts, as insecurity is no longer an issue of concern in the state. “My administration’s core value is in line with President Muhammadu Buhari’s agenda. He has vowed to revive agriculture and others; he is doing well and Kogi State government is following in that direction,” Bello said. He equally noted that his government also in line with the President’s efforts in the area of

job creation and diversification of the economy, adding that since the project can create thousands of direct and indirect job opportunities in the state the Kogi state government will give its full support. Governor Bello also commend the team for putting the state in the first phase of the project execution, noting that the state is blessed with human and fertile arable land that could yield huge returns for the investors. Smart Adeyemi, former senator of Kogi West constituency in his remarks, said Governor Bello’s zeal and determination to transform the socio-economic development of the state is the reason he took the decision to encourage the team to come invest in the state, adding the last economic summit held by the state government was an eye opener which he said had exposed the potentials of Kogi to the outside world, as he hinted that the team will kick start the first phase of the project in few weeks’ time. Adeyemi assured the team that Kogi state is one of the safest states to invest in Nigeria, adding that the governor’s passion for rapidly transformation of the economic fortune of the state and improving the wellbeing of the people deserves the support of all and sundry to make it a reality.

Kogi ADP to organise Cassava City Programme Victoria Nnakiaike, Lokoja

l l p l a n s f o r t h e Ko g i Agricultural Development Project, (ADP) maiden ‘Cassava City Day’ which is aimed at exploring the opportunities and prospects of cassava production has been concluded Oyisi Okatahi, managing director of ADP, said this in a statement in Lokoja recently, adding that the programme which had explored the treasures of cassava crop in the state, would be in collaboration with Kogi Ministry of Agriculture. He also disclosed that the programme would expose participants to ways of exploring the opportunities in cassava farming,

processing, storage and marketing. “The programme, which will hold November 15 at the Confluence Stadium, will also educate participants on cassava project financing, packaging, technology, sales, marketing and its entire value chain,” Okatahi said. The 12,500 hectares cassava farm city which is located at Osara in Adavi Local Government Area of Kogi involves farmers, dealers extension agent and crop processors , agro chemicals and equipment. Otahi also disclosed that cultural music competition involving Igala, Ebira, Okun, Bassa, Nupe, OgoriMagongo, Gwari, Kakanda, Oworo, Idoma and Eggan ethnic groups, will be part of the event.

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Leadership

Wednesday 14 November 2018

Shaping people into a team

Electric scooters are uniquely useful, and dangerous, for college students

hen a third-year Ohio State psychology student fell off a Bird electric scooter and fractured her ankle in September, she was using the scooter the same way many college students do: to get to and from grocery stores, pharmacies, or in her case, Target. She was a block away from her dorm when she hit a pothole and was thrown off balance. “When I fell to the ground, I heard a sickening crunch,” the student told me via private message on Reddit, where she goes by the name Nerdylullaby (she preferred not to have her full name associated with her account). I found her after seeing a post she wrote on the Ohio State University subreddit titled: “Y’all don’t fuck with the scooters.” An ambulance ride later, Nerdylullaby received surgery to place screws and plates into her ankle. When we spoke in October, she was still using a (nonelectric) knee scooter to get around. Even though insurance covered most of her medical bills, she still has to pay more than $800 for surgery, X-rays, and a two-night hospital stay. Legally, the full responsibility for the accident (and the medical bills) falls on the student: By consenting to Bird’s user agreement, she accepted all the risks entailed in riding the scooters. This story is not unique. Lately, there has been almost unrelenting attention to the risks of riding electric scooters. Emergency departments have decried the rise in scooter-related accidents, the Washington Post reported. In Los Angeles, injured riders accused scooter companies of “gross negligence” in a class-action lawsuit. And in response, some cities—including Denver, Santa Monica, California, and San Francisco—have temporarily banned the vehicles while they figure out how to regulate them. Those bans are easy to stomach if you think scooters are “the epitome of tech-bro arrogance” or just another example of how Silicon Valley swoops into the rest of America only to break things and leave. But the scooters aren’t being forced on

students: They actually like using them on and around campus. This is because the scooters are uniquely useful for college students, many of whom may not have cars and most of whom need an affordable, accessible way to move quickly between different places: home, class, work. So it makes sense that scooter companies have made university campuses a priority. Bird has its “University Pop Up Tour,” which launched in August. Similarly, Lime says it serves nearly 30 universities, from the University of South Alabama to Guilford College in North Carolina. Razor, a rideshare newcomer but a scooter old-timer, has a college program on about a dozen campuses, including Purdue University, University of Colorado– Boulder, and Texas A&M. All three of the companies operate around my university, Arizona State, where they’ve been received by students with open arms. (Disclosure: ASU is a partner with Slate and New America in Future Tense.) But if students have been quick to embrace the scooters, universities have been slow to understand how to deal with them. Midway through the fall semester, Arizona State “reminded” companies that campus transportation rules prohibited electric scooters. In response, the companies instituted “no-ride/ no-park zones” on university property—much to the dismay of students. In theory, this means that rides can’t be started or ended on

campus, and that users who try to do so may face fines or account suspension. In practice, there are still lots of scooters being parked and ridden on and around campus (albeit fewer than before). On the ASU subreddit, students’ reactions to the restrictions followed a common thread: The restrictions made sense from a safety perspective—but they were also pretty disappointing. As one user wrote, “some people were definitely jackasses with them, but they actually provided a pretty useful service … ” In protest, some students painted a sheet with an electric scooter and the caption “Gone but never forgotten,” which they hung outside the fraternity and sorority dorms. Arizona State isn’t alone. The University of Arizona, University of Missouri, Ohio State University, Oklahoma State University, Michigan State University, and Loyola Marymount University have all taken some action against scooters on campus, ranging from temporary bans to stricter regulations to impoundment. These universities look to one another for clues on how to strike a balance between safety, company power, and student demands. As they do so, they also seek guidance from local governments, many of which are similarly unprepared to deal with the machines. Many of the restrictions are temporary placeholders while campus and local officials come up with better plans for how (and whether)

the scooters can fit into their communities. Hard data about how scooters are used and what can go wrong would help this planning— but unfortunately, that data seems far from comprehensive. For example, Jerry Gonzalez, an Arizona State police spokesperson, said there was no central office collecting information on scooter accidents. Similarly, Benjamin Johnson, an Ohio State spokesperson, told me his university’s police department doesn’t track scooter-involved incidents, either. For most universities, including ASU and OSU, scooter accidents did not show up on daily crime logs. (Universities are required to publicly report crimes, but in most cases, scooter accidents don’t involve criminal activity and therefore don’t require a report.) Accidents occasionally appeared in crime logs from the University of California–San Diego. On the afternoon of Sept. 8, for example, the log shows, two women lost control of their scooters while riding downhill. When I followed up with UCSD’s police department about the accident, they reported injuries including a “minor head injury/concussion.” A few weeks later, another downhill scooter accident at UCSD ended up hospitalizing a rider, who suffered from cuts on their face and chin and a “medium-sized contusion” on their forehead. If universities had more comprehensive data on these types of accidents, they might be able to

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

institute more specific and useful policies—designated parking zones, better enforcement of safety requirements like helmets, no-ride zones on hills or crowded areas—rather than resorting to blanket bans. And companies, for their part, could use data to proactively regulate their vehicles to promote user safety— something which they’re already trying to do through features like putting caps on speed in certain locations, including on campuses. But there’s still a long way to go. There’s also another, less talked about but definitely dangerous part of the scooter equation around campuses: students who ride scooters while drunk. Many students treat scootering as an alternative to taking an Uber home from the bar. But as a San Diego police officer told the San Diego Union-Tribune, “Uber and Lyft are still cheaper than going to jail and being the laughing stock of the cell because you got a DUI-scooter.” Of course, there are some things that we can’t expect companies or universities to be responsible for. The couples who like to ride a single scooter together? They’re on their own. The people who use scooters like they’re in the demolition derby of the county fair? There has to be an element of user responsibility. But as it stands, college riders like Nerdylullaby take to Reddit and other networks in order to warn each other about the dangers of scooters. Maybe they weren’t wearing helmets, but they also weren’t doing anything particularly outrageous—and at the end of the day, it seems they were failed by safety measures from the companies and their universities. Universities serve as testing ground for all sorts of tech: They are full of young, savvy users more likely to be early adopters, they provide somewhat controlled and closed environments, and they run on word of mouth. If we can get the scooter safety equation right on campus, it seems like there’s hope for getting it right elsewhere. And if we can’t? Well, then, we’re going to have a lot of angry college students.

Wednesday 14 November 2018

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Tax Issues

BUSINESS DAY

Managing pay transparency ADEWALE AJAYI & YEWANDE ALLI, KPMG Nigeria

he Chartered Institute of Personnel and Development (CIPD), in its 2017 Reward Management Sur vey, stated that pay was becoming more transparent in most organisations. The study showed that 69percent of the 715 organisations sur veyed were open about pay levels, with 31percent favouring ‘great’ transparency in form of written policies. Similarly, in the 2016/17 HR/Reward Practices Survey conducted by KPMG Nigeria, 53percent of employees believed that their companies’ performance management systems were more than fair. Pay Transparency is a controversial concept with varying definitions across different bodies and organisations. Some define it using the literal word “transparency” and therefore interpret it as the act of revealing employee compensation information to other employees. Others interpret it as transparency of pay processes i.e. the process of being clear and open about compensation decisions, and providing all required information to understand these decisions. With the advent of technology and social media where people discuss and share all aspects of their lives, it is inevitable people will begin to seek platforms to share compensation information. It is important to note that there is no perfect level of pay transparency. As with other organisational decisions, it should be dependent on the organisational culture, brand strategy, goals, organisational p h i l o s o p hy , a m o ng st o t h e r factors. This increased openness, particularly amongst public service companies and large organisations, may be driven by the impact of recent legislative measures, such as the UK gender pay gap reporting and agitations for greater transparency on executive pay. In Nigeria, the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC) and Financial Reporting Council of Nigeria are championing the cause for transparency and disclosure for Executives’ pay information. This article explores the argument for pay transparency, what should be communicated at the minimum, key drivers involved in managing pay transparency and how employers can use pay transparency as a tool to drive business growth and profitability.

The Argument for Pay Transparency Accountability – Pay transparenc y leads to discipline in reward systems, especially amongst executive management. One of the key lessons from the global financial meltdown of 2008-2009 is the need for companies to put in place effective mechanisms for curtailing excessive risk taking and pursuit of short-term results at the expense of long-term value creation. To this end, companies are mandated to disclose their executive remuneration in annual repor ts, thereby promoting accountability and keeping executives’ pay under continuous public scrutiny. Institutional i nv e s t o r s i n t h e d e v e l o p e d countries always pay particular attention to these remuneration reports. Trust – This is one of the most important singular arguments for pay transparency. Pay transparency helps to breed trust, which in turn improves team work significantly. Also, this will help alleviate any gossip or speculations regarding pay policies. At tech start-up Buffer, for instance, all wages are available in a spreadsheet on the Company’s website. Even as the company scaled up from 10 employees to 65, they retained this transparency, coming up with a simple formula to ensure that staff understand why discrepancies exist. Pa y E q u i t y - E m p l o y e e s should receive proportionally fair treatment in terms of pay based on their contribution a n d i nve st m e nt i n t h e e mployment relationship and on clearly-defined expectations as communicated to the employees from time to time. Pay Transparency can help reduce discrimination and unfairness based on favouritism and per-

sonal relationship. Performance Management – W h e n e m p l o y e e s u n d e rstand how their pay plans are developed and how salary budgets are distributed across the organisation, they in turn understand their value-add to the organisation and how their individual contributions impact the bottom line. This will spur them to improve their performance in order to receive incentive pay and promotion to the next level. Engagement & Productivity – When employees realise they can earn more than they are currently earning, it makes them work harder invariably leading to an increase in career engagement thereby closing any identified skill gaps.

‘

Where a company has identified its desired level of transparency, a plan should be put in place to move to that level. These plans might entail updating compensation plans, identifying strategic communication processes, etc.

What Should Be Communicated There is no one-size-fitsall approach with respect to the level of pay transparency organisations should adopt. However, we have provided below a list of pay-related items that should be communicated: HR Strateg y - The plans, programmes and intentions to develop the human capability of an organization to meet the future competitive challenges in order to generate superior economic value. Reward Strategy - The distinct value proposition for current and prospective employees that attracts, motivates and retains employees required to meet the organization’s strategy. Total Rewards Strate g y – The mix of total rewards elements (compensation, benefits, work-life, per for mance and recognition, development and career opportunities) for each category of employees. Employees may be classified based on demographics, working environment, social status (income bracket), culture, etc. C o m p a n y ’s Pa y P h i l o s o phy - An organisation’s pay philosophy is a collection of its beliefs about its business, people, performance results and how to reward those that help to achieve it. It also reflects the company’s desired position with respect to competitive pay at a certain point in time. Variable Pay – nature, eligibility, objectives, targets and expected payout, vesting, risks and tax implications. Legally Required Communication - Information legally required to be communicated to employees. Comparator Group – Employees should know who their companies’ comparators are with respect to compensation Su r v e y P rov i d e r s – w h at compensation data sources does the Company use in evalu-

ating the market? Ke y Driv ers Inv olv e d in Managing Pay Transparency are: Executives – Set the tone, communicate programs at high levels. Also, as the pace-setter, the executives have to lead by example. When they learn to be transparent with pay, managers and personnel are likely to do the same. Culture – Refers to shared beliefs, values and assumptions held by members of an organisation. The culture should create an enabling environment for managing pay transparency. Managers – It is essential to run communication campaigns by managers to check for obstacles. Also, managers are vital in communicating with employees. Human Resources – Coordinates the implementation of pay transparency policies. They are also required to conduct training programs on these policies. Bridging the Gap Ma n a g e m e n t , t h e re f o re, needs to assess the level of pay transparency within its organization. Such information can be obtained through employee engagement sur veys, interviews, anonymous feedback etc. Once the results show that employees consider the current pay policy as not transparent, Management may seek to explore some or all of the following initiatives to bridge the gap: D e v e l o p a P l a n – W h e re a company has identified its desired level of transparency, a plan should be put in place to move to that level. These plans might entail updating compensation plans, identifying strategic communication processes, etc. Train Management – Management must understand the rationale behind every policy. Hence, information such as business strategy, reason for pay transparenc y and tools for success should be shared amongst managers. Prepare compensation policies – Provide comprehensive statements including compensation, benefits, work-life balance initiatives, performance and recognition policies, development & career opportunities as well as other associated cost-to-company expenditures. Conclusion The call to action is for companies to ensure they equip employees with the right amount of information on pay policies and how these decisions will impact their careers. Companies will need to have a good understanding of their employees’ needs to make this determination. One thing is clear: managing pay transparency is critical to breeding trust, engagement and improved business results.

