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news you can trust I **THURSDAY 16 AUGUST 2018 I vol. 15, no 119 I N300

Visa applicants stranded over suspension of US Consular services in Abuja IFEOMA OKEKE & JONATHAN ADEROJU

isa applicants scheduled for United States visa interview in Abuja have been left stranded following the decision of the embassy to shut down its operations in the state Continues on page 34

Apapa gridlock worsening 25 days after Osinbajo’s 72-hour order

FMDQ Close

Everdon Bureau De Change Buy

Sell

$-N 357.00 360.00 £-N 464.00 472.00 €-N 404.00 412.00

Foreign Exchange

Market Spot ($/N) I&E FX Window 362.25 CBN Official Rate 306.05

3M 6M 0.12 0.00 11.28 13.12

Currency Futures ($/N)

fgn bonds

Treasury Bills 0.00

10 Y 0.16

20 Y 0.00

14.47

14.83

14.17

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

0.00 362.68

0.00 363.58

MTN in data push pumps N200bn into network expansion

Signs medium-term loan facility with 12 Nigerian banks

Jumoke Akiyode-Lawanson

TN Nigeria, in a major push for data revenues signed a N200 billion sevenyear Medium term loan agreement with a consortium of local banks, with FBN Quest acting as a facility agent.

The largest operating telecommunications company in Nigeria, declared that the loan raised from 12 Nigerian banks will be used for expansion and improvement of data services where it sees a major part of its revenue growth coming from in the future. Speaking at the signing, Chief Executive Officer, MTN Nige-

ria, Ferdi Moolman, expressed enthusiasm at the completion of the agreement, saying it signposts MTN’s commitment to and confidence in Nigeria, and the strength of the strategic collaboration between MTN Nigeria and local financial institutions, that will help deepen and broaden the provision of ICT services in Nigeria.

CHUKA UROKO & MICHEaL ANI

“The signing of this loan facility is a major landmark in our expansion programme in which we are making significant investments. The facility will enable us evolve the network to deliver convergent and superior quality, drive voice capacity expansion and data service penetration, maintain optimal capital Continues on page 34

igeria, Africa’s largest economy and the continent’s most populous nation, is a great lesson on impunity and this explains why 25 days after the Vice President, Yemi Osinbajo, ordered a 72Continues on page 34

Inside NIMASA floating dockyard to save Nigeria N36bn annually – Peterside P. 2 BusinessDay partners BMW Club Nigeria for Bimmerfest 2018 P. 35

L-R: Remi O. Oni, executive director, corporate banking, First Bank; Gbenga Oyebode, chairman, management board, Aluko and Oyebode; Ferdi Moolman, chief executive officer, MTN Nigeria, and Emeka Okonkwo, executive director, corporate and investment banking, Union Bank, during the signing of a N200 billion Medium Term Facility with a consortium of banks, in Lagos, yesterday.

2019 election plot thickens as Saraki considers PDP Presidential ticket ... says investors, citizens have lost confidence in Buhari ... Reps meet INEC, query N28.6bn for recruitment of ad-hoc staff KEHINDE AKINTOLA, Abuja, & CYNTHIA IKWUETOGHU, MICHEAL ANI, Lagos

he race to the 2019 presidential election is getting stiffer as Nigerian senate president; Bukola Saraki on Tuesday said he is considering running for the post of president come February 2019. “I am consulting and actively

considering it,” Saraki, said in an interview with Bloomberg at his residence in the capital, Abuja. “I believe I can make the change,” he said. According to him, Investors and citizens have lost confidence in the president, “If a government can go and lock up an arm of government which has never happened in our history, we

should all be very concerned,” Saraki said. “We should not be surprised that they would use security agencies for elections.” The Senate president said that if he decided to run, it would be under the banner of the People’s Democratic Party (PDP), the main opposition group. Saraki will be joining host of others in the opposition party

including Aminu Tambuwal, Rabiu kwankwaso whose body languages have given sign of eyeing the ticket, and finally former Nigerian vice president Atiku Abubarkar who only has formally declared running for the post under the PDP. He would however first need to win the party’s ticket during the October 6th party primaries.

Saraki

“It has long been expected that Saraki would likely contest for presidency of which no one Continues on page 34

2 BUSINESS DAY NEWS

Yuan weakening to boost Nigerian imports from China BUNMI BAILEY & SOBECHUKWU EZE

igerian importers from China are benefiting from a weakeningintheYuaninthe past three months. Analysts believe that the cheaper Yuan would lead to an increase in trade volume between China and other countries like Nigeria, which a major importer of Chinese goods and services. “China has already positioned itself as a major trading partner for the African market. The weakening of the Yuan will translate to cheaper goods for Nigerian importers from China. It could also translate to higher import volumes from China,” Dolapo Ashiru, a stockbroker said. “But the potential increase in the volume of trade may hamper Nigeria’s focus on improving on its local industries and local production.” “So we need to build our local economy and become a hub for West Africa and also Africa. We need to be Africa’s China and develop a vibrant real sector that will be exporting finished goods to Africa and the rest of the world,” Ashiru advised. Data from the National bureau of Statistics (NBS) for the first quarter of 2018 shows China as the highest source of imports into Nigeria accounting for about 21.09 percent of total imports at a value of N531 billion. The Yuan is Asia’s worst performing currency over the past three months, sliding around eight percent against the dollar. As trade friction with the U.S. heated, the People’s Bank of China has been forced to take steps to support the economy and that has included allowing the Yuan to weaken. The Yuan slid 0.67 percent to

6.8900 per dollar Monday, its biggest loss since July 19, amid a selloff across emerging markets. The offshore rate lost 0.43 percent. China’s government bonds also declined, pushing the 10year yield up for a sixth straight day. It is now at 3.6 percent. The Central Bank of Nigeria (CBN) has a Naira/Yuan swap deal aimed at making it easier for Nigerian importers to access Yuan for their imports. The CBN has already started auctioning of Yuan directly to importers. As at the time of the first swap auction in July, the exchange rate was N56.4 to 1 Yuan but the Naira has since then appreciated to trade at N52.24 to 1 Yuan. Making the importation of goods by Nigeria importers cheaper than it was earlier in the year “The appreciation of the Naira against the Yuan is good news for importers and the Nigerian economy. It would help the country’s importers acquire raw materials from China at a lower price,” Abimbola Omotola, Head of Research, fixed income securities, Ecobank said. The Nigerian naira is perhaps the only emerging market currency to have been spared from the on-going volatility of the Turkish Lira which is dragging the rest of the emerging market currency down. Earlier this year the CBN signed a three-year agreement deal with the People Bank of China on a $2.5bn currency swap deal with the aim to make it easier for most Nigerian manufacturers, especially small and medium enterprises (SMEs) and cottage industries in manufacturing and export businesses to import raw materials, spare-parts and simple machinery to undertake their businesses.

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NIMASA floating dockyard to save Nigeria N36bn annually – Peterside ... facility to be operated on PPP Model ... FG committed to enhance environment for shipping DIPO OLADEHINDE

he multimillion dollar floating Dockyard owned by the Nigerian Maritime Administration and Safety Agency (NIMASA) which arrived the country recently will save the Country millions of dollars in capital flight once operational Efforts are also being made to create an enabling environment for the growth of indigenous participation in shipping. The Director General of the Agency, Dakuku Peterside who made this known during an interactive session with Journalists in Lagos said that the facility which would be operated on a PublicPrivatePartnershipmodelwillbe located at a facility of the Nigerian Navy. The NIMASA DG said that the Floating Dockyard would commence operations immediately after the commissioningbyPresidentMuhammadu Buhari. He added that when fully operational, Nigerian Ship-owners

and their foreign counterparts would no longer need to take their vessels outside the country for dry docking. According to him, “Nigeria loses up to $100m annually simply because whenourship-ownersneedtodrydock their vessels, they mostly take them to neighboring countries like Ghana and Cameroun thus spending avoidable forex. When this facility is fully operationalithasthecapacitytodry-dockany vessel in country and save the much needed foreign exchange.” Speaking further Peterside noted that the facility would be operated in conjunction with the builders as technical partners. He also assured that it will create thousands of jobs for teeming Nigerian youths as well as provide training opportunities for seafarers, adding that the NIMASA floating dockyard would also be available as a training facility for the students of the Nigerian Maritime University, Okerenkoko and other maritime institutions in the Country.

“We are planning to ensure that the permanent location of this facility would benefit our students for training and we have also engaged the builders to manage the facility for a one year period at a Naval facility” while further arrangements are being worked out,” he said. Speaking on other issues, Peterside said that the Agency is working on a special foreign exchange intervention for vessel parts acquisition and loan repayment processes to enable indigenous operators compete favourably with their foreign counterparts. He added that there is a team working with the Central Bank of Nigeria on how best this policy can be implemented. He said this is aside working towards the disbursement of the Cabotage Vessel Financing Fund (CVFF) which will give room for a full-fledged Cabotage regime with more job opportunities created.

•Continues online at www.businessdayonline.com

GTB plans to grow earnings from loan yields, ex-Nigeria operations in 2018 Endurance Okafor

uaranty Trust Bank (GT Bank), Nigeria’s second largest bank by branch network, plans to grow its earnings from loan yields and also from operations outside of Nigeria. This was disclosed to BusinessDay on Tuesday, 14th August 2018, during the bank’s half year conference with Chief Executive Segun Agbaje. The bank expects to boost loans to compensate for a drop in yields from T/bills investments. It believes it can earn a yield of about 7-9 percent on loans compared with cash deposits in foreign banks earning 2 percent. Agbaje said the bank would take $700 million to $800 million out of its placements with foreign banks and deploy that into loans. “Since yields have come down on T/bills one’s portfolio is probably down with about 400 basis points. We are going to try and lift some of our foreign placements which is yielding around 2 percent and move some of that to loans and the yield on loan should be around 7-9 percent that will increase the interest income.” Meanwhile the bank’s loans fell 11 percent in the six months to June following a 9 percent decline last year, as learnt from the confer-

ence call. The CEO said the bank plans to use some of its cash deposits to help grow its loan book by 10 percent by the end of the year after credit declined in the first half. The bank also expects its subsidiaries outside of Nigeria to account for about 20 percent of the business. “We will put more effort on the East Africa subsidiaries because we would like for them to do better than they are doing and once we get the East Africa on the block then we will begin to look forward to subsidiary growth of about 20 percent,” Agbaje told BusinessDay when it called in during the conference call. Although he said at 12 percent of profit, 15 percent loan and 18 percent of deposit, the subsidiaries outside of Nigeria are performing as expected but they would still like for the East Africa to make more improvement. The way the bank intends to achieve the growth of the East Africa subsidiaries is by ensuring Kenya subsidiary makes more profit while Uganda and Tanzania subsidiaries’ losses will be tackled. “Last year’s operation outside Nigeria were 9 percent of profit and in the first half of 2018 are up to 12 percent and our target is 20 percent,” Agbaje stated.

A complete blockage inward Ijora-Apapa bridge on Tuesday and Wednesday, leading to commuters stranded for hours on the bridge, as government remains clueless on problem. Pic by Olawale Amoo

Political tension prevents CBN from constituting board ... Banks CAR decline to 10.2% in FY 2017 HOPE MOSES-ASHIKE & ENDURANCE OKAFOR

he Central Bank of Nigeria (CBN) is yet to constitute its board of directors after it dissolved its former board in 2015. The CBN disclosed this in the draft of its 2017 annual report released on Wednesday. President Muhammadu Buhari had in April 2017 requested the confirmation of the appointment of a five non-executive directors of the Board of CBN. An economist who pleaded for anonymity said it just means their corporate governance is not efficient although most Nigeria government agencies do not have a board anyway. “It is really about corporate governance issues and it also as a result of the fact that the senate has not confirmed board members,” the economist said. Meanwhile the board of an organisation is supposed to ensure that

the corporate governance is well put in place but in case of these Nigeria parastatals, the board are just there as an internal organ and the decision are made by the management and not the board as it is done in the case of private organisations, the Economist said. The report noted the failure by two banks to comply with the requirements of the Code on composition of the board, board meetings, subsidiary cross directorship, holding company, succession planning, remuneration policy, limits of authority and risk management. It revealed that nine banks did not comply with the requirements on ethics and professionalism, as well as, rights of other stakeholders, adding that all banks complied with the requirements of the code on size of the board, separation of duties and disclosure and transparency. Also under corporate governance, three banks did not have an approved strategy document, while

those for some banks were not robust and comprehensive. The draft annual report revealed that Capital Adequacy Ratio (CAR) of Deposit Money Banks (DMBs) declined to 10.2 percent as at December 2017 compared to 14.8 percent in December 2016. The regulatory benchmarks for banks with national and international authorisation are 10 percent and 15 percent respectively. The decline was as a result of reduction in total qualifying capital, due to impairment from nonperforming loans. Similarly, asset quality, measured by the ratio of non-performing loans to industry total, worsened to 14.8 per cent and was above both the benchmark of 5.0 per cent and 12.8 per cent in 2016. Accordingly, the banks were directed to intensify debt recovery, realise collateral for bad debts and strengthen risk management.

•Continues online at www.businessdayonline.com

Thursday 16 August 2018

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BUSINESS DAY

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Thursday 16 August 2018

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BUSINESS DAY

6 BUSINESS DAY NEWS

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Why Lagos was ranked 3rd worst city to live in BUNMI BAILEY

ural-Urban migration explains why Lagos, Nigeria’s economic capital, was ranked poorly in the 2018 Economist Intelligence Unit’s Global Liveability Ranking released Tuesday. According to the survey, Lagos was ranked 138th position out of the 140 cities that was analysed. This ranking improved by one place in its initial position of 139th in 2017. Ayodeji Ebo, managing director, Afrinvest Securities Limited, said, “I think based on the indicators that was used, we have not seen any major improvement and rural urban migration has increased significantly which has put more pressure on the available resources in terms of infrastructure, health, education and social amenities. “Though we have seen some development, but we cannot compare the rate of development that we have seen relative to the rate of the

infrastructure spending or the rate of population that we are seeing. Population pressure is affecting social amenities which is why we are still lagging behind.” Lagos has a population of 12.5 million as of 2016, according to National Bureau of Statistics (NBS). By 2050, Lagos’ population is expected to double, which will make it the third largest city in the world but with fewer infrastructures than any other large cities of the world. The indictors used for the ranking index was Stability, Healthcare, Culture and Environment, Education and Infrastructure in which Lagos fairly scored 20.0, 37.5, 53.5, 33.3 and 46.4, respectively, which dragged its score to 38.5 from a total of 100. Cities like Vienna, Austria, which ranked first scored 99.1, Melbourne, Australia ranked second, scored 98.4, Osaka, Japan ranked third scored 97.7, Calgary, Canada ranked fourth scored 97.5, and Sydney, Australia, ranked fifth scoring 97.4, are the best

five liveable cities in the world. The least liveable cities were Port Moresby, PNG, which ranked 136th scored 41.0, Karachi, Pakistan, ranked 137th scored 40.9, Lagos, Nigeria, ranked 138th scoring 38.5, Dhaka, Bangladesh ranked 139th scored 38.0, and Damascus, Syria ranked 140th scored 30.7. Over the past five years, Lagos had always ranked poorly. In 2014, it ranked 138th, in 2015, it netted 137th, in 2016 it had 138th, and in 2017, it graded 139th. “Lagos is not a place you can consider liveable due to the poor infrastructure, insufficient water supply, standard of living, poor quality of live, unstable electricity, traffic congestion, insecurity etc,” Dolapo Ashiru, a stockbroker, said, “Every city is assigned a rating of relative comfort for over 30 qualitative and quantitative factors across five broad categories: stability, healthcare, culture and environment, education, and infrastructure,” the report read.

Recession bites harder in 21 Delta LGAs MERCY ENOCH, Asaba

hough the National Bureau of Statistics (NBS) months ago announced the nation’s exit from recession, 24 local government areas of Delta State are seen to still be in recession following their inability to pay workers’ salaries as well as meet up with other obligations. Only four LGAs have however exited recession having cleared all the backlog of salaries owed workers. Joyce Overah, commissioner, directorate of local government affairs, who made the disclosure during the 2018 press ministerial briefing in Asaba, said, “Among the 21 LGAs Ethiope East is owing seven months salaries while others are owing between one and two months salaries.” She said the state was

… 4 LGAs out of recession awaiting the next tranche of Paris Club refund due since March this year, to enable the LGAs clear the salaries owed workers and meet up with their obligations In October last year, at a post-budget briefing to highlight the breakdown of N298.078 billion budget proposal for 2018 fiscal year, the commissioner of finance, David Edebvie, said a total of N33.4 billion was refunded to the state in August 2017, just as he explained how it was expended. “Out of this amount, the sum of N7 billion belonged to the local government areas and we subsequently transferred it to the LGAs. Out of the balance, we spent N12.6 billion on salaries and pensions, while the sum of N14 billion was expended on capital projects execution,” Edevbie said.

Overah at Wednesday’s press ministerial briefing, also, disclosed that the directorate, as the secretariat of the Local Government Joint Account Allocation Committee, had discharged its duties excellently well, having successfully organised and hosted all the monthly Joint State/Local Government Account Allocation Committee meetings as well as prudently disbursed all funds that accrued to the councils till date. According to Overah, the directorate, through early/ prompt disbursement of funds received from the federal account to the councils, has helped to avert conflict and industrial problems that could have arisen from delay in disbursement of funds to LGAs for workers salaries, wages and traditional rulers’ stipends.

Lagos public servants urged to embrace technology for efficiency MODESTUS ANAESORONYE

ublic servants in Lagos State have been urged to embrace information technology as the country journeys on in the 21st Century, Akinwunmi Ambode, Lagos State governor, said. The governor, represented by Akintola Benson, commissioner, Lagos State Ministry of Establishments, Training, and Pensions, at the ongoing workshop for public servants, said the workers must now begin and complete their work exclusively on computers and the internet in order to claim the

benefits of speed, scalability, and inter-operability of systems that the 21st Century called for. At the workshop tagged, “Strategic Management and Transformational Leadership In The 21st Century-Agile Management Model,” he stated that this has become necessary as the country journeys on in the 21st Century and as the State Government and her institutions position to be adaptable to the changes of the unique challenges of the century. He said the workshop is designed to further the commitment of his administration to the fundamental trans-

formation of the Lagos State Public Service. Ambode added that his administration had demonstrated that we would not be deterred in the determination to ensure the realisation of this vision. He submitted that, from a citizen and governmental perspective, the key expectations from a 21st Century State Public Service are the ability to transplant private sector-tested management theories into the public service, realistic and practicallygrounded policy formulation and execution, the deepening of technical knowledge and utilisation of modern tools.

Thursday 16 August 2018

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Food inflation declines first time in 6 months CYNTHIA IKWUETOGHU & SOBECHUKWU EZE

igeria’s food inflation declined to 1.40 percent month-onmonth (MoM) in July, from 1.57 percent recorded in the previous month (June), indicating a drop in the composite food index to 12.85 percent in July compared with 12.98 percent in June. Data compiled by National Bureau of Statistics (NBS) show that this represents the first decline in m-o-m food inflation since February 2018, and the tenth consecutive decline in year-on-year food inflation since September 2017. However, there was an increase in prices of potatoes, yam and other tubers, vegetables, bread and cereals, fish, oils and fat, and fruits. According to Financial Derivatives Company (FDC), “During the month of July, there were some noticeable price moderating

factors, which include relative improvement in power supply from 3,588MWh/h in June to 3,619MWh/h, decline in the average wholesale diesel prices from N217per litre in June to N207per litre in July.” Also, “reduction in naira liquidity as a result of the delay in Federation Account Allocation Committee (FAAC) disbursement and the CBN’s mopping up exercise, marginal appreciation in the parallel market exchange rate from N362 per dollar at the end of June to N360 per dollar,” FDC stated in a report. Food inflation on a year-on-year basis was highest in Abuja (15.85%), Bayelsa (15.75%) and Imo (15.46%), while Plateau (9.40%), Bauchi (10.44%) and Kano (10.50%) recorded the slowest rise in food inflation in July 2018. On m-o-m basis however, July 2018 food inflation was highest in Kwara (4.57%), Kaduna (3.99%)

and Imo (3.44%), while Ogun (0.16%) and Osun (0.38%) recorded the slowest rise. Kwara, Kaduna and Imo states recorded the highest food inflation due to high increase in their prices of food caused by high transportation cost owing to bad road as well as other factors. “No state in Nigeria produces up to 90 percent of what they eat and so a lot of food comes from other states as well even the best producing states. However, when production is low, they know how to truck in more food from other states. “Most items been trucked in have elements of inflation due to high transportation cost resulting from bad roads. In addition, they suffer losses in the process because of lack of preservation and poor handling practices,” Emmanuel Ijewere, vice president, Nigeria AgricBusiness Group (NABG) told BusinessDay.

“However, the states with the lowest rate would behave such that, these states produce a lot of their food and they have very hardworking farmers that is in Ogun and Osun state,” Ijewere said. Kogi recorded food price deflation or negative inflation (general decrease in the general price level of goods and services or a negative inflation rate) in July 2018. “Kogi is the centre of production and people do not have to travel a long distance to bring their food in there. Also Kogi state people are very industrious when it comes to their farming” Ijewere concluded. The average annual rate of change of the Food sub-index for the twelvemonth period ending July 2018 over the previous twelve-month average was 17.10 percent, 0.65 percent points from the average annual rate of change recorded in June (17.75) percent.

ontrary to claims in some quarters that small-scale traders must present their permanent voters’ cards (PVCs) before they can access the newly launched Trader Moni, BusinessDay gathers that traders do not need PVCs for the scheme. Also, no document or property is needed to collect N10,000 loan, which is the benchmark for Trader Moni, launched last week by the Federal Government. The fund is managed by the Bank of Industry (BoI). Traders willing to access the fund only need to register, get captured and receive the money through their phones. According to the Federal Government, the traders have six months to pay N10,250

HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) and the Deposit Money Banks (DMBs), in collaboration with other stakeholders, have extended the Shared Agent Network Expansion Facility (SANEF) to 25 states of the Federation from 13 states in March. SANEF is a project powered by the CBN, DMBs, Nigeria Inter-Bank Settlement Systems, licensed Mobile Money Operators (MMOs) and Shared Agents with the primary objective of accelerating financial inclusion in Nigeria. The initiative involves on-boarding 40 million low income and unserved Nigerians into the financial system, increasing financial access points from the current 50,000 to 500,000 by 2020, and deepening access to mobile and digital finan-

and qualify for a bigger loan. The scheme, which is an initiative of Government Enterprise and Empowerment Programme (GEEP), will empower 2 million people. Toyin Adeniji, executive director, BoI, said the goal of Trader Moni was to take financial inclusion down to the grassroots. Adeniji said President Muhammadu Buhari-led administration recognised the contribution of petty traders to economic development and identified the fact that some of them might not have what commercial banks would require to grant loan, hence, his support for this initiative to help them grow their businesses. Uzoma Nwagba, chief operating officer, GEEP said, “This initiative is aimed to expand financial inclusion be-

cause we have over 23 million Nigerians that are financially excluded. This administration aimed to reach them so that they can grow their businesses.” In addition to Trader Moni, GEEP has ‘Farmer Moni’ for farmers, which avail them an opportunity to access up to N300,000 loan each, as well as ‘Market Moni’, targeting market women, traders and artisans to get between N50,000 and N100,000. Trader Moni was launched last Tuesday in five markets in Lagos: Ketu, Mushin, Ikotun, Agege and Abule Egba. Mufliat Adewunmi, Iyaloja of Ojuwoye Market, said: “We are happy about Trader Moni because it is a thing we have been expecting. The government should assist the masses, especially the traders. We thank Trader Moni.

cial products and services such as savings accounts, micro loans, insurance, pensions by Nigerians. Presenting an update of the project to the media, Titilola Shogaolu, divisional CEO, Interswitch Financial Inclusion Services, said since the launch of SANEF in March 2018, more people had been empowered and more had been employed. “We have done trainings in different region, including Anambra, Kebbi and Kano, among others. We have done market storm in Kaduna, Kano and a few other states, sensitising and creating awareness,” Shogaolu said. Others who addressed the media are Bolaji Lawal, a member of the technical committee, SANEF; Stanley Jacob, committee of e-Business industry heads (CeBIH); Victor Etuokwu, executive director, personal banking, Access Bank, and others.

ICE Africa confirms John Kamara as event ambassador

No PVC required for FG’s Trader Moni ODINAKA ANUDU

CBN, banks extend SANEF project to 25 states

larion Gaming has appointed John Kamara director of Global Gaming Africa, as event ambassador for ICE Africa, as the event positions itself to drive development across the region and bring the whole African Gaming continent together when it opens between October 24 and 25, at the Sandton Convention Centre, South Africa. Acknowledging the accolade and his objectives for the inaugural ICE Africa, Kamara explores gaming’s current situation on the continent, the region’s burgeoning disposable income and why operators view ICE Africa as an exciting gateway to the emerging market.

L-R: Olayemi Abbass, director, western zone, NIMASA; Dakuku Peterside, director general, NIMASA, and Sani Muhammed, director, Strategic Reform, at a press conference in Lagos.

7 NEWS

BUSINESS DAY

As ambassador for ICE Africa, he says his key objective is to showcase ICE Africa as the go-to event, which will help develop and bridge the gap between Africa and the rest of the world in terms of gaming. For myself as ambassador, I am also keen to work with Clarion Gaming to promote the value of the African market and the opportunities that abound across the continent. Talking at ICE London in February, he highlighted that the region was 52 nations with 1.6 billion people, 68 percent of whom were under the age of 27 - at this time, saying since ICE London, the region had actually grown again and was currently about 55 nations strong.

AfDB calls for agric technologies to optimise farmers’ output MIKE OCHONMA

resident, African Development Bank (AfDB), Akinwumi Adesina, suggests that African farms should be given access to technologies that will enhance production, with evidence from countries such as Nigeria demonstrating that technology coupled with strong government backing are yielding positive results. The AfDB chief says the technologies to achieve Africa’s green revolution exists, but are mostly just sitting on the shelves. Adesina states this during the Agricultural and Applied Economics Association annual meeting in Washington, DC, USA, that the challenge is a lack of

supportive policies to ensure that they are scaled up to reach millions of farmers. He cites the case of Nigeria, where policy during his tenure as the country’s agriculture minister resulted in improved rice production within three years, saying, “All it took was sheer political will, supported by science, technology and pragmatic policies.” He argues that just like in the case of rice, the same can be said of a myriad of technologies, including high-yielding water efficient maize, high-yielding cassava varieties, and animal and fisheries technologies. Meanwhile, the AfDB is currently working with the World Bank, the Alliance for a Green Revolution in Africa and the Bill and

Melinda Gates Foundation to mobilise $1 billion to scale up agricultural technologies across the continent under a new initiative called Technologies for African Agricultural Transformation. “With the rapid pace of growth of the use of drones, automated tractors, artificial intelligence, robotics and block chains, agriculture as we know it today will change,” he says. “It is more likely that the future farmers will be sitting in their homes with computer applications using drone to determine the size of their farms, monitor and guide the applications of farm inputs, and with driverless combine harvesters bringing in the harvest.”

8 BUSINESS DAY NEWS CSOs call for immediate release of detained journalist JONATHAN ADEROJU

ess than 24 hours the Presidency ordered the overhaul of the Special Anti Robbery Squad (SARS) about the incessant complaint from the public on the violation of human rights, the same outfit has arrested a journalist and is forcefully trying to get him to reveal his ‘source’ of a news article. The journalist, Samuel Ogundipe from Premium Times who covers security sector, was arrested over a story other media outfits also published about a letter written by the Inspector General of Police, Ibrahim Idris, to Acting President Yemi Osinbajo on last week’s siege at the National Assembly by security officials. Following his detention, various Civil Society Organisations (CSOs) like BudgIT, EIE, CODE and others, have thrown in their support behind the call for the release of Samuel Ogundipe, stating that his detention was un-

lawful and screams oppression. In a statement released yesterday, the CSOs emphasised that the arrest of the journalist “rubs off as a slap to our democracy and shunts the freedom of the media in nation building. “We are conflicted by the idea that the Police, designed to protect and abide by the law, intimidates the media at will over publications of stories that do not sit well with it. “Our organisation will like to remind the Nigeria Police Force and other law enforcement authorities that the Freedom of Information Act 2011 provides freedom to citizens, including journalists, in obtaining public information and use.” The CSOs called on all civil society groups, media groups, international bodies and citizens to reject this brutal use of the police in violating human rights, as this was detrimental to free speech and governance as a whole.

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Poor power supply, high interest rates biggest constraints to businesses - CBN CYNTHIA IKWUETOGHU & OGHOGHO EDOSOMWAN

usinesses operating in Nigeria have listed poor power supply and high interest rates as their biggest constraints, according to the latest business expectation survey by the Central Bank of Nigeria (CBN). In the CBN business expectation survey released August 7, businesses identified insufficient power supply (64.1 points), high interest rate (58.1 points), unfavourable economic climate (54.3 points), financial problems (50.6 points), unclear economic laws (48.9 points), insufficient demand (45.1 points) and unfavourable political climate (45.1 points) as the major factors that constrained business activities in July. The complaints about poor supply come despite claims by the Federal Gov-

FEC approves Enugu/Onitsha road revision from N10.3bn to N15.7bn TONY AILEMEN, Abuja

ederal Executive Council (FEC) has approved augmentation of the contractual cost of the Enugu to Onitsha road from N10.3 billion to N15.7 billion. Minister of information and culture, Lai Mohammed, while introducing the matter at the briefing of State House correspondents after the FEC meeting presided over by Acting President Yemi Osinbajo, said the memo from the Ministry Power, Works and Housing was the only memo that survived at the meeting. “His memo was the only one that survived and his memo was for augmentation of an existing road contract,” Mohammed said.

The power, works and housing minister, Babatunde Fashola, said the contract, first awarded in 2012, was part of the series of roads captured as Umanna - Udi Agu – Ebenebe – Amansi – Awka - and spurred to Umumba road, section 2 in Enugu State. “The contract was awarded in 2012 covering Enugu to Onitsha high way. Because of lack of appropriate budgeting and funding, all of these projects could not be completed and there were also failures in implementation, so we inherited it. “There was also the need to provide fir erosion control measures and drains and that has led to revision of the cost. It was that revision to enable us complete the road project that was presented.

rowth and Employment (GEM) Project, with the aim of helping businesses grow, has identified rise in population as a major contributor, among others, that aids the growth of the Nigeria’s construction industry. According to Ndah Abu, assistant project coordinator of the project, this trend is followed by a rising middle class with their demand for better conditions - like better houses, road networks and societal needs of social infrastructure. Abu said unfortunately, most urban areas in Nigeria have crowded cities that are

not economically dense, and investments in infrastructure, industrial and commercial structures have not kept pace with the concentration of people, nor have investments in affordable formal housing matched the urbanisation trend in Nigeria. “It is based on the foregoing that the GEM project focuses on supporting interventions that promote affordable housing in Nigeria,” he said. “The first phase of the intervention was to develop a Standard Manual for affordable housing in Nigeria. The manual has been validated by stakeholders in the construction industry.

ernment that electricity generation has improved in the country. Minister of power, works and housing, Babatunde Fashola, recently claimed that power generation had hit an all-time high of 7,000mw. In order to tackle the high interest rate problem facing businesses, Dolapo Ashiru, a stockbroker, urged the CBN to implement the promise it made to start buying commercial papers at single digit interest rate. “This will be good for businesses as they will be able to get cheap credit. Entrepreneurs need access to cheap credit and CBN has to work towards this provision if it wants to encourage longterm developmental projects in the country,” Ashiru said. On the power sector, the stockbroker called for a full deregulation of the sector for the nation to overcome its power supply challenges. “The government have to fully deregulate the power

sector, though this will cause the price of power to increase, it will be cheaper than using generator to generate power. In the long run, with full deregulation of the power sector, power supply to businesses will improve,” he said. The CBN survey also shows that the country’s business confidence index (BCI) declined in July at 13.6 index points, as fear of macro-economic instability mounts. The BCI dropped from its previous index point of 34.7 points in June. Henry Ogbuagu, managing director of GDL, said sharp fall in the BCI was a reflection of the increasing scepticism among business owners and foreign investors about the Nigerian business environment. “People are increasingly sceptical about doing business in the country. A lot of foreign investors are sceptical about the future of the economy and this is largely fuelled by uncertainty around the

forthcoming elections. Political risk, security risk and economic risk all affect the expectations of investors,” he said. Surprisingly, the survey shows businesses were more confident about macroeconomic stability as the elections get closer. A high level of optimism by businesses in services, industrial, wholesale/retail trade, and construction drove this confidence. The optimism index for August is services (34.8 points), industrial (16.5 points), wholesale/retail trade (4.6 points), construction (2.8 points) sectors. Also, employment index by sector shows that the services sector indicated the highest prospects for creating jobs, followed by wholesale/ retail trade, construction, and industrial. Firms expect the naira to appreciate in July and August, as the confidence indices stood at 27.3 and 44.8 points, respectively.

L-R: Iyom Josephine Anenih, former minister of women affairs; Peter Obi, former governor, Anambra State; Yeye Adenike Shobajo, CEO, AS+A Communications Limited; Moronfolu Fasinro, chief client engagement officer, Sterling Bank plc, and Sinatu Ojikutu, former deputy governor, Lagos State, at the 2018 public relations forum and CSR awards in Lagos, yesterday.

GEM highlights opportunities in construction industry, warns on over-crowded cities DANIEL OBI

Monday 16 April 2018

“This support became necessary given the high rate of unoccupied housing projects in most urban cities. Moreover, there is no generally acceptable standard to guide affordable housing projects in Nigeria. Developers seem to rely heavily on inadequate information in making their business decisions, leading to low capacity utilization in the sector,” Abu said. This information gap, according to Abu, informed GEM’s second phase of support to the Nigerian housing sector. Although the housing market appears to have a lot of challenges, there is paucity of housing statistics to reveal its true state, he said.

Petrol, diesel, kerosene, cooking gas prices drop in July CONRAD OMODIAGBE

remium Motor Spirit (PMS), otherwise known as petrol, Automotive Gas Oil (diesel), kerosene and Liquefied Petroleum Gas (cooking gas) all experienced a drop in prices for the month ending July 2018. According to a report published by the National Bureau of Statistics (NBS), the crude oil by-products each experienced a monthon-month drop in their prices when compared with the preceding month of June. Petrol decreased by -0.09 percent, bringing its average price for July to N146.80, a slight decrease

when juxtaposed with N148.10, which was the price of petrol in June. Looking at the states individually, Borno State comes on top with an average of N155.00 per litre, making it the state with the highest price, while Gombe at N142.79 per litre has the cheapest average of all the states. Diesel also experienced a slight month-on-month drop of -0.32% from June to July, resting at N204.32. With N247.50, Borno State has the highest average price for purchasing diesel, while Nassarawa State goes below the average at N175.83. The report by the NBS

also shows that kerosene, which is the most accessible means of cooking in Nigeria, dropped slightly in its price by -1 percent between the months of June and July, reaching a new price of N276.87 from N279.67 per litre. Yobe State goes above the average with N310 per litre while Kogi goes below average at N238.89 per litre, making them the states with the highest and lowest prices, respectively. Average price per gallon of kerosene also dropped by -0.41 percent to N1000.19 for the month of July. Borno State has the highest price at N1130, while Rivers State has the lowest price at N921.05.

