BusinessDay 16 Oct 2019 by BusinessDay

businessday market monitor

Biggest Loser

Biggest Gainer CCNN NN15.85 4.28pc

MTNN N129.00 -0.77pc 26,513.65

Foreign Reserve - $41.12bn Cross Rates - GBP-$:1.28 YUANY-N 51.12 Commodities Cocoa

US$ 2,522.00

Gold

₦2,982,082.05 +0.23pc

Crude Oil

N300

Foreign Exchange

Buy

Sell

$-N 357.00 360.00 £-N 442.00 452.00 €-N 384.00 393.00

$1,481.03 $58.86

news you can trust I * * WEDNESDAY 16 OCTOBER 2019 I vol. 19, no 415

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

www.

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

362.63 306.95

SEGUN ADAMS & OLUWASEGUN OLAKOYENIKAN

igeria’s September inflation reading saw the fastest increase in the prices of consumer goods and services in four months, a sign that the Federal Government

0.00

10 Y 0.00

20 Y 0.05

14.29

14.42

14.67

-0.02 12.33

NGUS MAR 25 2020 363.53

food prices rise at fastest pace in 4 months border closures reverse CBN inflation gains (NBS) said Tuesday. Inflation had been falling steadily since May. Food-price growth accelerated for the first time in four months, rising by 34 basis points to 13.51 percent year on year in September. Food constitutes over 50 per-

3M -0.28 11.82

NGUS DEC 24 2019 362.68

FG fails to heed history lessons as inflation surges on FX controls has failed to heed the lessons of the country’s historical inflation story: local prices often move up once foreign supply is cut off. Nigerian inflation rose to 11.24 percent in September from 11.02 percent in August, which was its lowest in almost four years, the National Bureau of Statistics

fgn bonds

Treasury bills

NGUS OCT 28 2020 365.50

Seplat takes lead in indigenous scramble for onshore assets …to buy London-listed Eland Oil & Gas …production to hit 64,000bpd DIPO OLADEHINDE

cent of the consumer price index. The acceleration in headline inflation followed Federal Government’s order to partially close Nigeria’s border with Benin and Niger Republic to curb smuggling of rice and other commodities,

he decision by Seplat Petroleum Development plc to acquire London-listed independent exploration company Eland Oil & Gas for $484 million is expected to show other local players how to take advantage of current wave of investment opportunities as International Oil

Continues on page 38

Wednesday 16 October 2019

BUSINESS DAY

news Despite cashless policy drive, CBN spends N14.5bn more to print currency in 2018

L-R: Dele Alake, former commissioner for information and strategy, Lagos State, representing Bola Ahmed Tinubu, APC national leader; Allison Madueke, former chief of naval staff; Christopher Kolade, Nigeria’s former high commissioner to the United Kingdom/chairman of the occasion, and Anya O. Anya, former CEO, Nigeria Economic Summit Group (NESG)/ guest speaker, at the annual lecture themed ‘Business and Accountable Governance: The Obligation of Leadership’ organised by TheNiche, in Lagos, yesterday. Pic by David Apara

…highest cost of production in 5yrs …N662m spent on currency disposal ENDURANCE OKAFOR

IMF projects Nigeria’s economy to grow by 2.5% in 2020

...inflation to rise by 11.7%, current account balance to contract by 0.2% ...projects modest improvement in global growth to 3.4% in 2020 HOPE MOSES-ASHIKE, Washington DC

he International Monetary Fund (IMF) on Tuesday projected that Nigeria’s real economy will grow by 2.3 percent in 2019 and 2.5 percent in 2020 compared with 1.9 percent projected in 2018. Also, Nigeria’s inflation rate is expected to rise by 11.7 percent next year from 11.3 percent projected in 2019, while the country’s current account balance will contract by 0.2 percent in 2019 from 1.3 percent in 2018. The country’s inflation rate, a measure of composite changes in the prices of consumer goods and services, increased by 11.24 percent in September from a year earlier compared with 11.02 percent in August, the National Bureau of Statistics (NBS) said Tuesday. The IMF released the World Economic Outlook on Tuesday which revealed that in sub-Saharan Africa, growth is

expected at 3.2 percent in 2019 and 3.6 percent in 2020, slightly lower for both years than in the April 2019 outlook. Higher, albeit volatile, oil prices earlier in the year have supported the subdued outlook for Nigeria and some other oil-exporting countries in the region, but Angola’s economy – because of a decline in oil production – is expected to contract this year and recover only mildly next year. Gita Gopinath, economic counsellor and director of the Research Department at IMF, who unveiled the World Economic Outlook in Washington DC, said there was a slight upward revision for growth this year and that came mostly from strong agricultural production earlier in the year, but the growth is not high enough to lift the per capita growth into positive tertiary. “For some time we have been emphasising on a comprehensive package to lift

growth. On the element of that, it would have to be stronger non-oil revenue mobilisation as Nigeria has one the lowest rates of revenue in the world which was hit hard by the drop in oil prices that is essential for the country to be able to spend more on priorities such as social safety and infrastructure,” Gopinath said. She said there was the need for tight monetary policy and simpler unified exchange rate system. Foreign exchange restrictions have also been distorting public and private sector decisions and holding back investments. “In the case of Nigeria, a lot depends on oil prices and crashes and one thing to keep in mind about Nigeria is the per capita growth remains weak and this why we are talking about restructuring reforms,” she said. In South Africa, despite a moderate rebound in the second quarter, Gopinath said growth is expected to be weaker

in 2019 than projected in the April 2019 WEO following a very weak first quarter, reflecting a larger-than-anticipated impact of labour strikes and energy supply issues in mining, together with weak agricultural production. While the three largest economies of the region are projected to continue their lacklustre performance, many other economies – typically more diversified ones – are experiencing solid growth. About 20 economies in the region, accounting for about 45 percent of the sub-Saharan African population and 34 percent of the region’s GDP (1 percent of global GDP), are estimated to be growing faster than 5 percent this year while growth in a somewhat larger set of countries, in per capita terms, is faster than in advanced economies.

•Continues online at www.businessday.ng

On World Food Day, millions of Nigerians face food crisis, poor diets CALEB OJEWALE

s the global community marks World Food Day today, October 16, millions of Nigerians will do so either on empty stomachs or on poor diets. In Maiduguri, the capital of Borno State, for instance, food is a luxury, contrary to comments credited to Sabo Nanono, Nigeria’s minister of agriculture, that “there is no hunger in the country”. However, for others like Abdulkadir Jidda, chairman, All Farmers Association of Nigeria, Borno State chapter, hunger is a part of daily life felt by people, not only in the state, but several places in the region. “I feel very bad because we cannot even afford to participate in the ceremony of World Food Day. And you know the reason,” said Jidda, in a phone interview, referring to insecurity which has crippled agricultural output in once prosperous regions

where going into farmlands 2 kilometres beyond the capital is now almost like a suicide mission. “Under such situation, we cannot do anything (agriculture), or celebrate with anybody who is free,” said Jidda. “We are not free (to even produce food), so we cannot celebrate World Food Day.” A total of 5.3 million Nigerians experienced acute food crisis in 16 states of northern Nigeria last year, when the country was identified among eight countries with the worst food crises in 2018. This was contained in the Global Report on Food Crises, which further noted that 22.7 million Nigerians in the north alone are at risk of food crisis if things do not improve. When declining purchasing power by average consumers across the country is factored in, the picture gets grimmer as not only the north is at risk of acute food crisis, but even the south as well. If current trajectories do not www.businessday.ng

change, things could even get worse, as Nigeria is expected to be the third most populous country in the world by 2050 with a population of 411 million, overtaking the United States and coming after both China and India. Coordinated by the Food Security Information Network (FSIN), the food crisis report is described as a major collaborative effort between numerous agencies in the international humanitarian and development community, showing Nigeria’s food crisis puts it in the company of countries such as Yemen, the Democratic Republic of the Congo, Afghanistan, Ethiopia, the Syrian Arab Republic, the Sudan, and South Sudan. This year’s theme for the World Food Day is not addressing hunger from the perspective of “food availability”, but from that of nutritious healthy diets. According to the Food and Agriculture Organisation of the United Nations (FAO), “This year, World Food

Day calls for action across sectors to make healthy and sustainable diets affordable and accessible to everyone. At the same time, it calls on everyone to start thinking about what we eat.” However, this requirement is largely another luxury in Nigeria, where many people are more concerned about getting something to eat, and less about how nutritious it is. Currently, 43.6 percent of children in Nigeria have stunted growth, according to the 2018 Global Nutrition Report. The prevalence of stunting is still classified as a high public health concern, according to World Health Organisation (WHO) standards. Wasting, a reflection of acute malnutrition, affects approximately 18 percent of children under five years old in Nigeria, which, according to WHO standards, is a very high public health concern, noted Feed the Future in its 2018 action plan for Nigeria.

https://www.facebook.com/businessdayng

•Continues online at www.businessday.ng

igeria’s cash-based economy seems to be weighing down the efforts by the Central Bank of Nigeria (CBN) to digitalise financial transactions as the apex bank spent N14.52 billion more to print currency notes in 2018. According to the 2018 annual report by the Currency Operations Department of the CBN, N64.04 billion was spent to print currency in 2018, a reflection of the dominance of cash in the economy. Compared to the N49.52 billion used in printing the banknotes in 2017, the industry regulator spent additional 29.31 percent or N14.52 billion to produce naira notes last year, data analysed from the report released Tuesday show. BusinessDay analysis of the CBN data revealed that the N64.04 billion spent in printing the naira in 2018 is the highest that has been used by the apex since 2013 when it started publishing the figures. “The bank approved an indent of 3.35 billion pieces of banknotes of various denominations in 2018 to meet the currency needs of the economy,” the apex bank said in the report signed by Priscilla Eleje, director, Currency Operations Department at the CBN. Further analysis of the report revealed that the Nigerian Security Printing and Minting (NSPM) plc, which

was awarded the contract for the production of the entire indent for the year, delivered 2.65 billion pieces or 79.2 percent of the total approved 3.35 billion pieces of banknotes, leaving a balance of 698.03 million as at end-December 2018. Also, the 3.35 billion pieces of currency indent ordered from NSPM in the review year is the highest the apex bank has requested since 2014 when it ordered 1.76 billion pieces. “The sum of N662.21 million was expended on currency notes disposal,” the report said. The issuance of legal tender currency is one of the core mandates of the CBN, as enshrined in section 2(b) of the CBN Act 2007. The Currency Operations Department executes this mandate, as well as the procurement and distribution of foreign currencies. In 2012, under the leadership of Sanusi Lamido, the then CBN governor, the apex bank introduced the cashless policy programme which is aimed at curbing excesses in the handling of cash or reducing the volume of currency in circulation. Seven years later, Godwin Emefiele, CBN governor, re-introduced the cashless policy. The policy intends to encourage electronic payments, with the objectives of developing the payments system, as part of the key

•Continues online at www.businessday.ng

Senate passes PSC Bill, pegs $500m fine, 5 years imprisonment for defaulting IOCs SOLOMON AYADO, Abuja

he Senate on Tuesday passed the Deep Offshore and Inland Basin Production Sharing Contract Act 2004 (Amendment) Bill 2019. The Senate also approved $500 million and or five years imprisonment as penalty for International Oil Companies (IOCs) operating in the country that default on the Production Sharing Contracts. The Senate passed the Bill after it said it discovered that the Federal Government has lost N7 trillion oil revenue over a period of 20 years due to non-review of the Production Sharing Contract (PSC). President Muhammadu Buhari had last week written to the Senate to convey his request for lawmakers to quickly amend the Act. The PSC is a contractual arrangement for petroleum exploration and production whereby the Federal Government as owner of petroleum resources engages a contractor to provide technical

@Businessdayng

and financial services for an agreed share in profit oil after payments of royalty, coat and tax oil. On Tuesday in Senate, the PSC Bill was finally passed by the upper chamber after consideration of the report of the Joint Committees on Petroleum (Upstream), Gas and Finance. The Senate estimates that Nigeria stands to benefit about N1.5 billion annually being revenue due to the Federal Government from IOCs operating in the country. The bill was sponsored by Albert Akpan Bassey and Ifeanyi Ubah. Before the bill was passed, the Senate introduced sections 17 and 18 into it for appropriate penalties against violation of the Act. The senators took the bill in clause-by-clause consideration of the committee’s report. The report of the amendment recommended 10 years for a future review of the law.

•Continues online at www.businessday.ng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

news Explosion averted as container truck Sujimoto offers lifetime scholarship to Pencom cautions operators on inappropriate investment of pension funds brushes fuel-laden tanker support early childhood education

he timely intervention of soldiers from the Signals Barracks at Mile 2 in Lagos on Tuesday averted a potential fire explosion from a fuel-laden tanker after it was brushed by another truck conveying a 40-foot container. About some minutes before 11am, the fuel tanker was slowly navigating the narrow lane on Lagos-Badagry Expressway leading to both Orile and Oshodi when another truck forced itself into the way, tearing a part of the tanker. From passers-by to members of the NURTW who operate a garage opposite the scene, commercial motorcyclists and bus drivers, among others, everyone fled the area for fear of a likely explosion. By then the gushing fuel had spread extensively on the road, mixing up with the brown water covering a part of the road, just under the Mile 2 Bridge. The spilt content also extended into the gutter. While this was happening, all movements on the Orile-bound stretch of the road were crippled, leading to a chaotic scene around the Mile 2-Orile axis. BusinessDay reporter on the ground saw the security operatives frantically making calls to get the Fire Service to nip any possible fire outbreak in the bud. It took the fire-fighters about 30 minutes to arrive at the scene. Details of the company the fuel tanker worked for was not clear as the tanker had no label. A different account said the

trouble started after touts, who usually collect money from truck and tanker drivers, hit the tanker with an iron and it began to gush out fuel. The intervention of the security operatives prevented some people from rushing to scoop petrol from the leaking tanker, a common sight in Nigeria when such leakages occur. Mukaila, one of the NURTW leaders who witnessed the incident, said, “We all ran away from here because it might lead to a fire outbreak. It was immediately that fire-fighters were called. People wanted to start to steal fuel but they were not allowed by the security men. “The major problem here was that the road is not wide enough. Two big vehicles cannot use the road in a hurry at the same time. Again, it seems one of the drivers was having issues with some people. The fire-fighters came to clean the tanker and transferred the fuel into a smaller tanker before people resumed their activities.” Emeka, another witness, a bean-cake (Akara) seller, said his sale was paralysed during the period, although thankful that no casualty was recorded. From Jesse in Delta State, where nearly 1,000 people died while scooping petrol from a pipeline in 1998, to the most recent one at Ijegun in Lagos State last July, hundreds of Nigerians have lost their lives while scooping fuel from tankers or vandalised pipelines.

www.businessday.ng

Endurance Okafor

fter about 33 years, Sijibomi Ogundele, managing director of Sujimoto Construction, returns to his primary school in Agege to give 50 pupils a lifetime scholarship. At the occasion, Ogundele brought tears of joy to the faces of the students and teachers of New Oko-oba Primary School, Agege, as the Sujimoto CSR train made a stopover bearing bags of gifts and goodies. Speaking at the occasion, Ogundele said, “As human, we must never forget that, we have two hands — one for helping yourself, the other for helping others. If your neighbour is hungry, your chicken is not safe; our tithe at Sujimoto goes directly to people who need it the most. For us, giving back goes beyond CSR, it’s an obligation.” The feeling of nostalgia and excitement began to wane when during inspection of the school facilities, Ogundele realised that in a school of about 700 students and over 26 classrooms, only three classes had desks and chairs. The others are plain empty and the students have to sit on bare floor. Also, out of four toilets, only one is

functional. Moved by the deplorable state of facilities in the school, he pledges to provide the school with sufficient desks and chairs, and renovate the deplorable toilets. According to Ogundele, “Every year, we shall take a part of our profits and give back to different public schools, like Ijebu Ode Grammar School, Model College Meiran, Zaria to Jos and many other schools, because for us at Sujimoto, giving back is an obligation.” He however challenges the students to dream big, embrace integrity and be an ambassador for generosity. With over 1000 gift packs distributed among the overly excited students and the passionate teachers, Sujimoto CSR brought renewed hope and confidence on the faces of the students and teachers. On a final note, he encourages Nigerians to invest in helping to develop the capacity of our youthful population whichever way they can, saying, “We know the government is doing a lot already but it is not enough. We call on every citizen to join hands and help invest in our nation’s greatest asset human capital.”

https://www.facebook.com/businessdayng

Cynthia Egboboh, Abuja

ational Pension Commission (PENCOM) has cautioned the pension operators against inappropriate use and investment of pension funds following the clamour for deployment of the accumulated funds to support several new initiatives in both the public and private sectors. Aisha Dahir-Umar, acting director-general, PENCOM, speaking at a conference for directors of pension operators in Abuja on Tuesday, said operators were obligated to be guided by the principles that would assist the industry to remain focused on delivery of the objectives of the pension reform, which is ensuring payment of retirement benefits as and when due. Dahir-Umar said, “With the recent upsurge of clamour for deployment of pension funds to support new initiatives may be indicative of the high level of acceptability and robustness of the pension reform; they also call for increased vigilance by both the regulator and operators against derailment from the main objectives of the Reform”. Dahir-Umar speaking further said the conference, which is themed “Driving economic development through a sus@Businessdayng

tainable pension industry” was in pursuant to its statutory mandate of promoting capacity building and institutional strengthening of licensed pension operators. “The industry has accumulated assets worth over N9.4 trillion as at August 2019. These pension assets are overwhelmingly invested in the national economy, with positive impact in all major sectors and a significant contribution to the GDP,” she said. Ibrahim Shekarau, chairman, Senate Committee on Establishment and Public Service, in his remark, said it was important to ensure that pension contribution funds were invested to provide areas that could provide economic growth. “This conference should be seen as platform to consolidate the pension fund to finance developmental projects and promote excellence in corporate governance towards sustaining the gain of pension reform in Nigeria,” Shekarau said. Speaking further, Shekarau stressed that poor governance in pension administration had impeded its success in the past hence the introduction of the Pension Reform Act, adding that the National Assembly would continue to play its positive role to enhance effective pension administration in Nigeria.

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINES DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINES DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Wednesday 16 October 2019

COMMENT

comment is free

Send 800word comments to comment@businessday.ng

Enterprise development: Understanding efficiency and productivity (2) SMALL BUSINESS HANDBOOK

EMEKA OSUJI

nefficiency will always make an app earance, wherever it exists. It cannot be hidden for too long. Therefore, in the deployment of scarce resources, managers must look out for the best way to utilise a resource such that its output is maximised. This includes the output of staff, both in the front and back offices. For the credit and marketing staff of a Micro Finance Bank (MFB) on which this piece is focused, for instance, we have to ensure that expenses are kept down, while revenues are pushed up. Operating expense ratio is the starting point in the consideration of efficiency. The cost expended per borrower ratio will also show how well we manage the services rendered to clients. To be really productive, operators must ensure that staff are neither underutilised or overused. They have to be optimally engaged for best productivity. These relationships could be observed by looking at a number of ratios that relate cost to income, cost to borrow-

ers, staff numbers to the number of clients each staff member is managing and such. Operating expenses may come in trickles or small outlays but they add up to the huge cost that make or mar an institution. It includes all the expenses of running the business (including all the administrative and salary costs; such as depreciation and allowances of board members for sitting at meetings). These expenses are exclusive of financing costs and loans loss provisions. Similarly, extraordinary expenses and expenses from previous periods are excluded. Dividing these expenses by the average gross loan portfolio yields what is called operating expense ratio. This ratio is simple and even common, but it is probably the most important mirror or reflection of how well a lending programme is managing its costs, vis a vis revenue. No wonder the operating expense ratio is regarded as the best indicator of the overall efficiency of a lending institution. This is why the ratio is also referred to as the efficiency ratio. It is the best way of measuring the institutional cost of delivering the loan services entailed in average loan size of a credit portfolio. The a priori expectation is that this ratio should move in opposite directions with efficiency. In other words, the general rule is that the lower the operating expense ratio, the higher the efficiency of the institution. High operating expenses make it increasingly difficult for an operator to compete on the basis of price. It is important that we not only understand the import of this number but also some ways in which it may be manipulated

by vested interests. The size of the portfolio, not just because it is the denominator, is important in the analysis of operating expense ratio. Some economies of scale accrue to those with large portfolios, though this advantage tends to be neutralised after a small firm reaches a certain volume (experts say up to $5 million). It follows therefore that a small firm may improve its efficiency by growing its loan portfolio. Although loan size has been identified as the most important influence on operating expense ratio, the methodology of lending is also an important factor. Large loans do not necessarily cost more to administer. Indeed, they are cheaper to manage. In lending methodologies that involve very small loans, the ratio may be poor as administrative costs are higher. An example is the Village Banking model that make small loans and requires much training costs to be incurred. In such circumstances, it becomes important to also analyse and compare cost per borrower, and locational factors (urban and rural). Comparing costs per borrower removes the influence of loan size and shows efficiency as it ought to be. The average number of active borrowers a staff is handling is a good indicator that may also be used to monitor staff engagement. Clients of a microfinance institution are in a way akin to the subscribers of a telecommunication service provider. You get to know when they buy a SIM card but you never know when they stop using it until you check, either from the billing operations or elsewhere. Telecom subscriber could just drop off a network without notice but their names

‘

It is important that we not only understand the import of this number but also some ways in which it may be manipulated by vested interests. The size of the portfolio, not just because it is the denominator, is important in the analysis of operating expense ratio

This piece is an excerpt from my books: Entrepreneurship and Small Business Development, and Leading Essays on Microfinance to be publicly presented at NIIA on November 8, 2019 Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emekaosujii

Taming the fangs of terrorism

t will be difficult to totally eliminate the act of terrorism once it has been experimented in a society. It may then become a vice just like armed robbery or kidnapping. Terrorism cannot be eliminated by the act of force alone, but also by subtle diplomacy, strategy, mass education and enlightenment. Back in the 70’s we’ve had religious skirmishes in the north (Kaduna, Kano and Bauchi states) after the 3-7days orgy, the matter is swept under the carpet, no white paper issued, no sponsors apprehended, and punished and no compensation paid. We then pretend all is well, but the evil seed had been sown. Then in the 80’s we had the Maitaisine crises, immediately the head of the organisation was killed, everything was swept under the carpet, the maitaisine has metamorphosed into Boko Haram. Also, in the 80’s, we had religious crises in some northern states but government has followed the same pattern. The Fulani herdsmen are terrorising citizens, what ac-

tion has Federal Government taken? Have the farmers whose crops were destroyed been compensated? Six years ago, a female teacher was beheaded in Gombe state, the matter has since been forgotten and culprits freed. Also 4 years ago, an Igbo lady was killed in Kano what has government done? Nothing. Early 2003, Central Intelligence Agency (CIA) informed the Obasanjo led federal government that they should watch the activities of some Islamic groups in the north as they could be dangerous, but government ignored the advice. If the federal government had monitored the sect activities at that time, Boko haram would never have manifested. Now the same federal government is complaining about Boko haram. They’ve killed thousands, destroyed businesses and properties worth billions and also introduced suicide bombing into Nigeria’s terrorism dictionary. But the root cause of these crises has not been unveiled, since no sponsor has

www.businessday.ng

remain as subscribers until the list is cleaned out. Similarly, a client of a microfinance institution may stop borrowing but the name remains on the list of clients serviced by an account officer. It is important to know exactly which clients are active, otherwise a service provider may be carrying a long list of supposed subscribers not knowing that most of them have long since alighted from the service. It is the active clients/borrowers that shape the bottom-line. So, finding out the average number of active clients handled by each account officer is an important piece of information regarding efficiency. There are some tricks that can be used to influence ratios in one direction or the other. Those who use ratios must be conversant with those influencing factors as to be in a position to make valid declarations based on such ratios. For instance, analysing average number of active clients as an efficiency and productivity ratio without understanding the lending methodology of the operator is futile. Number of active borrowers per credit officer is a ratio that depends on the lending methodology adopted by the microfinance institution. Group lending methodology may influence efficiency one way or the other.

DAVID ATTA been apprehended nor punished, the cycle will continue and the next time it will be sophisticated bombs on our streets and mass suicide bombing using teenagers. I suggest that a white paper should be issued on all religious crises in the country and the penalty should be death sentence and confiscation of all properties of the culprits (our punishment is too weak; we give 10-20 years imprisonment it should be death and within 2 years verdict should be out on suspects). A policy to control birth in the north should be instituted, because in situation where by a man has 30 children, the tendency to donate some for a cause that he fancies will be there. Subjects on religious tolerance should be taught in schools, a legislation should be made that anyone that kills for religion sake will also be killed and the over 10 million “Almajiri” kids, should be put in schools and catered for by the government. There should be free education in the North up to secondary level, because the religious

https://www.facebook.com/businessdayng

tolerance in the north is much lower than that of the South and a befitting rehabilitation college established for ex-boko haram members. Exchanging captured boko haram members for kidnapped citizens may be a dangerous idea, a cue should be taken from Saudi government about their rehabilitation methods and federal government should consider setting up an anti- terrorism department and religious tolerance department. In the presidency, terrorism insurance scheme should be established and compensation committee set up to compensate all victims of religious crises and terrorism. With these laudable innovations the federal government may be getting closer to the root causes of terrorism in our country Nigeria and thereby taming its fangs. David Atta is a writer from Abuja. He can be contacted via phone: 07033012122 or mail: davcon247@gmail.com

@Businessdayng

BUSINESS DAY

Wednesday 16 October 2019

COMMENT CHARACTER MATTERS WITH DAPS

DAPO AKANDE

haming victims of sexual exploitation and portraying them as accomplices and even as culprits for provoking the man to take advantage of them; societal pressures; pressure from family and in-laws barely 9 months into marriage as to why she has not produced an offspring yet; mounting economic pressures as the Nigerian economy grinds harsher by the day, bringing with it, increasing mental stress on the wife and mother who watches helplessly as her children go hungry; all of these add up and must explain why depression induced mental health issues have become so prevalent amongst women. Something has to be said also about the psychological scars’ sexual harassment, exploitation, violation and statutory rape, more often than not, leave in the lives of victims. The demeaning nature of such experiences invariably lead victims to question their value and worth, if they could be so recklessly debased, at times by those old enough to be their father or even grandfather! Countless women

comment is free

Send 800word comments to comment@businessday.ng

The one that got caught have tried to take their lives because they just couldn’t live with the shame and many preferred to give up their educational pursuit than to trade their bodies for grades they had already worked hard to earn. For many, this assault on their sense of self-worth begins while still at school, a place understandably expected to provide safety, only for it to continue in the work place later in life. This is why we would be making a grave mistake, if because of recent happenings, we were to treat this problem as one peculiar to the closed environment of the ivory towers. It’s an endemic national issue which ought to be given the attention it deserves. Take a good look at the public sector and private sectors, you’ll find it there. Stories of bosses in both sectors who hinge the promotion of female subordinates on what they’re willing to do is commonplace. While we’re at it, let me add that this is not even just a Nigerian problem. It is indeed a global one, evidenced by the “me too” movement initiated in tinsel town, better known as Hollywood, where powerful men demand carnal knowledge of upcoming actresses in exchange for highly sought-after movie roles. The propensity to oppress others and to use one’s position to extort favours, whether it be of a sexual,

financial or other nature is an age long human frailty. There’s a reason why the Bible says the heart of man is desperately wicked; deriving a sick type of pleasure in devaluing others as we lord it over them; stripping them of their dignity just because we feel we can and giving no thought to the long term effects this may have on their psychological make-up. Boniface Igbenegbu, an Associate Professor in University of Lagos, currently in the eye of the “sex for grades” storm certainly doesn’t seem to have dwelled on any such consideration. How he must wish he had. Thomas Hobbes is noted for his hypothetical State of Nature theory which presents the world as a harsh, savage and unforgiving place where you literally must eat or be eaten to survive. As he famously put it, “life was nasty, brutish and short” because there was no cooperation between men. Every man was for himself and himself only. The unsustainability of an environment where all men were in perpetual state of war with each other became clear and the very uncertainty of anyone even seeing the next minute became unbearable. This subsequently led to a consensus on the need for men to cooperate and cede some of their freedoms to a central authority mandated to regulate the affairs of

‘

Take a good look at the public sector and private sectors, you’ll find it there. Stories of bosses in both sectors who hinge the promotion of female subordinates on what they’re willing to do is commonplace

igeria’s electricity sector seems to be on the verge of gaining stability and eventual transformation which have been initiated by the signing of an implementation agreement of the Nigeria Electrification Roadmap (NER) signed between the Nigerian government and Europe’s largest engineering company, German Siemens AG. However, the details of Siemens’s technical and commercial proposal hold significant energy security concerns for Nigeria in the long term, hence requiring an urgent review. This, it seems, did not come to the knowledge of the Nigerian government and her policy makers and needs to be highlighted for strategic decision making in further engagements and implementation of NER. Among other benefits that Siemens’s proposal listed, it also boasted of the benefit of being “one basket supplier for generation, transmission, distribution and automation” of Nigeria’s electricity infrastructure. This is potentially rewarding with multiple benefits of cost-effectiveness including reduced transaction costs; ease and speedy procurement processes and contract negotiations; effective project coordination, implementation and management; efficient business process workflow for the electricity market. However, this one basket of multiple benefits comes with its challenges. How so? The Phase 1 of the proposed projects promises to deliver additional 2GW of electricity to the grid and significantly reduce Aggregate, Technical, Commercial and Collection (ATC and C) losses, while the Phase 2 will increase grid capacity to 11GW and achieve further reduction in ATC and C losses which will lead to achieving optimal grid stability and reliability. These two projects comprise of supply, installation and maintenance of several electrical and communication hardware and software across

the entire grid infrastructure. The success of these Phase 1 and Phase 2 projects are significantly reliant on Siemen’s globally recognised Spectrum Power™ 7 based SCADA/EMS (Supervisory Control and Data Acquisition/Energy Management System). While Siemens may possess the required technology and capabilities to deliver on its promises – particularly in stabilising and in guaranteeing optimum reliability of the grid, it puts Nigeria’s energy system in a highly compromised situation of perpetual reliance on Siemen’s technology. What are the dangers? As Nigeria’s grid continues to grow in scale, it will require the same Siemens technology to communicate with the rest of the grid infrastructure and gradually, the technology will become the bloodstream and red blood cells of the grid and eventually Nigeria’s grid will be locked into the technology. What this means is that in the event that Siemens and the Nigeria Electricity Supply Industry (NESI) disagree with some/any of Siemens’ services in the future (which is very likely, due to the peculiar electricity market challenges that Nigeria is reluctant and unable to solve) and decides to try another service provider, the NESI cannot disengage from Siemens because of the risk of the entire grid collapsing. This is because Siemens may have to retrieve its assets (depending on the financing model agreed with the NESI initially). If, at the time, it is NESI that owns the assets, it may have to maintain a costly maintenance and support service contract with Siemens particularly for software upgrades to keep the grid up and running. In any case, this scenario is possible if Siemens’s hardware and software are compatible with the new service provider’s hardware and software for a seamless integration to take place. But it is highly improbable without bugs.

www.businessday.ng

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

Also, on incompatibility, the NESI may have to get rid of Siemen’s technology in favour of the new provider’s technology, at grave cost in terms of economic losses due to grid failure that will occur and cost of project implementation it can’t afford. The scenario which is more likely is that NESI will have to continue business with Siemens irrespective of the quality of service delivery against what it promised in its proposal which in itself is not very clear, as there are quite a number of services that Siemens offers that is not made available in the proposal it sent to the government. An important question that NESI and government need to ask is how these services Siemens specified as not offered in the proposal, affect the efficiency of the grid, and would NESI need to engage Siemens differently to offer these services if the grid will eventually need these services in the future to function optimally and at what cost to NESI will this be? Another concern is that the Phase 3 of the proposed projects that will increase Nigeria’s capacity to 25GW through additional generating capacity of about 7,200MW is reliant on gas, particularly the 1,350MW each for Abuja, Kaduna and Kano states proposed by the Nigerian National Petroleum Corporation (NNPC) with Siemens supporting the projects using its SSC5-2000E, SGT5-2000E gas engines, steam turbines and other gas technologies. These projects rely on the proposed AKK (Ajaokuta-Kaduna-Kano) Pipeline Project to supply gas to the power plants. The challenge is that Nigeria is yet to adequately solve the insecurity problems especially in the Niger Delta in the oil and gas sector which has resulted in significant drop in electricity generation. Until this is solved, it will be foolhardy to keep planning and relying on long stretches of gas pipeline projects that originate from the Niger Delta. In the meantime, Nigeria may need to

https://www.facebook.com/businessdayng

men in a structured society. This was the first government. The stark realities of our society where governance appears so distant and the antenna of the average man is in constant search for the slightest opportunity to “chance” his fellow man of his rights or dignity causes me to wonder if Hobbes’s hypothetical world hasn’t finally manifested here in Nigeria after all. Our authority figures, represented in this discussion by our university lecturers should assume the role of responsible custodians and not opportunistic predators. As education is a moral enterprise meant to enable and empower us to satisfy the innate human need of self-actualisation, present in all of us, it sickens me to hear stories of lecturers who callously deny female students their university degrees because they’re smart and bold enough to spurn their lecherous advances. The destinies of our young ladies have been toyed with for long enough. It’s about time the relevant authorities took more than a passing interest and instead start to do the right thing by our girls. Changing the nation...one mind at a time.