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Verisure gets CILT national endorsement Page 35

Primero Transport go cashless on Lagos BRT

…As company takes stock @ 3

Sales upsurge, cost cuts raise Toyota profit

oyota Motor Corp. (TMC) reported a 28 percent surge in the last quarter on growing sales in Europe, Asia and the Americas and cost cutting, even as it raised its profit forecast for the full year. The top Japanese automaker said that its July-September profit totaled ¥585.1 billion, up from ¥458.3 billion the year before. Quarterly sales rose 2 percent to ¥7.31 trillion. Cost reductions and marketing efforts helped the results for the latest quarter, though an unfavorable exchange rate hurt, according to Toyota.

Stories by MIKE OCHONMA

fter three years of uncertainty especially in Nigeria’s public transportation sector, the management of Primero Transport Services Limited, one of the leading transportation and allied services provider in the country recently rolled out the drums as part of activities to mark its three-year anniversary. Part of the activities to celebrate the existence of the public transportation company was a media parley as part of appreciation moves to thank key stakeholders for the support that, the company has received since its inception. They also conducted a facility tour to showcase the thoroughness, quality and standards that Primero has set. Primero Transport services Ltd. is a privately owned company with an ultra-modern facility in Ikorodu which boasts of a fuel storage facility, an automated washing bay, a maintenance workshop, a ware-

house and a control room driven by technology. According to Fola Tinubu, managing director of Primero Transport Services Ltd., “Although three years feels relatively new, we have made significant strides in this short period. We are happy to serve the people of Lagos State and know that our work here will be integral in our quest to becoming Africa’s leading transportation provider”. He further noted that Primero Transport Services Ltd. has introduced the card system scheme to Lagos- the cashless system, enables passengers to travel seamlessly and eliminates leakages which are often associated with cash transactions. In the same vein, Tinubu appreciated Primero’s staff for keying into the vision and working to ensure the company’s mission statement is met; while tirelessly serving its esteemed customers. He expressed Primero’s commitment to excellence, as evidenced by their fully air-conditioned buses which are outfitted with free Wi-Fi. Tinubu went on to state the

L-R: Segun Anako, general manager; Fola Tinubu, managing director and Francis C. Obi, director all of Primero Transport Services Limited at the media parley and facility tour, held at Primero Transport Services main depot, Majidun Awori, Ikorodu, Lagos.

challenges of doing business saying, “Too many people rely on our service daily for government to cap our ability to generate revenue and not do something about the everincreasing cost of doing business”. The increase in cost of operation has affected everything from the price of diesel to the price of spare parts, which, at times, has hampered Primero’s operations. In order to overcome these, and many other challenges of doing business locally, Tinubu shared that Primero Transport Services has signed a Memorandum of understanding (MOU) with the biggest bus manufacturer globally

to ensure that going forward the company would start assembling buses locally. This new initiative, which will take effect next year, will work to bring jobs and revenue to the nation while hopefully reducing Primero’s operational costs. Primero’s future plans include expanding their number of routes, but noted that this can only happen with approval from Lagos state government. It prides itself as socially responsible, in just a few short years it has impacted people through its various CSR activities, and improved the quality of life for the millions of commuters it has served thus far.

The manufacturer forecasts a ¥2.3 trillion profit for the fiscal year through March. That exceeds its earlier forecast for ¥2.1 trillion but is down nearly 8 percent from nearly ¥2.5 trillion in the previous fiscal year. Toyota sold 2.183 million vehicles in July-September, up from 2.175 million vehicles the same period a year earlier. Vehicle sales slipped in the U.S. and Japan but improved in Europe, the rest of Asia and Central and South America. The company stuck to its full-year forecast for selling 8.9 million vehicles globally for the year through next March. “We are steadily making progress toward achieving our challenge-level target,” Senior Managing Officer Masayoshi Shirayanagi said in a statement on cost-cutting efforts. Toyota, often seen as representing iconic Japanese manufacturing, is trying to focus on artificial intelligence, autonomous driving, car-sharing services and other new uses of technology to keep up with changes in the industry. President Akio Toyoda of Toyota Motor Corporation and a member of the founding family have repeatedly said the carmaker’s business needs to change from merely making various vehicles to addressing all kinds of mobility needs.

Ford’s new EcoSport offers exciting recipe

n these days of automotive revolution where many manufacturers are chunning out captivating designs, everyone wants big, butch-looking SUVs, but realworld budgets get in the way for many, which make this small SUV segment a complete no-brainer for car manufacturers. As one of the earlier entrants, Ford has done rather well with the EcoSport, leading the segment with impressing sales figures in many countries including Nigeria where Coscharis Motors holds the dealership rights. It would be recalled that, the local dealership recharged the automotive market with the launch of the new EcoSport at the last Abuja Motorfair held inside the Old Parade ground located inside the federal capital territory, Abuja.

However, this vehicle which could be described as a little suburban wilderness conqueror is facing a whole lot more competition these days, so thankfully Ford has hit the refresh button. The predecessor straddled a fine design line that combined some sleek car-like design elements with the towering stance of a proper SUV. The facelift takes things in a more muscular and truck-like direction, largely thanks to a more upright trapezoidal grille that’s now positioned between the headlights rather than below them. The new ‘baby Ranger’ look is sure to be a hit with the EcoSport’s target market. Inside, the cabin offers decent space, and two adults will fit quite happily in the back, with comfortable leg and head room, although

three abreast will be a squeeze. The 334 litre boot has a relatively small load floor but it is very deep so be prepared to stack things on top of each other. On the road, noise suppression is excellent and overall the EcoSport has a mature and cocooned feel to it out on the road. The ride is reasonably comfortable, nothing to really complain about but perhaps a little more firmly sprung than we’d like from a family vehicle such as this. Road-holding is not bad considering the vehicle’s relatively tall and narrow stance (just don’t get too carried away when cornering in the EcoSport), and the steering has a nice, weighty feel to it. Depending on the market, the Trend and Titanium models are fitted with the familiar 1-litre,

three-cylinder turbopetrol engine, and it’s a gem of an engine from a driveability perspective, although it’s not as economical as it claims to be. It delivers power smoothly across the rev range and you don’t get any shakes at idle. It has got enough power to tackle the urban grind and open road relatively

briskly. Both Titanium and Trend can be had with either a six-speed manual or a new torque converter six-speed autobox, the latter having been fitted to our Titanium test car. The box is not exactly sportscar snappy, but it swops cogs quickly and efficiently.

Wednesday 14 November 2018

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Verisure gets CILT national endorsement Stories by MIKE OCHONMA mikeochonma@gmail.com

and innovative IT product/software, specifically targeted at the FMCG (Fast Moving Consumer Goods) industry, haulage companies, as well as the various national transport unions with a large pool of drivers in their employ”. Verisure is being generally accepted in the country as many fleet owners have come to appreciate the importance of keying into the system in order to ensure the smooth flow of their businesses. Adewunmi explained that Verisure provides “DriversCheck™, a drivers database where haulage drivers are duly registered and their details updated to make for easy check on their status. Before employing a driver, you should look them up on DriversCheck™ to ensure you are employing a driver whose integrity is guaranteed”. “Current and constant reporting on driver’s activities to give an overall picture of a driver’s professional or work attitude. Employment information database like

guarantor’s current information, Driver’s License check and verification, to determine employability Allows for easy traceability in the case of theft and locks out offending drivers hence preventing a re-occurrence by such drivers again in the industry. The product is absolutely free to Transporters”. Adewunmi said all registered drivers are covered by a fidelity guarantee insurance, just as they are issued Verisure Identity Cards which includes drivers’ VIN (Verisure Identification Number) that is unique to each driver and guarantees confidentiality of all stored data about each driver on the Drivercheck app. With a mission to standardize the haulage industry in terms of driver information, record keeping and performance monitoring and management, the company’s vision is to be the go-to company for any issues relating to driver recruitment, training and discipline for the Haulage industry.

BMW, Ford offers ‘pay-back-time’ to customers

he Nigerian headquarters of the Chartered Institute of Logistics and Transport (CILT), has thrown it weight behind Verisure, an integrated IT solutions and software manufacturing company with head office in the United Kingdom, and operating in Nigeria. The endorsement is coming on the heels of a comprehensive delivery by Verisure Nigeria Limited at the annual general meeting of the CILT held in Lagos and attended by industry operators in the public and private sectors. CILT believe it is high time the haulage industry had this form of technological intervention in terms of driver performance rating and background checks to ensure that the human element in the value chain of haulage services is to a large extent regulated. It believes that the coming onboard of Drivercheck will go a long way in easing the troubles associated with recruiting drivers of unscrupulous behaviour who, often times, have collapsed businesses worth millions of naira. These same drivers may still be in the system as there have, hitherto, been no objective way and manner of flagging them and ultimately flushing them out of the system. According Olumuyiwa Adewunmi, a director of the company, “we recently launched a new

BUSINESS DAY

s the end of the business year draws nearer, Coscharis Motors, owners of the BMW and Ford franchise has lined up exciting offers for two of its major brands. The offers are intended for its loyal customers and prospective that are potential brand converts from now to the end of December 2018. The offers themed, ‘’Coscharis Unbeatable Offers’’ come in different categories. For the BMW brand, the offer is simply for customers to buy one BMW X6 and get 1 MG car for free. Also buy one BMW 2 series and get second at half price. While for the Ford brand, which is targeted at fleet buyers of the Ford Ranger, that is individuals and organizations who buy 10 Ford Rangers get one Ford

support our ever loyal corporate and individual customers cushion this reality even at minimizing our bottom-line’’. He stated. These exciting offers are not only to delight our existing BMW and Ford brand enthusiasts alone, but to equally accommodate those that have not used any of the brands before, courtesy of these juicy offers to end the year by way of exploring this opportunity to own brand new vehicles from any of the brands on offer. According to him, despite all odds with the peculiar challenges within the automobile industry, Coscharis Motors as a leading player in the industry usually runs this sort of promotions at year end or during special seasons to appreciate our numerous loyal customers

Focus for free instantly. Group managing director of Coscharis Group, Josiah Samuel while formally announcing all these great offers said it is a payback time to the loyal customers of the two brands who had believed in these brands over the years and new converts by way of sustaining the company’s policy of value for money. “We understand the harsh economic reality but have decided to

Although this mouth watering offers are expected to end by the end of this year, offers are only valid while stock lasts and with guaranteed requisite warranty periods says Abiona Babarinde, General Manager, Marketing and Corporate Communication for Coscharis Group. “We also have special favourable pricing for other brands and models in the spirit of Christmas.” He concluded.

Motion sickness affects over 70% people globally Race for 2018 NAJA Awards begins

… As JLR’s new tech moves to curtail the scourge

aguar Land Rover is planning to make car sickness a thing of the past with vehicles that can tell if passengers are likely to feel unwell as the self-driving Range Rovers and Jaguars of the future will be able to adjust the car’s settings to prevent nausea. This could be achieved by moderating the driving style for example, by taking corners more smoothly or by turning on the voice commands on the sat nav to warn passengers if it is about to turn left or right. Cabin settings would also be adjusted. The British carmaker says motion sickness affects more than 70 percent of people globally and that its pioneering motion technology will be able to reduce car sickness by 60 percent. The brains behind this are Jaguar Land Rover veteran engineer Spencer Salter who has helped create an algorithm that generates a ‘wellness score’ for passengers using biometric sensors to record physiological

signals that indicate they are getting sick. In future self-driving cars, passengers would use the sensors once to record their personal score. Meanwhile, the firm has already collected 24,000km of motion sickness data from passengers in this way. It said, this data will be fed into a car so it can adjust the driving and cabin settings plus seating positions to help stop a passenger from becoming nauseous. Those who took part in the

tests carried out tasks such as checking emails which can make some people feel unwell during a car journey.mSalter said little has been known about the causes of car sickness and how to mitigate them. In his words, “As we move towards an autonomous future where occupants will have more time to either work, read or relax on longer journeys, it’s important we develop vehicles that can adapt to reduce the effects of motion sickness in a way that is tailored to each passenger’’.

he Nigerian Auto Journalists Association (NAJA), a body of all Journalists reporting the Nigerian auto industry has fixed December 13, 2018 for its annual Awards. The annual event rewards corporate organizations and individuals that have made exceptional contributions to the Nigerian auto industry in the last one year. According to the organizers, the awards, which also honour deserving auto brands, models and other auto ancillaries like tyre brands in the country will hold at the prestigious Eko Hotels, Victoria Island, Lagos State. The organizers explained that high point of this year’s ceremony will be in the Car-Of-The-Year (COTY) award category. Other categories of awards are Luxury Car of the Year, Heavy Duty Truck of The Year, Auto Plant of the Year, CEO Of The Year, Auto Personality Of The Year and CSR Company Of The Year, Pick-up of the Year, Showroom of the Year and many others. Speaking on the upcoming awards, Mike Ochonma, the newly elected chairman of Nigerian Auto Journalists Association stated that the annual awards remains the only authentic industry event in the country because of the active participation of all the motoring journalists drawn from

the print, electronic and online media in the voting process. Chairman of the Organising Committee, Moses Ebosele explained that this year’s edition, just like the previous editions will be recognizing various auto brands and models that have achieved extraordinary success in the last one year. The Awards provide the opportunity for organizations to gain competitive advantage by having their projects, initiatives, contributions, products and services recognized and provide the ultimate platform for improving brand awareness, loyalty.