Thursday 16 August 2018

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Thursday 16 August 2018

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Eligible customers: Implementing the declaration

IDOWU OYEBANJO Idowu Oyebanjo is a chartered power system engineer from the UK.

he Electric Power Sector Reform Act (EPSRA) of 2005 sets the Nigerian Electricity Supply Industry (NESI) on the journey towards perfect competition where there are few, if any, barriers to the entry of new players and prices are determined by the forces of demand and supply. In May 2017, the Minister of Power exercised his rights under sections 25 to 28, and 100, to declare eligible customers and effectively introduced competition in the supply of electricity to customers in four (4) different categories. Exactly a year before the introduction of the transitional electricity market in 2015, I have argued that the NESI is not mature for an electricity market and 4 years further on, my position remains the same as the condi-

IHEANYI NWACHUKWU Nwachukwu is a journalist and works with BusinessDay Media

wards ceremonies are generally a celebration of talent, success and achievement while carrying a connotation of reputation and expertise. Beyond that, they are employed by all sorts of sectors. From educational awards right through to the Grammies and Oscars, it is usually an endorsement of people’s abilities and rewarding those achievements. The PEARL Awards can aptly be described as the PEARL of Nigerian Awards in recognition of its invaluable positive contributions to the nation’s economy and sustained long years of rewarding corporate excellence thereby promoting value enhancement to shareholders’ wealth. Following the Nigerian National Honours and the Nigerian National Order of Merit Award no other recognition event has flourished sustainably like the PEARL Awards and for this reason, we shall be paying attention to the activities of this landmark initiative recognizing and rewarding corporate excellence with finesse and credibility. Going the memory lane, the Performance, Earnings And Returns Leadership (PEARL) Awards was instituted in 1995 to reward companies quoted on the Nigerian Stock

tions precedent have not been met. Notwithstanding, the declaration of customer eligibility is a step in the right direction and its success will depend on the framework for its implementation to be developed by the Nigerian Electricity Regulatory Commission (NERC) and its ability to carry out effective monitoring and control among other functions. In order to succeed, NERC needs to set up working groups, working in conjunction with all stakeholders, to look at related policy issues including but not limited to cost reflective tariffs, regulated versus negotiated pricing regime, network access, use of systems charges, commercial and legal arrangements, revenue collection, transparency, metering, settlement and balancing systems, network constraints, phased-implementation, etc. The implementation of the Eligible Customer (EC) criterion should be trialed first with transmission level customers to enable the relevant working group(s) to identify and document the different issues, problems and possible solutions that may be experienced with a wide-scale implementation of customer eligibility at lower voltages with more ECs. This will not only allow customers who have hitherto been practicing a version of customer eligibility to officially transfer into

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The implementation of the EC directive will require working groups to prepare and administer different implementation specific templates including power purchase agreements (PPAs), distribution and transmission networks use of systems agreements, and other key legal, regulatory and commercial considerations

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this category, but will allow the experience gathered to influence implementation strategies later. It must be highlighted heretofore that NERC has proposed a twophase implementation which includes ECs with direct connections to generators and those with transmission-level connections in phase 1, while ECs connected at distribution level, subject to three (3) conditions precedents, will be involved in phase two. All ECs are to have a consumption of no less

than 2MW per month. The implementation of the EC directive will require working groups to prepare and administer different implementation specific templates including power purchase agreements (PPAs), distribution and transmission networks use of systems agreements, and other key legal, regulatory and commercial considerations. Also, EPSRA 2005 needs to be updated to reflect the obligations of licensees in relation to the declaration. By extension, relevant Grid Codes (transmission and distribution codes), standards, manuals and policies have to be updated. Aside from these, it must be anticipated that some players will be involved in anticompetitive acts to frustrate the implementation of the EC regime and so a separate code of practice is required to forestall this and facilitate the smooth transition into retail competition. This code will be administered by a seasoned administrator – the competition code panel administrator. The role of the code panel among other things will include the review of technical challenges arising from the implementation of the declaration, the establishment of independent connections providers (ICPs), and the entrenchment of the roles of licensed electricity traders, Independent Electricity Distribution Networks (IEDN), and other relevant groups or players that will facilitate retail competition within the NESI.

The success of any power system is measured by the degree of satisfaction of customers and so, a system of tracking and reporting the overall experience of customers and other market participants becomes more important. The implementation of the EC declaration will lead to increased regulatory workload arising from a more complex network arrangement of on-grid and off-grid systems. Addressing the issue of adequate manpower to effectively cope with the anticipated workload should be a priority. The EPSRA 2005 envisioned full competition in the Generation and Supply of electricity to customers within the NESI and the implementation of the declared customer eligibility is a first step in the direction of retail competition. As a minimum, the proper implementation will lead to the unbundling of the role of the existing distribution companies (DisCos) into distribution network services delivery and distribution supply services, introduction of contract-based competition, the emergence of cost-reflective tariffs and pricing reforms, increased efficiency, and a considerable reduction in both aggregate technical, commercial, and collection (ATC&C) losses and the overall cost of energy supply. Send reactions to: comment@businessdayonline.com

Promoting value enhancement to shareholders’ wealth: A case for the Pearl Awards Exchange for outstanding operational performance and excellence; thereby enhancing the vibrancy, growth and development of the capital market. The maiden edition of the Awards Nite was held on May 27, 1995 at Eko Hotel & Suites, Victoria Island, Lagos where Nigerian Breweries Plc carted away the Overall Highest Award (PEARL of the Nigerian Stock Market) among other laurels won by this company at this edition. Instructively, Dangote Cement Plc, remains the only quoted company to have won same most prestigious Award (PEARL of the Nigerian Stock Market) back to back in 2012 and 2013. Since inception over two decades ago, the PEARL Awards has recognized and rewarded over eighty (80) companies in different categories of the Awards based on their sterling performance. They Awards Categories (Main Competitive Awards Category): Sectorial Leadership Awards, Market Excellence Awards, Overall Highest (The PEARL) Award, Special Recognition Awards Category, Non-Listed Securities Award, Stockbroking Firm of the Year Award, Issuing House of the Year Award, and Good Corporate Governance Award. The Honorary Awards Category includes: CEO of the Year Award, Capital Market Development Award, Capital market Correspondent Award of the Year, and Media Award for Capital Market Development.

Methodology of the Awards: The winning companies in the main competitive category emerge through rigorous data analysis and evaluation. The Sectoral Leadership Awards rewards a company for out-performing other companies within the same sector, based on aggregate points garnered from all the ten indices utilized for ranking. The Market Excellence Awards is based on consideration of the entire market leadership in respect of each of the ranking indices. For each of the indices, points are awarded in order of performance to the top ten companies ranging from 10 points to 1 point. Companies with 10 points win each of the Awards. The Overall Highest Award considers companies that have emerged as Sectoral Leaders of their sectors and have performed most outstandingly in the market excellence category. The Sectoral Leader with the highest points in the market excellence is therefore awarded the PEARL of the Nigerian Stock Market. The uniqueness of the PEARL Awards is in the Awards process being based on verifiable facts and figures obtained from the companies’ financial reports, NSE daily listing, and NSE 52-week trading reports. The parameters utilized are credible and globally acceptable parameters for data evaluation. These parameters include Turnover Growth, Earnings Yield, Dividend Yield, Return on Equity, Profit Margin Ratio, Net Asset Ratio, Share Price Appreciation etc. It is worthy of note that PEARL Awards

remains the only Awards in this part of the world that is based on objective criteria and empirical data. One of the factors that stand the Awards out is the composition of the Awards Board of Governors over the years. Since inception, the Board has been peopled by time-tested and first class professionals as well as highly respected capital market experts with unquestionable integrity. The Board gives broad based policy guidelines on the activities of the Awards. The integrity of the Awards has remained impeccable over the decades. The PEARL Awards does not charge any fee from companies nominated for the purpose of winning the Awards as part of efforts to maintain its impartiality and ensure objectivity in its assessment of quoted companies and other stakeholders’ institutions at its yearly Awards. The Securities & Exchange Commission, the apex regulatory body in the capital market in appreciation of the shared value of corporate excellence promotion in Nigeria, which PEARL Awards exemplifies, endorsed the PEARL Awards Project in 2003. The Commission also supports the institutionalization of PEARL Awards Africa, a continental version of the Awards in Nigeria. In terms of innovation, the PEARL Awards in its 23 years of existence has come up with various initiatives aimed at deepening and enhancing capital market development in Nigeria. These include: PEARL Awards Annual Public

Lecture for Capital Market Development instituted in 2005 to provide a forum for seasoned experts and technocrats (national & international) from the public and private sectors to brainstorm annually on germane, contemporary and emergent issues in capital market development with the view to enhancing investors’ protection, strengthen shareholders’ confidence and ensuring market integrity and stability. Publication of the Nigerian Stock Market Annual (NSMA), a research compendium which covers contemporary issues in the Nigerian Capital Market, the Nigerian economy and the global economy. Published since 1995, the publication has helped to impact knowledge on numerous readers that cut across the private and public sectors of the nation’s economy. The main objective of the publication is to strengthen the knowledge base of shareholders and investors alike on the salient issues concerning the capital market, the Nigerian economy and the global economy among others. The comprehensive analysis of the PEARL Awards Report culminating to the emergence of winning companies is usually published in this annual publication, and publicly presented at each year’s Awards Nite. Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Write-up on mobile money and agent banking awareness initiatives

HENRY CHUKWU Chukwu is Programme Specialist – Agent Networks at EFInA

espite the rapid growth in many other emerging markets a n d t h e h ig h penetration rate of mobile phones in Nigeria (60.4% of Nigerian adults), the uptake and awareness of Mobile Money and Agent Banking have been persistently low at 1% and 16% respectively according to the EFInA Access to Financial Services in Nigeria 2016 Survey. Mobile money is an obvious channel for Nigerians at the bottom of the pyramid to use as they adopt financial services for the first time. Up to 25 mobile money Op-

erators (MMOs) have been licensed since the launch of mobile money service in Nigeria in 2009. Despite this large number of MMOs, high mobile phone and SIM card ownership, mobile money uptake and usage is still low in Nigeria. The Central Bank of Nigeria (CBN) issued the Guidelines for Agent Banking and Agent Banking Relationships in Nigeria in 2013; and the Operating Framework for Super Agent in 2015 in its bid to deepen the uptake of mobile money and agent banking products. However, the uptake of mobile money and agent banking services still remain low in Nigeria. L ow awareness, access and trust are some of the key obstacles affecting the uptake of mobile money in Nigeria. Awareness and understanding however remain important drivers of mobile money uptake and usage. Customers need to be fully aware of the mobile money service and understand how it could be beneficial to them. To ensure mobile money and agent banking services get the best visibility possible in Nigeria, operators need to consider a wide variety of marketing strategies and options.

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Low awareness, access and trust are some of the key obstacles affecting the uptake of mobile money in Nigeria…. Customers need to be fully aware of the mobile money service and understand how it could be beneficial to them

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Bas e d on findings from the EFInA Access to Financial Services in Nigeria 2016 Survey, the fact that 73.4% of adults who have not heard of mobile money are prepared to use new technology shows

an immense opportunity for mobile money and agent banking penetration in Nigeria. EFInA has therefore developed and engaged in different initiatives, working closely with financial services providers and the regulator to promote awareness, uptake and usage of these services in Nigeria. Some of the low-cost options which have been identified for improving mobile money awareness in Nigeria include: • Word of mouth/confidence, which usually result from up-and-running platforms • Liaisons/collaboration with community or market leaders • Campaigns through Local Transport Systems e.g. slogans and pictures displayed in buses • Mass awareness campaigns through market storms, road shows, use of branded items and leveraging on existing market clusters or the different associations • Referral method (Loyalty): This could be effective as 41.5% of those aware of ,mobile money heard through family and friends • Set up awareness booths at local festivals/fairs/com-

munity events EFInA recently collaborated with the Central Bank of Nigeria (CBN) and financial services providers to conduct mass awareness campaigns in selected local government areas in the North. These awareness campaigns have helped the industry to deepen the understanding, uptake and usage of mobile money and agent banking services in the campaign locations. Some of the impacts which have been reported include: recruitment of over 500 new financial services agents; onboarding of new customers on the mobile money wallets and banks’ financial products; activation of financial services in Kiru community of Kano State which had no bank presence before the awareness campaign and; positioning of financial services agents in locations where there are insufficient bank presence. We plan to conduct these campaigns in phases, as we make progress on these different collaborations and initiatives being implemented with stakeholders in the mobile money and agent banking space. Send reactions to: comment@businessdayonline.com

Nigeria beyond oil and gas

… The need to identify opportunities that exist in agriculture

JONATHAN ADEROJU Aderoju is a journalist/sports analyst

rude oil prices dropped in 2016 to below $30 per barrel, and ever since there have been a significant deal of uncertainty in the oil and gas industry, especially whether crude prices may ever return to the 2014 levels of $100 per barrel. Although the prices currently average within $70 to $73 per barrel, the apprehension about its continued sustainability is still substantial.

The major cause that leads to decline in oil prices is the comparative increase in its supply relative to demand. Since the decline in crude oil revenue, Nigerian government has begun to seek for alternatives to diversify the economy in light with the recent economic recession. Following the trend of the continuous decline in the oil sector, many oil and gas companies are equally considering investment in the non-oil sectors. Nigeria has an estimated population of 200 million people, with abundance of other natural resources including arable land and a dynamic workforce, Nigeria presents a huge potential of untapped or under-tapped market. According to the Nigeria Bureau of Statistics, the non-oil sector grew by 0.76 percent in real terms during the reference Q3 2017. This is lower by 0.79 percent point compared to the

rate recorded in the Q3 of 2016 and -1.20 percent points lower than in the Q2 2017. This non-oil sector was driven mainly by agriculture, in real terms, the non-oil sector contributed 89.96 percent to the nation’s GDP in 2017, lower than the share recorded in the Q3 2016, 91.91 percent and in the second quarter of 2017, 90.96 percent. Four sub activities make up the Agricultural sector: Crop Production, Livestock, Forestry and Fishing. The agriculture sector grew by 12.50 percent year-on-year in nominal terms, showing an increase over the Q3 of 2016 by 5.13 percent points but a slight decline by -0.03 percent points when compared to the preceding quarter’s growth rate of 12.53 percent. Crop Production remains the major driver of the sector as it accounts for 91.97 percent of overall nominal growth of the sector.

In the third quarter of 2017, Agriculture contributed 24.44 percent to nominal GDP. This figure is higher than the rates recorded for the Q3 of 2016 and Q2 of 2017 at 24.11 percent and 19.28 percent, respectively. The agricultural sector in the third quarter of 2017 grew by 3.06 percent y-o-y in real terms, a decrease of -1.47 percent points from the corresponding period of 2016 and an increase of 0.05 percent points over the preceding quarter. The sector in the current quarter contributed 29.15 percent to overall GDP in real terms higher than the contributions in the third quarter of 2016 and second quarter of 2017, which stood at 28.68 percent and 22.93 percent, respectively. The agriculture sector experienced a 48.74 percent growth in the last 12 months to March 2018. According to PricewaterhouseCoopers, the Agricultural activities currently contribute

to more than 21 percent of Nigeria’s GDP and provide employment to 70 percent of the Nigerian working population, which is comparatively higher than the contribution from the oil and gas sector. The oil and gas industry by its nature is generally capital intensive, high risk and subject to tougher regulatory requirement. Likewise, the agriculture value chain also possesses the same attributes but in different contextual frameworks, yet, with potential for better returns on investment. With the recent global oil crunch it is a major wake-up call for oil and gas industry players to explore the agricultural value chain and identify opportunities that exist. As interest grows in agriculture, funding from international partners are expected to increase, reducing investment risks. Send reactions to: comment@businessdayonline.com

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Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya

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Thursday 16 August 2018

Power without responsibility

t was Kwame Nkrumah, G hana’s nationalist leader and foremost Pan-Africanist that popularized the concept of power without responsibility. Then, he referred to neo-colonialism as the worst form of imperialism because, “…for those who practice it, it means power without responsibility and for those who suffer from it, it means exploitation without redress.” The neo-colonialist exercises untrammelled powers without the corresponding responsibility that goes with the power. That is why Nkrumah considers this situation so dangerous to African states and advocated for the creation of an African Union, in the mould of the United States of America, to prevent Africa‘s former colonial masters from surreptitiously exercising destructive influence in their former colonies. But it is not only former colonial powers that exercise power without responsibility in Africa. Another group is what Nkrumah refers to as the ‘invisible government’, a loose amorphous grouping of individuals, cabal,

kitchen cabinet, or even godfathers as we call them here, who though unelected, wield untrammelled powers without any means of being responsible or accountable for the powers they wield. And in our polity dominated by ethnic politics, such groups are likely to be made up of the leader’s kinsmen or those from his part of the country. The existence of this cabal around President Buhari has been an open secret. Even the President’s wife, at a time, alluded to the existence of such a group who “don’t know our party manifesto…don’t know what we campaigned for…” but who have now hijacked her husband’s presidency and are steering it in the direction of they so decide. Right from the President’s inauguration, the cabal took full charge and, of course, exploiting the president’s obvious lack of understanding of economics and most complex issues of governance, as well as vulnerability due to old age. What makes the takeover by this shadowy group more complete is the tendency of the President, a highly provincial man himself, to over-trust and over del-

egate authority to his close aides and associates – appointed or not – who are mostly his relatives and or people from his part of the country. Stories abound of these powerful individuals determining key appointments. It is an open secret in the country that what is needed for a job, a connection or contract with the government is to get to meet a member of this powerful group. President Buhari himself empowered this group early in his administration to be the clearing house and policy centre of his government and restricted even his ministers from accessing him except through this channel. This set the stage for all the impunity and extra-legal actions agencies of government have been taking these past years without any consequences. Some months back, it emerged the Inspector General of Police disobeyed the directive of the president and no disciplinary action was taken against him. Also, twice the Department of State Security (DSS) wrote to scuttle the Senate confirmation of nominated Chairman of the Economic and Financial Crimes Commission

(EFCC). It does not matter that both agencies were directly under the control of the presidency and the DSS was headed by the president’s kinsman. There should be no mistake about it ; this amorphous group of individuals is the greatest threat to our democracy. Prior to elections, they are always very quiet and invisible and only spring to life after the elections, grabbing and exercising powers they did not legitimately receive from the electorate and alienating both the people and those who had electoral mandate of the people in the process. In a normal democracy, the legislature, who constitutionally performs oversight functions on the executive, will publicly name and quiz such individuals and protect the Presidency from being hijacked. But in Nigeria’s case, even the parliament is about being taken over by this cabal to neutralize all opposition to their powers. Nigerians must rise and respond to this threat, else they will wake up soon to realize that the democracy they fought so hard for to establish and sustain has been taken away from them.

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Thursday 16 August 2018

CityFile

7 fake revenue agents arrested in Anambra

even suspected illegal revenue collectors have been arrested by security operatives at Old Garki, Amansea on the old Enugu-Onitsha road, Awka for extortion and violent attacks on lorry drivers. The susp e cts w ere caught during the on-going crackdown on fake revenue collectors by the Anambra State ministry of trade and commerce. Christian Madubuko, the commissioner for trade and commerce, who spoke to journalists on the arrest in Awka, expressed dismay at the activity of illegal revenue collectors, especially after government’s warning. The fake revenue collectors consisting of six men and a lady were caught on Amansea road collecting what they called “produce fees” and “commerce and industry fees” from lorry drivers passing through the state. Madubuko said the group had mounted unauthorised road blocks and attacked lorry drivers and extorted money from them. The state commissioner

for environment, Michael Okonkwo, who also condemned the ugly trend, noted that some people also collected sanitation fees from the people illegally. Okonkwo vowed that his ministry would soon set its dragnet for the arrest and prosecution of perpetrators of such acts, and called on the residents to be cautious in making payments. “The state has authorised persons issued with papers through the office of the chief of staff to operate as revenue collectors for government,” he said. One of the suspects who identified himself simply as “State Coordinator” Nigeria Lorry Drivers Association (NILODA), Mmaduka from Ukpo in Anambra, confessed that he illegally collected revenue with his men at Amansea. He claimed that the commissioner for agriculture authorised the collection of the fees. However, Afam Mbanefor, commissioner for agriculture, promptly denied the allegation when his attention was drawn to the statement by the suspect.

Police lose 30 officers in 1 month in Akwa Ibom

o fewer than 30 police officers sacrificed their lives in the service of their fatherland in the last one month in Nigeria. Adeyemi Ogunjemilusi, the Commissioner of Police (CP) in charge of Akwa-Ibom, disclosed this, Tuesday, at a security summit in Eket. The summit was organised to address the challenge of crimes and cultism in Eket local government area, Akwa Ibom. The conference was organised by the local government in conjunction with the state police command. “We have lost over 30 police officers within one month in the country. Police officers are sacrificing their lives daily, but it is unfortunately that we focus our mirror on the few bad elements that dent the image of the police force,” Ogunjemilusi said. He, however, said that over 60 suspected cultists were arrested recently in the area during violent clash between two rival cult groups.

“It is an offence for anybody to ask you to commit yourself or belong to any secret society before giving you an employment,” he said. According to him, anyone caught engaging in cultism will be dealt within the confines of the law. Ogunjemilusi noted that there were leverage for those youths who want to denounce cultism and reconcile themselves to the society in order to become law abiding citizens. He outlined tips on how the people could protect their property and their loved ones. “We need vehicles to improve our response capability in the state,” he said. Also, Frank Archibong, the chairman of Eket local government area, said that the council would not tolerate cultism in the area. “We can no longer tolerate or fold our hands and allow the criminal minded elements in our midst to soil and tarnish an integrity which we have built over the years for ourselves and community,” Archibong said. NAN

The major road leading to White Sand in a deplorable state.

Land use charge not to put burden on people - Akeredolu YOMI AYELESO, Akure

overnor Oluwarotimi Akeredolu of Ondo State has explained that the land use charge policy of the government is not intended to put burden on the people of the state. Governor Akeredolu made the clarification during the launch of land use payment at the office of the state Board of Internal

Revenue (BIR), Oyemekun model tax station, Akure. The governor, after making his own payment, clarified that his government inherited the land use charge law, which he explained has been in place since 2014. He said: “It is important that we make this very clear to our people. What we are implementing is the land use charge law 2014. It is not a law that came about when we came into office; we are executing a

law that has been existing before we came into office. “The law is so specific that everybody needs to pay arrears from 2014. The day the law was promulgated, it became binding on us to pay from 2014. But, we look at it and felt that payment of the arrears might cause issues, hence a waiver for 2014, 2015 and 2016 “We are not here to put burden on our people. But when a law is there, as a government, we must im-

plement it. And it’s going to have a very great impact. We are looking at revenue generation; we are looking at building infrastructure and proper planning. “My house, that of the deputy governor and those of the exco members have been captured. I want to appeal to our people and also thank them for their cooperation. I call on our people to pay the little amount that are charged on their properties. It’s going to be annually.”

Lagos: White Sand residents decry poor state of roads JOSHUA BASSEY

esidents of White Sand, IsheriOshun, in Igando-Ikotun local council development area of Lagos State, have cried out to the government over the deplorable state of roads in the area. Adewale Oyewo, a resident of the area and chairman of the Community Development Association (CDA) said that the road, which is a major thoroughfare linking Festac in Amuwo Odofin local government area of the state, had been left unattended to by the government, despite the fact that White Sand won the Lagos State second best CDA award in 2016.”

According to Oyewo, the communities around the area have spent millions of naira on infrastructure development for some years now without any assistance from the government or any of its agencies. He lamented how people would in the past, fold their trousers, remove their shoes in order to pass the roads, and parents would have to carry their children on their backs to go to school, before he formed a G-20 team that started putting their monies together to get something done on the roads, and even for electricity. Oyewo, who commended the efforts of the state government on projects being carried out in other

parts of the state, pleaded with Governor Akinwunmi Ambode, to include the White Sand road as part of the next projects to be executed by the state government. “This will alleviate the suffering of the residents, which cut across 15 CDAs including Viable, Kosobameji, Isale-Ijon, OdoAtoro, Oke-Isheri, AnuOlohun, Palm City, Ajaye, Iseki-Ijon, God’s Own, Harmony, Wazobia, Fagbile Phase 3, Irepodun, and Osun Isheri. Benson Otite, chairman of Palm City CDA in White Sand, also lamented their ordeal saying the residents find it difficult to move in and out of their residences due to lack of good drainage system.

Otite stated that the residents of the community had resorted to self-help by taxing themselves but added that government’s assistance was urgently needed. Speaking also, Ismail Adebayo, chairman of Kosobameji CDA, said series of letters had been sent to the Lagos State ministry of environment for assistance, to no avail. He stated that the community had to manually dredge the canals in the area since help was not forth coming from the government. Isheri-Oshun is a fastdeveloping area of Lagos State, linking many parts of the state together such as, Okota, Amuwo Odofin, Festac, Bucknor and Ijegun, Adebayo said.

BUSINESS DAY

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Thursday 16 August 2018

BUSINESSTRAVEL Investors are assured of dividends on their investments with Medview – Bankole Muneer Bankole is the chief executive officer Medview Airline Limited, the only domestic carrier in Nigeria listed on the Nigerian Stock Exchange. In this interview with IFEOMA OKEKE, he speaks of the challenges facing the aviation sector and reasons why investors should be assured of their investments in the airline. What are the challenges in the aviation sector that are affecting your operations directly? he aviation industry is facing a lot of challenges and the government has a lot to do. If you go to the genesis of the challenges, you will discover that airlines pay the government agencies so many charges. We also have challenges with supply and price of aviation fuel. Considering the Apapa traffic and condition of the road, the ripple effect is seen in our operations because fuel is not supplied on time. Today, we also do not have a Maintenance and Repair Overhaul (MRO) in place. Aircraft at one time or the other will be due for checks. There are periodic checks, scheduled checks and maintenance and repairs. These things are mandatory. When you fly an aircraft for 200hours, you shut it down and do mandatory checks. C-checks are carried out every 18months. When this happens, those aircraft that have gone on checks will not be available. Sometimes two or three aircraft are affected and the airline may face some challenges. This will affect the cash flow. Many air planes are not flying; meaning no fund come into the coffers of the airline. The challenges are such that when you do not get that money at the right time, the Central Bank of Nigeria (CBN) always works with terms such as forward looking, future purchases, and on-the-spot purchases. The monies for these purchases are not handy because the money is coming from a local source. There are so many things that will affect cash flow. There are no issues with Medview Airline in particular. Rather Medview’s presence on the stock exchange market sends a message to the whole world. There are lots of stakeholders who have interest in the airline and monitor

Muneer Bankole

our activities. How has your hajj operations fared this year in comparison with previous years? There is no comparison with Medview airline. We are blessed with hajj. Medview got its name from the holiest place in the world, where all Muslims love to go and where the prophet himself was buried. Coming to hajj, we decided to carve a niche on our own and that is where we started. I was in Maiduguri and Kaduna to experience the airlift of Muslims for the hajj. The hajj is for a short period with good investment coming out of it. Hajj operations have been our

major business as 30percent of our inflow is from hajj operations. Hajj is in two phases. Phase one is the period when we take the people for hajj. This lasts between four to five weeks. After two weeks break, we have phase two, when we bring them back. The new national carrier, Nigeria Air seems to have come to stay. Let’s hear your opinion on the airline. It is too young to comment on an airline that is yet to kick off. We will wait and see. There are stages to setting up an airline. One of the things to identify is, who are those behind the scene? I wish them all the best and thank Hadi Sirika, the minister

of aviation for bringing a new airline. Some people think domestic airline operators are afraid of the new national carrier. How true is that? I am not worried or afraid at all. The sky is wide enough for every one of us. We are almost 200million people in Nigeria, only five domestic airlines operate scheduled flights where we are supposed to be over 20. We are not doing anything. People are scared to fly because the environment is not there. The only airport in the east that is viable is Owerri and Enugu airports. Where is the population? In the whole of South-South, we have Calabar and Akwa Ibom, in the whole of SouthWest, we have Ibadan, Ilorin and Akure. We are blessed in this country. The land scape in Maiduguri is bigger than some countries in the world. The properties are enough for us to survive on. Do you think Nigeria benefits from opening up its skies to foreign airlines? It is unfortunate for us as we open our doors to everyone. I was in Abuja and I saw AirFrance, Lufthansa, British Airways, Emirates and Ethiopian airline. Ethiopian airline operate in five airports. They are in Enugu, Abuja, Kano, Kaduna and Lagos. What else do we have? When the doors are wide open for external forces, what do the domestic carriers gain? A woman who decides to give birth to her baby in the market, what other privacy does she have? When you have opened the door, there is nothing there to sell to anyone. We are not contesting anything. It is for the benefit of our people that they can access airports in Enugu, Kaduna, and Kano and get flights. However, the rampage of our airports by foreign airlines is not benefiting our economy and the domestic

carriers. What is the state of your aircraft which you took out for maintenance? The aircraft are coming back. One is landing in very soon. The second one is done and the third one will be brought into the country a couple of days from now. We will also be having a new CRJ aircraft. We have a proverb in our culture which says ‘whatever you conceal has value.’ When you see the aircraft coming, you will know we are a trusted people. When are your London and Dubai operations starting off again? Our London operation is still in front and Dubai is not far away from us. We are stable in these stations. We have the licences. If we don’t have the routes and the certifications, we won’t be talking of the stations. We are in five international stations and one of them is in Jeddah. This is where you can see us operating in and out. We also do lesser hajj. So, this is a route that we do not play with. We have been there for 15years now. In the whole of this country, we are only two airlines approved by the president to carry out hajj operations. God bless the president for this. We are trusted and tested. When we started the hajj, 14 airlines were carrying out hajj but today, we are just two. The story behind our success is sincerity. What assurances are you giving to your investors? We have carried out two annual general meetings and we have declared dividends. Despite the challenges, we are able to tell them the books are open and we declared the first and second year. The first and second quarter results may look dull because of the aircraft challenges but from the window of the third quarter and towards the end of winter and Christmas, I know God will see us through.

Turkish airlines posts $258m operating net profit in first half of 2018

urkish Airlines total revenue increased significantly during the first half of the year approximately by 30 percent compared to the same period of last year, reaching USD 6 billion. Thus, having displayed a remarkable growth performance in 2017, Turkish Airlines managed to increase both passenger and cargo revenue in the first half of 2018. During the first half of the year, Turkish airlines managed to increase net operating profit up from 17 million dollars to 258 million

dollars, due to the increasing demand and unit revenues despite the increasing fuel prices. In the first half of the year, EBITDAR (earnings before interest, taxes, depreciation, amortization and rent), which is used as a cash generation indicator, stood at 1.28 billion dollars, with a 38 percent increase. EBITDAR margin improved by 1,5 percentage points to 21,5 percent. This value is the highest first half EBITDAR value that Turkish Airlines, that continues to be one of the most

profitable airlines in the sector, has so far achieved. During the first half of the year, total Load Factor climbed 4.3 percentage points to 80.4%, recording the highest load factor in Turkish Airlines history for the first half. During the same period, increase in total number of passengers carried, capacity (available seat kilometer) and demand (revenue per kilometer) was 18 percent, 9 percent and 16 percent, respectively, over the same period of last year.

Turkish Airlines carried more than 35 million passengers during this period. According to International Air Transport Association (IATA) first five month figures, the global aviation sector realized capacity growth of 6 percent and demand growth of 7 percent. Turkish Airlines, which continues to strengthen its identity as a leading global airline with its everexpanding flight network and the implementation of other significant investments, currently operates flights to 49 domestic and 255 in-

ternational destinations, a total of 304 destinations in 122 countries, along with Freetown, Samarkand, Krasnodar and Moroni, which have launched within this year. The fleet of Turkish Airlines, one of the youngest and most modern in the world, operates a total of 325 aircraft, comprising 215 narrow body, 92 wide body and 18 cargo aircraft, as of today. Investing in the most advanced and environmentally friendly new generation aircraft, Turkish Airlines aims to reach a fleet of 500 aircraft by 2023.

Thursday 16 August 2018

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

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Analysts revise growth outlook for Nigeria upward despite fragile economy that Nigeria will produce 3.7 million tonnes of rice in the 2018/19 farming year, which is not enough to meet consumer demand. The USDA projects rice consumption to increase to 6.7 million tonnes from the 6.4 million tonnes recorded in 2017/18.

omosomi omomia Nigeria’s economic prospects rospect for the country has remained positive for the 2019 fiscal year, as analysts and economists continue to revise outlook for the country upwards. In July, the International Monetary Fund (IMF) upgraded its growth rate forecast for Nigeria’s Gross Domestic Product (GDP) in 2019 to 2.3 percent, while retaining 2.1 percent for 2018, citing improved crude oil prices. The 2019 GDP growth forecast of 2.3 percent published for Nigeria was 0.4 percentage points higher than the 1.9 percent announced in April this year. Similarly, the African Development Bank (ADB) also projected growth at 2.1% in 2018 and 2.5% in 2019. The outlook is predicated on higher oil prices and production, as well as stronger agricultural performance, according to the multilateral institution in its Africa Economic Outlook report published in 2018. Rand Merchant Bank (RMB) is the latest financial institution to revise its forecast for the Nigerian economy upward. According to the bank’s recently released Nigeria report, growth forecast for Africa’s largest economy has been reviewed northward from 2 percent to 2.1 percent and 2.3 percent respectively in 2018 and 2019. Again, the key driver for the growth projections is the rise in oil prices, with the sector growing at 14.8 percent year on year in the first quarter of this year, supported by higher oil prices. In 2016, Nigeria experienced its first full-year of recession in 25 years. Global oil prices reached a 13-year low and oil production was crushed by van-

Source: IMF dalism and militant attacks in the Niger Delta, resulting in the severe contraction of oil GDP. Although the oil sector represented only 8.4 percent of GDP in 2016, lower foreign exchange earnings from oil exports had spill over effects on non-oil sectors (industry and services) dependent on imports of inputs and raw materials, and overall real GDP contracted by 1.5 percent.