Energy security concerns of Nigeria-Siemens deal: Emerging future energy pathways (1)

@Businessdayng

OKAFOR AKACHUKWU

significantly diversify its electricity generation portfolio, and think toward other markets and utilisation of her gas resources that do not require long distance networks of gas pipelines that cannot be adequately secured. These include solar, wind, biomass, biogas and nuclear power. For instance, the nuclear power plants initially planned to be located in either Kogi or Akwa-Ibom states could be sited in either Kaduna or Kano states to replace the proposed gas power plants. This requires no transportation of any thermal fuel to the power plant. Interestingly, negotiations between the Nigerian government and ROSATOM are progressing steadily on the nuclear projects, although, nuclear power is not an energy source that Germany and Siemens may want to be associated with. Mr President may have left industry stakeholders in doubt about Nigeria’s actual intended energy policy and pathway during his speech at the agreement signing, as there are other energy sources that the country is exploring that weren’t highlighted. If the Siemens deal pulls through as it is proposed, it is evident that Nigeria will have to take her bilateral relationship with Germany more seriously, perhaps Germany will ascend, herself, to become Nigeria’s most important partner. I think, rather convincingly, that we should have more than one grid automation provider from different countries for Nigeria’s electricity system. This can be structured in a way that different service providers will be serving different

Joseph writes from Abuja

Wednesday 16 October 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

Tackling the challenge of engaging content on Nigerian airwaves

wo major spikes in public engagement with media content over the last fortnight exposed both a threat and an opportunity. There was the Sex for grades expose on the BBC Africa Service and the chaotic narrative of a fake presidential wedding that became a social media sensation. Each activity generated intense fireworks, one to shed light and the other to provide entertainment for citizens at the expense of the high and mighty. Many have pointed to the lull that descended on the television audience of young viewers as part of the reason for the excitement with these other activities. There is a lacuna in entertainment fare for the youth audience particularly. They filled the gap with user-generated content on the risqué side. More significantly, the gap speaks to a challenge that is as well an opportunity for the Nigerian media industry. Social and online media have become dominant platforms for sharing of the narra-

tives of Nigeria by citizens. They do so with passion but without the safeguards of professionalism. The consequence is the growing calls for stifling of freedom of expression by authority figures and their drum majors in society. It would be the wrong approach to a problem that has within it the seeds for its resolution. Each of the scenarios are clearly within the competence of Nigerian media professionals to tackle. They have done so in the past and can do even better now. Some analysts have pilloried the media for what they termed the lead of the BBC in doing a major impactful investigative report on the menace of “Sex for grades” in our higher institutions. If they are not alleging professional negligence, they point to the impact of the story as proof of the influence of that media surpassing that of the Nigerian media. We consider both allegations untrue, unfair and misguided. Nigerian media continues to perform its role of traditional reportage as well as going the extra mile with investigative reports. Nigerian print and online

platforms have reported various instances of sexual harassment and the damage it does to victims, the system and the society. Exposes by Nigerian media cover governance, politics, health, societal failures and various other areas. On the matter of sexual harassment, our platforms have done a yeoman’s job, from print to online. Am October 30, 2017 report in The Cable exposed the pimping of schoolgirls by security guards and teachers at Federal Government Girls College, Langtang, Plateau State. Old students of the school immediately set up a panel to investigate the matter, and the federal government followed afterwards. E nv i r o n m e n ta l a n a l y s e s points to the fact of an audience seeking entertainment fare that can engage them. The need is acute because of the growing privations of citizens and their search for outlets for release, relaxation and refreshment. Entertainment is one of the bestknown panaceas for release of tensions that Nigerians seek. Budgets are tight, yet advertisers seek platforms with strong audi-

ence pull as the market place for value exchange. BusinessDay, in line with our remit as a business publication, sees more opportunities than threats in the situation. The exploitation of opportunities leads to the creation of solutions in products and services for the benefit of stakeholders and the society. The need represents an opportunity for the creation of entertainment fare on the airwaves that would keep our audiences engaged. Public broadcast organs in Nigeria occupy a significant share of the market. They also hold in their archives admirable records of responsiveness with programming that held the attention of Nigerian audiences across demographics and psychographics. We believe the public broadcaster, radio and television, can rise to this challenge and opportunity with a little tweaking by federal and state governments to allow greater empowerment and latitude to their managers. So too can the many players in the private sector. Here’s to all concerned: convert this threat to an opportunity.

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi

ENQUIRIES NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799110 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 LEGAL ADVISERS The Law Union

OUR CORE VALUES

MISSION STATEMENT To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Wednesday 16 October 2019

COMMENT

comment is free

Send 800word comments to comment@businessday.ng

Cyril A. Odu: An island of human rectitude! FRANKLIN NNAEMEKA NGWU

ccording to Ecclesiastes 3: 1-8, there is a time for everything! In verse one, it states that “All things have their time, and all things under heaven continue during their interval.” It continues in verse two with “A time to be born and a time to die. A time to plant and a time to pull up what was planted.” While I believe in the words of God as contained in the Bible and we are further admonished to give thanks to God in every situation, I must confess that there are situations that it feels like having a face to face discussion with God to clarify certain things. One of such situations is the transition of Cyril Akporuere Odu, “Uncle CY!” If my desired face to face clarifications were to be granted, I have only one question, why was Ecclesiastes 3:2 not properly followed? Born about February 11, 1951, and with a degree in Geology from University of Ibadan in 1972, Uncle CY can be said to have worked for over 46 years from the time he joined Mobil Producing Nigeria and his transition on September 17 2019. With his immense career and contributions to ExxonMobil, Africa Capital Alliance, Income Electrix, Union Bank and

many other firms that significantly relied on his professional leadership and guidance, I do not think that it was the time to say good bye Uncle CY! As he was to firms, so he was to family, community, church and uncountable individuals. Untiring in both moral, financial support and generosity! He was an island of national rectitude in a sea of moral turpitude. In him, I clearly learnt that the easiest and most sustainable route to success is not really about your profession or degree but in being a good human being! Uncle CY was unquestionably a good human being! Just like yesterday, I remember vividly how he took over an hour in Port Harcourt explaining to me how and why he accepted to be the Chairman of Union Bank; of a thriving Technology firm; and CEO of African Capital Alliance almost at the same time. Oblivious of what awaited him and rejoicing in the announcement of his friend Udoma Udo Udoma in the first batch of President Buhari’s ministers in 2015, he received a call with little room to reject the offer to become the Chairman of Union Bank. As he was still trying to understand his new position, a similar call came again, this time asking him to take over from Okey Enelamah as the CEO of African Capital Alliance with Okey also announced as a minister. While trying to reconcile his rapidly changing situation, another call came from a very senior person in government requesting him to also assume the chairmanship of the thriving technology firm. While engrossed in the gist, we

‘

While I believe in the words of God as contained in the Bible and we are further admonished to give thanks to God in every situation, I must confess that there are situations that it feels like having a face to face discussion with God to clarify certain things

narrowly missed our lunch that day as we had to return back to the 5-year strategy workshop of Income Electrix that I had gone to facilitate in Port Harcourt. Uncle CY was also the Chairman of Income Electrix. This is a man that had retired from ExxonMobil in 2012 as Vice Chairman of the board and Chief Financial Officer. In my admiration and concern on why he was taking up too many appointments after retirement, he confided in me that he never lobbied for any and that he accepted them mainly from his undying belief that Nigeria will be great with our genuine individual and collective efforts and commitments for a better economy and country. Assessing his approach to work confirms that Uncle CY was a true example of James Allen’s counsel for us to work joyfully and peacefully, knowing that right thoughts and rights efforts will inevitably bring about right results. In both the service of songs and the funeral service, his immense positive footprints and impacts were abundantly very clear! Overwhelmed with the unending eulogies poured on him, a man excitedly bellowed “this is the right way to die.” I reminded him that with such footprints and eulogies, he did not die but only transited! Another man lamented why Uncle CY did not go into government and why our leaders are not like him? In my disappointment with the state of affairs in Nigeria, he was a messenger of hope and optimism par excellence with his deep understanding of the issues and exceptional curative and optimistic suggestions.

Reversing the ugly trend of outsourcing in Nigeria

o what you can do best and outsource the rest – Peter Drucker (1909-2005), father of Modern Management Theory. Outsourcing, a word that came from the phrase, “outside resourcing”, became a key part of international business economics in the 1990s. Wikipedia defines it as an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally and sometimes involves transferring employees and assets from one firm to another. Subcontracting is the practice of assigning or outsourcing specific parts of the obligations and tasks under a contract to another party known as a subcontractor. Outsourcing is prevalent in strong-matrix environments where complex project planning, execution and monitoring are norms. Business processes, people and projects are what companies seek to outsource. Outsourcing, as against the popular ugly perception, is not done to swindle middlelevel managers and entry-level employees. Companies primarily outsource to reduce outlying and non-core business expenses including taxes, energy costs, and excessive government regulation. Maximising the use of external resources, accessing world-class capabilities, optimum utilisation of core staff for other functions, reducing and controlling cost of operation and maximising efficiency for time-consuming activities are some of the other reasons’ companies outsource. In every attempt to explore reasons companies outsource, risk management comes to the fore. The probabilities of occurrence of identified and unidentified cost and schedule risks in high-tech projects are always very high. Not even the most robust risk response strategy can guarantee

zero risk occurrence and impact. Hence, the need will always arise to plan how to mitigate, transfer or completely avoid all risks when they occur. Only risks resulting from natural disasters are either shared between the client and contractor or between the contractor and subcontractor in predefined percentiles, or owned entirely by the client with adequate fallback planned. Ownership and management of risks are not burdens any organisation wants to bear. Hence, to shelve the rigor and cost of risk management activities, a large portion of the overall project work, especially at the execution phase, are contracted. Summarily, telecoms operators for example, pass project risks to telecoms vendors in a legally-binding contract. The contractors (telecoms vendors) may further pass on the risk to subcontractors in another legallybinding contract; a form of outsourcing referred to as subcontracting. Another form of outsourcing called offshoring, affords cheap access to foreign capabilities. In an international project endeavour, a company can source right from its head office in Nigeria, for example, professionals from other countries. This singular benefit of outsourcing can help project owners eliminate additional overhead costs, avoid certain government mandates and regulation, access best-fit employees at reduced costs, yet increasing the efficiency of project’s progress in remote locations. The exponents of the concept of outsourcing did not intend it to make employees feel inadequate, though that is what is largely obtainable in Nigeria especially within the telecoms sector where there seem to be no more dignity in being outsourced. An externally sourced employee works on a project managed by a client to his company. The employee is entitled to all

www.businessday.ng

Dr. Ngwu is a senior lecturer in strategy, finance and risk management, Lagos Business School and a member, expert network, World Economic Forum.

SEGUN AKANDE

benefits, major and fringes, that are available in his company (the outsource company). He is a full-time member of staff of his company. He is a subject-matter expert sourced through an outsourcing company (his company) or one who gets on a project through subcontracting, in which case he is a staff of the subcontractor. He has a parent company to return to on expiration of the client’s project. This is what professional outsourcing stipulates. Sadly, in Nigeria today, the wanton rate of unemployment has been hijacked and outsourced staff are being widely mistreated. Companies now either establish outsource companies or contract them to recruit project team members on harsh terms. Outsource companies are made to abide by clients’ dictates, however unpopular and nonconforming they are to the tenets of the outsourcing practice. Low salaries, next to no pension remittances, unreasonable extension of work hours without pay, few leave days and zero leave allowances are a few of the harsh realities of outsourced staff in Nigeria. In a November 13, 2016 publication by Sahara Reporters, the Nigerian arm of a foremost Chinese ICT vendor was accused of mistreating its staff and the Nigerian state. The company was said to have trampled freely on the workplace quota approved by the Nigerian Immigration Services which stipulates one expatriate to four Nigerians, translating to 75 percent Nigerians and 25 percent foreigners. In that publication, as at November 1, 2016, of the 3117 strong workforce this company had, only 675 have full-time employment contracts. The rest, Nigerians and non-Nigerians were outsourced. Of the 675 staff, 354 were Nigerians while 321 were foreigners, implying a distribution of 52.44 percent to 47.56 percent. After every

https://www.facebook.com/businessdayng

Even with a degree in Geology and an MBA, his analysis of public and private sectors challenges as well as family and religious matters gave impression of a man with an eclectic exposition and degrees. Running into him in Protea Hotel Victoria Island, Lagos, we had a chat about some government policies and based on his insights, I changed the topic of my Business Day Wednesday column which was very critical of the government policy. With people like Uncle CY, the pain of losing my dad, Ozor Jacob Ngwu (Okwunna le edunwa) (the counsel of the father that guides a child) at the time I needed him most in 2011 was significantly lessened. In Uncle CY, I found more than a father, I also had a brother and friend who related and counselled with infectious humility and love! Now that you have joined Okwunna, what will your family, numerous firms, friends and children like us do! Mathew 5:4 reminds us that “Blessed are those who mourn for they shall be comforted.” We take solace that Uncle CY lived a good and impactful life which will last from generation to generation! 2 Corinthians 4:17-18 states that “For our light and momentary troubles are achieving for us an eternal glory that far outweighs them all. So, we fix our eyes on not what is seen, but on what is unseen since what is seen is temporal, but what is unseen is eternal.” Adieu Uncle CY!

three months, the company moved almost 80 percent of newly recruited staff to the outsource platform, with the excuse that the staff failed in their probation period, thus giving an impression of obeying the regulations. This is clearly a way to subcontract the functions of in-house (core) departments to companies that offer fewer benefits. This is a practice at the expense of the Nigerian economy. If this trend is not quickly checked, more regulations will be slighted. The Nigerian Ministry of Labour and the Association of Outsourcing Professionals of Nigeria must enforce strict compliance to existing labour laws. Our country, with many outsourcing firms, contribute a meagre $2 billion to over $500 billion the outsourcing industry generates worldwide, annually. This suggests we are lagging in a lot of ways. Corruption is at centre of outsourcing practice in Nigeria and we must deal decisively with this menace! Company’s projects and daily operations where unclearly defined activities go on daily, will usually have risks to deal with. Outsourcing as a management process, has been proven to be the most effective input to closing these projects on time and within budget. Nigerian outsourcing firms must be strengthened and given absolute independence from their clients, by strengthening existing laws and making new ones. When practiced within its tenets, the disparity between full-time staff and outsourced staff will be completely removed. In the end, companies will remain competitive and the Nigerian economy will stay afloat turbulence.

Segun Akande, a telecom professional, wrote in via segunolaakande@gmail.com

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

AGRIBUSINESS

In association with

ag@businessdayonline.com

Why FX ban on starch, ethanol importation matters JOSEPHINE OKOJIE

espite being the world’s largest cassava producer, Nigeria is among the top global importers of cassava byproducts such as starch, flour, and ethanol. The country has failed to take advantage of its cassava production as it spends millions of dollars yearly importing these cassava byproducts thereby putting pressure on Nigeria’s foreign exchange reserves. Also, importing thousands of jobs it could have created if entrepreneurs are tapping into the opportunities in crop production. A 2017 sectorial report by the Manufacturers Association of Nigeria (MAN) showed that the country imported a $654 million (N235.4 billion) worth of cassava by-products that year. The breakdown shows that Nigeria’s demand for starch is put at 600,000MT and supply is 24,000MT with imports accounting for 576,000MT (96 percent) yearly. Also, local demand for HQCF is put at 504,000MT and supply is 60,480MT, with importation accounting for 443,520MT (88 percent) yearly. Similarly, ethanol demand is put at 350 million MT and local supply is 10.5 million MT, while imports accounted for 339.5 million MT (97 percent) yearly. Experts say the recent Federal Government’s FX restriction to importers of starch, ethanol, and HQC will spur massive investment in the cassava downstream value chain.

Also, they stated that with such investments, the country will create jobs for its teeming youth population. Nigeria is the largest producer of cassava in the world with about 46 million metric tonnes and an average yield per hectare between 10.6 to 15 metric tons. “Nigeria mostly operates in the upstream cassava sector rather than the downstream, which limits advantages the country can get,” AfricanFarmer Mogaji, CEO, X-Ray Farms Consulting Limited, said. “We need to start harnessing the potentials in the cassava byproducts and I believe with the recent FX restriction we would start seeing investments in the downstream,” Mogaji said. Cassava has major industrial products like industrial starch, ethanol, flour, glucose syrup, sweeteners amongst others. These products are also raw

materials for numerous industries with limitless domestic and export market potentials. Starch is used in many areas across food and beverage firms for the production of caramel, biscuits, bread, and confectioneries. It is also used in pharmaceuticals and in nonfood industries such as battery firms, gum, and super glue, among others. Tapping the investment in the cassava downstream value chain is Union Dicon. The company is showing massive interest in starch, having acquired 15,000 hectares of land in Ebonyi to produce cassava, starch, and other food products. Ni g e r i a i n d u s t r i e s h av e continued to import starch, flour and ethanol in large quantities as they claim that not much local starch and flour meet their standards, saying that the market has failed to constantly supply highquality starch and flour. “Nigerians are ignorant about the

Kogi set to inaugurate N4bn rice mill VICTORIA NNAKAIKE, Lokoja

he Kogi State government has concluded plans to inaugurate newly constructed a N4 billion rice mill. Ya y a h a B e l l o , t h e governor, disclosed this during an inspection tour to the factory site at Omi Dam in Ejiba, Yagba West LGA of the state. “In 2016, we visited this particular dam and I promised to establish rice mill here, and today we have this factory 100 percent completed by the state government, which had been neglected by the immediate past PDP administration,” he said. “We are here to inspect a new rice factory that is second to none as far as northern Nigeria is concern,” he added. Bello also noted that the

factory has the capacity to produce over 1,000 bags of 50 kg of high quality rice every day, and could employ over 5,000 people directly with more indirect jobs to be created. He added that over N300 million would be injected into the economy of the state every month through the factory, while generating additional N120 million to the state’s IGR monthly. ”The rice mill will also be producing fish and poultry meals, because we are presently having over 500 fish ponds at Omi Dam. We have the capacity to produce cassava and all agro allied products in this particular location.” “The factory had its own independent power generation plant, powered through biomass gasification technology. The capacity of the plant is 500 kWh and the rice milling plant capacity at www.businessday.ng

every processing line (shift) is 200kwh.” “The plant would have an excess power of 300kwh which would be used to power strategic locations in neighbouring communities. All that is required now is that the FG through CBN to come to our aid because we have the capacity to expand this factory in multiple folds,” he added. Earlier, Solomon Owoniyi, the Obaro of Kabba, who spoke on behalf of all the traditional rulers in the region, thanked the governor for his kind gesture, saying the facility was the first of its kind and the best in the whole of the state. However, the monarch urged the governor to use his influence and connection with the Presidency to ensure that the Kabba-Ilorin Road was rehabilitated for the benefit of the people and the factory.

opportunities in the cassava value chain. Nigeria currently imports over 95 percent of industrial starch used in the country,” said Segun Adewunmi, president, Nigeria Cassava Growers Association (NCGA). “Currently, industrial starch sells for over N200, 000 per ton which means we can generate N10 trillion annually from cassava production,” Adewunmi said. He said many cassava processing industries in the country have collapsed due to inadequate, irregular, unaffordable all-yearround supply of cassava. The biggest challenge confronting farmers is low yield per hectare. “Farmers are not getting the yield they are supposed to get and this makes them not break even. If the production of cassava is not attractive, farmers will not expand their production areas,” said Abdulai Jalloh, project leader, African

Cassava Agronomy Initiative. He said that some of the limiting factors to increased productivity in cassava production are poor weed control and high cost of farm inputs. Research across the globe shows that some countries have started using micro-nutrients to upscale cassava yields to about 100 metric tonnes per hectare with starch content of cassava up-scaled to 38 percent in Indian and 40 percent in Malaysia. Jalloh stated that if Nigeria must take advantage of the high potentials in cassava production; farmers need varieties with high starch content, adding that the government must initiate policies that would boost cassava production in the country. Cassava requires less labour than all other staple crops. However, it requires considerable post-harvest labour because the roots are highly perishable and must be processed into a storable form soon after harvest, experts say.

Do not compromise on border closure- RiFAN tells Buhari SIKIRAT SHEHU, Ilorin

he Rice Farmers Association of Nigeria (RiFAN), Kw a r a S t a t e c h a p t e r has urged President Muhammad Buhari to maintain his stand on the border closure. Sadeeq Mahmud Ab d u l l a h i , c h a i r m a n RiFAN - Kwara state chapter in an inter view w ith BusinessDay, commended President Buhari and Hameed Ali, the Controller General of the Nigerian Customs Service for the stringent measures on the border closure. Abdullahi who described the decision as apt and timely for Nigeria to improve its food production, expressed readiness to partner with governments at all levels to

https://www.facebook.com/businessdayng

further boost production. A c c o rd i n g t o h i m, border closure has raised hope for rice farmers in the state and the country at large, saying Kwara rice farmers are putting more effort to produce high quantity as they are recording more patronage and revenue. The RiFAN chairman revealed that Kwara youths are now indicating interest and ready to key into rice farming, as he disclosed that the association will soon go into dry season farming. “The border closure has helped us before our people do not appreciate what indigenous farmers produce, they do not cherish our rice; let alone patronizing it,” he said. “I want to urge President Muhammadu Buhari not @Businessdayng

to compromise on the issue of border closure. Let him not listen to any foreign groups or leaders, we learned they have been appealing to him but he should leave the border closed for us to embrace our homemade products,” he added. He, however, disclosed that 2459 rice farmers have benefited from the CBN/ RiFAN anchor borrower program between 2017 and 2019 in Kwara State. The association he says is trying to do more for farmers to ensure adequate food security not only in the state but in the country at large. “ We hav e 2 2 , 7 5 0 registered rice farmers across Kwara State. But not all of them are in the CBN/ RiFAN anchor borrower program,” he further said.

Wednesday 16 October 2019

BUSINESS DAY

AGRIBUSINESS ag@businessdayonline.com

Agric revolution: Akwa Ibom unlocking food production potentials JOSEPHINE OKOJIE

igeria is making frantic efforts to ensure that agriculture and allied services play a key role in its quest for economic and revenue diversification. This stems from the enormous negative impact of a drop in oil prices on the economy. To support the current diversification drive and mitigate the impact of oil price, Akwa Ibom State, located in the South-South of Nigeria, has demonstrated a commitment to developing the country’s agricultural sector in such a way that the private sector earns a modest return on investment while the government generates revenue and meet with the ever-growing demand for food. In a state broadcast on the occasion of the 31st anniversary of the creation of Akwa Ibom State recently, Governor Udom Emmanuel said: “We are diversifying our economy and placing emphasis on agriculture. We are producing food to feed our people through our investments in agriculture. Akwa Hatchery is working and producing, the Cassava mills are in operation across the State.” The agriculture and food sufficiency sector has been given a very high priority by Governor Emmanuel. His objective has always been to ensure that food is readily available for his people to put on their table and also to diversify from petrodollar to an agro-based state economy. To this end, as part of the private sector-led investment drive of the state government, a lot of projects have been undertaken, many others are being pursued. For instance, an investor is embarking on a multi-billion-naira Coconut Refinery project in the state which will soon be commissioned with a capacity to employ more than 5000 people directly and indirectly. As part of the agricultural value-chain and backward integration to service the Coconut Refinery with raw input from local farmers, the state had embarked on the cultivation of 11,000 hectares of Coconut Plantation. This is strategic thinking. To also diversify the economy of the state to wean his people from reliance on crude oil money, the Akwa Ibom State government has registered 4,920 rice farmers in the state who are producing rice for local consumption and sales to other parts of Nigeria and the West Coast. The state is also boosting its comparative advantage in growing Cassava with the cultivation of at least 1,450 hectares of Cassava Plantation in five local governments. Animal production and husbandry are also part of the overall agricultural policy of the Emmanuelled administration. To ensure that the state is self-sufficient in dairy and meat production, the administration of Governor Emmanuel imported over 200 highbred cows from Mexico; the cows are currently at Uruan. Not many people know and not many state governments do this but there is the Government Green House, along the Victor Attah International Airport road, which has been producing vegetables such as lettuce, tomatoes, cucumbers that were not hitherto grown in the state. His administration has established 22 hectares of improved cocoa plantation in six LGAs namely, Ini, Essien Udim, Mkpat Enin, Ikono, Abak, and Ukanafun. In collaboration with the Federal Ministry of Agriculture, the state government commenced the sale of oil palm seedlings at a subsidised rate. Akwa Ibom State is known to have one

Governor Emmanuel.

of the best flavours of cocoa in the country. Governor Emmanuel has resuscitated cocoa production through the establishment of Cocoa Development Committee chaired by the deputy governor, Moses Ekpo. He also flagged off the Cocoa Maintenance Scheme to improve the yield of cocoa from the present 300kg/ha to 1,500kg/ha between 2016 and 2019. Governor Emmanuel has provided support for 8,200 cocoa farmers to cultivate 30,000 hectares of Cocoa. He has trained 480 youths on Cocoa Maintenance Scheme. Experts have been brought in to work with the Ministry of Agriculture and the technical committee to teach Cocoa farmers conventional agronomic practices to improve cultivation of cocoa in the state to earn foreign exchange. Apart from cocoa, 6,000 hectares of land has been designated for the cultivation of cassava. There are cassava multiplication farms in Ikot Okudom in Eket LGA, Ikot Ekan in Abak and Ishiet Ekim in Uruan to teach cluster groups best practices in cassava production. The state government has approved counterpart funds for FADAMA 111 Programme. Under this programme, cassava is targeted for cultivation annually between 2016 and 2019. The state is expected to cultivate 6,000ha of cassava in 2019 thereby moving the present cluster to core status. In addition, the governor has approved the establishment of three new cassava processing factories in the three senatorial districts in the state namely: Ibesikpo Asutan LGA (Nung Udoe, Eket LGA (Ikot Okudom) and Abak LGA (Ikot Ekang). This will reduce the cost of processing cassava into other derivatives such as fofo, garrison, and pallets as well as their prices significantly. Governor Emmanuel has approved the reactivation and management of the defunct state premier fisheries at Obio Eket, Nsit Ubium by Merlot Anny Limited. To put an end to capital flight from the state, an ultra-modern poultry hatchery complex, which will produce at least 520 dayold chicks per day has commenced operation at Mbiaya in Uruan. The hatchery, which comprises a feed mill and a breeder farm, has commenced production. It is expected that the hatchery will attain its full production capacity of 520,000 day-old chicks per week. “Akwa Ibom State government is doing a lot in the area of agriculture. The state is harnessing the potentials in the sector to ensure food security for the country,” said Deborah Adesua Ameli, chief operating officer, Agroyields – an agricultural and commodity trading company. “The state is providing the enabling www.businessday.ng

environment to support the entire agricultural value chain,” Ameli said. Overwhelming achievements From the Coconut Refinery to the Akwa Ibom Rice and other economic projects, the administration of Emmanuel has clearly spelt out his priority for agriculture and food sufficiency. The state’s industrialisation programme has been linked to agriculture because many industries use agricultural by-products. Hence the massive cocoa production in the state is to produce cocoa for export and having it processed to produce beverages like Bournvita, Ovaltine etc. Akwa Ibom state is also into massive baking oil production that is novel in the western coast of Nigeria. It is the only state in this country that is actually going into that production, and of course this will to a large extent impact greatly on the downstream effect on pharmaceuticals and the downstream effect on other allied industries. Also the state is going into massive banana and tomatoes production which can be canned. So the current drive in the area of industrialization is not without a major contribution by the agric sub-sector. The whole thing is interwoven in one. The journey of people of the state to Jos and other states in the North just to buy tomatoes has been greatly reduced because of the tremendous effort made in the cultivation of tomatoes and the harvesting. Many farmers and dealers now frequently visit the green house to purchase the state’s tomatoes. By the time the project is in full blown, the state will succeed in putting a permanent stop to the journey up north. The target is to have 10 of those one-hectare green houses. In partnership with Ibom Agricom, the target of the state government is to hit five metric tonnes per day in rice production by massively cultivating 100,000 hectares. This will flood the market with Akwa Ibommade rice; one that is planted, processed and packaged in Akwa Ibom. Through his efforts, the price of garri has been brought down; rice is in abundance and many people have been made to stop going to Jos to buy tomatoes. He has been making Akwa Ibom to be food sufficient. The administration of Governor Emmanuel believes that the state, which is blessed with abundant natural resources, fertile land and good climate, can produce sufficient foods to feed her population and provide a sustainable raw materials base for her burgeoning industries. In just four years, the administration’s agricultural sector catalogue of development

https://www.facebook.com/businessdayng

has been overwhelming. It has developed 11,000 hectares of coconut plantation; 2,100 hectares of cassava plantation in 15 LGAs (FADAMA); 48,000 rice farmers registered for CBN anchor borrowers scheme; 450 youths were trained on cocoa maintenance and 500,000 improved cocoa seedlings were raised for distribution to farmers at highly subsidized rate across the 28 cocoa producing local government areas. The states established hatchery called Akwa Prime Hatchery produces 10,000 day-old chicks per week and there has been free distribution of improved corn seeds to farmers. The state has commenced the construction of vegetable greenhouses and the cattle ranch and has cultivated over 1,200 hectares of rice; constructed of 33 cassava micro-processing mills and training of 300 youths under the Graduate Unemployment Youth Scheme (GUYS). Each of the youth will be empowered with N1million to embark on any agricultural enterprise. The state has also constructed the Tractor Hiring Enterprise (AEHE) centre; refurbish the cassava processing factories at Ikot Okudom, Eket LGA; Nung Udoe, Ibesikpo/Asutan LGA and Ikot Ekang in Abak LGA and leased to private operators for the production of high quality garri, odourless fufu, and cassava flour. Similarly, the state has procure 600,000 bags of fertilizer for farmers in the state; distributed 500 citrus seedlings, 600 hybrids plantain suckers and 1,000 pineapple suckers to farmers; established a large hybrid rubber nursery at Ebighi Anwa, Okobo L.G.A in partnership with the Rubber Research Institute of Nigeria, for distribution to rubber farmers at highly subsidized rate and establishment of demonstration plots on various agricultural technologies for the transfer of improved technologies to farmers through Akwa Ibom Agricultural Development Programme (AKADEP). The state also established three model villages for production, processing and packaging of Vitamin A products; partnered with World Bamboo Organization for Bamboo development; procure and distribute of 30,000 hybrid plantain suckers to 348 farmers; install maize preservation/shelling machine at Nung Udoe; create Kiado goat multiplication scheme (Pioneer multiplication site developed at Nsit Atai); construct 35 boreholes as part of infrastructural benefits of FADAMA at Sawah rice production, Nnung Obong and set up of Technical Committee on Agriculture and Food Sufficiency. The governor said he is roaring to do much more in his second term in office.