36 BUSINESS DAY Financial Inclusion

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& INNOVATION

Wednesday 14 November 2018

Supported by:

Mobile payments lag among electronic payment channels in H1 2018 Endurance Okafor

Source: CBN, BusinessDay

lation of mobile money could evolve owning to significant volumes of currency that could be circulating in mobile wallets, and may not be visible to the regulatory authorities. As such it was clear that a

better balance between the market and the regulatory structures was required. Meanwhile, since then there has been an explosion in mobile money wallet usage in Kenya and other Africa peers, the Nigeria’s

Deepening financial ‘inclusion through financial technology (fintech) can boost investments, reduce poverty, and help build stronger institutions with less corruption

‘

he volume of transactions carried out by Nigerians in the first half of 2018 through mobile payments lagged when compared to the volume reported for ATM and PoS, analysis from Central Bank of Nigeria’s (CBN) H1 report for electronic transaction channels show. Mobile payments amounted to 28 million transactions valued at N495bn ($1.6bn) in the first 6 months of 2018. The volume of the transactions through the channel grew by 14 percent year-on-year. This accounted for only 4.7 percent of total electronic transactions compared to ATM transactions which dominated the electronic payment channels with a volume of 429 million transactions. The CBN data show also revealed that 120 million transactions were reported for PoS in H1 2018, representing an increase of 103 percent year-on-year. “The volume of pointof-sale (PoS) transactions indicates the impact of the CBN’s cashless policy on the economy,” FBNQuest Capital Research said in a statement. Meanwhile, the low level of transaction reported for the mobile payment channel can be linked to the fact that Nigeria has a bank led model in driving financial inclusion as against the Telco led model in Ghana, Kenya and other Africa countries. As at the time Nigeria was considering the optimal approach needed to leverage new, innovative technology to deliver financial services to its people, the Central Bank analysed in some detail how to structure the guidelines and the regulatory environment to deliver the benefits on offer, without compromising the integrity of the financial system. Africa’s largest economy needed to see how the regu-

CBN was rather focused on an independent bank led model that would supplement and support the existing banking system. Nigeria currently has a 58.4 percent financial inclusion rate compared to Kenya’s 81.6 percent financial inclusion rate in 2017 from 74.7 percent in 2014. A survey by BusinessDay showed that the Telco led model in African countries reported tremendous progress owing to the already existing large customer base of the Telcos. Kenya has about 60 percent mobile money service penetration, while Ghana has about 40 percent service penetration, and Nigeria with a lot more population numbers, remains at 1 percent owing to its bank-led model. This is despite the efforts by the country’s apex bank to include about 80 percent of the country’s population by the year 2020. The impediments to achieving the set target are ascribed by CBN to economic constraints, insecurity issues in

the northern part of Nigeria, obsolete strategies, among others to Meanwhile, the data from the CBN’s recently released report for H1 2018 shows that a total volume of 596 million transactions was recorded on electronic payment channels in the first half of this year, compared with 462 million reported in the same period of 2017. Internet subscriptions directly correlated with electronic transactions stood at 103 million as at end-June, according to the Nigerian Communications Commission (NCC). This translates into a penetration rate of 56 percent. Although the volume of web (internet) transactions in the period under review stood at 3 percent, less than the 5 4.7 percent from mobile payments. “However, we do note that there has since been an increase in internet subscriptions to 106 million in September,” the research arm of FBN Holdings said in a statement. As at H1 2018, the total

active bank accounts stood at 73 million, pointing to 39 percent potential exposure (of the population) to electronic payment transactions, as compiled from data provided by the Nigeria Inter-Bank Settlement System (NIBSS). In this context, the CBN report disclosed that there were 18,052 functional ATMs across the country in the same period. According to the report, slightly over 185,000 PoS terminals were deployed during the period under review. “Deepening financial inclusion through financial technology (fintech) can boost investments, reduce poverty, and help build stronger institutions with less corruption. To achieve this end, there needs to be an adjustment to the model to allow greatly increased collaboration between telecommunications operators and banks. We understand that the CBN is currently engaging stakeholders in an attempt to move fintech forward,” FBN Quest Capital research explained.

Wednesday 14 November 2018

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Financial Inclusion

& INNOVATION

BUSINESS DAY

Supported by:

Diamond Bank: The Silver Lining for Financial Inclusion in Nigeria

wo key factors which separates the rich from the poor are the decisions they make about finance and access to credit. Consequently, tools and products focused on savings, credit history, lowcost loans, ease of transaction, and options such as mortgages - all of which are elements of retail banking, are crucial to lifting people out of poverty on a massive scale. Simple tool such as bank account means one can receive payment from anywhere in the world without wasting time to physically go collect it. This frees up more time and energy for productivity. An active bank account means the owner, whether a farmer in a rural area or a businessperson in the city, with a healthy balance sheet can access loans to boost productivity and earn more. And a tiny app on your smartphone, or a proxy financial agent or ATM, means the end of needless hours spent

in banking halls to make transactions. Banking tools are empowering and thus lead to financial liberation. It is no coincidence that the number of Nigerians without access to financial services in Nigeria, at 70 million, almost equals the 80 million Nigerians living in extreme poverty. There is obviously a correlation and this reality places a huge responsibility on banks as major players to facilitate economic development in Nigeria. It is to this end that the Central Bank of Nigeria in 2012, under its National Financial Inclusion Strategy (NFIS) set a target of financial inclusion rate of 80 percent for Nigeria’s adult population by 2020. The CBN initiated the move, actively pushing for more citizens to enjoy access to formal financial services and thereby increase their chances of financial empowerment. Diamond Bank, since its inception in 1990, has always been about retail

banking, financial inclusion, and catering to the finances of ordinary people. Currently, we by a wide margin lead others in financial inclusion, thanks to our innovative efforts, growing the market share by offering 10 million, previously unbanked individuals, financial services. In recognition of our efforts, we were voted “Best Bank for Financial Inclusion” in Nigeria in last year. Diamond bank has targeted campaigns for Nigerians living in remote parts of the country. One of the campaigns, exclusively targeted at financially excluded people, helps to put faces on Nigeria’s unbanked. While so much has been said about financial inclusion, many people often don’t know what people who need to be banked look like. Diamond Bank partnered with African telecommunications giant MTN to roll out its hybrid savings account, Diamond Yello account. This service combines both financial and telecommunications

functions. Diamond Bank was one of the first Nigerian banks to employ the use of the Unstructured Supplementary Service Data (USSD) for its Yello account, allowing users to open Diamond bank accounts and carry out financial transactions on their mobile phones, without data or credit. Since its launch in 2014, before commercial banks were forced into retail banking, the Yello account has been able to register more than 9 million bank accounts consisting mostly of young people, and women (women are the demographic most hindered from financial inclusion; the Diamond Yello account has solved that conundrum in Nigeria) in northern Nigeria whom have never owned a bank account. Presently, Diamond Bank controls a large share of USSD transaction volume in Nigeria with 40 percent. Nigerians have benefitted from these innovative

products. One of them is Tasiu Mansur, a tailor in Kano who received 2 million naira from Diamond Bank in 2016, for being the 2 millionth Nigerian to open a Diamond Yello account and was also featured in a documentary. For someone who admitted to have never stepped foot in a banking hall before, opening a bank account and receiving 2 million naira for it enabled him to rent a shop, purchase equipments, and hire staff, thereby creating a value chain in that part of Nigeria that has been synonymous with high unemployment. Another of Diamond Bank’s important service is geared towards SMSEs. Its Emerging Business Installment loans gives SME owners, who are looking to expand their businesses, financing for up to 3 years to purchase fixed assets that would help. The bank also helps with financial advisory services for these small businesses thereby enabling them to scale.

One of its most innovative products is its mobile app, which was also voted the Mobile Banking App of the year by Nigerian foremost business magazine Business Day in 2017, for the second time in a row. The bank’s mobile app has 2 million subscribed users, mostly Nigeria’s increasingly digitally-savvy youth, helping them to access some of the bank’s services and giving them inclusiveness into the Nigerian banking system. While the Diamond mobile app harnesses digital technology in smartphones to bank Nigeria’s youths, the Diamond Yello account harnesses mobile phones and USSD to bank the less digital-literate in the informal sectors of the country. Diamond bank’s solutions to financial inclusion have solved two of its key problems; instilling trust in banking institutions, and bringing the bank closer to the people, and has made its over 10 million retail customers much happier.

38 BUSINESS DAY NEWS

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MTN, Airtel to apply for mobile banking... Continued from page 1

companies will be able to offer to Nigerians a lot more financial

services on their phones, including paying for goods and services, and withdrawing money from recognised payment service agents on the roadside. However, the telecom companies are not allowed to collect deposits or give out loans but players in the telecom and financial industry expect that partnerships could be created that could see telecom companies offer more services in collaboration with banks and other financial institutions. Segun Ogunsanya, chief execu-

tive officer, Airtel Nigeria, told BusinessDay that the telco “already has a name for its subsidiary company that will operate as a payment service bank to carry out basic mobile money services such as funds transfer and payments.” Rob Shutter, MTN Group CEO, also told Reuters, Tuesday, that the group ‘‘will apply for a mobile banking licence in Nigeria and plans to launch the service next year.” If granted the license regardless of its current hiccups with the Nigerian government, MTN, which is the largest mobile operator in Nigeria, says it is ready to start mobile money services as early as the second quarter

of next year. “We will be applying for a payment service banking licence in Nigeria in the next month or so, and if all goes according to plan, we will also be launching Mobile Money in Nigeria probably around Q2 of 2019,” Rob Shuter told a telecoms conference in Cape Town. It is believed that the swift move by MTN and Airtel to embrace this opportunity to play in the financial services space – the next big growth area for Telcos, will also prompt Globacom and 9mobile to apply for licenses. The CBN, on November 2, 2018, published the draft policy guideline, for payment service banking by non-banks in order to help drive the country’s national financial

inclusion strategy goal of 80 percent inclusion by 2020. Olusola Teniola, President of Association of Telecommunications Companies of Nigeria (ATCON) told BusinessDay that “the telecommunication operators are very keen to apply for licences because they have always wanted to be given a free hand to participate in mobile money services. Although what CBN is allowing is not what they fully wanted, it is a step in the right direction and is open to further reviews in the future.” Mobile network operators have over the years clamoured for the right to fully participate in the mobile money industry, leveraging their capabilities – technology, infrastructure, and distribution network and subscriber base to drive financial inclusion. Series of meetings with the Nigerian Communication Commission (NCC) and the CBN which resulted in the two regulators visiting India to view and analyse the progress of telco-operated mobile money services somewhat softened the resistance to the idea for mobile network operators to qualify for mobile banking license. Industry watchers say the application fee of N500, 000 as well as a non-refundable licensing fee of N2 million, requirement to have a minimum capital of N5 billion and the requirement of the organisation to operate in rural and unbanked areas, with a minimum of 25 percent of their total touch points in these areas eliminate a vast amount of non-bank organisations. However, it is likely to drive increased partnerships and collaboration to enable smaller or-

Wednesday 14 November 2018

ganisations to participate. They are also of the view that the guideline which proposes a structure wherein the name of the subsidiary company to perform payment banking services shall not include any word that links it to its parent company may prove problematic, as financially excluded individuals who are already sceptical may need a sense of familiarity through a trusted service provider. Some have said that the requirement for PSBs to maintain a minimum of 75 percent of their deposit liability in CBN securities, treasury bills and other short-term federal government debt instruments may also limit the effectiveness of PSBs as having them invest the greater percentage of their deposit liability in low-yield investments will limit profitability. However, Teniola assures that the telcos are satisfied with the current guidelines and are making moves to secure the required licenses. “It is beyond doubt that the mobile operators are happy with the guidelines. They will start by providing payment services and in the future, they can be allowed to grant loans and do more services like Mpesa in Kenya,” he told BusinessDay. The mobile operators had in September 2018 revealed their commitment to deepening financial inclusion and providing Nigerians with access to a range of affordable financial services. Current financial exclusion levels stand at over 40 percent. It is argued that the significant gap could be covered to meet Nigeria’s target of 20 percent financial exclusion by 2020.

L-R: Michael Economakis, executive vice chairman, AG Leventis; Kostantinos Bitsios, executive vice chairman, Hellenic Federation of Enterprises; Yewande Sadiku, executive secretary, Nigeria Investment Promotion Council (NIPC); Ninos Yiamakis, chairman, Hellenic-Nigeria Chamber of Commerce, and Kayode Pitan, managing director/CEO, Bank of Industry, at the Nigeria-Greece Investment Summit in Lagos.

I will no longer submit myself for trial – Dasuki

Nigeria’s railway ambition suffers setback...