Fiscal policy The recently-approved budget for 2018 marks another large increase in spending, which contributes to a rise in budget deficit forecasts to 3.2 percent of GDP from 3 percent in 2018 (compared to the government’s 1.7 percent deficit target). Less than a month after signing the 2018 spending plans into law, President Buhari has requested a N229bn supplementary budget for electoral spending. Budget implementation remains a key challenge for the government. The late passage of the 2018 spending plan will most likely impact on the targets of the Economic Recovery and Growth

Foreign exchange A positive development for the currency is the increase in foreign reserves from US$29bn two years ago to US$47bn recorded in May 2018. Between US$5bn and US$7.5bn has already been used for intervention since 2017. The Eurobond issuance has also helped to fill demand. However, RMB warns that the unprecedented level of domestic and offshore borrowing has been factored in to the reserves amount, inflating the numbers by around US$8bn. The RMB report maintains that the NAFEX will continue to trade within a tight range between 359 and 363 against the dollar for the next two years. To take strain off the maintenance of the peg, the Bank does not rule out the possibility of a 5 percent depreciation to around USD/NGN365. Despite this, the repor t views that the official CBN rate w ill b e kept intact is based on two scenarios, which are driven by the outcome of the general election. If incumbent President Buhari wins the election, the status quo will remain, and he will be happy to keep the CBN rate as is to pay oil importers (technically maintaining the fuel subsidy). If the opposition wins, there will be attempts to distance itself from Buhari policies, so there might be the possibility of the CBN rate being removed. Overall, there is the general consensus that outlook for the economy is positive, on account of oil prices. As the country moves closer to its sixth national elections in 20 years of democracy, economists and analysts are not in doubt that the risks to Nigeria’s economic recovery remains high. 12734BDN

GDP and economic growth Though the economy experienced recovery with growth at 2.1 percent in 2017 year on year. The economy remains fragile reflected by GDP falling to 2 percent in Q1 2018 indicating that the thrust toward recovery has waned. Activity in the nonoil sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending, according to RMB research. Furthermore, an undiversified production base coupled with infrastructural deficiencies and political uncertainty, fuelled by the continued unpredictable events leading up to the 2019 elections, have all contributed to constitute a prolonged and gradual economic recovery period.

The report also predicts that inflation is set to come under pressure in the second half of 2018, as base effects subside and election spending increases. Furthermore, food prices are set to come under pressure as well, as a result of farmers’ crisis across the country, particularly in areas of the North and Middle belt regions, as well as the resultant negative impact on food supply chains coupled with the high cost of transport. With a contribution of about 22 to 25 percent to Nigeria’s GDP, Nigeria’s agricultural sector is yet to deliver as much output and wealth as counterpart sectors. There is overwhelming evidence that lack of structure in the sector, limited modern farming skills, lack of affordable financing, supply insecurities, inconsistencies in government policies and regulations are top among constraints facing agribusiness investments in Nigeria. However, it is the rising demand and the falling production of rice on the back of higher costs and insecurity that will intensify the pressure on food inflation. A recent study by the United States Department of Agriculture (USDA) shows

Inflation and monetary policy Further exacerbating inflationary pressures in the second half of 2018 is the amendment of excise duty rates for alcoholic beverages and tobacco. RMB further posits that the NiFEX rate is likely to converge with the NAFEX naira rate, which will result in more pressure on inflation in 2019. The Merchant Bank therefore expects the rate to average 11 percent and 10 percent in 2019 and 2020. RMB also anticipates monetary policy rates to remain unchanged at 14 percent for the rest of the year. In July, the Central Bank of Nigeria (CBN) kept its benchmark policy rate at 14% at its latest MPC meeting, citing potential inflationary pressures especially from food prices, a liquidity injection in the second half of the year from the implementation of the 2018 budget and pre-election spending.

Plan (ERGP), as well as capital projects planned for 2018.

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

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We believe in stretching ourselves. In broadening our horizons and embracing the unconventional to consider every possibility. Solutionist Thinking means deliberating together and collaborating with our clients to unlock exceptional prospects for the future. It’s the magic that inspires everything we do.

www.rmb.com.ng

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Thursday 16 August 2018

Nestlé Nigeria Plc surmounts economic headwinds with significant revenue growth

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

Africa Prudential earnings spike on growth in investment income BALA AUGIE

he leadership of the Nigerian Stock Exchange (NSE) has commended Africa Prudential Plc for championing laudable initiatives, which has contributed significantly in developing the Nigerian Capital Market. Speaking during the closing gong ceremony at the Exchange, Oscar Onyema, chief executive officer of the NSE lauded Africa Prudential for ground-breaking initiatives over the past years. Onyema represented by Tunji Kazeem, chief risk officer of the NSE said “The Exchange and Africa Prudential Plc have had several years of cordial relationship. We are sure the wisdom and leadership of the company will present further opportunities to collaborate on capital market development and other mutually beneficial areas such as sustainability” he added. For the first six months through June 2018, Africa Pru-

dential’s gross earnings rose by 48.63 percent to N2.17 billion from N1.46 billion the previous year. The growth at top line was largely driven by a 57.15 percent increase in net investment to N1.57 billion in June 2018 from N1 billion the previous year. Further analysis shows investment income was driven by a 327.04 percent surge in term deposit to N939.95 million in the period under review from N219.95 million the previous year. The leading Registrar in Africa’s largest economy attributes the stellar performance to its diversified business model as the company is relentless in the pursuit of innovation while leveraging on technology to offer exceptional service to customers. Analysts are of the view that Africa Prudential will benefit from the gradual economic recovery as more firms are expected to declare bumper dividend this year. A lot of companies have

reverted to the path of profitability, thanks to liquidity in the foreign exchange market since the introduction of the new foreign exchange policy by the central bank. Also, the rebound in crude

6.2-inch screen size, 720x1500 screen resolution and the 18:9 screen aspect ratio that gifts the Hot S3X a scintillating aesthetic. This device is also poised to be a trendsetter for subsequent devices to be released within the field of smartphone creation. The Hot S3X has a 16MP A.I (Artificial Intelligence) selfie camera with dual LED flash. The A.I selfie camera recognises the user’s environment within milliseconds, the best various light shades and automatically picks the best settings for high quality images. It also has dual rear cameras (13MP+2MP), which features geo-tagging, autofocus and face detection for the best quality photos. The Hot S3X is powered by a 4000mAh battery with 2A quick charge and runs on Android 8.1 Oreo OS coupled with 430 Qualcomm Snapdragon processor chip set for a fully optimized system without glitches. The Hot S3X also possesses rear fingerprint sensor, Face Unlock system, accelerometer and so much more. Tayo Odunowo, marketing communications manager, Infinix Mobility Nigeria deliberated on the device’s significance to its target audience as it is a tool to bridge the gap between futuristic technology

to N985.30 million in June 2018, from N864.28 million the previous year. “The results show the success and strength of our business model as a Company, as we are committed to taking

L-R: Esther Akinnukawe, HR executive, MTN Nigeria; Tara Fela-Durotoye, guest speaker and founder of House of Tara; Mazen Mroue , COO, MTN Nigeria; Bolanle Austen-Peters, guest speaker / CEO of BAP Productions, and Ugonwa Nwoye, customer services executive, at the official launch of “The Women at Y’ello” at MTN’s headquarters in Lagos.

Infinix Mobility unveils Hot S3X smartphone remier Smartphone brand, Infinix Mobility has just unveiled Africa’s first and biggest notch screen smartphone with A.I Selfie camera – Infinix Hot S3X. The device is the latest addition to the Hot S series family, joining the list of devices that make up an impressive product portfolio from Infinix and reemphasizes the brand’s aptitude for designing stylish smartphones with sophisticated tech features. The Hot S series, which was officially launched in 2016 is a lifestyle smartphone series comprised of devices with innovative features and an apparent stylish appeal which most smartphone consumers find utterly irresistible. With the Hot S3X, Infinix Mobility has delivered a 6.2inch notch screen smartphone which is a first of its kind within the African smartphone ecosystem. The notch screen is essentially a cut-out, at the top, of a part of the screen display that retains the display space on either side of it, for information such as date, battery statistics and more, and for apps. The HotS3X comes in a lustrous design measuring at 156.7x75.3x8.3mm. The notch screen is inculcated with a

oil price and output were responsible for the gradual economic recovery as the country existed its first recession in 25 years. Africa Prudential’s net income increased by 14 percent

and today’s world “OEMs globally are always on the lookout for the next big thing to talk about. It is evident carefully looking at the features on the Hot S3X that we at Infinix take pride in our ability to understand and meet our youthful consumers’ needs, and eventually surpass their expectations”. The Hot S3X comes in colour variants such as Berlin Grey, Milan Blue, Ice Blue and is currently on sale within every authorised Infinix retail store nationwide. Infinix is a premium smartphone brand designed for young generations who desire to live a smart lifestyle. Founded in 2012, Infinix is committed to building cutting-edge technology and fashionably designed dynamic mobile devices to create globally-focused intelligent life experiences through a merging of fashion + technology. Through daily interactions, these intuitive products become part of a lifestyle that represents trend-setting and intelligent experiences for young people around the world. Infinix currently promotes four product lines: ZERO, NOTE, HOT S, and HOT in a global marketplace reaching countries in Europe, Africa, Latin America, Middle East and Asia.

Africa Prudential Plc to greater heights by continuing to break new grounds, thereby staying ahead of competition,” said Obong Idiong, the managing director/CEO of the company. ”The Company will intensify efforts to build on the progress so far recorded in our business diversification drive by pursuing relentless innovation in product development and process improvement, leveraging technology to offer exceptional customer experience to our clients,” said Idiong. The Registrar says it plans to expand into the African market, driven by technology, translating to strong operational and financial efficiency. Driven by the need to diversify its business portfolio to achieve long-term sustainability and viability, the Company decided to initiate a change of name from Africa Prudential Registrars Plc to Africa Prudential Plc which it completed in Q1 2018. In line with this business diversification drive, the new Africa

Ethiopian airline records success in finance, operational efficiency IFEOMA OKEKE

thiopian Airlines, Africa’s largest Airline Group, has announced that it recorded success in the 2017/2018 fiscal year. In line with its 15 years strategic roadmap, Vision 2025, the airline registered historical success in financial, commercial, operational and customer service areas. During the 2017/18 fiscal year, Ethiopian introduced additional 14 new aircraft, more than one aircraft per month; The airline opened eight new international destinations, namely Geneva (Switzerland), Chicago (USA), Bahrain, Kaduna (Nigeria), Buenos Aires (Argentina), Kisangani and Mbuji-Mayi (Democratic Republic of Congo) and Nosy-Be (Madagascar). The number of passengers carried grew by +21 percent topping the 10 million mark for the first time in the airline’s history and reaching 10.6 million passengers; freight carried grew by 18 percent from previous fiscal year to attain 400,339 tons; oper-

ating revenue grew by 43% from previous fiscal year to culminate at 89.1 billion Ethiopian airline birr (ETB); Net profit stood at 6.8 billion ETB. During the fiscal year, the airline was given for the first time in its history a 4 Star rating by SKYTRAX, the leading customer service rating organization in the airline industry, putting it on par with other global airlines. SKYRAX also recognized Ethiopian as Best Airline in Africa; Best Business Class in Africa and Best Economy Class in Africa. Ethiopian airline reached and passed the 100th aircraft in service milestone during the year, becoming the first African airline in history to do so. Recapping the exceptional 2017/18 fiscal year performance, Tewolde GebreMariam, group CEO Ethiopian Airlines, said: “It was an exceptional year for Ethiopian with record performance in financial, operational, commercial and customer service areas. “This historical performance is, due first and foremost, to the commitment, hard work and competence of my 16,000 col-

leagues with each one of them at all echelons of the company playing a critical role in this success. I wish to thank them for their dedication, hard work and contribution in enabling our national carrier to fly high in the sky and defend the colors of our country and our continent. “They are the backbone of the airline and the architects of its success. This performance is all the more exceptional given the very tough operating and competitive environment in Africa, where jet fuel price, our main cost driver, has soared during the year and is on average 30 percent more expensive in Africa, our home market, than in the rest of the world, putting the continent’s carriers at a severe competitive disadvantage,” Gebre Mariam said. He noted that the remarkable result was also achieved in the backdrop of aggressive foreign carriers’ penetration into the African market with the African airline industry collectively forecasted to lose money. “The historical performance attests the soundness of our fast, profitable and sustainable growth plan, Vision 2025.

Thursday 16 August 2018

BUSINESS

DAY

COMPANIES & MARKETS Nestlé Nigeria Plc surmounts economic headwinds with significant revenue growth OMOSOMI OMOMIA

s a result of a growing population and an emerging middle class, there has always been a growing demand for fast moving consumer goods (FMCG) in Nigeria. However. as a result of the economic downturn and subsequent slow recovery, the manufacturing sector in 2017 declined marginally by 0.2 percent. Growth in the segment has been hampered by weak purchasing power of consumers leading to decline in revenues. This, coupled with forex illiquidity on account of oil price-supply volatility resulted in high cost of inventory and production translating to eroded profits. Despite the nation’s fragile economy, Nestlé Nigeria Plc surmounted the financial headwinds that led to declined growth and exit of many manufacturing companies from the industrial sector and the country. The company’s latest financial report reflects that the Company recorded growth of 34 percent for the year ended December 31, 2017. The Food & Beverage manufacturer continues to withstand the challenging business environment brought on by weak consumer spending, rising input costs and currency depreciation. The food and beverage (F&B) sector with GDP of N2.8 trillion in 2017 is the largest segment of the Nigerian manufacturing industry accounting for 44 percent of

manufacturing GDP. In 2017, the F&B sector grew marginally by 2 percent from 2016. Nigeria remains one of Africa‘s biggest food importers – despite high investments in local food production. This has impacted negatively on sectoral growth, as players continue to invest significantly on backward integration and capital expansion projects to capture and increase market share. Nestlé’s turnover in 2017 exceeded the GDP growth of 11 percent recorded by its Industry in the period under review. Five-year average sales growth for Nestlé of 16 percent also outperformed the GDP growth in the Food, Beverage and Tobacco sector for 2017. The result also compares with the Company’s year on year sales growth of 20 percent in 2016 when the country entered into its first recession in 25 years. It is safe to suggest that Nestlé was positioned to withstand the macro-economic shocks brought about by the recession. Nestlé Nigeria has developed three commitments encapsulated in the Company’s core purpose of ‘enhancing quality of life and contributing to a healthier future.’ The first commitment is helping Nigerian families lead healthier lives, working alongside stakeholders and partners to improve livelihoods, and providing access to clean drinking water in the communities in which it operates. The company works to-

Mauricio Alarcon, MD & CEO of Nestlé Nigeria Plc

wards its commitments by aiming to provide quality and nutritious meals that are accessible to all “purse sizes.” Today, over 80 percent of the total volume of products the company manufactures and markets in Nigeria is fortified with micronutrients to help address malnutrition. Nestlé is innovating and renovating its products to meet consumer expectations. The Manufacturer’s strategy of seeking to offer healthier products adapted to the taste and nutritional needs of local consumers is paying off. The firm launched two new products in 2017 – the

Africa’s Talking joins Open Banking Nigeria

obile Technology Company, Africa’s Talking has joined the league of technology companies partnering with Open Banking Nigeria in the development of Open APIs for the Nigerian financial industry. Africa’s Talking provides Payments and Communications APIs (SMS, USSD, Airtime and Voice), to help both startups and large companies communicate with their customers across Africa. To further strengthen their objective of unlocking the potential of mobile communication networks across Africa by simplifying

the process and technologies required to exploit them, the organization has teamed up with Open Banking Nigeria to help extend this innovation. Speaking on the partnership, Simon Aderinlola, Africa’s Talking country director, said “Open Banking Nigeria has a huge potential to drive financial inclusion and also boost innovation in Nigeria which is why Africa’s Talking is partnering with the organisation, to create security and safety for customers to share their financial data with banks or third parties, this would open the doors to millions of Nigerians currently out of the financial market. We appreciate and

first – the Milo Ready-ToDrink beverage, and the second - Maggi Naija Pot was launched to consolidate the brand’s dominance of the Nigerian culinary market. Going into the current year, Nestlé has continued to focus on demand creation activities for its existing products while enhancing its portfolio. In February 2018, the Company launched Nestlé Golden Morn Puffs – a multi-grain cereal made from maize, millet, oats and soya. Golden Morn Puffs is fortified with GRAINSMART, a unique combination of vitamins and iron. Nestlé seeks to increase

the use of locally sourced raw materials through close collaboration with governments, research institutes and agricultural communities; particularly in maize, sorghum, soya beans and cassava. Efforts towards increasing local sourcing over the past 6 years have resulted in an average of 80 percent of raw materials being sourced locally for the Company’s products and brands. Currently, over 41,600 farmers supply grains and legumes to Nestlé’s factories. In addition to providing a steady source of income for the farmers, the company works alongside partners like IFDC, USAID, VEGA and CPNFA to help the farmers increase productivity and improve crop quality by reducing contaminants. These efforts seek to enhance food safety especially in maize and soybeans, thereby increasing the income of the farmers and ensuring a steady supply of high quality grains to meet Nestlé’s production standards. Nestlé Nigeria Plc announced its financial results for H1 2018 which shows that the Company continued its momentum from 2017 delivering a revenue of N135.3 billion for H1 2018, a growth of 11% over H1 2017. Profit after tax is N21.5 billion compared to N16.5 billion in the corresponding period of the previous year. Commenting on the results, Mr. Mauricio Alarcon, MD & CEO of Nestlé Nigeria Plc said, “We are pleased with the sustained growth of our Company amid the competitive business

landscape. These results were possible thanks to the relentless efforts of our highly passionate team to provide high quality and affordable nutritious food and beverages to Nigerian consumers.” On the outlook for the second half of the year, Mr. Alarcon said, “We will maintain the focus on delighting consumers with our nutritionally superior products by increasing promotion initiatives and providing more nutrition education. In line with our Creating Shared Value principle, we remain committed to building thriving and resilient communities through local sourcing, expanding the commercialisation of our products and strengthening our value chain.” Nestlé’s investments over the last five years include N74 billion on manufacturing plants comprising a N4.8 billion Water Factory in Abaji, FCT Area Council. In addition to capital investments, the Company has also channeled N4 billion towards its CSV programmes and projects across the country. Nestlé has been operating in the country for over 57 years. With a staff strength of over 2,200 direct employees, 3 manufacturing sites, 8 branch offices and a head office located in Lagos, Nestlé produces and markets several brands including Maggi, Milo, Golden Morn, Cerelac, Nescafé and Nestlé Pure Life. Overall, the sector generates over 1.5m jobs in the country and thus employs 5 percent of the country’s workforce.

Austrian coy targets Anambra for energy plant MICHEAL ANI

believe in the future this work portends” Africa’s Talking provides communications and payments APIs across Africa, headquartered in Kenya with an office in Nigeria, the mobile technology company offers APIs to companies to build solutions and services on USSD, Voice, SMS, Airtime, and Payments. Open Banking Nigeria, a not-for-profit, non-partisan industry group, is committed to developing and advocating Open Banking API standards for the Nigerian financial industry. Visit www. openbanking.ng to know more about Open Banking Nigeria, objectives, partners, and progress made.

n Austrian company is set to build a waste to energy plant in three industrial cities in Anambra State, Chuma Okeke, senior special assistant to the Governor of Anambra state on International Business Development said. The energy plants, which will create over 1000 jobs in Anambra State and make Anambra energy efficient and one of the cleanest states in the country, will be erected in Onitsha, Awka and Nnewi. Okeke said the state government will receive a delegation from an Austrian company to the South-eastern state to fine-tune business partnership with the governor of Anambra State,

Willie Obiano, the board of Anambra State Investment Promotion & Protections Agency and the Anambra State for Waste management to Energy Generation in Awka, the state’s capital city. According to him, it will be the first Waste to Energy & Bio gas plant in African. “The meeting will take place in Awka recently. The economic importance of the meeting is that it will bring the first Waste to energy & Bio gas plant in Africa to Anambra and will provide 1,000s of jobs. “This partnership is very crucial to us because the waste from the cities like Onitsha, Nnewi and Awka where a lot of industries function will now be cleaned up and the waste will be used for energy. “Also economically the

waste to energy plants will help Anambra in its mission to become a premier destination for industrialization and manufacturing with the steady power to be generated from the waste to Energy Company. Onitsha is known to have high amounts of waste due to the industrial nature of the city, but Okeke said that “the waste to Energy Company coming into Anambra State will have a big impact on the citizens of Anambra as well as our attitude to waste management”. He however did not mention the cost estimate of this partnership. Meanwhile, The Austrian Company, Sustainable Environmental Technology GmbH Austria, is a two-time European Union Award winner for Sustainable Energy Providers.

BUSINESS DAY

C002D5556

Thursday 16 August 2018

COMPANIES & MARKETS

SIFAX signs deal with Gambian govt to build, operate multi-million dollar dry port AMAKA ANAGOR-EWUZIE

IFAX Group, a multinational company with interests in various sectors has signed a Memorandum of Understanding (MOU) with the government of Gambia to build and operate a dry port in Banjul. A dry port is an inland intermodal terminal directly connected by road or rail to a seaport and operating as a centre for the transshipment of cargo to inland destinations. A statement signed by Muyiwa Akande, corporate affairs manager of SIFAX, stated that the MOU was signed in Banjul by John Jenkins, group managing director, SIFAX Group and Abdoulie Tambedou, managing director, Gambia Ports Authority (GPA). After the signing ceremony, the SIFAX Group delegation, which also included Taiwo Afolabi, group executive vice chairman and Saheed Lasisi, general manager, Business

Development and Strategic Planning, also met with the Gambian President, Adama Barrow, where prospects of extending the company’s investment plan to other sectors of the country’s economy was discussed extensively. The terms of the MOU include a multi-million dollar investment in the building and operations of the dry port to decongest the Port of Banjul in a public-private partnership business model. While thanking the president for the opportunity to Invest in the country, Taiwo Afolabi assured him and the people of Gambia of SIFAX Group’s willingness to open up the economy of the country by not only building and operating a world-class Inland Container Terminal but also investing in other sectors that will help the Gambia grow and compete favourably among her peers in the continent and beyond. “SIFAX Group believes in making Africa the focus of its investment hub. We are of the view that Africans stand a bet-

ter chance to sincerely develop and tap the array of business and growth opportunities that abound in the continent. We have been doing this in some West African countries and we are sincerely grateful to the president for opening the doors of Gambia to us. Our promise is that the country’s economy will feel our impact as we don’t intend to limit our interventions to the maritime sector alone. We have identified other areas we will be willing to invest in the nearest future,” he said. On his own part, John Jenkins assured that the company will rely heavily on its 30-yearold business experience acquired working in various sectors and countries as it sets out to turn around the country’s maritime sector. “We are delighted as a company to begin this journey of investing in The Gambia. As a company, we have a record of success in all the sectors and countries we operate. We will bring our experience and expertise to bear in the running of the dry port.

Business Event

L-R: Jury, 5th All Africa Music Awards (AFRIMA), Joett from Kenya; Mike Dada, president/CEO, and Angela Martins, head of culture, Africa Union (AU), during a world press conference to announce the nominees for 2018 All Africa Music Awards, in Lagos.

TCON names Globacom as agent of telecoms transformation Jumoke Akiyode-Lawanson

he Association of Telecommunications Companies of Nigeria (ATCON) has listed Globacom, as an agent of change that has significantly impacted and transformed Nigeria’s telecoms sector till date. A recent publication of a list of 100 heroes of Nigeria’s telecoms by ATCON recognised the indigenous telcos for pioneering a series of innovations that have helped to positively transform the nation’s telecommunications sector including the introduction of its per second billing (PSB) which was introduced by Globacom in 2013. Glo’s per second billing made it possible for Nigerians to get unprecedented value for money by paying only for the

exact time spent on calls and spurred other telecom operators to adopt the call billing method. The book also added that Globacom facilitated telephone penetration nationwide through hundred percent reduction of GSM SIM price from N20, 000 to N200 and crashing of call tariff from N50 to 5kobo. In addition, the publication also listed several products pioneered by Globacom. They included Blackberry, vehicle tracking, mobile internet, mobile banking, multimedia messaging service (MMS), in-flight roaming services, voice SMS, Magic Plus and Text2email. Also noted was Globacom‘s Glo 1,the first wholly-owned submarine cable, a high capacity optic fibre cable which brings direct connectivity between West Africa, the UK and the rest of the

world. The 9,800 km-long cable which provides excess bandwidth to all the cities connected to it ensures the availability of bandwidth to enterprise customers in West Africa and beyond. In continuation of Globacom’s giant strides in the nation’s telecoms industry, it recently laid foundation of Glo 2 sub marine cable, another landmark which on completion will be the first submarine cable in Nigeria to terminate outside Lagos, thus providing enough bandwidth to communities in the southern part of the country, especially the oil platforms. The book was formally launched in Lagos on August 3, 2018 in an event which was chaired by Ernest Ndukwe, former executive vice chairman, Nigeria Communications Commission (NCC).

Two-thirds of UK CEOs looking to collaborate with start-ups Iheanyi Nwachukwu

K CEOs are increasingly looking to collaborate with startups in order to drive innovation and support their growth objectives, according to the findings of KPMG’s 2018 Global CEO Outlook. Partnering with third-party cloud technology providers topped the list of actions CEOs are planning to take over the next three years (65 percent), followed by collaborating with innovative startups (61 percent). Seventy percent of UK CEOs who took part in the survey agreed that the only way for their organisation to achieve the agility it needs was to increase the

use of third-party partnerships, compared with 53 percent of CEOs outside of the UK. The survey of 150 UK leaders and a further 1,150 global CEOs on their future investment plans, found that 61 percent of CEOs in the UK are relying on a network of third-parties to support their growth and innovation objectives, compared to just 53 percent globally. Commenting on the findings, Kirsty Mitchell, Director of Growth at KPMG said: “The explosion of new technologies, which has impacted customer behaviours, has changed the landscape for businesses looking for growth. As a result, CEOs are having to turn to new strategies to increase the

agility of their often large and multilayered businesses. We are seeing more collaborations between large corporates and small businesses as they attempt to outpace their competition in the race for innovation to results. “Entrepreneurial energy, an ability to spot gaps in the market for innovative products that consumers actually want, and speed of response to changing demands are what start-up ventures offer and what big businesses want to emulate. Conversely, small businesses benefit from big businesses’ strong routes to market, greater sophistication in business processes and mentors with worldly-wise experience.

L-R: Desmond Elliot, member, Lagos State House of Assembly; Abiodun Ayodeji, marketing manager, Promasidor Nigeria Limited; Godwin Dudu-Orumen, rector, Cowbell Football Academy, with Daniel Pogbe, captain of River Benue Football Team, at the closing ceremony of Cowbell Football Academy Summer Camp held at the National Stadium, Surulere, Lagos.

L-R: Asemota Clifford, footballer Ace Charity; Rotimi Olawale, executive director, Youth Hub Africa; Makinde Afolabi, monitoring and evaluation officer, Education As Vaccine, and Micheal Agada, footballer Yiaga Africa, during the commemoration of International Youth Day in Abuja. Pic by Tunde Adeniyi

L-R: Yebetal Getachew ,general manager stills, West Africa Business Unit, Coca-Coca-Cola ; Sanjeev Kumar, finance director, West Africa Business Unit, Coca-Cola; Paul Kyari Lassa , winner of the men tournament “Road to Mauritius”, and Oseni Ahmed, captain, IBB International Golf and Country Club, Abuja, at the IBB Golf club in Abuja at the weekend.

Thursday 16 August 2018

BUSINESS DAY

C002D5556

Investor

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (03 – 08–18)

36,499.67

N13.322 trillion

2,644.37

1,611.58

809.92

Week close (10 – 08–18)

35,446.47

N12.941 trillion

2,512.59

1,595.24

809.92

Percentage change (WoW) Percentage change (YTD)

-2.89 -7.31

-4.98 -2.01

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

848.13

317.70

2,501.15

1,773.21

1,363.91

845.30

300.50

2,422.97

1,694.77

1,336.31

NSE Banking Index

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

1,746.68

475.44

139.37

1,643.87 1,602.31

461.68

145.30

455.47

142.96

NSE 30 Index

-1.01

0.00

-2.53

-6.91

-25.51

-8.27

-1.35 -4.20

-1.61 2.58

976.10

-0.33 -13.40

-5.41

-3.13

-4.42

-2.02

-9.13

-5.37

-14.21

-3.15

GTBank: Stocks hold upside potentials HEANYI NWACHUKWU

uaranty Trust Bank plc recently released its audited financial results for the firsthalf (H1) period ended June 30, 2018. A review of the bank’s results at both the Nigerian and London Stock Exchanges shows positive performance across all financial indices, reaffirming the bank’s position as one of the most profitable financial institutions in Nigeria. Gross earnings for the period grew by 5.9percent to N226.6billion from N214.1billion reported in June 2017. Profit before tax stood at N109.6billion, representing a growth of 8.4percent over N101.1billion recorded in the corresponding period of June 2017. The bank’s Loan Book dipped by 10.8percent from N1.449trillion recorded as at December 2017 to N1.293trillion in June 2018, while customers’ deposit grew by 10percent to N2.269trillion from N2.062trillion in December 2017. The Bank ’s balance sheet remained strong with a 5.9percent growth in Total assets as the Bank closed the period ended June 2018 with Total Assets of N3.549trillion a n d Sha re h o l d e r s’ Fu n d s o f N497.1billion. Cost to Income Ratio (CIR) declined to N33.8percent from 34.3percent in the same period of 2017. In terms of Assets quality, non-performing loans (NPL) ratio improved to 5.8percent in June 2018 from 7.7percent in December 2017. Overall, Asset quality improved with Cost of Risk of 0.1percent and adequate coverage of 167.5percent for Lifetime Credit Impaired Loans –that is NPLs. Capital remains strong with CAR of 22.04percent in spite of the implementation of IFRS 9. On the backdrop of this result, Post- Tax Return on Equity (ROAE)

and Return on Assets (ROAA) closed at 34.1percent and 5.5percent respectively. GTBank continues to be best in class in terms of all financial ratios posted by Financial Institutions in the Industry as indicated by its Post-Tax Return on equity (ROE) of 34.1percent, Post-Tax Return on Assets (ROAA) of 5.5percent and PBT margin of 48.4percent. The bank will be closing the register of shareholders that qualify for the 30kobo interim dividend on August 22, while the interim dividend will be paid on August 30. GTBank has remained one of analysts top picks this year. The stock is on the equity watch list of Afrinvest research analysts for this month of August. Before the H1’18 scorecards were released, Cordros Capital in one of their weekly recommendations had a positive view of GTBank’s Q2 2018 performance. At N38.8 as at Tuesday August 14, 2018, the bank’s stock price is nearing its 52-week low of N36.55.

Some analysts are optimistic the stock will near its 52-week high of N57. GTBank Plc is listed on the Main Board of the Nigerian Bourse. Its market capitalisation is in excess of N1.141trillion and shares outstanding of 29,431,179,224 units. Kayode Tinuoye-led team of research analysts at Lagos-based United Capital Plc retained their HOLD rating for GTBank stock. According to the analysts, “Overall, the result was largely in line with our expectations. We maintain our view that weaker appetite for loan growth and a lower yield environment will keep full-year numbers modest. Yet, our outlook is positive for the Bank due to its superior cost and credit management structure. Also, the bank remains one of our top picks in the sector due to its robust profit profile, buttressed by a huge net margin of 42.2percent and Return On Average Equity (ROAE) of 34.1percent”. “The Bank declared an interim dividend of 30kobo/share. On the

strength of the results, we maintain our Target Price at N40.6/share, translating into 4.1percent upside potential compared to current market price. Thus, we maintain a HOLD rating on the shares”, said United Capital analysts. The analysts Hold rating is based on their valuation and subjective view (if any), that the total return upside on the stock’s current price is less than the cost of equity. Following the H1’18 scorecards of GTBank Plc, Olalekan Olabode’s team of analysts at Vetiva Capital Management Limited revised their Target Price (TP) for the stock to N51.58 (Previous: N50.88). “We have updated our model to reflect the earnings outperformance in H1’18. Notably, we cut our loan growth estimate for the year to a 5percent year-on-year (y/y) moderation (down 11percent yearto-date (YtD) from our previous 5percent growth forecast. Although we remain cautious of the risk environment in the second half of

the year and as the general elections approach, we cut our loan loss provision modestly to N7.9 billion (Previous: N10.3 billion) due to the contained H1’18 run rate. “Our FY’18 forecast translates to a cost of risk of 0.6percent for the period. With Operating Expense coming largely in line with our estimate, the expense line is little changed at N131 billion. Hence, we forecast a PAT of N190 billion for FY’18. We expect GUARANTY to post market leading RoAE and RoAA of 31.1percent and 5.4percent respectively for FY’18. The bank trades at a premium to industry peers with P/B and P/E ratios of 1.9 x and 6.7x versus Tier I average of 0.9x and 4.7x respectively. Overall, we revise our target price higher to N51.58 (Previous: N50.88) and maintain our BUY rating on the stock”, according to Vetiva research analysts. Their ‘Buy’ rating is given to the stocks because they consider it highly undervalued, but with strong fundamentals and expected potential return in excess of or equal to 15percent realisable between the current price and analysts’ target price. “In spite of declining yields and the challenges in the operating environment, we have delivered a decent half year result. The quality of this result is built on the strength of our businesses as well as the success of our digital-first customer-centric strategy in delivering financial services that are simpler, cheaper and more valuable to our customers’ everyday lives,” said the Managing Director/CEO of Guaranty Trust Bank Plc, Segun Agbaje. He further stated that “We will continue to focus on consolidating our leading position in all the economies in which we operate by staying committed to building a business that is both nimble and efficient whilst strengthening relationships with our customers and creating business platforms that provide them with additional benefits beyond banking.”

BUSINESS DAY

C002D5556

Thursday 16 August 2018

Investor

Helping you to build wealth & make wise decisions

United Capital investment views

Investor’s Square

Rising political risk spook investors …NSE-ASI down 2.9percent week-on-week

he Niger ian bourse extended the prior week’s bear ish momentum amid rising tensions in the political space. Thus, the Nigerian Stock Exchange (NSE) All Share Index (ASI) ended all of 5 trading days of the week to 10th of August 2018 in the red territory as investors turned a blind eye to modest numbers posted by the likes of GUARANTY and ZENITH. T h e N S E -A S I f e l l b y 2.9percent week-on-week (w/w) to 35,446.5 points while year-to-date (YtD) return sank to a 9-month low of -7.3percent. Investors lost N381.3billion as market capitalisation ended the week at N12.9trillion. Activity level weakened as average volume and value traded declined 33.5percent w/w and 59percent w/w to 185.1million units and N1.7billion respectively. Sectoral performances was overly bearish as all of the 5 sectors we track, declined w/w. The Oil & Gas (-5.4percent) and Industrial Goods (-4.4percent) Indexes suffered the most losses w/w, consequent on price declines in SEPL AT (-8.5percent), TOTAL (-5.1percent), Forte Oil (-1.5percent) and DANGCEM (-6.6percent), followed closely by the Financial Services (-2.9percent) - Insurance ( - 1 . 6 p e rc e nt ) a n d Ba n k (-1.3percent)- Index, owing to w/w losses recorded by LINKASSURE (-10percent), GUARANTY (-2.6percent) and ZENITH (-1percent). Similarly, sell-offs in DANGFLOUR (-8.9percent), FLOURMIL (-8.9percent) and DANGSUGAR (-3.1percent) dragged the Consumer Goods Index lower by a marginal 0.3percent w/w. Investors’ sentiment was underwhelming as market breadth closed the week at 0.4x (previously 0.7x); 15 stocks advanced while 42 declined w/w. This week, we expect the market to remain largely downbeat due to the absence of a bullish trigger. However, we note that the current depressed market provides long-term bargain hunting opportunities on fundamentally mispriced stocks. Money Market: CBN netrepays 74.9billion OMO bills on underwhelming auction demand Compared to the preceding week, there was a slight squeeze in system liquidity as rates averaged 8.3percent (previous week: 6.1percent) on the backdrop of Wholesale FX provisioning by banks. Elsewhere, the CBN allowed a net repayment of N74.9billion OMO bills - selling N377.1billion of OMO bills against N452billion maturities. Consequently, this trajectory supported liquidity rates at single-digit. The CBN set out to sell a total of N452.0bn at the OMO auction across two maturities, nonetheless, demand was underwhelming at 0.8x. The 91 & 203-day bills on offer were closed out at stop rates of 11.05percent and 12.15percent respectively.