@Businessdayng

Wednesday 16 October 2019

BUSINES DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Consumer Goods

Analysts see upside in these six consumer goods stocks SEGUN ADAMS

hile analysts say t h e Ni gerian Stock market would remain largely bearish for the rest of the year, half-a-dozen stocks in the underperforming consumer goods sector are still expected to appreciate by year’s end. Analysts at Lagos-based investment bank, United Capital say overall outlook for consumer goods firms remains bleak, but their valuation favours a price gain in Nestle, Unilever, Nigerian Breweries, Flour Mills of Nigeria, Dangote Sugar and International Breweries. Since the start of the year, the consumer goods index-a measure of the sector’s price movement- has plunged 31.69 percent compared to the 15.5 percent decline seen in the broad market. Leading the pack, Nestle is expected to gain 15.8 percent to N1,407 per share, the most among the consumer goods stocks in their analysis. The popular consumer goods brand has defied odds and shown resilience

amid stiffer competition and in spite of a weak recovering economy that has pressured price point of consumer goods. “Of all the FMCGs under our watch, only NESTLE was able to grow both its top-line and bottom-line numbers in H1-19,” United Capital said. “This was as the management continued to innovate to stay competitive in terms of pricing.” The investment bank noted that Nestle’s Milo Ready-To-Drink pack and t h e re c e nt ly lau n c h e d Maggi powder seasoning continued to gain widespread acceptance in the marketplace while buoying revenue for both the food and beverage segments, and as a result, total revenue was up 4.9 percent year-on-year to N141.9bn in H1 2019. Nestle also benefited from local sourcing of raw materials and is taking advantage of lower interest rate environment to improve operation. Another consumer goods firm, Unilever is estimated to see an upside of 14.2 percent to N30.5 per share although the company’s performance failed to impress as analysts at

the bank. United Capital noted revenue decline across key product segments as both Food business and Home and Personal Care (HPC) business faltered leading to 11.4 percent year-on-year decline in H1 2019. The analysts said the sharp decline in the HPC segment can be attributed to consumers’ rotation to cheaper unlisted/imported alternatives given weak wallets while the Food business

seems to reel from sterner competition which suppressed volumes. “Consumers have constantly adopted affordability as the key factor in consumption decisions, thus Unilever’s premium brands continue to lag,” the report stated. The third biggest upside has been estimated to be seen in Nigerian Breweries which has an expected return of 11.1 percent to N51.1 per share.

Nigerian Breweries has been able to regain some of the market shares it lost to intense rivalry in the beer industry, Heineken N.V, the parent company was quoted to have said. “As expressed in our FY18 earnings analysis, our outlook for the Brewer remains modestly positive,” said United Capital analysts. Flour Mills of Nigeria, Dangote Sugar and International Breweries are also expected to gain 9.8 percent,

7.8 percent and 4.8 percent respectively. “NESTLE remains our top pick for the sector,” United Capital said in the report. “However, in the brewery space, we expect NB to continue to weather the storm from INTBREW and GUINNESS.” For the millers, United Capital says broad economic challenges are expected to continue to bite deeper on their bottom-line performance.

FINTECH

Lydia eyes $1.1bn to revolutionise MSME funding in Eastern Europe GBEMI FAMINU

igerian fintech startup Lidya is making moves to expand its lending business to Eastern Europe precisely Poland and the Czech Republic as it recognizes the challenges small and medium enterprises face in accessing funds in the European economies. Lidya which was established in 2016 by Tunde Kehinde and Ercin Eksin was targeted at helping small and medium business enterprises open accounts,

save money, build credit profiles, and access credit to grow their businesses and address private necessities. The company aims to digitize and streamline the credit assessment process to make it easy for any SMEs across Africa to access the funding they need to grow their business. Tunde Kehinde, cofounder of the firm said “During slowdowns, banks restrict themselves from taking risks while businesses still need to function and finance their operational expenses, Together with the long-term investors on our

side, we are basically agnostic to business cycles,” said. A recent report released by the Organisation for Economic Cooperation and Development (OECD) shows that Poland is among the countries with the highest loan rejection rates for small and medium enterprises. Following its expansion strategies, Lidya plans on reaching 4 countries annually, including eastern European markets. It will initially make $10 million of new capital available for financing companies’ operating expenditure and said it can provide an additional

$200 million in pursuit of the expansion. Ercin Eksin, co-founder of Lidya said the company plans to disburse $1.1 billion within the next five years to small businesses unable to get bank loans and is targeting customers in the agriculture, pharmaceutical, and retail sectors. Lidya also uses creditscoring smart algorithms and technology which provides a unique credit score to predict a customer’s creditworthiness thereby enabling access to funding. the company’s strategic

movement to new markets will examine its online scoring system which captures data aimed at making fast decisions relating to granting short-term loans. Lending agreements for Polish and Czech customers may average $15,000, compared with $3,000 in Nigeria, where the firm has issued 10,000 loans. Lidya has hired the former head of Polish factoring company Idea Money SA to run its operations in the country and doesn’t expect an economic slowdown caused by headwinds buffeting western European

economies to impede its growth. Earlier in 2018, the startup secured a $6.9 million seed funding from Omidyar Network and Alitheia Capital, co-manager of Umunthu which was used to improve its services as also expand to other African countries. Lidya, since inception in 2016 has granted more than 1,500 loans to help companies involved in agriculture, hospitality, logistics, real estate or health in Africa. The start-up also raised $1.25 million in seed funding in 2017 led by Accion Venture Lab.

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

Wednesday 16 October 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

FINANCIAL SERVICES

Baobab Microfinance Bank targets N5bn capital base by 2020 half-year ... mulls expansion to Ghana HOPE MOSES-ASHIKE

ollowing a move by The Central Bank of Nigeria (CBN) last year to raise the capital requirements of National MFBs from N2 billion to N5 billion, Baobab Microfinance Bank Limited, a Nigerian microlender, says it expects to grow its capital to meet the new benchmark by mid-2020. The microfinance bank would grow its capital base by 42.86 percent to N5 billion, from N3.5 billion currently by the first half of next year, the company has said. “O r d i n a r i l y w e h a d planned that before December we would have increased our capital to N5 billion but the CBN also gave an opportunity to wait for a while, so by next year we will have up to N5 billion”, Kazeem Olanrewaju, the managing director/ CEO, said during the 10th year anniversary celebration of the bank in Lagos. In terms of customer base,

the bank has grown to about 100,000 today and has disbursed over N55 billion since the inception of the company. In terms of loan book the bank, today is doing almost N10 billion and in terms of customers with an outstanding loan, it is about 23,000, branch network is 20 and “we are still counting, staff strength is 528 and we are still counting”, he said. Olanrewaju also said Baobab has enjoyed growth which is expected to continue into the years ahead. “So we are starting another journey from January 2020 we believe that that journey will take us to that height where we will become a household name in the services we provide,” Olanrewaju said. Phillip Sigword, group CEO of a Baobab group noted the company’s plans to expand to Ghana sometime in the next two to three years. “We are always looking at new countries. One day we would like to go to Ghana that is what one of the board members said and maybe to

East Africa,” Phillip said. Philip also said microenterprises and small businesses create jobs and drive the Nigerian economy. Responding to question of the impact of the Central Bank of Nigeria (CBN)’s recent directive on Loan to Deposit Ratio (LDR) on Microfinance banks, Olanrewaju said that has heightened competition in the sub-sector but “we are already doing more than 65 percent and so in terms of effect on us from the regulatory side is zero but because of this regulation the commercial banks are out to get customers to be able to extend credit to so the competition is there”. He said this can only lead to customers getting the best of service and the best of rate. “Competition is expected to drive down the cost loans in Nigeria that is what you will see. You will also see growth in the productive sector because if interest becomes cheap, it means that people who have venture can easily take loans and be able to invest,” he said.

L-R; . Yasser EL-Farra, president/CEO, Tenaui Africa Limited ; Yuichi lshiz president/CEO, Canon Europe, Middle East and Africa (EMEA) ; Festus Keyamo, minister for State, Labour and Employment, and Ademola Kasumu (r) MD/CEO, KAS Prints, and others, at the unveiling of the Revolutionary Canon 10000VP Digital Print Equipment by KAS Prints in collaboration with Federal Ministry of Labour and Employment in Lagos .Pic by Pius Okeosisi

L - R: Robert Giles, head, product insights and capabilities, Access Bank Plc; Adewale Adekoya, DiamondXtra N1million Winner; and Victor Etuokwu, executive director, retail banking, Access bank Plc. at the DiamondXtra Season 11 cheque presentation ceremony in Lagos .

AGRICULTURE

BASF expanding investment to boost food security in Nigeria, other African countries MODESTUS ANAESORONYE

ASF, a multi dimensional company with hands on agricultural solutions, nutrition, energy, construction, and chemicals has reaffirmed its commitment to deploy variety of models to boost food security in Nigeria and across Africa. The company said food security is a priority in its policy framework, as that is critical in supporting government’s effort towards achieving food sufficiency for citizens across the African continent. Jean Marc Ricca, managing director, BASF West Africa said there is need for someone to trigger cold rooms that will aggregate and preserve food products from the farms, to the market and factories because a lot of the products are wasted, and this undermines the efforts put in by the farmers. He said there has to be a dedicated effort to support activities in the agricultural value chain so that food security can be a reality. Marc Ricca said part of the company’s new initiatives is conversion of plastic waste into raw materials and chemicals that would be used in industries.

We believe that plastic waste, which has become a serious challenge in our environment and almost one million tons generated annually provides an opportunity to enhance productive capacity, raw materials, and job opportunity, he said He further noted “We are here to deploy more models that never existed as part of our value contribution to the economy of Africa because we believe in Africa and we are pursuing these vigorously”, Marc Ricca said. On the operating environment, he said the biggest challenge facing Nigeria is power, stating that a lot needs to be done to create conducive environment for businesses to thrive. “Power is the biggest problem; other issues can be addressed over time through constructive engagement with the government, and the relevant authorities”. Marc Ricca said “I still expect a lot more because we can do so much, and we cannot continue to blame the government, stating that the private and public sector must work together to bring these development to reality”. Nigeria could be the incubator of global resources, but then minimum infrastructure

is critical for all of these to happen, he said. On the company’s Corporate Social Responsibility drive, Linda Brown, head of communications and Transformation, said BASF CSR is focused on sustainability and so has driven policies that empower young people and women, which does not only enable them acquire skills but also make them economically relevant. Brown said the Company has quite a number of initiatives that accommodate young graduate trainees, equip them with relevant skills that make them employable in industries within and outside the continent of Africa. BASF West Africa Limited was established in Lagos, Nigeria in July 2012. In 2015, a construction chemicals production facility was opened in Lagos in order to serve the West African market. Industry portfolios represented in the African region include chemicals, plastics, dispersions, agricultural products, nutrition, oil and gas. BASF products are used for industrial applications in a variety of sectors including paper, packaging, leather, detergents, cosmetics, construction, mining, agriculture and automotive industries.

www.businessday.ng

L-R: Olu-Victor Oyinloye, minister in charge, Nigerian Series; Afolabi Oke, minister in charge, Triune Center; Fela Durotoye, CEO, GEMSTONE Group; Kayode Akintemi, MD/CEO, PlusTV, and Chinasa Amaechi, MD/ CEO, Mind to Mind Initiative, at the 2019 Trinity leadership conference, with the theme: “Youths in National Leadership” in Lagos. Pic by Olawale Amoo

L-R, Patricia Ojora, Trustee, Gallant Graces Foundation, Janet Adetu, President, Gallant Graces Foundation, Fayoke Lawal, Marketing Purchases Manager P&G And Head Women Network P&G Nigeria, Lara Cookey, Trustee, Gallant Graces Foundation And Adetola Tomisin, Brand Manager, Always & Gillette, At The International Day Of Girl - Child Organize By Gallant Graces Foundation For The Students Of Gbara Community & Ilasan Senior Secondary School, Ajah Lekki, Lagos.

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINES DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

NPA abolishes safe anchorage operations to save cost for ships calling Lagos Ports AMAKA ANAGOR-EWUZIE

hips calling Apapa and Tin-Can Island Ports located in Lagos can now heave a sigh of relief as the Nigerian Ports Authority (NPA) said it has abolished the operations of safe anchorage and its consequent charges on shipping companies. According to the NPA, safe anchorage operations pile up costs to shipping companies as vessels anchored in the area are expected to pay as much as $2,000 for the first day and $1,500 for the subsequent days. BusinessDay understands that in some cases shipping companies pay as much as $2,500 per day to security outfits guarding the safe anchorage areas. Speaking at a quarterly stakeholders meeting held in Apapa last week, Hadiza Bala Usman, managing director of the NPA, disclosed this in Lagos on Thursday while responding to complaints by stakeholders that some private

Source: Nigeria’s Maritime Industry Forecast 2019-2020

security companies collect as much as $2,000 per day to secure vessels against attack outside the Lagos anchorage. She directed shipping companies not to pay any anchorage dues to private security firms as the NPA would take responsibility of providing security to vessels at the Lagos ports’ anchorage areas. “Today (Thursday 10th October 2019), NPA has is-

sued Marine Notice to say that there is no longer any anchorage in Lagos addressed as safe anchorage. We are aware that about $2,000 is being charged on the first day and every other subsequent day is $1,500. We know that it is increasing charges for shipowners but that would not exist anymore from today,” said Usman, who was represented by Sekonte Davies, executive director,

Onne Customs raises revenue profile, generates over N81.2bn in Q3 AMAKA ANAGOR-EWUZIE

he Nigeria Customs Service (NCS), Port Harcourt Area II Command, Onne Port said it generated a total of N81,196,697,858.57 in the third quarter of year, July to September 2019, surpassing the sum of N69,535,174,318.38 that was collected within the same period in 2018, with over N11,661,523,540.19. The Command also recorded a total of 66 seizures with Duty Paid Value (DPV) of N865,926,821.00 within the period under review. According to a statement signed by Ifeoma Ojekwu, public relations officer, Area II Command, Onne, Aliyu Galadima, Customs area controller of the command, attributed the success to increased deployment of tact, intelligence enforcement and technology in maximising compliance from port users. The statement noted that Galadima was also vigorously pursuing the Customs’ man-

agement zero tolerance to duty evasion, smuggling and other infractions like under declaration. The command has also been reviving proficiency in identifying and blocking all avenues of revenue leakages; enhancing capacity building in areas of modern Customs operations and reinforcing the commitment of officers in the discharge of their duties. In terms of seizures, the command intercepted 12 x 20 feet containers comprising 13,180 jerry cans of 25 litres of vegetable oil with DPV of N82, 517,024.00; five by 20 feet containers comprising of 8,706 cartons of foreign soap worth N79,497,617.00; one by 20 feet and another one by 40 feet containers loaded with 57,300 pieces of matches, 59 cartons of matches, 1,300 sacks of shovel,100 cartons of hook knives, 172 sacks of diggers all amounting to N52,463,002.00. Ojekwu said the command intercepted one by 40ft container loaded with scrap metals worth N5,386,979.00 and www.businessday.ng

41 x 20ft containers comprising of 181 bundles and 10,800 packs of corrugated aluminium roofing tiles/sheets and its accessories with DPV of N561,753,188.00; “The command also seized one by 20ft container comprising of 315 bales of textiles (wax material) N18,495,395.00; 69 bags of imported rice and 329 bales of clothing amounting to N10,725,658.00. It also seized four by 20ft containers of 160 logs of hardwood with DPV of N10,342,838.00; one by 20ft container comprising of 588 cartons of battery, 18 cartons of rolls PVC, 80 bundles of plain cartons and 10 keys of gum worth N20,654,664.00,” she listed. Meanwhile, the area controller stated that there would be continuous sensitisation for stakeholders on the need to be compliant with extant laws governing Customs activities, adding that the commands was always ready to facilitate trade in line with global best practices to compliant importers and their agents.

Marine & Operations of the NPA. To provide anchorage, Davies said, is NPA’s responsibility and the Nigerian Navy has been in collaboration with the authority to ensure that every anchorage of NPA is safe. “The National Security Adviser and the Chief of Naval Staff are collaborating with us.” In addition, she, however, said the authority

has perfected plans to take delivery of patrol vessels to enhance waterfront security at the ports. Usman assured that NPA was working in partnership with the Nigerian Navy in order to strengthen waterfront security at the ports. “NPA has procured s e c u r i t y p at ro l b o at s and we are going to take delivery of some of them in the next six weeks. If not for a few issues, by now, they should have been here. Upon arrival, it will enhance our waterfront patrols and also tightens security operations at Nigerian ports,” she said. Usman further said that NPA w ould s oon commence procurem e nt p ro c e s s f o r a cquisition of fenders for the var ious ber ths in the port that need to be replaced. Earlier, several stakeholders raised concerns over constant attacks on vessels at berth in Lagos Ports; calling on NPA to increase patrol of the waterfront and put in place well-coordinated efforts to address the security

menace. To address this, stakeholders urged the NPA to make the entire anchorage areas safe for all in a way that anchorage dues can be imposed on ships calling Ports in Lagos for the safety of the ships. In his submission, Yakubu Abdulahi, general manager, Operations of Greenview Development Nigeria Ltd (GDNL), a terminal operator in Lagos Port Complex Apapa, said at the meeting that every two months, pirates come on board and attack vessels at berth. According to him, once the pirates launch attack on the vessels, they operate freely and also leave freely without anybody challenging them, and they leave through the waterfronts. “This means there is a need to increase patrol of the waters in a more coordinated manner. If the Marine Police and the Navy are actually taking part in the internal water surveillance, then, we need to understand what is actually going wrong,” he suggested.

LADOL developing facilities to support sustainable entrepreneurs - Jadesimi

my Jadesimi, managing director of LADOL Free Zone, said the integrated logistics firm is presently developing infrastructure and facilities to support a range of sustainable entrepreneurs and SMEs globally. According to her, LADOL would be developing innovative customised solutions for the West African market. Jadesimi, who was one of the five industry leaders chosen to select the winner of the global ‘We Empower’ female entrepreneurship challenge at the recently held United Nations General Assembly week in New York, said investing in female entrepreneurs with sustainable business plans, was one of the most lucrative ways to achieve the UN Sustainable Development Goals (SDGs). “We Empower is putting brilliant female entrepreneurs on a global stage. All five awardees were impressive – both in terms of the

https://www.facebook.com/businessdayng

bankability of their business models and their passionate dedication to the SDGs. These are the business models of the future,” said Jadesimi. She said the mainstream financial sector is largely oblivious to such opportunities, meaning that they are also great undervalued investment opportunities. “Sustainable businesses such as these will be the drivers of global prosperity. Eighty percent of the 680 million new jobs the world needs will come from SMEs. We need to exponentially expand the work of organisations such as We Empower, so that millions of sustainable businesses and business leaders can be identified and supported,” she suggested. WE Empower, which is the UN’s Sustainable Development Goals (SDG) challenge, is a global business competition for women entrepreneurs, who are advancing the UN’s SDG and inspiring entire communities to create @Businessdayng

the ideal world by 2030. The challenge honoured five women entrepreneurs, one from each of the five UN regions, who are advancing the SDGs through their business practices. It recognises their innovative work, provides capacity-building, training sessions and highlevel advocacy opportunities to the awardees, and ignites awareness about the valuable contribution women entrepreneurs can make toward the SDGs. The awardees convened in New York City during the week of the UN General Assembly. The first major event was a dynamic pitch competition hosted by fashion designer, activist, and Vital Voices board member, Diane von Furstenberg, and judged by- Amy Jadesimi (MD LADOL) and others. The $20,000 grant was awarded to Leah Lizarondo, CEO and co-founder, 412 Food Rescue but all five of the awardees were highly commended.

Wednesday 16 October 2019

MARITIMEBUSINESS INTERVIEW SHIPPING

LOGISTICS

MARITIME e-COMMERCE

BUA made 100% commercial use of terminal for 18 months without interference - NPA AMAKA ANAGOR-EWUZIE

BUSINESS DAY

ontrary to the claim of BUA Ports and Terminal Limited that the Nigerian Ports Authority (NPA) has run afoul of the court injunction, the authority has said that within the 18-month period, January 2018 when the injunction was secured and June 2019, when the Authority decommissioned Terminal B for safety concerns, BUA made full use of the terminal without interference. Consequently, BUA berthed 117 vessels made up of liquid and dry bulk cargos. This alone has faulted every attempt to suggest that the NPA has flouted the orders of a court of law. The total number of vessels berthed showed that BUA has been making full commercial use of the terminal even with the poor quay walls and low draft, said Adams Jatto, general manager, corporate and strategic communications, of the NPA. Jatto, who made this claim in a statement, said Bua Ports and Terminals Limited also claimed to have written several requests for approval to perform remedial works on the berth. “This is a laughable claim as BUA only commenced writing the authority requesting to reconstruct the berth after the concession termination notice had been issued following 10 years of refusal to fulfil this obligation. How can you request to reconstruct a berth which you have no legal claim to following the termination? This is yet another of their attempts at deceiving the Nigerian public,” Jatto questioned in the statement. Recall that BUA had accused the NPA of not fulfilling its obligations including: refusal to abide by a court order, provision of security, dredging of the port, repair, renew and rebuilding of quay walls. On security, Jatto who faulted BUA’s allegations that due to lack of adequate security, hoodlums and vandals, find their way into the terminal to cut the pipes and steel beams of the berths, said the NPA had a record

of three reported cases that took place between 2014 and 2016, 10 years after BUA was supposed to have commenced and concluded the reconstruction works. “These acts of vandalism (which were recorded on August 25, 2014 at 17:45 hours; June 27, 2016, and August 11, 2016 at 2:00 hours respectively) would not have happened if the company had complied with the agreement and conducted the reconstruction within 90 days stipulated within the concession agreement,” he said. According to him, the collapsed state of the berth exposed the structures and allowed for the cutting by hoodlums. He, however, reiterated the Authority’s commitment to securing the berths. “The decision to decommission Rivers Ports Terminal was out of safety concerns. This concern resulted from a May 16, 2019 BUA Ports and Terminals Limited letter informing us that the “jetty is in a state of total dilapidation and needs urgent repair or reconstruction. Our engineers have advised us that the jetty is liable to collapse at any moment,” he said. He said the NPA would be an irresponsible regulator to look the other way and endanger the lives of Nigerians when a company painted this frightening situation in a letter sent to the Authority. Stating that the NPA was prepared to diligently pursue the arbitration process, which it initiated despite the delay by BUA, said the continued media show cannot be used as a ploy to hamstring the NPA from performing its rightful oversight duties. Recall that NPA said 10 years after the handover of the premises to BUA Ports and Terminal Limited, the company failed to commence the reconstruction of berths 5-8 as required by the agreement. This forced the authority to issue a letter to BUA in order to draw their attention to non-compliance to the agreement. “Despite receiving the letter, dated February 3, 2016, BUA refused to honour this fundamental term of the lease agreement. Consequently, the Authority served a default www.businessday.ng

notice dated February 11, 2016 and another one dated July 27, 2016 on BUA. “The letter reminded that the non-compliance, which led to the deterioration of the berths 5-7 and the total collapse of berth 8, constitutes a breach of the concession agreement and a threat to the safety of lives around the terminal.” On November 11, 2016, NPA said, it issued a 3-month termination notice to BUA with the intention to save users of the ports users from any untoward incident, citing default notices served on them in relation to the non-fulfilment of the obligations under the lease agreement. “On receipt of the notice of termination, BUA sought and obtained a restraining order from the Federal High Court, Lagos on January 18, 2018 barring the Authority from giving effect to the termination. The NPA obeyed the order by not interfering in their operations for over 18 months until BUA wrote to the NPA on May 16, 2019, to complain that the state of the terminal is of safety concern,” NPA said. NPA further said, “On carrying out an investigation, it was discovered that the jetty in BUA terminal was in a state of total dilapidation and needs urgent reconstruction as described by BUA Ports and Terminals Limited themselves, which forced the authority to decommission the terminal. Mohammad Ibrahim, general manager, BUA Terminals Limited said that the company was losing huge amounts of money due to the decommissioning, adding that the jetty serves tank farm owners and fish farm owners. Ibrahim said that commissioning of the factory is this month, but that the lack of a Jetty could undermine smooth its operation, wondering what is left of such a facility without a berth or jetty. “Apart from BUA, the customers we serve will be affected. Those that depend on the terminal are in trouble. We realize $500,000 to $600,000 a month from the jetty out of which we pay NPA monthly lease of $1050. We also pay throughput fees of $1.29 per tonne,” said Ibrahim.

‘Why the 909 USSD code is distinct from other applications’ Stanbic IBTC officially launched its *909# Unstructured Supplementary Service Data (USSD) application in September 2019. In this interview, EMMANUEL AIHEVBA, Stanbic IBTC’s head of customer channels discussed what makes the code distinct from the USSD offerings of other financial institutions. JUMOKE AKIYODE-LAWANSON brings the excerpts.

h a t makes the 909 USSD c o d e different from existing mobile transaction codes owned by other financial institutions? The 909 banking code is quite different from others in the industry because it is the only USSD code designed to cater to the multifaceted financial needs of customers. It is the only USSD code that offers customers’ access to their bank accounts, mutual funds (investment), pension and mobile wallets (virtual banking) services at the same time. What do you mean when you say that the 909 USSD code is designed around the customer’s life and needs? This is because the 909 code allows you to carry out banking transactions at anytime, anyplace and anywhere on any type of mobile device (both feature and smart phones) without any hindrance or limitation. The solution is fast, secure and reliable and customers do not need data on their phones to access the 909 offerings. The introduction of USSD codes come with certain challenges such as customer data breach, service challenges, etc. How does the 909 USSD code combat this challenge? Like any other product and services offered by Stanbic IBTC, 909 has been carefully designed with reliable security features that guarantee the integrity of customer and transaction data processed on the platform. The Stanbic IBTC 909 USSD offering is also operated in line with stipulated security regulation by the Central Bank of Nigeria (CBN) for USSD services.

Emmanuel Aihevba

Why have you decided to launch a campaign at this time and what for? The essence of the 909 campaign was to reward our loyal customers, who over the years had been using 909 to perform their basic banking transactions. In the same vein, we used the campaign to also reach out to prospective customers who do not currently use the 909 code to let them know about the various services available on the platform and how these can be of benefit to them. The bonus airtime reward and other giveaways during the period of the campaign were available to both existing and prospective customers on the platform.

What sort of benefits and rewards were available to customers during the month-long campaign? Existing and prospective customers who used the 909 code for their banking transactions – most especially for the purchase of airtime, won amazing airtime bonuses throughout the month of September 2019. Branded gift items and other exciting giveaways were also made available to walk-in customers in our branches and to those The 909 code has been in who followed the Stanthe market for a while. bic IBTC social media

https://www.facebook.com/businessdayng

@Businessdayng

handles on Twitter, FaceBook and Instagram What are your expectations in terms of customer adoption of the 909 USSD code? Our expectations are quite high as we believe that 909 is a solution that every customer that has a relationship with the Stanbic IBTC Group should adopt and use for their everyday transactional needs. As I had earlier highlighted, the offerings on the platform transcends beyond banking as pensions, wallet and asset management (mutual funds) services are other offerings currently available to existing and prospective customers on the 909 platform. Are there plans for an upgrade that will enable customers perform more functions in the future? Yes, the 909 platform will continue to evolve as we continue to strive hard to meet the different but exciting needs of our customers. For example, insurance and stock broking services are key offerings that we are already looking at whilst there are also plans to add to the growing list of billers / utilities that customers can access on the platform.

Wednesday 16 October 2019

BUSINESS DAY

cityfile Insecurity: 2,000 clerics pray in Benin IDRIS UMAR MOMOH, Benin

gainst the backd ro p o f r i s i n g insecurity in Ni g e r i a , s o m e 2,000 Christian leaders from around the world would be gathered in Benin, the Edo State capital, for a week-long prayers. T h e c l e r i c s a r e e xpected from 10 countries i n A f r i c a, Eu ro p e a n d America. Ralph Okhiria, media aide to the National

An accident between J5 and Golf along AYA Junction to Kubuwa express way in Abuja.

picture by TUNDE ADENIYI.

Edo to take over Benin-Auchi Highway IDRIS UMAR MOMOH, Benin

do State government has commenced plans to take over the reconstruction of the Benin-Ekpoma-Auchi Highway to end years of deplorable state and avoidable loss of lives to accidents. Th e s t at e g ov e r n o r, Godwin Obaseki disclosed while inspecting one of the 40 Edo City Transport Service (ECTS) buses re-

…opens discussions with FG furbished by the state government at Government House, Benin, on Monday. “We are in conversation with the Federal Government, I met with the minister of works last week and he assured me that remedial work will start this week on the BeninEkpoma-Auchi Road. The minister has assured that some funding is available to make progress on the road.” The governor, who noted

that the remedial work being done on the road was not good enough, said that the state government wanted a total rebuild of the road. “We are exploring the possibility of requesting the Federal Government to give us the entire stretch of the road from Benin to Auchi, so we can raise funding to complete the work on the road. “The road is a main artery that connects three senatorial districts

of the state. If we do not fix that road, it will have serious consequences on the economy of the state”. He said that the state was looking at the total rebuild of the road and fixing of the road in phases. “The road is a priority and we can fix the road in segments; starting with the Benin-Ekpoma axis, then the Ekpoma-Okpella axis, then the Okpella -Okene axis,” Obaseki said.

Kaduna community El-Rufai on developmental projects

esidents of Sab o n Ta s h a i n Kaduna State have appealed to Governor Nasir el-Rufai to use the state’s 2020 budget to drive development into their community. According to the community in a communiqué issued on Monday at the end of a one-day capacity building for community budget tracking team at Sabon Tasha in Chikun

local government area, doing so would ensure fairness, equity and justice. They claimed that the a re a h a d s u f f e re d n e glect from government at all levels over the years despite being the most populated in the local government. A c c o rd i n g t o t h e m , their neglect and marginalisation has to do with their political preference in elections. They argued

that after the last general elections, the decisions o f g ov e r n m e nt s h ou l d favour all, regardless of political affiliation or ethno-religious inclination. “None of the projects captured in the 2018 and 2019 Chikun local government budget for the ward has commenced, except that of Ungwan Boro to Yakowa way, which is now worse than it was due to abandonment,” it noted. The community mem-

bers lamented that they were confronted with the problems of bad roads, dilapidated social amenities and infrastructure, which required urgent government intervention. Some of the leaders, who signed the communique include Jessy Ajeson, chairmen, Sabon Tasha Youth Movement ; Sheyin Wakili, Pama Youth Movement, and Tachio Bonnet of Galadima United Youth.

President of Pentecostal Fe l l o w s h i p o f Ni g e r i a (PFN ), Felix Omobude said in a statement made available to newsmen. According to Omobude, Christian leaders would be united in prayers against terrorism, insurgency, kidnapp i n g , a r m e d ro b b e r y / banditry, and other violent crimes, as well as pray for the peace, unity, economic, political and social well-being of Nigeria.

Defiled 10-year girl dies in Aba GODFREY OFURUM, Aba

-ten year girl, names withheld, who was defiled by a 16-year boy, identified as Paul Ikwechegh, a native of Igbere in Bende local government area of Abia State, has died. The girl died in an undisclosed hospital in Aba, as a result of injuries inflicted on her, Ikwechegh. The Police Commissioner (CP) in Abia State, Ene Okon confirmed that the case was reported to the Aba Area command, last week. According to Okon, the

report of the death of the little girl has taken the case away from rape to murder, vowing to ensure that justice is served on the matter. “The case was transferred to state CID last week. But since the information now is that the girl is dead, it will now be treated as murder. Trust us that justice will be done” he said. Cityfile gathered that the deceased, who hailed from Nkporo, in Ohafia LGA of Abia State, was forcefully taken away against her will, by the suspect, who defiled her in a brutal manner that led to her death.

Flooding: Oyo to build more bridges

ollowing flooding occasioned by overflow from streams and rivers, Oyo State government in partnership with Ibadan Urban Flood Management Project (IUFMP) is to construct more bridges and drainages. Speaking during a visit to one of the sites at Aba Eleshin Bridge on Jakanta Road in Apata, Ido local government in Ibadan, the commissioner for environment and natural

resources, Kehinde said t h e g ove r n m e nt w ou l d be confronting the environmental challenges head on. Ayoola, however, said beyond constructing the bridge, the residents of the community must also desist from indiscriminate dumping of refus e under the bridge in order to avoid hazards associated with such act. “Government will soon start the construction of the bridge here to safeguard lives of the people”.

Aisha Buhari opens COWLSO’s confab …as Sanwo-Olu’s wife plans endowment fund Ayinke House JOSHUA BASSEY

ome 3,000 participants are expected at the 2019 national women to be declared open by Nigeria’s first lady, Aisha Buhari. T h e c o n f e re n c e i s annually organised by the Committee of Wives of Lagos State Officials

(COWLSO). This year’s conference, the 19th in the series, will hold at the Eko Convention Centre, Hotel Eko and Suites, Lagos. Ibijoke Sanwo-Olu, wife of the Lagos State governor and chairman of COWLSO, who briefed newsmen, said the event would take place between October 22 and 24, 2019. www.businessday.ng

According to her, the theme of this year’s conference is “unlearn, learn and relearn: 21st century w omen’s T.H.E .M.E .S perspectives/approach.” The theme, she added, was selected to empower women with skills to key into emerging opportunities being provided by the Lagos State government. “As it is the tradition

of the conference to empower women to contribute positively to the development of the state and Nigeria at large,” she said. Meanwhile, Ibijoke Sanwo-Olu has said plans are underway to launch an Endowment Fund in aid of pediatric surgeries for needy babies at the Ayinke House, in Lagos

https://www.facebook.com/businessdayng

State University Teaching Hospital (LASUTH), Ikeja. She made this known during a visit to LASUTH as part of the corporate social responsibility of COWLSO. According to her, it was important to make the right investment in healthcare delivery to play up the health of the people, and also support the needy. “We decided to do our @Businessdayng

CSR here; this is Ayinke House in LASUTH. We are hoping that we would send the message down to the people that there is need for us to invest in our patients, as well as invest in our doctors and nurses so that they can deliver good healthcare to our people,” she said.