Felix Omohomhion, Abuja

Continued from page 1

federal government since 2015 to revamp the country’s debilitated

railway lines. GE had initially proposed to invest US$2.0 billion in the deal which could have significantly improved the way cargoes are moved across the country, saving time and money and significantly boosting intercity commerce and productivity. GE was initially the lead in a consortium, which has China’s SinoHydro, a leading infrastructure construction services corporation, South Africabased Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider as members. But GE in August 2018 announced that it was dropping its lead role in the consortium to Transnet. This resulted in the Federal Government entering into another round of negotiation with Transnet to forestall any stoppage of the rehabilitation of the combined 3,500 kilometres decaying narrow gauge lines across the country. A top official of Transnet had told BusinessDay on the sidelines of FT Africa summit held in London in October that Transnet had formally written to the Ministry of Transportation and had gotten approval to lead railway rehabilitation work. The Transnet top official had also confirmed that the Federal Ministry of Finance had already issued a $45-million standby credit for the interim phase of the railway rehabilitation project to take off in November. Out of the $45 million, about $19 million was to be given to Transnet to bring in about 200 flatbed wagons to move containers from the Apapa ports, while another $20 million was to be given to Chinese Sino for the

rehabilitation of the railway tracks up to Ilorin in Kwara state and the balance of $6 million was to be given to GE to rehabilitate 10 coaches. JP Morgan was supposed to monetise the US$45 million standby letter of credit so that the interim phase of the work could begin. However, the Transnet official had also warned that plans for the interim phase of the rehabilitation work to take off in November could be delayed if the repairs to the tracks are not completed before November. He said that there would be no need to bring new wagons into the country if the tracks are not reliable. ‘‘We would not want new wagons to be brought only for them to derailed” It is already November and BusinessDay can confirm that the repairs on the railway tracks remain undone. BusinessDay could not confirm if JP Morgan failed to monetise the US$45 million letter of credit guaranteed by the Ministry of Finance, hence the delay in the whole project. But GE’s exit from the deal means Nigeria will now have to seek new partners for the railway rehabilitation programme. Sources familiar with the railway industry have told BusinessDay that for most of the last 15 years, the Nigeria Railway Corporation, NRC, has not had a single commercial freight contract. Heavy containers that could easily be moved by railway, are transported mainly by road, resulting in excessive load on the country’s already inadequate road network and consequently increased wear and tear. A significant amount of cattle and other agricultural goods come from the north down to the south while manufactured goods including cement and salt as well as imported goods and petrol move from the south to the north and none of that goes by rail. Sources familiar with the matter told BusinessDay that the very slow

approach of the government is what has now put the whole project in jeopardy. If the government had moved fast when GE was still keen in the project in late 2015 and early 2016, cargoes would be moving by rail now, sources in the railway industry have told BusinessDay. “The government was not committed enough to getting the project over the line when GE demonstrated significant interest” a player in the railway industry told BusinessDay. Former GE CEO, John Flannery, had visited Nigeria twice to iron out details of the deal, in the space of one-year stint at the helm, which lasted between August 2017 and October 2018. Even though, Oso, the GE official who spoke to BusinessDay said that his organisation remains committed to the sustainable development of Nigeria, analystssayNigeriawillregretthismissed opportunity to rehabilitate its old narrow gauge lines if the consortium falls apart.Thedealwassupposednottocost Nigeria a kobo as the investment was to be covered by the consortium which received a sovereign guarantee that any certified investment made would be refunded if the concession does not get to financial close as envisaged. Speaking with BusinessDay on telephone Tuesday evening, Edeme Kelikume, managing director and chief executive of Connect Rail Services Limited described the pulling out of GE from the deal as gradually bringing the entire narrow gauge concession process to a dead end. He expressed doubt on the readiness of Transnet, which is publicly owned South African rail organisation, similar to Nigeria Railway Corporation, in stepping into the big shoes of GE. He said GE was looking for a perfect and hitch-free concession deal which was not forthcoming, even though the Federal Government was willing to make it work but was slow in closing a deal.

former National Security Adviser, Sambo Dasuki, has vowed not to submit himself for trial any longer. Dasuki is standing trial on alleged illegal possession of firearms and money laundering and as well as three sets of charges with two of the sets relating to his alleged diversion of funds meant for purchase of arms. He told a Federal High Court in Abuja, yesterday that he will stop to attend court for his trial. When the case came up before Justice Raji Mohammed, on Tuesday, a letter by Dasuki to the court requested that he should be allowed to stop submitting himself for trial. The ex-NSA, who has been detained by the Department of State Security since December 29, 2105, anchored his request on the Federal Government’s continued refusal to comply with series of court orders granting him bail. He cited five court orders, including one by the Court of Justice of the Economic Community of West African States, that had ordered his release but continued to be violated by the Federal Government. His letter dated November 12, 2018, was addressed to the Registrar of the Federal High Court, Abuja. The letter personally signed by Dasuki, was titled, ‘Unabated persecution of Col. Mohammed Sambo (retd) by the Federal Government of Nigeria’. He stated in the letter, “At this point, I strongly believe that there must be an end to this hypocrisy and lopsided/partisan rule of law.” “Since the Federal Government has resolved not to comply with judicial orders, directing my release, it is better for the court to also absolve me of the need to submit myself further prosecution.” “Justiceshouldbeevenlydispensed,

as opposed to same, being in favour of the Federal Government of Nigeria.” He said as part of the efforts to regain his freedom, he filed applications in three different courts complaining of the disobedience of court orders by the Federal Government of Nigeria and the Department of State Security. “These courts were however of the view that I should apply for the enforcement of my fundamental human rights, given the peculiar circumstances of the case,” Dasuki said. He said his family was sceptical about filing such fundamental rights enforcement suit “given the highhandedness of the government and its resolve not to comply with any kind of order which admitted me to bail”. The lawyer, who represented him during the proceedings, Victor Okwudiri, brought his client’s letter to the attention of the presiding judge. He claimed that the defence team was not aware of the letter personally signed by Dasuki until they got to court on Tuesday. “We were not aware of the letter until this morning when we got to court. But what I could get from the letter when I rushed through it this morning is that he is complaining about his plight in the custody of DSS,” Okwudiri said. But the prosecuting counsel, Dipo Okpeseyi (SAN), told the judge that Dasuki had informed operatives that he would not come to court since he had sent a letter to the court. He said DSS operatives, although, could force him to court, chose not to take such action to accord the defendant some respect due to his position as a former NSA. He described as an affront to the court, Dasuki’s decision not to appear in court but to write a letter instead.

•Continues online at www.businessdayonline.com

Wednesday 14 November 2018

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39 NEWS

BUSINESS DAY

Senate queries FG’s move to reduce MTN’s fine from $8.1bn to $800m Bonga oil spill: Victims urge FG to prevail on OWEDE AGBAJILEKE, Abuja

he Senate has raised questions against attempt by the Federal Government to reduce the $8.1 billion fine imposed on MTN Nigeria, to $800 million. The upper chamber said the planned reduction was a matter of interest to it, noting that though it was not particularly against whatever the government would want to do with the MTN fine, it should be intimated on why the reduction became necessary. The Senate also said how the percentage of reduction from $8.1 billion to $800 million was arrived at was of interest to it, saying it was equally interested in knowing what informed the penalty of $8.1 billion in the first instance. The Central Bank of Nige-

ria had in a recent statement by its governor, Godwin Emefiele, said it would reduce the amount it had ordered MTN Nigeria to repatriate. While addressing reporters in London, Emefiele said new documents provided by the telecom company would help to reduce the size of the claim. “I don’t think it will be staying at $8.1 billion. I want to believe that the figure will reduce. Whether it will be dropped completely, I honestly cannot say at this time. The central bank will be examining these, then it will be escalated up to my level,” Emefiele had said. The Senate in 2017 adopted a resolution largely exonerating MTN of alleged illegal repatriation $14 billion out of the country. Chairman, Senate Committee on Banking, Insurance and other Finan-

cial Institutions, Rafiu Adebayo Ibrahim, told reporters on Tuesday in Abuja that he was shocked when he was contacted that the CBN failed to implement Senate resolutions before conducting another investigation into the alleged infraction by MTN. Ibrahim said that his committee would immediately ask for CBN report on the matter to be batter informed. He said the only way Nigerians would know what transpired between the CBN and MTN on the $8.1 billion fine was through a detailed report. Ibrahim said, “The last time we heard about this issue was when we had a little retreat last two weeks in Lagos, where they (CBN) did the presentation of their biannual activities to the committee (Senate Committee). “We took them up on the issue, and the bank, that’s the

CBN told us how they did the investigation. We are taking them up based on the fact that we have investigated and we saw what happened. All our resolutions were passed to them, and they did not even implement the resolutions before saying they’re going into another investigation. “They said their investigation was based on a petition from a law firm and their stand was that the penalty was correct. “So, judging from the information we have now, it will be ridiculous for them to say they’re bringing the penalty down from $8.1 billion to about $800 million. That will be ridiculous for the CBN. “What they told us that day was that they were going to give us the report from when they started the investigation to date and their discussion with MTN. L-R: Funsho Odukoya, chief operations officer, RMB Nigeria; Destiny Aladeyekun,head boy, Estate Senior Grammar School, Ilupeju; Michael Larbie, chief executive officer, RMB Nigeria/regional head, West Africa; Damilola Odebiyi, head girl, and Folake Adams, principal, Estate Senior Grammar School, Ilupeju, during the World Savings Day with RMB at the school in Lagos.

NSACC to hold breakfast forum in Lagos

Metrofile Group appoints Babatunde Osho as Nigerian CEO

he Nigeria-South Africa Chamber of Commerce (NSACC) will hold its November Breakfast Forum scheduled for November 29, at the Iris hall, Eko Hotel and Suites in Victoria Island, Lagos, by 7.30am. The sales director of Vocadom Business Nigeria, Zakari Usman, will be the guest speaker for this month’s edition. Usman will share insights on the topical issue: “The Future Belongs to the Intelligent Enterprise” given the dynamics of navigating one’s business in our ever evolving society. Executive secretary, Iyke Ejimofor, states that the event is primarily for captain of industries, business owners and top-level executives as well as other interested parties. He adds that the chairman of the Chamber, Foluso Phillips, and other executive directors are expected to attend the forum.

FRANK UZUEGBUNAM

Ejimofor, on behalf of the Chamber, encourages everyone who wants to grow and strengthen his or her business or gain insights on how to thrive globally should make effort to attend. He expressed that the meeting is a “great door opener and participants will benefit in many ways, including: finding personal contacts for future follow up and initiate new vendor relationships, and so on. Since the inauguration of the Nigeria-South Africa Chamber of Commerce in the year 2000, the bilateral relation between both countries has grown tremendously. The Chamber has been a veritable economic tool responsible for the increment in trade between Nigeria and South Africa. Through the Chamber activities, many South African firms have indicated interest in joint partnership with Nigerian firms and other forms of economic co-operations with several business establishments in Nigeria.

nformation and record management company, Metrofile Group, has announced the appointment of Babatunde Osho as its new managing director for Nigeria. Before this appointment, Osho had worked with MCI International as a senior manager and NEC 3G Mobile Systems Limited in the UK as head of finance before joining MTN in January 2004 as senior manager, Business Analysis in the Finance Department. He later went on to become chief enterprise solution officer for MTN Nigeria and CEO, MTN Liberia. Osho brings to Metrofile decades of experience and a proven record of taking customer-centric technology companies to the next level. He obtained his MBA degree from Imperial College Management School, UK, and MSC from London School of Economics and Po-

Shell to pay $3.6bn fine

rtisanal fishermen in the Niger Delta, affected by the December 2011 Bonga oil spill, have urged the Federal Government to compel Shell to pay the $3.6 billion fine for the spill. Samuel Ayadi, coordinator, Niger Delta zone, Artisanal Fishermen Association of Nigeria, made the call in an interview with the News Agency of Nigeria in Yenagoa on Tuesday. Justice Mojisola Olatoregun of a Lagos Federal High Court, on June 20, upheld the $3.6 billion fine imposed on Shell by the National Oil Spills Detection and Response Agency (NOSDRA), dismissing Shell’s appeal. Ayadi lamented that Shell Nigeria Production and Exploration Company (SNEPCO) had yet to comply with the court order, saying that the judgment was a lifeline to the fishermen. Following the December 20, 2011, spill, NOSDRA in March 2015, imposed a $3.6 billion fine on Shell for discharging 40,000 barrels of crude into the Atlantic Ocean. The fine comprised $1.8 billion as compensation for the damage to the natural resources and consequential loss of income by the affected shoreline communities as well as a punitive damage of $1.8 billion.

CHANGE OF NAME

I, formerly known and addressed as Sheu Sarafa Ajao now wish to be known and addressed as Sheu Sarafa Opeyemi. All former documents remain valid. Banks General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Njoku Blessing Ngozi now wish to be known and addressed as Nwakaeze Ngozi Susan. All former documents remain valid. General Public please take note.

CHANGE OF NAME

litical Science, UK. He is an Alumnus of Wharton Business School, USA Advanced Management Programme (AMP 55) as well as the Oxford Said Business School, UK Advanced Management and Leadership Programme (OAML) and IMD Orchestrating Winning Performance (OWP). “Mr Babatunde’s appointment is in line with Metrofile’s global growth strategy”, Pfungwa Gore Serima, Group CEO, Metrofile Holdings Limited said. “In his new role, he will provide day-to-day leadership to our Nigerian team as we look to expand here and West Africa” he added.

I, formerly known and addressed as Olajide Olufunmilayo Boriowo now wish to be known and addressed as Oseni Olufunmilayo Hazeezah. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Adenekan Folakemi Tolulope now wish to be known and addressed as Olowe Folakemi Tolulope. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Christian Chinonso Nwankwo now wish to be known and addressed as Nwankwo Chukwunonso Christian. All former documents remain valid. General Public please take note.

Chairman of NOSDRA board, Ayo Akinyerule, had urged SNEPCO to pay the fine to enable the agency compensate the impacted fishermen and communities. Ayadi said the fishermen thrown out of business by the incident had patiently waited for the litigation processes to end, saying, “The Bonga oil spill was a heavy blow to us artisanal fishermen. Ironically the spill from the oilfield named after the local fish specie, Bonga, was what led to the near extinction of the specie. “We can no longer see Bonga fish in our dishes because the spill wiped out generations of the specie. The chemical dispersant spread to dissolve the leaked crude is very toxic to fish and other marine creatures. “We were directed by NOSDRA to pull out of fishing to avoid catching contaminated fish that would jeopardise public health. The income loss is in addition to the damage done by the contamination of our fishing gear, outboard engines and nets.

CHANGE OF NAME

I, formerly known and addressed as Ayomah Oghenekwe Gabriel now wish to be known and addressed as Ayomah Gabriel Oghenekevwe. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Elegbede Elizabeth Folake now wish to be known and addressed as Otegbola Elizabeth Folake. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Aina Francisca Oyindamola now wish to be known and addressed as Mrs. Saka Francisca Oyindamola. All former documents remain valid. General Public please take note.

CORRECTION OF NAME

My name was wrongly written on my bank account as Tijesu Israel instead of my correct name which is Oyediran Tijesu Israel. All former documents remain valid. Banks and general public should take note.