Looking into the new week, a sizeable maturity to the tune of N473.4billion (NTB maturity- 33.4billion, OMO maturity – 440billion) is expected to hit the system and we do not expect any aggressiveness from the CBN in curbing any excesses, given that OMO rates have remained stable at 11.6percent since May-18. Consequently, rates are expected to hover close to prevailing levels - barring any other significant liquidity event. Yields: Political tensions rouse skittishness Defying expectations of further declines at the shortend of the Nigerian yield curve and ultimately at the longerend, the week to 10th August 2018 was a skittish week for the fixed income market. In the T-Bills market, the bearish theme was guided by institutional supply and sentiments around the OMO auction that took place on Thursday. Consequently, average T-bill yield inched higher by 39bps w/w to close the week at 12.5percent. (91-

domestic currency saw a 19bps appreciation in the Investors & Exporters FX window to finish at N362/$1. Looking ahead, the outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and forward market, as well as the better price discovery in the I & E FX window. Global stocks lower as trade tension worsens In the week that ended 3rd August 2018, geopolitical tensions between the U.S. and other countries set the tone for global equity markets, with trade relationship between US, China, Turkey and Russia further deteriorating during the week. Thus, major US equity benchmarks ended mixed to bearish for the week after a downturn Friday drained earlier gains. The S&P 500 Index declined 0.2percent w / w , h a l t i n g i t s re c e n t bullish streaks. Also, the DJIA Index trended southwards by 0.6percent w/w while the tech-laden NASDAQ Composite Index trended higher by 0.3percent w/w amid

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

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

day (up 30bps to 11.5percent), 182-day (up 56bps to 13percent) and the 364-day (up 32bps to 12.9percent). In the Bonds space, two main themes steered trading sentiments; first, political news dominated headlines, rousing offshore sell-off ahead of the forthcoming election. Second, there was a shift in the date for the scheduled August auction from August 22 to August 15, this further guided more sell-off as players anticipated renewed supply of bonds. As such, average bonds yield edged higher by 12bps to end at 14.1percent. This week, we should see some caution trading as players wait on the outcome of the bond auction. We would also likely see some local buy-side action given that yields are relatively attractive. Foreign Exchange: Movement across FX windows remain muted In the Foreign exchange market, the naira continued to experience stability as movements across FX windows remained soft. The parallel and interbank market saw mild depreciations by 14bps and 2bps to settle at N359/$1 and N306/$1 respectively. Elsewhere, the

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

declaration of intention by Tesla CEO to take the company private. In Europe, rising trade tensions weighed on the region’s equities as the major benchmark Indexes tracked closed the week in the red territory. Overall, Germany’s DAX (-1.5percent) and France’s CAC (-1.2percent) suffered the most losses w/w, followed by the Pan European STOXX (-0.8percent) while the UK’s FTSE mustered a marginal 0.1percent w/w gain. Emerging markets Indices were mixed last week. Russia’s RTSI (-7.7percent) dipped massively amid US sanctions. Also, Brazil’s IBOV (-6percent) ended the week bearish. However, China’s SCHOMP halted its recent bearish streaks, recording a 2percent w/w gain as the People’s Bank of China (PBoC) defended the yuan from further depreciation. Similarly, South Africa’s JALSH (+1percent) and India’s Sensex (+0.8percent) trended northwards w/w. This week, the Q2-18 U.S earnings season will continue to wind down with less than 3percent of companies in the S&P 500 expected to file their reports.

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

FMDQ OTC Market review: ` Fixed Income, Currency market OTC Min onthly turnover shows record dip July Vol. 4, No. 7; July 2018

…declines by N4.13trn IHEANYI NWACHUKWU Repurchase Agreements/Buy-‐Backs 18.65%

n the month ended July 31, 2018, the turnover in Fixed Income and Currency (FIC) market was N13.09trilion against N17.23trillion recorded in June. This value represents 23.99percent or N4.13trillion decline month-on-month (MoM) and 13.53percent or N1.56trillion increase year-onyear (YoY). MoM turnover largely declined across all segments of the FIC market, excluding the Repurchase Agreement/BuyBacks market which recorded a 5.22percent (N120bilion) MoM increase in July. The Treasury bills (T.bills) and Foreign Exchange (FX) segments remained the major drivers of turnover in the FIC market, jointly accounting for 74.26percent of total turnover in July, albeit a 5.09 percentage points (ppts) decline from their levels of contribution in June. Stanbic IBTC Bank Plc and Access Bank Plc maintained 1st and 2nd positions for the seventh consecutive month on the League Table, while United Bank for Africa Plc maintained the 3rd position for the sixth month running. The Dealing Member (Banks) [DMBs] occupying the 1st, 2nd and 3rd positions account for a cumulative 41 percent market share of the overall trades executed (buy and sell sides) in the markets. Providus Bank Plc, SunTrust Bank Nigeria Limited and Nova Merchant Bank Limited occupied 24th, 25th and 26th places respectively, at the bottom of the League Table for value traded for the overall OTC market. Access Bank Plc, United Bank for Africa Plc and Stanbic IBTC Bank Plc topped the League Table in the Intermember trading category for the overall OTC market. Leaders in the Deposit Money Banks (DMB) versus Client trading category were Stanbic IBTC Bank Plc, Access Bank Plc and Standard Chartered Bank Nigeria Limited, while leaders in the DMB versus Central Bank of Nigeria (CBN) trading category were Stanbic IBTC Bank Plc, Zenith Bank Plc and Citibank Nigeria Limited. FX Market Total FX market turnover in July was $12.61billion, a 36.31percent ($7.19billion)

Other Bonds 0.03% FGN Bonds 6.83%

OTC Turnover Unsecured Placements/Takings 0.23% Foreign Exchange 34.06%

T.bills 40.20%

decline from the turnover JUL 25, 2018) with a total open recorded in June ($19.80billion). contract size of $405.66mm, Turnover at the Investors & matured and was settled on Exporters (I&E) FX Window FMDQ, whilst a new 12-month in July was $3.39billion, open contract (NGUS JUL 24, representing a 13.74percent 2019) for $1.00bn at $/N363.58 ($0.54billion) MoM decline was introduced by the CBN to from the value recorded in June replace the matured contracts. In July, the USD/NGN rate in ($3.93billion). Despite the MoM decline the parallel market appreciated in turnover at the I&E FX by $/N2 to close the month at Window, its contribution to total $/N360.00 (from $/N362.00 FX market turnover increased as at June 29, 2018), while the from 19.85percent in June to Naira depreciated at the I&E FX 26.88percent in July, bringing Window, losing $/N1.08 to close the total year-to-date (YTD) the month at $/N362.40 (from turnover at the I&E FX Window $/N361.22 as at June 29, 2018), resulting in the closing USD/ to $33.67billion. Analysis of FX turnover by NGN rate at the parallel market trade type showed a similar being N2.40 lower than the USD/ MoM trend to the total FX Market NGN rate at the I&E FX Window turnover in July, with Member- for the first time in 2018. Similarly, the CBN Official CBN trades recording the highest MoM percentage decline of Spot rate also depreciated in 38.11percent ($2.14billion), while July, losing $/N0.15 to close at Member-Clients trades recorded $/N305.90 (from $/N305.75 as the highest MoM decline in value at June 29, 2018. Stanbic IBTC of $4.06billion from $11.21billion Bank PLC, United Bank for Africa in June to $7.16billion in July. PLC and Standard Chartered Analysis of contribution to Bank Nigeria Limited, have a total FX turnover by trade type combined Spot FX market share indicated Member-Client and representing circa 67percent of the overall value of Spot FX trades Member-CBN trades remained 1st Stanbic IBTC Binank LC executed thePmarket. the major drivers of turnover. nd DMB verus However, the contribution 2 United Bank for Africa Client PLC trades o fFX Me m b e r- C B N t ra d e s comprised the bulk of this market share,Caccounting 56% of declined marginally by 0.76pptsStandard hartered Bfor ank circa Nigeria to 27.52percent, while the the trades executed. Stanbic IBTC rd 3 Ltd. Bank Plc, Standard Chartered contribution of Inter-Member and Member-Client tradesstto total Bank Nigeria Ltd. and Access 1 Stanbic ank PinLC at 1st, 2nd and BankIBTC Plc Bcame FX turnover increased marginally 3rd positions respectively in the by 0.73percentage points (ppts)Standard Chartered Bank Nigeria and to 15.78percent and FX Swaps market; while in the FX FX 0.16ppts Derivatives 56.78percent respectively. 2ndIn lineLtd. Forwards market, Stanbic IBTC with the MoM trend in rdthe FX Bank Plc, Access Bank Plc and 3 typeUnited Bank fChartered or Africa PBank LC Nigeria Standard market, analysis by product st Spot Limited ranked 1st, 2nd and 3rd showed that turnover in1FX Access Bank PLC and Derivatives declined MoM positions respectively. In the OTCIBTC FX Futures market, Citibank byT.bills 35.01percent ($4.25billion) 2nd Stanbic Bank PLC and 41.85percent ($2.78bn) Nigeria Limited., Standard Chartered Nigeria respectively. 3rd United Bank for Bank Africa PLC Limited and Access Bank Plc ranked 1st, In July, the 25th Naira-settled st Stanbic BTC 3rd Bank PLC 2ndIand respectively. OTC FX Futures contract1 (NGUS

Product

Bonds

Position Dealing Member (Banks)

2nd 3rd 1st

Access Bank PLC Coronation Merchant Bank Ltd. Access Bank PLC

OTC M Turn 978 all s ! The driv in Ju in Ju Stan seve mai [DM sha Pro occu valu Acc Lea Lea Ban Cen Ban FX Ma Tota turn Win valu Win to 2 Ana Mar Perc high (see Ana and con the incr In li turn ($2. JUL on F 4.D $ 0 ! ! the "

Thursday 16 August 2018

C002D5556

BUSINESS DAY

Investor

Helping you to build wealth & make wise decisions

UPDC REIT: Vacant ‘VMP 1’ asset puts pressure on returns to unit holders

…investment in Pearl Hostel 1 to reduce current allocation in liquid assets IHEANYI NWACHUKWU

PD C Real Estate Investment Trust ( R E I T ) f i na n c ia l statements for year ended December 31, 2017 shows income from investment property at N1.124billion, slightly higher than N1.104billion in the corresponding financial year of 2016. Net income was higher at N2.637billion against N1.844billion in 2016. Profit after tax (PAT) increased to N2.208billion higher than N1.512billion in 2016. Earnings per unit - basic and diluted stood higher at 83kobo against 57kobo in 2016. The UPDC Real Estate Investment Trust the “Trust”, established in June 6 2013, is a close-ended Real Estate Investment Trust which is listed on the Nigerian Stock Exchange (NSE). The units of the Trust can be bought and sold through a licensed stockbroker on the floor of the exchange. The primary objective of the Trust is to enable investors earn stable income while preserving capital over the long term. This is achieved by ensuring stable cash distributions from investments in a diversified portfolio of income–producing real estate property and to improve and maximize unit value through the ongoing management of

the Trust’s assets, acquisitions and development of additional income-producing real estate property. In the financial year ended December 31, 2017, the Trust was affected negatively by challenging macroeconomic environment. The principal activity of the UPDC Real Estate Investment Trust (the Trust) is to pool investment in a diversified portfolio of income-generating real estate in Nigeria with high growth potential in accordance with the Trustee Investments Act, the Investments and Securities Act (2007), the Securities and Exchange Commission’s

Rules and Regulations and the Trust Deed (the Applicable Regulations). Its asset, Abebe Court Ikoyi, Lagos, a residential property generated yield of 5.49percent, according to the result sent to investors at the Nigerian Stock Exchange (NSE). The residential property with 7.6percent vacancy rate is a mix of corporate (84percent) and individual (16percent) clients. The performance of the Trust was affected negatively by the challenging macroeconomic environment as Victoria Mall Plaza Phase 1 (VMP 1), is currently vacant and not generating income. The

residential property, Victoria Mall Plaza Phase 1 (VMP1) located in Victoria Island, Lagos is 100percent vacant. In addition to this negative, the REIT projections during the initial public offer (IPO) of the Trust had assumed that the properties purchased by the Trust between 2014 and 2015 would be sold in 2017, and would generate some income. The expected income on the assumed sale will not come in as the Trust was unable to acquire additional properties between 2014 and 2015, partly due to the macroeconomic environment and also because the fund manager could not

identify qualifying assets which meets the Trust’s benchmark returns. Meanwhile, its Victoria Mall Plaza Phase 2 (VMP2) in Victoria Island, Lagos which is a commercial property yielded 6.59 percent return. It is occupied by major international auditing/ consulting firm and has zero (0) vacancy rate annually. Further check on the Real Estates assets held shows its UAC Office Block located on CBD, Abuja yielded 6.55percent return. It is a commercial property with various corporate clients including four (4) banks. The property’s length of tenancy shows: 30 percent annual; 50percent biennially; 20percent between 3 and 5 years. Its vacancy rate is 6.1percent. Another of its real estate asset located at 1-2 Factory Road Aba, Aba has zero percent vacancy rate. The commercial property yielded returns of 7.72percent. It is occupied by various corporate clients including a leading logistics company. Their length of tenancy shows: 67percent annual; 33percent between 2 and 3 years. The Trust traded a total of 1.32 million units in 2017 and closed at a price of N10 on December 31, 2017. The earnings yield on investment in the Trust as at December 31, 2017 was 8.10percent. Its asset allocation shows Real Estate Assets (79.14percent); Real Estate Related Assets

(5.55percent); and Liquid Assets (15.28percent). Although the allocation to Real Estate asset class exceeds the target minimum of 75percent, the allocation to liquid asset exceeded the maximum investment of 10percent. The asset managers linked this to the inability to find qualifying real estate or real estate related assets that met Trust’s requirements. “In the course of the year, we had identified a couple of real estate assets, but they were either overpriced or did not meet the investment criteria of the Trust, hence we could not conclude on the acquisition. However, one of the real estate assets identified, an Hostel, meets the investment criteria of the Trust. In this regard, the investment committee approved that the Trust invest in Pearl Hostel 1 at the Pan Atlantic University. “Further to the investment committee’s approval, we have commenced the required due diligence and forwarded our final offer letter in respect of Pearl Hostel 1. The proposed investment in Pearl Hostel 1 will reduce the current allocation in liquid assets to 13.5percent. In order to ensure that the target asset allocation is achieved, we will continue to seek additional investments in real estate or real estate related assets, in the next financial year,” the asset managers noted.

Seplat: Increasing footprint in domestic gas market holds value for shareholders IHEANYI NWACHUKWU

eplat Petroleum Development Company Plc recently signed shareholder agreement and share subscription agreement with the Nigerian Gas Processing and Transportation Company (NGPTC), a wholly owned subsidiary of Nigerian National Petroleum Corporation (NNPC). The successful signing of the agreement this week s h o w s t h e c o m p a n y ’s commitment to increase its foot print in the domestic gas market. They signed five agreements to expedite the development of a project aimed at delivering about 3.4billion standard cubic feet of gas per day by 2020. Seplat is leading Nigerian indigenous Oil and Gas Company listed on both the Nigeria Stock Exchange (NSE) and London Stock

E xchang e (L SE). Stock buyers are increasingly showing interest in the shares of Seplat hoping for higher returns from it’s the company’s investments in the wake of increased oil price. The stock price closed at N650 as at Tuesday August

14, 2018; nearing its 52-week low of N625 against 52-week high of N769. NGPTC will subscribe for 50 percent of the shares in ANOH Gas Processing Company Limited (AGPC), a company that was incorporated in 2017, for the

purpose of processing future wet gas production from the upstream unitised gas fields at OML 53 & OML 21, which is operated by Shell. ANOH is one of the largest Greenfield gas and condensate developments in Nigeria which will supply

critical and much needed gas volumes to be internally consumed in the country into a growing domestic market. The agreements are an important precursor to the Final Investment Decision (FID) for the ANOH project which is expected in the fourth-quarter (Q4) of 2018. Austin Avuru, Seplat’s Chief Executive Officer said, “We are delighted to have entered into an Incorporated Joint Venture with our government partner NGPTC. The execution of the agreements today is an important step as we head towards taking FID on the ANOH project later this year.” The signed Shareholder Agreement will govern S e p l a t ’s a n d N G P T C ’s respective interests in the AGPC incorporated joint venture. Other commercial agreements with NNPC and the Nigerian Gas Marketing

Company (NGMC) were also executed during the signing ceremony held at NNPC headquarters in Abuja on Monday. The unaudited half year (H1) financial results for Seplat Petroleum Development Company Plc for the period ended June 30, 2018 as released by The Nigerian Stock Exchange shows the company grew revenue by 160 percent to N104.794billion, from N40.317billion in the corresponding H1 period of 2017. Gross Profit increased by 225percent to N53.307billion from N16.403billion. Profit B e f o re Ta x at i o n ( P BT ) increase by 559pecent in H1’18 to N37.093billion f r o m L o s s B e f o r e Ta x (LBT) of N8.090billion in H1’17. Profit for the period increased by 276percent to N14.844billion, from N8.432billion Loss After Tax in H1’17.

BUSINESS DAY

Luxury

Malls

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C002D5556

Thursday 16 August 2018

Spending Trends

FG’s LPG policy reduces kerosene importation, consumption by 19% BUNMI BAILEY

he Federal Government’s drive to e n c ou rag e the consumption of Liquefied petroleum gas (LPG) popularly known as cooking gas may be the reason for the decline of household kerosene imports and consumption. According to the National Bureau of Statistics (NBS), Kerosene importation reduced by 19 percent to 110.7 million litres in the first half of 2018 from 136.7 million litres in the same period of 2017. “Government is pushing its gas agenda very far. They are using new projects like the 614km AjaokutaKaduna-Kano Gas Pipeline Project to open up or extend the pipelines so that more people will have access to gas and there is also a lot of investments in the gas industry so that people can use it to carry out their projects,” Ayodele Oni an energy partner at Bloomfield Law Practice said. “Kerosene is one of the

by products of gas and also expensive. We have a lot of gas in abundance which is cheaper for us to use. So why are you looking for a more expensive alternative source. Gas is cheaper in the long run, more environmental friendly and more competitive for the economy,” Oni explained The present administration has been systematically reducing the importation of House Hold Kerosene in a bid to increase domestic consumption of LPG by various homes across the country. Vice-President, Yemi Osinbajo recently stated in 2016, that Nigeria spent $1billion as subsidy on kerosene in 2015 and stressed that this was because of the massive dependence on kerosene and firewood by millions of households in the country. “The government had decided to unlock the domestic LPG value chain as this was one policy that the current administration was passionate about since Nigeria had one of the largest gas reserves in the world,” Osinbajo said at a Domestic

Liquefied Petroleum Gas Stakeholders’ Forum in Abuja. The dependence and importation may further decline as the oil and gas industry is creating an enabling environment that would enable investors to contribute their quota towards making Nigeria’s

abundant natural gas resources serve as launching pad for the nation’s industrialization take off. “It is imperative for Nigeria to market its enormous gas resources at the global level because we have to get our industries to work. Without power, we cannot have industrialization in our

country. We are therefore committed to making the best use of what we have in terms of gas potentials and ensure that gas, indeed, drives the power sector,” Folashade Yemi-Esan, the permanent secretary, Ministry of Petroleum Resources said at the Nigerian Pavilion on the sidelines of the ongoing

27th World Gas Conference (WGC) which took place in Washington DC, US in June 2018. The reduction in kerosene importation may have also have negative impact on the its prices as local consumers are complaining about the high prices. Johnson Chukwu, CEO, Cowry Asset Management Limited said, “Government is doing a lot to encourage the usage of gas as domestic fuel instead of kerosene and this has slowed down its importation which has made the price to be quite expensive, making it compelling for people to see gas as an alternative source of cooking fuel,” Also earlier in August 2018 , the federal government had agreed to the removal of Value Added Tax (VAT) locally produced LPG from the Nigeria Liquefied Natural Gas company (NLNG). This action will make reduce the cost of locally produced LPG, making it more competitive against imported ones and also encourage investors to go into the manufacture of LPG.

Sealing the deal in Asia, Australia India’s antitrust regulator has cleared Walmart’s USD 16 billion acquisition of online marketplace Flipkart. The Bentonville-based retailer has also, along with JD.com, backed Chinese online grocery and delivery firm DadaJD Daojia to the tune of USD 500 million in its latest round of fundraising. Ikea in India The Swedish furniture giant plans to keep prices low as it opens its first store in Asia’s thirdlargest economy, raising the proportion of locally sourced materials to overcome import duties. Ikea is targeting middle and low income consumers in India, where the average

annual per capita income is below USD 2,000. Software staff Alibaba has introduced a series of diners – with robot waiters. The restaurants are attached to its new chain of Hema semi-automated supermarkets. Rival JD.com is following suit, with plans to open 1,000 restaurants featuring food prepared and served by robots by 2020. Digital push in EuropeBritish multinational retailer Marks & Spencer is joining forces with True, a retail and consumer investment firm, to access innovations and technology from start-ups that it can implement into its business operations. The move is part of M&S’s plan

to become a “digital-first retailer” and to bolster its IT capacities. Within expectations Ahold Delhaize, the DutchBelgian operator of grocery chains in the United States and Europe, reported secondquarter sales of EUR 15.5 billion, down from EUR 16.1 billion in the same period a year earlier, while net profit rose to EUR 410 million from 355 million. Shaky outlooks Berlinbased online fashion retailer Zalando has reduced its fullyear forecast after secondquarter figures fell short of analysts’ expectations. Meanwhile, around 400 jobs are in jeopardy at Danish jewellery chain Pandora following a profit warning after sales dropped in Q2. Extended offers in US Department store operator Sears is adding an array of brands, including Hoover and Dockers, to its online marketplace. Targeting working women, supermarket chain Meijer has introduced its own-brand apparel line, Ophelia Roe, featuring polished fabrics and “trend-forward” details, patterns and cuts Against all odds Etsy has increased its revenue guidance for the year. The online

crafts marketplace has beaten expectations and recorded a 30% sales jump in the second quarter. Also topping the estimates with its Q2 net income was burger chain Wendy’s thanks to the popularity of its value-menu offerings. Delivery trials Kroger is set to compete in the race with online grocery sellers. The supermarket chain is experimenting with a variety of technologies. Its next big push will be giant warehouses staffed with fast robots to pack orders straight for delivery to shoppers. Comeback for toys The US toy industry grew its dollar sales by 7% to USD 7.9 billion in the first half of 2018, a period that saw the liquidation of Toys ‘R’ Us. Retailers have announced that they will be dedicating more space to and increasing their stock of toys this holiday season. Tackling competitors in Asia, Middle East Alibaba plans to merge its food delivery units and raise funds for the combined business, intensifying a battle for dominance of China’s booming on-demand services market. Meanwhile, search engine Baidu is getting ready to beat Google amid rumours that the US tech giant is planning to re-enter China.

Global Retail Update

ocation, it’s the key in the retail world, with pet retailer Petco preparing to enter the Canadian market, Ikea opening its first store in India, and Russian supermarket Lenta adding two new stores in Siberia. Thinking more globe than global, two major UK grocers are making new moves to save the planet. Struggling department store operators such as Britain’s Marks and Spencer and US icon Sears are investing in new ways to combine their physical and digital businesses. Meanwhile, traditional grocers in Germany and Switzerland, as well as a Chinese bookstore, have revealed some stunning store concepts. Below are the updates Click and collect in US, Canada Amazon is to begin rolling out a grocery pick-up service at Whole Foods locations across the US. The offering, which is only available to Prime members, will see dedicated parking lots set aside at stores for customers using the service. Coming to Canada Pet specialty retailer Petco has partnered with Canadian Tire to bring its products to the Great White North. Japanese fast fashion retailer Uniqlo has

had a Canadian launch of its own with its release of mobile shopping in the country,with customers able to have clothes delivered anywhere Canadawide. Green grocers Europe Tesco has begun offering water in aluminium cans, the first of the UK’s Big 4 supermarkets to do so. Meanwhile, rival Morrisons has announced that it will begin removing plastic wrapping from its cucumbers, a move the grocer said will prevent 16 million plastic sleeves from being used every year. Digital directions London-based company Flux is partnering with Itsu to power paperless receipts at all of the Asian-inspired fast food chain’s UK stores. Marks & Spencer is allowing online returns at 280 of its Simply Food stores. Previously, shoppers could only return online orders at larger format Marks & Spencer stores. Supermarkets in Siberia Russian supermarket chain Lenta is to open two new stores in the Siberian cities of Kemerovo and Novokuznetsk, bringing the grocer’s total number of store launches to 20 this year. The new locations will see the retailer’s total number of supermarkets across Russia rise to 115.

Thursday 16 August 2018

C002D5556

BUSINESS DAY

Retail inflation eases to 9-month low in July on cheaper food items

Criticism prompts India to review its e-commerce policy draft

etail inflation fell to 9-month low of 4.17 per cent in July on declining vegetable prices which may prompt the Reserve Bank to pause interest rate hike in its next monetary policy review. In the last two reviews RBI has raised the key repo rate by 0.25 per cent each on inflationary concerns. The next bi-monthly policy is to be unveiled on October 5. Based on the Consumer Price Index (CPI), retail inflation for June has also been revised downwards to 4.92 per cent from the earlier estimate of 5 per cent, as per the Central Statistics Office (CSO) data released today. The previous low was in October 2017 at 3.58 per cent. As for year-on-year comparison, retail inflation had increased by 2.36 per cent in July last year.

The CSO data revealed that inflation in vegetables declined by (-) 2.19 per cent last month, compared to 7.8 per cent in June. The rate of price rise in fruits slowed down 6.98 per cent, as against over 10 per cent in the previous month. However, inflation in the ‘fuel and light’ segment based on the changes in the CPI increased to 7.96 per cent from 7.14 in the previous month. Economic Affairs Secretary S C Garg said that all macroeconomic parameters are performing well. “Today CPI inflation data got released. Inflation is down to 4.17%, very close to target of 4%. It is down from 5% in June. Food inflation is only 1.37%,” he said in a tweet. India Ratings and Research’s (Ind-Ra) Chief Economist and Senior Director

(Public Finance) Devendra Pant said: “This is nine month lowest retail inflation... Sharp decline in retail inflation to 4.17 per cent, closer to RBI’s 4 per cent inflation target will give lot of comfort to monetary authorities and we expect RBI to stay in pause mode in rest of FY19.” Milk and its products, meat and fish showed inflation easing during the month. However for eggs, cereals and products as also oil and fats the rate of price rise was higher than in June. If the recent depreciation of the Indian rupee sustains, it may modestly feed into the CPI inflation over the near term, said Aditi Nayar, Principal Economist, ICRA. “Crude oil prices continue to display a volatile trend, driven by geopolitical risks and concerns regarding supply as well as demand in various parts of the world. The CPI inflation in Q2 FY2019 looks set to lag the MPC’s estimate of 4.6 per cent, reducing the likelihood of a rate hike in the October 2018 policy review,” she added.The prices for the data are collected from selected towns by the Field Operations Division of NSSO and from selected villages by the Department of Posts. Price data are received through web portals, maintained by the National Informatics Centre. Culled from Business standard

ndia is reworking prop o s e d e - c o m m e rc e rules after a draft, which had signaled a shift toward boosting domestic startups, sparked criticism, according to people familiar with the matter, who asked not to be identified as the discussions are private. Commerce Minister Suresh Prabhu tweeted Aug. 11 that his ministry had received a “few concerns,” and will reach out to stakeholders to address them. The initial document received pushback, including a proposal on foreign investment in some areas and one requiring Indian consumer data to be held locally, one of the people familiar said. The discussions may lead to an overhaul and a fresh draft will be posted in a few weeks on the ministry’s website, the person said. The 19-page draft, a copy of which has been seen by Bloomberg, underscored India’s intent to examine every aspect of e-commerce regulation from data localization to antitrust rules. The changes would tighten restrictions on global giants like Amazon.com Inc. and Google and may bolster local startups such as digital payments provider Paytm. The nation’s interest in stricter norms for an Internet market that’s been largely open for decades reflects the pitched battles being fought in segments like online retail, cloud services and digital payments.

Broadly the draft had signaled “some kind of protectionist thinking,” said Nandan Nilekani, chairman of Asia’s second-largest technology services outsourcer, Infosys Ltd. “It may stem from a feeling that Indian startups should be given a boost, something on the lines of the China model.” Unlike its neighbor, India has allowed Silicon Valley giants like Facebook and Google to dominate entire segments including search, social and messaging. The draft called for creating a “fair environment for domestic digital firms to find their rightful place,” and “leveling the playing field for foreign players and domestic startups.” It proposed a single legislation to encompass all aspects of e-commerce and a single regulator to govern the industry. It also outlined measures that would make local data storage mandatory, curb discounting in online retail and allow founders to keep control of their startups

even with a minority stake. Continuing the theme of boosting domestic players, it proposed allowing foreign investments up to 49 percent in companies that use the inventory model to sell locally-produced goods on online platforms. Untapped Opportunity Over half a billion Indians will come online in the a next wave of internet users and shoppers, said a new report released jointly by Bain & Co, Google and Omidyar Network this month. Data consumption on the mobile is already at par with developed markets at 8 GB per month per user. Yet, only over a third of India’s current 390 million users transact online, the report said, suggesting a massive untapped opportunity. The draft had suggested strengthening regulatory vigilance for payments systems, a move that would bring more stringent oversight for the likes of Google’s Tez and WhatsApp’s pilot payments service.

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com

Job applicant needs help to fund Son’s surgery Name:- Chinonso Onwumere State of Origin:- Imo Age: 29 years Occupation:- Job Applicant. I concluded my National Youth Service Corps in December, 2017. My husband was in the transportation business, but after his truck packed up last year, he became a Real Estate Agent. I planned starting a petty trading business with the money I saved during my NYSC until I get a job, but my son’s illness gulped it all. Nature of your son’s ill-

ness: It all started last year with convulsion and he was treated, but after some months he fell sick. The sickness became frequent. We took him to the hospital when we had money, and the times we didn’t, we opted for Chemist shops. We kept treating him until he had another convulsion that led to his present condition. We had to rush him down to Federal Medical Centre (FMC), Owerri where MRI of the brain was conducted. We were told my son has a mass in his brain and needs urgent Neurosurgery. But due to financial constraint, the

surgery wasn’t done. We frequented Chemists, Private hospitals, FMC Ow-

erri and churches seeking for assistance but my son’s condition was not getting

any better. We rallied round and was able to raise some money for his surgery which

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

was done at University of Nigeria Teaching Hospital, Enugu. After the first surgery, my son underwent a second surgery and a third surgery is to be conducted tomorrow (Monday), but we are yet to raise the N1.5million for the surgery. Challenge: We have exhausted all our options. Our friends and family members have assisted us in many ways, but we are yet to raise a third of the amount required for my son’s surgery. All the money we received including my husband’s income goes for this cause and we are yet to raise it all. I appeal to everyone to help me in any way they can so my son can live.

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24 BUSINESS DAY

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Bank IT Security

Thursday 16 August 2018

What’s behind Jack Ma’s $10m gift for African tech startups? FRANK ELEANYA

ast week Wednesd a y , Ja c k Ma , founder of Alibaba was in South Africa - the first time in the Southern African region - to launch the $10 million Netprenuer Prize targeted at innovative entrepreneurs and startups in Africa. The prize will go as grants from the time of its inception to the year 2030. This visit is not the first time the serial entrepreneur is coming to Africa. His first was in 2017 when he visited both Rwanda and Kenya for the launch of the African Young Entrepreneurs Fund. Jack Ma joins the league of big tech executives and leaders that have visited the continent in recent times to see first-hand the much touted entrepreneurial spirit of young Africans and the growing tech industry on the continent. The league include Facebook founder, Mark Zuckerberg, Google CEO, Sundar Pichai, France President, Macron to mention a few. The continent’s population which is continuously on the

rise and mostly young is an opportunities for most foreign investors. There is also the widespread underdevelopment that characterise many economies in Africa. “The day I started Alibaba I told my team, “If not now when? If not me, who? Let’s come to Africa and do something.” Jack Ma told the audience in South Africa about the desire to invest in African startups. “This continent is full of entrepreneurial young

people. The entrepreneurs in Africa are first-class. They have the passion, dreams and opportunities.” At a session he headlined, ‘Netpreneurs: The Rise of Africa’s Digital Lions’, Jack Ma explained that the Netpreneur Prize is open to small businesses in Africa which will vie for $1 million in prize money every year for the next ten years, starting in 2019. The Jack Ma Foundation will host an

Quizac’s AI platform nears completion for public downloads CALEB OJEWALE

n February, an Artificial Intelligence platform that was to make learning easy through a mobile App was featured on TechTalk, and even though it missed the April launch date, TeckTalk has been able to test the App this week. The App, called Quizac is not yet available on Play Store for public download, but according to projections by its developers, this should happen in a matter of weeks. Quizac may have taken longer than schedule, but some of the features currently provided in it, show it could be promising for learning. Tade Samson, founder, The Quizac game, explained that the team had to take time to perfect the App in order for it to truly deliver on the objective of helping students to learn. “Quizac was meant to help students remember more by reading less. We

achieve this by modeling decades of proving scientific concept called spacedrepetition into quizac,” said Samson, explaining that “the success of Quizac fully depends on the precision of our learning model.” Samson had explained previously that, “Quizac is an Artificial Intelligence powered learning improve-

ment, multiplayer quiz app for students and knowledge lovers. We recognized the need to make common knowledge available to students in a more interactive and engaging way and also provide common facts which are unknown to individuals. “Quizac leverages on spaced repetition to ensure higher knowledge retention and better academic performance. Quizac is like the News app but, for knowledge.” The App works on the principle of spaced repetition, defined as a learning technique that incorporates increasing intervals of time between subsequent reviews of previously learned material, in order to exploit the psychological spacing effect. Alternative names include spaced rehearsal, expanding rehearsal, graduated intervals, repetition spacing, repetition scheduling, spaced retrieval and expanded retrieval.

annual competition, with all 10 finalists receiving grant funding and access to the Netpreneur community of African business leaders for mentorship and other resources. A $1 million grant will go a long way to revive most startups, however, the biggest winner of the prize could be Jack Ma and his business empire. Jack Ma – a former teacher – cofounded and chairs

Alibaba Group, one of the world’s largest e-commerce businesses. Although Alibaba is most popular for strides in the global e-commerce market, but it is fintech that could offer Jack Ma the best opening in Africa. And Jack Ma has the right product in AliPay, a third party mobile and online payment platform. Currently, it has over 800 million active users and most recently is looking to expand into other emerging markets. The entire tech space in Africa has attracted significant investments, no doubt; but investments in Fintech sit on top of the pack. The space has not only attracted investment in terms of funding, product launches from foreign brands have also gained traction. Just recently, Transsion, the owners of mobile phone brands like Tecno, Infinix and iTel, revealed it will be launching its fintech product called PalmPay. Opera has also launched its fintech product – Opay - this year. Nigerian banks are beginning to leverage WhatsApp’s payment feature to provide most convenient payment

service to their customers. Google is expected to also launch a fintech service anytime soon. It is believed that part of the long term objective for the launch of Google free WiFi is to enable the rollout of its fintech service. Why would Jack Ma bait on a space that is already looking saturated? In view of millions of Africans that currently unbanked, the fintech is far from saturated. But more important is the fact that ecommerce appears to have hit a road block in countries like Nigeria. Players in the space have seen their market share considerably reduced by platforms such as Instagram, Facebook and WhatsApp. Most merchants now prefer to sell their products directly using these social media platforms. Jack Ma can also make a play for social marketing with WeChat which is widely seen as the WhatsApp of China with more than 800 million users. However, you look at it, Jack Ma’s $10 million prize will in no small way help rejig the fortunes of many startups in Africa, but it is not free.