Wednesday 16 October 2019

BUSINESS DAY

PENSION today

In Association With

States compliance to CPS real testament of pro-people governors

he Pension Reform Act 2004 as amended in 2014 did not make it compulsory for States to adopt the Contributory Pension Scheme(CPS). But its adoption, compliance and judicious implementation of the scheme by any chief executive of state (governor) is a big sacrifice that shows a propeople government. This therefore, is one important index to measure a governor or state government that is forward looking and interested in the welfare of its citizens. In this case, not only has the governor made sacrifice to use tax payers money judiciously, he has shifted away from the norm of public sector wastages that see chief executives on that capacity living luxury life and extravagance on public funds, when there a pressing needs in their states. Industry regulator, the National Pension Commission (PenCom) in its commitment towards ensuring effective implementation of the CPS across the states has continued to engage stakeholders to enable them appreciate the scheme and also address some of the challenges confronting implementation. Dan Ndackson, head, States Operations Department of PenCom during an interview said in adopting the CPS, challenges come from two angles - one is from the executives of the states and the second is from the labour unions. According to him, the challenges that come from labour are as result of ignorance because it is co-employee scheme, which guarantees the employee the likelihood of him getting something at retirement much more than the old scheme. “So, even though the scheme has some challenges in some states, I link it to the ignorance of them not understanding the benefits of the scheme.” Ndackson said the greatest challenge that this scheme has are those that come from the chief executives of the States. “The truth is that, any state government that adopts the scheme makes a sacrifice. What sacrifice does that government make? The money, that ordinarily some could have used for some other things including wrong uses have to be paid religiously on monthly basis. Not so many chief executives are comfortable with that.” “For many chief executives, their longest life span is eight years, and we have seen the government survive its two terms without paying pensions under the Defined Benefit Scheme and nothing happens.

Many governors are comfortable with that and are doing so. So, I have always called governors that adopt the contributory pension’s scheme as pro-people government, as people who have welfare of their citizens at heart because what they are doing is making sacrifices, while some others who have this money abuse it rather than invest on their people.” But this is different from the CPS because PenCom monitors compliance, as soon as it is adopted. On the effectiveness of PenCom enforcing compliance with this scheme, Ndackson said unfortunately, the constitution give states the powers to design their own pension laws. “However, it is the beauty of that constitutional provision that we let the states know the beauty of the scheme and encourage those that are willing. If state governments decide to opt out, there is nothing we can do. So it is a constitutional provision that allows states the independence to enact a pension law that suits their interest, and what PenCom can do is to say look, we have seen the good things that are in the CPS, tell the gospel on the beauty of the scheme, so that other chief executive who see it can implement it in their own states for the benefit of their employees.” Like an ‘SOS’, states and local governments that were yet to see the need to align with the CPS should do so quickly to protect

the future of their workers and citizens, as well as create an economic backbone for such states to be able to provide infrastructure for the betterment of their citizens, expert in the industry said. The non implementation of this scheme has denied the States the obvious advantages of the contributory pension model, including its sustainability as a system, robust framework that eliminates the incentives for corruption in benefits administration and ability to access the pool of investible pension funds to drive economic and infrastructural development in their respective domains.” “I would therefore passionately appeal to all the States and Local Governments to step-up their efforts to implement the CPS in order to avail themselves and their employees of the numerous opportunities and benefits of the Scheme, the expert said. PenCom said in its second quarter 2019 report that it has continued its engagement with State Governments on the implementation of the CPS. The Commission held a meeting with the officials of Jigawa(State and Local Governments) Contributory Pension Scheme. The meeting was convened to review the Commission’s comments on the Trust Deed Governing the administration of the Contributory Defined Benefits Scheme in Jigawa State. At end of the meeting, the delegation expressed appreciation to the Commission for its input and promised to

incorporate the comments into the Trust Deed and resubmit for the Commission’s review. Meanwhile, a delegation from Zamfara State, led by the Head of Service met with the Commission during the quarter also to notify the Commission of the re-enactment of its State Pension law and solicited the Commission’s intervention to facilitate the refund of employees’ pension contributions by the PFAs. The Commission cautioned the State on the implications of adopting a Contributory Defined Benefits Scheme and advised the State to forward to the Commission a comprehensive schedule of all beneficiaries with their individual bank account details on a PFA-by-PFA basis and subsequently request the PFAs to refund employees’ contributions. Again, the Commission paid courtesy visits to the then Governors-Elect of Lagos and Bauchi States, and the meeting was to appraise them on the administration of the CPS in their States. Again, the South-West and South-South Zonal Offices of the Commission held meetings with Regional Heads of Pension Fund Administrators in their respective Zones during the quarter under review, and the meeting was to discuss pertinent issues directed at strengthening service delivery strategies in the Pension Industry. The Commission also conducted a sensitization program for Pension Desk Officers of Ministries, Departments and Agencies in Kaduna State. The team also conducted Capacity Building sessions for the Kaduna State Pension Bureau, and theprogrammes was aimed at engaging the officers on the recent developments in the industry and also address key challenges. There was also a two-day sensitization program on the 24 and 25 April, 2019 for Administrative Officers and Pension Desk Officers of FCT Administration (FCTA), FCT Area councils and their Local Education Authorities (LEAs). During the quarter also, the Commission conducted Consultative Forum for States and the FCT in Lagos, and the two-day event was attended by Heads of Service and Permanent Secretaries of States, CEOs/DGs/ES of Pension Bureaux/Boards/Commissions of States and FCT as well as Compliance Officers of PFAs/PFCs, and it was aimed principally to monitor the status of implementation of the CPS in the States and Local Governments.

IS NOW RC634453

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

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme. If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

Wednesday 16 October 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Insurance recapitalisation: What will determine survival rate? Modestus Anaesoronye

ow much capital the insurance industry is able to attract will determine the survival rate in the ongoing recapitalization exercise, expert has said. The expert who predicted that about 30 companies (+ or - 5) will meet the recapitalization requirement, said funding from investors locally or internationally is necessary to strengthen the market capacity. Ken Aghoghovbia, deputy managing director/COO, Africa Reinsurance Corporation (Africa Re) in an exclusive interview at the sideline of the recently concluded NESG conference in Abuja said “I expect the number of survivors after the recapitalization to come to somewhere around 30, plus or minus, which is not a bad number.” “But what is the right number, I think that will depend on many factors, primarily how much capital is being attracted into the market. If we have more capital, then the number could be higher but if not we hope to see mergers and acquisition to ensure that the market is not disturbed. “ Aghoghovbia, said while following the regulations effectively, it is important that the market players and insurance companies work towards achieving this timeline and whatever needs to be done should be done quickly, and all hands need to be on deck to see that there is a smooth exercise. With an estimated N200 billion expected into the Nigerian insurance industry after the ongoing recapitalisation by underwriters, the sector is hopeful to emerge stronger, contribute reasonably to the economy and

also able to offer good returns to investors. Industry experts believe that the sector post consolidation will have enough resources to attract quality manpower, acquire necessary skills to underwrite big ticket risks, increase retention in the local market, and be able to take advantage of untapped potentials to create shareholder value. Daniel Braie, managing director/CEO, Linkage Assurance Plc said firstly, the Nigerian investment climate is still one of the most attractive in the world in terms of investment returns, so that in itself is an impetus for new investors. Speaking specifically about the insurance industry, Braie said the full potentials of the industry was yet to be realised when you consider that the insurance penetration ratio is still below one percent. “Look at it from the point of our population demographics, the insurance industry is a huge market waiting to be unlocked. This should be an attraction for any investor to put in money. In addition, the compulsory insurances if adequately enforced will also offer opportunities for the insurance industry to grow and contribute to the overall growth of the economy.” “The future of the insurance industry in Nigeria is very bright given the growth opportunities highlighted earlier especially in the retail space. Because of these potentials companies like Prudential of Britain and Allianz of Germany have recently partnered with local companies in addition to those already operating in the country.” Mayowa Adeduro of Law Union and Rock Insurance Plc said the attractions to any informed investor to put money into insurance business is first the potential of the industry. “The population of Nigeria is over 200

Allianz Nigeria partners Cars45 to deepen retail insurance distribution Modestus Anaesoronye

llianz Nigeria, local operating entity of global insurance giant, Allianz, has collaborated with Nigeria’s leading tech-powered automotive trading company - Cars45 – to deepen retail insurance and entrepreneurship opportunities for Nigeria’s teeming youth population. The launch of Cars45autopreneur - the automotive trading company’s novel platform this month, in Lagos consummated this new partnership, with small and mediumscale car in attendance. The new platform aims to empower everyday Nigerians to increase their nominal earnings through paid referrals using the Cars45autopreneur mobile app. Allianz Nigeria on the other hand, will provide insurance protection for cars bought on the platform by providing accessible and affordable car insurance services Owolabi Salami, executive at Allianz Nigeria noted that with the unemployment rate now at an alarming 23.1 percent and underemployment at 16.6 percent, there is a pressing need for corporate citizens to ideate and implement income-earning opportunities that will be suitable alternatives to formal employment for the teeming youth population. “We want to partner with you to increase your income-earning

capacity by selling insurance for us when you sell cars”, Owolabi disclosed to the guests at the launch event. Founded in 2016, Cars45 has successfully moved Africa’s startup boom into the usedvehicle space, effectively addressing key issues like mistrust, a lack of vehicle history, and the absence of a structured dealer network – issues that have bedeviled the Nigeria used vehicle space. Walter Bossman, the chief Marketing and Strategy Officer at Allianz Nigeria, noted that this alliance with Cars45 is in tandem with Allianz’ long term strategy to deepen insurance penetration in Africa markets through strategic partnerships and contemporary distribution channels. The Allianz Group is one of the world’s leading insurers and asset managers with more than 92 million retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from Property, Life and Health insurance to Assistance services to Credit insurance and Global Business insurance. Allianz is one of the world’s largest investors, managing around 673 billion euros on behalf of its insurance customers - while their asset managers PIMCO and Allianz Global Investors - manage an additional 1.4 trillion euros of third-party assets. www.businessday.ng

L-R: Dorcas Adesokan, winner of women’s singles; Akin Ogunbiyi, chairman, Mutual Benefits Assurance Plc, Francis Orbih, President of Badminton Federation of Nigeria and Anuoluwapo Opeyori, winner of men’s singles at the 3rd Mutual Benefits National Badminton Championship held in Lagos

million people with over 70 percent below 50 years age. The industry is about N400 billion GPI in 2018 but has the potential to double that in 5 years. The infrastructure deficit means there will be increasing spending in capital projects that attracts insurance.” According to Adeduro, increasing awareness of risk and insurance means more premiums to the industry. Better regulatory and governance environment creates opportunity for growth.” Tola Adegbayi, executive director, General Business at Leadway Assurance Company Limited has this to say, “I would think that the potential for insurance is great for our country. The general banter is about population size and the bulk of this relates to the lower income groups where we have the most vulnerable part of our population,

thus speaking to the potential for micro insurance.” According to Adegbayi, the core for insurance is then the middle income persons, SME business owners who desire financial freedom and security. “Insurance provides that freedom to aspire and the needed security should anything happen; meaning that any investor needs to look at the market potential of this group.” The National Insurance Commission (NAICOM) had in a circular issued on Monday May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance companies from N10 billion to N20 billion, with 30th June 2020 as deadline.

Mutual Benefits National Badminton Championship lifts Nigeria on Africa scale Modestus Anaesoronye

utual Benefits National Badminton Championship, now in its third year has produced best players in Africa at both male and female categories, with the country also moving from its 6th position in 2017 to now the number one position. “I am delighted to inform you that between the maiden edition Mutual Benefits National Badminton Championship in 2017 and the 3rd edition now, Nigeria has moved up in ranking from the 6th position to the number one position in Africa, Akin Ogunbiyi, chairman, Mutual Benefits Group said at the finals and closing ceremony of the 3rd edition of the Mutual Benefits National Badminton Championship held in Lagos weekend. Ogunbiyi said it has become an annual event through which Mutual Benefits plays a pivotal role in development of Badminton in Nigeria, Africa and in the global sports arena. He noted that over the years, youth empowerment through the development of Sports has been a key focus of Mutual Benefits’ Corporate Social Responsibil-

https://www.facebook.com/businessdayng

ity (CSR) activities, stating that National Badminton Championship has become a veritable platform for young talented players to develop and showcase their talents, receive exposure and get mentorship. Ogunbiyi further stated that Mutual Benefits National Badminton Championship is proud to identify with the African number one male, Anuoluwapo Opeyori, the African number one female, Dorcas Adesokan and African number one men’s doubles, Anuoluwapo Opeyori and Godwin Olofua as our products. “During the 2nd edition of this championship, I predicted that this event is a platform for nurturing talents who will fly the flag of Nigeria on the international stage. Today, it gives me so much pleasure to announce to you that Anuoluwapo, Godwin and Dorcas are on the road to Tokyo Olympics to represent Africa” With Champions like Anuoluwapo, Godwin and Dorcas who are on the road to Tokyo Olympics, it is obvious that they are producing results and working assiduously to fulfill the mantra of BFN which is “Repositioning Badminton for Sustainable Growth, Ogunbiyi stated.

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

Helping insurance consumers understand their rights will help build trust, confidence - experts Modestus Anaesoronye

s businesses globally celebrates this year’s Customer Service Week, aimed at recognizing the importance of customers in business growth and how to service them efficiently, the attention of the insurance industry has been drawn to deepening consumer relationship. Experts say, Insurance as a risk protection mechanism would make more meaning if the insured or consumers of insurance understand their rights and privileges in the contract. Not only would this empower them to make effective claims in the time of loss, it will change their orientation, build the required trust and confidence needed to grow a virile insurance industry. Insurance industry in Nigeria has a low penetration rate, equal to 0.4 percent when you look at the population tothe GDP, underscoring the low level of acceptability of insurance. Borrowing a leaf from what the Insurance Con-

L-R: Cathy Sanni, head, Human Resources, FBNInsurance Limited; Dayo Gbadebo, deputy director, Benola; Rivers Khumalo, chief technology officer, FBNInsurance Limited; Festus Izevbizua, executive director, Finance & Admin, FBNInsurance Limited, at the cheque presentation to Benola - a Cerebral Palsy Initiative in commemoration of the 2019 World Cerebral Palsy Day.

sumers Association of Nigeria (INSCAN) did some years back, it was necessary to continue education and enlightenment of the public about benefits of insurance. Stakeholders at that event observed that promoting insurance education would go a long way towards building stronger relationship between the

insurers and the insuring public. They also argued that though the industry has been painted with bad image, from both the ills of the operators and heresay by many consumers, a continuous education and awareness would help build a new generation of Nigerians that would appreciate

insurance and make it part of their life. One of the participants said, what the association was doing is a fulfillment of its cardinal mandate of assisting the growth of the insurance industry in Nigeria through creation of public enlightenment, platforms for exchange of information between the insurance

operators and the industry’s strategic stakeholders. He noted that if the consumer rights are recognized by insurance operators and the responsibilities on the part of the clients are respected, the insurance industry in Nigeria will flourish as well bring itself out from perennial image challenges that occasioned the low public awareness and growth of the insurance industry in Nigeria. Leadership of INSCAN had said the association having indentified the wide gap between the consumers and the providers of insurance, would partner with relevant agencies to increase awareness and confidence about insurance. “Our target is to build confidence and trust on insurance among Nigerians, such that the benefits could impact on the economy, the association said. “We believe that if there is proper education such that the consumers have a change of heart and perception about the industry, patronage will rise, productivity will grow, investors would be happy and the industry will be better for it, the group stated.

Royal Exchange links growth to cost optimization, innovation, retail market expansion Modestus Anaesoronye

oyal Exchange Plc, Nigeria’s premier insurance and financial services group has attributed its improved performance in the 2018 financial year to cost optimization initiatives, innovation in key categories and extensive retail market expansion. The Company noted that despite the very harsh operating environment, the group was able to deliver a better result in 2018 against the previous years. Royal Exchange Plc in the 2018 financial year posted a Gross Written Premium of N14.7billion, representing an increase of 15 percent when compared to the figure of 2017, which stood at N12.8billion. Kenny E. Odogwu, chairman of the Company made

the disclosure during the company’s 50th Annual General Meeting held in Lagos. He disclosed that Net Premium Income for the period amounted to N9.1billion which is a 29.7 percent growth over the 2018 figure, while net underwriting profit amounted to N9.73billion in the financial year under review. Underwriting profit went up to N3.67billion in the 2018 financial year, up from N1.05billion in 2017, while Net Income stood at N4.35billion, from the corresponding figure of N2.4billion in 2017. A further analysis of the operating results showed that the Total Assets of the group witnessed a growth of 6.74percent, from N33.2billion in 2017 to N35.53billion as at December 31, 2018. Net claims paid for the period under review amounted www.businessday.ng

to N3.1billion, an 8 percent marginal reduction from the 2017 figure of N3.42billon. According to Odogwu, Royal Exchange Plc envisions a situation where the retail insurance market should be able to contribute between 50-60 percent of its revenues in the future, as the retail market is the future of insurance in Nigeria, considering the population of the country. He further added that with the recent approval from the National Insurance Commission to undertake agricultural insurance, the company has entered into strategic alliances with various stakeholders in the agricultural space to drive insurance with that sector of the economy and in the couple of months, revenues will start coming in from there. Speaking further, he noted that “Royal Exchange Plc, will in the years to come, contin-

ue to be an aggressive player in the retail market in Nigeria and will be looking at different strategies to increase its product offering and visibility in the marketplace, while not losing track of the corporate market, where the returns and margins, and getting thinner, yearly”. The chairman noted that streamlining major components of the group’s businesses is a continuous exercise especially in the areas of service delivery, processes and operations to deliver superior returns in the medium term to shareholders through digital transformation. The group has recently acquired a new insurance software and this will go a long way to enhance our operations and enable the group provide fast and efficient services to our customers. This will further enhance our on-going transformation processing

https://www.facebook.com/businessdayng

involving the revamping of our mobile banking app for our Microfinance Bank, Internet Banking and USSD Banking, procurement of a USSD code for the sale of all our subsidiaries’ products, ongoing development of a new website with call-to-action/sales capabilities, deployment of a core solution for our healthcare business, among other activities, all geared towards ensuring we remain the leading insurer that we are known for. “The company has implemented various cost optimization strategies and business process re-engineering measures which shall guarantee profitability in both the current financial year and the years ahead. Our re-engineering process will center on three main pillars, namely Digital Transformation; Efficient Distribution Channels and Business Process Remodeling”. @Businessdayng

Sigma Pensions, Lioness assemble women entrepreneurs for practical ideas

ne of Nigeria’s leading pension fund administrators (PFAs), Sigma Pensions in collaboration with Lioness is bringing together 100 leading women entrepreneurs from Lagos for the first in a series of popular Lioness Lean In networking events in Nigeria. The event is being hosted by Lionesses of Africa, the fastest growing community of women entrepreneurs on the African continent with over 850,000 women business builders in its network, and Sigma Pensions, one of the leading Pension Fund Administrators in Nigeria. The event builds on the 100s of events that have been hosted already in Africa’s leading cities by Lionesses of Africa over the past five years. As always, the focus of the event will be on women entrepreneurs sharing their startup stories, inspiring each other with their experiences, and of course, lots of networking. The Lioness Lean In Lagos breakfast networking event will be hosted at the Wheatbaker Hotel in Ikoyi, Lagos tomorrow with the Sigma Pensions team playing host together with Lionesses of Africa Founder and CEO, Melanie Hawken. Speaking in advance of the event, Melanie Hawken said “It is so good to be finally bringing our Lioness Lean In events to Lagos and to have the opportunity of meeting so many women entrepreneurs in our Lionesses community here and hearing about how their businesses are growing and seeing at first hand their new products and services. Speaking about their decision to partner with Lionesses of Africa to host the first Lioness Lean In events in Nigeria, Nafisah Muhammad Buba of Sigma Pensions said “With the growing number of female owned businesses in Nigeria and therefore the increase in the SME workforce, this partnership is a brilliant opportunity for us in Sigma to engage with Female Entrepreneurs towards assisting them to create a platform that will not only help them to develop a sustainable business but also enable them and their employees to effectively plan for retirement.

Wednesday 16 October 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

A short guide to building your team’s critical thinking skills MATT PLUMMER

ith critical thinking ranking among the most in-demand skills for job candidates, you would think that educational institutions would prepare candidates well to be exceptional thinkers, and employers would be adept at developing such skills in existing employees. But according to a 2016 survey of 63,924 managers and 14,167 recent graduates, critical thinking is the No. 1 soft skill managers feel new graduates are lacking. This confirms what a Wall Street Journal analysis of standardized test scores given to freshmen and seniors at 200 colleges found: The average graduate from some of the most prestigious universities shows little or no improvement in critical thinking over four years. Employers fare no better. Half rate their employees’ critical thinking skills as average or worse. Why is it so difficult to teach people how to think critically? It starts with the fact that there is little agreement around what critical thinking is. From there, it gets even less clear. Most employers lack an effective way to objectively assess critical thinking skills and most managers don’t know how to provide specific instruction to team members in need of becoming better thinkers. Instead, most managers employ a sink-or-swim approach, ultimately creating workarounds to keep those who can’t figure out how to “swim” from making important decisions. But it doesn’t have to be this way. To demystify what critical thinking is and how it is developed, our team at Zarvana turned to three research-backed models: The Halpern Critical Thinking Assessment, Pearson’s RED Critical Thinking Model and Bloom’s Taxonomy. Using these models, we developed the Critical Thinking Roadmap, a framework that breaks critical

thinking down into four measurable phases. Here is how to assess the critical thinking skills of each of your team members, how to help those who are struggling and how to know when a team member has mastered one phase and is ready for the next. PHASE 1: EXECUTE If team members are just starting a new role or have never been pushed to think for themselves, they will likely be in the execution phase. In this phase, team members simply do what they are asked to do. Converting instructions into action requires several of the skills Halpern describes as critical thinking: verbal reasoning, decision-making and problemsolving. You know your employee is getting it when you can answer “yes” to these 3 questions: — Does he complete all parts of her assignments? — Does he complete them on time? — Does he complete them at or close to your standard of quality? If a team member is struggling here, make sure he understands your instructions by asking him to rearticulate each assignment before he begins. Start by giving him smaller assignments with more immediate deadlines. Once

he’s begun the work, ask him to explain what he did, how he did it and why he did it that way. Once team members are making suggestions for how to improve their work, you know they’re ready for the next phase. PHASE 2: SYNTHESIZE In this phase, team members learn to sort through a range of information and figure out what is important. For example, they can summarize the key takeaways after an important meeting. Here, you want to be able to answer “yes” to these questions: — Can they identify all the important insights? — Do they exclude all unimportant insights? — Do they accurately assess the relative importance of the important insights? — Can they communicate the important insights clearly and succinctly? Synthesis is a skill that, like any other, grows with practice. Try to give team members who are getting stuck here as many chances to synthesize as possible. You could ask them to share takeaways after a call with a client, for example, or after an important meeting. When you check in with them, make them share the insights first and in a succinct manner. If they are still struggling

to identify what is important, try leading them through resourceconstrained thought experiments that force them to isolate the most important information (e.g., “What if you could share only one insight?”). You know team members are ready for Phase 3 when they can provide a summary of the important insights and implications for future work on the spot without preparation. PHASE 3: RECOMMEND In this phase, team members move from identifying what is important to determining what should be done. The goal is for them to consistently make recommendations that are wellfounded — even if their recommendations don’t align with your opinion. Here’s how you can assess their progress: — Do they always provide a recommendation when asking you questions instead of relying on you to come up with answers? — Do they demonstrate appreciation for the potential downsides of their recommendation? — Do they consider alternatives before landing on a recommendation? — Are their recommendations backed by strong, sensible reasoning? When team members enter this phase, start by requiring

Make this summer your best one ever With any of our FirstBank cards, you can enjoy a flexible summer in over 200 countries worldwide Visit any FirstBank branch for the issuance of your Summer Cards

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

them to make recommendations before you share your opinion. Then ask them to share their rationale, the alternatives they considered and the downsides of their recommendations. This pushes them to do more than share the first idea that comes into their minds. Team members are ready to move to Phase 4 when they make reasonable recommendations that reflect sound business judgment on work that is not their own. PHASE 4: GENERATE In this phase, team members must be able to create something out of nothing, such as a project to improve the new-hire training program. They become adept at translating the vision in others’ heads (and their own) into projects that can be executed. Assess their progress with these questions: — Do they propose high-value work that doesn’t follow logically from work they are already doing? — Can they convert your and others’ visions into feasible plans for realizing those visions? — Can they figure out how to answer questions you have but don’t know how to answer? To help team members move into this phase, you will often have to model this thinking for them. Invite them to observe and participate in your own brainstorming session. Show them it is not only OK but required to spend time thinking. Ask them to keep a list of their ideas for improving the project, department or organization. Invite them to share those ideas with you regularly, and seriously vet the ideas with them. It’s time to reject the notion that critical thinking is either an innate gift or a skill learned only through experience. Begin using this systematic approach to lead team members through the four phases of critical thinking. By doing so, you can help them develop one of today’s most indemand skills.

• Matt Plummer is the founder of Zarvana.

Wednesday 16 October 2019

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

How new health care platforms will improve patient care ASHWINI M. ZENOOZ AND JOHN FOX

H HEALTH

ardly a day goes by without another new entrant declaring its foray into health care. For example, through a series of strategic acquisitions, Best Buy expanded from selling electronics and deploying its Geek Squad for repairs to providing home health services and remote monitoring. Then there’s the explosion of apps, virtual consults and health chat bots making up the telemedicine market, which is expected to grow to $64 billion in the U.S. over the next five years. The locus of care is shifting from the hospital or clinic to patients themselves. This burst of innovation offers the promise of a more personalized approach to medicine focused on keeping patients well and out of the hospital, reducing overall cost of care. But it also brings with it some significant challenges that demand new approaches and safeguards. CARE TRAFFIC CONTROL Orchestrating care and integrating data across an increasingly diverse and potentially virtualized care team requires new tools. In response, many health systems have begun to partner with a variety of customer rela-

tionship management platforms that have developed workflows and capabilities to meet the unique challenges of patient engagement and enable systemwide care traffic control. Most electronic health records were never designed around patients. Also, the average health system is challenged with integrating data and coordinating care across 18 different EHR systems across its various affiliated providers. A patient-relationship platform that sits atop these oth-

erwise disconnected systems can provide a coordinated view of the patient journey. The expansion of digital health and the entry of Big Tech players such as Apple, Amazon and others have created incentives for legacy EHR vendors and health systems to embrace a more open exchange of data. The rapid move across the industry to data-sharing via APIs using Fast Healthcare Interoperability Resources standards is a positive sign that the industry’s information silos may

finally be breaking down. NAVIGATING THE HEALTHCARE DATA TSUNAMI Even with the right tools in place, coordinating patient care across an expanded and more diverse ecosystem will only get more challenging with the tsunami of data coming from these new sources. Every month, new smart medical devices appear and more app-using patients begin to monitor their health, expecting the resulting data to be sent to their doctors and EHRs.

Early in 2019, the Centers for Medicare and Medicaid Services responded with a proposed rule calling on the health care industry to take steps to give patients “safe, secure access to, and control over, their health care data.” Rules need to be written to separate a signal from the noise — for example, what heart rate patterns from a remotely monitored congestive heart failure patient get ignored and which trigger an alert to the EHR. Much more work is needed to wrestle with these thorny issues in order to effectively translate clinical skills into digital care delivery. As data moves into patient hands, the traditional role of the physician as trusted gatekeeper begins to break down. If you share health information with your physician, she has privacy obligations. If you share it with Alexa or Google Home, the same privacy rules don’t apply. We need to educate patients to the risk versus reward of these technologies and evolve data privacy regulations to match new realities.

• Ashwini M. Zenooz, MD, is the senior vice president and general manager for healthcare and life sciences at Salesforce. John Fox is principal and strategy lead at Slipstream, a content consultancy with expertise in health care and life sciences.

Why tech’s approach to fixing its gender inequality isn’t working ALISON WYNN CONNECTING wo ways technology companies often try to improve their cultures for women are through unconscious bias training and mentorship programs. But these programs often fall short of their goals. Unconscious bias training attempts to combat bias in the workplace, but existing research demonstrates that such training can, at best, be ineffective, and at worst, exacerbate bias. Mentorship and development programs aim to increase women’s skills and confidence to help them advance, yet women continue to be under-represented in leadership. My new research suggests that if tech companies want to attract and retain women, they need to recognize the role their policies and culture play in causing inequality and pursue organizational change. Implementing broader recruiting strategies, specific and measurable performance evaluation criteria, and transparent procedures for assigning compensation will go a long way toward reducing gender inequality in tech. THE PROBLEM WITH FOCUSING ON INDIVIDUALS I found that executives tended to focus on teaching women to fit the existing mold in order to advance in senior leadership, instead of on how they might change the mold. Executives also emphasized efforts to train employees on recognizing and curbing their own biases. Individu-

als can only do so much to “self-correct” their own biases. Research has found that providing training without also emphasizing a shared commitment to broader organizational change can actually exacerbate bias. THE PROBLEMATIC “PIPELINE” ARGUMENT I frequently heard the so-called “pipeline” argument: the idea that girls and young women lack the same interest or talent for technology as boys and young men, which causes inequalities later in their careers. This line of thinking locates the source of the problem outside the www.businessday.ng

organization, in larger cultural factors. The few executives who did not outsource the problem of inequality to larger cultural forces took steps to change organizational practices. AN ORGANIZATIONAL APPROACH TO EQUALITY Scholars have identified ways organizations can contribute to — or mitigate — inequality: BROADEN RECRUITING EFFORTS. Instead of relying on traditional channels that may focus on a narrow subset of qualified candidates, engage in more diverse sourcing. For example, recruit at

https://www.facebook.com/businessdayng

historically black colleges or universities outside your typical list. Attend conferences that feature women and people of color. Then eliminate bias in your recruiting presentations and materials , job ads and interview questions. Consider using coding challenges like GapJumpers to replace resume screens. CLARIFY CRITERIA FOR HIRING AND EVALUATION. Research from the Stanford VMware Women’s Leadership Innovation Lab shows that a lack of clear criteria can lead to @Businessdayng

bias in evaluations. Establish transparent, measurable criteria for evaluating employees ahead of time, and hold managers accountable for giving employees specific feedback. Avoid using vague or ambiguous criteria like “high potential.” Women and people of color are often held to a higher bar, so make sure all employees are held to a consistent standard. INCREASE ACCOUNTABILITY AND TRANSPARENCY IN PAY AND PROMOTION DECISIONS. Research shows that organizations lacking transparency and accountability in pay and promotion decisions can experience “performancereward bias,” where rewards are unfairly distributed among employees, with women and underrepresented minorities receiving fewer rewards than they deserve based on performance. Thus organizations should take steps to ensure that pay and promotion outcomes are clearly linked to employee performance.