CHANGE OF NAME

I, formerly known and addressed as Peace Nneka Akagor now wish to be known and addressed as Peace Nneka Fagbemi. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Moses Samuel Ifeoma Pamela now wish to be known and addressed as Nwafili Ifeoma Pamela. All former documents remain valid. General Public please take note.

Wednesday 14 November 2018

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BUSINESS DAY

A2 BUSINESS DAY NEWS

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$400m Skyway tech seeks to resolve Nigeria’s urban gridlocks JOSHUA BASSEY

igeria stands a chance of becoming part of a global solution to increasing urban gridlocks, as Skyway Africa begins talks in the country to introduce string rail transportation technology investment said to be worth about $400 million. The technology, which runs on an elevated platform along existing road infrastructure, is basically designed to enable people and businesses overcome the challenge of increasing urbanisation, its associated road congestion and the resultant economic losses. Lagos for example is said to be losing over N42 billion monthly to road congestion. With the state’s population estimated to hit about 30 million people by 2030 amid inadequate infrastructure, analysts are of the view that Nigeria’s economic nerve centre may

be a hell of a place to live in and do business unless drastic measures are adopted to move people and goods. The fast-moving string rail transportation technology, according to the promoters, can cover the distance between Lagos and Abuja in about 45 minutes at an average of 150km per hour. Arogundade Samson, regional head of Skyway Capital, the promoter of the technology, told BusinessDay in Lagos, that the innovative transportation technology was eco-friendly, and “does not require much space of land to construct, as it runs on elevated platform as well as generates its own power. “This new transportation system is eco-friendly, safe, comfortable and significantly cheaper compared to all existing solutions. Having passed a range of international expert evaluations, the innovative string system has proved its validity in several European

and Asian countries since 2014.” In a bid to solve the problems of traffic within the Lagos metropolis and ensure easy movement of people and goods between the city and the Federal Capital Territory, Abuja, work is in the pipeline for a Hi-Tech transportation system to ply the route. According to Samson, the transportation system is designed to assist governments alleviate the sufferings of the people in moving from one point to another. The company possesses the technical know-how and financial capability to deliver the project in no time, so long it enjoys support and cooperation of Lagos and Federal Government, he says. Since Nigeria has same challenge with India in terms of population and lack of social infrastructure, the country too stands a chance to benefit from the technology same way India has, he states.

Vladimir Maslov, a member of board of the company, says they are ready to sign an agreement with Federal and Lagos State governments to signal the take off of the fasttrack transportation project. Maslov believes the system will reduce the rate at which commuters are exposed to accident on the road, zero tolerance for pollution and maximum security of lives and property of passengers. Ayodele Adewale, Nigerian partner for the project, says it will largely assist government’s drive for better transportation infrastructure in the country. “I believe there is the need for government to provide incentives for the company to move in their equipment because the project after its implementation will be a win-win for both parties,” Adewale, a former chair of AmuwoOdofin Local Government Area of Lagos State, says.

Lagos Mainland hosts maiden Lagos Retail Festival

he first edition of Lagos Retail Festival will be hosted by Lagos Mainland, starting from November 23 to 29. The event, to take place at the Welcome Centre Hotel, Airport Road, Lagos, promises participants and visitors a rewarding experience. Lagos Retail Festival is a gathering of retail entrepreneurs who will be showcasing their brands, either already established brands or emerging brands. Aside this, the event will bring together players within the value chain to engage in thought provoking conversations that would lead to meaningful connections. During the event, over 500 vendors/brands are expected to engage with over 10,000 attendees/visitors within the three hubs available at the venue. The hubs are the Experience Centre, the Retail Village and the Heartland. The Festival encompasses networking, business as well

Alaghodaro: Edo earmarks 100 roads for construction

do State governor, Godwin Obaseki, says 100 roads in different parts of the state have been earmarked for construction as the dry season sets in. Obaseki, who said this during the 2018 Alaghodaro Summit in Benin City, the state capital, noted that his administration had made appreciable progress in the last two years in provision of infrastructure, education sector, job creation and empowerment as well as in repositioning the state for investments. Addressing guests, members of his cabinet and members of the All Progressives Congress (APC) in the state

at the luncheon held after the Thanksgiving Service to celebrate his two-year anniversary as governor of the state, the governor acknowledged the achievements of his predecessor, which he said his government was building on. He explained, “Two years on, Edo people are celebrating the progress we have made in all sectors of the state.” He thanked Edo people and residents for their support and encouragement, adding that the input from the people helped the administration to perform better. “God has endowed the state and placed her in a unique location. We all

should be patient and trust God to help us make more progress,” he said. Secretary to State Government, Osarodion Ogie, said: “This celebration is to tell our people how far we have gone in fulfilling our promises. For us, we are progressing as all we promised in four years will be done in less than four years, looking at our progress so far in the first two years.” Ogie noted that God has been faithful to the Obasekiled administration in fulfilling the electioneering promises made to Edo people in the area of job creation, infrastructure development, sports development, education and health care.

as avenue to catch fun. While the Experience Centre serves as the flagship venue for the festival, hosing the conferences, exhibitions and brand zones, the Heartland would play venue to the discount and bargain shopping and entertainment, while the Retail Village serves as the SME market, live band and recreation centre. While participants, vendors and visitors engage in business ventures, networking, SME clinic, workshops, sales and merchandising, master classes, exhibitions, they would equally be thrilled to music and entertainment, game zones, etc. The festival “would provide a platform for business collaborations and offer business learning and advisory sessions for vendors, participants and attendees, while offering a relaxing space for exhibitions, shopping and relaxation,” a statement from the public relations office says.

Edusko hosts education leaders at 2nd edition of Business of Education Summit

L-R: Wole Adeniyi, executive director, personal and business banking, Stanbic IBTC Bank plc; Omolara Osunsoko, head, operations shared services, Stanbic IBTC Bank; Yinka Sanni, group chief executive, Stanbic IBTC Holdings; Liu Jun Sheng , commercial consul, Chinese Embassy in Lagos; Lubin Wang, chief executive officer, Industrial and Commercial Bank of China (ICBC), Africa; Demola Sogunle, chief executive, Stanbic IBTC Bank, and Babatunde Macaulay, regional head, personal and business banking, Standard Bank West Africa, at launch of Stanbic IBTC Bank Africa-China Banking Centre in Ilupeju, Lagos, yesterday . Pic by Pius Okeosisi

Wednesday 14 November 2018

dusko, an EdTech firm, hosted hundreds of school leaders across Nigeria in its second edition of the Business of Education summit, recently. The Business of Education is an annual education event where school owners, administrators, directors, policy makers and education entrepreneurs converge to discuss and proffer solutions to issues and problems in Nigeria’s education system. This year’s edition of the summit focused on the roles of policy makers, technology and school leaders in preparing the children for the future. In his opening address, the convener of the summit, Jide Ayegbusi, reiterated the need for everyone to be concerned about the state of education in the country.

“We have all gathered here today because we have realised that if education standards hit an all-time low and our schools churn out quack graduates, our companies wouldn’t have quality staff to employ; our hospitals would be staffed by death-dealing doctors; our pharmacists would manufacture toxic drugs, our engineers would design dysfunctional models; crime rates would be all time high and our economy would be grounded. So, education is indeed everyone’s business,” Ayegbusi said. The keynote speaker, Fred McBalonguri, provost/president, Academic City College, Ghana, charged all stakeholders to re-imagine what education was in Africa, refine our curriculum to fit our context while also embrace new ways of passing information to the students.

MainOne powers up MEST Incubator with high-speed internet, affirms support for start-up community

est Africa’s connectivity and data centre services provider, MainOne, has partnered the Meltwater Entrepreneurial School of Technology (MEST) to provide high-speed internet access to the MEST Incubator in Ikoyi, Lagos. MEST is a not-for-profit organisation that provides technology training, seed investment and mentorship for the next generation of globally successful African software entrepreneurs. This partnership will leverage MainOne’s fibre connectivity as well as MEST’s seed fund and incubator to

foster the growth and success of entrepreneurs by providing workspace, highspeed internet, hands-on support, resources and a vibrant community to help start-ups succeed. According to Funke Opeke, MainOne CEO, MainOne remains committed to powering up the start-up and technology ecosystem in Nigeria, which remains underdeveloped, to foster socio-economic development of Africa through the creation of sustainable businesses and enterprises. “We will continue to support initiatives like the MEST with investments in

fibre-optics infrastructure to deepen broadband penetration and create enabling environment for these companies,” she said. “Our expansion into Lagos was in response to the vast amount of talent present combined with the surge in the development on technology in the country. Our Pan-African network of incubators is aimed at discovering the best tech talent on the continent and providing our existing entrepreneurs the support they need as they expand into new markets across the continent,” Neku AtawodiEdun, director of Investor Relations at MEST, said.

Wednesday 14 November 2018

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A3 NEWS

BUSINESS DAY

Mobile money transfer rises 43% on convenience, low cost, increased platforms BUNMI BAILEY

obile money transfer in Nigeria rose 43 percent over a ten-month period, driven by customer convenience, low transaction charges, and increased supply of online banking platforms, a BusinessDay analysis shows. Volume of transactions (transfers) via mobile devices rose to 5.9 million in the first 10 months of 2018 from 4.1 million in the same period last year, according to data obtained from the Nigeria Interbank Settlement System (NIBSS). The value of mobile transfers rose 53 percent from N155.8 billion in 2017 to N238.2 billion as of October 2018. Correspondingly, the volume of cheque transactions fell by 16.5 percent to 7.6 million from 9.1 million over the same period, according to the NIBSS data. Nigerian banks are trying to catch up with their counterparts in other parts of Africa in the provision of online and mobile banking facilities as part of efforts to deepen financial inclusion in Africa’s most populous country. The Central Bank of Nigeria has set a target of 80 percent inclusion to be achieved by year 2020. Dolapo Ashiru, a stockbroker, says this development is in line with the plan to migrate more bank customers to the mobile platforms, which is more convenient to both banks and their clients. “More Nigerians are embracing online and mobile banking, and banks are aggressively rolling out mobile banking platforms and mobile applications,’’ Ashiru says, noting, ‘‘Also banks consider it cheaper and more efficient to encourage clients to embrace

… cheque volume falls by 16.5% their online banking services than to engage in aggressive branch expansion.” Ayodeji Ebo, MD, Afrinvest Securities Limited, says the increase can be attributed to the improved customer awareness as well as lower charges relative to other payment platforms. “Businesses have begun to integrate ENIBSS to their platforms to ease payment processes at minimal charges,” Ebo says. Stephen Nejo, a banker, states that banks have cut the cost per a mobile money transaction to N52.50 per

transfer, down from N100, saying this was based on an agreement by the banks and CBN’s acceptance. Ayodele Teriba, CEO, Economic Associates, says there is a decline in the number of cheque transactions because more people are catching up with mobile transfers than before now. “In the past, before you can do any transfer, you would have to go to the bank. But now you can use a token at home to do your mobile transfer anywhere,” Teriba says. The number of mobile phone subscribers in Nigeria

rose 15 percent to 162 million in September 2018, from 140.7 million in October 2017, according to figures on the website of the Nigerian Communications Commission, which regulates the industry in the country. Part of CBN’s plan to achieve an inclusion rate of 80 percent in two years’ time is to raise ATMs from 11.8 units in 2010 to 203.6 units, POSs from 13.3 units to 850 units, Mobile agents from 0 to 62 units, all per 100,000 adults between 2010 and 2020, the banking regulator says on its web site.

Akinwunmi Adesina, president of African Development Bank, with Coordinator of Nigeria’s ERGP Implementation Unit, Folarin Alayande.

Angry book blames Odili for origin of political violence in Rivers, Amaechi, Wike for profiting from it IGNATIUS CHUKWU & INNOCENT ETENG

new book unveiled in Port Harcourt at the weekend traced the introduction of violent politics in Rivers State to former governor, Peter Odili, and blamed former governor Chibuike Amachi and the incumbent, Nyesom Wike, for continuing to benefit from it. The revelation is contained in volumes one and two of the series titled, “Footprints of Nkpoo Sibara, Dele Giwa and Ken Saro-Wiwa,” written by Patrick Naagbandon, a travel journalist and author. The books are broken into chapters and are mainly a collection of articles initially published in the writer’s column (The Town Crier) - starting from 2005 - in several lo-

cal and national newspapers like Port Harcourt Telegraph, National Network, The Guardian, National Concord, Sahara Reporters, The Neighbourhood, Daily Sun, Vanguard, The Humanity, and The Beacon. In the 297-paged volume one, for example, Naagbandon said Odili celebrated his 60th birthday in Abuja because Port Harcourt was unsafe due to the activities of armed youths, most of whom took their career in the period Odili was governor. He wondered how Odili is touted as a man who governed well when he can no longer live in the state. Pressed during an interview with newsmen, Naagbandon said unequivocally that Odili laid the foundation

of what was happening today. For cultism, he empowered criminal gangs, which he used for election purposes during his time as governor between 1999 and 2007. The author of The Last Militant and The Fury of a Fisher Woman also said the gunsempowered youths were now running rampage, making Port Harcourt and Rivers State, at large, unsafe. He also indicted immediate past Governor Rotimi Amaechi and the current Governor Nyesom Wike for building on and benefiting from Odili’s creation of insecurity, instead of nipping the evil at the bud. “He (Odili) laid the foundation for arms struggling and gun struggle in this place. These are issues highlighted and I am not just say-

ing it because I want to make any cheap point out of that.” While the books also explore the life and events good or bad - of many popular characters like Dele Giwa, Ken Saro-Wiwa and former Enugu governor, Chimaroke Nnamani; Naagbandon said his reason for highlighting Odili’s unknown past was because he had no other home except Port Harcourt. I stand by every word contained in the book, he said. “I am saying it because I am angry; because, some of us, we do not have any other home. This is our home. Nigeria is our home and if this society eventually collapses, where are we going to run to? That is why we must fight to rescue this society out of that (evil).”