HMD expands product offerings with new Nokia devices

MD Global, the c o mp a ny c u rrently making Nokia phones has announced that Nokia 5.1 and Nokia 2.1 phones will be available in Nigeria from 20th August, as the company continues to rapidly renew its portfolio of Nokia Android smartphones. Shipped with Android One and Android Go, the devices according to HMD, will offer access to the latest Google services, such as the Google Assistant, and continue to deliver a pure, secure and upto-date Android experience. Joseph Umunakwe, general manager, HMD Global West, East and Central Africa said: “We are encouraged by the response that we are getting to our products. Our consumers tell us they love their Nokia smartphones on Android. It is our constant endeavour to enhance the experience to better suit the everyday needs of our fans. Every single detail on a Nokia smartphone has been designed with consumers in mind, which is why we are delighted to introduce these

refined smartphones that deliver a dramatic step up on performance, continue to drive the most premium design elements to price points accessible to everyone and deliver the class-leading quality that you expect from us.” “With this range, we deliver larger screens, enhanced performance across our range with processor upgrades offering up to 50 percent higher performance while maintaining the perfect balance with power consumption and stunning designs – all in a segment where consumers often need to compromise. With our renewed portfolio, you can now enjoy a premium smartphone experience without paying a premium on the price. Each phone radiates effortless style with meticulous attention to detail and no matter your budget, you will be able to find a Nokia smartphone that is right for you,” Umunakwe added. Continuing with the classic design of the previous generation, HMD says the new Nokia 5.1 is understated, compact and effortlessly

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

stylish. It gets its structural integrity from a single block of 6000 series aluminium, refined through a rigorous 33 stage process of machining, anodising and polishing to give an exquisite satin finish and feel in the hand. The new Nokia 5.1 packs a 0.3inch bigger display in a 2mm narrower body and precise attention to the finest details like harmonising the rounded edges on the screen bezel with the corners of the phone to offer a compact, pocketable experience. Nokia 5.1 comes with a higher resolution 5.5inch Full HD+ display in 18:9 aspect ratio, making it more pleasurable for browsing the web, watching favourite shows, sharing funny memes or gaming. Serving long-lasting entertainment needs for consumers who are always on the go, Nokia 2.1 comes with a 2-day battery life, a large 5.5-inch HD screen and dual frontfacing stereo speakers. The Nokia 2.1’s huge 4,000mAh battery now charges even faster so users can get back up and running even more quickly than before.

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INSIDE Should ad valorem stamp duties apply to loan agreements?

Institutional investors, govt, need to have more confidence in indeginous lawyers - Yimika Adesola In this edition, Yimika Adesola, the young, vibrant Founder of LEGALLY ENGAGED (LE) - a careers resource center for law students, law graduates and young lawyers speaks to BusinessDay Law Editor, THEODORA KIO-LAWSON about her passion for equipping law students and young entrants into the profession with insight into the practice of law in Nigeria and other ancillary issues. She talks about leaving a comfortable job at one of Nigeria’s foremost law firms, setting up her new company, the knowledge gap in the legal industry; lack of confidence in indigenous lawyers; providing law graduates and young lawyers with the information required to make better decisions in the profession, as well as LE’s mentoring schemes. EXCERPTS…

30 DETAIL to Moderate the Power Session at Spotlight Nigeria Forum

31 Bar Council of England & Wales collaborates with NBA to train Niger Delta lawyers on environmental law and ADR

32 Employment law & Industrial Relations committee set to hold annual seminar

ell us about your journey into corporate commercial law and your experience. I knew relatively early that I wanted to be a corporate/ commercial lawyer. So, I studied Law at the undergraduate and postgraduate level and began my career at a Tier 1 commercial law firm in Nigeria. I also had stints at a few global corporate law firms in London, and these experiences largely informed my view of what a country’s legal profession can and should function like. You recently started the outfit, LEGALLY ENGAGED. Tell us about it. How it all started and what the experience has been with human resource and capacity building in the legal profession. Legally Engaged is a career centre that focuses primarily on law students and young lawyers. Legally Engaged has three divisions – an online editorial, a training academy and a placement centre. Through the online editorial on our website, we provide previously unavailable insight into the practice of law in Nigeria and ancillary issues. Our training academy seeks to improve both the technical knowledge and the soft skills of students and graduates by offering courses in areas that are neglected by legal education in Nigeria. Our placement centre works with employers of legal professionals to place lawyers and law graduates into jobs across the country. The idea came to me while I was studying for the Bar examinations at the Nigerian Law School. I wanted information on the types

Yimika Adesola

of law firms that existed in Nigeria, their practice areas, their hiring policies, how I could approach them, etc., but couldn’t find any reliable source with that information. So essentially, I identified an information gap within the profession and decided to fill it with Legally Engaged. What started as a blog to fill an information gap has now evolved, and is still evolving, into an organization that caters to the knowledge and recruitment needs of the legal profession in Nigeria. The experience so far has been stimulating. Like everything else, it has had its highs and its lows, but altogether I am extremely pleased that I decided to follow this path. The reception has, for the most part, been great and we have received acclaim and support from many quarters.

Do you think the growth and success of the industry is hinged on its ability to close whatever knowledge gaps (if any) exist at moment? Certainly. I think that there are huge knowledge gaps in the legal industry in Nigeria and I believe closing these gaps will bring us much closer to seeing significant advancement in the industry. I always draw parallels between Nigerian lawyers and lawyers in more developed countries. Besides the fact that systems run smoother abroad, one finds that foreign lawyers themselves seem to be more capable and able to take on greater responsibility than their Nigerian counterparts. Large institutional investors, governments and other clients are still not able to trust Nigerian lawyers to solely handle some of

the large-scale transactions that take place in our economy; they would almost always engage a foreign law firm on the transaction to ‘babysit’ us. The difference between us and them is surely not intelligence; it is the fact that they have a solid knowledge foundation that was laid from university, and they continually build upon that foundation. To increase investor confidence in the Nigerian legal industry, we need to demonstrate that we have the knowledge and tools to stand toe-to-toe with our foreign counterparts. We simply cannot continue in a system where a few senior lawyers in a few firms are the custodians of the majority of the knowledge and expertise – this will lead to a dearth of capable hands to run our law firms in a few decades. We need to equip younger lawyers and then actually give them the opportunity to showcase what they know. Mentoring is part of LE’s offerings. What sort of impact would you like to see it have on the future of the legal profession in Nigeria? Yes, thanks to our selfless volunteers, Legally Engaged runs the Legally Engaged Mentorship Programme, a mentoring programme aimed at connecting law students and young lawyers with successful legal practitioners. Because we cannot possibly deal with each individual’s peculiar circumstances via the information and advice on our website, these senior professionals are there to provide the mentees with information and guidance on a Continues on page 26

Delta State opts for new policy on judicial appointments

elta State Judiciary on Tuesday announced a new policy that would see only those under the age of 50 as eligible for appointment as judges in the state. A formal statement released by the office of the Chief Judge (CJ) and signed by the Public Relations Officer, Agbaragu Timothy, revealed that the policy

had become necessary to enhance the prospects of judges from the state for appointment into the Court of Appeal and the Supreme Court. It stated that the new policy was a “paradigm shift” from the old order, which allowed elderly judicial officers with less prospects of making it to the apex court to be appointed judges.

Citing the examples of Justice Ebiowei Tobi to the Court of Appeal and Justice Onajite-Kujuobola’s secondment to the Gambia judiciary, who according to the CJ made it to apex courts due to their vibrancy, it expected that this new policy, will see a greater number of judges from the state making it to superior

courts of records at the centre in good time. The CJ thus commended Governor Ifeanyi Okowa for his unwavering support to the state judiciary in the discharge of its constitutional responsibilities; whilst urging judges should, in turn, strive at all times to uphold justice, fairness and equity.

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Should ad valorem stamp duties apply to loan agreements? …A legal analysis

ometime in the second half of year 2016, the Federal Inland Revenue Service (“FIRS”) issued a notice titled “Establishment of Stamp Duties Offices in all States of the Federation and the FCT”, which contained a list of instruments, items and applicable stamp duty rates chargeable by the FIRS. Interestingly, in the list of instruments chargeable with ad valorem duty is an item called “Loan Capital/Agreement” which is chargeable with ad valorem duty of 25 Kobo for every 200 Naira. This terminology and the consequential charge payable has generated significant controversy particularly pertaining to the definition of loan agreement, whether loan agreements fall within the purview of stamp duty law and if they do should ad valorem duty apply to unsecured loan agreements.

Understanding the Framework of Stamp Duties Tax Stamp duties is a form of tax which is chargeable in respect of the various matters and transactions stipulated in the Stamp Duties Act, Cap S8, Laws of the Federation of Nigeria, 2004 (“Act”) at the rates stipulated in the Act. By virtue of the Act, any instrument executed in Nigeria, or relating to any property in Nigeria, or any matter or thing done or to be done in Nigeria is required to be charged with applicable stamp duty and stamped in accordance with the Act. Generally, the effect of failure to stamp an instrument is inadmissibility of such instrument in evidence in civil proceedings in Nigeria except that where such instrument is a registered security instrument within the ambit of Sec 197 of the Companies and Allied Matters Act (‘CAMA’), the additional effect by virtue of Sec 202 CAMA is that such instrument is void for any amount for which it is not stamped. It is instructive that the Act clearly specifies the instruments and transactions chargeable with nominal and ad valorem stamp duties, the timing for stamping of documents and the administrative framework for operation of stamp duty. Interestingly, by virtue of Sec 114 of the Act, all duties, fines and penalties not commenced or prosecuted within 5 years of the offence are statute barred and Sec 116 clearly specifies that any amendments to the duty chargeable on instruments/ transactions may be varied by the National Assembly or State House of Assembly in respect of those documents that fall within the exclusive purview of the relevant legislative body.

Adebanjo Abayomi

Thursday 16 August 2018

Okey Nnebedum

Analysing the Legality of Ad Valorem Stamp Duty on Loan Agreements As a form of taxation, the determination of applicable stamp duty must be based on the clear provisions of statute. This basic principle is hinged on Smithsonian canons of taxation, particularly the canon of certainty. According to Adam Smith “the tax which each individual is bound to pay ought to be certain and not arbitrary”. The Stamp Duties Act specifically provides which transactions and instruments ad valorem duties are payable and it would seem that the FIRS has extended the rates payable on ‘Loan Capital’ to ‘Loan Agreements’. Consequently, the implication of this annexation by FIRS is that it suggests that ‘Loan Capital’ and ‘Loan Agreements’ are of the same genre and thus, can be conferred with the same status and also more gravely that FIRS has the power to make that unilateral annexation. The obvious question then is what is Loan Capital? how distinct is it from Loan Agreement? and then, does FIRS have the power to make such annexation? The provisions of section 102 of the Act is very interesting and revealing, not only in terms of the imposition of duty on loan capital, but also with respect to what constitutes loan capital. Now under Sec 102 (5) ‘loan capital’ is defined as follows: Loan Capital “means any debenture stock, other stock, funded debt by whatever name known or capital raised by any corporation, company or body of persons formed or established in Nigeria which is borrowed or has the character of borrowed money, whether it is in the form of stock or in any other form, but does not include any overdraft at the bank or loan raised for a merely temporary purpose for a period not exceeding 12 months” In the robust definition provided above, the critical elements

are (i) ‘debenture stock’ (ii) ‘other stock’ (iii) ‘funded debt’ and (iv) ‘capital raised… which is borrowed or has the character of borrowed money’. A careful analysis of these elements suggests that they can all be classified as debt security that is issued by a company or corporate, the critical characteristic being that all involve an issuance process by a company. The rationale for this conclusion is not farfetched. A cursory look at Sec 166 -177 and 183 – 196 of CAMA reveals that ‘Debenture Stock’ are debt instruments that are issued by a company; whereas even though ‘Other Stock’ is not expressly defined, the Act defines ‘stock’ to mean “…any share …in the capital stock or funded debt of any local authority, corporation or company…” thus suggesting some form ownership right in an instrument issued by a company; while ‘Funded Debt’ is not defined under the Act, its dictionary definition is “debt that is due after one year and is formalized by the issuing of bonds or long term instruments’. The final element i.e. ‘Capital Raised…” does embody all forms of debt, however the use of ‘Loan Capital’ in Section 102 (1) of the Act reinforces our view that its application refers strictly to debt security that is issued by a company. Section 102 (1) provides as follows: “Where a corporation, company or body of persons formed or established in Nigeria propose to issue any loan capital, they shall, before the issue thereof, deliver to the Corporate Affairs Commission a statement of the amount proposed to be secured by the issue.” Having established that ‘Loan Capital’ referred to under the Act refers to debt security that is issued by a company the question then is does Loan Agreement fall within this definitional purview? Our answer is a resounding No. Continues on page 27

Institutional investors, govt, need... Continued from page 25

one-on-one basis. We see that a lot of young lawyers make costly mistakes that they wouldn’t have made if they simply had a more experienced lawyer to bounce ideas off. I have been in this position. Thus, the Legally Engaged runs the Legally Engaged Mentorship Programme to grant students and lawyers access to someone (outside of their organization) that they can turn to whenever they need direction, and who can also keep them accountable as regards their career or education goals. We believe that by doing this we contribute to the development of lawyers who are able to maximize potential at an early stage and drive the profession to stellar heights. In the long run, what do you hope to achieve with LEGALLY ENGAGED? The ultimate goal for Legally Engaged is to influence policy and be at the forefront of the making of decisions that affect both legal education and the practice of law in Nigeria. We see extensive room for improvement in our profession. Because we are young lawyers ourselves, our thinking and initiatives are arguably ‘fresher’ and more innovative and most importantly, actually reflect issues that affect young lawyers. Thus, we have the ability to implement changes that will truly bring reform to the legal profession and the Judiciary in Nigeria. What are some of LE’s shortterm goals and how are you working towards achieving them? Our short to mid-term goal is to be what we have coined the “law careers bible”. We hope to use our first-mover advantage to establish ourselves as thought leaders and influencers as far as legal education and the careers of lawyers are concerned; lawyers and law firms will consult with Legally Engaged before taking major steps in their careers or in their recruitment drive. We are working to achieve this by strengthening our ties with educational institutions and employers of legal professionals across Nigeria and beyond. Most start-ups experience or pass through what we would call the ‘teething phase,’ do you mind sharing some of yours with us? And if you haven’t had any of these, pray tell, how have you pulled this off? Oh, we are most certainly passing through that. I think our greatest challenge is largely tied to the fact that we are doing something that has not really been done in the legal profession in Nigeria. Unlike other organizations whose challenge is showing clients why they should choose them

over their competitors, our challenge in some instances, is proving to clients that our offerings are required in the first place. How do you hope to surmount this problem? We are surmounting this challenge mostly by engaging law firms and senior lawyers. A lot of senior lawyers complain about the quality of graduates coming out of our universities, so we are making them see that the services we offer hold the solution to that problem. To see better results in the legal profession as far as young lawyers are concerned, we need to increase our investment in those young lawyers. Speaking of capacity building, it would seem that seniors in the profession are beginning to pay attention to the issue of capacity. There’s a lot of knowledge sharing going on at the moment. The Nigerian Bar Association Section on Business Law (NBA-SBL) committee seminars and training for young and mid-level lawyers continue to hold on every month and sometimes twice a month. There’s also the Lagos branch learning series; and the Abuja (Unity) branch ‘Discussion Series’ also aimed at capacity building. The NBA-SBL has gone as far as setting up ‘SBL CLUBS’ in universities across the nation. With all of these opportunities created, are there really any excuses for not learning and building capacity at this time? My advice would be to simply turn up and engage. In the past, lawyers had to take a lot of responsibility for their own training and development and seek out learning opportunities on their own. These days, a lot of the work has already been done for students and young lawyers and there really is no excuse not to tap into these opportunities. Also, it pays to be long-term minded in one’s approach. A lot of these opportunities cost little to nothing because the costs are usually borne by the NBA or law firms. However, even with those are not free, in allocating their resources, students and young lawyers need to prioritize things that will yield long-term results and better their chances of getting where they want to be in their careers.

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DETAIL to Moderate Power Session Should ad valorem stamp... at Spotlight Nigeria Forum Continued from page 26

ETAIL, Nigeria’s first commercial solicitor firm to specialise exclusively in non-court room practice will be at the upcoming Spotlight Nigeria Forum in Paris, France between October 4th and 5th, 2018 to moderate the Power Session. The event organised by a France-based non-profit organisation called Friends of Nigeria with support from the Nigerian Embassy in France and the FrancoNigerian Chamber of Commerce and Industry (FNCCI) is a gathering of French and Nigerian business leaders, investors and public sector leaders to be held at the Marriott Rive Gauche Hotel & Conference Centre in Paris, France. DETAIL will be moderating the Power Session of the Forum. Additional sessions to be featured will focus on industry sectors, which include, Real Estate, Hospitality and Construction, Manufacturing & Processing, Agriculture, Fast Moving

Consumer Goods, Digital & Technology, Creative Industry, Education and Capacity Building. Spotlight Nigeria offers a platform for companies and business leaders from Nigeria and France to explore potential business opportunities together. Over 200 business leaders and investors from Nigeria, France and the European Business Community are expected to attend. The forum will consist of Conference plenary and break-out sessions, B2B Meetings, Exhibitions, Networking cocktails, etc. Participating French companies and organisations at this event include, CSN Energy, France,?Lafarge Group, Vergnet Group, France, GreenElec Group, France, CIAN, France, ADEPTA (The largest network of French companies involved in Agribusiness in France), Chambers of Commerce International Paris, French Council of Investors in Africa, African Business Club, Paris, MARLINVEST, France, ENSIATE, France and Darewin, France.

Loan Agreements are documents which evidence a debt given to a company by a lender. While clearly both ‘Loan Capital’ and ‘Loan Agreement’ can be broadly classified as ‘Debt’ the operative difference is that the former is a type of debt issued at the instance of a company to an investor and is evidenced by a certificate or note, whereas the latter does not undergo any issuance process and it is given at the instance of a lender. If the distinction above is accepted, then by deduction Loan Agreements could never have been within the contemplation of the Act, given Sec 102 (1) requires a company to ‘…deliver to the Corporate Affairs Commission a statement of the amount proposed to be secured by the issue’. Our reading of this part of the Act is that a company raising loan capital is required to notify the CAC of the amount it intends to raise during the issuance process. Considering that the borrowing powers of a company are enshrined in Sec 166 of CAMA, there is nothing in CAMA that suggests that a company must inform CAC of any loan facility obtained by a company. Additionally, it is instructive that the word ‘Loan Agreement’ is not used in any part of the Act and given the position of the Courts that where the provisions of a law are clear and unambiguous, no other extraneous meaning should be read into such provisions while interpreting it therefore the use of ‘Loan Agreement’ within the Act is out of scope. Finally, a reading of Sec 116 of the Act clearly indicates that it is only the National Assembly and State House of Assembly

that have the power to modify, repeal and add additional stamp duty rates therefore the inclusion of ‘Loan Agreement’ in the list of instruments for which ad valorem duty is chargeable under the Act, amounts to an attempt to amend the provision of a Statute by administrative notice, and is a usurpation of the powers of the legislature which is solely responsible pursuant to Sec 116 to make laws on stamp duties within the Federal Republic of Nigeria. Ancillary Issues Relating to Ad Valorem Stamp Duty on Loan Agreements Granted that in every loan transaction, the most crucial concern of the lender is the ability to recover the loan principal and interest. Every lender always considers with greatest amount of details, what recourse is available to it in the possible event of a borrower’s default in repayment. This is the reason most loans are backed by security. Nevertheless, there are also instances where lenders are willing to lend without security. In most of these cases, the paramount consideration, again revolve around the ability of the lender to recover both the principal loan and interest from the borrower. However, other than security, the lender is more concerned with the repayment cashflow, the borrower’s credit rating or credit support from the borrower’s parent company or affiliates. Once comfortable on these issues, the need for security becomes less important. In a secured lending, the lender relies on the enforcement of its security as a buffer upon the occurrence of default. The realisation of such security is limited to the stamp duties paid on the security document. The

provision of section 202 of CAMA reveals that the amount recoverable by a lender in a claim for the enforcement of security over the secured assets is limited to the amount for which stamp duties was paid in relation to that security document (otherwise known as secured amount). Hence it is understandable why in a secured lending, there is compelling reason to stamp with ad valorem duty. Whilst the realisation of the security may be adduced as the preeminent motivation for ad valorem stamping in a secured lending, an unsecured lender has no recourse to any assets as an assurance of its ability to recover the indebtedness; it relies solely on the borrower’s promises and undertakings in the loan agreement hence applying ad valorem stamp duty on unsecured Loan Agreements disincentivises both the lender and borrower and makes the cost of borrowing even more expensive. Conclusion It is our considered view that the continued application and indeed the propriety of ad valorem stamp duty tax on Loan Agreements by the FIRS is questionable and clearly debatable. Whether or not this continued practice will be challenged, and it is clear from the above that there are grounds for challenge, this remains more of a question of when rather than if; even as we hope that FIRS would reverse itself and act within the ambit of the law. Abayomi Adebanjo, Co-Head, Financial Services Sector at Jackson Etti & Edi (JEE) and Okey, Nnebedum, Senior Associate, JEE.

Governor, colleagues commiserate with family of late Rivers AG

he news of the death of the Attorney General of Rivers State, Emmanuel Chinwe Aguma, SAN, last Friday, threw several members of the legal profession into shock as the late AG was until his death, a very active bar man. Amongst those most hit by the shocking incident was the governor of Rivers State, Nyesom Wike, who was not only a colleague but a close ally of the late AG. Reacting to the blow, Wike promptly issued a statement directing all flags in the State Government House and government offices to be flown at half-mast for two days. The statement signed by his special assistant on electronic media read: “at all times, even in his sick bed, his exemplary zeal to serve Rivers State never waned. Consequently, the Governor of Rivers State, His Excel-

Late Emmanuel Chinwenwo Aguma, SAN

lency Nyesom Ezenwo Wike CON, GSSRS has approved that flags fly at half-mast for two days beginning from tomorrow, Saturday 11th August, 2018 as a mark of honour to mourn the departed legend. “Needless to say that Rivers State and indeed the nation will miss his versatility and invaluable contributions to the development of our State and Nigeria. This loss is monumen-

tal but we urge all people of goodwill to remember his wife, children, mother and the entire late Chief Emmanuel Aguma family of Port Harcourt as well as the State in prayers.” The governor also led some elders and leaders of the state, as well as members of the State Executive Council on a condolence visit to the Aguma residence at Ogbunabali in Port Harcourt on Saturday. A condo-

lence register has been opened at the Government House in honour of the late Attorney General who was said to have died on Friday. The President of the NBA, who also expressed shock at the incident, has extended his heartfelt condolence to the Family of the late Rivers, AG. He said, “The news of the demise of one of our revered bar leaders from NBA PortHarcourt Branch, Emmanuel Chinwenwo Aguma, SAN was received with great shock by the Nigerian Bar Association and entire Legal Community in the afternoon of Friday 10th August 2018 when it was reported that he died at a hospital in London, England after a brief illness. “His service to the bar over the years had been highly commendable. He was an astute lawyer, very versatile and indeed a complete bar man.

He continued, “Aguma created a lasting impression on any one that came across him owing to his warmly reception to all and a key promoter of the need for discipline and sanctity within the profession. His death is indeed a monumental loss to the Nigerian Legal profession and young legal practitioners who look up to him for guidance and mentoring. An active and committed Bar man, Aguma was said to be a leading light in the NBA, especially the Port Harcourt branch where he served as Secretary in 2000-2002, and later Chairman between 2006-2008. He made invaluable contributions toward the unity and stability of our noble association. Until his death, Aguma was married to the President of the International Federal of Women Lawyers (FIDA) Nigeria, Hon. Inime Ifenyinwa Aguma.

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BDLegalBusiness industryfile Bar Council of England & Wales collaborates with NBA to train Niger Delta lawyers on environmental law and ADR Theodora Kio-Lawson

he Nigerian Bar Association (NBA) in collaboration with the Human Rights Committee of the Bar Council of England and Wales on Monday August 13, 2018 held a training workshop on ‘Environmental Law and Alternative Dispute Resolution (ADR) in the Niger Delta Region of Nigeria’. The Training, which took place at the NBA National Headquarters in Abuja is the second in a series of training jointly organised with the BHRC in furtherance of the objectives of both institutions. Funding for the training was provided by ROLE, UK and UK Aid; with support from the Niger Delta Development Commission (NDDC) to fund the costs of the local component of this training. The Rule of Law Expertise (ROLE) Programme works to strengthen the rule of law in developing countries through supporting the provision of pro bono legal and judicial expertise. Giving a brief overview of NBA interventions in the Niger Delta region, the Chairman, NBA task force on peace, security and sustainable development in the Niger Delta, Albert Akpomudje, SAN disclosed to the audience that it was in 2016 that the NBA President inaugurated

President of the Nigerian Bar association (NBA), Abubakar Balarabe Mahmoud, SAN during the training workshop for lawyers on Environmental Law and Alternative Dispute Resolution in the Niger Delta Region of Nigeria at the Nigerian Bar Association Auditorium Abuja.

the task force to coordinate the interventions of the NBA in the region. He said, “Of specific importance was the provision of pro-bono legal services/assistance to individuals and communities affected by the conflict; promoting the protection of citizen’s rights in the environment as well as advocating for the use of Alternative Dispute Resolution (ADR) Mechanisms in the resolution of conflicts.” Akpomudje also stated that it was in furtherance of its mandate that the task force organised a town hall meet-

Kirsty Brimelow QC, Chairperson of the Bar Human Rights Committee of the Bar Council.

Albert Akpomudje SAN, Chairman, NBA Task Force on Peace, Security and Sustainable Development in the Niger Delta.

ing with stakeholders in Port Harcourt on various issues of peace, security and sustainable development took the centre stage. He thus thanked the NBA President for setting up the task force and his constant support in the course of the committee activities. Earlier, in his opening remarks, the NBA president, Abubakar Balarabe Mahmoud, SAN welcomed Kirsty_Brimelow QC, Chairperson of the Bar Human Rights Committee of the Bar Council and her colleagues to the training; stating that program was the second in a series of trainings that have been jointly organised in furtherance of the partnership

between the NBA and the BHRC, which started in 2017. Mahmoud disclosed that the partnership has made it possible for the NBA to bring participants from across various branches in the Niger Delta and beyond to join the training. “We would like to use this opportunity to thank the Bar Council and particularly Kirsty for their immense support to the Nigerian Bar Association in the course of the last year and half. “Only last February, we welcomed Kirsty and her team to Abuja on a similar training program but that time with focus on the human rights

protection to the IDP’s and other victims of the conflict in the North East,” she said.” According to the NBA president, the last training was recorded as hugely successful as it successfully equipped members of the association with the much needed knowledge and skill to deliver legal support to thousands of victims that were in desperate need for protection and other legal services in the region. He stated “The program also included a ‘Training-the-Trainers’ workshop for selected participants who subsequently provided ‘step-down’ trainings to lawyers across the Nigerian Bar Association branches located in North-East Nigeria.” The partnership which started in 2017 and was formalised on 12th February 2018 when both institutions signed a Memorandum of Understanding (MOU) agreeing to work together to build capacity for Nigerian lawyers in regional and international human rights law, as well as other mechanisms available to address the human rights concerns of Nigeria. It aims to also enhance the skills of Nigerian lawyers in the practical application of human rights law in the domestic, regional and international context, through training and capacity development programmes for members of the NBA across Nigeria.

Employment law & Industrial Relations committee set to hold annual seminar The Employment, Labour & Industrial Relations (ELIR) Committee of the Section on Business Law of The Nigerian Bar Association (NBA-SBL) - one of the specialist committees of the NBASBL, set up to enhance the practice of employment, labour and industrial relations in Nigeria, is set to have its annual seminar themed, ‘Employment, Labour and Industrial Relations: a Changing Landscape’. Below, ANTHONY NWAOCHEI, Chairman of the committee and Managing partner, Law Crest LLP gives us an overview of Employment Law in Nigeria, trends in industrial relations, as well as highlights of the forthcoming seminar in Lagos - where topics such as, economic realities in the workplace; emerging trends in labour litigation; the changing face of employment law and industrial relations in Nigeria and other jurisdictions amongst other things will be discussed.

verview “The sources of employment and industrial relations law in Nigeria today are predominantly the Constitution of the Federal Republic of Nigeria (as amended), the Labour Act, the Employees Compensation Act, the Trade Unions Act, The Trade Disputes Act and several other related legislations covering issues such as pensions and health insurance amongst others; as well as international treaties and conventions that have been ratified by Nigeria relating to labour, employment and industrial relations generally. However, considering that the definition of a worker under the Labour Act applies to persons typically known as junior staff, contracts of employment for nonworkers who perform executive, administrative and professional roles determine the terms and conditions of their employment. To a large extent, experts are of the view that the state of our laws relating to labour and in particular, the Labour Act which is over 40 years are outdated and do not meet the requirements of the current labour industry that has evolved over the years and continues to evolve. In other words, the laws have not evolved as fast as the industry has. “That notwithstanding, further to the National Industrial Court Act, 2006 (“NICN Act”) and the third alteration to the constitution, the attitude of the National Industrial Court which is vested

intend via the NBA-SBL to make our contributions thereto, once invitations are sent to the public in that respect.

Anthony Nwaochei, chairman, Elir Committee of the Nba section on Business Law.

with exclusive jurisdiction over employment issues, has been to adopt international best practices in dealing with issues arising from labour disputes where there seems to be a lacuna in our laws or it is in the best interest of justice.” Objectives of the ELIR committee “The core objectives of our committee are to deepen the capacity of lawyers, as well as other relevant stakeholders in employment & industrial relations law and practice on the one hand; and to positively influence legislation and policies relating to or affecting employment and industrial relations on the other hand. Towards achieving this, we are first and foremost a veritable source of information for stakeholders on recent legal developments in the employment sphere, especially on the rulings of the National Industrial Court and

other superior courts of record. We have also collaborated with the training committee of the NBA-SBL to provide continuing legal education in order to enhance the capacity of lawyers and HR practitioners. “We have also through regular stakeholders fora involving lawyers, judges of the National Industrial Court and representatives of other critical stakeholders like the NECA, CIPM, NSITF, Ministry of Labour, unions and HR executives, from time to time, discussed the current status of our labour laws and their pros and cons under today’s realities. “The committee has further constituted a sub-committee to review the Nigerian Labour Act which considering its age, quite frankly, falls far short of what the Nigerian labour market presently requires. We are aware that at present, a draft all-encompassing bill is in its formative stage and we

The Dynamics in Nigeria “From a legal perspective, of particular note would appear to be an attempt to bring labour and industrial laws and practices in Nigeria in conformity with international labour standards when one views recent legislations, particularly the National Industrial Court Act, 2006 (“NICN Act”) and the Constitution (third alteration) Act, 2010, as well as recent decisions of the National Industrial Court. “The National Industrial Court on the basis of the latitude allowed it by the constitution (third alteration) Act, 2010 in adopting international best practices, has jettisoned technicalities as well as common law rules which go against international best practices or are against the interest of justice. We have also witnessed via these recent legislations, the restriction of all matters relating to employment relationships within the exclusive jurisdiction of the National Industrial Court. As we are also aware, prior to the recent case of Skye Bank vs. Anaemem Iwu, the only judgments of the National Industrial Court which litigants could appeal were judgments from fundamental rights suits. What this ELIR seminar seeks to address

“The seminar would provide a platform for subject matter experts and stakeholders to critically examine emerging trends in the employment and industrial relations space and their effect on employment and industrial relations as well as serve as a capacity building opportunity for stakeholders. We further expect it to provide clarity on certain legal issues which stakeholders appear not to be certain about.” Participation “Apart from the Honourable Minister for Labour and Employment who is expected to give a keynote address, we have a distinguished panel of subject matter experts cut across the academia, commercial law firms, the National Industrial Court as well as from other critical stakeholders including NECA, CIPM, the Ministry of labour and HR executives from leading employers of labour. We also expect lawyers and representatives of all stakeholders to be in attendance.” Engagement “We expect a very interactive seminar with the various stakeholders bringing their various perspectives and speaking to practical issues that affect them.” The Seminar organised by the ELIR committee of the Nigerian Bar Association Section on Business Law (NBA-SBL) would hold on Friday August 24, 2018 at the Radisson Blu Anchorage Hotel in Victoria Island, Lagos.