Wednesday 16 October 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Sixt Nigeria sees opportunity amid economic instability … Opens Mobility Driving Academy in Lagos

MIKE OCHONMA

MIKE OCHONMA Transport Editor

ixt Nigeria says that despite teething operational hiccups and economic uncertainties, , it has been able to demonstrate that business can be done with the strict observance and adherence to international best practices in synergy with Coscharis Mobility Limited. At the last annual national conference in Lagos, Christain Chigbundu, managing director/chief executive of Coscharis Mobility Limited-Sixt Nigeria, said that the venture came into existence in 2014 with a clear vision of creating value by making a change in the Nigera’s transport and logistics industry. ‘’We have over the years shown that business in Nigeria can be done by best practices in international standard notwithstanding the environmental challenges which we at Coscharis Mobility has turned into opportunities to deliver value for money’’. He said. Within six years of operation, Coscharis Mobility Limited-Sixt Nigeria has remained a very strong player in such logistics services as short and medium term car rental service, long term car rental, short and long term leases, fleet management and consulting, haulage and supply chain management, including outsourcing & HR consulting. Aware of the place of logistics in the local tourism and hospitality industry, Sixt Nigeria has the highest hotel locations operating from FourPoint, Radisson Blue , Oriental, Legend Hotel and Le Meridian Hotel with other locations to be rolled out in 2020. For air travellers, arrivals and departures can make use of the car rental and logistics services at the Murtala Mohammed Airport, Lagos and Port Harcourt International Airport, with Abuja and Owerri airport openings coming up next year. In the submission of the man-

aging director and chief executive of Coscharis Mobility Limited, ‘technology plays a very major role in every business and it is in realisation of this that, Sixt Nigeria, knowing its importance that it has come up with a number of initiatives. Among these are online booking where customers can log into the website, book their vehicles, make payments and have the vehicles delivered to them. As at the time of filing this report, Sixt Nigeria ‘’My Ride’’ online booking app is already available on google play store but will be effective in next year. While this will also make vehicle booking seamless for its customers, more of the company’s technology initiative will be made available to customers in 2020. The Sixt Nigeria boss said, ‘’We have in few years of operation built a list of over 3,000 corporate clients and individual clients. Notwithstanding the growth of our clientele list, we have also recorded above 70% of customer excitement. As good as this may be, we are not relenting in driving

this excitement to 90%-customer remains the key our services’’. One of the highlights of this year’s annual national conference (ANC) was the recognition and reward of few of Coscharis Mobility Limited staff that have in the last 12 months, contributed immensely to the growth of the company. The list was made up of two of Sixt Nigeria executive chauffeurs from each of our locations drawn from Lagos, Port Harcourt and Abuja. He admitted that his company is recognising hardwork because, positive milestones would have been impossible without those regarded as one of its best assets considered as loyal and dedicated staff. Christain Chigbundu also identified security as a critical issue in the country today. He said that Sixt as a way of ensuring the security of our clients has trained some chauffeurs in handling security situation. These are made up of professional chauffeurs dressed in spy police uniforms that are verified before they commence work with the vehicles that are tracked. History was also made during the event following the formal

opening and facility tour of the Mobility Driving Academy that is set to offer International standard driving school for beginners, advanced, corporate and articulated vehicle users. The motive of establishing the driving academy our reporter learnt is to bring a positive change in driving across the nation. ‘’As a forward looking entity, we thrive to continually delight our stakeholders by creating value in all ramifications which has given birth to the new born baby in our service family that we are celebrating today which is the Mobility Driving Academy’’. He said. Coscharis Mobility Limited have also, in few years of operation opened offices in Port Harcourt, Abuja, Uyo, Enugu, Kano with other branches to be rolled out next year. In 2020, the company will play major role in haulage industry with a planned partnership with its arent company in leasing; Ford Truck which is the No 1 truck in Europe and United States of America. When leased, client will have to pay monthly lease rentals.

Toyota, GM, Arm Holdings look to self-driving tech MIKE OCHONMA

ritish chip technology firm Arm Holdings is joining with General Motors and Toyota to establish common computing systems for self-driving cars, an effort the companies hope will speed development of the technology. Arm supplies the underlying technology for the processors found in today’s smart phones but does not make chips itself. Its ties to the automotive industry dates back to the late 1990s, when carmakers began to add computer chips to vehicles for functions like engine control and diagnostics. On Tuesday the company said it was helping to create the Autono-

mous Vehicle Computing Consortium, or AVCC, along with the two carmakers and industry suppliers Bosch, Denso and Continental. The AVCC will be an independent group funded by membership fees from the companies that join. Arm officials said its work will be open to non-members. The group’s first task will be to establish a common computing architecture. That effort aims to make it easier for car companies to write software that will work on chips from different vendors, similar to how Microsoft Corp Windowsbased software works on processors from Intel Corp or Advanced Micro Devices. With car and technology companies working on self-driving vehicles, www.businessday.ng

analysts expect the number of chips in cars to expand. But the current test vehicles being used to develop selfdriving software are using the same kind of large, electricity-hungry chips found in data centers. Across the industry, chip firms and carmakers agree that the power diet and size of the gear must be cut drastically to fit into cars for the general public, to perhaps a tenth or less the levels of current systems. “The massive amount of technological innovation required to power fully self-driving vehicles at scale requires collaboration at an industry level,” Massimo Osella, chairman of the new group’s board and a lab group manager for research and development at GM, said in a statement.

https://www.facebook.com/businessdayng

Auto firms target 20th Abuja Motor Fair for visibility

@Businessdayng

ith a resolve to flaunt the best and the latest as well as demonstrate their poise to play strongly in the dull local automotive market, some auto dealers are strongly getting set to register their presence at the International Conference Centre Annex, Abuja, venue of the 20th edition of this year’s motorfair. Chairman of the organizing committee of the event, Ifeanyi Agwu, said the fair will be a landmark and a benchmark in auto exhibitions business in the entire West African sub-region. He promised that participants and visitors will have a rewarding experience. According to him, banks and insurance companies, major oil companies, manufacturers and dealers in auto-accessories have indicated interest and are seriously preparing to participate in the event. A source from one of companies going to the show in a chat said “a strategic platform as the fair offers very ample space for us to demonstrate to Nigerians and the rest of the world that we are ready to play strong and rightly in

Jelani Aliyu, DG, NADDC

Africa’s largest market which offers a vista of opportunities with its abundant potentials. ‘’So my company being a proactive one will be there because it is a forum to meet our target market in their large numbers. We are determined to show to our existing and potential ones that we are ready and capable of meeting their expectations and demands”

Wednesday 16 October 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

government to proLagos blue line stations turn criminals den British ceed with rail reform 2020 MIKE OCHONMA Transport Editor

MIKE OCHONMA

agos, Nigeria’s largest city and commercial capital is constructing a light rail system under a public private partnership (PPP). The project is sponsored by the Lagos State Government (LSG) and will be developed by Lagos Metropolitan Area Transport Authority (LAMATA) on behalf of the Lagos state government. But passing through the train stations that is almost near completion before it was abandoned following the exit of former governor of Lagos state; Babatunde Fashola presents a veru ugly picture of government’s total disconeect from the gigantic project following the infiltration of criminal elements on the infrastructure that has been completely neglected. China Civil Engineering Construction Company (CCECC) wasappointed as the contractor for the construction of the first line (Blue). The contract includes the basic design and construction of the rail infrastructure. Detailed design and surveying for the entire project has been completed. The Chinese Civil Engineering & Construction Corporation (CCECC) is constructing the Blue line in two phases. The first phase includes the National Theatre to Mile 2 section and the second phase includes the Mile 2 to Okokomaiko section. CCECC has completed 90% of the structural work for the line. In all, there are combined fivekilometre viaduct rail over road and cable stay-bridge will be built, link-

ing the Red and Blue lines. Other infrastructure to be built as part of the project include signalling, control and communications (SC&C) systems; supervisory control and data acquisition (SCADA) systems; depot and workshop facilities; an operations control centre and a training facility for drivers. As many who live and work on the Lagos-Badagry route daily yearn to see the project completed, four train stations have been completed and the train track laid on the Mile 2 to National Theatre route. But at the time of filing this report, these com-

pleted train stations have become a safe haven for destitutes and a thriving shelter for indecent and other forms of criminal activities. From the National Theatre inward Lagos Island, the pillars to take the train track across the swampy portion of Ijora and Lagoon, as well as, the pillars to take the train track to the Island Terminal are being constructed. It was targeted when the project between 2009 and 2010, that by the end of 2012, a total of 8km of the Blue line will be completed. Construction of the Blue line was initially expected

to be completed since 2011, but has been delayed to 2015 due to funding issues. Today, the CCECC have to suspend work raising questions as to the funding situation of the project. The Blue line measures 27 kilometer long, connecting Okokomaiko to Marina, while the first two lines of the urban rail project are estimated to cost $1.4bn. The second which will run between Marina and Agbado when completetd will be 30km long. LAMATA has proposed seven lines in the Lagos network. These are the red, blue, green, yellow, purple, brown and orange lines.

After Uber boat service, Helicopter is next, says Sanwo-Olu MIKE OCHONMA

overnor Babajide SanwoOlu of Lagos state has said that, his administration is committed to easing the movement of goods and services within the metropolis to move the economy of the state forward. The governor assurances was coming on the heels of the Lagos state’s flag-off of marine tranporation scheme in partnership with Uber Technologies, Inc. an American multinational ridesharing company in the area of marine transportation. On the state’s future plans, Sanwo-Olu said “We are going to have helicopter shuttle in Lagos. Traffic management and transportation is the pillar of our agenda. The government is entering into the partnership because they want to create an enabling environment for all’’. Pointing out that the state government is equally committed to other modes of transportation in Lagos; the governor said that, water transportation has come to stay in the state. Assuring that boat transportation is a safe means of transport; he noted that the state is also mindful of safety and security which is very

important in transport business. Lola Kassim; General Manager West Africa at Uber said that Uber is aware of Lagos state government’s commitments and extremely strong vision to improve transportation and that is why they are partnering with the state. “It is an exciting day for Uber in Nigeria. We have helped people to get around their cities reliably in the last 5 years. We know that Lagos has extremely strong vision to improve transportation. This is why we have been taking steps to partner the state www.businessday.ng

government to see how we can offer easy transportation. I announce our Uber Boat. This for us is to see how we can use our Uber Technology to help people move from one place to the other”. Kassim said. Sanwo-Olu who narrated how he mooted the idea of boat transport when he was in the United States few months ago with the top management of Uber, said the initiative will further make the movement of about 10 million to 12 million people that are moved from one place to the other in Lagos State.

https://www.facebook.com/businessdayng

Frederic Oladeinde, state commissioner for transportation said that the governor in the last few months has been involved in a lot of developmental projects of which transportation management is part of it. Stating that the marine transportation system will make Lagos State a world class environment Oladeinde said “In bringing the whole thing together, we will be displaying one of the high technology. Lagos State caters for about 14 million people; water transport is one of the most effective ways of transportation”. The waterway service, UberBOAT, is operated in partnership with local boat operator Texas Connection Ferries and the Lagos State Waterways Authority (LASWA). “This initiative is aimed at providing commuters with an easy and affordable way to get in and out of the city’s business districts,” Uber; the ride-hailing firm said in a statement. The pilot phase will operate on weekdays from 7a.m. to 6 p.m. on a fixed route between two locations in the city. Passengers will be charged a flat fare of N500 per trip, compared with about 300 naira by minibus operating along the axis within the metropolis. @Businessdayng

ignificant reforms to Britain’s rail franchising system have been included in the Conservative government’s new legislative agenda announced in a Queen’s Speech last Monday. The British Conservative government says the Williams Review is the first comprehensive review of the railway in a generation. Government says it will publish a White Paper on the recommendations of the independent Williams Review later this autumn and will start to implement the reforms in 2020. Keith Williams, former British Airways chief executive, who is leading the review set up by the government in September 2018, which included a 10-month consultancy with the industry, is set to announce its findings in the next few weeks. The review is focused on reforms in five key areas: a new passenger offer focussed on customer service and performance measures that drive “genuine behavioural and cultural change” with initiatives to give a stronger consumer voice, improved accessibility, and better passenger information simplified fares and ticketing that help to promote innovation and customer-focused improvements across the network. It will also include the roll out of “pay-as-you-go’’ a new industry structure to reduce fragmentation, align track and train more closely, create clear accountability and reduce government influence in day-to-day operations. Williams says a wide range of organisations have expressed support for a new arm’s length body to act as a ‘guiding mind’ a new commercial model. The current franchising model he said “has had its day” and is holding the sector back, stifling collaboration, preventing the railway from operating as a cohesive network and encouraging train operators to prioritise “narrow commercial interest” over passengers, and address people-related challenges. A range of proposals on leadership, skills and diversity are being drawn up to support reform and help involve the workforce in the long-term. The review is the first comprehensive review of the railway in a generation and is a clear commitment to bring in root and branch change. Prime minister Boris Johnson has already announced plans to give leaders in the north of England more say on how the railway is run across their region. “The industry welcomes the government’s firm commitment to take forward the recommendations of the Williams Review, particularly its focus on fares and contract reform,” says Paul Plummer, RDG chief executive. “Both are key to a new partnership between the public and private sectors in rail that delivers more for passengers and the country”.

Wednesday 16 October 2019

BUSINESS DAY

BANKING ‘Momo Agent network to address challenge of access to banking infrastructure’ Working with other industry operators, Momo Agent network, the recently licensed MTN Super-agent looks to addressing issues around identity and access to physical banking infrastructure, Usoro Usoro, director, Y’ello Digital Financial Services (YDFS), in this interview with Hope Moses-Ashike and Segun Adams speaks more on the firm’s plans towards enhancing financial inclusion. Excerpt. Congratulations on receiving the MoMo Super-Agent license recently. It was quite an achievement. It has been over a month now, what is new? Any update on steps that your company has taken since that time or moves you plan to make? ike you rightly pointed out, we obtained the super-agent license from the CBN in August and we formally launched the service to our customers the same month by the 28-29th, when we commercially rolled out the service. As it is we have about 10,000 agents scattered across the country that are providing access to financial services to customers. The plan is to scale that number almost by tenfold by the end of the year and aggressively grow it on a year-to-year basis to about 500,000 in the next 4-5 years. So, we have started. Already we are carrying out our mini launches in at least five other states just to take the message further down to our customers, so it is not just an Abuja event; we are going to Owerri, Kano, Port Harcourt. We will be in Ibadan and of course the people of Lagos are not excluded but that is not to say the service is not available nationwide. It is now just the market and on-the-street communication and engagement of our customers that are going to hold in those key states. What services do you provide to customers? So we offer a brochure of services at our Momo agent, you can carry out basic transfers. You can carry out bill payment whether it is DSTV or electricity; you can carry out bank depository services or withdrawal from your bank account. But one of the products we are really passionate about because that speaks to the unbanked is the transfer service that allows two people without a bank account to be able to send money to each other. All you have to do is to walk up to any MOMO agent, hand cash to the agent and the money will be transferred and the recipient picks it up from any other MOMO agent. Of all the bouquet of services we offer, that is the one we are really excited about because it speaks to the segment we are passionate about which is the unbanked. What is the limit for fund transfer on the MoMo platform? For your normal deposit or withdrawal services it is as dictated by the banks but for this transfer service which is targeted at the unbanked, you can send and receive up to N50,000 naira on a daily basis in line with the CBN Know Your Customer (KYC) regulations. So the limit is regulated by the apex bank and it is N50,000 daily. I understand this is in line with the CBN’s drive for financial inclusion which I recall started around 2010 and 2012, why is MTN just joining in that drive now? So we have always been engaged in this segment as MTN in different ways, through partnerships, through collaboration with other financial service providers but I think the super-agent license represents the first from the CBN to MTN. It is just that our role has evolved overtime in the various capacities. It has now evolved into the role of a super-agent and of course there is still a lot of engagements that are on-going with regulators in the space to also see that role evolve into something bigger. Now the CBN and the Bankers’ Committee last year announced plans to roll out 500,000

Usoro Anthony Usoro

agent network which they have started already through SANEF. What would be your own network share in this regard? For us the goal of achieving full financial inclusion is one which requires players to be on-board whether it’s the banks, SANEF or the Telcos. We all are working towards the same common objective and the big goal is not what share that we have; instead, it is that we jointly work as an industry towards achieving 100 percent financial inclusion in the country. The financial inclusion target has been raised to 95 percent with 2024 as the new deadline. What are your plans in helping to achieve these targets? There are two reasons people are financially excluded. One is the challenge of identity and the other is the challenge of access to any physical banking infrastructure. The agent network is one of those critical ways of fixing issues around access by ensuring financial services can be offered at the last mile. So our efforts toward building the MoMo agent network would substantially address that problem. Identity is on the side of the customers that most of them do not have the basic requirements to open an account whether it is an ID card or a utility bill. But the CBN has done something significant in solving that problem which is introducing the three-tier KYC framework that allows people to have a basic bank account without the huge documentation requirement. So to a large extent, that framework has somewhat improved the issues around identity but the big one which is access is what we are coming to see how we can work with the industry to address. When you look around, you see that typical mobile money agents across platforms have poor structures as mobile shops from which they engage with the public. What are your plans for security of agents if they are going to be receiving deposits from customers? Part of what we do is that in the process of selecting agents we usually would prefer an existing business whether it is a pharmacy or a supermarket because those people already have money sitting in their till by virtue of them collecting money from their customers based on what merchandise they sale. Being a MoMo agent helps them get rid of that www.businessday.ng

cash because a customer coming to withdraw means they can hand that cash in their till to the customers thereby reducing their cash exposure. So to some extent the agent service helps them mop up cash that would have been lying idle in their till. Some of the agents we have met are saying that the problem they are facing is that some customers find it difficult to disclose their identity. How do you solve this problem? We have a unique way of solving this problem particularly for MTN customers because by merely providing your phone number that has already exposed you to some form of identity, at least the ones provided in your SIM registration process. So we may not require a customer to give us their full identity, your phone number gives you an identity which we can easily validate Remember that fraud is a major issue in the Nigerian financial services sector. How are you mitigating against it? This is another area where one cannot work in isolation whether it’s banking, telcos or switches, all players need to come together and we are working to ensure we stem the fraud, some of it through education and others through collaborative efforts which are information. I cannot give you the details about but be rest assured all hands are on deck to address cyber fraud. The coming onboard of MoMo would create employment. What is the scale you are estimating? It is broad; it is really all the jobs that will arise from the ecosystem whether it is the fact that the agent who benefits from financial transactions will hire an extra hand to look after that area of his or her business. Also, there are people who are also responsible for recruiting and managing agents to cover their territories and regions or the thousands of people that would also be a part of customer education. There is a whole ecosystem that this would give rise to and across each of that value chain we expect huge employment opportunities to arise. You are looking at penetrating rural areas but these parts of the country lack electricity and good network coverage. What does this mean for your penetration goal? The beautiful thing is that financial services strengthen the business case for building a base station or upgrading infrastructure in certain localities. If your locality was initially served by a base station afar from it and you could only make calls, the presence of the mobile money agents will improve the business case for Telcos, not just MTN, to go put a station in that area. This does not negate the fact that there is always an on-going year-on-year effort by MTN to improve its network across the country but the case is strengthened when you add financial services to it and some of the upgrades can be faster accelerated. We however ensure that our financial services are offered through multichannel. We do USSD. Any 2G network will be able to deliver this service, so you don’t need a 3G or data on your phone. A basic 2G network which is what you would find in a lot of rural areas can seamlessly serve the purpose. What about capacity building for your agents? That is the beauty of the agents because we train the agents who also in turn train the customers.

https://www.facebook.com/businessdayng

We understand that for a service like this, it is not just how much radio or TV ads, the face-toface interaction that happens between an agent and a customer is also very critical because it is where the bulk of the education happens so an agent is one of the critical ways we would be educating our customers about this service. There is no doubt about the intensity of the competition in the mobile money space. How are you ensuring you thrive amid competition? Like I said there needs to be collaboration and with many people joining hands to achieve financial inclusion in Nigeria it helps. It is important that all players are collaborating and MTN regards all other players as collaborators towards achieving a national objective and not rivals. Why should I use MoMo when I can simply use bank services? There are different products that address different needs; if you are a banked customer that wants to send money to another person, by all means it might be that the existing services work for you. But there are more than 50 million people today who do not have a bank account. If one of such wants to send money to another unbanked then they would benefit from a MoMo agent service. Is it safe to say that MoMo agent has the huge MTN network to benefit from? Naturally so, MTN already has a huge distribution network and a lot of those people today that meet the CBN’s requirement for offering financial services would be the natural segment for MoMo agents. Would the MoMo service be restricted to MTN subscribers? No, remember there are two segments, for banked customers it is open. The initial phase for the transfer service would be limited to MTN customers so that we can at least identify who is sending and receiving. We expect that our service provider the bank that is offering the service would extend it to include others but on the face of it every customer can do bill payment, every customer can carry out depository or withdrawal services, so it is open to all customers. What about giving out loans? Can someone access loans? The important distinction is that as a MoMo agent we do not directly offer financial services. So we partner with licensed financial services providers to offer. It is likely that in the future we could partner with a lender to offer a lending service through the agent network. See us as a supermarket and everyone brings their goods to us to sell. So that’s who a MoMo agent is; it’s is a financial supermarket and as many people that offer financial service products can bring them to us to sell to customers but we do not produce our own products. By implication, you are saying that MoMo is not a PSB? Definitely not. It is not a PSB as that license is completely different from a super-agent. What MoMo does is to ride on the super-agent license. You spoke about collaboration, are you going to be operating under the umbrella of SANEF? So SANEF is a shared agents network put together by the banks and what I think they have simply done is to set up a joint venture that allows them to roll out an agent network. We would be complementing that effort even though we are not part of SANEF.

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

tax issues Ahead of 7.5% VAT rate by 2020 Iheanyi Nwachukwu

ast week, President, Muhammadu Buhari, presented the 2020 Federal Budget proposals to the Joint Session of the National Assembly, being his first budget presentation to the 9th National Assembly. The proposed expenditure of N10.33trillion in 2020 as against N8.92trillion in 2019, which represents an increase of 16 percent is to strengthen Nigeria’s macroeconomic environment; invest in critical infrastructure, human capital development and enabling institutions, especially in key job creating sectors; incentivise private sector investment essential to complement the Government’s development plans, policies and programmes; and enhance Nigeria’s social investment programmes to further deepen their impact on those marginalised and most vulnerable Nigerians. The President, during his presentation stated that the projected Federal Government Revenue for 2020 is N8.15trillion against projected revenue of N7trillion in 2019 budget. The 2020 budget, according to President Buhari has five strategic objectives, in terms of achieving incremental, but necessary, changes to the nation’s fiscal laws. These objectives are to: promote fiscal equity by mitigating instances of regressive taxation; reform domestic tax laws to align with global best practices; introduce tax incentives for investments in infrastructure and capital markets; support Micro, Small and Medium-sized businesses in line with Nigeria’s Ease of Doing Business Reforms; and to raise Revenues for Government. Other highlights of the Budget are: Benchmark oil price: $57, Budgeted production: 2.18million barrels per day, and Exchange rate: N305/$1. Tagged “Budget of Sustaining Growth and Job Creation”, which attracted both praises and criticisms, the President said his administration remains resolutely committed to the actualisation of its vision of a bright and prosperous future for all Nigerians. The draft Finance Bill proposes an increase of the VAT rate from 5percent to 7.5percent. As such, the 2020 Appropriation Bill is based on this new VAT rate. The additional revenues will be used to fund health, education and infrastructure programmes. As the States and Local Governments are allocated 85percent of all VAT revenues, Federal Government expects to see greater quality

and efficiency in their spending in these areas as well. A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The Budget proposals raise the threshold for VAT registration to N25 million in turnover per annum such that the revenue authorities can focus their compliance efforts on larger businesses thereby bringing relief for our Micro, Small and Medium-sized businesses. “The Bill proposes to create a threshold for VAT registration by excluding small and medium businesses with less than N25 million annual turnover from VAT registration. While this would reduce VAT compliance burden for small and medium businesses, the government will need to create a workable methodology for monitoring businesses that are actually within the threshold for registration, otherwise, it may occasion loss of revenue for government”, Andersen Tax said while looking at the implication of the proposed VAT rate hike to 7.5percent. The proposed 2020 total expenditure of N10.33trillion comprises: non-debt recurrent expenditure of N4.88trillion, Capital expenditure of N2.46trillion and Debt service of N2.45trillion. The projected revenue for 2020 is mainly driven by other revenue and non-oil revenue of N3.7tillion www.businessday.ng

and N1.8tillion, up 95.7percent and 30.6percent compared to 2019 estimate respectively. Meanwhile, oil revenue was revised downward to N2.6trillion. Research analysts at FSDH group had noted in their 2019 macroeconomic revenue and outlook that “to meet revenue projections, the federal government will implement an increase in taxes for some key products/transactions which could also trigger inflation”. They had noted that “Nigeria’s weak revenue growth is a short to medium term challenge. Fiscal authorities must work to enhance the country’s revenue profile to cater for the growing infrastructure/debt financing needs. The increasing cost of debt servicing in the light of slower revenue growth leaves lesser room for expenditures on critical infrastructure and payment of salaries.” The average VAT collection in the past 6 years is about N900 billion. The revenue is shared 15percent to the Federal Government, 50percent to States and 35percent to Local Governments net of 4percent cost of collection to FIRS. Ahead of the 2020 Budget presentation, Taiwo Oyedele, Tax Leader, PwC Nigeria had in a March 21 note said an increase in VAT rate now is bad timing and inconsistent with current economic reality. “VAT increase will lead to higher inflation, interest rate hike, more unemployment and generally make people poorer.

https://www.facebook.com/businessdayng

“Any increase in VAT rate without a registration threshold and zero rating of basic consumption will increase burden on the poor and SMEs contrary to the 2017 National Tax Policy. Trying to expand the VAT net while also increasing VAT rate at the same time is a faulty tax strategy. Nigeria can make twice as much from VAT at current rate by reforming the law, expanding the net and ensuring robust administration rather than by increasing rate,” he said. The VAT Act already exempts pharmaceuticals, educational items, and basic commodities, which exemptions we are expanding under the Finance Bill, 2019. Specifically, Section 46 of the Finance Bill, 2019 expands the exempt items to include the following: brown and white bread; cereals including maize, rice, wheat, millet, barley and sorghum; fish of all kinds; flour and starch meals; fruits, nuts, pulses and vegetables of various kinds; roots such as yam, cocoyam, sweet and Irish potatoes; meat and poultry products including eggs; milk; salt and herbs of various kinds; and natural water and table water. Wole Obayomi, partner and head of Tax, Regulatory & People Service (TRPS) Practice of KPMG in Nigeria had in a September 2019 note said that increase in VAT rate has been on the fiscal agenda of the Federal Government for some time now. “One of the arguments of the @Businessdayng

Government in support of the increase is that Nigeria’s 5percent VAT rate is the lowest in Africa. However, the argument does not acknowledge the difference between the VAT regime in the other countries and Nigeria, where the VAT regime is a variant of sales tax”, he said. “It will be recalled that the Government once increased the VAT rate to 10percent in 2007 but had to revert to the status quo following opposition by the organised labour”, Obayomi added. He commended the current approach of engaging with relevant stakeholders before seeking amendment of the VAT Act to implement the proposed increase in the VAT rate. Also in their September 17 note, tax experts at Deloitte said: “Nigeria has one of the lowest VAT rates in the world. However, it still practices a modified VAT system where taxpayers can only claim a limited portion of input VAT against output VAT charged. Consequently, without a corresponding adjustment to the VAT system, the increment may turn out to have a higher impact than envisaged. This is more so as entities will ultimately seek to pass the cost to end-users. This may result in increased inflation.” Inflation rate in August 2019 reduced by 0.06 percent to 11.02 percent from 11.08 percent recorded in July. This week, the National Bureau of Statistics (NBS) releases September 2019 inflation figure.

Wednesday 16 October 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Financial inclusion: 2018 implementation falls short of expectations— NFIS report …to include 8 out of 10 Nigerians by 2020 Stories by ENDURANCE OKAFOR

he implementation of the Nat i o n a l Fi nancial Inclusion Strategy (NFIS) in 2018 did not meet the expectations of the Central Bank, the industry regulator has said. According to the bank’s annual NFIS report, released on Friday, the strategy did not give room for changes in the financial services industry as it was constrained by economic and security challenges. “Though financial inclusion numbers improved in 2018, effective implementation of the strategy (NFIS) was constrained as it did not give room for innovation and changes in the financial services landscape,” the apex bank said in the report. The Central Bank adopted the NFIS in 2012. The Strategy articulated the demand, and supplysides and regulatory barriers to financial inclusion, identified areas of focus, set targets, determined key performance indicators (KPIs), and established the implementation structure. The strategy was launched to reduce the percentage of adult Nigerians who do not have access to financial services

from 46.3 percent in 2010 to 20 percent in 2020. Also, the strategy stipulates that 70 percent of those to be included in the financial system by 2020 should be in the formal sector. The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 percent of adults still lack access. If the regulator is to meet the 80 percent inclusion target by 2020, it would have to bridge the 16.8 percentage gap before year-end. According to the Central Bank, the financial inclusion progress achieved since the launch of the NFIS was counteracted by various challenges such as the 2016 economic recession, heightened security challenges occasioned by the Boko Haram insurgency in the North East as well as low adoption of Digital Financial Services

(DFS) which constrained the expansion of access to finance. However, the financial exclusion rate reduced from 40.1 million adults in 2016 to 36.6 million adults in 2018. This means that 63.2 percent Nigerians are now included compared to 58.4 percent in 2016. Given the review of the NFIS in 2018 which provides for a principle-based approach to implementation, thereby allowing Financial Services Providers (FSP) to create innovative products and services to deepen financial inclusion. It is expected that regulators and FSPs will be more innovative in designing and implementing programmes that will accelerate the pace of financial inclusion in 2019. Research by McKinsey in 2016 revealed that the potential economic benefits of digital financial services alone as an essential

component of financial inclusion include: Bringing 46 million new individuals into the formal financial system and boosting GDP growth by 12.4percent by 2025 ($88 billion). According to the findings from the research, attracting new deposits worth $36 billion, providing new credit ($57 billion), creating 3 million new jobs, and reducing leakages in government’s financial management annually by $2 billion are also some of the potentials of digital finance services. “One key feature of the revised National Financial Inclusion Strategy is the recommendation to leverage DFS and technological innovation to drive financial inclusion in underserved areas,” the Central Bank said. As a direct offshoot of the revised strategy, the apex bank issued a Payment Service Bank (PSB)

Licensing and Regulatory framework. In line with the NFIS 2.0 principle of providing a level non-traditional player like the Telco’s, Fast Moving Consumer Good companies (FMCGs) and all entities with a large distribution network to leverage on their existing structure and provide financial services for the unbanked. According to the policy trust promoters of PSB would have 25percent of their presence in the excluded areas. One issue that has bedevilled the penetration of Financial Services to the underserved areas is insufficient fixed location agents. To achieve the financial inclusion target of 80percet by 2020, Nigeria requires 62 Agents per 100,000 adults of which as of December 2017only 28.2 agents per 100,000 adults had been recorded. To address this issue; the Body of Bank Chief Executive Officers (CEOs) and the CBN set up the Shared Agent Network Expansion Facility (SANEF), which has amongst other objectives, the mandate to increase agent network by half a million by next year. Most of these agents would be located in areas with high unbanked populations like the North West and North East regions,

the financial industry regulator stated. To ensure the presence of at least one financial service access point in all 774 local government areas in Nigeria, the CBN licensed a National Microfinance Bank (NIRSAL) that would leverage the locations of NIPOST in all the local government areas in the country to deepen access. This is intended to also fast track access to credits to MSMEs and facilitates inclusive economic growth. According to the CBN, the initiative is expected to commence by next year. “In this sense, implementation in 2019 will focus on domesticating the Sochi Accord in Nigeria, thereby unlocking the potential for Fintechs to drive financial inclusion in Nigeria,” the latest annual NFIS report read. The apex bank expects that there would be increased stakeholder engagements with the Fintech communities in 2019 and beyond. Through the financial inclusion initiatives to be implemented by the CBN in 2019 coupled with the already existing policies, the industry regulator is optimistic that by 2020, 8 out of 10 Nigerians would have been included in the financial net.