Explainer

Why are aircraft still towed to point of disembarking at Nigerian airports? IFEOMA OKEKE

any passengers do not know when it happens. You land at the airport, the seat belt signs are left on and an announcement over the public address system instructs you to remain on your seat till the aircraft has come to a complete halt. Well, the thing they fail to tell you is that the aircraft is being towed. The practice of towing the aircraft to the aerobridge, which is the point to disembark passengers after landing, has raised concerns, though the Federal Airports Authority of Nigeria (FAAN) says it is an added precautionary measure. In other countries, airlines taxi their aircraft into the aerobridge but in Nigerian airports, airlines pay to have their aircraft hauled to the bridge. BusinessDay findings show that airlines pay N985 million annually to tow their aircraft into the aerobridge. Experts say this money can be saved annually if the FAAN can simply link the aerobridge to the aircraft once the pilot lands. According to the 2017 figures from the Nigeria Civil Aviation Organisation (NCAA) on passenger movement, international airlines operate 30 flights on the average every day from the Murtala Muhammed International Airport (MMIA). This implies that in 365 days, the airport will process nothing less than 10,950 flights annually. Ground handling companies charge airlines $250 per towing. This implies that airlines pay nothing less than $2,737,500 million every year to tow their aircraft into the finger. This amounts to N985,500,000, using an exchange of N360 to a dollar. BusinessDay gathers that the practice has continued because of the opportunity for commercial gain. One investor had claimed it had volunteered to assist the concerned agencies fix the problem but they have

refused because of the amount they realise from towing aircraft into the bridge on a daily basis. But Henrietta Yakubu, general manager, public affairs, FAAN, said some airlines prefer to park in the open bay, and space constraints often resulted in towing. She assured that the issue would be addressed after the construction of the new terminals. In other airports outside Lagos, aerobridge do not even exist, thereby forcing passengers to walk all the way to the airport terminals. John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART), and chief executive of Centurion Securities, said the problem was more nuanced as the fingers in many Nigerian airports were built in 1975, and no improvement had been done on them to include an aerobridge. Ojikutu said apart from the fingers in Abuja airport, the ones in other airports are out-dated and may not accommodate certain aircraft types if they are taxied. Thus, the airlines have no choice but to tow them into the finger The expert said that certain types of aircrafts do not lend well to taxing due to Nigeria’s peculiar airport infrastructure. For instance in 2007, Airbus 340 had long wing fan and Emirates was flying Boeing 777. The two of them chose fingers that were closer to each other to park. The pilot alone cannot safely park that aircraft side by side with the other one. So, they park outside and the towing vehicle will come and tow them into the finger. In the course of towing, the risk of vehicles used for the operation hitting the aircraft is heightened, Airlines like Airpeace has had complaints of this in the past. The cost of fixing the engine of a 777 damaged in the process could well be over $20 million yet the Nigerian Civil Aviation Authority does not have insurance cover for this operation.

BUSINESS DAY

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Wednesday 14 November 2018

PrivateEquity & fundraising A5

BUSINESS DAY

Actis, Westmont acquire stake in Four Points Sheraton Hotel MICHEAL ANI

ctis, a leading Private Equity firm that invests in Real Estate, energy and consumer businesses, signed an agreement with Westmont Hospitality Group (“Westmont”), to acquire an undisclosed stake in Four Points Sheraton hotel located on Victoria Island in Lagos, Nigeria, both companies said in a statement Monday. The joint venture between the private-equity house, Actis and Westmont Hospitality Group will enable both firms; harness their complementary expertise in acquiring hospitality assets in major cities across sub-Saharan Africa, both firms said. “This is a very neat fit for our respective needs and ambitions in the region”, Funke Okubadejo, Director at Actis, based in Lagos, said. “Hospitality is capital intensive and requires an experienced trusted partner able to handle the operating aspects. Westmont has a fantastic reputation as an operating partner and franchisee for some of the most prestigious hotels in the

world and Actis has unparalleled experience investing on the ground in Africa. We are very excited about the potential of this venture together”, Okubadejo said in a mail response to BusinessDay. The deal is coming one week after Asset & Resource Management Holding Company Limited’s (ARM) announced its successful exit from Oceanwinds Hospitality Limited (OHL), owners of Four Points by Sheraton Lagos Hotel. Four points declined to comment on the deal. Actis has a long heritage of investing in Africa having committed US$4,5bn to the region over the last 15 years, and Actis is the largest Private Equity Real Estate GP in sub-Saharan Africa. Westmont, founded in 1975, is one of the world’s largest privately held hospitality groups having owned or operated over 1,100 hotels globally including hotels in Mozambique and Zambia. Westmont has invested alongside institutional partners since 1993, representing over US$9,0bn of invested capital globally. Ewan Cameron, director

of Development (Africa) at Westmont, said “Westmont has committed to expanding its hospitality investments in Africa, and is delighted to have partnered with Actis on the acquisition of Four Points Lagos. We look forward to collaborating with Marriott to ensure Four Points Lagos fulfils its potential to be the preferred business hotel at the heart of Lagos’ Victoria Island.” The Four Points by Sheraton Lagos is well located amongst the commercial nodes of Lagos and close to the Central Business District, making it an attractive venue for international business travellers. The Four Points by Sheraton Lagos - OHL’s single asset - is an internationally branded 234-key hotel, with 231-room, 8 meeting and conference rooms, 4 Food & Beverage outlets and a full service Spa and Fitness center. ARM initiated and managed the development of the hotel which began operations in 2010, following which ARM provided asset management services which have seen the hotel’s Revenue Generation Index (RGI) consistently rank among the top 2 in its competitive set.

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Wednesday 14 November 2018

Skyway Aviation offers shares for sale in IPO CYNTHIA IKWUETOGHU

kyway Aviation Handling Company Plc (SAHCOL), owned by Sifax Group has offered 406,074,000 ordinary shares of 50 kobo each at N4.65 per share in an initial public offering (IPO) for dealing members by way of an offer for sale. This was according to the Market Bulletin sent by the company to the Nigerian Stock Exchange and signed by Godstime Iwenekhai, Head, Listings Regulation Department on Tuesday 13th of November 2018. According to the Bulettin, the offer opened for subscription on Monday, 12th of November 2018 and will close on Wednesday, 19th of December, 2018. Meanwhile, BusinessDay calculations showed that the market value of the company would be about N1.9 billion. An IPO by way of offer for sale is the very first sale of stock issued by a company to the public through the exchange platform for listed companies. Taiwo Afolabi, Chairman of Skyway Aviation said in a statement that the shareholders of the company were obligated to divest 49 percent equity stake to the local investors in accordance with the terms of the executed share sale and purchase agreement regarding the privatisation of the former Skypower. Afolabi stated that the divestment would occur in different phases, as 30 percent of the entire issued and fully paid up ordinary stake would be offered for sale in the first phase while 19 percent equity stake would be divested at a future date. 10 percent of the shares to be

divested would be sold to the staff of the company in accordance with section 4.2 of the SSPA and section 5 (3) of the Public Enterprises (Privatisation and Commercialisation) Act No. 28 of 1999. “The company sought and obtained the approval of the Bureau of Public Enterprises for a phased divestment in view of current market conditions.” Afolabi said. However, SAHCOL Chairman advised Nigerians to subscribe to the offer as it represents an opportunity to invest in the growing aviation handling sector. He further stated that more details of the offer are contained in the prospectus and would be available nationwide when the offer opens. The company was converted to a public limited company on the 5th of October, 2018 with plans to be fully listed on the Nigerian Stock Exchange, as “the company was waiting for a right time,” said Basil Agboarumi, Managing Director, Skyway Aviation. SAHCOL is 100 percent owned by the Sifax Group was incorporated as an Aviation Ground Handling Service Provider under the Nigerian Company and Allied Matters (CAMA) Act of 1990. The company is formerly known as Skypower Aviation Handling Company Limited. Before it was privatised in 23rd of December, 2009, it was carved out of the liquidated Nigeria Airways Limited as part of the Nigerian Federal Ministry of Aviation’s reform of 1996. The company is present in all the commercially operated airports in Nigeria and offers various services as; Ramp handling, Passenger handling and Cargo handling.

BUSINESS DAY

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Wednesday 15 November 2018

FINANCIAL TIMES

World Business Newspaper

Brexit deal ‘almost within touching distance’, says May’s deputy Cabinet Office minister says agreement ‘still possible but not definite’ in next 24 to 48 George Parker

Brexit deal is “almost within touching distance” and could be concluded within 48 hours, David Lidington, Britain’s de facto deputy prime minister, has declared. Mr Lidington, speaking ahead of a cabinet meeting in Downing Street, said he was “optimistic because we have managed to get things down to a small number of difficult issues outstanding”. “We are not quite there yet,” the Cabinet Office minister told the BBC’s Today programme. Asked if a deal was possible in the next 24 to 48 hours, he said: “Still possible but not at all definite.” The Europhile Mr Lidington said talks between Olly Robbins, Britain’s chief negotiator, and Michel Barnier’s EU team carried on into Monday evening and had made progress. UK prime minister Theresa May convenes her cabinet on Tuesday to discuss what she has called the “endgame” of Brexit. Mrs May still hopes that the EU will convene a special European Council meeting on November 25 to sign off an agreement, leaving her very little time to agree an exit text. UK officials have admitted that unless there is a breakthrough by the end of Wednesday, the timetable for an EU Brexit summit

could slip into December. Mrs May wants to win parliamentary approval for any deal before Christmas. Dominic Raab, Brexit secretary, has told colleagues the government will start implementing contingency plans for a no-deal outcome, if no progress has been made. The biggest obstacle remains

Amazon to split HQ2 between Washington DC and New York areas Tech giant to choose Crystal City and Long Island City as winners in 14-month search Shannon Bond and Joshua Chaffin

mazon is set to announce as soon as Tuesday its decision to put big new offices in New York City and the northern Virginia suburbs of Washington DC, according to two people familiar with the matter. The choice will conclude the Seattle technology company’s 14-month long search for a second headquarters with a split verdict, dividing the project between the Crystal City area of Arlington, Virginia, and the Long Island City neighbourhood of Queens. Amazon launched the high-profile search for the project it dubbed “HQ2” in September 2017, promising to bring more than $5bn in investment and 50,000 jobs over the next 20 years to the winning candidate. Cities across North America fell over themselves to offer financial incentives, infrastructure investment pledges and even naming rights to win the company over. But the decision to place satellite offices in big coastal metropolises where Amazon already has significant presences suggests pragmatism won out over the possibility of creating a new technology hub in a regional city in middle America, as some observers had hoped. Amazon declined to comment. Its decision was first reported by the Wall Street Journal.

the exit mechanism that would allow Britain to leave a temporary customs arrangement — a backstop to avoid the reintroduction of a hard border in Ireland. Eurosceptic ministers, who met in trade secretary Liam Fox’s office on Monday to co-ordinate tactics, insist Britain must have the right to walk away from the arrangement.

The EU is insisting on a joint review mechanism to end the temporary arrangement, which would last until a permanent UK/EU trade deal puts in place a frictionless border in Ireland. Eurosceptic ministers will resist any role for the European Court of Justice in this mechanism. A number of pro-Brexit minis-

ters have warned privately that a no-deal outcome would be better than any deal that could theoretically leave Britain trapped in a customs union. Given the proximity of the two sides to a deal, it is likely that Mr Raab and Mr Barnier will be involved in the final stage of negotiations to give a political impetus to the talks.

Five US tech giants spend combined $115bn on buying back stock Outlay on buybacks almost doubles, putting investors among biggest beneficiaries of Trump tax reforms

New York and Washington have ample populations of highly educated workers and plentiful amenities, from public transportation to culture, that could help Amazon win an expensive war for talent. The choice also reflects Amazon’s priorities when it comes to the next phase of growth in its sprawling business. In New York the company will be near the advertising, fashion and banking industries, all areas in which it is looking to make inroads. Long Island City is a former industrial waterfront section of the Queens borough of New York City that has been transformed in recent years by shiny high-rise apartment buildings and office towers. The neighbourhood has been one of the beneficiaries of a push by the city, started by former mayor Michael Bloomberg, to reposition New York as a leader in digital industries in the wake of the 2008 financial crisis. In the Virginia suburbs of Washington, Amazon will be close to big clients of its cloud computing and business supplies divisions, including defence contractors and government agencies. And it will be on the doorstep of regulators and lawmakers at a time of increasing scrutiny of the big tech companies. Crystal City’s cluster of boxy conContinues on page A7

Richard Waters and Andrew Edgecliffe-Johnson

he five US tech companies with the largest cash piles took advantage of President Trump’s tax reforms to spend more than $115bn in the first three quarters on buying back their own stock. The share buybacks so far this year by Apple, Alphabet, Cisco, Microsoft and Oracle, after the tax change came into force at the end of 2017, are nearly double what the companies spent in the whole of last year, making investors some of the biggest beneficiaries of a plan that was billed as a boost to US jobs. They also increased their capital investment by 42 per cent compared with the same period last year, to $42.6bn, according to FT calculations. Tech companies have also led a parallel trend, identified in a report released on Tuesday by Moody’s Investors Service, for US companies to channel a large part of their tax windfalls into paying down debt. The new data add to the debate about the extent to which the tax reforms have boosted investors, rather than stimulating invest-

ment and benefiting American workers. The National Association for Business Economics reported last month that the changes to the tax code had “not broadly impacted hiring and investment plans”. Tech companies had been sitting on some of the largest cash piles, almost all of it stranded offshore where it escaped an immediate tax. Last year’s Tax Cuts and Jobs Act brought these reserves into the tax net but at a reduced rate — in turn freeing the companies to use the money rather than leave it to continue to pile up. “Most companies are using cash to buy back stock and make acquisitions, rather than invest in new facilities,” said Walter Price, a tech investment manager at Allianz. “I think this is good for shareholders and management.” Tech companies were also paying down debt they took on in previous years to buy back shares, he added. Apple, with the largest offshore cash and investment holdings, generated headlines soon after the passage of the tax bill when it said its “direct contribution” to the US economy would be $350bn over the next five years.