BUSINESS DAY

Thursday 16 August 2018

Harvard Business Review

Global Business Perspectives Connec ting

Th e

World

One

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A field guide to the hurdles facing blockchain adoption

lockchains mean a lot of different things to a lot of different people. For bitcoin fanatics, the original blockchain was a way to create a currency that could circumvent and eventually supersede central banks. For central banks, the blockchain has become a promising way to record their own currencies in an effort to retain their dominant place in society. For some cryptocurrencies, like Monero and Zcash, the blockchain is a way to ensure total privacy and anonymity. For others it is a way to make anonymity a thing of the past in financial transactions. Beneath all these conflicting goals, the blockchain is just a new way to record data, generally in a communal fashion, with a bunch of people keeping the records, rather than just one central institution like a bank or government. This basic idea, though, can be configured in countless different ways. And companies, startups and governments around the world have been engaged in what sometimes looks like a race to try out as many applications as possible, with billions of dollars chasing the promise. What has not become clear, so far, is whether the blockchain design will really be able to accomplish any of the big promises that have been made for it. Essentially every big category of project in the blockchain realm has run up against obstacles that have so far barred the way to real breakout success. That has led to a big decline in the price of many blockchainbased cryptocurrencies over the last six months — the price of bitcoin is down nearly two-thirds from the peak in December. But while we don’t yet know if blockchains will really work in the long run, we are starting to understand the problems they will have to overcome if they want to have a chance at working. The blockchain we know the most about is the original one, linked to bitcoin. In a simple sense, this blockchain has been a resounding success. Since it began recording every bitcoin transaction in 2009, the bitcoin block-

chain has more or less seamlessly kept the records of a currency that is now worth over $100 billion — and with no institution or person in charge. But bitcoin has so far failed at its goal of becoming a new kind of digital cash, which was the ambition described in the original documentation. So far, almost the only thing bitcoin has been used for is as a speculative commodity, like a digital gold, with lots of trading on the price. (The one place where bitcoin has been used for regular real transactions is in the black markets.) There are many reasons bitcoin has not been more useful so far. The monetary policy and economics of bitcoin — with only 21 million of the coins ever created — are a particularly fascinating question mark hanging over the project. As are the security issues that arise when every holder is responsible for keeping their own password, or private key. But no problem has been more immediately stubborn than the limits on how many transactions the bitcoin blockchain can handle. It turns out that when a whole bunch of people are keeping the records for something — as the blockchain design requires — there are limits on how many trans-

actions all those computers can share and store in a set amount of time. This issue — the so-called scaling problem — is now something that confronts essentially every major cryptocurrency out there. While bitcoin can handle only around seven or so transactions each second, the second most valuable network, Ethereum, can do only double that, and none of them are getting close to the 50,000 a second that Visa manages. Developers working on bitcoin and Ethereum have been building several different solutions that might address this. Most of them involve adding new databases, with more capacity, on top of the ground level blockchain ledgers. So far, though, it’s not clear if these can work without introducing new problems or sacrificing the qualities that attracted followers to these projects in the first place. Ethereum, and a bunch of other valuable cryptocurrencies that have been inspired by it, have a separate set of problems that they will have to figure out. The creator of Ethereum, Vitalik Buterin, wanted to build a system that would house a virtual currency like bitcoin, but with the added ability to create programs, directly on the

blockchain, that could make some of the currency’s movements automatic. In the simplest type of transaction, the Ethereum blockchain will record money moving between wallets (which are like individual accounts) only in response to a particular event. In one simple type of transaction, for example, money would move between wallets only if a specific team won the World Series. These so-called smart contracts inside Ethereum are now being copied by many other projects. Ethereum, though, has been dogged by new complexities that smart contracts have introduced into an already fiendishly complicated system. Ethereum smart contracts have been hacked and rigged in unexpected ways that have allowed for multiple thefts of tens of millions of dollars. That is a small minority of all the transactions, but it makes many people worry about whether blockchain smart contracts have, in the language of hackers, created too great a surface area for attack. Some worry that these sorts of smart contracts are just not the sort of thing that a shared database is equipped to handle. Many of the problems facing cryptocurrencies like bitcoin and Ethereum arise from the fact that these systems are open to anyone with internet access. Anyone can go online and create a wallet and begin helping to keep all the records for these systems that run on so-called public blockchains. That creates a security headache that cryptocurrencies were designed to deal with, but that never goes away. What do you do when North Korea, or some other actor under sanctions, starts moving money on the system? That kind of question has led most newcomers to the blockchain world — many of them from the corporate and government worlds — to take an interest in newer kinds of blockchain databases that aren’t as open. The world of private or permissioned blockchains has taken off over the last two years, with projects like Hyperledger and the Enterprise Ethereum Alliance getting a lot of attention (the latter is working on private versions of the Ethereum software). These systems have fewer people keeping track of any given blockchain. That makes it easier to scale up these

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systems to handle lots of transactions, because there are fewer computers that have to communicate. It also can make it easier to bar bad actors from getting access to the system because only people with permission have access to it. Companies like IBM and Walmart have said that blockchains, even when they are open only to a select number of people, still can produce more reliable records of information — that everyone can access at any time — than the old systems that relied on a central bookkeeper. But fans of bitcoin and other socalled public blockchain systems have mocked these projects. The often-heard criticism is that a blockchain that is being maintained by only a few institutions is less at risk of an attack from the outside but much more at risk if one of the institutions on the inside is compromised, allowing one of the participants to fudge the old records. These private blockchains can lose the resilience to attack that is part of what made blockchains so attractive in the first place. For now, private blockchains are too new to have gone through the security gantlet that bitcoin has already passed through. Many private blockchain projects have been tested in pilots, but almost none have entered into real commercial production. As private blockchains begin to be used daily to track supply chains or copyrights, the other big question is whether they will be economically attractive enough to persuade companies to replace their old database systems — with one person in charge — with the inefficiencies that come with multiple people keeping records. But the bitcoin blockchain faced much more significant questions when it began, like why would any serious person pay attention to some digital tokens that are worth nothing more than the ledger they are written on. Now there are lots of serious people paying attention to bitcoin and everything that has spun out from it; the latest blockchain research center is about to be opened by professors at Stanford University. All those serious people make solving problems a lot easier.

BUSINESS DAY

C002D5556

Thursday 16 August 2018

Investing in Rivers State Port Harcourt is the new attraction point to investors - Charles Bekee, outgoing MAN chairman In this exclusive, the prince and former commissioner of commerce, Charles Bekee, CEO of Eastern Iron Wrought, reveals to IGNATIUS CHUKWU how companies are cheated by their Accounts officers and turn around to paint Rivers black. He also revealed why Rivers State is retaking its position as investors’ destination and some of the sweetners awaiting businesses in the Garden City especially raw materials, tax holidays, and easy access to land. He said by the time the proposed security outfit swings into action, the state would be like no other in terms of safety of investments. What do you tell investors to attract them to Rivers State? Investing in Rivers State, what are the good things to attract them? t depends on the kind of investors wanting to invest in Rivers State. If it is in the oil and gas sector, we would let them know that this is the hub and centre of raw materials. We also would let them understand that the government here has relatively created the enabling environment to operate in the state in the area of security. That is what a lot of people are afraid of because it has been blown out of proportion. By the time the Rivers State Neighbourhood Watch Corps swings into action, safety would be greatly boosted. What I tell investors I met outside Nigeria is, anyway, is; do people go to invest in Afghanistan? They usually say yes. We know Afghanistan is a troubled zone. So, why would anybody not come to invest in Rivers State? All we need do is to educate investors and show them the peace that is here, we show them the Greater Port Harcourt City where Government is ready to give land to any investor. There is tax holiday to attract would-be investors to attract them to invest. One other disincentive is double taxation. People suffer without enlightenment. I have said it time without number and the governor has repeated it that most of the issues you hear about are caused by the finance officials of the private companies who want to dupe their companies. They go to the tax officers and demand for various demand notices so they could extract more from their companies and they share the loot. Their accounts officers scare them by threatening them that; ‘Ah, this is how they do it here oh’. That is not true. The state is not so hostile with taxes or harsh to investors. The governor said that he has given more land certificates than regimes before, have your members

been enjoying this gesture? I have no complain from my members over certificates of land. The governor is willing to issue certificates. Before coming into office, he had interactions with the business sector. They were also the first group he held meetings with after his emergence as governor and they were the only group that hosted the contestants to a debate. He made promises and he has kept to them. C/O is always given, multiple taxes are curtailed. As a manufacturer, where do you stand on the FG not signing EU’s EPA the pact with the African Union? What is better for Nigeria at this point in time: protectionism or open border? Manufacturers stand strongly against signing these pacts. For AU, Nigeria’s minister of trade was part of drafting the paper but when the manufacturers reached out to the President and spoke against signing it, the FG became cautious. Our reason is; how many countries in Africa have manufacturing firms in their countries? Most of them do not manufacture anything but they depend on goods that come from their colonial masters and other links. Nigeria now wants to build a manufacturing economy and we would be at the hurting end. Most other countries have nothing to lose. The carrot they dangle is that it would open doors for Nigeria to export but we say, look out for hidden agenda. There EU could use those empty countries dump Nigeria out of its ambition and push goods into Nigeria’s 200 million people. So, the FG must be careful so they do not automatically kill our economy. When this information was made available to the president, he became careful. He did not say he would not sign but he needed to study the two pacts deeper and try to understand the level of trade we would do with

Charles Bekee, outgoing chairman, MAN, Rivers/Bayelsa chapter

other African countries. That is the same matter with EU’s Economic Partnership Agreement. I have told them that what we need is transfer of technology, not them bringing their goods. They talked about bringing funds but we said, lets define what those billions of euros would do here. Are you opening industries here and at what time do you transfer them to us? What we need is transferring technology to us. There are instances when people would come and set up so-called factories and import through them to dump on us. We want them to define the funds they want to bring: would it not stifle the local industries? We the manufacturers are not saying we do not need industries or not need a relationship with the EU or the African countries but let us define it.

What is your position on palm oil that is dominant in Eastern Nigeria; should the FG ban its importation or open the doors? Why would there not be a ban on cooking oils when it’s our occupation here? Were we not the ones that gave Malaysia the seeds that now threaten us? We should not shy away from certain policies. In Dubai today, there are things you do not do in their economy. They will not allow you to destroy their sensitive sectors. China became famous today because they closed their doors and developed. We are saying, do not import what we can produce such as palm oil. We have small scale manufacturing firms for palm oil. Let us not stifle them. I support the FG in banning palm oil, if not total ban but high tariff to discourage importation. Free

import of palm oil will kill the local production industry. I am in total of the FG on this. Any peep into your tenure now that you are exiting? There is no human that does not have challenges. We taken MAN here to new heights, from the heights our last chairman, Emilia Akpan, took it to. We have brought more companies in, created more awareness with the state government, opened more discussions with the state governments here, our income has tripled, we have established some relationship with tertiary institutions to allow MAN share opinions with them. I think we have done much more than was set out. I will create a legacy of participating in MAN council after my tenure and will continue to bring my experience and stature to bear on whatever they are working on. What we have noted in the past is that every past chairman of MAN hardly attends council meetings anymore. I am going to be an exception and an example for others to follow. We must take MAN in Rivers and Bayelsa states to the height we want to take it to. MAN is an advocacy group and we must make contacts with lawmakers in the region because most of the policies that affect MAN are federal laws, not state laws. So, we need to reach out and create friendly relationships to push MAN matters. If they do not understand our issues, how would they debate motions at the National Assembly? This is the only way to get speedy response to MAN matters. We have industries and what concern us are financing, accessing funds, Customs issues, etc, not about showcasing. We are mounting MadeIn-Nigeria exhibitions yearly just to prove to the society our capacity to produce reliable goods. We introduced it here in Port Harcourt and the national MAN adopted it now as a tradition.

Replicate rice policy in more products, expert urges government Innocent Eteng, Port Harcourt

ayo Williams, a business development expert and ILO (International Labour Organization) certified master trainer, has urged the federal government to replicate its policy on rice in other imported products. Williams, who is the CEO of Simply Exponential Consult Limited, said this in Port Harcourt last weekend during a training section organised by NECA’s Network of Entrepreneurial Women (NNEW) and Shell Petroleum Development Company (SPDC) for 15 women

who run small ventures. She said doing so would not only cut down unemployment, but would also take the country’s GDP skywards. The federal government has for more than two years banned the importation of rice into the country. It has also encouraged and supported local farmers to boost local production. “The rice policy, for instance, is trying to give us home-grown rice to feed our populace rather than the imported sacks of rice we used to bring from a whole lot of other countries. So if we can replicate this kind of policy in toothpick, in hospi-

tality industry and so many areas, we can have our own people involved in generating more revenue even within the country, so that our GDP can grow and then the unemployment rate will go down and our economic well-being will improve,” Williams said. She continued: “We are familiar

with the fact that SMEs provide up to 90 per cent of employment in the nation. Government cannot really give the teeming population that employment. But if we empower SMEs to start providing goods and services that are consumed by a nation of 180 million (people), we would have a greater number of people in gainful employment. “The employment statistics right now is pretty worrisome. We have up to about 30% unemployment rate and we believe that if more entrepreneurs are encouraged in this way to set up cottage industries and to provide services, we would have replacement for a lot of things we

used to import.” Williams, who, at the training in Port Harcourt, talked about the importance of having a business plan, oversaw a session on direct and indirect costing in business. She told participants that, to attract funding, they must register their businesses and they must write and work with a feasible business plan. “We have a lot of intervention funds now - like BIO funds and CBN funds. All these funds are available for SMEs to access only if they have proper planning in place and they can show evidence in a business plan, good record keeping and being bankable,” she said.

Thursday 16 August 2018

C002D5556

BUSINESS DAY

FEATURE

Capital Market upbeat over planned NSE demutualisation The Nigeria capital market is in the process of making history as the planned demutualisation of the exchange is expected to bring the capital market of Africa’s largest economy on a par with other international jurisdictions, result in enhanced governance, transparency and visibility while attracting strategic partners, investors and good quality issuers. Endurance Okafor, BusinessDay’s Analyst shares insight on the NSE demutualisation.

he nation’s capital market is therefore in high mood over the planned demutualisation of the Nigerian Stock Exchange (NSE) from a company limited by profit to a company limited by shares. This followed the demutualisation process reaching its final stage of implementation, as both chambers of the National Assembly have passed the enabling bill into law. The bill is currently awaiting assent by President Muhammadu Buhari. Reacting to the development, Capital market operators including dealing members, stockbrokers, issuers, registrars and other stakeholders said they are full of expectations over the benefits to be derived from the conversion. In view of these, they expressed optimism that President Buhari would sign the bill which they described as first of its kind in the history of Nigeria and West Africa. For instance, a Capital Market lawyer, Rosemary Ugwu could not hide her joy on hearing the news that the bill has been passed by the National Assembly. “The bill is a further demonstration of the commitment of the leadership and members of the National Assembly and indeed, the federal government to re-position the NSE towards achieving its role not only as a critical institution but a major contributor to the economic development of Nigeria,” Ugwu said. A licensed stockbroker, Ethelbert Opara said demutualisation act when implemented would generate substantial motivation for the development of an agile Exchange. “As a demutualised entity that is profit-seeking, the NSE will be in a better stead to capitalise on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly be able to better support the economic growth of Nigeria,” Opara said. Meanwhile, demutualisation of a stock exchange is a process by which a non-profit, member/ brokers owned mutual Exchange is converted into a profit seeking shareholder corporation, open to members of the public. Demutualising an Exchange therefore transforms it from being owned by members or brokers, to one with a different governance structure where members of the public can buy shares. A demutualised Exchange may take the form of a public company listed on its own Exchange like the Australian Stock Exchange or remain private like the Toronto Stock Exchange. Now a global phenomenon, demutualisation is being embraced by several countries of the world. For instance, of the 64 members of

the World Federation of Exchanges, 56 have demutualised. Up till the early 1990s, most of world stock exchanges were non-profit, mutual organisations limited by guarantee and monopolised by members and stock brokers. The first stock exchange to break away from the norm was the Stockholm Stock Exchange in 1993. It was followed by Helsinki Stock Exchange in 1995, the Copenhagen Exchange in 1996, the Amsterdam Exchange in 1997, the Australian Exchange in 1998, the Toronto, Hong Kong, and London Stock Exchanges in 2000. While in the African market, Johannesburg Stock Exchange and the Nairobi Stock Exchange were demutualised in 2006 and 2014 respectively. However, despite being the largest economy in Africa, Nigeria Stock Exchange established 58 years ago, is yet to demutualise. Attempt to demutualise the Nigerian Stock Exchange began in 2017 with a resolution passed by the Members of The Exchange at an Extra-Ordinary General Meeting (EGM). Following the resolution, Yusuf Tajudeen, Chairman, House of Representatives Committee on Capital Market and Institutions, sponsored a bill which was first read in the House on Wednesday March 29, 2017. The Bill is titled “An Act to facilitate the development of Nigeria’s Capital Market by enabling the Conversion and re-registration of the Nigerian Stock Exchange from a Company Limited by Guarantee to a Public Company Limited by Shares and for related Matters, 2017” (Otherwise called “Demutualisation Bill” HB 983). The second reading took place on Thursday, 8th June, 2017. At the Senate, the bill (SB 531) was sponsored by Senator Forster Ogola, Acting Chairman, Senate Committee on Capital Market. It was read the first time on Wednesday 19th, July 2017. Second Reading took place on Tuesday 25th July, 2017.

After the passage of the second Reading in both chambers, the Bill was commuted to the relevant Committees on Capital Market for further legislative action. Following these resolutions, a Public Hearing was held on Thursday, 27th July 2017, at the National Assembly. The Public Hearing attracted all the key stakeholders in the Capital market including; officials of the Central Bank of Nigeria, Securities and Exchange Commission, Nigerian Stock Exchange, Corporate Affairs Commission, Federal Ministry of Finance, Association of stockbroking Houses of Nigeria, Chartered Institute of Stockbrokers, Investments and Securities Tribunal, Nigeria Pension Commission, capital market registrars, lawyers, issuing houses, Senators, Honourble Members and the Media. Senate Present Bukola Saraki and Speaker House of Representatives were equally present. So far, the bill has not received any opposition. The bill was eventually passed into law by the Senate on Thursday 22nd December, 2017 and the House of Representatives on Thursday 1st February, 2018. However, due to differences in the long title of the Bill, a conference committee was subsequently constituted by both chambers; the report of the Committee was approved on 30th and 31st May, 2018 by the House and Senate respectively. The Nigerian Stock Exchange (NSE) was established in 1960 as a private company called the Lagos Stock Exchange. It was incorporated into a company limited by guarantee in 1990. Following the demutualisation of other Stock Exchanges around the world, major stakeholders of the Nigerian Stock Exchange have moved to demutualise the NSE in order to make it profitable and attractive to investors. This process will change the legal existence of the NSE from a mutually-held organisation to a competitive joint-stock company

whereby its shares will trade publicly. This simply means that members of the public will for the first time in history, have the opportunity to own shares in the second largest Exchange in Africa. Giving reasons for the demutualisation, its Chief Executive Officer, Oscar Onyema said it was in furtherance to the resolutions of the NSE Extraordinary General Meeting held on March 30, 2017 where members voted in favour of the demutualisation exercise. He highlighted the benefits of a demutualised exchange to include: facilitating the development of the capital market, improved corporate governance, availability of resources from capital investments, enhanced competitiveness, increased global brand and visibility of the exchange, investor participation opportunities and ability to build a more sustainable institution. “It is of particular importance to the Nigerian capital markets and the wider economy that the Exchange be aided to successfully demutualise, as it enables the Exchange to serve the capital market’s ecosystem and economy more effectively than it has done in the past,” Onyema explained. Interestingly, both during its consideration and passage by the National Assembly, the Bill received massive endorsements by major stakeholders in the capital market as well as operators of the money market. Those who have endorsed the bill so far include; the Finance Minister, Kemi Adeosun, the Governor of the Central Bank of Nigeria, Godwin Emefiele, Registrar-General of the Corporate Affairs Commission as well as officials of the Securities and Exchange Commission ( SEC), Investments and Securities Tribunal (IST), Association of Stockbroking Houses of Nigeria, and The Chartered Institute of Stockbrokers. For instance, at the public hearing, Adeosun said the federal government supports the demutualisation effort because it would enhance the

provision of access to global best practices, creation of a better regulatory framework/formula for ownership stakes, greater independent investor participation in governance of the exchange and put the exchange in a better position to support the economy. Expressing joy at the passage of the bill, the sponsor, Tajudeen Yusuf, said the bill was in line with the Capital Market Master Plan 20152025 and that demutualisation of the Nigerian Stock Exchange would promote efficiency in the creation and harnessing of capital, create liquidity in the market as well as adopting and strengthening corporate governance best practices. On his part, the Senate President and Chairman of the National Assembly, Bukola Saraki said the lawmakers anticipate that the demutualisation of the NSE will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeria’s economic development. “Demutualising the Exchange will generate substantial motivation for the development of an agile Exchange thereby consolidating its innovativeness and strengthening its leadership both at local and international levels, whilst also adding value to its stakeholders,’’ Saraki said. He said “the demutualisation of the Exchange will bring the Nigerian capital market at par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers.” A Lagos-based Investment banker and Stockbroker, Elizabeth Okolo of Capital Assets Limited congratulated both the Council and Members of the NSE on the passage and urged President Buhari to expeditiously consider and sign the bill into law. ‘The demutualisation holds a number of significant benefits for the Nigerian economy including augmentation of Nigeria’s debt profile, increase capital raising capabilities, capital support for government initiatives, attraction of foreign and local investors and assisting corporate and financial institutions to raise capital,” she said. With the completion of the legislative process and expected transmission of the bill to the President, attention is now focused on President Buhari to sign the bill into law. When this is done, the newly demutualised NSE will attract local and foreign investors to the Nigerian capital market which will greatly improve the Nigerian economy, spur competitiveness, improve market liquidity and place the NSE among its peers in the global capital market community.

Politics & Policy

BUSINESS DAY

C002D5556

I will only retire when Atiku is installed - Iwuanyanwu He’s the best President Nigeria will have - Ihedioha

mmanuel Iwuanyanwu, a chieftain of the People’s Democratic Party (PDP) and frontline businessman, has declared his support for the presidential aspiration of former Vice President of Nigeria, Atiku Abubakar. Iwuanyanwu in company of other leaders of the PDP in Imo State received Atiku in Owerri during his visit to the state in continuation of his nationwide consultations with PDP stakeholders across the country. According to Iwuanyanwu, “Atiku’s political journey has come a long way and he is particularly cut out for the demands of the time at this juncture in Nigeria’s politi-

cal history. I will only retire finally after Atiku is installed. Atiku is an intelligent leader and he is the only one who can be fair to the Ibos.” Speaking in the same vein, former Deputy Speaker of the House of Representatives and gubernatorial aspirant in Imo State, Rt. Hon. Emeka Ihedioha says that Atiku will be the best president Nigeria will have in 2019. Atiku, in company of a delegation led by the Director General of his presidential campaign organisation and former Governor of Ogun State, Gbenga Daniel, visited Owerri for a meeting with Peoples Democratic Party (PDP) stakeholders in Imo State in continuation of his nationwide consulta-

tions. While welcoming Atiku into the state, the former deputy Speaker noted that “Atiku is well prepared to be president of Nigeria and he remains the best president Nigeria will have in 2019.” After a close door private meeting with Chief Iwuanyanwu, Atiku proceeded to the PDP secretariat in Owerri where he met with the State Executive Council led by the state’s party chairman, Barrister Charles Ezekwem. In his remarks, Atiku commends the warm welcome he and his entourage received from supporters in Imo State. He said that his aspiration to become president in 2019 is borne out of his belief that Nigeria deserves a more com-

petent leadership. “Today our country is at a critical condition. The economy is not working as expected and millions of jobs have been lost. There is so much division everywhere and we need a leadership that can unite the country. “If I secure the ticket of our great party and subsequently elected president, I am ready to listen to and appreciate the feelings from every part of the country. These are the challenges we face today and I am very humbled by the endorsement from leading party members from this state to my aspirations and I am even more determined in this mission to restore the country to prosperity and unity,” Atiku said.

Thursday 16 August 2018

Atiku’s visit to Imo State Former Vice President of Nigeria, Atiku Abubakar and a delegation led by the Director General of his presidential campaign organization and former Governor of Ogun State, Otunba Gbenga Daniel, visited Owerri, for a meeting with Peoples Democratic Party (PDP) stakeholders in Imo State in continuation of his nationwide consultations. The delegation was received by party chieftains led the state party chairman, Barrister Charles Ezekwem, Chief Emmanuel Iwanyanwu, former governor Achike Udenwa, former minister, Chief (Mrs.) Kema Chikwe, Senator Chris Anyanwu among others. The reception at the airport and throughout the visit was tumultuous.

Confusion, panic hit voter registration centres …As Nigerians groan, lament INEC shoddy arrangement INIOBONG IWOK

state of confusion and panic has hit various voter registration centres across the country in the ongoing Continuous Voter Registration (CVR) exercise by the Independent National Electoral Commission (INEC), due to the large number of Nigerians who besiege the centres to carry out their registration before the closing date. Officials of INEC are overwhelmed and incapacitated in handling the large turnout due to shortage of personnel and logistics. INEC Tuesday extended the closing date for the registration from August 17th to August 31st, but the exercise, which began last year April nationwide, has been plagued by several problems, ranging from shortage of personnel, logistics and operational machines which have limited the commission’s operations across several states in the country.

There have been widespread criticisms over the commission’s poor handling of the exercise from groups and political leaders across the country. Investigation by BusinessDay in several registration centres yesterday, revealed that while there were large turnout of Nigerians at the centres to register, the limited machines being deployed and shortage of INEC personnel were not adequate to handle the surge. Several people in some centres in Lagos, who spoke with this medium yesterday, accused the INEC officials of having a pre-determined number of people it would register in a day, stressing that some of them had to wake up by 4am to write their names on the list. A resident in Ikeja Lagos, Kayode Olufemi, urged the Federal Government to harmonise the Bank Verification Number (BVN) and the national identity card, by the National Identity Management Commission (NIMC), stressing that such decision would

automatically stop the current duplication of biometric of Nigerians and could be used for the current Continuous Voter Registration exercise. “The current system where you register for National ID card, bank verification number is not ideal; why can’t we use these data for voting exercise? It is a failure of the system; a country like Nigeria should have sources where data of its people could be found. I have been here since morning you can see the crowd; what they are doing here is to register 150 people who wrote their names in the morning, some of them came here 4am after that they stop for the day,” Olufemi said. Speaking on the situation, the Southwest Vice chairman of the main opposition People’s Democratic Party (PDP), Eddy Olafeso, wondered if INEC would be able to conduct a credible election next year, with the way it was handling the exercise, warning that all Nigerians who are up to the age of voting should not be denied

the opportunity to vote. “One would expect that INEC would have been more prepared for this exercise; we are in a serious problem as the general election comes next year. This should tell if INEC is serious about the election, if it could not handle the voter registration exercise with the millions of money given to them. Every Nigerian up to the voting age deserves to register and should not be denied,” Olafeso said. Political analyst, Sunday Ekanem, stated that INEC should have stationed their personnel’s in wards across the country to carry out the exercise, adding that the current procedure was too bureaucratic to achieve efficiency. “What do you expect from this system, where it seems INEC is being authorised to act in certain way. One would have thought that they would carry the registration to wards, just like it was done in the past, rather than station it in their offices and one or two other places in the council.

Kalu calls for youth participation in politics …As ‘Vision Alive’ youth conference ends in Aba GODFREY OFURUM, Aba

enjamin Kalu, former chairman, Bende Local Government Area of Abia State, has urged youths to take advantage of the passage of the #NotTooYoungToRun Law to present themselves for political office.

Kalu, made this call, in Aba, Abia State, at the annual youth programme organised, by Vision Alive Foundation, a youth non-governmental organisation that is into human capacity development. He described the #NotTooToungToRun” law, as the best thing that has ever happened to the youths of Nige-

ria, as it will surely transfer power to eligible and qualified youths with vision to transform the country. According to him, “it is the beginning to the end. When the youths embrace this and present themselves, definitely, we are going to get to the position that we need youths to be. “The availability of the

youths is very important. The youths making themselves available is the main thing, the youths preparing themselves is key. “Being a youth is not a qualification for you to be in a political office. You must seek mentorship, you must be prepared, you must participate, you must engage. This is what

will make people believe in your candidacy. If you can’t do that, the resources will come as it came for Barrack Obama, former president of the United States of America. “Obama did not have the resources, when he presented himself, but people saw in him, a resourceful person; they saw in him, a prepared

person and resources were gathered to make sure that he led the USA”. He explained that most political parties in the country are creating spaces for youths and urged the youth population to take advantage of the development and present themselves for political offices.

Thursday 16 August 2018

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BUSINESS DAY

Politics & Policy

2019 presidency: How far can Saraki go? ZEBULON AGOMUO

esterday, when the news broke that Bukola Saraki, president of the Senate, may have given an indication that he was considering seeking the nomination of the People’s Democratic Party (PDP) to contest the presidential election fixed for February 2019, many observers gave divergent opinions. An online medium had quoted the Senate president as saying: “I am consulting and actively considering it.” According to him, “I believe I can make the change.” In the last two weeks since Saraki announced his defection from the ruling All Progressives Congress (APC) to the PDP, he has been in the eye of the storm. The leadership of the APC, headed by Adams Oshiomhole, has consistently insisted that the Senate president must either resign, or be impeached. Although going by the 1999 Constitution (as amended) which stipulates that a Senate president can only be removed by the two-thirds of the total number of members which the APC cannot muster, given the present composition of the Senate, Oshiomhole, up till last Tuesday, insisted that Saraki must be impeached. The rumour of his ambition had continued to swell, particularly after he dumped the APC for the PDP. Last Monday, Saraki had paid a private visit to former President Olusegun Obasanjo in Abeokuta, ostensibly to seek his buy-in to his aspiration. A few days before he visited Obasanjo, he had also consulted with a former military President, Ibrahim Babangida in Minna, Niger State. Since Saraki’s movement back to the PDP, the umbrella party has been assailed by internal bickering and allegation of undue favoritism. Ahmed Makarfi, a former governor of Kaduna State and one of the presidential aspirants on the PDP, platform is embittered about the back-and-forth movements of the likes of Saraki, who have unfortunately returned to the PDP to seek nomination as the party’s presidential candidate. Makarfi, who was a former national chairman of the PDP, said: “For some politicians, at the slightest provocation they will just jump to another party. Any little issue they will run away and a little

Saraki

while when they are not comfortable they will come back. But we must be careful so that we don’t create the impression that it does not pay to be loyal or committed because it would discourage people from doing so and that will destroy the party.” “Everything must be balanced in such a way that we take care of the loyal and dedicated party men. We must not create a situation where you have a home and a visitor comes and you give him guest room to stay and the next day he wants the master bedroom and the next day he wants you to leave your home for him. Does that happen in any society? No, PDP must never allow that kind of thing to happen,” Makarfi warned. By the same token, Godswill Akpabio, a former minority leader in the Senate, who recently dumped the PDP for APC, blamed his defection on poor treatment meted out to some of the loyal members of the party. Alleging that the PDP does not have a good reward system for steadfast members, Akpabio said: “My colleague, the Senate president who unfortunately was one of those who joined to destroy the PDP in 2015 just attended the NEC meeting and out of excitement, the same national chairman rolled out the drums and announced him National Leader of the party.” According to him : “Having been the Senate minority leader,

and by implication the chairman of the PDP caucus in the National Assembly, I thought there was no more room for me, since we now have a National Leader who has just defected.” Saraki had also given an indication that he must have reached an agreement with the leadership of the PDP on a number of things, saying: “The PDP has learnt its lesson from the loss in 2015, and I think unfortunately the APC did not learn from their victory. While negotiating with the PDP we listed a number of issues. We talked about how to sustain and improve the fight against corruption; the issue of providing more powers to the states; inclusion and having a more nationalistic approach on things we do; to continue to improve the environment that will ensure investments. We listed a number of items during the discussions with the PDP, and there is a written agreement to that. We trust that we can hold them to that.” “We would ensure that the party is strong on security. The APC too have not done well on the issue of security. We have the opportunity with the right kind of presidential candidate and president to provide the leadership for the party. The party has a good opportunity to lead the country in the right direction,” he was quoted to have said. Now, the question many ob-

servers are asking is: “How morally correct would it be for PDP to handover to Saraki its flag for 2019 presidential election?” A party member, who spoke with BusinessDay on condition of anonymity said: “There is no doubt that Bukola Saraki is a master strategist when it comes to politics. But I am not very sure that he is the best presidential candidate for PDP at this point in time.” The PDP member further said: “Saraki has too many battles and it would be detrimental for the PDP to say to him, ‘come represent our party for 2019’. That would mean open preparation for defeat. Truth be told, I have not seen any presidential material among the lot other than the former Vice President Atiku Abubakar. I do not know the man one-on-one; but I must say right away that if our great party PDP wants to be seen to be in the race at all, it must consider fielding Atiku Abubakar. “Do you know why? I think it is only Atiku that can match the APC candidate by all standards. If it is money, he has it; if it is connections, he has it; if it is experience, he has; if it is building bridges across the country, Atiku has it. There is no other aspirant, of all those that have declared interest, that parades all these attributes, rolled into one.” The party man further explained that any attempt by the PDP to

give Saraki the ticket may lead to serious crisis that may ultimately consume the PDP. “Already temper is running high in the party, among some aspirants who believe they may have been sidelined by the leadership of the PDP in favour of the new comers. If for instance, someone like Saraki emerges, it would create a serious crisis that may lead to the extinction of the party. By the way, I do not think that the Senate President has all it takes to win votes across the six geo-political zones of the country. I do not know how popular he is in the zones other than Kwara State,” he said. Abimbola Agboola, a Lagosbased political affairs analyst, expressed concern that the PDP appears not to have learnt its lesson and is taking steps that are not altogether healthy for the expected victory in 2019. “Honestly, I thought by now, the PDP would have learnt its lessons after going through a lot of crisis which led to its disastrous defeat in 2015. For me, there is no point encouraging everybody to join the race as presidential aspirant. It would have reduced its chances of running into crisis by not making bogus promises. “I understand that these promises were made to woo membership, particularly the big fish. But I thought that it would serve the party better if the aspirants can go for a consensus candidate. There are many of them on the list that I am convinced cannot win a presidential election in the country, at least for now. I wonder why everybody is coming out, and some of them are making some utterances that are laced with innuendoes, which convey the message that they are not ready to work together,” Agboola said. Some observers suggested that the best bet for the Senate president should have been for him to go back to the Senate. “Honestly, I think that the best option for Bukola Saraki, if you asked me, would have been for him to go back to the Senate. By the time he spends another four years there, he would have garnered more experience, and also by that time, the crisis around him would have been a thing of the past. You know, in this country, our sense of history is very infinitesimal. Then, he could come up for the presidency. But now, I don’t think, honestly, it would come out fine,” Fred Alumona, an IT expert, said.

I joined Accord Party because PDP was badly managed - Doyin Okupe … Party vows to take over Lagos INIOBONG IWOK

former Senior Special Assistant on Public Affairs to former President Goodluck Jonathan, Doyin Okupe, has said that his decision to defect from the main opposition People’s Democratic Party (PDP) was because the party was hijacked by individuals who could not man-

age its affairs. Okupe, who was speaking at a stakeholders’ meeting of the party in Ilupeju Lagos yesterday, which was attended by all the local government chairmen, state executive members and leaders, noted that part of his reasons for leaving was because he was not happy and was tired of the PDP. “I left the PDP because I was not

happy with the people in the party; maybe, they were young and that is why they did not run the party well. My conscience was not happy in the PDP,” Okupe said. He added that his decision to join Accord was not for his selfish ambition, while he promised to use his years of experience in politics to build the party ahead of the 2019 general election.