Softcom launches product to ease financial transactions

oftcom Limited, a Fintech company has launched an innovative payment solution product named Eyowo, which it says will revolutionise how people spend; spend, save, receive and borrow money. According to the Lagos-based company, Eyowo is aimed at providing simple, modern and reliable financial services to anyone with a phone number. This includes consumers, re-

tailers, businesses, and developers. “Eyowo was created in an attempt to solve the financial inclusion problem in Nigeria. Today, we are launching a bank for all”, Tomi Amao, CTO/CIO, Eyowo said at the recent launch of the platform in Lagos. In his remarks, Amao said the target market of Softcom is everyone who has a payment need and has a phone number. “This includes people and businesses who

want to make or receive payments for goods and services online and offline.” Wi t h E y o w o, t h e company said people can send and receive money, buy airtime, pay bills, make cardless ATM withdrawals, request and accept payment from customers using only their phone numbers. The company added that individuals can also save and earn interest, borrow money at zero

www.businessday.ng

interest and have access to dollar cards to carry out international transactions. “We’ve engineered products that are truly accessible to everyone regardless of the social status they belong to. Eyowo is available on Android, iOS, USSD, Voice, SMS and on the web”, Ope Adeyemi, Product and Partnerships Lead, Eyowo said. The company also highlighted Eyowo Retail, a service that uses

https://www.facebook.com/businessdayng

just one tool to manage orders, payments, inventory, customers, settlements and reports, thus helping retailers organise their business more efficiently for optimal growth. Through Eyowo, businesses can also now accept more forms of payment – cash, card, bank transfers, “this will significantly expand the customer base and horizon for internet-enabled businesses who today can only receive pay@Businessdayng

ments from bank account holders,” Adeyemi said. To deliver on its promise, Eyowo has partnered with leading financial service institutions including Providus Bank, GTBank, Interswitch, NIBSS, Bank of Industry, Verve, amongst others. “We will continue to join forces with organisations whose ethos is aligned with our vision for financial services in Africa,”Amao explained.w

Wednesday 16 October 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 15 October 2019

Top Gainers/Losers as at Tuesday 15 October 2019 LOSERS

GAINERS Company

Opening

Closing

Change

CCNN

N15.2

N15.85

0.65

NAHCO

N2.33

N2.45

UCAP

N2.03

N2.1

FIDSON

N3.95

UACN

N6.65

Company

Opening

Closing

Change

MTNN

N130

N129

-1

0.12

GLAXOSMITH

N7.1

N6.4

-0.7

0.07

DANGFLOUR

N23

N22.45

-0.55

0.05

GUARANTY

N26.85

N26.65

-0.2

N6.7

0.05

AFRIPRUD

N3.9

-0.1

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

26,513.65 2,484.00 174,414,493.00 2.317

Global market indicators FTSE 100 Index 7,211.64GBP -1.81-0.03%

Nikkei 225 22,207.21JPY +408.34+1.87%

Generic 1st ‘DM’ Future 27,011.00USD +265.00+0.99%

Deutsche Boerse AG German Stock Index DAX 12,629.79EUR +143.23+1.15%

S&P 500 Index 2,998.77USD +32.62+1.10%

Shanghai Stock Exchange Composite Index 2,991.05CNY -16.84-0.56%

12.906

Stock market erases previous gain as MTN, GSK, 11 others dip Stories by Iheanyi Nwachukwu

igerian stock ma rke t wa s down by 0.16 percent on Tues day October 15 as thirteen (13) equities recorded new lows as against 7 advancers. T h e Ni g e r i a n S t o c k Exchange (NSE) All Share Index (ASI) depreciated to close at 26,513.65 points as against 26. 557.44 points recorded previously. In 2,484 deals, equity dealers exchanged 174,414,493 units valued at N2.317billion. Access Bank

Plc, GTBank Plc, FCMB Plc, Global Spectrum Energy Services Plc and Transcorp Plc were actively traded stocks. The stock market’s yearto-date (YtD) returns stood at -15.64percent. The value of listed equities stood at N 12.906trillion. The market’s new low offers value hunters and investors with mediumto-long term view the opportunity to buy stocks with good fundamentals, thereby positioning for yearend rewards like dividend income and possible capital appreciation. MTN led the loser league after its share price dropped from N130 to N129, losing

N1 or 0.77percent, followed by GSK which declined from N7.1 to N6.4, after losing 70kobo or 9.86percent; and Dangote Flourmills Plc which lost 55kobo or 2.39percent, from N23 to N22.45. On the gainers table, Cement Company of Northern Nigeria Plc advanced most, from N15.2 to N15.85, adding 65kobo or 4.28percent, NAHCO Plc followed after rising from N2.33 to N2.45, adding 12kobo or 5.15percent, and United Capital Plc which moved up from N2.03 to N2.1, adding 7kobo or 3.45percent. Analysts expect mixed trading partner on Wednesday.

L-R: Otunba Abimbola Ogunbanjo, president, National Council of The Nigerian Stock Exchange (NSE), during a courtesy visit to Alex Okoh, director general, Bureau of Public Enterprises, in Abuja recently.

Stanbic IBTC shines at all Africa Employee Engagement Awards

tanbic IBTC Holdings Plc, a member of Standard Bank Group, won three awards at the All Africa Employee Engagement Awards held recently in Sandton, Johannesburg, South Africa. The All-African Employee Engagement Awards rewards individuals and businesses for contributions to the development of employee engagement and the future of work on the African continent.

Stanbic IBTC Holdings emerged winner in three of the 12 categories. The organisation won in the Customer and Employee Experience and Major Corporate Engagement C o m p a n y o f t h e Ye a r categories. Olufunke Amobi, C o u n t r y H e a d , Hu m a n Capital at Stanbic IBTC was also awarded the 2019 Employment Engagement Professional of the Year.

The All Africa Employee Engagement Awards attracted entries from companies across the African continent. Amobi described the awards as a testament to the fact that Stanbic IBTC is a great place to work and provides a conducive environment for employees to thrive and excel. She said: “The awards recently won by Stanbic IBTC are a reflection of the values which we represent. We are

very much interested in the growth and development of our employees; we promote respect for each other and we uphold the highest levels of integrity. We also encourage the culture of team bonding in addition to inspiring our employees to constantly raise the bar.” She added that the awards would spur the Human Capital team of Stanbic IBTC Holdings to achieve more successes in the coming years.

Duma Mxenge, Satrix SA; Fiona Ahimie, FBNQuest Securities Ltd; Jude Chiemeka, head, Trading Business Division, The Nigerian Stock Exchange (NSE); Yusuf Wadee, Satrix SA and Omotola Imafidon, FBNQuest Securities Ltd during Satrix SA’s Nigerian no-deal roadshow to understand the Exchange Traded Funds (ETF) ecosystem. Satrix played a major role in developing South Africa’s ETF Market. www.businessday.ng

https://www.facebook.com/businessdayng

Julius Berger Investments to acquire 20% equity in Petralon 54 Limited Iheanyi Nwachukwu

ulius Berger Nigeria Plc has updated its shareholders on the strategic partnership with Petralon Energy Limited. Julius Berger Nigeria Plc had on June 19, 2017 notified shareholders of its strategic partnership and joint investment agreement with Petralon Energy Limited (“PEL”) for the acquisition and development of oil fields in Nigeria. P E L h a d o f f e re d f o r subscription to Julius Berger Investments Limited (JBIL), a wholly owned subsidiary of Julius Berger, 20percent of its equity share capital in Petralon 54 Limited (P54L), a wholly owned subsidiary of PEL (the Investment). The subscription is subject to engagement and the receipt of all, consents, and approvals. In a notice at the Nigerian Stock Exchange (NSE), Julius Berger Nigeria Plc said the

@Businessdayng

Board of JBIL had approved the acquisition subject to the necessary engagements, and receipt of all the requisite regulatory approvals and consents. “ The Investment has received ministerial consent but necessary engagements with key stakeholders regarding the Investment, continues. “The share capital of JBIL is sufficient to fund the Investment. The Investment is in line with the strategic goals of Julius Berger on diversification and would enable Julius Berger to a cqu ire know-h ow a nd experience in the Oil and Gas Sector”, the notice reads. Julius Berger promised to provide further details to the market as the transaction progresses. The share price of the construction giant remained unchanged at N18.55 at the close of trading on Monday October 14, 2019. Julius Berger currently trades around its 52-week low of N18 having reached a 52-week high of N28.80.

Wednesday 16 October 2019

BUSINESS DAY

INSIGHT

NDIC: 30 years of protecting depositors’ funds ance Corporation (NDIC) under the leadership of its Director General and CEO Malam Umaru Ibrahim, has earned three certifications from British Standards Institution (BSI) on Information Security Management System ISO/IEC 27001:2013, IT Service Management System ISO/IEC 20000-1:2011 and Business Continuity Management System, ISO 22301:2012. On that day NDIC was handed over the prestigious awards on behalf of the BSI by the British High Commissioner to Nigeria.

BASHIR IBRAHIM HASSAN Nigeria Deposit Insurance Corporation (NDIC) is 30 this month. t’s time for celebration because, without any fear of contradiction, NDIC, has, in the past 30 years, meticulously carved for itself, a positive reputation founded on integrity and reliability in the banking and financial industry of Nigeria. This is no mean an achievement considering that sound and safe banking system can only be achieved and sustained in an atmosphere of uncompromising ethical, professional and moral ethos. This was achieved from years of hard work of the founding fathers; through the dedication of the board, management and staff of the corporation; and through careful planning predicated on sound managerial principles shaped by an ambitious vision to excel; a lofty mission to achieve and a robust core values that stand the test of times to guide the journey. “To be the best deposit insurer in the world by 2020” is vision of NDIC. While this may sound overtly ambitious, it should be noted that in strategic planning, vision is not something an organization can achieve on their own. It is something that guides them in their work and which they believe can be achieved if other relevant organizations share the vision and work towards it. And NDIC has a shared vision with all its stakeholders—the CBN, Ministry of Finance, the SEC, etc. All are working towards making Nigeria great among the comity of nations. If the vision is ambitious, the mission to achieve it must be lucidly articulated. It should describe, in line with standards in mission statement drafting, what NDIC does, with whom it does it and broad terms how it does it. The NDIC mission says: “To protect depositors and contribute to the stability of the financial system through effective supervision of insured institutions, provision of financial/technical assistance to eligible insured institutions, prompt payment of guaranteed sums and orderly resolution of failed insured financial institutions”. How NDIC does carry its work to achieve its mission? There are four key results areas one need to study closely to comprehend how this highly diligent corporation work and achieve the fantastic results it flaunts at this juncture of its history. The areas are: Deposit Guarantee; Banking Supervision; Failure Resolution and Banking Liquidation. Of course there are other areas, such as its institutional growth and development and its corporate social responsibility activities that add density to the colours of NDIC’s portrait. It is indeed a colourful portrait of 30 years of great achievements. Let’s look at the four key result

Umaru Ibrahim, MD/CE, NDIC,

areas one after the other. Deposit Guarantee This is a key and distinct mandate of the Corporation. As a deposit insurer, the NDIC guarantees the payment of deposits up to a maximum limit in accordance with its statute in the event of failure of an insured financial institution. The deposit insurance system in Nigeria covers all deposit taking financial institutions licensed by the Central Bank of Nigeria. These include: Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Primary Mortgage Banks (PMBs), Non-Interest Banks (NIBs) and subscribers of Mobile Money operators. Accordingly, the NDIC, currently provides deposit insurance cover to the 27 DMBs, 888 MFBs, 38 PMBs and 1 (One) NIB in operation in the country. The NDIC periodically reviews its coverage level for all insured financial institutions in Nigeria taking into consideration the macroeconomic environment, the deposit structure of the industry, the size of the deposit insurance fund (DIF), amongst others. In the last 30 years the NDIC has increased the maximum deposit insurance coverage twice, from N50,000.00 per depositor per deposit money bank (DMB) at inception, to N200,000.00 2006 and N500,000.00 in 2010. Similarly, maximum coverage per depositor of PMBs/MFBs increased from N100,000.00 in 2006 to N200,000.00 in 2010. Coverage per depositor per PMBs had since been increased to N500,000.00 to reflect the increased deposit structure in the sub-sector. Banking Supervision Supervision guarantees stability, www.businessday.ng

integrity, soundness and efficiency in the banking system. Therefore, NDIC, as a risk minimizer, collaborates with the CBN to supervise banks to ensure that the institutions remain healthy at all times. The supervision role helps detect problems and addressed promptly. As a depositor insurer, NDIC also employs banking supervision as a major tool for the protection of depositors’ interest. The supervisory activities of the Corporation are carried out through a combination of on-site examination and off-site surveillance. The collaboration between the CBN and NDIC over the years has reduced bank examination cycle, enhanced monetary policy, promoted safe and sound banking practices as well as assisted distress resolution, particularly in the last 10 years. The current management of the Corporation under the leadership of its managing director and CEO, Malam Umaru Ibrahim has deployed an appropriate policy framework which has produced great results in the interest of the banking industry, including the following: • adoption of Risk-Based Supervision Framework, • development of Framework for Early Warning Signals to detect problem banks • development of Framework for the Identification and measurement of Systemically Important Banks (SIBs) and • institution of a Framework for the Provision of Financial and Technical Assistance to deserving insured institutions. These efforts have been recognised globally. For example, on Monday, May 21, 2018 the world came to know that Nigeria Deposit Insur-

https://www.facebook.com/businessdayng

Failure Resolution Ensuring that failing and failed insured institutions are resolved in a timely and efficient manner, and without disruption to the payment system in the country is one area in which the NDIC had demonstrated great ingenuity and sagacity. It is worthy to note that the Corporation was established when the banking system was already in distress. As a matter of fact, there were about seven technically insolvent state-owned banks in the system in 1988. The Corporation had to grapple with the resolution of bank failures at an early stage of its existence. It garnered invaluable experience in this regard over the years. Depending on the severity and peculiarity, NDIC, in collaboration with the CBN, adopted different options in the past to resolve failures in the system. The options ranged from Open Bank Assistance (OBA), Purchase and assumption (P & A), Bridge Bank, Asset Purchase and reimbursement (payout) of Insured Depositors. Furthermore, a novel option was adopted by the Corporation to resolve the problems of banks affected by the global financial crisis of 2009, which manifested in poor asset quality and risk management, in addition to weaknesses in corporate governance. In the discharge of its statutory role under Section 39 (i) of the NDIC Act 16 of 2006, and in consultation with the Federal Government, CBN and Ministry of Finance (MOF), the Corporation adopted the Bridge Bank mechanism to resolve the failure of three (3) DMBs namely Afri Bank, Spring Bank and BankPHB, which transformed into Mainstreet Bank, Enterprise Bank and Keystone Bank respectively. Again in 2018, the same mechanism was used to resolve the failure of Skye Bank Plc, which transformed to Polaris. In all the cases where the bridge banking option was adopted, NDIC intervention safeguarded 12,667 jobs, protected deposit liabilities of over N 1.759 trillion, prevented the systemic repercussions of the failure of the banks on the entire financial system, thereby engendering macro-economic stability, sustained daily operations of the failed banks including meeting maturing obligations and enhanced depositor and other stakeholders confidence in the banking system. @Businessdayng

Bank Liquidation Although Deposit Insurance is remedial in nature, it is also a preventative mechanism in terms of building confidence in the system and entrenching accountability. Bank liquidation is another key result area of NDIC operations. In this aspect, the Corporation has recorded giant strides and made tremendous achievements in ensuring that depositors of liquidated banks suffer as little loss or pain as possible. Between 1994 and date, a total of 53 DMBs, 325 MFBs and 51 PMBs were liquidated without disruption to the payment system. However, the NDIC opted for Purchase and Assumption (P & A) approach to resolve the problems of 13 banks closed by the CBN in 2006 as a result of their inability to meet the Consolidation/Recapitalization requirement of N25 billion. NDIC’s liquidation activities also involve recovery of debts and realization of assets of closed banks. Accordingly, a cumulative amount of ₦29.01 billion was recovered from debtors of DMBs in-liquidation as at 31st December, 2018. With regards to MFBs in-liquidation, a total of ₦125.84 million was realized from debtors as at 31st December, 2018. Debt recoveries from PMBs stood at N290.43 million as at 31st December, 2018. A cumulative sum of ₦21.396 billion was realized from the disposal of physical assets of closed DMBs as at 31st December, 2018. While cumulative sums of N391.25 million and ₦78.17 million were realized in respect of MFBs and PMBs respectively. These recoveries culminated in the payments of ₦116.258 billion as liquidation dividends to Depositors, Creditors and Shareholders of closed DMBs, MFBs and PMBs in 2018. It is important to stress that through sustained and diligent liquidation activities, the NDIC has realized assets to pay, in full, the deposits of the customers of 17 of the DMBs in-liquidation. In effect, all the depositors of the 17 defunct banks who came forward to file their claims have been paid all their monies (both insured and uninsured) that were erstwhile trapped in those banks. It all sound incredible, but that is the turf for gold medalists—earners of deservedly golden medal of integrity and reliability. As the NDIC marks the milestones of the past three decades, it has shown a remarkable capacity not only to sustain the high standard recorded in banking supervision in the recent past, but to raise its bar in line with their core values of Honesty, Respect & Fairness, Discipline, Professionalism and Team Work.

Hassan is a financial analyst writes from Abuja

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

news Seplat takes lead in indigenous scramble ... Continued from page 1 Companies (IOCs) divest from onshore to offshore assets. The deal will give the combined business greater scale in production and reserves, with the combined oil production set to increase to 38,000 barrels of oil per day (boepd) for the enlarged group. Factoring in Seplat’s gas production, total production is expected to grow to 64,000 boepd. The acquisition is scheduled for completion at the end of 2019. The two entities will continue to run separately in 2020 (but with consolidated financials) and then a full integration of the entities in 2021 as the deal is being wholly funded through a combination of existing cash resources of Seplat and a new loan facility available to Seplat. The deal underscores the viability of Nigeria’s growing indigenous onshore oil industry as most of the majors have been rapidly divesting their assets in the volatile Niger Delta region in favour of bigger – and more secure – offshore blocks, a development which Seplat Petroleum has taken advantage of. According to sources, this is due mainly to a combination of reasons ranging from ageing Joint Ventures (JV) assets to crude oil theft, insecurity, hostility from host communities, increasing costs of oil and gas projects and unfavourable government policies. Adeoluwa Eweje, an international oil and gas expert with an understanding of Nigeria’s oil and gas sector said the only way for other indigenous players to pull this kind of Seplat’s deal is to improve on their internal governance structures while embracing operational best practices. “Its dual listing on London Stock Exchange (LSE) and Nigeria Stock Exchange (NSE) among several other factors put Seplat in a favourable position, which is why they are trying to consolidate on their assets,” Eweje said. Eweje noted that due to recent stability in the Niger Delta region, Nigeria will continue to see renewed interest from investors while local companies with better internal structures will be able to take advantage of this opportunity. “If local players can fix their internal structures right and be more transparent they would seal likewise deals like Seplat,” Charles Akinbobola, an energy analyst with Sofidam Capital said. International Oil Companies (IOCs) account for more than 70 percent of the nation’s daily crude production. Seplat’s CEO Austin Avuru said that the acquisition is

in line with a key part of Seplat’s established strategy to pursue opportunities in the onshore and offshore areas of Nigeria that offers nearterm production with cash flow and reserves potential. “This acquisition signals the next step in our journey that will underpin Seplat’s ambition to be the leading independent E&P in Nigeria,” Bryant Orjiako, chairman of Seplat, said. According to the transaction timetable and conditions, the deal will be tabled before shareholders of Eland at the court-ordered meeting and at the general meeting and must be approved by a majority in number of the shareholders voting at the Court meeting, either in person or by proxy, representing at least 75 percent in value of the Eland shares voted. The deal is expected to see Seplat gain Eland’s 45percent operating stake in licence OML 40 onshore asset in the Niger Delta where continuous drilling on both Opuama and Gbetiokun has led to OML 40’s average net production increasing for five consecutive half-year periods with average net production of 9,948bopd seen during the first half of 2019. “It’s more profitable for IOC to sell onshore assets to smaller companies rather than keeping it and paying heavily for them,” Abayomi Fawehinmi an oil expert in a Lagos based oil firm said. Eland also has had plans to drill an exploration well at the Amobe prospect in the licence later this year, as well as an appraisal at the Abiala discovery, a development which is expected to favour its new owner Seplat. In addition, Seplat is expected to takeover Eland’s 40percenty interest in the Ubima licence that is now estimated to hold 9.3 million barrels of proven and probable reserves after a resource upgrade earlier this year. ARM Securities Limited also estimates Seplat’s 2P liquids reserves to increase by 41 million barrels to 268million barrels, with its 2P Oil Reserves and 2C Oil Reserves expected to increase by approximately 65 million barrels to 330 million barrels, bringing total oil and gas reserves to 626 million barrels of oil equivalent. “We see this playing out positively for Seplat’s shareholders, given potential boost to Earning per Share (EPS) on the long term. This, in addition to upcoming ANOH gas project further boosts the upside on our fair value estimates FVE on Seplat of N828.90 which is a 69 percent upside from current pricing,” ARM Securities Limited said.

•Continues online at www.businessday.ng www.businessday.ng

Babatunde Fashola (m), minister of works & housing; Oluwatoyin Smith (2nd r), coordinator, National Blood Transfusion Service Abuja Centre; Omo Izedonmwen (l), medical officer; Owoeye-Olowe Oluyemisi (2nd l), and others shortly after an advocacy visit by the members of the National Blood Transfusion Service Abuja Centre to the Ministry of Works & Housing headquarters. Pic by Tunde Adeniy

FG fails to heed history lessons as inflation surges... Continued from page 1

and a directive to the Central Bank of Nigeria (CBN) to stop providing dollars to import food items including milk. All these are in a bid to ramp up local farm production and attain full food security as well as manage the nation’s scarce foreign exchange reserves. Food imports account for about 76 percent of $4.2 billion worth of informal imports from neighbouring Benin Republic, Niger and Cameroon, according to a CBN report. This highlights the importance of the border to Nigeria where huge domestic demand relative to local production means capital control – a government’s measure to limit the flow of foreign capital in and out of the domestic economy – would always fuel inflation. Food items like rice, frozen poultry and tomato paste have now risen since the border policy, which has now graduated to full closure, was enacted. The price of a 50kg locally produced rice rose by more than two-third from the end of July to N22,000 as at October 10, according to a research conducted by Lagos-based Coronation Merchant Bank. Also, the price of imported rice of the same weight surged at the same rate to N27,000 within the same period, while a 25kg rice produced offshore grew by more than double to N14,000. A kilogram of imported frozen turkey and frozen chicken have risen by 69 percent and 27 percent respectively, while locally produced frozen chicken has risen 40 percent, strain-

ing the pockets of Nigerians, already home to some of the poorest consumers in the world. “We attribute food inflationary pressures to the impact of border closures in August 2019,” said Cardinal Stone research analysts led by Philip Anegbe, in a note. “In our view, the closure of several land borders, including the bustling Seme border, to combat food smuggling, led to reduced supply of imported food and increased demand for local food produce.” The elephant in the room Capital control is not an unusual approach to managing foreign exchange in Nigeria and it is the government’s preferred option rather than currency devaluation, or floating the currency when faced with acute dollar shortage. In 1984, the government closed borders as devaluation of the naira and expansion in money supply caused an inflation rate surge to 41.2 percent as the government embarked on price control measures, but inflation fell in 1985 to 5.5 percent after the government opened the borders. More recently, declines in oil price between 2014 and 2016, which accounts for more than 90 percent of Nigeria’s forex earnings, saw the CBN restrict several food items from accessing forex to curtail pressures in the foreign exchange market. The continuous restriction of some other items is enough proof it is not working, according to an analyst who would spoke on condition of anonymity. “The underlying issue is the FX, rather than waiting to talk about devaluation

https://www.facebook.com/businessdayng

the government is trying to take out demand quantitatively,” the source said. “We have been down this road before and the sooner oil prices rebounded we abandoned it.” The decision to impose capital controls fuelled inflation to the highest level in almost 12 years thereby worsening the 2016 recession. Foreign reserves declined by $3.2 billion in the third quarter of 2019 alone to settle at $41.7 billion, on the back of fresh pressure on oil price that has hit capital inflow into Nigeria, according to analysts at United Capital, a Lagosbased investment bank. While the analysts say the CBN is not yet at a tipping point as the reserves remain well above the 6 to 3 months benchmarks recommended by the IMF, they note the disturbing trend. Meanwhile other experts say Nigeria with a population of 200 million people to feed, which is practicing largely subsistence agriculture would not be able to produce enough to cover local demand. “The restriction would be effective if there are complementary policies to drive production locally,” said Johnson Chukwu, MD/CEO of Cowry Asset Ltd. “Otherwise economics teaches us prices would keep rising as cost of smuggling rises.” The more impoverished Northern Nigeria been hardest hit by the policy to curb food imports, contrary to comments credited to Sabo Nanono, Nigeria’s minister of agriculture, that “there is no hunger in the country.” In Maiduguri, the capital of Borno state, food is a @Businessdayng

luxury, according to Abdulkadir Jidda, chairman, All Farmers Association of Nigeria, Borno state. “I feel very bad because we cannot even afford to participate in the ceremony of world food day (October 16). And you know the reason,” said Jidda, in a phone interview, referring to insecurity which has crippled agricultural output in the once prosperous region where going into farmlands 2 kilometres beyond the capital is now almost like a suicide mission. 5.3 million Nigerians experienced acute food crisis in 16 states of northern Nigeria last year, when the country was identified among eight countries with the worst food crises in 2018. This was contained in the Global Report on Food Crises, which further noted that 22.7 million Nigerians in the north alone are at risk of food crisis if things do not improve. Analysts expect inflation to continue to rise for the rest of the year on the back of increased demand due to Christmas festivities and the continued border closure. Specifically, the price of rice in particular is expected to rise given the nation’s supply gap of about 2.7 million tonnes. “The inflation print we saw suggests pressure… expectations are for higher prices in the rest of the year,” said Wale Okunrinboye, head of research at Lagosbased Sigma Pensions. The Federal Government however appears bent on pursuing the border policies, despite pains being inflicted on Nigerians. “At some point it has to be Nigeria first -- we have to protect our own industries,” Finance Minister Zainab Ahmed said on Monday.

Wednesday 16 October 2019

BUSINESS DAY

news

Don’t go on strike, Ngige tells FG pledges to ease access procedures to N2.5bn Labour as dialogue continues artisanal mining fund, grow investment Innocent Odoh, Abuja

inister of Labour and Employment, Chris Ngige, has again appealed to Organised Labour and the Joint National Public Service, Negotiating Council (JNPSNC) to shelve their proposed strike as the Federal Government is working hard to resolve the issues over consequential adjustment of the new minimum wage of N30,000. The minister made this appeal on Tuesday, while speaking with labour leaders in a ‘make or mar meeting’ in Abuja, for which if the issues are not resolved today could lead to industrial action earlier threatened by Labour. Negotiations have broken down severally as the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), after receiving briefing from the JNPSNC, issued a statement recently warning that if the issues of the consequential adjustment were not addressed by Wednesday, October 16, the Labour movement would have no other alternative than to call its members nationwide to embark on a total strike. Although grade levels 1-6, according to the government, have started receiving their salary increase of N30,000 minimum

wage from N18,000, since the new minimum wage was signed into law by President Muhammadu Buhari on April 18, but Labour is demanding a 29% adjustment on the salary of grade level 7-14. It also demands for salary increase of 24% for grade level 15 -17, while the government is offering 11% for the level 7-14 and 6.5% for level 15 -17. The minister asked the labour leaders to consider the dire Economic straits confronting the nation, saying “ the meteoric rise in of recurrent expenditure especially personnel cost is worrisome. Today our budget presented to the National Assembly has 76 per cent for recruitment expenditure and 24 percent for capital expenditure, it doesn’t call for cheers. “I appeal that the Sword of Damocles of strike you should bring it down.” Also speaking, the Secretary General of the Trade Union Congress (TUC) Musa Aliyu Ozigi, said the union has come with open mind to discuss the issues even as he prayed that the meeting will resolve the lingering issues. Acting Head of Service of the Federation, Folashade YemiEsan also appealed to Labour to appreciate the position of the government.

HARRISON EDEH, Abuja

n the heels of the growing concerns of poor access to the N2.5 billion artisanal mining fund for small scale miners launched by the Federal Government in 2016, the Federal Government has pledged to ease the procedures of access of such funds to drive growth in the sector. This, analysts say, is still not contributing much to Nigeria’s Gross Domestic Product (GDP) despite potentials. The artisanal miners many of whom had not formalised

their mining business had lamented their inability to access the fund, citing concerns of ‘difficult conditions’ by the Bank of Industry, who requests for bank guarantee, collateral security, tax clearance, among others. Since the establishment of the fund, domiciled in the Bank of Industry (BoI), BusinessDay findings reveal that only one artisanal miner has been able to access the fund, prompting concern of weak contribution of 0.12% of the sector to the GDP for a sector that largely has the capacity to drive Nigeria’s diversification

away from oil resources. ”In collaboration with the BoI, the Ministry established a small scale mining fund of N2.5 billion to grant loans to artisanal miners at 5% concessionary rate. The ‘stringent’ conditions which hitherto were necessary have made it difficult for people to access this fund. Only one artisanal miner has accessed the fund in the sum of N95 million out of the N2.5 billion,” Olamilekan Adegbite, minister of mines and steel development, said on Tuesday at the opening of mining week. He stated that the Federal

Government was working out some other unorthodox means to make sure that other people accessed this fund. Speaking on the proposed Mineral Export Guidelines, the minister said, “There would be no room for royalty payment evasion. All mineral exports shall be inspected by government appointed independent pre-shipment inspection agents, who are empowered by law to render quantity and quality control services and monitor pricing.

2020 Appropriation Bill passes 2nd Reading as Senate adjourns for budget defense ... to resume plenary October 29 Solomon Ayado, Abuja

he Appropriation Bill for an Act to authorise the consolidated revenue fund of the N10.33 trillion for 2020 budget has passed second reading in the Nigerian Senate. The Senate was on Tuesday forced to adjourn plenary for two weeks to pave the way for budget defense by ministries, departments and agencies (MDAs). It will resume sitting on October 29. Senate president, Ahmad Lawan, who announced the adjournment at the end of Senate plenary, said the essence was to hasten the passage of the budget to revert to January-December budget cycle. Lawan revealed that budget defense by MDAs shall commence on Wednesday, October 16, and last till October 30. According to the Senate president, any head of MDA that fails to appear before the NASS committees on the assigned date should not come again and at such, consider its budget not defended. Stating further, Lawan announced that from November 6 - 21, the joint committees of both Chambers would meet to harmonise the budget report for onward passage. President Muhammadu Buhari had, a week ago, presented a 2020 budget of N10.33 trillion to a joint session the National Assembly. He announced an increase in VAT to 7%, an estimated GDP of 2.93%, and N8.155

trillion revenue generation, as well as a debt Service of N2.45 trillion, among others. But the lawmakers questioned the parameters and fiscal assumptions set by the President in the 2020 budget and said it was not sustainable. Specifically, the senators queried the 2.93% GDP expected to be driven largely by non-oil output, as economic diversification accelerates, said it was unrealistic. Also questioned in the estimates was the increase in VAT from 5% to 7.5%. The Senators equally faulted the debt service in the 2020 budget which is estimated at N2.45 trillion, said it will throw the country into increased borrowing. On revenue, the lawmakers said the N8.155 trillion projected by Buhari cannot be realised in 2020 fiscal year.

CHANGE OF NAME

I, formerly known and addressed as Ogo-Oluwa Olanrewaju now wish to be known and addressed as Fadeyi Muisi Olanrewaju. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Jacob Emmanuel Ojochenemi now wish to be known and addressed as Jacob Emmanuel Moses. All Former documents remain valid. General public please take note. www.businessday.ng

L-R: Collins Onuegbu, founder/executive vice chairman, Signal Alliance/communications secretary HBSAN Board; Ndidi Nwuneli, co-founder/managing partner, Sahel Consulting; Prisca Ndu, executive vice chairman, Infrastructural Development and Energy Co. Ltd/Financial Treasurer, HBSAN Board, and Adam Saffer, CEO, chief of party, Cultivating New Frontiers in Agriculture (CNFA), USAID.

847 soldiers killed by Boko Haram buried in Borno Cemetery - Senator Ndume Solomon Ayado, Abuja

hairman, Senate Committee on Army, Ali Ndume, has revealed that 847 Nigerian soldiers killed by Boko Haram insurgents were buried in the Military Cemetery located in Maiduguri town of Borno State. Ndume, who represents Borno South Senatorial District, disclosed this Tuesday while fielding questions from newsmen in Abuja on the visit of the committee to Borno State, saying the soldiers were gruesomely killed since 2013.

CHANGE OF NAME

I, formerly known and addressed as Alabi Monsurat Titilayo now wish to be known and addressed as Alabi Monsurat Salaudeen. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Martins Johnson now wish to be known and addressed as Ojo Kehinde Dayo. All Former documents remain valid. General public please take note.

Apart from the deceased 847 soldiers, Ndume stated that other soldiers killed by the terrorists might have been buried in other military cemeteries located in other parts of the North - Eastern region. “We visited the cemetery because as you know, there have been reports of mass burial in the armed forces. We went to see how well kitted they are. We also visited the army hospital that was attacked twice. “The war is won but Boko Haram needs to be defeated. They don’t only attack civilians

CHANGE OF NAME

I, formerly known and addressed as Miss. Azunnaya Chikaodi Anna now wish to be known and addressed as Mrs. Uwah Chikaodi Anna. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Karimi Ibrahim Oladapo now wish to be known and addressed as Abdulkarim Ibrahim Iyanda. All Former documents remain valid. General public please take note.

https://www.facebook.com/businessdayng

but the military as well. So far, from the record we saw in the cemetery, I think we lost over 847 soldiers - by their record there and that is in that cemetery alone. “That is from 2013 till date. And so you know they have cemeteries elsewhere where they bury victims. But that allegation that there is mass burial is not true. Nigerians don’t do that. Nigerian army will never do that. “In fact, if any of them is missing, they go out to search and get the person before declaring whether or not he is dead and even if he is dead,

CHANGE OF NAME

I, formerly known and addressed as Ubah Prince Chimezie now wish to be known and addressed as Mrs. Ubah Winners Chimezie. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Karimi Ibrahim Oladapo now wish to be known and addressed as Abdulkarim Ibrahim Iyanda. All Former documents remain valid. General public please take note. @Businessdayng

they make attempts to retrieve the body.We went, we asked questions. That is not true,” he said. He however commended the dogged fight against insurgency by the military, noting that the soldiers were paying supreme price to protect lives and property of Nigerians. “The commitment of the Armed forces to this country are unparalleled to none. For the conditions they find themselves and still decide to sacrifice their lives for the country - is commendable,” he stated.