Since then, it has lifted its capital spending to $14.5bn, an increase of 14 per cent from the year before. But its spending on buybacks has soared to $62.6bn in the first nine months of the year, nearly three times as much as the same period the year before. Investors and analysts said that repatriated cash was also contributing to renewed investment. But planning new facilities takes longer than executing a buyback, and will take longer to show up in capital spending figures, said Mr Price. “There’s a strong correlation between tax reform and capital spending,” added Youssef Squali, an internet analyst at SunTrust Robinson Humphrey, pointing at Google and Facebook, which plan to spend a combined $37bn between them this year, up from just under $21bn in 2017. The US commerce department said that growth in business investment overall had slowed in the third quarter after a bumper start to the year. Brett Ryan, senior US economist for Deutsche Bank, said last week he expected a recovery in capex in the fourth quarter, followed by a gradual slowdown in 2019.

Wednesday 15 November 2018

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NATIONAL NEWS

BUSINESS DAY

Amazon to split HQ2 between...

Malaysia’s Mahathir says US has promised to return 1MDB money

Continued from page A6

crete buildings was originally built in the 1960s and 1970s to house defence contractors. In recent years it has become home to a growing number of tech start-ups, as well as a shared living space operated by WeWork. Amazon weighed its decision largely in secret, keeping a tight grip on the process through non-disclosure agreements. Most cities, keen to stay in the company’s good graces, kept details of their proposals under wraps. Neither New York nor northern Virginia publicly disclosed how much in tax breaks and other inducements they had offered the company, though details are expect to emerge over time as the states’ legislatures may need to approve some of the incentives. At 25,000 people, the new offices will be a little more than half the size of Amazon’s Seattle headquarters, which currently houses 45,000 staff. “Picking two strengthens the idea that Seattle is still HQ1 for the near to medium term,” said Matt McIlwain, managing director at Seattle’s Madrona Venture Group and an early Amazon investor. Amazon is not the only tech company whose explosive growth has found it outgrowing its existing footprint. Google is also expanding in New York, with plans to double its staff numbers there to nearly 20,000 people.

Opec lowers oil demand growth forecast and warns of oversupply in 2019 Anjli Raval

pec has again lowered its forecast for 2019 oil demand growth, in a further sign Saudi Arabia and its partners inside and outside the cartel could be forced to cut supplies to bring the market into balance. Opec’s research arm said on Tuesday world oil demand growth is forecast to grow by 1.29m barrels a day next year, which is around 70,000 b/d lower than last month’s prediction and the 1.45m b/d it forecast in July. Worries are mounting about a slowdown in the world economy, trade tensions, emerging market countries’ currency weakness and the fallout on oil demand. “The recent downward revision to the global economic growth forecast and associated uncertainties confirms the emerging pressure on oil demand observed in recent months,” Opec said in its monthly market report. Khalid al-Falih, Saudi Arabia’s energy minister, said on Monday Opec and its partners outside of the cartel had conducted an analysis which showed a 1m b/d drop in oil supplies from October levels was required to balance the market. “The consensus is that we need to do whatever it takes to balance the market,” said Mr Falih. The change in rhetoric comes even as US president Donald Trump called on Opec and its allies to curb production to offset any declines from Iran after the administration reimposed sanctions against Tehran. Producers in June agreed to relax curbs in place since 2017 and Saudi Arabia pledged to raise output towards 11m b/d. But the US earlier this month issued waivers to big buyers of Iranian oil — such as India and China — allowing more of the country’s exports to flow than anticipated. This sent prices from above $85 a barrel last month to below $70, with Brent crude falling $1.53 a barrel to $68.59 on Tuesday.

PM looks to recoup billions and warns Goldman Sachs it will be punished if found guilty Stefania Palma and Hudson

‘Bad Blood’ wins the FT and McKinsey Business Book of 2018 John Carreyrou takes the prize for his riveting account of the collapse of Theranos Andrew Hill

ad Blood, John Carreyrou’s riveting account of the rise and scandalous fall of Theranos, the blood-testing company, has been named Financial Times and McKinsey Business Book of the Year. Mr Carreyrou received the £30,000 prize at a ceremony at the National Gallery, London, after Bad Blood emerged as the clear winner over five other shortlisted titles in a judging session on Monday morning. The book recounts the inside story of the collapse of Theranos and the disgrace of its once-feted founder Elizabeth Holmes, after the group’s supposedly revolutionary blood-testing system turned out to be dangerously flawed. Since the book’s publication, Ms Holmes and Ramesh “Sunny” Balwani, former chief operating officer at Theranos, have been charged with perpetrating a multimillion dollar fraud on investors, doctors and patients. In September, the company announced that it would dissolve and return any remaining cash to creditors.

The book award judges heaped praise on Mr Carreyrou’s book, which is published by Picador in the UK and Knopf in the US. They said that it raised questions not only about the culture at one start-up — at its high point valued at more than $9bn — but in the whole of Silicon Valley. The book offers insights about the cult of founder-leaders and weaknesses in regulation and corporate governance. Theranos’s board once counted among its members former US secretaries of state Henry Kissinger and George Shultz, and Jim Mattis, current US defence secretary. The group also attracted high-profile investors, including moguls Larry Ellison and Rupert Murdoch. Accepting the award, Mr Carreyrou said that readers should learn from the Theranos scandal that the “move fast and break things” approach to technology innovation did not work well in areas such as healthcare or self-driving vehicles: “I hope that people read this book and keep in mind that this Silicon Valley playbook doesn’t apply very well to regulated industries and especially doesn’t [apply] when lives

are at stake.” Lionel Barber, FT editor and chair of the judging panel, called Bad Blood “a brilliant piece of enterprise journalism” that “reads at times like a thriller”. Kevin Sneader, global managing partner of McKinsey, the consulting firm that supports the prize, presented the award to Mr Carreyrou, a reporter for The Wall Street Journal. Mr Sneader said the book taught lessons about “the proper trade-offs between fostering innovation and conducting due diligence”. The award dinner was addressed by Charlotte Hogg, chief executive of Visa Europe. At the same ceremony, Andrew Leon Hanna collected the £15,000 Bracken Bower Prize for the best proposal for a business book by an author aged under 35. His book, Twenty-Five Million Sparks, will explore how entrepreneurs and entrepreneurial ideas emerge from refugee camps and communities. The Business Book of the Year Award was launched in 2005 and goes to the book that provides the “most compelling and enjoyable insight into modern business issues, including management, finance and economics”.

Zimbabwe has no choice but to embark on painful reforms Spending cuts, new taxes and an anti-corruption drive can help to revive the economy Emmerson Mnangagwa

hen Margaret Thatcher was elected UK prime minister in 1979, she recognised that piecemeal change would not be sufficient to tackle the problems of labour unrest, rampant inflation and economic stagnation. A wholesale transformation and modernisation of the British economy was required. While there would inevitably be downsides to such rapid change, Thatcher was undeterred. The challenges that Zimbabwe faces today are no less acute. But my government is committed to tackling them head on. Like Thatcher, we are not afraid of taking tough, and at times painful, decisions. As she used to put it, there is no alternative. In order to reform, restructure and rebuild the Zimbabwean economy, the national budget must be balanced and spending reined in. The government wage bill is unsustainable. A large and inefficient public sector cannot be allowed to hold back private enterprise. We have set

about cutting unnecessary expenditure, therefore. We are reducing the number of ministries, limiting foreign travel and perks for officials, and retiring or redeploying senior officers. Privatisation and the reform of state-owned enterprises are also key components of this strategy. Organisations which have outlived their commercial viability or necessity will be dissolved. Over the past two years, we have spent large sums to support struggling state-owned enterprises. But we cannot continue to prop them up. So we have earmarked underperforming bodies for sale and have given them strict deadlines to conclude privatisation deals. Governments do not only cut. They must also collect. As part of an effort to broaden the tax base, we recently introduced a 2 per cent levy on electronic transfers, which make up around 96 per cent of all financial transactions. Collecting revenue effectively and efficiently, combined with cuts and privatisations, will enable us to cut the budget deficit.

These measures are being complemented by an anti-corruption drive that will save Zimbabwe hundreds of millions of dollars. Investigations are under way and arrests are already being made, including of ministers and senior executives. The era of zero tolerance for corruption is here. The economy is already quietly showing signs of improvement, with growth forecasts revised upwards. Many sectors are thriving. The country’s gold mines have already surpassed the total output of 2017, for example, while a plant for the production of lithium carbonate project in Kweke is off to a promising start. Critically, agriculture is increasingly being funded by the private sector. However, Zimbabwe cannot succeed alone. We are seeking new areas for co-operation and partnership. I was delighted, therefore, by the warm welcome our delegation received at the recent UN general assembly, where I urged the international community to support us as we revive our economy and build a better future.

he US Department of Justice has promised to return billions of dollars that were siphoned out of Malaysia’s 1MDB state investment fund, according to prime minister Mahathir Mohamad. “The process takes a bit of time. In the first place you have to provide proof that money is yours,” Mr Mahathir told journalists at the Asean summit in Singapore. “But [the DoJ] has promised that they will give back the money”. The DoJ estimated funds misappropriated from 1MDB total about $4.5bn. Mr Mahathir is aiming to recoup the full amount but said that “much of the money may have been lost along the way”. Malaysia is seeking to retrieve some of these funds from Goldman Sachs, which arranged $6.5bn of bond issuances for 1MDB, almost half of which was misappropriated, according to the DoJ. Malaysia’s ruling coalition, which ousted former prime minister and 1MDB founder Najib Razak in the May elections, has been calling for Goldman to return the $600m it was paid to arrange the three bond issues. This month, the DoJ indicted two former Goldman bankers, while Anwar Ibrahim, who is set to succeed Mr Mahathir in the next two years, said last week that Goldman “must understand that to be complicit . . . is inexcusable”. Mr Mahathir on Tuesday reinforced this message, warning that Goldman would face punishment if found guilty. “If the law says that someone has committed a crime then they should be accordingly punished through the process of law,” he said. This month, the DoJ accused two former Goldman bankers — Tim Leissner and Roger Ng — of working with Malaysian financier Low Taek Jho, also known as Jho Low, to launder billions of dollars siphoned out of 1MDB and to conspire to bribe government officials so the bank would win business. Mr Low maintains his innocence, while Mr Leissner has pleaded guilty. Roger Ng, who was arrested in Malaysia, has not entered a plea and could not be reached for comment by the Financial Times. Mr Mahathir has also refused to rule out banning Goldman from Malaysia. “Goldman Sachs has done things which are wrong that they shouldn’t have done”, Mr Mahathir said in a CNBC interview. “But we want to see the results of all this investigation and the actions taken against Leissner, for example.” When asked what the scandal said about compliance controls at Goldman Sachs, Mr Mahathir said that they “[don’t] work very well”. Goldman declined to comment on Mr Mahathir’s comments. On Monday, Goldman Sachs had its worst day on the markets since 2011: its share price fell 7.5 per cent on mounting concerns about the 1MDB scandal.

BUSINESS DAY

Wednesday 14 November 2018

Live @ The Exchanges Top Gainers/Losers as at Tuesday 13 November 2018 GAINERS Company

Market Statistics as at Tuesday 13 November 2018

LOSERS Opening

Closing

Change

WAPCO

N15

N16.3

1.3

GLAXOSMITH

N11

N12.05

1.05

STANBIC

N47

N48

FLOURMILL

N16.5

N16.85

0.35

UNILEVER

N39.25

N39.5

0.25

Opening

Closing

Change

NESTLE

Company

N1460

N1450

-10

OKOMUOIL

N79.8

N75.75

-4.05

JBERGER

N23.7

N21.35

-2.35

N21.95

N20.6

-1.35

SEPLAT

N668.5

N668

-0.5

ASI (Points)

32,152.90

DEALS (Numbers)

2,880.00

VOLUME (Numbers) VALUE (N billion)

2.242

MARKET CAP (N Trn

11.738

Stock market up marginally by 0.03% … Lafarge leads basket of 16 advancers Stories by Iheanyi Nwachukwu

igerian stock market recorded slight increase at the sound of closing gong on Tuesday November 13 as only 16 stocks gained against 26 losers. The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased marginally by 0.03percent at the close of trading, causing the Year-to-Date (ytd) return to stand at a negative of 15.93percent. The NSE All Share Index closed at 32,152.90 points against the preceding day close of 32,143.41points while Market Capitalisation closed at N11.738 trillion against preceding day close of N11.735 trillion, representing N3billion increase. Lafarge Africa Plc advanced most, from N15 to N16.3, after adding N1.3

or 8.67percent. GlaxoSmithKline Consumer Nigeria Plc advanced from N11 to N12.05, up N1.05 or 9.55percent; while Stanbic IBTC advanced from N47 to N48, adding N1 or 2.13percent. Flourmill Nigeria Plc

stock price also increased from N16.5 to N16.85, up 35kobo or 2.12percent; while Unilever Nigeria Plc rallied from N39.25 to N39.5, up 25percent or 0.64percent. Nestle Nigeria Plc recorded the biggest loss

after its share price decreased from N1460 to N1450, down by N10 or 0.68percent; Okomu Oil Palm Plc followed after its share price declined from N79.8 to N75.75, down N4.05 or 5.08percent. Julius Berger Nigeria

Plc declined from N23.7 to N21.35, down by N2.35 or 9.92percent; Forte Oil Plc dipped from N21.95 to N20.6, losing N1.35 or 6.15percent; while SEPLAT stock price dropped from N668.5 to N668, losing 50kobo or 0.07percent. The volume of stocks traded increased by 181.30percent, from 142.1 million to 399.7 million, while the total value of stocks traded increased by 44.1percent from N1.556 billion to N2.24billion in 2,880 deals. Ikeja Hotel Plc, FBN Holdings Plc, Diamond Bank Plc, FCMB Group Plc and UBA Plc were actively traded stocks on the Lagos Bourse. The Services sector led the activity chart with 280.2million shares exchanged for N575million; followed by Financial Services with 98.2million shares traded for N708 million.