The Lagos State chairman of the party, Femi Ikuomola, said the party had put aside its recent internal problems, stressing that it was mobilising members across the state and embarking on reconciliation of aggrieved members ahead of the general election. Ikuomola said the party was prepared to defeat the ruling All Progressives Party Congress (APC)

in Lagos State, stressing that it was currently strategising across the state. “As you can see our party is well positioned; we are strategising ahead of next year’s elections and we would take over Lagos from APC; I can tell you. We have members across the state and if the election is free and fair, we would win,” Ikuomola said.

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Visa applicants stranded over suspension... Continued from page 1

indefinitely.

The United States Embassy in a statement on Tuesday said it has shut its visa and consular services section at its embassy in Abuja indefinitely. Visa interview were previously conducted only in Lagos and Abuja. With the closure of the Abuja centre, hundreds of applicants scheduled to be interviewed in Abuja are now wondering what will happen to them. Many of them will now be forced to come down to Lagos, from whatever State they reside for the interview, without guarantee of getting the visa. “I reside in Abuja and this is the second time I have applied for the visa because I was told I applied for the wrong visa type. I had to cough out another N57,600 within a space of one month just to apply for the visa. I thought I had crossed the bridge, only to wake up to the news that US had shut down its visa and consular services in Abuja,” an applicant, who will not want her name mentioned told BusinessDay. Another applicant who simply

identified himself as Yomi told BusinessDay that he was supposed to go to United States next month for a conference but unfortunately, he could not get a visa interview in Lagos within the short period of time he had left to attend the conference and had scheduled an appointment in Abuja. Yomi said he had no other option than to quickly book a return flight to Lagos and hope he can get an interview appointment in Lagos. The U.S. Mission in Nigeria revealed that no fewer than 220,000 Nigerians applied for non-immigrant visas in 2014. Travel experts say this number may have increased since then and therefore the closure is likely to place increased pressure on the Lagos office, which has been the busier of the two issuing offices. In a statement issued by the embassy on its website yesterday, it stated that, “Until further notice, all consular appointments at the U.S. Embassy in Abuja have temporarily ceased for both visa and for American Citizen Services. Consular functions in U.S. Consulate Lagos are not affected and will continue. Scheduled visa and

ACS applicants for Abuja will be contacted for rescheduling.”BusinessDay contacted Tosin Akin-Ogundeji, Information Specialist, Public Affairs Section (PAS) U.S. Consulate General who refused to disclose the reason for the decision. “I am not sure when the Abuja ban will be lifted. I cannot tell you the reason why. I currently have no detail on that,” Akin-Ogundeji said. However, one of the traveling agents that deals with US visa processing told BusinessDay that the issue is a technical issue which the consulate is working to resolve. Frank Meke, spokesperson for the National Association of Nigeria Travel Agencies, (NANTA) told BusinessDay that although no traveller has officially come to the association to complain because the US doesn’t encourage people coming through third parties he insisted that travellers have expressed their concerns about the development. “There are things the diplomatic communities get away with because of the way Nigeria’s system is structured. In a country that is not divided, you can’t do this to their citizens and get away with it. That is actually what is playing out now,” Meke said.

L-R: Abiodun Peters, compliance manager, Nigerian Bottling Company Limited (NBC); Akintunde Oyebode, executive secretary, Lagos State Employment Trust Fund (LSETF), and Amaka Onyemelukwe, public affairs and communications manager, Coca-Cola Nigeria, at the signing of Memorandum of Understanding (MOU) for the Empowerment of 1000 Women in Lagos State, yesterday.

2019 election plot thickens as Saraki considers... Continued from page 1

will be surprised if he eventually

declares,” Rafiq Raji, Chief Economist at Macroafricaintel said on a phone response. If he were to win, it might actually be positive for the country. Although he has to win first as no one is sure on who will eventually emerge as a preferred candidate for the party. “He has a good shot at winning and perhaps securing the ticket of the PDP and if he does, he would do a good job in terms of investors in the country,” Raji said. Over the past weeks, Saraki visited a one-time Nigerian Military president Ibrahim Babangida in Minna, he also had several closed door meetings with former Nigerian president Olusegun Obasanjo. A move technocrats said was to justify his stance on whether or whether not to join the presidential race. Since clinching the post as the senate president in 2015 against Buhari’s wishes, the Saraki led national assembly has always been at logger heads with the APC led executive. His defection last month back to the PDP came amid a wave of such departures from the APC, including dozens of senators and at least two state governors. After security operatives surrounded Saraki’s home last month for undisclosed reasons,

the secret police (DSS) temporarily blocked access to the National Assembly on Aug. 7, in what Saraki said was an assault to democracy On investment, Saraki said most of the inflows that have come in are merely hot money, and that is because the oil price has gone up. “Investment in the real sector is not seen he said. The private sector, in my view, has probably taken a position that the confidence is not there in the government. The country requires a government that is truly pro-business, and a president that sees himself as a chief marketing officer,” Saraki said. Bearish investors sentiment continued yesterday with the Nigerian Stock Exchange All Share Index (NSE ASI) depreciating further by 0.62 percent to close at 35,069.34 points, compared with the 0.35 percent slide recorded yesterday. On the other hand, the 30-Day and 180-Day NIBOR increased to 12.25 percent and 14.72 percent respectively while the 90-Day NIBOR decreased to 12.80 percent The average yields in the treasury bills secondary market closed higher by an average of 5 basis points across most of the maturities traded in the Treasury Bills 2-way-quote market. Demand for Secondary Market Treasury Bills continued to shrink despite relative stability in the Money Market.

On the involvement of security forces in political matters, Saraki noted that “There has been a persistent disregard for due process and a lack of neutrality for some of these issues. For you to have credible elections, you must have safe elections. Security agencies are actively getting involved in the politics.” “The fundamentals of whatever we are going to develop are going to be based on sound democracy, credible elections, freedom of choice of Nigerians. If we don’t have that as a foundation, then everything else cannot happen.” On gasoline subsidies, Saraki said “If the country is going to have a subsidy, it should have a budget for it. Because once we have a budget for it, the private sector can also play a role in the importation of petroleum products. “And if the private sector plays a role, definitely the cost of the subsidy will go down and there will be more efficiency in the delivery of products. But in the environment we are in today, where it’s only the Nigerian National Petroleum Corp. that’s doing that, it’s going to be inefficient, it’s not going to be transparent.” On the PDP, he said “The PDP has learnt its lesson from the loss in 2015, and I think unfortunately the APC did not learn from their victory.” “While negotiating with the PDP “we listed a number of issues.

•Continues online at www.businessdayonline.com

Thursday 16 August 2018

MTN in data push pumps N200bn into... Continued from page 1

structure and funding level that support growth and expansion,” Moolman said. “Making it possible for people to connect to each other and the world, find and share information and ideas, create and access new digital services and reimagine old services. This partnership puts in place infrastructure that empowers commerce, industry and the provision of public services,” Moolman said. MTN’s debt increased to 69.8 billion rand as of the end of June, compared with 57.1 billion rand six months earlier. Kunle Awobodu, MTN Nigeria’s Chief Financial Officer, told BusinessDay that; “although MTN has the most expansive fibre network in the country, there is an issue with fibre cuts and attack. Therefore, we need to protect our network in a way that even when we get attacks, our network doesn’t go down. We are going to invest in ring-fencing our coverage all over Nigeria and also invest in fibre infrastructure so that high speed data can reach the rural parts of the country.” Industry watchers say that MTN’s continuous investment in growth and expansion of services shows extreme confidence in the Nigerian market. They also say that the N200 billion loan syndication is a marker as to the strength of Nigerian banks to service telecommunication businesses which are capital intensive investment areas. “Our revenue base is still largely dominated by voice which contributes about two third of our total revenue, but what we are beginning to see is that people are not making calls as much as they used to, and are more interested in data based applications, so, as we transition into this movement, we need to invest in our network. Our view is that we must prepare for the future. If a big portion of our revenue is going to come from data and from digital services in the future, we have to start that investment now, and that is why we have taken the medium term loan,” Awobodu said. The loan facility is structured with a two-year moratorium and a repayment plan of five years and is denominated in Naira. MTN had in 2013, raised a total of N239 billion in loans for expansion which is said to wind down in 2019. “We raised the loan locally and that loan is winding down next year.

We have kept to the loan servicing agreement and all the repayments have been made as at when due. Final payment will be done in 2019,” Ishmael Nwokocha, MTN’s General Manager, Corporate Treasury Finance. According to Awobodu, MTN already has Long Term Evolution (LTE) frequency in some parts of the country. “We actually have LTE frequency, but the more frequency you have, the better services you can provide and it also helps us in terms of the coverage that we can give to the populace. So we keep looking for opportunities in the market to give us services to the outer part of Nigeria with better network quality. What we are doing with our LTE services is that we plan to expand. We started with three cities; Lagos, Abuja, Port-Harcourt and we expanded to reach about nine or 10 cities in total, but we have cities that are still not on 4G and we would like to expand into those cities, and this is part of why we are doing this CAPEX expansion,” he said. Analysts say that just as the earlier loan had boosted MTN’s ability to grow, increase revenue Year-onYear, and provide expansive voice coverage as the number one telco in the country, its plans to fund its capital expenditure, working capital and evolving business opportunities including opportunities in data with the newly taken N200 billion loan will create technological advancements for the country in many more ways than one. They say that MTN’s data driven plans has the potential to raise technology penetration to the hinterlands and encourage the take off and development of medium to highbrow businesses in the rural areas. It also has the potential to slow down the rate of rural-urban migration. The N200 billion loan facility was provided by a consortium of banks made up of; Citibank Nigeria Limited, Diamond Bank Plc, Ecobank Nigeria Plc, Fidelity Bank Plc, First Bank of Nigeria Plc, First City Monument Bank (FCMB) Limited, FSDH Merchant Bank Limited, Rand Merchant Bank (RMB) Nigeria Limited, Standard Chartered Bank Plc, Stanbic IBTC Bank Plc, United Bank for Africa (UBA) Plc and Union Bank of Nigeria. MTN says that the new loan arrangement will help it continue to provide optimum services and products for its over 55 million customer base.

Apapa gridlock worsening 25 days after Osinbajo... Continued from page 1

hour joint operation to clear

the gridlock in Apapa caused by stationary trailers, the situation is getting worse instead of improving incrementally as expected. Since the VP’s visit, Apapa has moved from bad to worse with surging trailers and tankers who seem to have defied both the VP and the taskforce set up to force them out and end their siege on the dilapidated roads and bridges that lead to the premier port city adjudged the busiest in West Africa. This action only speaks to our life as a nation where people allow personal interest to override collective considerations and also becloud their sense of moral judgment which ought to consider the right of the other man to comfort and convenience. Osinbajo, who made the unscheduled visit to the port city to assess the traffic situation, directed relevant government agencies to immediately

embark on the decongestion of the bridges and roads on which trailers and tankers were indiscriminately and mindlessly parked. He directed that the operation should be carried out by collaborative efforts of the Police, Nigeria Navy, Nigeria Army, the Nigeria Air Force, FRSC and the NSCDC, LASTMA, LASEMA, Container truck drivers, National Association of Road Transport Owners, NUPENG, Road Transport Employers Association of Nigeria. The vice president followed this up five days later, precisely on July 26, 2018 with a meeting in Apapa with maritime unions, businesses, residents and other stakeholders over Apapa-Oshodi Expressway which has collapsed and has been rendered impassable by the rampaging trailers and tankers, yet the truckers are not only around, but have become more audacious.

•Continues online at www.businessdayonline.com

Thursday 16 August 2018

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Regional security: Benin Monarch advocates establishment of ECOWAS Council of Traditional Rulers

he Benin Monarch, Omo N’ Oba N’Edo Uku Akpolokpolo, Oba Ewuare II, has made a case for the establishment of a Council of Traditional Rulers to support efforts at riding the West African sub-region of cross-border crimes. Oba Ewuare II made the submission in his lecture entitled “The Role of Traditional Institutions in the Preservation of Cultural Values and the Management of National Security,” he delivered at the Institute for Security Studies, Bwari, Abuja. According to the Oba, traditional rulers as divined statutory authority closest to the grassroots are better placed to curb crimes by unscrupulous migrants, leveraging on the closer ties and shared values among traditional rulers in the Economic Community of West African States (ECOWAS). He called for the creation of an Upper Chamber, made up of traditional rulers, through the instrumentality of the Constitution. The Omo N’ Oba also

canvassed for the establishment of a Security Trust Fund, from where money could easily be drawn to provide the necessary equipment, training and other requirements, devoid of impediments, in combating and prosecuting security challenges. In his incisive lecture, the royal majesty noted that the creation of Advisory Council of Traditional Rulers would put the wealth of experience of traditional rulers at the disposal of the various heads of governments on matters of security in the West African economic bloc. “Such mechanism would strengthen the role of heads of states and governments, through the sharing of intelligence and provisions of grassroots support, which traditional rulers represent,” he said. The well-attended event, had in attendance Course Participants at the Institute for Security Studies Centre, Bwari, Abuja, security experts and representatives of agencies saddled with the management of the nation’s security.

35 NEWS

BUSINESS DAY

BusinessDay partners BMW Club Nigeria for Bimmerfest 2018

he BMW Club Nigeria, a nonfor-profit club in Lagos, has entered into an agreement with BusinessDay Media to be the official media partner for the third edition of Bimmerfest, holding October 7. Bimmerfest 2018 is one of the largest BMW automobile gatherings on the BMW calendar worldwide, and will bring together BMW and other vintage car owners in the country together to participate in motorcar racing and other car related entertainment activities. Bimmerfest has been named as the biggest gathering of car lovers in West Africa. BMW Club Ghana has already indicated an interest in being part of this year’s celebration in Nigeria. BMW Club of Nigeria is an exclusive enthusiast organisation operating under the guidelines of the BMW Clubs International Council,

Munich and the Club is also a proud member of the BMW Clubs Africa. The Club prides itself of exclusive motoring activities, ranging from autotainment, motorsports, lifestyle shows and road safety campaigns in Nigeria. The 2017 Bimmerfest had on display some top range BMW models – the oldies, the newbie’s, the customised and the tuned. There was a miniature golf course set up within the venue for the golf lovers, on-screen display of some of the world’s best automobile stunts, engine display, auto care, safety and technical sessions, backyard BBQ, drinks, food and traditional summer favourites with a playful twist. BMW Clubs Africa is the Umbrella organisation for BMW Clubs in Africa. It is a member of the International Council of BMW Clubs. BMW club in Africa can be traced back to 1981 when the

BMW Club of South Africa was formed in Johannesburg, representing both cars and motorcycles. In 1983 and 1984 the Club became a member of the International Council. The umbrella Club for Africa was formalised in 1989 and restructured in 1994, and Club Africa was created to be the representative body of its Member Clubs. BMW, which stands for Bayerische Motoren Werke in German, or Bavarian Motor Works in English is a German multinational company that produces luxury automobiles and motorcycles. It is one of the popular German car brands with a cult following with owners of the brand often swearing to its quality and unbeatable driving pleasure. BMW was founded in 1916 and has its headquarters in Munich, Bavaria. BMW produces motor vehicles in Germany, Brazil,

China, India, South Africa, the United Kingdom, and the United States. Automobiles are marketed under the brands BMW (with sub-brands BMW M for performance models and BMW i for plug-in electric cars), Mini and Rolls Royce. Motorcycles are marketed under the brand BMW Motorrad. The company has significant motorsport history, especially in touring cars, Formula 1, sports cars and the Isle of Man TT. With its four brands BMW, MINI, Rolls Royce and BMW Motorrad, the BMW Group is the world’s leading premium manufacturer of automobiles and motorcycles and also provides premium financial and mobility services. The BMW Group production network comprises 30 production and assembly facilities in 14 countries; the company has a global sales network in more than 140 countries. L-R: Temitope Alonge, chief medical officer, University College Hospital (UCH) Ibadan (l), and Ademola Adebise, acting MD/ CEO, Wema Bank plc (r), at the launch of the Hospital Management Solution System, an initiative of the bank, at UCH Ibadan.

Edo constitutes State Universal Basic Education Board

do State government has constituted the Universal Basic Education Board (SUBEB) following the approval of the governor. A statement issued by the Secretary to the Edo State Government, Osarodion Ogie, on Wednesday, said the appointments were in line with the provisions in Part II of Sections 6 and 7 of the Edo State Universal Basic Education Law, 2015, and subject to the confirmation by the Edo State House of Assembly.

The appointees are: Joan Osa Oviawe – chairman; Elizabeth Ighodaro – member (Edo South); Anthony Oshiowekhai Ekhaisomi – member (Edo North), and Stevenson Ehime – member (Edo Central). The constitution of the board will strengthen the ongoing reform in the education sector embarked upon by the Godwin Obaseki-led administration to ensure quality education driven by well-trained teachers who would leverage on modern technology in teaching.

Nigeria’s currency-in-circulation drops by N332.4bn YTD Fight against human trafficking: Edo lauds EU, JONATHAN ADEROJU

ollowing data from the Central Bank of Nigeria (CBN) official website, it has shown that the quantum of money circulating within the Nigerian economy reduced by N332.403 billion or 15.4 percent in between January and July this year. According to the CBN, currency-in-circulation dropped from its peak of N2.157 trillion in the festive period of December 2017, to N1.824 trillion. Year-on-year, the figure however showed an increase by N55.741 billion or 3.15 percent from N1.769 trillion at the end of July 2017; while month-onmonth, currency in circulation dropped from N1.9

trillion, or N75.845 billion representing 3.99 percent slide. Between March and July, it reduced from N2.039 trillion, or N214.498 billion or 10.51 percent. Just like the nation’s inflation rate, currency-in-circulation has dropped consistently month-on-month, since the end of March, with the biggest decline being between June and July. Meanwhile, the CBN sustained its intervention in the interbank foreign exchange market by injecting another $210 million into various sums of the market on Tuesday. At the session, the CBN offered $100 million as wholesale interventions and allocated $55 million each for Small and Medium Enterprises (SMEs) forex

window and the invisibles sector, for customers requiring forex for Business/ Personal Travel Allowances, tuition and medical fees, among others. Isaac Okorafor, acting director, corporate communications at the CBN, confirmed the figures, and expressed the management’s pleasure at the performance of the naira, noting that the currency had continued to enjoy stability against the dollar and other major currencies of the world in recent times. He reassured the public that management would continue to intervene in the interbank foreign exchange market in line with its resolve to ensure liquidity in the forex market and maintain stability.

Benin Monarch as taskforce clocks one

do State governor, Godwin Obaseki, on Wednesday saluted the roles of the Benin Monarch, Oba Ewuare II and the European Union in the fight against human trafficking and illegal migration in the state, in the last one year. Governor Obaseki gave the commendation while taking stocks of the activities of the Edo State Task Force Against Human Trafficking, during its one-year anniversary, at the weekly state Executive Council meeting in Benin City. The governor, one year ago, initiated a multipronged fight against human trafficking, few months into assumption of office, deploying a mix of approaches to curb the ugly trend. “We believe that if we

tackle the issue of poverty by making people more comfortable, they will not want to travel illegally. For us as a government, we have encapsulated the challenge of migration as one that is driven by under-development. “We thank the Benin Monarch, Oba Ewuare II for his support and responsiveness, which have been praised by the World. This has shown that trafficking and prostitution are not in our culture,” the governor said. He expressed his gratitude to the EU, Christian Association of Nigeria and Muslim leaders for their support in ensuring that the menace of human trafficking is tamed. Earlier, chairman of the taskforce, Yinka Omorogbe, during her presentation, said they had received 3,883 re-

turnees, who have benefited from the state government’s reintegration package. Omorogbe explained that the taskforce’s data showed that 80.17 percent were independent migrants between 18 and 25 years of age, which is alarming, as they are members of the active population. In a report released to mark its one-year anniversary, the taskforce said the state government received 3883 persons from Libya, noting that the holistic approach includes receive the victims; provision of medical diagnosis and assistance; contact and reunion with family; security screening, investigation and protection, vocational training and empowerment and payment of stipends.

Thursday 16 August 2018

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BUSINESS DAY

FINANCIAL TIMES Lira rallies after Turkey introduces measures to curtail short selling

Colombia and corruption: the problem of extreme legalism Page A4

Page A3

World Business Newspaper

South Korea’s economic integration plan with North risks US ire

Blueprint for road and rail links comes as progress falters on denuclearisation Bryan Harris

outh Korea is planning to establish road and rail links with North Korea by the end of the year as Seoul seeks to bolster economic engagement with the regime amid faltering progress on denuclearisation. The plan, however, is likely to raise eyebrows in the US, which has remained steadfast about maintaining stringent sanctions on Pyongyang in an attempt to coerce the regime to abandon its nuclear weapons. If completed, the infrastructure projects would represent a concrete step towards the economic integration of the Koreas — a prospect that economists believe could in the long run dramatically improve growth in both countries. The approval rating of President Moon Jae-in has fallen to 58 per cent — from 79 per cent in June — amid growing concerns that his policies are not doing enough to revitalise South Korea’s sluggish economy. “Even though political unification may be a long way off, establishing peace between the South and the North and freely visiting each other, and forming a joint economic community is true liberation to us,” Mr Moon said on Wednesday, at an event to mark the country’s independence day. With a nod to the origins of the EU as a simple trading bloc, the 65-year-old leader added that he wished to create a “north-east Asian railroad community” that would bring together the two Ko-

reas, the US and four other Asian countries, most likely China, Japan, Russia and Mongolia. “This community will lead to an energy bloc and economic bloc in Northeast Asia by expanding our economic area to the northern continent and becoming the foundation of coexistence and prosperity in Northeast Asia. And this will mark the start to a multilateral security system in Northeast Asia,” he said. Since North Korea and the US pledged to pursue peace following a landmark summit in Singapore in June, Seoul has pursued proposals to link the two Koreas. This has included a plan to develop three economic belts, along the west and east coast of the peninsula and across the demilitarised zone. Such integration could effectively end South Korea’s “island” status by integrating it into energy and transport networks in Russia and China. According to a report by the IBK Economic Research Institute, the proposals could boost South Korean gross domestic product by more than 1 per cent. The sunny economic outlook contrasts with the tense political sentiment on the peninsula. Pyongyang has traded barbs with Washington and Seoul in recent weeks over the allies’ demand that the regime abandon its nuclear weapons. Although North Korea agreed to work towards denuclearisation at the Singapore summit, it has yet to show any evidence it is moving in that direction and vowed to retain its nuclear knowledge.

Facebook is turning matchmaker. Is this a good thing? Do we really want Silicon Valley coders to predict who we may or may not like? Aime Williams

he world’s most successful social-media platform began as a rudimentary “hot or not” site. Facemash, created by Harvard student Mark Zuckerberg, presented viewers with random pairs of student photographs he’d scraped from the university’s intranet, and asked them to rate who was the more attractive. The site was shut down but Zuckerberg is now returning to his dorm-room roots. Earlier this year, he announced that Facebook would launch a dating service. This makes sense for the company but might leave users a little queasy. I’ve used Facebook since 2007; it has 10 years of my posts, status updates, chats and photos to analyse. It’s becoming clear

that we don’t know the extent to which Facebook monitors us, but it certainly holds a huge amount of data on us. Think of all the excruciating private messaging its algorithms will have at its disposal if people use it to find a date. Yet it may be for just this reason that Facebook — and other tech companies — could be good matchmakers. Why bother leaving things to chance when you could just let all-knowing robots choose your partner? Most apps ask users to accept or reject potential dates by swiping left or right — repetitive labour of the sort humans have always sought to replace with machines. Then there is the small talk, which is quite boring. What if you could get a chatbot to do the basics, Continues on page A2

South Korea’s Moon Jae-in, right, has outlined plans for road and rail links with the North Korean regime of Kim Jong Un, left, by the end of the year © AP

Economists warn on dominance of US corporate giants The rising grip of a small group of large companies comes under scrutiny Sam Fleming and Brooke Fox

merica’s biggest companies are grabbing a swelling share of revenues across major sectors while workers see pedestrian wage growth, teeing up a vexed debate over whether public policy needs to respond. So-called superstar companies are becoming increasingly powerful, allowing some to widen the mark-ups they charge on products and services. As these highly profitable businesses become more dominant, workers are capturing a smaller slice of the economic pie, some analysts say, contributing to income inequality. Democratic party politicians and progressive think-tanks have latched on to the phenomenon: Elizabeth Warren, the Massachusetts senator, has urged that antitrust authorities sharpen their teeth and claims that “competition is dying” in America. The notion that antitrust laws

are too lax is contested, however. A presentation from the US Department of Justice and the Federal Trade Commission at the OECD in June cast doubt over some of the research on concentration in the corporate world, saying the analysis was not tracking meaningful product markets. Economists increasingly agree that some sectors are becoming more dominated by a few big corporate players. A standard measure of corporate concentration — the Herfindahl-Hirschman index — is up 48 per cent since 1996. There has been greater concentration in about 75 per cent of US industries in the past two decades, according to research from academics including Gustavo Grullon of Rice University. America’s internet giants have, for example, built powerful positions in their markets. Google and Facebook together controlled more than 58 per cent of total US digital advertising spending last year, according to eMarketer. Amazon is

on track to capture nearly half of America’s ecommerce market this year, according to the research group, while its share of overall retail in the country, including offline sales, is 5 per cent. Healthcare has meanwhile seen a wave of acquisitions, including hospital tie-ups and the proposed merger between CVS Health and Aetna. The IMF published research in June focusing on a measure of corporate power — mark-ups measuring the gap between the prices charged and production costs. Among US publicly listed companies these have risen by a sales-weighted average of 42 per cent from 1980 to 2016, in a possible sign of weaker competition. Similar trends are visible in other countries. “We see evidence of rising market power and declining competition in the US,” said Daniel Leigh, deputy division chief in the western hemisphere department of the IMF. “This is coupled with signs that the [labour] share is going down.”

Currency pressure forces Hong Kong and Indonesia into action HKMA defends forex peg as fallout from Turkey’s financial turmoil resonates Emma Dunkley and Edward White

sian currencies came under renewed pressure on Wednesday forcing central banks in Indonesia and Hong Kong to take action and marking an escalation in the fallout across emerging markets from the financial turmoil in Turkey. Indonesia’s rupiah weakened to its lowest level in nearly three years, hitting a low on Wednesday of Rp14,651 against the US dollar, prompting the Bank of Indonesia to defy economists’ forecasts and increase rates. The central bank raised its benchmark lending rate by 25 basis points to 5.5 per cent, compared with a consensus view of economists polled by Reuters for the rate to stay on hold. In Hong Kong, the weakening local currency forced the de facto

central bank to step in twice and sell $575m of its reserves to buy HK$4.5bn, after it touched HK$7.85 against the greenback on Wednesday. In China, the onshore renminbi weakened by 0.3 per cent to 6.0907 per dollar, while India’s rupee slumped to a record low on Tuesday, breaching 70 against the greenback. The sell-off in emerging market currencies was sparked earlier this week by the plunge in the Turkish lira to a record low on Monday, following intensifying trade friction with the US and concern over its domestic economy. Charts That Count: Powell Paroxysm Analysts said contagion concerns played a role in the broader sell-off across EM currencies, with countries that have large current account deficits and which rely heavily on external borrowing the hardest hit.

The strengthening US dollar has also led investors to sell out of riskier emerging market assets. Paul McNamara, an emerging market fund manager at GAM, said that India “has been the big offender” in terms of trade deficit, but noted that the equivalent figure from Indonesia on Wednesday of a $2bn deficit in July “was horrendous”. “Given that dollar strength is a problem for all emerging markets, we think Asian currencies are not in great shape,” he said. “The cycle across Asia looks fairly mature . . . central banks should be tightening rates a little bit more than they are.” Analysts said the Hong Kong dollar’s weakness was triggered by the widening gap between interbanklending rates in Hong Kong and the US. Hong Kong’s three-month Hibor rate has declined to 1.8 per cent, while US Libor sits at 2.3 per cent.

BUSINESS DAY

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NATIONAL NEWS

FT Facebook is turning matchmaker.. Continued from page A1 weeding out anyone who is particularly unsuitable or offensive? Bernie, an app launched in 2014, offered to work alongside Tinder and do the boring swiping and chatting for users. Its website promised “freedom from hours of daily swiping”, and suggested it would “save time by eliminating dates that aren’t interested”. Sounds intriguing. But it was suddenly shut down in 2017 (at the time, founder Justin Long said Tinder had asked the app to close; neither he nor Tinder could be reached for comment). One burgeoning data set for the tech companies will be generated by facial recognition. Programmers could use users’ hot-or-not ratings to calculate which facial features people find attractive. Apps could optimise matches this way, but it’s not hard to imagine the information also proving useful for advertisers. Another app, Hily, which cofounder Yan Pronin describes as a “social discovery app”, doesn’t swipe for you, but it does more than show pictures of potential matches. The app, which is still in beta mode, filters matches for similar interests and word choices, and scans messages for “depth of dialogue”. Analysing verbal exchange takes things a step further than offering dates based on geographical proximity, as Tinder does. Using algorithms for dating apps isn’t new — it’s just that the best tech brains haven’t made their code available to the rest of us yet. In 2012, a PhD student in Los Angeles called Chris McKinlay realised that he wasn’t using dating website OkCupid efficiently. The site asks its users to answer a series of questions and rate how important their prospective dates’ answers are. For example: you might say you believe in gender equality, and mark it of high importance that any prospective date does too. McKinlay used Python — a type of code — to group women into categories based on their replies. He then wrote different profiles — highlighting slightly different character traits — to boost his match scores with different groups. He ended up meeting his fiancé and closing his account. Facebook is the latest dating market entrant from big tech, but others will surely follow. We could end up living in a world where the perfect date is automatically found for us among the vast data vaults of Facebook, Amazon or Google. But do we really want Silicon Valley coders to predict who we may or may not like? I already worry that the music streaming service Spotify, which keeps trying to suggest what songs I might like to listen to, diminishes my world. Amazon does the same with books. Now dating apps will do it for potential partners. The assumption is that humans have predictable tastes and choices — and maybe that’s true. But it sounds like a robot’s view to me.

Thursday 16 August 2018

New Zealand bans foreigners from buying homes Overseas purchasers have snapped up luxury estates to use as ‘bolt-holes’

Jamie Smyth

Narendra Modi offers healthcare sweetener ahead of India elections PM also promises manned space flight by 2022 in wide-ranging Independence Day speech Amy Kazmin

ndia’s Prime Minister Narendra Modi has unveiled a healthcare scheme to shield poor families from costs of illness — and promised a manned Indian space mission by 2022 — as the country marked the 71st anniversary of its independence from British colonial rule. In a sweeping Independence Day speech at New Delhi’s Red Fort, his last before national elections next year, Mr Modi said on Wednesday that India had made great strides since he took power in 2014, ending the policy paralysis that afflicted the previous administration. “From being seen as among the ‘Fragile Five’, India is now the land of reform, perform and transform,” the prime minister said. “We are poised for record economic growth . . . India’s voice is being heard on the world stage. We are integral parts of forums whose doors were earlier closed to us.” Speaking for nearly 90 minutes in Delhi’s heat, Mr Modi sounded the bugle for what is expected to be

a hard-fought election campaign, positioning himself as both a strong, decisive leader, and as a champion of social justice and the poor. He said his government had pushed through a long-awaited goods and services tax, tackled entrenched corruption while also providing poor families with access to a wide range of amenities, including electricity, water, toilets and cooking gas. In a promise that will capture the imagination of many of his compatriots, Mr Modi pledged that India would launch a manned space flight by 2022. If successful, it would make India just the fourth country to do so, after the US, Russia, and China. But it is the attempt to overhaul India’s rickety healthcare system— and ensure access to quality health services for even the poor — that is one of Mr Modi’s ambitious and potentially transformative undertakings. At present, India’s public hospitals are struggling under the combined pressures of chronic underfunding and vast demand, while an unexpected illness or accident can

be a devastating financial crisis for many Indian families, forcing them deep into debt to pay for private care. Known in Hindi as Ayushman Bharat or “India blessed with long life”, Mr Modi’s new scheme is intended to provide up to 100m poor families with as much as Rs500,000 ($7,1O0) in annual health insurance coverage to pay for secondary or tertiary hospital care. “It is high time we ensure that the poor of India get access to good quality and affordable healthcare,” Mr Modi said. The rollout of the scheme — which the government estimates will cost $1.7bn in the first two years but others say will be considerably more expensive — will begin on September 25. But the programme could get off to a bumpy start, with many doctors and hospitals warning that the prices set by the government for procedures such as caesarean sections, knee replacements and placing coronary stents are unrealistically low, especially given the high costs of healthcare in large cities.