CHANGE OF NAME

I, formerly known and addressed as Ameh Esther Eware now wish to be known and addressed as Ameh Esther. All Former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Jabita Aminat Ejide now wish to be known and addressed as Odesanya Jabita Aminat Ejide. All Former documents remain valid. General public please take note.

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINES DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

ANDREW EDGECLIFFE-JOHNSON AND JOE RENNISON IN NEW YORK

eWork’s bonds dropped to new lows as investors responded to the expected high cost of a rescue refinancing being put together by the bank that failed to take the company public only a few weeks ago. WeWork’s bonds maturing in 2025 dropped to 79 cents on the dollar on Tuesday, from over 90 cents on October 11 and following a long weekend that saw the bond market remain closed on Monday. It gives the debt an implied yield of over 13 per cent. One person who had seen the terms of the roughly $5bn package put together by JPMorgan Chase said they included about $2bn in unsecured debt, structured as payment-in-kind notes and carrying a high coupon of as much as 15 per cent. The structure, which is still being negotiated with investors, reflects the risk lenders would be taking on in financing a company that expects to burn through its current funding by late November. “People are taking a look and realising the rescue is going to be expensive,” said John Dixon, a high-yield bond trader at Dinosaur Financial Group. “When you see the anticipated funding is going to pay something close to twice what the bond issued last year yielded, then you need to reprice.” The details of the offer were first reported by Bloomberg. JPMorgan and WeWork declined to comment. Payment-in-kind notes pay

WeWork bonds drop to new lows as investors weigh refinancing

Terms of funding deal said to include rare payment-in-kind notes and a costly coupon

lenders a portion of the interest on the debt with additional bonds, rather than cash. Such notes are rare, said Vicki Bryan, founder of research company Bond Angle, as they tend to be issued by “extremely distressed companies and end up adding to an already mas-

Assault against Kurdish forces not agreed with Moscow, says Putin’s special envoy

Jamie Dimon’s bank rides record investment banking fees to stand out from Wall Street pack

ecord investment banking fees helped JPMorgan Chase retain its Wall Street crown on Tuesday, while rival Goldman Sachs was knocked by a 27 per cent drop in profits following losses on tech investments such as WeWork and Uber. JPMorgan, the US’s biggest bank, and trading powerhouse Goldman bookended a bumper earnings day for US banks that also included lacklustre third-quarter results from Citigroup and Wells Fargo. JPMorgan was the standout performer of the four big banks, with net income rising 8 per cent to $9.1bn. Revenues were up 8 per cent to $29.3bn in the three months to end September. Both numbers beat analyst expectations, and JPMorgan was rewarded with a 4 per cent rise in its share price by lunchtime in New York. “JPMorgan is best in class of global banks and it shows this quarter,” said Wells Fargo analyst Mike Mayo. The results included the best third quarter ever for JPMorgan’s investment banking division, which handled the catastrophic attempt to float WeWork, and several other

listings that plunged in value after they begun trading. Jamie Dimon, JPMorgan’s chief executive and chairman, repeatedly declined to comment on the bank’s relationship with WeWork, but Jenn Piepszak, finance chief, said the financial impact of the group’s situation was “not material” for the bank and “within our risk appetite”. “We continue to support our client through a complex situation and are working with them through alternative financing strategies,” she said. Ms Piepszak added that although the pipeline of investment banking deals was strong, fourth-quarter fees were expected to be lower than the third quarter of 2019 and the fourth quarter of 2018. Other parts of the bank also performed strongly, including a 25 per cent increase in revenues from fixed income trading revenues against a year ago, and a 10 per cent rise in credit card sales volumes. Mr Dimon said the results demonstrated “broad-based strength and the resilience of our business model despite a more challenging interest rate backdrop”. However, he struck a note of caution for the future, warning that US economic growth had “slowed slightly”. www.businessday.ng

or pursue an alternative proposal from SoftBank. The Japanese group poured more than $10bn into the office company in successive financing rounds that raised its private market valuation to $47bn in January. It is now considering buying out

Russia calls Turkey’s invasion of north Syria ‘unacceptable’

JPMorgan earnings leave Goldman in the shade LAURA NOONAN IN NEW YORK

sive debt load.” Two people familiar with WeWork’s deliberations said they expected the company to decide by the end of this week whether to accept the debt deal from JPMorgan, which was the lead underwriter on its failed initial public offering,

other investors — and diluting the stake held by co-founder Adam Neumann — at a valuation below $10bn, one person familiar with the proposal said. Should SoftBank effectively take the company in house, WeWork insiders expect it to insist on sweeping changes to its board and management. WeWork had expected to raise $3bn to $4bn in new equity from an initial public offering, on which another $6bn in bank debt was dependent. But the company’s failure to convince public market investors to back it — even at a cut-price valuation of $15bn to $20bn — left a hole in its finances, following a period in which it ramped up spending on new properties in anticipation of the fresh funds. The sudden reversal in WeWork’s fortunes has left Mr Neumann pushed back to a nonexecutive chairman’s role, with his shares’ voting rights severely curtailed. On Tuesday he received the endorsement of Marc Benioff, however. The Salesforce chief executive told Business Insider that Mr Neumann was “probably one of the greatest entrepreneurs I’ve ever met. He’s an incredible evangelist.

HENRY FOY IN MOSCOW, LAURA PITEL IN ANKARA AND CHLOE CORNISH IN BEIRUT

ussia deployed troops in north-eastern Syria to help reassert control over the territory in the wake of Turkey’s military onslaught against Kurdish forces, labelling Ankara’s incursion “unacceptable”. Alexander Lavrentiev, president Vladimir Putin’s special envoy for Syria, said on Tuesday that Ankara’s offensive had not been agreed with Russia, despite the Kremlin having emerged as the most influential foreign power in Syria. In the harshest comments yet from a Russian official, Mr Lavrentiev said that Moscow had “always believed that any military operation in Syrian territory is unacceptable”. He said that the security of the Turkish-Syrian border “should be ensured . . . by way of deploying government forces along the entire border” — a suggestion that directly conflicts with Ankara’s plan to control a 32km-deep stretch of the country’s north-east. The warning from Moscow and the announcement that Russian soldiers had been deployed on the front line between Syrian and

https://www.facebook.com/businessdayng

Turkish troops came two days after Kurdish forces struck an emergency deal with the Syrian regime in order to ward off a Turkish assault against them. That pact has seen Syrian leader Bashar al-Assad, backed by Russian firepower, re-establish a military presence in several northern towns that had been controlled by US-backed Kurdish forces under the Syrian Democratic Forces umbrella. Turkey’s president Recep Tayyip Erdogan insisted on Tuesday that Ankara was proceeding with its plan to assert control over a 480km stretch of the border from the Syrian town of Manbij, east of the Euphrates river, to the Iraqi border. He vowed to secure the region “within a short time”. But the strong words from Russia, which has become an important partner for Turkey in Syria, served as a reminder of the constraints likely to be imposed by other foreign powers. They came less than 24 hours after Donald Trump, US president, also set out his own red lines on the Turkish incursion and announced US sanctions on Ankara. Sinan Ulgen, chairman of the Istanbul-based think-tank Edam, @Businessdayng

said that, from a military perspective, Mr Erdogan could control the whole border region if he wanted to. But he added: “The obstacle is of a more political nature, about what happens if he decides to do it.” Kerim Has, a Moscow-based analyst of Russia-Turkey relations, said he believed that Mr Erdogan had hoped to gain “much more territory” after launching his offensive last week but had been boxed in by the rapidly shifting dynamics and the demands of Washington and Moscow. “Ankara, in my opinion, doesn’t have any choice other than reaching a deal with Russia and the US,” he said. Mark Esper, US defence secretary, said on Tuesday that US troops were retreating partially because they were “at risk of being engulfed in a broader conflict”, underscoring fears that international powers could be dragged into direct confrontation in the chaotic north-east Syrian theatre. Despite a pledge by Mr Erdogan to send Turkey-backed Syrian rebel groups into Manbij, the Syrian army moved into the border town on Tuesday, filling a vacuum left by US forces whose bases there had been part of an effort to assuage Turkey’s security concerns.

Wednesday 16 October 2019

BUSINESS DAY

NATIONAL NEWS

Young Canadians fall out of love with Justin Trudeau Millennials are largest voting bloc but many are disillusioned with prime minister JASON KIRBY IN TORONTO

n 2015, few young Canadians were more dedicated to the cause of getting Justin Trudeau elected than Justin Kaiser. A Liberal since he was 17, Mr Kaiser had volunteered in two previous elections and at 24 had risen to become the national head of the Young Liberals, the party’s youth wing. It was his job to identify young voters on campuses and “persuade them to vote for Justin Trudeau”. “We had a message of real change and doing things different, and we were extremely successful with it,” he said, noting that Liberal candidates were elected in “almost every single riding with a university and the neighbouring ridings next to those universities”. Much has changed. Today, as a campaign manager for a Green party candidate in Vancouver, British Columbia, Mr Kaiser is working to oppose the re-election of Mr Trudeau’s government on October 21. “Too many things happened [during Mr Trudeau’s first term] that were not in the best interest of the country,” he said, pointing to the Trudeau government’s purchase and approval of the Trans Mountain Pipeline. “You can’t be a climate leader and buy a pipeline.” In an election where millennials account for the largest demographic bloc of voters, Mr Kaiser is an example of a phenomenon that could spell trouble for Mr Trudeau on polling day: the young people who came out in droves to support him in 2015 are showing signs they will not return in the

same numbers this time. The 2015 election was “a complete anomaly”, said John Wright, a pollster with DART Insight and Communications. Historically, less than 40 per cent of people in the 18-34 age group cast ballots in federal elections. But in 2015, the voting share jumped to 57 per cent, with Mr Trudeau picking up most of the increase. The prime minister’s message of hope and change, which echoed that of then-president Barack Obama’s 2008 campaign, “galvanised” young voters in the final week of the campaign, said Mr Wright. The Liberals embraced social media and Mr Trudeau’s rhetoric around tolerance, transparency, climate action and female equality — not to mention his promise to legalise cannabis — contrasted with Conservative prime minister Stephen Harper’s repeated talk about tax cuts. While the Harper Conservatives ultimately received nearly as many votes as they had in the 2011 election, the higher turnout of young voters, along with the collapse of the left-leaning New Democratic party in that election put Mr Trudeau over the top. The landscape looks far different in the final week of this campaign. A new DART & Maru/Blue poll puts the NDP at 39 per cent among voters aged 18-34, up from 22 per cent a month ago. Over the same timeframe Liberal support among younger voters fell from 39 per cent to 27 per cent. (Conservatives more or less held steady at 24 per cent among the demographic while the Greens are up 3 percentage points to 8 per cent).

‘Interswitch One Africa Muisc Fest’ receives boost, as AirPace throws weight behind 2019 Edition

nterswitch One Africa Music Fest is delighted to announce that we have partnered with Air Peace as our 2019 Official Airline Sponsor. Air Peace is quickly becoming one of Africa’s leading airline carriers domestically and internationally. This partnership will highlight our shared commitment of philanthropy, tourism and global awareness showcasing all that Africa has to offer. The multi-faceted partnership between the two organizations was solidified on Friday, Interswitch One Africa Music Fest and Air-Peace have come together to engage customers through entertainment, lifestyle and tourism. Speaking on Air-Peace’s partnership with One Africa Global, Allen Onyema, CEO of Air-Peace remarked that “Africa is made up of vibrant populace and we are extremely proud of the rebirth that has been witnessed, notably in the entertainment sector and the economy, particularly with our music, fashion, and the creative industry which has resounded and gathered international applause in recent years on the forte of sheer flexibility and in the spirit of growing African enterprises. This partnership was forged by the growing influence of One Africa Global products and Air-Peace’s commitment to becoming the largest and most prof-

itable airline company providing safe, efficient and affordable short and long-haul services. We remain persistent in our mission to actively engage and reward our customers across Africa, leveraging on global platforms that have the tenacity to promote Africa’s heritage such as One Africa Global”. In addition to this fruitful partnership, Paul O., CEO, One Africa Global said “It’s been my ultimate goal to showcase Africa to the world and create a channel that bridges the gap. I am enthusiastic and equally pleased to announce this partnership! As two proudly African brands come together for a common goal to showcase the very best from Africa. We are on a journey to take Africa to the world and bring the world to Africa. I am super excited it is with Air Peace. This year the Interswitch One Africa Music Fest was completely sold-out in New York and London. Our next concert will take place in Dubai on the 15th of November at the Festival Arena, Festival city Dubai. In an attempt to continuously reaffirm our commitment in taking Africa to the world, One Africa global is running promotional campaigns for 24 new customers of Quickteller to stand a chance to win an all-expense paid trip to Interswitch One Africa Music Fest events happening in Dubai. www.businessday.ng

UK and EU locked in race to broker Brexit deal

Johnson offering cash payment to Northern Ireland to bring DUP onside JIM BRUNSDEN, SAM FLEMING AND MEHREEN KHAN IN BRUSSELS, MICHAEL PEEL IN LUXEMBOURG AND GEORGE PARKER IN LONDON

oris Johnson was on Tuesday night locked in a race against time to secure a Brexit deal, after EU chiefs warned him that unless he made new concessions he would be forced to accept an extension to his October 31 exit deadline. The British prime minister spent the eleventh hour haggling with Arlene Foster, leader of Northern Ireland’s Democratic Unionist party, over a big cash payment for the region to help secure her support for the deal taking shape in Brussels. Mr Johnson held a series of meetings with Conservative Eurosceptics MPs and the DUP to persuade them to accept a deal that would impose customs checks on goods entering Northern Ireland. British negotiators in Brussels were in constant contact with Number 10 to see how far they could go

to meet EU demands, amid rising hopes that a deal could be concluded ahead of the European Council meeting starting on Thursday. In a crucial breakthrough for Mr Johnson, the head of the hardline Tory European Research Group said a “tolerable” deal could be secured with the EU, possibly by the deadline of midnight on Tuesday set by Michel Barnier, chief EU Brexit negotiator. Steve Baker, who helped to vote down Theresa May’s Brexit deal on three occasions, emerged from 80 minutes of talks in Number 10 to declare: “I am optimistic it is possible to reach a tolerable deal that I am able to vote for.” The DUP, which would have to accept a new customs border on the Irish Sea, told Mr Johnson that its support was contingent on more cash for Northern Ireland. “Clearly it’s going to be a big package,” said one person close to the talks. Mrs Foster, who entered Downing Street at 7pm on Tuesday night with the DUP’s deputy leader Nigel Dodds, said it was vital that any final

deal had the consent of both nationalist and unionist communities. Mr Johnson has long identified the summit as the crunch moment for Brexit negotiations, and failure to achieve a deal by then would leave him forced by UK law to seek a delay to Britain’s scheduled October 31 departure date. “This is a moment of political leadership: does the UK want Brexit? If so, the EU is ready to conclude a deal,” said one EU official. The progress in the UK-EU negotiations after several days of intense work has prompted cautious optimism in Brussels that a deal, considered impossible only days ago, may be within reach. This contrasts starkly with Sunday evening, when Mr Barnier gave a downbeat assessment to diplomats of Britain’s Brexit proposals. Since then, the two sides have focused on settling the vexed issue of how to prevent a hard border on the island of Ireland after Brexit, and in particular the need for a watertight proposal for how and where to carry

Turkey steps up offensive against Kurdish forces in Syria Ground troops seize villages and continue aerial bombardment of towns CHLOE CORNISH IN BEIRUT AND AYLA JEAN YACKLEY IN ISTANBUL

urkish ground troops have stepped up their offensive againstKurdishforcesinnortheastern Syria, seizing villages andcontinuinganaerialbombardment of Syrian towns close to the border. Bombing near residential areas had forced thousands of people to flee, said the Kurdish Red Crescent, a local humanitarian organisation, which said 10 civilians had been killed in the past 24 hours. Recep Tayyip Erdogan, Turkey’s president, said 109 militants had been killed in the operation against Kurdish forces, which Ankara accuses of terrorism. The Kurdish-dominated Syrian Democratic Forces said three fighters had died. The SDF, armed and equipped

https://www.facebook.com/businessdayng

by the US and other western allies to battle Isis, the Sunni jihadi group, in north-east Syria, are fighting back against the Turkish advance. Two civilians were killed by rocket and mortar fire from Syria that hit the Turkish border town of Akcakale, according the region’s governor, including a nine-month old baby boy. More than a dozen other civilians were hurt when mortar fire hit four Turkish towns, Anadolu news agency said. Ankara has said it wants to push Kurdish fighters that it considers terrorists away from its borders and create a safe zone that Syrian refugees in Turkey can return to. But the long-anticipated offensive has sparked an international backlash, amid concerns over the threat to civilians and Kurdish forces — which have helped the international fight against Isis — and fears that the operation could enable the resurgence @Businessdayng

of the jihadist group. Mr Erdogan has reacted angrily to European criticism, reiterating his threat to let Syrian refugees enter Europe if Brussels continued to oppose his military actions. “If they try to describe our operation as an occupation, our work is easy. We’ll open our gates and send you 3.6m refugees,” Mr Erdogan said in a speech to members of his political party. The EU has called on Turkey to stop the military incursion. The attack, which began on Wednesday, came days after US troops left the border area, giving an apparent green light for the Turkish operation. President Donald Trump has threatened to “destroy and obliterate” Turkey’s economy if it takes actions he deems “off-limits”.He has also said Ankara must take responsibility for Isis captives, previously seen as the responsibility of Kurdish fighters.

Wednesday 16 October 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

IMF slashes global growth forecast on trade war fears Fund warns of ‘precarious’ economic situation as tariffs chill business confidence CHRIS GILES IN WASHINGTON

lobal growth is set to fall to its slowest rate since the financial crisis this year, the IMF said on Tuesday, as it warned that the self-inflicted wounds of the US and China’s trade war had created a “precarious” economic situation. Tit-for-tat tariffs have chilled business confidence and investment, the fund said, leaving global trade in goods almost stagnant and forcing central banks to cut interest rates to shore up growth. There is an urgent need to cease hostilities and restore confidence to the global outlook, the IMF said in its twice-yearly World Economic Outlook, in pointed comments directed at US President Donald Trump’s administration. Gita Gopinath, the fund’s chief economist, said: “With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot. “As policy priorities go, undoing the trade barriers put in place with durable agreements and reining in geopolitical tensions top the list,” she added. “Such actions can significantly boost confidence, rejuvenate investment, halt the slide in trade and manufacturing and raise world growth.” The world economy will grow only 3 per cent in 2019, the IMF estimated, down from 3.8 per cent as recently as 2017 and 0.3 percentage points below its equivalent forecast six months ago. This is the slowest rate of expansion since the global recession of 2009. The trade wars started in early 2018 by the US will leave global output 0.8 per cent lower in 2020 than it could have been, had more internationalist policies been followed, the IMF said. If the world’s central banks had not acted quickly to loosen monetary

policy, output would have been a further 0.5 per cent weaker. The IMF predicted that the global economy would improve next year, growing at a rate of 3.4 per cent, but this forecast is entirely dependent on recoveries in highly-stressed economies such as Turkey, Argentina and Iran and improvements in global weak spots such as Mexico, Brazil and Russia. The global “big four” economies of China, the US, the eurozone and Japan will see no improvement in their growth rates over the next five years, it predicted. The Chinese economy, now the world’s largest, will slow gradually from its 2019 growth rate of 6.1 per cent, reaching 5.5 per cent by 2024. The forecast for 2019 was cut by 0.2 percentage points from April this year. In the US, the fund expects a further slowdown from 2.4 per cent this year to 2.1 per cent in the election year of 2020 — well below Mr Trump’s promise to maintain expansion above 3 per cent a year. Given the weakness of the German economy, which is suffering from deep stress in its automotive sector, the eurozone is expected to expand only 1.2 per cent this year, rising slightly to 1.4 per cent in 2020. Downgrades were widespread even in countries far removed from the US-China trade war. In sub-Saharan Africa, for example, more than half of the countries are expected this year to post per capita growth below the median levels of the past 25 years. The report said the forecast downgrades “largely reflect the fact that tariffs have risen and are costing the global economy”. Most of the downturn has come in manufacturing and global trade, while services and consumer confidence have held up reasonably well.

Neil Woodford’s empire implodes as he quits last two funds UK’s best-known stockpicker takes ‘highly painful decision’ after being fired from flagship PETER SMITH AND OWEN WALKER IN LONDON

eil Woodford ’s investment empire imploded on Monday as the UK’s best-known fund manager was fired from his flagship fund and he walked away from his remaining two investment vehicles. His dismissal was followed by the transfer of £3bn of assets out of the flagship Woodford Equity Income Fund by its administrator, which also abandoned an attempt to relaunch the frozen investment vehicle . The fund will now be liquidated. In an initially angry response, Mr Woodford said the decision by the administrator, Link Fund Solutions, was “one I cannot accept, nor believe is in the long-term interests [of investors]”. But last night Mr Woodford threw in the towel, resigning from the Woodford Patient Capital Trust and

his Income Focus Fund, in effect ending three decades of managing outside money. “We have taken the highly painful decision to close Woodford Investment Management,” he said. “I personally deeply regret the impact events have had on individuals who placed their faith in Woodford Investment Management and invested in our funds.” Mr Woodford became a household name during 26 years at Invesco where he turned £1,000 invested into more than £25,000. But he was later known for a reckless investment style, piling into illiquid and unquoted stocks, which led to the destruction of his clients’ savings. The Equity Income Fund was suspended in June after being crippled by relentless redemption requests and investment losses, sparking the biggest crisis in the European fund management industry in a decade and an investigation by the UK’s Financial Conduct Authority. www.businessday.ng

In his first investment outlook since retiring, Bill Gross again demonstrated his taste for obscure pop music references © Reuters

Bill Gross warns of slow growth and sluggish markets One-time ‘bond king’ recommends dividend-paying stocks over negative-yielding debt JENNIFER ABLAN IN NEW YORK

ill Gross, the one-time “bond king” who cofounded Pimco in 1971 and built it into a $2tn asset manager, is warning investors to brace for slow economic growth globally and an end to double-digit annual stock market gains. In his first investment outlook since retiring in March, Mr Gross said on Tuesday that with trillions of dollars in debt offering negative yields, investors should be holding stocks that promise secure dividend payouts. Mr Gross, 75, whose letters to investors are as famous for their quirky asides and analogies as for their economic and market analysis, employed a 1980s pop music reference to discuss the impact ultra-low interest rates have had on asset prices. Financial markets, he said, “have been ‘Saved by Zero’ as the rock group The Fixx rather ironically sang way back in 1983”.

Low rates boost stock valuations relative to bonds while stimulating the economy. Mr Gross estimated that stock prices in 2019 have risen by roughly 15 per cent because real 10-year Treasury rates declined by 80 basis points during the year. “Since 2009, perhaps one quarter of the 200 per cent rise in the US market can be attributed to the 200-basis point decline in real Treasury rates over the same period,” Mr Gross said. “Bull markets in equities are born by lower real rates and the historic run of the past decade has been fertilised by the journey to zero.” Mr Gross said further upside in equity markets is limited, because central bankers were “becoming wise to the negative effects of rates at zero (or less) that literally rob small savers and larger financial institutions such as banks, insurance companies and pension funds of their ability to earn historically ‘guaranteed’ carry”. In the absence of “substantial

fiscal stimulation”, he said, the boost from negative interest rate yields may have reached an end after years of double-digit gains in equities, he said. Mr Gross, who turned to investing after serving as a US naval officer, co-founded Pacific Investment Management Co in 1971, attaining rock-star status in investing circles as he attracted hundreds of billions of dollars in assets. His tenure at Pimco ended abruptly and acrimoniously in September 2014, when he was ousted. Mr Gross then joined Janus Henderson Group in October 2014 but endured a rocky four years of performance. Mr Gross, whose net worth Forbes magazine said on Monday had declined to $1.5bn from $2.5bn as recently as June 2018, featured his latest investment outlook on his new website, www.williamhgross. com, where investors can view an archive of some of his market commentaries from the past 40 years.

Where it all went wrong for Facebook’s Libra After 7 backers pull out, the future of the digital currency hangs in the balance HANNAH MURPHY IN SAN FRANCISCO AND KIRAN STACEY IN WASHINGTON DC

hen Facebook unveiled ambitious plans in June to spearhead the creation of a global digital currency, co-founder David Marcus promised unprecedented co-operation between some of the biggest names in technology and payments. “Everyone will play their role,” the Facebook executive said of the 28 initial founding members of his Libra scheme. But this month, Facebook was blindsided when seven of the high-profile companies, including eBay, PayPal, Visa and Mastercard, stepped back from the project, leav-

https://www.facebook.com/businessdayng

ing its future hanging in the balance. How did Facebook’s currency unravel? Members of the so-called Libra Association became wary of the project after regulators and politicians across the globe warned that a mass-market digital currency could pose a threat to the financial system, as well as lead to money laundering and increased financing for terrorism. Some former members told the Financial Times they felt Facebook underestimated the regulatory scrutiny that the project would draw, and had oversold members’ commitment, which at that stage consisted of signing a non-binding agreement to contribute at least $10m to its coffers in the future. Several also said that despite @Businessdayng

its ambitions to promote Libra as a joint effort, the project had been tied too closely to Facebook at a time when the company is grappling with numerous privacy-related scandals and a flurry of antitrust investigations in the US and Europe. “Facebook has been a lightning rod,” one former member said, adding that there was a “perception gap” between what Facebook thought would be a “tremendous rollout” and the gravity of the partners’ concerns. The final straw, several people said, came after Mark Zuckerberg, Facebook’s chief executive, was called to testify before Congress and several Democratic senators wrote to the payments members urging them to rethink their involvement.

Wednesday 16 October 2019

BUSINESS DAY

ANALYSIS

FT Pimco lawyer files gender and race discrimination suit

Complaint alleges attorney was passed over for promotion after pregnancy JENNIFER ABLAN IN NEW YORK

Pimco lawyer has filed a gender and racial discrimination lawsuit against the $1.8tn asset manager, alleging she was passed over for promotions and denied career opportunities after becoming pregnant. Andrea Martin Inokon, who is African-American, claimed in a complaint filed on September 24 in a California superior court that Pimco operated as a “fraternity in a perversely literal sense”. Pimco strongly denied all the allegations. Based on her experiences at the company’s Newport Beach, California, headquarters, Ms Inokon alleged that “senior male officers encourage drinking and fraternisation at strip clubs, golf outings and poker nights”, and that this corporate culture influenced personnel decisions. “Senior male managerial-level employees mentor young male professionals, give them preferential assignments, introduce them to the investment firm’s power brokers, and groom them for membership in the investment firm’s leadership, even when their professional skills and qualifications are notably deficient,” the complaint said. Ms Inokon, who has worked for Pimco for eight years and is still employed by the company, alleged she was passed over for several senior positions — including executive senior vice-president — “in favour of less-qualified males” because of her “race, gender and pregnancy”. The suit further alleges that as a result of her two pregnancies, Pimco “took away opportunities, reassigned projects to less-qualified males”, subjected her to “unfair criticism” and attempted to induce her to “give up her career”.

Michael Reid, a spokesman at Pimco, told the Financial Times: “The allegations in this filing, in relation to Pimco’s employee policies generally and the specific circumstances of this employee, are not accurate and Pimco will demonstrate that she was treated and compensated fairly based on her role and performance.” The lawsuit is unusual in the finance industry, which has nurtured a culture that tends to keep discrimination and harassment complaints out of the courts, critics say. The suit seeks monetary damages, Ms Inokon’s appointment as an executive senior vice-president, and an audit of Pimco compensation practices to see whether they comply with federal civil rights laws or need to be corrected. “This is not about getting money from it,” said Nancy Abrolat, the attorney representing Ms Inokon. “This is about trying to bring to light a very, very wealthy company — and why aren’t they complying with our laws?” Ms Inokon also alleged that despite her “record of superior performance,” Pimco has paid her less than “similarly situated men,” most of whom are Caucasian, throughout her career. “Compensation and promotional decisions at Pimco are centrally controlled by its managing directors with considerations also provided by Pimco’s executive committee and through its executive officers that when viewed collectively are predominantly Caucasian male professionals,” the lawsuit said. Women hold three of the nine seats on Pimco’s executive committee and account for 13 of its 80 managing directors. Pimco has never employed an African-American managing director, the lawsuit alleged.

US imposes sanctions on South Africa’s Gupta brothers Treasury says Indian-born family members part of ‘significant corruption network’ JOSEPH COTTERILL IN JOHANNESBURG

he US government imposed sanctions on South Africa’s Gupta business family and an associate over their alleged role in a vast corruption scandal linked to the former president, Jacob Zuma. The US Treasury’s Office of Foreign Assets Control said on Thursday that it had placed Atul, Ajay and Rajesh ‘Tony’ Gupta, a trio of Indian-born brothers, on its sanctions list as “members of a significant corruption network in South Africa” that looted state coffers. The Guptas have been accused in South Africa of using a friendship with Mr Zuma to control cabinet appointments and public contracts for their private benefit. Mr Zuma left office last year after being sacked by the governing African National Congress. His successor as president, Cyril Ramaphosa, has pledged to root

out the alleged ‘capture’ of the state by the Guptas. “The Gupta family leveraged its political connections to engage in widespread corruption and bribery, capture government contracts, and misappropriate state assets,” Sigal Mandelker, the US Treasury’s under secretary for terrorism and financial intelligence,” said. The sanctions target “the Guptas’ pay-to-play political patronage, which was orchestrated at the expense of the South African people,” Ms Mandelker added. Salim Essa, a close business ally of the Guptas, was also designated under the US sanctions. The Treasury’s move will forbid US entities from doing business with the family or handling their assets. The Guptas, Mr Essa and Mr Zuma have always denied wrongdoing. The family left South Africa for the United Arab Emirates after Mr Zuma fell from power.

www.businessday.ng

Wirecard’s suspect accounting practices revealed FT Investigation: internal documents from the payments company point to a concerted effort to fraudulently inflate sales and profits DAN MCCRUM IN LONDON

rom inside its grey corporate headquarters in Aschheim outside Munich, Wirecard projects an image of one of Germany’s leading business success stories, a fintech champion to rival software giant SAP. After a decade of breakneck growth, Wirecard has become a favourite among investors, with a market capitalisation greater than Deutsche Bank, placing the company in the prestigious Dax 30 index. Yet Wirecard’s seemingly irresistible rise has been plagued by intermittent controversy about its accounting and business practices. Earlier this year, white-collar crime investigators raided Wirecard’s offices in Singapore multiple times in connection with allegations that sales and profits were invented at numerous subsidiaries across Asia. Edo Kurniawan, the company’s head of international reporting, was named among six suspects. In response, Markus Braun, Wirecard’s Austrian chief executive, dismissed the problems as a local difficulty with scant financial impact. He blamed the payment processing company’s fast growth and outlined a dozen measures to improve compliance, including the appointment of a new chairman of the supervisory board in 2020. Wirecard’s stock price, which initially fell 40 per cent to €97, has since recovered to about €140, giving it a €17bn market capitalisation. Today, the Financial Times is publishing documents which cast further doubt on Wirecard’s accounting practices. Internal company spreadsheets, along with related correspondence between senior members of Wirecard’s finance team, appear to indicate a concerted effort to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland, as well as to potentially mislead EY, Wirecard’s tier-one auditor. The decision to publish these

https://www.facebook.com/businessdayng

documents follows repeated charges by Wirecard that the FT is relying on fake material and that its own journalism is corrupt and suspect. The documents, provided by whistleblowers, give the clearest picture to date of Wirecard’s questionable accounting practices and business model. In its defence, Wirecard has claimed that FT reporters have facilitated market manipulation in collusion with short sellers. These allegations have been widely circulated in the German media and are the subject of a legal complaint in Germany, an investigation by BaFin, the German financial regulator, and a probe by prosecutors in Munich. The FT categorically rejects Wirecard’s allegations on all counts. A recently concluded two-month review conducted by an external law firm, RPC, found no evidence of collusion between FT reporters and market participants. Established in 1999, Wirecard has been a pioneer in the processing of digital payments. In Germany, where consumers prefer to pay in cash, it caught the imagination of investors looking for a blue-chip European digital champion to match those in Silicon Valley. Initially known for processing payments for online gambling markets and porn sites, Wirecard purchased a bank in 2006 and evolved into a full-service payments operation, providing the software and systems to plug online businesses into the global financial system. With trillions of dollars of transactions up for grabs as consumers abandon cash, Wirecard is jostling with giant rivals such as Vantiv in the US and China’s Alipay for a share of the fast-growing market. It says it processed €125bn in transactions last year, a rise of 37 per cent. It is projecting 40 per cent growth in underlying earnings this year. Over the past decade Wirecard has fuelled its expansion by buying smaller payment processing businesses and groups of customers around the world, including a 2017 @Businessdayng

move to take on 20,000 merchant clients of Citibank, spread over 11 Asia-Pacific countries. The deal was intended to make the company a household name across the region. Wirecard has also said its geographic reach has expanded by working with hundreds of partner processing companies, which fill in gaps when Wirecard lacks the expertise or local authorisation to process payments itself. A focal point of the FT’s inquiries into Wirecard is one of these partner companies, a Dubai-based intermediary called Al Alam Solutions, which documents indicate contributed half of the German company’s worldwide profits in 2016. Wirecard staff have described Al Alam as a “third-party acquirer”, payments jargon for a business licensed by the big payment networks, such as Visa and Mastercard, to help retailers accept credit card transactions. Al Alam was purportedly the spider at the heart of an international web, processing vast sums for 34 of Wirecard’s most important and lucrative clients in the US, Europe, Middle East, Russia and Japan. Yet when the FT visited Al Alam’s Dubai office this year it became clear this was a threadbare operation. A former employee told the FT it had just six or seven staff. Neither Visa nor Mastercard have any record of a relationship with Al Alam, deepening the mystery of why Wirecard would refer business to the partner company, given the German fintech group already has Wirecard Processing, its own payment processing subsidiary employing scores of staff, nearby in Dubai. Internal financial reports from 2016 and 2017, shared between members of Wirecard’s finance team and obtained by the FT, detail the business which has supposedly flowed through Al Alam. The documents record about €350m of payments from 34 key clients as passing through Al Alam, on behalf of Wirecard, each month during the period.