Sterling Bank launches world first digital commodity marketplace

igeria has set a new global record as the world’s first fully digital, end-to-end blockchain based commodity trading and financing platform was announced by Sterling Bank Plc on Tuesday, November 13, 2018, in Lagos. Developed in partnership with Binkabi and AFEX Commodities Exchange, the platform will decentralise Agric commodity trading in Nigeria and all emerging economies, helping to reduce intermediation in trade while distributing profit more widely across the value chain. Speaking at the press briefing announcing the platform, Chief Executive Officer, Sterling Bank Plc, Abubakar Suleiman, said Nigeria loses about half of its agricultural products yearly to post harvest processes. “By introducing and establishing a viable

and efficient agricultural commodities exchange platform, we are able tackle this sort of challenge. Cereal grains such as rice, maize and soya beans which are among the basic staple foods across Nigeria suffer the most loss among all agricultural commodities. By applying some of the latest scientific storage technologies and providing liquidity, we can help reduce this problem and increase margins for the farmers. “In addition, this is a medium to long-term value investment for us at Sterling Bank. The productivity gain from the partnership is that the Agric sector will be derisked and our farmers will become more viable for commercial lending. It will also create a pathway for more banks to lend to farmers without intervention funds making it possible for the Government

to free up funds allocated to subsidizing Agric sector to other industries”. Ayo Balogun, Country Manager Nigeria at AFEX Commodities said the commodity exchange was designed with farmers in mind, to help them mitigate risks and ensure payments are made through reliable financial service providers. “A typical scenario at the exchange involves the use of warehouses across the country with modern facilities where farmers and traders

399,757,012.00

can take their produce to minimise wastages. Farmers can deposit their agro commodities in certified warehouses and are issued receipts, which are recognised by the bank. We are excited that a reputable commercial bank like Sterling Bank has come on board to enable farmers reduce exploitation by middlemen. As a result of this partnership, farmers can use their receipt as collateral to procure loans or other

financial services. They can also sell the receipt on the commodity exchange market without transferring their agro commodities from the warehouse.” Quan Le, Founder and CEO of Binkabi, said, “Our vision is to ensure that the commodity network becomes fairer and more profitable through collaborative efforts which leverages blockchain technology. We understand that if financial markets can fail ordinary people in the developed world then the agricultural markets are failing ordinary farmers in the developing world. The only difference is that these farmers don’t have a voice - it is a silent crisis. This has motivated us to work with like-minds to develop a marketplace of end-buyers and endsellers of commodities to help reduce intermediation in trade, distributing profit more widely in the value chain.

United Capital daily insight What may be the next big thing for stocks? oreigners were net sellers of Nigerian stocks for most of 2014 and 2015. Nonetheless, the narrative started to change in mid-2016, following the official devaluation of the naira. By April 2017, foreigners started plying into the market at record levels on the backdrop of the introduction of the market-friendly investors and Exporters FX window (I & E window) that brought along improved FX liquidity and restored investor confidence in the Nigerian market. Looking at the recent trend of foreign flows, it appears that foreign enthusiasm for Nigerian stocks has waned. Since Dec-17, a downtrend has been in place but what is more interesting is the fact that foreigners started to net-sell Nigerian stocks by April 2018 (1-year after the introduction of the I&E window). Reasons are not farfetched; the market is responding to concerns over upcoming elections as well as the general riskoff sentiment for Emerging and Frontier Market assets. For us, we think upcoming elections could be the next “big” catalyst that would spur buying opportunities. Political uncertainty has been one of the key reasons that the market has remained underwhelming as the macroeconomy seems to be recovering, albeit gradually, thanks to improved crude oil output and oil prices which has so far surprised positively in 2018. Thus, with the outlook for the economy still relatively stable, we anticipate a post-election equities market recovery on the assumption that political uncertainty would have cleared-off, hence, we expect the market to respond accordingly.

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I WEDNESDAY 14 NOVEMBER 2018

Opinion

PMB & AA: Please talk about Nigeria! FRANKLIN NNAEMEKA NGWU (PHD)

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

s we get ready for 2019 election campaigns due to officially start from 18th Nov 2018, it is important that we remind the presidential candidates especially President Muhammad Buhari and Atiku Abubakar that the focus of the campaigns and elections should be Nigeria and not their personal issues. The latter unfortunately has been the case since the emergence of Atiku on 7th October as the PDP presidential candidate. Given their unwillingness to retire from active politics possibly due to their undying love for Nigeria, I am not sure there is any Nigerian of voting age that might not have significantly heard of the two top candidates for at least 10 years. Nigerians are tired of hearing that Atiku has been accused of corruption or that PMB’s cows are permanently about 150 every year! While such unhelpful triviali-

ties are clear to many Nigerians, what is not clear and to which we are very eager to hear are the plans of the two top candidates on the many socio-economic challenges facing Nigeria! According to World Economic Forum, ‘Nigeria, a country with immense growth potential and resources, is however constrained by many challenges such as issues of good governance, limited infrastructure development, insecurity, climate change, youth unemployment/underemployment and human capital development. Even with these challenges, the economic potential of the country remains compelling. It has the biggest market in Africa with about 200 million citizens, including over 100 million below the age of 40, many of whom have demonstrated enormous entrepreneurial spirit. In addition to oil and gas, there are large deposits of other natural resources such coal, gold, bauxite and copper in different parts of the country. With a visionary and committed leadership, the challenges facing the country can be effectively addressed and the potential opportunities exploited to achieve rapid, sustainable and inclusive economic growth’. Your Excellencies, the above is a fair summary defi-

nition of the country you are eager to govern. Nigerians are desperate to hear your detailed plans on how the identified key challenges will be addressed. While we have tested PMB on two occasions now, Atiku has not really been properly tested as the main driver. However, as they say that experience can help to improve performance, Nigerians are very desperate to hear how both PMB and Atiku will leverage on their experiences to rescue Nigeria from the varied crisis we are presently in. This is not the time to talk through campaign aides or representatives who are most of the time unprepared and not committed to the progress of the country. As both PMB and Atiku can be said to be among the very few Nigerians that have immensely benefitted from Nigeria far more than they can ever repay, I beseech them to focus on Nigeria. Looking at their life trajectories, they come across as full-time recipients of Nigeria’s generosity. I implore them to deeply appreciate that their privileged positions cannot be attributed only to their hard work and intellect but mainly due to the good heartedness and generosity of Nigerians and God. A constant question that should be in their minds is ‘How to give back to

‘

Nigeria is in crisis and urgently requires serious thinking and governance. We are desperate for very competent leaders to properly and graciously lead and govern. The 2019 election should be for PMB and Atiku a period to show gratitude to Nigerians through a detailed, measurable and achievable plan for a sustainable growth and development of the country

Nigerians for all the unmerited gifts and blessings? Nigeria is in crisis and urgently requires serious thinking and governance. We are desperate for very competent

leaders to properly and graciously lead and govern. The 2019 election should be for PMB and Atiku a period to show gratitude to Nigerians through a detailed, measurable and achievable plan for a sustainable growth and development of the country. The detailed plan is very important as it will help Nigerians to make an informed decision on whom to further bless with their votes. While PMB might claim that his government has the Economic Recovery and Growth Plan (ERGP) as a development blueprint, the reality on ground does not suggest that the ERGP is presently working. Even though the focus of this contribution is not on ERGP, it is important for the PMB government to understand and appreciate that Nigerians are asking for something more realistic and practicable as the ERGP is limitedly achievable as it ignores inherent but very important Nigerian peculiarities. For instance, focusing on job creation, Nigerians want to know in very clear, visible and achievable details how millions of jobs will be created to address the frightening unemployment and underemployment levels. They want to know how many untapped opportunities such as the com-

munications sector, the six regional structure, the sports and agricultural sectors can be harnessed and exploited to create over 10 million jobs in two years. Your Excellencies, are you aware that the Nigerian Postal Service for instance can be innovatively organized to create over 1 million jobs in 1 year. Are you aware that over 15 million Nigerians in diasporas can be leveraged on to create over 2 million local jobs in Nigeria and over N5 trillion annual trade opportunity? I am not sure that you appreciate that the present insecurity situation we have can be utilized to create over 100, 000 new police jobs with little or no government expenditure. Nigerians want to know how our industrialization can be achieved through the building and location of one industry in each of our 109 senatorial zones. In our increasing Chinese engagement, we are eager to hear how it will be managed to ensure that the engagement will not result into immitigable negative consequences. The challenges and opportunities are numerous and it is the details that Nigerians want to hear not that PMB now has WAEC attestation certificate or that Atiku’s private jet was searched when it arrived the poverty capital of the world!

Why the end of the longest oil bull market since 2008? DAN STEINBOCK Dr Dan Steinbock is an internationally recognized expert of the multipolar world and the founder of Difference Group Lt. He has served at India China and America Institute (USA), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see http:// www.differencegroup.net

alf a year ago, crude oil prices were expected to climb from $53 per barrel in 2017 to $65 per barrel by the year-end and to remain around that level through 2019. By midOctober, crude had soared to $75 and the rise was expected to continue. Yet, in just 10 days oil has fallen to less than $60. Oil prices are in a bear market one month after four-year highs. The question is: Why? Oil’s short-term fluctuations The simple answer is that until mid-October the escalation of US-Sino trade tensions, despite President Trump’s vocal rhetoric, seemed to be manageable, which supported global prospects. Yet, the US mid-term elections have contributed to growing volatility and uncertainty.

Trump’s illicit decision to withdraw from the Iran nuclear deal (JCPOA) contributed to the upward oil trajectory, along with the expected supply disruptions in Venezuela which is amid domestic economic turmoil and US efforts at regime change. As US-China tensions continue to linger and bilateral talks have not resulted in tangible results, expectations have diminished regarding the anticipated Trump-Xi meeting in late November. Consequently, global recovery no longer seems as solid as analysts presumed only recently. Even signs that OPEC and other oil producers including Russia could soon cut output have not put a floor under the market. Also, Trump’s concession, after heavy pressure by Brussels, to allow Iran to remain connected to SWIFT, which intermediates the bulk of the world’s cross-border dollardenominated transactions, has contributed to more subdued oil price trajectory. Another supply-side force involves US crude inventories that have been swelling. These stockpiles rose by 5.7 million barrels toward the end of October, although gasoline and distillate supplies shrunk, according to American Petroleum Institute. US production is reportedly rising faster than previously projected. But whether these nearterm forces will prevail depends on longer-term struc-

‘

tural conditions. Global crisis and postcrisis fluctuations At the eve of the global financial crisis in summer 2008, crude oil reached an all-time high of $145.31. As the bubbles burst, crude plunged to a low of $40; a level it first reached at the turn of the ‘80s, amid Iran’s Islamic Revolution. During the global crisis in 2008-9, the US Fed and other central banks in the major advanced economies cut the interest rates to zero, while resorting to rounds of quantitative easing. Meanwhile, policymakers in advanced economies deployed fiscal stimulus packages to re-ener-

gize their economies. So, crude rose again until the mid-2010s, when the price still hovered above $100 per barrel. That trajectory came to an abrupt end, when the Fed initiated the rate hikes and normalization policies, which strengthen the US dollar, whereas oil prices, which remain denominated in dollars, took a dramatic plunge. By early 2016, crude prices fell to less than $30 – below the crisis low only eight years before. Crude prices were also hit by the “oil glut”, or surplus crude oil around 2014-15, thanks to critical volumes by the US and Canadian shale oil production, geopolitical rivalries among oil-producing nations, the eclipse of the “commodity super-cycle,” and perceived policy efforts away from fossil fuels. As meetings by the Organization of the Petroleum Exporting Countries (OPEC) failed to lower the ceiling of oil production, the result was a steep oil price meltdown. Eventually, the 13-member oil cartel was able to agree on a ceiling. At the eve of the OPEC talks in Vienna in spring 2017, oil prices rose to $55. Riyadh needed stability to cope with domestic economic challenges and the war against Yemen. So it permitted Iran to freeze output at pre-sanctions levels. Russia supported the cuts because it remains dependent on oil revenues. The extension also benefited shale and gas

producers in the US and the Americas. Crude prices began to climb, but thanks to the OPEC agreement to cut production. Oil’s longer-term structural prospects Crude markets are under secular transformation. Bargaining power has shifted from advanced economies to emerging nations. US is producing record levels of shale. Renewables are capturing more space. Due to sluggish demand, further cuts loom in horizon as prices remain subdued. Moreover, when dollar goes up, oil tends to come down. Oil is denominated in US dollars, whose strength is intertwined with the Fed’s policy rate. As long as the Fed will continue to hike rates, this will contribute to further turbulence, particularly in emerging economies amid energy-intensive economic development. In November 2017, OPEC agreed to extend oil supply cuts until the end of 2018. That fueled crude from low-$50s in spring 2017 to more than $70 last mid-October. In effect, crude mirrored the elusive global recovery, along with the prime indicators of global economic integration. It was these positive horizons of world trade, investment and finance that contributed to steady gains of crude prices until mid-October – but then the fragile recovery crumbled.

When President Trump showed no inclination toward US-Sino reconciliation, hopes associated with world trade, investment and finance finally dissipated. And as the prospects of global recovery turned elusive, crude prices began a steady fall. In the short-term, the status quo could change, but that would require effective reconciliation in US-Sino friction and the reversal of US sanctions and energy policies, among other things. In the long-term, significant changes would require sustained OPEC production ceilings, economic malaise in leading emerging economies, dramatic reversal in world trade, investment and finance and – most importantly – the end of the dollar-denominated oil regime and thus the eclipse of US-Saudi militaryenergy alignment. Some of these changes are not economically viable. Some are desperately needed internationally. Still others are not likely to materialize without significant conflicts and geopolitical realignments. Ironically, there was nothing inevitable about the dramatic reversal of oil prices in October. It was not based on economics. Rather, it was the effect of overcapacity and the Trump trade wars fueled by hollow dreams of an ‘America First’ 21st century. That’s America’s policy mistake, but global economy will pay the bill.

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