De-risking agricultural investment in Africa Climate science can reduce uncertainty in a high-risk environment Evan Girvetz

eset by frequent drought, unpredictable rainfall, degraded soils, pests, disease and conflict, African farmers struggle to produce a steady supply of crops and livestock for consumption and sale. Such risks remain too great for investors, who struggle to unlock financing to support agribusinesses. Agricultural lending interest rates in Africa are frequently in double digits, reaching as high as 47 per cent in some countries. According to the African Development Bank, less than 3 per cent of total bank lending in Africa goes to a sector that accounts for about 70 per cent of all employment and more than 40 per cent of gross domestic product. The impact of climate change on people in sub-Saharan Africa is expected to be as great as or greater than in other regions, yet the continent receives just a 5 per cent share of global climate funding. Initiatives in Climate-Smart Agriculture (CSA), which seek to help farmers adapt to changing weather patterns while reducing emissions and boosting food security, remain severely underfunded. This is why a multiyear project, led by the International Center for Tropi-

cal Agriculture (CIAT) working with the World Bank, the UN Food and Agriculture Organization and other partners, is delving into evidence that may guide investors towards the most viable CSA options in African countries. Originally designed to inform a $250m World Bank CSA Project, so-called “CSA profiles” have been produced for 14 African countries: Benin, Ethiopia, Ivory Coast, Kenya, Lesotho, Mali, Mozambique, Niger, Rwanda, Senegal, Uganda, Tanzania, Zambia and Zimbabwe. For the first time, we have a detailed snapshot of the diverse climate risks each of these countries is facing, and an analysis of the factors that are driving or hindering the adoption of climate-smart practices. Take Kenya, for example, where agriculture generates 28 per cent of GDP and annual exports worth more than $2.5bn. We worked with stakeholders to identify and analyse agricultural techniques that could make the production of key commodities such as rice, tea and dairy more climate-smart and less risky to investors. Practices such as water-efficient irrigation for rice and biogas production for dairy farms were shown to be highly climate-smart. Yet adoption rates were incredibly low, signalling a key area for investment to boost resilience in

the sector. In Senegal, total precipitation rates are predicted to decrease by as much as 10 per cent in some regions, meaning temperatures could increase by 2C. This is worrying and exposes farmers to immense risk, given that only 5 per cent of land is equipped for irrigation. Our research has shown that providing climate information is one of the most effective ways to help farmers and other investors reduce their risk exposure to such conditions. In line with this, the Senegalese National Meteorological Agency produces four types of climate information — seasonal forecasts, 10-day forecasts, daily forecasts and instant forecasts for extreme events — which are helping farmers better adjust their agricultural management to respond to weather forecasts. Through seminars, training and the integration of local knowledge, farmers are adapting their land management practices in consideration of weather forecasts. For instance, in a season where rainfall is projected to be lower than average, farmers substituted maize for soyabeans or sesame due to their lower water requirements. Predicting the onset date of the rainy season can help farmers avoid losing their seedlings due to early planting — a key piece of climate information.

ew Zealand has banned foreigners from buying existing residential property in a blow to the global super-rich, who have snapped up scores of luxury estates in recent years to use as holiday homes and provide a “bolthole” in case of global catastrophe. The new law, which was passed by parliament on Wednesday, follows a public outcry last year when it was revealed that Peter Thiel, co-founder of PayPal and a prominent supporter of Donald Trump, was granted citizenship by the New Zealand government despite his case not meeting the usual requirements. He is one of a growing band of foreign billionaires, including James Cameron, the film director, Julian Robertson, the hedge fund guru, and Mikhail Khimich, a Russian former oil magnate, who have bought properties in popular beauty spots, such as Queenstown and Wanaka. Last year the New Yorker pinpointed New Zealand as a favoured destination for rich “survivalists” preparing for apocalypse. “Saying you’re buying a house in New Zealand is kind of a ‘wink, wink, say no more’,” Reid Hoffman, co-founder of LinkedIn, told the magazine in its article headlined “Doomsday prep for the super rich”. Mr Thiel owns a 193ha estate on Lake Wanaka, which he bought in 2015 for NZ$14.5m ($9.5m). Robert A Johnson, head of the Institute for New Economic Thinking, a US think-tank, told a 2015 audience at Davos he knew hedge fund managers all over the world who were “buying airstrips and farms in places like New Zealand” because they thought they needed a bolt-hole in case rising inequality provokes a revolt. The government of prime minister Jacinda Ardern has also expressed concern that an influx of Chinese property investors, particularly in Auckland, New Zealand’s biggest city, is pushing up house prices and squeezing out local buyers. David Parker, New Zealand’s trade minister, told parliament that one-fifth of homes in Auckland and one-tenth of homes in the Queenstown Lakes district council area — two of the country’s most expensive housing markets — had been sold to overseas buyers in a recent quarter. “There can be a debate as to how much the effect is on price; there can be no doubt that there is an effect,” he said. “We’re here today to take another step towards restoring the great New Zealand dream of home ownership.” The law follows a 60 per cent surge in house prices during the past decade that has driven local home ownership levels down to their lowest in almost 70 years. Immigration, a shortage of affordable homes and high rents are also contributing to a housing crisis, which has placed the issue at the top of the political agenda. The Labour-led coalition campaigned in last year’s election on a platform to solve the housing problem, after a study by Yale University concluded that New Zealand had the worst homelessness crisis in the developed world.

Thursday 16 August 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Lira rallies after Turkey introduces measures to curtail short selling Ankara raises tariffs on US cars, alcohol and cigarettes as row escalates Laura Pitel

urkey on Wednesday introduced measures to try to head off short selling of the lira as Ankara tried to arrest a currency crisis. The lira rallied sharply after Turkey’s banking regulator adjusted its rules relating to currency swaps and other similar transactions, including foreign exchange forward dealing. The measures have the effect of curbing banks’ ability to supply lira to foreign financial institutions. The lira was 3.3 per cent firmer at TL6.13 per dollar, extending Monday’s recovery, when the central bank moved to shore up Turkey’s financial system. At the beginning of the week, the currency hit a record intraday low of TL7.2149. “Basically what they’ve done is effectively raised offshore interest rates without raising rates,” said Peter Kisler, who runs an emerging market fund at North Asset Management. “The ability of Turkish banks to supply lira to the market has been reduced by half.” The measures to try to bolster the lira were announced by the Banking Regulation and Supervision Agency alongside measures to ease pressure on the country’s banking system. The regulator also moved to rein in consumer spending, one of the drivers of Turkey’s runaway inflation and wide current account deficit, by shortening the maximum maturity on consumer loans, placing new limits on credit card instalments. Ankara also raised tariffs on American cars, alcohol and cigarettes, escalating a row with US president Donald Trump. Fuat Oktay, Turkey’s vice-president, announced the tit-for-tat measures on Twitter, in what he said was retaliation for “deliberate attacks” on the Turkish economy by the US administration. The measures, published in Turkey’s official gazette, doubled tariffs on a series of imported American goods. They raised tax on US alcohol to 140 per cent, cars to 120 per cent and leaf tobacco to 60 per cent. Tariffs were also doubled on cosmetics, rice and coal. Ankara and Washington have been locked in a bitter row over the continued detention of Andrew Brunson,

an evangelical pastor from North Carolina who was arrested in Turkey in October 2016. Mr Trump has repeatedly demanded the release of Mr Brunson, whose fate has become the most prominent cause in a wider range of simmering tensions between the two Nato member states. Earlier this month, the US president imposed sanctions on two Turkish ministers in a bid to force Turkey to send Mr Brunson home. Last week, Mr Trump doubled tariffs on imported Turkish aluminium and steel. Recep Tayyip Erdogan, the Turkish president, has responded furiously to the row, which has compounded concerns about his country’s fragile economy in the eyes of international investors and piled pressure on the Turkish lira. The currency has lost more than 40 per cent of its value against the dollar this year. On Wednesday, a court in Izmir rejected Mr Brunson’s appeal against house arrest. A further appeal would now be lodged with a higher court, Mr Brunson’s lawyer said. Mr Erdogan, who has accused the US of waging “economic warfare” on Turkey, has maintained that his nation will not “bow down” to Mr Trump’s demands. On Tuesday he declared that Turkey would boycott US electronics and urged Turkish citizens to stop buying iPhones and turn to Turkish-made goods instead. The Turkish president was due to host the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, for a working lunch at the presidential palace on Wednesday, the second time the two leaders will have spoken this week. Turkey has become an increasingly important ally of Qatar, where it has a military base and has strengthened economic ties since Saudi Arabia and three other Arab states imposed an embargo on the Gulf state last year. Qatar is the world’s richest nation in per capita terms and has a sovereign wealth fund that is estimated to have about $300bn in assets under management. As Turkey’s currency crisis deepened, there have been concerns that the country’s banks, which generally have healthy capital ratios, could become vulnerable to corporate and consumer defaults as a result of the lira’s slide.

US futures sink on China and emerging market concerns Peter Wells

all Street looks set to slide at the open, with futures lower after Chinese stocks fell more than 2 per cent and investors kept a watchful eye on developments in emerging markets. China’s Shanghai Composite fell 2.1 per cent on Tuesday keeping the equities gauge in bear market territory from a three-year high struck in January. The country is still under something of a cloud as trade tension with the US continue to simmer, and its currency has slid to its weakest since 2017. Turkey’s lira continues to bounce back from its record low earlier this week, but its wild moves have triggered volatility in other EM currencies. Indonesia’s central bank caught

forecasters off guard earlier today by raising interest rates in part to prop up its currency, which was at its weakest since 2015. Futures for the S&P 500 were down 0.6 per cent, while those for the Dow Jones Industrial Average shed ⅔ of 1 per cent. Nasdaq 100 futures were down 0.9 per cent. Investors scurried for the relative safety of government debt, pushing yields — which fall as prices rise — lower. The yield on the benchmark 10-year US Treasury was down 3.8 basis points at 2.8587 per cent. The US dollar continued to hover at a 13-month high, with the DXY index up 0.1 per cent at 96.802. In Europe, Germany’s Dax and France’s Cac 40 were both down 1.2 per cent, while London’s FTSE 100 dropped 1.3 per cent.

The lira has lost more than 40% of its value against the dollar this year

UK watchdog issues damning report on PwC’s work for BHS Financial Reporting Council caves to political pressure to publish full report Madison Marriage

ritain’s accounting watchdog caved to political pressure to publish a more extensive report on its investigation into PwC’s audit of collapsed retailer BHS, saying its significant consulting work risked compromising its independence. The Financial Reporting Council on Wednesday released the report, which gave a damning verdict on the work carried out by PwC and its lead partner on the audit, Steve Denison. The regulator had previously only published a brief report on the outcome of its investigation — a record £6.5m fine for PwC and a penalty of £325,000 for Mr Denison — after coming under legal pressure from former BHS owner Sir Philip Green to desist from releasing the full report. The report released on Wednesday contains differences to the original document that Sir Philip attempted to block. The FRC declined to comment on what changes were made. The new report is highly critical of the amount of time Mr Denison spent on the audit — just two hours — as well as the level of consulting work PwC provided for BHS, which resulted in fees that were eight times

higher than the audit fee. The extent of the non-audit work “risked inappropriately influencing [Mr Denison’s] judgment or behaviour,” the FRC said. The watchdog also stated that PwC failed to apply appropriate scepticism to the cash flow forecasts put forward by BHS management, and was critical of the firm’s failure to safeguard its auditors’ independence. The PwC auditors failed to fully investigate several signs that the company faced severe financial difficulties, and “gave no consideration to how these matters may have impacted BHS’ ability to continue as a going concern”, the watchdog said. “They failed to gather any audit evidence on which to conclude that the going concern assumption was appropriate. Based on the audit evidence obtained, they should have concluded that a material uncertainty existed.” Duncan Wiggetts, head of professional standards at the ICAEW, one of the biggest accounting bodies, said: “This is clearly a case where conduct has fallen significantly short of the exacting professional, technical and ethical standards expected of chartered accountants. It is right that the FRC has conducted a thorough investigation and imposed sanctions.”

Sir Philip’s holding company Taveta sold BHS in 2015 for £1 to Dominic Chappell, a former bankrupt. It subsequently collapsed in 2016 with a huge pension deficit and the loss of 11,000 jobs, marking one of Britain’s most controversial corporate failures. Sir Philip applied for an injunction to block the publication of the FRC report in June, arguing that its release could cause “serious and potentially irreparable harm” to Taveta, its directors and employees. Although the injunction was not granted, the FRC continued to avoid publishing the full report while considering the legal implications. This angered politicians and prompted Frank Field, chair of the House of Commons’ work and pensions committee, to urge the regulator to release the full report. A version of the report was last week leaked to The Sunday Times, rendering any attempt to halt its release futile. The latest report published by the FRC contains language that Sir Philip’s lawyers pushed for in court. His lawyers took issue with an earlier version where the FRC stated management’s assumptions regarding future losses at BHS “were not reasonable”.

O2 in deal with revolutionary LiFi company Technology uses light as data transmitter and ‘paves way’ for 5G in the UK Nic Fildes

Scottish company that has developed a technology that turns lightbulbs into WiFilike data transmitters has signed a deal with O2. PureLiFi, a University of Edinburgh spinout, was founded in 2012 to commercialise LiFi — or light fidelity — technology that can be used to reduce the strain on traditional WiFi networks. The company is backed by Temasek, the Singapore sovereign wealth fund, which has invested $17m into the business. The technology uses LEDs — light-emitting diodes — to transmit data. The signals cannot penetrate walls or curtains, meaning that a direct line of sight is needed for the technology to work. That makes it useful in secure environments where WiFi systems are not used or confined areas with light sources

such as offices or inside cars. Harald Burchardt, chief commercial officer at pureLiFi, said that airports are a good example of where LiFi can play a huge role in improving connectivity. Traditional public WiFi networks struggle to cope with the demands of connecting thousands of travellers, but a LiFi network could provide a dedicated connection to each person sitting near one of the thousands of lightbulbs already installed in the terminals. Alistair Banham, chief executive of pureLiFi, said that the technology is complementary to WiFi in that it reduces the demands on the network. He said it would play a key role in the development of 5G as light has 1,000 times the capacity of radio-based connectivity. “The amount of wireless data required for driverless cars, 8K TVs, smart homes and smart cities means it is very clear we are going to run out of spectrum. WiFi has become a

victim of its own success. There is not enough bandwidth. Light can solve those problems,” he said. O2 has embedded a LiFi system from the company into a room at its headquarters in Slough, west of London. It said the trial would help to “pave the way” for 5G in the UK. Other companies to test LiFi include Wipro in India, Cisco, Babcock and BT. The company is also working with lighting companies including Lucibel in France to embed the technology into the infrastructure as opposed to a small box-like controller. The use of light for transmitting information has been used since the dawn of telecommunications with Alexander Graham Bell launching a light-based “photophone” in 1880. Sailors have also used flashing lights to communicate in Morse code. It was, however, the rise of the LED light that led to the development of LiFi with standards due to be ratified for the technology by 2021.

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Thursday 16 August 2018

ANALYSIS Emerging markets index falls into bear market

MSCI’s measure of EM shares has dropped 20% from January highs Adam Samson

Colombia and corruption: the problem of extreme legalism Once considered independent, the judicial system risks becoming politicised by graft scandals John Paul Rathbone and Gideon Long

or the past ten months, Luis Andrade has suffered a baleful daily routine. Every morning, the former McKinsey consultant has breakfast in his Bogotá apartment, works out at the downstairs gym, then goes online, watches movies or scans the news. He has little else to do. By law, Mr Andrade cannot leave his building overlooking the Colombian capital. His enforced isolation is far from the days when he jetted between clients in New York, São Paulo and Bogotá. It is also an abrupt fall from grace from his recent job. Until last year, Mr Andrade ran a $20bn portfolio of projects at the National Infrastructure Agency (ANI), and was so well-regarded that Juan Manuel Santos, the thenpresident, described him as an “impeccable” public servant. Now the mild-mannered 58-year old is under house arrest for alleged corruption. Mr Andrade’s charges stem from the Odebrecht scandal which has rocked Latin America and that the US Department of Justice has called the world’s biggest bribery scheme. So far, the probe into the Brazilian construction firm has felled a Brazilian and a Peruvian president, and led to the conviction of scores of business leaders and government officials across the region. Popular anger over the scandal has also helped make corruption many voters’ main concern during the marathon of Latin American elections held this year — including in Colombia. Iván Duque, the centre-right president who began his term on August 7, has said he wants Colombia to be “a shining example of law”. There will even be a referendum about corruption this month. What makes Mr Andrade’s case unusual, though, is that everyone agrees about his honourable reputation and that he did not accept bribes from Odebrecht. The attorney-general has said there is no evidence of that, a view that gels with testimonies of those who have admitted to paying bribes. “The Colombian legal system is Kafkaesque,” Mr Andrade told the FT. Many agree. “This is an extremely legalistic country,” notes Rodrigo Uprimny, a former Constitutional Court magistrate and member of the International Commission of Jurists. “It’s the most legalistic in Latin America and one of the most legalistic in the

world.” Indeed, such a legalistic culture highlights not only Mr Andrade’s curious situation but also the challenges Mr Duque faces over the next four years, many of which have a legal basis. These range from implementing Colombia’s controversial 2016 peace process with Marxist Farc guerrillas, to Venezuela’s crisis, and the fate of Mr Duque’s political mentor — the polarising figure of former president Álvaro Uribe. A key factor across all these issues is whether Colombia’s legal traditions can help restore confidence in national institutions, or be manipulated by the powerful to save themselves and attack their enemies. ‘A nation of angels’ The notion of Colombia as legalistic may seem counter-intuitive given its reputation for extreme illegality — as dramatised in the Netflix series “Narcos”. Popular lore even celebrates the rule-bending culture of the vivo, or street sharp. “The vivo lives off the fool, while the fool lives off his work,” runs the refrain. There is also the tragic illegality of a six-decade civil conflict that left a quarter of a million dead. Yet extreme legalism is as strong a Colombian tradition. It dates from the 19th century and Francisco de Paula Santander, a founding national father known as the “man of laws”. Victor Hugo later mocked the country’s 1863 constitution as written for “a nation of angels”. But the lofty quality of Colombian jurisprudence is renowned — as is the bravery of many of its judges who stood up to drug lords such as Pablo Escobar, and who still exercise judicial independence today. “Most judges take a deep pride in their work, and often risk their lives — which is interesting as they operate in such a violent and corrupt country,” said José Miguel Vivanco, the head of Human Rights Watch and a Chilean lawyer who has worked in Latin America for 30 years. “Colombia probably has the region’s most sophisticated approach to legal principles; it goes far beyond formulistic debate.” The flipside of that coin, however, is a complex legal system. There are five higher courts: a Constitutional Court; a Supreme Court; a State Council, which adjudicates on public/private disputes; an Electoral Court; and a National Judicial Council to investigate judges. Furthermore, as of this year, Colombia has yet another court system, the Special Jurisdiction for Peace tribunals, or JEP. It will rule on war crimes from the civil con-

flict, and has been hailed by some as a model for peace processes elsewhere. “Colombia is a paradise for lawyers,” says Fernando Carrillo, state ombudsman. Adding further complexity to the system are tutelas — legal complaints launched by individuals if they believe constitutional rights are infringed. Néstor Osuna, professor of constitutional law at Bogotá’s Externado University, says a staggering 7m tutelas have been lodged since the 1991 Constitution launched the system. One recent tutela judged that the 1m Venezuelan refugees now in Colombia can have access to the national health system. “Often [all] these courts end up working at cross-purposes,” said Ramiro Bejarano, a leading civil and commercial lawyer. “On the one hand, that creates a system of checks and balances as the courts balance each other out. The problem, though, is that the system has become corrupt, often because the judges are appointed via a political process.” This politicisation of Colombia’s legal system is essentially why Mr Andrade believes he is under arrest. In 2011, he gave up his McKinsey job to work in Colombia’s public sector with a specific task: cleaning up the National Concessions Institute (INCO), a notoriously mismanaged institution. Cost overruns on INCO projects were often huge, with the extra cash allegedly shared between corrupt beneficiaries. Such illicit payments are colloquially known as “marmalade”, and are often spread around to fund political campaigns. Rather than reform INCO, Mr Andrade created a new body, the ANI. Roads and bridges were built as investment flowed in. In 2014, P3 Bulletin, a specialist journal, voted ANI the best public-private partnership agency in the Americas. Under Mr Andrade, it awarded over 30 contracts without any legal complaint. However, the ANI also had some ongoing infrastructure contracts with Odebrecht left over from INCO. When the Odebrecht scandal erupted in 2016, Mr Andrade was dragged in. As elsewhere in Latin America, the scandal had a political dimension. It emerged that Odebrecht provided funding towards not only the 2014 presidential re-election campaign of Mr Santos but also his rival, Óscar Iván Zuluaga. Further complicating matters is an apparent conflict of interest that reaches to the heights of Colombian politics and finance.

wide gauge of emerging market equities has dropped by one-fifth from its January highs, leaving it in a bear market amid rising global volatility. MSCI’s main EM equities index, which tracks large- and mid-cap stocks in 24 countries, fell nearly 2 per cent on Wednesday. It has now tumbled more than 20 per cent from the high it struck on January 29, according to Reuters data. EMs have faced increased pressure over the past few months. Rising interest rates in developed markets, particularly the US, has made EM assets less desirable to foreign investors. At the same time, a resurgent dollar has dulled the returns for international investors (and hit the MSCI index, which is measured in dollar terms). Several major EMs are facing issues of their own. Turkey has been at the forefront, facing severe ructions in its currency and other financial markets. In Latin America, Argentina has faced similar challenges.

China, the world’s biggest EM, has also been under pressure — the CSI 300 index of Shanghai and Shenzhen shares is down 18 per cent so far this year — amid concerns about slowing growth and a trade dispute with the US. In a sign of worries over China, the country’s offshore renminbi, which trades in major hubs outside of China, took a fresh hit in New York trade on Wednesday. It was recently down 0.66 per cent on the day against the US dollar. Wednesday’s low of Rmb6.9487 was the weakest level since January 2017. Other risk assets also faced selling pressure on Wednesday. In the US, the S&P 500 index was off 1.1 per cent not long after the open on Wall Street. The Stoxx Europe 600 gauge was down 1.3 per cent in afternoon action. Investors scooped up perceived havens, including US Treasuries. The 10-year note yield was down 4.5 basis points at 2.8497 per cent. Japan’s yen, which tends to rise during times of uncertainty, was up 0.5 per cent.

Falls for metals and oil stocks hit bourses

Dollar strength drags on commodities prices; Turkey’s lira continues to recover Michael Hunter and Adam Samson

eepening dollar strength is putting pressure on commodities prices, taking a toll on resource stocks which are hitting US and European indices. In New York, the S&P 500 basic materials sector is down 1.7 per cent and energy is 1.5 per cent lower, helping to drag the index down by 1 per cent overall to 2,811. With copper at a 13-month nadir and oil prices down more than 1 per cent, resource stocks are also taking up 8 places on the list of the 10 biggest fallers on London’s FTSE 100, which is down 1.4 per cent. The Stoxx index tracking Europe’s mining sector is down 4.6 per cent, the equivalent following oil and gas majors is 1.8 per cent lower. The wider Stoxx 600 is down 1.3 per cent. The dollar index is back at levels last seen in July 2017 — up 0.3 per cent at 96.96 — leaving it up more than 5 per cent for the calendar year. Currencies Turkey’s lira is continuing to fight back from the record lows it touched earlier in the week after the country’s financial regulators tightened rules in an effort to ease selling pressure. The lira is 4.2 per cent firmer at TL6.0856 per dollar after a more volatile run during Asian trading hours, although the recovery leaves it trading around notably weak levels. Nonetheless, the pattern extends Monday’s recovery, when the country’s central bank moved to shore up Turkey’s financial system. At the beginning of the week the currency hit a record intraday low of TL7.2149 as the dispute between Turkey and the US deepened. The recovery comes after the Banking Regulation and Supervision Agen-

cy tightened the limit on the amount of capital Turkey’s banks can commit to transactions with foreign counterparties involving currency swaps and forwards, instruments that can be used to place bets that a currency will decline. The rebound for Istanbul stocks is fading. The BIST 100 is down 3.4 per cent, with the index tracking the country’s banks down 1.7 per cent. “It remains to be seen how sustained the lira’s recovery can be without some more compelling action to close Turkey’s current account deficit. “External financing requirements will prove much more difficult until a degree of confidence in lira stability emerges. What is clear on a broader emerging market scale is that confidence has been quite strong up until very recently.” Derek Halpenny, European Head of Global Markets Research at MUFG The euro is down 0.3 per cent at $1.1307. The pound touched its lowest level since June 2017 as fears that the UK could face leaving the EU without a deal on the terms of its departure left the currency looking exposed. Sterling is off 0.4 per cent $1.2675. Equities Asian stocks weakened with technology stocks lower. Japan’s Topix index was 0.8 per cent weaker. Hong Kong’s Hang Seng was down 2 per cent. The CSI 300 index of major Shanghai and Shenzhen-listed stocks retreated 2.4 per cent. Commodities Brent crude is down 1.6 per cent at $71.32 and West Texas Intermediate, the US marker, dipped 1.8 per cent to $65.87 a barrel. Gold was down $12, or 1 per cent, at $1,182 an ounce.

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I THURSDAY 09 JULY 2018

Opinion

Weep not for Ortom CHRISTOPHER AKOR Chris Â Akor, Â a Â First Â Class Â graduate Â of Â Political Â Science, Â holds Â an Â MSc Â in Â African Â Studies Â from Â the Â University Â of Â Oxford Â and Â is Â BusinessDayâ&#x20AC;&#x2122;s Â Op-ÂEd Â Editor Â christopher.akor@businessdayonline.com

enue state governor, Samuel Ortom, has attracted public sympathy over his persecution by the presidency, the Economic and Financial Crimes Commission and his erstwhile party, the All Progressive Congress. Some weeks before his official defection, his party, the All Progressives Congress, through its national chairman, Adams Oshiomhole, made spirited attempts to prevail on the governor to remain in the party. However, the moment the governor announced his defection to the opposition Peoples Democratic Party, PDP, the music changed. First, Oshiomhole declared the governor a failure and said he was relieved the governor left. â&#x20AC;&#x153;I am relieved as national chairman, and I believe that the leadership of the party in Benue is also relieved that Ortom has left the party and returned to the club he belongsâ&#x20AC;? Mr Oshiomhole said. Immediately after, the Economic and Financial Crimes Commission (EFCC) remembered he had laundered over N22 billion of the statesâ&#x20AC;&#x2122; funds and said he was under inves-

tigation. The EFCC also went a step further by freezing five bank accounts belonging to the Benue state government. Also at the same time, eight renegade members of the Benue State House of Assembly quickly began impeachment proceedings against the governor for corruption and gross misconduct, ostensibly with the aid of Policemen deployed with â&#x20AC;&#x2DC;orders from above,â&#x20AC;&#x2122; to cordon off the state assembly, chase out all workers and prevent the other twentytwo members of the house from gaining entry into the assembly complex. Such was the level of persecution that even the fiery nobel laureate, Wole Soyinka, took sides with the embattled governor, going to the extent of writing him and urging him to remain resilient and undeterred in the face of persecution. The nobel laureate largely agreed that the avalanche of attacks are because of the governorâ&#x20AC;&#x2122;s political choices. â&#x20AC;&#x153;Coincidences are, by their very nature, suspect, and I certainly perceive the beginnings of a heavy-handed campaign of reprisals from ruling circles over your political decisionâ&#x20AC;?, Soyinka said. True, Ortom has come under coordinated attack for daring to dump the party. But the reality is more nuanced. Just as Adamâ&#x20AC;&#x2122;s Oshiomhole claimed, â&#x20AC;&#x153;Ortom got the partyâ&#x20AC;&#x2122;s ticket on a platter of gold,â&#x20AC;? had been a total failure as a governor and the party and the presidency was only tolerating him because he belonged to the ruling party. The moment he left, he became a legitimate target â&#x20AC;&#x201C; and for good reasons.

Samuel Ortom was a minister under the Goodluck Jonathan administration. He contested the governorship ticket in his then party, the PDP, and lost to the then governorâ&#x20AC;&#x2122;s candidate. Desperate to actualise his ambition, he ran to the former governor and leader of the APC in the state who used his influence to hand over the APC ticket to him ahead of leading contenders like Emmanuel Jime, Steve Ugba, and Joseph Waku even when the partyâ&#x20AC;&#x2122;s primary election has been conducted although it was inconclusive. Ortom was not handed the party ticket based on the impressiveness of his manifesto or campaign promises. The sole consideration was his willingness to be loyal to the party leader and godfather, George Akume. For so long as Ortom was

â&#x20AC;&#x2DC;

The only problem now is that while Ortom shared the stateâ&#x20AC;&#x2122;s resources with the APC bigwigs in the state he will be prosecuted alone for the mismanagement of the stateâ&#x20AC;&#x2122;s resources

loyal to Akume and by extension, the presidency, there was absolutely no problem. The federal allocation would come, it will be shared between the owners of the state, as recent revelations show, and all was well, even when workers salaries were not been paid. Bailout funds and Paris Club refunds will also go the same way. On a visit to the state in December 2017 asecondaryschoolteachertoldme that since December 2016, he has not received a penny from the government in form of salary or allowance. As at the last time I checked, workers are still being owed more than eight months salary arrears andprimaryandsecondaryschool teachers and local government workers about fourteen months salary arrears. This is not to talk about pensions that the state has completely stopped paying. The inability to pay salaries in a state that is mostly comprised of civil servants and their dependants had cost the governor a lot of goodwill. He had not only become unpopular in the state, he was also being publicly insulted and pilloried openly by traditional and religious leaders for failure to pay workerâ&#x20AC;&#x2122;s salary. For instance, on December 27, 2017, a Catholic priest in Tarka, Fr Ashwe, rudely stopped the governor, Samuel Ortom, from addressing the congregation at the thanksgiving Mass to mark the 64th birthday celebration of his godfather, Senator George Akume at St Christopherâ&#x20AC;&#x2122;s church Wannune, Tarka local government area of the state. According to

reports, Senator Akume had addressed the congregation at the thanksgiving and after he finished, he handed the microphone over to the governor, who obviously wanted to address the congregation and explain to the people why he had been unable to pay salaries. But the priest interrupted and stopped the governor from saying anything asking him to wait until they get to the reception venue where he could lie to the people about salary issues and other matters as much as he wanted. The priest said he would not allow Ortom to stand in Godâ&#x20AC;&#x2122;s house to deceive the people again. Then the herdsmen attack on the state escalated the relationship could no longer hold. Sensing an opportunity to win local support and against the presidentâ&#x20AC;&#x2122;s unwillingness to stop the killings and even siding with the killers, Ortom, a hitherto staunch Buhari supporter and leader of governorâ&#x20AC;&#x2122;s urging the president to seek a second term, quickly changed sides and became the champion of his people even if he did nothing with the huge security votes he was drawing from the federation account to mobilise security agencies to stop the killings in the state. He rather became very critical of the federal governmentâ&#x20AC;&#x2122;s lackadaisical attitude towards the killings while carefully presenting himself as a helpless state governor with no powers to do anything. â&#x20AC;&#x153;This is a federation. Our responsibility is not to enforce

the law. It is the responsibility of the federal government. So all that we can do is to alert them; and to be proactive and give them information. That as much I did. Today, we are still calling on them. The killings are still going on and action is not being taken to stop the killings. These herdsmen are known. But for whatever reason, they have immunity against the constitution of the federal Republic of Nigeria. Today they are going about with arms and killing and no single person has been arrested with the arms. That is my query with the federal government,â&#x20AC;? he was quoted as saying in one of his numerous visits to one of the IDP camps in the state. But when accused by the EFCC of embezzling N22 billion from the state coffers, the governorâ&#x20AC;&#x2122;s defence was that he used the money to mobilise security agencies to stop the killings in the state. Although he was neither the initiator of the anti open grazing bill and of the â&#x20AC;&#x2DC;Public Mass Burialâ&#x20AC;&#x2122; for the victims of the New Year eveâ&#x20AC;&#x2122;s attack, he went along with them even in the face of severe pressure from the federal government and from his godfather to cancel the event. That event signalled the beginning of the end for him in APC. By the time he decamped to the PDP, the APC in Benue state has become deeply unpopular with the people who see it as a party controlled by their oppressors. The only problem now is that while Ortom shared the stateâ&#x20AC;&#x2122;s resources with the APC bigwigs in the state he will be prosecuted alone for the mismanagement of the stateâ&#x20AC;&#x2122;s resources.

Implications of the Monsanto ruling on African farmers crux of this issue is the chemical glyphosate, the main ingredient of Roundup, the most widely used weed killer in the world. It is also the most used herbicide in South Africa, and is widely used across the African continent with minimal safety oversight. The ruling should NDIDI OKONKWO NWUNELI sound an alarm for African Ndidi Â Okonkwo Â Nwuneli Â is Â the Â governments, farmers and civil Co-ÂFounder Â of Â AACE Â Food Â Pro-Â society organizations as safety cessing Â & Â Distribution Â Ltd, Â Man-Â aging Â Partner Â of Â Sahel Â Consulting Â protocols are falling far behind rising demand for crop protecAgriculture Â & Â Nutrition, Â Founder Â of Â LEAP Â Africa Â and Â a Â 2018 Â Aspen Â tion products in Africa. The prosecution in JohnNew Â Voices Â Fellow sonâ&#x20AC;&#x2122;s case found that Monsanto knew its Roundup and Rangern August 10th, 2018, a Pro weed-killers were dangerCalifornia judge ordered ous and failed to warn consumMonsanto, a global ag- ers. In its defense, Monsanto ribusiness owned by Bayer, to argued that its products were pay $289 million in damages safe, registered for use in over to Dewayne Johnson, a former 130 countries, widely studied groundskeeperwho used the and researched, and were not Monsanto herbicide Roundup responsible for Mr. Johnsonâ&#x20AC;&#x2122;s for many years and is now dying cancer. They intend to appeal of cancer. the verdict. As I watched the news of this With the widespread inciruling announced on major in- dence of crop pests and disease ternational channels, I thought across Africa, responsible for up of the wider implications this to 50 percent loss of harvests, decision could have on farmers farmers increasingly recognize that I work with in Africa. At the the importance of crop protec-

tion.This has transformed West Africa into a growth market for Monsanto and other international agribusiness giants. However, there is minimal farmer education about the proper methods of application for herbicides, insecticides and fungicides and the risks associated with unsafe use. Indeed, I have personally seen many of these products sold in bottles, with minimal warnings. I have observed that most smallholder farmers lack the income to purchase basic gloves, masks, protective clothing or sprayers to protect themselves during the application process. Many even store these chemicals in their homes or with their harvest, because they lack separate storage space. Sadly, there is limited data on negative effects of the use of these products in the African context, and no landmark cases to propel the investigation of the short, medium and longterm implications of improper use. However, a recent studyby researchers based out of Cornell Universityand Georgetown Universityof farmers in

Ethiopia, Nigeria, Tanzania, and Uganda revealed evidence a range of negative human health outcomes associated with pesticide use including time lost due to illness. The reality is that African farmers needaffordable, safe and sustainable crop protection products and this in turn demands that product manufacturers are responsible, regardless of whether the operate in environments with strong regulatory agencies. Multinational companies such as Bayer, Dupont, Syngenta, Dow, BASF need to recognize that even though Africa represents large and growing markets, they must uphold global best practices in sales and marketing, and resist the temptation to applya double standard. Both multinational and local manufacturers must ensure farmers are educated in the proper application methods and risks associated with the chemicals. They should invest in educating government and state extension workers who can provide comprehensive training to the farmers.

Companies should also equip government agencies with the requisite protective clothing and equipment for spraying, which can be rented and shared by clusters of farmers. In order to protect farmers and consumers, African governments must regulate the contents of crop protection productsand monitor the health impact of glyphosate, which the World Health Organization has associated with cancer. They must stipulate packaging and labeling requirements and fund farmer education drives using community and village radio stations to reach farmers who are illiterate. They must also rebuild the extension systems, improving the training, efficiency and effectiveness of the extension workers, enabling them to provide continuous education and support to the farmers, especially those in remote rural communities. Meanwhile, farmer and c o n s u m e r o r ga n i z at i o n s should partner with civil research institutions to conduct research on the impact of crop

protection products,and hold companies and governments accountable for setting high standards and ensuring compliance. The Monsanto ruling also heightens the urgent need for Africa to revisit more integrated pest management systems that use natural approaches for controlling pests such as crop rotation to break the cycle of pests and diseases. Many such methods are age-old African traditions which have been discarded since the age of agricultural science and technological innovation. Dewayne Johnsonâ&#x20AC;&#x2122;s experiences as a groundskeeper in a California county school system, and his experiences are far from those of farmers in Africa. But his legal case, and those of the many other claimants who will engage in future legal battles are a wakeup call for African farmers, the regulatory agencies and the local and global private sector. We must learn from the lessons of other nations and commit to raising awareness and partnering to protect our crops and our people.

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