Wednesday 16 October 2019

BUSINESS DAY

news

Sanwo-Olu writes House, seeks approval for N250bn loan …as investigation of Ambode’s 820 buses continues JOSHUA BASSEY

n what seems to lend credence to his insistence that his administration is challenged by paucity of funds, the Lagos State governor, Babajide Sanwo-Olu, has written to seek the House of Assembly’s approval for a loan of N250 billion. This is coming as the House of Assembly is continuing its investigation into how former governor of the state, Akinwunmi Ambode, spent billions of naira to purchase 280 buses meant for the Bus Reform Initiative (BRI) of the last administration. Three former commissioners in the Ambode’s administration were on Tuesday invited by the investigative committee set up by the House to tell the lawmakers what they know about the purchase of the buses, which the lawmakers said was never approved by them. Sanwo-Olu in the letter seeking the lawmakers’ approval for the loan, which was read by the clerk of the assembly, Sani Azeez, on Tuesday, said he was constrained by lack of funds.

The loan request was broken down as follows: a fixed rate bond of N100 billion from the capital market and an internal loan of N150 billion. Sanwo-Olu in the letter further said the budgetary provisions of recurrent and capital budget of Ministries, Departments and Agencies (MDAs) were not likely to be utilised before the end of the year, noting that N34.050 billion could be re-ordered. The governor said that his administration was constrained by the lack of revenue for the remaining months of the year and would not be in a position to propose a supplementary budget, which informed the recourse to re-ordering 2019 budget. According to Sanwo-Olu, the budget as at 31st August, 2019 had a 71 percent overall performance, which is below the set target of 100 percent. “Further analysis shows that the recurrent expenditure stood at 80 per cent while capital expenditure was at 64 per cent performance, portending a 49:51 capital/recurrent ratio against the target of 55:45.

Edo leads campaign to reduce state’s cancer burden, launches Better Health Initiative

do State government has reaffirmed its commitment to guarantee a better, safe and healthy life for all citizens, noting that the state is willing to partnerallstakeholderstocombat all preventable diseases. Speaking at the launch of the Better Health Initiative, a nongovernmental organisation that fightscancer,theEdoStatedeputy governor, Philip Shaibu, said the state government was already leading several campaigns and awareness programmes to help reduce incidences of cancer in the state. He noted that ongoing campaigns and activities of the initiative would further reduce the cancer burden in the state. The deputy governor, who was represented by permanent secretary, Ministry of Health, Osamwonyi Irowa, said the present administration led by GovernorGodwinObaseki,placedhigh

value on the health and wellbeing of the citizens. He assured of state government’s continuous support towards the activities of the organisation, adding, “I am impressed to see a young Nigerian come up with the Better Health Initiative, which is about reducing the cancer burden in the state and beyond.” In her remarks, the founder of the initiative, Obehi Asika, said Better Health Initiative was formed to ensure a cancer-free generation starting with the state. She said the initiative was about cancer awareness, treatmentandsensitisationandtoprovide support for cancer patients, adding, “Cancer is dangerous, it kills and people have lived in the denial of what cancer can do. People need to be more aware of riskybehaviourthatcausescancer. This way they can prevent it and live healthier.”

Nigeria’s total public debt hits N25.7trn in six months OLUWASEGUN OLAKOYENIKAN

igeria’s total public debt rose 5.41 percent to N25.7 trillion in the first six months of 2019, latest data released by the Debt Management Office (DMO) on Tuesday have shown. The country’s total debt stock, which comprises domestic and external debts of the Federal Government, the 36 States of the federation as well as the Federal Capital Territory, increased by N1.32 trillion in the first half of this year from N24.38 trillion as of December 31, 2018. Total external debt grew to N8.32 trillion in half-year 2019 from N7.75 trillion recorded as at end of December last year,

while total domestic debt rose to N17.37 trillion from N16.62 trillion. The increases were largely driven by federal government’s external and domestic borrowing which grew by 8.5 percent and 5 percent to N7.01 trillion and N13.41 trillion within the period, respectively. A breakdown of the debt figures seen by BusinessDay revealed that the debt proportion of domestic to external borrowing stood at 67.6 percent and 32.4 percent as at June 30, bringing the debt agency closer to achieving its Debt Management Strategy which aims to have a debt stock mix of 60 percent domestic and 40 percent external debt. www.businessday.ng

L R; Edward Adamu, deputy governor, corporate services CBN; Uche Messiah Olowu, president/chairman, Chartered institute of Bankers of Nigeria (CIBN); Ibrahim Tanko Mohammed, chief Justice of Nigeria; Bayo Olugbemi, MD/ CEO, First Rgistrars/Investor Services Limited; Seye Awojobi, registrar, CIBN, and Patrick Akinwuntan, MD/CEO, Ecobank Nigeria Limited, at the 19th national seminar on Baking and Allied Matters for Judges, theme “Disruptive Innovations in the Nigerian Financial System; The Legal Considerations” in Abuja. Pic by Tunde Adeniyi

Worsen health indices, poor funding hinder healthcare expansion in Nigeria Anthonia Obokoh & Godsgift Onyedinefu, Abuja

igeria’s target is to achieve Universal Health Coverage (UHC) by 2030, which is the third goal of the Sustainable Development Goals (SDGs), some stakeholders in national and public health matters on Tuesday complained that the Nigerian health sector was recording worsening health indices with concerns that the trend would remain amid low budgetary allocation from the Federal Government. These stakeholders gather to join a National Health dialogue with the theme ‘the state of Universal Health Coverage in Nigeria.’ The stakeholders stated that Nigeria’s health sector had not recorded any appreciable advancement but declined over the last decade, in addition to ranking top in disease burdens and deaths in Africa and the world, while criticising the allocation for health in

… as Nigerians bear over 90% financial burden for healt care the proposed 2020 budget. Asishana Okauru, directorgeneral, Nigerian Governor’s Forum (NGF) speaking at the 2019 National Health dialogue in Abuja, decried that Nigeria health indices were alarming and shameful. “The country has the second highest maternal mortality rate globally, highest malaria prevalence in the world, second highest HIV prevalence in Africa, while Nigeria bears 19 percent of all global maternal deaths,” Okauru said, saying adequate funding was at the core at addressing the challenges. Chiedo Nwankwo, a health expert at John Hopkins University, USA, said the sector had continued to record low funding despite Nigeria’s commitment under the African Union to provide not less than 15 percent of its GDP on health. “The negative funding has

HBSAN designs workshop on business leadership at 25th NESG 2019

arvard Business School Association of Nigeria (HBSAN) in collaboration with Nigerian Economic Summit Group (NESG) hosted a design workshop on Business Leadership at the 25th Nigerian Economic Summit, October 8, 2019, in Abuja. The 25th Nigerian Economic Summit with theme; Nigeria 2050: Shifting Gears, identified 12 accelerators as central to the growth of the competitive industries in Nigeria: Macroeconomic Stability, Reinventing Government, Human Capital & Productivity, Regulations, Investments, Sanctity of Contracts, Technology & Innovation, Business Leadership, Infrastructure, Data, Trade & Export Promotion and Market Efficiency and HBSAN’s Design Workshop focused on the accelerator Business Leadership. Group discussions were facilitated around three fo-

cus areas – Systems Leadership, Entrepreneurship and Responsibility/Accountability. Each session had specific questions and provided the highest level of interaction between participants and discussion leaders in resolving a compelling challenge and recommending modalities for operating at scale in the global market. The workshop was facilitated by HBS alumni - Ndidi Nwuneli (co-founder/ managing partner, Sahel Consulting), and sessions were moderated by Collins Onuegbu (founder/ executive vice chairman, Signal Alliance /communications secretary, HBSAN Board), Adam Saffer (CEO/ chief of party, Cultivating New Frontiers in Agriculture (CNFA), USAID), and Prisca Ndu (executive vice chairman, Infrastructural Development and Energy Co. Ltd./financial treasurer, HBSAN Board).

https://www.facebook.com/businessdayng

abysmally negative impact as each Nigerian is forced to bear over 90 percent of financial burden to cover up the funding gap in accessing health care annually,” she said, and explained that millions of families across the nation, especially the vulnerable and indigent, have been forced to choose between feeding their family and providing health care for their loved ones. “Health has been consistently underfunded in the last ten years, by the end of 2019; the federal government would have spent only 4.1 percent of its budgetary allocation on health. Out of a total of 61.41 trillion naira, the federal government spent only 2.775 trillion naira of securing the health of its citizens,” she said. “The average amount spent per person on health care annually is N35, 931 and of this amount the FG spends only 4.7 percent, this means that citizens

are left to pay over 90 percent,” she cried. She said the Nigerian government must get its priorities right in matters of health. According to Nwankwo, health comes before economic development and not the other way round. “Government at all levels must be intentional in funding primary health care, improve community based insurance scheme to cater for the informal sector and be committed in achieving universal coverage which ensures equal access to health without financial burden on the citizens,” she said. Waziri Mohammed, former executive Secretary, National Health Insurance Scheme (NHIS), noted that Nigeria cannot achieve the third goal of the Sustainable Development Goals (SDGs) of achieving UHC by 2030 if the current challenges are not addresses.

Osinbajo says health insurance best bet for Universal Health Coverage Godsgift Onyedinefu, Abuja

ice President Yemi Osinbajo says the Federal Government cannot adequately provide health care services to over 200 million Nigerians but an effective National Health Insurance Scheme (NHIS) remains the best option in achieving Universal Health Coverage (UHC) for all and addressing funding challenges. Nigeria’s target is to achieve UHC by 2030, which is the third goal of the Sustainable Development Goals (SDGs) The vice president, who was represented by Nicholas Audiferren, his chief personal physician on Tuesday at the 2019 National Health Dialogue, acknowledged that the Nigeria health sector was currently faced with a number of challenges. He however noted that the government had implemented a number of interventions to address the challenges. According to Osinbajo, the allocation of 1 percent from @Businessdayng

the consolidated revenue to Basic Health Provision Fund (BHCPF) in the 2018 budget is one of such interventions. He added that the launch of the Patients’ Bill of Rights (PBoR) in 2018 to protect vulnerable patients and the eradication of polio among others also showed government’s commitment. The minister of health, Osagie Ehinare, also speaking, said the NHIS established in 2005 was still young and still developing, adding that the entire Nigeria health system was still a work in progress. The health minister, while acknowledging that the NHIS covers only about 5 percent of Nigerians, said the government would work faster to ensure universal coverage by 2030. On the issue of funding, Ehinare said the sector got low budget because the country had a lot of challenges, and rather called for the need to spend the little available fund as prudently as possible.

Wednesday 16 October 2019

BUSINESS DAY

news

Inclusive governance, partnership of business owners seen driving Nigeria’s economic development STEPHEN ONYEKWELU

aily news in Nigeria is awash with both literature and data that showhowAfrica’smost populous nation has fallen behind peers on vital indicators of economic growth and development. This situation is due to a lack of inclusive governance structures and a movement among business owners that can reverse the trend, according to experts that gathered at the second public lecture organised by the The Niche, a Nigerian newspaper, in Lagos on Tuesday. “It is now obvious that successful societies in terms of prosperous and peaceful development are those that have striven for inclusiveness in the midst of diversity in their political and economic systems,” said Anya O. Anya, former CEO, Nigeria Economic Summit Group, at the

lecture themed ‘Business and Accountable Governance: The Obligation of Leadership’. Over 6,000 years of documented history show that absolutist governance systems have little or no respect for the rule of law, suppress disruptive creativity and encourage an extractive economy, which confers profits and wealth to the friends of those in power. These absolutist systems stimulate enormous degrees of social and economic inequalities that lead to revolutions, such as the French Revolution of 1789 that abolished the feudal systems. In 1979, business leaders reversed the economic fortunes of New York after the city went bankrupt and shed over 1 million jobs. A coalition of business leaders co-opted freedom fighters in 1987 and started a process that brought down the apartheid government in South Africa. The Business

Against Crime initiative under President Nelson Mandela used a similarapproachtocombatcrime. “The most critical stakeholders in any country are the citizens, in whom sovereignty reposes and business owners who are the most invested. For any meaningful change to take place, these two categories of stakeholders must arise and steer the course of governance,” Innocent Chukwuma, director, West Africa at the Ford Foundation, said. Some of the tell-tale signs of Nigeria’s ailing economy include an economic growth rate of about 2 percent and a population growing at 3.8 percent per year, almost twice the economic growth rate. The Debt Management Office says Nigeria’s debt as of 2015 was a little over N12 trillion but has ballooned to over N25 trillion as of 2019 and the country will spend 60-70 percent of total earnings in servicing debt.

Regulatory agencies ruining FG’s ease-of-doing business policy - OPS JOSHUA BASSEY

igeria Employers’ Consultative Association (NECA), a key member of the Organised Private Sector (OPS), has observed contradiction in the Federal Government’s ease of doing business policy following the frequent sealing off of business companies by government’s regulatory agencies. The latest in the series of Gestapo style actions, according to NECA, is the recent sealing off of the premises of Nestle Nigeria plc by the National Lottery Regulatory Commission (NLRC) over an alleged N65.1 million indebtedness to the commission from sales promos carried out by Nestle between 2009 and 2014. The business premises of Nestle Nigeria, including its administrative head office in Ilupeju, Lagos, were last week sealed off by the operatives of NLRC but later unsealed same day after both parties entered into an agreement. Speaking on the development on Tuesday, Timothy Ola-

wale, director-general of NECA, said the regulator’s penchant for shutting companies had become a source of concern to business operators. “This approach is counterproductive to the efforts to improve the ease of doing business in Nigeria. It has the potential to roll back progress towards attracting further investments into the country,” Olawale said. The director-general rejected the allegation by NLRC that Nestle owed N65.1 million to the commission as unpaid lottery fees, saying, “This matter is currently pending at the Court of Appeal, and the officials of the NLRC, fully aware of this situation, invaded the premises of Nestle Nigeria accompanied by cameras, forced the management to sign an undertaking to pay the claimed sum within four days as a pre-condition for unsealing their premises.” He further contended that NLRC’s action in sealing the premises and forcing it to sign an undertaking in a matter pending in court raised concerns about

the ease of doing business in Nigeria. “The rule of law requires that parties in a court case should respect the rule of law and maintain status quo until the final determination by the court,” he said. He observed that this was not the first time the NLRC unduly pressured its members, calling on the Federal Government to impress on the NLRC the imperative of respecting the rule of law as well as promoting dialogue and engagementtoresolveissuesamicably within the provisions of the lawwhendealingwithbusinesses. The enforcement team of NLRC led by the director of monitoring and enforcement, Sajo Mohammed, on Monday, October 7, sealed the administrative office of Nestle located at 22-24 Industrial Avenue, Ilupeju, Lagos. The premises of the company were however unsealed same day following what the commission described as a “written undertaken by Nestle plc to pay up its debts to the Federal Government of Nigeria, totalling N65.16 million.”

Access Bank hits over N1bn daily digital lending Hope Moses-Ashike

ccess Bank plc’s expanded digital lending portfolio, which gives Nigerians quick and 24/7 access to funds for emergencies without any collateral, has hit a record N1 billion daily in loan value. According to Victor Etuokwu, executive director, retail banking, Access Bank, “We are at the forefront of digital lending across the continent. This is a deliberate choice we made when we introduced the first USSD- based digital lending product in Nigeria basedonourdeepunderstanding of our operating environment. In the past two years, we have disbursed over 3.5 million loans to individuals. “We acknowledge it is no mean feat when compared to where the market is coming from, but this is still a scratch in the overall potential of this market. This yearalonewehavedisbursedover N45 billion in more than 2 million

disbursements to individuals and have recently witnessed a spike in our volumes hitting N1billion daily. This achievement and our focus on retail lending reiterate our commitment to democratize access to financial services leveraging digital technology.” Since the launch of Access Bank’s digital loan portfolio with PayDayLoanastheflagshipproduct, Access Bank has continued to expand its loan portfolio using its proveninnovativealgorithmsand deep machine learning capabilities. The Bank’s retail innovation journey has led it to expand its digital loan offerings to other multi-tenured variants to fit the needsofitsdiverseretailcustomer segments. The bank also launched a dedicated loan application platform known as QuickBucks in the third quarter of last year; a Mobile Banking Application for digital loans aimed at improving customers borrowing experience for retail loans. As part of its

commitmenttodeepeningdigital finance, the Bank has gone a step ahead to provide access to phone ownership as it recently launched a 12-month Device Ownership schemewhereanysalary-earning customercanselectaphoneofhis choice from its QuickBucks app and walk into any of its partner outlets across the country to pick up the phone. ChineduOnuoha,headdigital banking business development, Access Bank, commented recently on this laudable achievement: “Our objective is to ensure that there is a digital loan product for every adult Nigerian who has proven means of livelihood because we know that every individual at one point or another requires some form of financial support. Our flagship digital loan product, PayDay Loan, is tailored to help individuals meet their urgent cash needs. Though the tenor for this loan is 30 days, we also have loans with tenors of 3 months and 6 months.”

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 16 October 2019

BUSINESS DAY

POLITICS & POLICY Stop heating up the polity, Group tells Oshiomhole

he Obaseki/ Shaibu Movement (OSM) has cautioned Adams Oshiomhole, national chairman of the All Progressives Congress (APC) and former Edo State governor, to rein in his followers from peddling falsehood with the intent to destabilise the state. The group in a statement by its leader, Hon. Damian Lawani, said the Governor Godwin Obaseki-led administration has worked to create and sustain a peaceful and orderly state governed by the rule of law, noting that any attempt to return the state to a time of chaos will be vehemently resisted. According to him, “We urge Oshiomhole to caution his people from peddling falsehood of a nonexistent attack on him or his residence. The Commissioner of Police in the state has come out to debunk the alleged attack. So, it is best for them to

Governor Godwin Obaseki

cease from spreading such an allegation. They should stop heating up the polity.” He noted that the state government’s position on the ban on thuggery in the state, remains sacrosanct, adding, “We are totally in support of the ban on thuggery. We are better off for such a decision because market women and other business owners are no longer harassed by

touts and dispossessed of their hard-earned monies in the name of revenue collection. With the new electronic system, everything is seamless.” The group also alleged that the APC national chairman was degrading his exalted office by associating with persons who go about threatening to attack security officials. “It is disgraceful that

an associate of Oshiomhole, Tony Kabaka, would make public statements threatening to deal with the Police, all in an effort to return the state to a period of violence,” he said. He added, “I want to put it to them that Edo State Government has outlawed thuggery and it will never be allowed again in the state. The reign of thugs has been abolished and every right-thinking member of the public in Edo State will agree that we have had it good since the coming of this administration.” He noted that the state remains one of the most peaceful in the SouthSouth region of the country, which makes it immensely attractive to investors, adding, “Just as the Commissioner of Police has said, the state remains one of the most peaceful in Nigeria. That is what we want to be known for. Hence, there is no room for thuggery in the state.”

Lagos Assembly constitutes 36 standing committees INIOBONG IWOK

udashiru Obasa, speaker of the Lagos State House of Assembly, yesterday unveiled 36 standing committees of the House. The ninth Assembly has been operating with Ad-Hoc committees since its inauguration on June 7. The Selection Committee Chairman was headed by the Speaker himself and the Chief Whip, Rotimi Abiru would chair the Ethics and Privileges Committee. Other committees in-

clude, House Service, Tijani Olatunji; Public Accounts (local), Fatai Mojeed; Agric, Kehinde Joseph; Economic Planning and Budget, Gbolahan Yishawu; Special Duties and Intergovernmental Relations, Kazeem Raheem, and Education, Yinka Ogundimu, Other committees are, Science and Technology, Olanrewaju Afini; Environment, Desmond Elliot; Energy and Mineral Resources, Folajimi Mohammed; Waterfront Infrastructures, Ibrahim Layode; Physical Planning and Urban

Development, Nurudeen Akinsanya; Procurement, Lu k ma n O l u m o h, a n d Transportation, Temitope Adewale. They are also, Commerce and Industry, Sanni Okanlawon; Women Affairs and Poverty Alleviation, Mojisola Meranda; Works and Infrastructure, Abiodun Tobun; Wealth Creation, Jude Idimogu; Mojisola Alli-Macualy, Health Services, Akeem Shokunle; Establishment, Pension and Training, Rasheed Makinde; Interparliamentary, Fatai Oluwa and Finance, Rotimi

Olowo. Others are Committees on Tourism, Saka Solaja; Youth and Sports, Owolabii Ajani, Judiciary, Human Rights, Public Petitions and LASIEC, Victor Akande; Lands, Adedamola Kasunmu; Housing, Bisi Yusuff; Information and Strategy, Tunde Braimoh; Local Government Administration, Olayiwola Sobur; Legislative Compliance, Rauf Age-Sulaiman; Overseas and Investment, Sylvester Ogunkelu, and Public Private Partnership, Noheem Adams.

Sanwo-Olu seeks lawmakers’ approval for N250bn loan ...Requests for reordering of 2019 Budget INIOBONG IWOK

abajide Sawo-Olu, governor of Lagos State, has sought the approval of the State House of Assembly for the approval of N250billion loan which is to be sourced through capital market and internally. Sanwo-Olu also requested for the re-ordering of 2019 Budget which stands at N873.532 billion by the House of Assembly. These were contained in a letter read on the floor of the House of Assembly by the Clerk, Sani Azeez during plenary on Tuesday. Sanwo-Olu pointed out that budgetary provisions of both recurrent and capital budget of ministries, departments and agencies are not likely to be utilised before the end of the year and the sum of N34.050 billion can be re-ordered. The breakdown shows that the recurrent is N24 billion while the capital is N10.050 billion. The governor said that the government is constrained by the lack of new revenue sources for the remaining months of the year and as a result, he would not be in a position to propose a supplementary budget, hence the recourse to reordering the 2019 Budget. Sanwo-Olu, in the letter, noted that the 2019 Budget had been partially implemented by the last administration before the tenure came to an end on 29th May, 2019. According to him, “The budget as at 31st August, 2019 had a 71 percent overall performance which is below the set target of 100 percent. “Further analysis shows that the recurrent expenditure stood at 80 percent

while capital expenditure was at 64 percent performance, portending a 49:51 capital/recurrent ratio against the target of 55:45. “It should be noted that some of the major MDAs that are supposed to implement the capital expenditure are performing below expectation, while others have almost exhausted their budgetary provisions,” he said. He, therefore, implored all other arms of government to cooperate with him by ensuring that they improve on spending in priority areas. The governor stressed that the present administration was confronted with the need to keep its electoral promises to the citizens and resolved to take advantage of the weather condition in the later part of the year to complete various projects. “As a result, the present structure of the budget would have to be amended to specifically drive capital expenditure through the completion of various ongoing capital projects, which were started by the previous administration, in addition to accommodating few new priorities such as completion of Lagos Badagry expressway, Agege Pen Cinema over head bridge, Agric-Isawo road and Bola Ahmed Tinubu-Igbogbo road. “Rehabilitation of schools, initiate and complete smart city project and zero tolerance for portholes amongst others,” he said. The Speaker, Mudashiru Obasa, however, committed the governor’s request to the joint committees on Finance, Budget and Economic planning to report back to the House on Monday, 21st of October, 2019.

Ogun commissionership race intensifies as politicians throng Abiodun’s office …PDP, ADC, SDP jostle for slots in APC-led government RAZAQ AYINLA, Abeokuta

ll roads lead to OkeMosan, Abeokuta, Ogun State Governor’s Office currently being occupied by Governor Dapo Abiodun and All Progressives Congress-led government as influential politicians are now mounting pressure on the governor and party for possible appointments of their nominees into the state executive cabinet, mainly as commissioners, special advisers and into other political offices.

Former governor Gbenga Daniel; Gboyega Nasir Isiaka, former governorship candidate of African Democratic Congress (ADC) and Bayo Dayo, factional state chairman of People’s Democratic Party (PDP) came to the OkeMosan Abeokuta, Governor’s Office on Tuesday where meetings were held, which were based on subtle political manoeuvring and permutations on the candidates to be appointed into the state executive cabinet. Recall that the runoff to the governorship election in

Ogun State was rough, tough and full of political acrobatics as APC was broken into two factions - Ex-Governor Segun Osoba’s faction and Ex-Governor Ibikunle Amosun’s faction which later metamorphosed into Allied People’s Movement (APM) that paired Adekunle Akinlade against Governor Dapo Abiodun of APC. The whole political scenario prompted some chieftains and members of almost all strong political parties in the state, namely, PDP, ADC and Social Democratic Party

(SDP) to team up with then disjointed APC in the state to slug it out with ex-Governor Ibikunle Amosun and his anointed governorship candidate and party, Adekunle Akinlade and APM, in the March 9th, 2019 governorship poll. It was however, gathered that the visits to Governor Dapo Abiodun’s office by some influential politicians on Tuesday were not unconnected with the soon-to-besent to the State House of Assembly, list of commissioners and other appointees,

hence, those that teamed up with APC to defeat former Governor Amosun and his candidate now want appointment slots as a payback for their contributions then. It was also gathered that Governor Dapo Abiodun is seriously considering option of nine commissioner slots to his mother party - APC, based on the nine federal constituencies domiciled in the state out of 20 commissioner slots. Some slots are said to have been reserved for former Governors - Segun Osoba and Gbenga Daniel; to the

governorship candidates of ADC, SDP and PDP; Gboyega Nasir Isiaka, Rotimi Paseda and Senator Buruji Kashamu, respectively. This, BusinessDay learnt, will be given in addition to the commissioner slots already reserved for Vice President Yemi Osinbajo’s political group from Ogun East Senatorial District and to Senator Solomon Adeola in order to cater for the politicians attached to a strong chieftain of APC from Lagos and other APC group from Ogun West Senatorial District.

Wednesday 16 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thebigread

BUSINESS DAY Wednesday 16 October 2019 www.businessday.ng

A Tecno Mobile sign in Maiguguri, Nigeria. The Chinese handset brand is owned by Shenzen-based Transsion, which listed last week in Shanghai with a market cap of $6.5bn © Bloomberg

” Chinese companies are getting in on the ground. In 2018, Tecno became the fifth most admired brand in Africa, according to Brand Africa, squeezed in between Coca-Cola and Puma, with Apple sixth

david.pilling@ft.com

China is cornering Africa’s ecommerce market

Companies such as Transsion are using the continent as a test bed for innovation David Pilling

ll over Africa, in its clogged cities and fast-changing towns and villages, buildings are painted in Tecno blue and billboards offer the allure of the Tecno brand. From the Grand Marché in Mali’s capital, Bamako, to the business hub of Nairobi in Kenya, where entire 20-storey towers are slathered in the Tecno logo, aspirational Africans are being bombarded. What is Tecno, you may ask, if you are not a frequent traveller to the continent? Tecno is an Africa-specific brand created by Transsion, a Shenzhen-based handset manufacturer. Last week, the company, founded in 2006, listed on the Star Market, Shanghai’s Nasdaq wannabe, closing up more than 60 per cent on its first day for a market capitalisation of around $6.5bn. The stor y holds lessons about Africa and its increasingly dynamic interaction with the world. Transsion, which last year sold more than 100m handsets, has proved you can make money in Africa if you work out what people want and what they can afford. From 2008, Transsion specifically targeted the continent, skipping the crowded Chinese market to concentrate on a new frontier where the population

is set to double over the next 30 years. Starting with basic “feature” phones, Transsion developed its technological offering to cater for African tastes, gleaning intelligence from research centres established in Nigeria and Kenya. Many Transsion phones have slots for multiple SIM cards so customers can make cheap provider-to-provider calls and bypass lapses in coverage. Battery life has been extended, vital for users in places where electricity may be intermittent. Handsets are adapted to languages including Amharic and Swahili. As Transsion sells more smartphones, which now make up more than a third of its offering, it puts its effort on the mid-tier market, keeping the cost to around $100 for most handsets. Unusually, it also offers aftersales service. Transsion, whose sales in Africa zoomed past those of Samsung in 2017, saw an opportunity where others did not. While the west still too often treats the continent as a charity case, many Chinese companies see a business opportunity. True, most people in Africa are poor. In Kenya, a relatively prosperous economy, gross domestic product per capita is still a lowly $3,000, even in purchasing parity terms. Yet

the continent’s population is growing faster than any other on earth and — in its more successful economies — income per head is doubling every decade or so. Chinese companies are getting in on the ground. In 2018, Tecno became the fifth most admired brand in Africa, according to Brand Africa, squeezed in between Coca-Cola and Puma, with Apple sixth. Itel and Infinix, its other two brands, make 17th and 26th place. While most companies move into Africa as an afterthought, Transsion has done things in reverse, using Africa to innovate and to test the robustness of its offering. It is now selling phones in India and Latin America. Transsion is also testing Africa as a manufacturing centre, something that could become more feasible as the African Continental Free Trade Area comes into effect. It has opened two manufacturing facilities in Ethiopia, which is pursuing an Asia-style industrial policy, in addition to factories in China, India and Bangladesh. Together with Huawei and ZTE, Chinese equipment makers that have wired up the continent virtually single-handedly, Transsion has helped lead the African telecoms revolution. The hardware installed, China’s software developers are also coming. Alibaba has

road-tested its Alipay system in South Africa and WeChat has a partnership with Kenya’s M-Pesa mobile money offering. To be fair to western companies, some, including Vodafone, Orange and Facebook, whose WhatsApp messenger service is ubiquitous, have also seen the potential of the African consumer. And if China has been more commercially savvy, western governments have bankrolled humanitarian schemes that Beijing would never consider. There is no Chinese Pepfar, the US President’s Emergency Plan for Aids Relief. And it was the CDC Group, part of Britain’s aid effort, that funded the MPesa money-transfer system on which much of the continent’s ecommerce ecosystem is built. That ecosystem is extraordinarily inventive. Start-ups are offering services from offgrid power to farming advice, and from cut-price medicines to haulage trucks ordered up Uber-style. Jack Ma, the founder of Alibaba, has also turned his attention to Africa’s potential, launching a $1m Netpreneur prize. When most people think of China in Africa they think of mining and construction. But things are moving on. It is no longer the highways where the main action is taking place. It is the superhighways.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.