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news you can trust I ** friDAY 17 january 2020 I vol. 19, no 479

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PDP asks CJN to resign, says Supreme Court panel heavily compromised ... says APC planning to take Sokoto, Benue, Bauchi, Adamawa, Plateau, others Solomon Ayado, Abuja

L-R: Ijeoma Ude, advert manager, BusinessDay Media Limited; Patrick Atuanya, Editor; Okezie Ikpeazu, governor, Abia State, his deputy Ude Oko Chukwu, and Patrick Ijegbai, business development manager, South East, South South, BusinessDay Media Limited, during a BusinessDay management team visit to the governor in Umuahia, to present the awards for best State in Education Development, and Most Improved state for promoting Made in Nigeria goods and SMEs.

For first time in decades, consumer credit shows signs of take-off in Nigeria Working class dusts cobwebs off borrowing plans As banks target retail pockets with lower interest rates LOLADE AKINMURELE

36-year-old manager of a Lagos-based business consulting firm, Adebayo Kolawole, has always had his reservations about Nigeria’s weak and fragmented consumer

credit economy. Promise, who schooled and worked for combined four years in the United States, says it’s bizarre that most Nigerians must pay 100 percent out of pocket for everything from automobiles to healthcare. He says it’s a sign of a non-ex-

istent consumer credit economy that it’s debit cards you find in working-class Nigerians’ wallets, and rarely a credit card. While it will take time to fully bed a consumer credit culture in Nigeria due to some traditional challenges, there are signs that the building blocks are being

laid by commercial banks under pressure by the Central Bank of Nigeria (CBN) to open the taps on consumer credit. Consumer credit is personal debt taken on to purchase goods and services. A credit card is one Continues on page 38

ational chairman of the People’s Democratic Party (PDP), Uche Secondus, has said the Supreme Court panel led by the Chief Justice of the Federation, Justice Muhammed Tanko, which delivered judgment on Imo State governorship election, is heavily compromised. Consequently, the PDP has asked the CJN to resign and step aside from chairing the sevenman panel of Supreme Court. Secondus said the Supreme Court had lost its credibility going by the verdict it passed to remove a PDP governor, Emeka Ihedioha. The Supreme Court had on Tuesday, in a judgment removed the immediate past governor of Imo State, Emeka Ihedioha, and declared the candidate of the All Progressives Congress (APC), Hope Uzodinma, as duly elected Continues on page 38

Inside

Nigerians laud Buhari’s nomination of Kingsley P. 37 Obiora Deputy Governor, CBN Tony Elumelu donates tech centre to AAU P. 37

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Investors shun medium-short term OMO bills as CBN offers N200bn HOPE MOSES-ASHIKE

nvestors on Thursday shunned short- and longterm Open Market Operation (OMO) bills after the Central Bank of Nigeria (CBN) offered a total of N200 billion in the secondary market. The reason, as explained by Akintunde Olusegun, analyst from Polaris Bank, is that the investors bid at a higher rate than the CBN could offer. However, investors oversubscribed the longer tenor bill as the total subscription stood at N407.60 billion, while the CBN offered a total of N180 billion for 362-day tenor instrument. The offer, which matures on January 12, 2021 recorded a total sale of N201.25 billion at a stop rate of 13.20 percent after the investors bid at a range of between 13.11-13.23 percent. For the 180-day tenor bill, the CBN offered a total of N10 billion but there was no sales. However, investors bid at a bid range of between 12.50-12.50. The offer which is expected to mature in July 14, 2020 recorded N1.50 billion subscription. The CBN also offered N10 billion for the 82-day tenor instrument, which matures April 7, 2020 but there was no subscription and no sales. Olusegun noted that there

has not been much activities in the short and medium term bills, which accounts for the low or no demand by investors. The Overnight (O/N) rate, which is the rate at which Deposit Money Banks (DMBs) borrow and lend to each other, declined by 9.10 percent to close at 5.07 percent, while the -Open Buy Back (OBB) rate, the money market instrument used to raise short term capital, declined by 9.19 percent to close at 4.14 percent. At the primary market auction held Wednesday, the CBN offered NT-Bills worth N225.45 billion across 91-day (N5.85 billion), 182-day (N26.60 billion) and 364-day (N193 billion) tenors. The FSDH Research show that the NT-Bills market closed on a positive note on Wednesday with average yield declining by 2 percent basis point and settling at 4.44 percent from 4.46 percent on the previous trading day. Buying interest was witnessed on 30-Jan-20 and 13-Feb20 maturity NT-Bills, compressing yields by 15 bps and 11bps respectively. The average OMO yields rose by 31bps to 13.11 percent from the last close 12.80 percent. Average OMO yields on the short-term, mediumterm, and long-term maturities increased by 48 bps, 37 bps and 10bps, respectively.

UK-Africa investment summit Sanwo-Olu rejigs cabinet as new appointees join to deliver jobs, growth JOSHUA BASSEY HOPE MOSES-ASHIKE

he UK’s International Development Minister, Andrew Murrison, says the UK-Africa Investment Summit will help forge closer trade partnerships to deliver more investment, jobs and growth benefitting people and businesses across Africa and the UK. He made the statement during a visit to Clarke Energy in Merseyside, Liverpool Wednesday, where he opened a new engine repair workshop at the engineering company, to make power plants across Africa, including in Nigeria, more efficient and support Africa’s drive for clean energy. Opening the workshop, Minister Murrison met the Overhaul and Repair Centre Manager, Dave Nicholls, to see first-hand how high efficiency gas engines are being repaired in Knowsley in Merseyside and sent back to African nations. Similar units being deployed across Nigeria, Kenya, Tanzania and Cameroon will improve the reliability of power to businesses and communities, helping to keep the lights on and power flowing in countries with unstable energy systems. During the visit he heard how the engineering company

will provide 10MW in electrical output in Kano and has secured contracts with Nigerian companies Mamuda Group, a conglomerate with over 7,000 employees in the region, and a beauty and personal care & home care firm Aspira Nigeria. By supplying natural gas engines, this will help reduce costs, lower emissions and benefit whole communities. Murrison also announced a new DFID-funded testing lab for solar products ensuring that solar panels and appliances meet global standards and households have access to good quality, reliable clean energy. Following his visit, Minister Murrison said: “Clarke Energy is just one great example of how UK businesses - including those from Liverpool - are already leading the way in investing in Africa. “Clarke Energy’s investment in Africa shows how UK expertise, technology and innovation are improving access to cleaner forms of energy, which can be replicated by businesses across the UK and Africa.“ Touring the engineering company, Minister Murrison learned more about the business’s ambition to change the future of Africa’s energy supplies and the use of green energy across the continent.

agos State governor, Babajide Sanwo-Olu, has carried out a minor cabinet reshuffle, with the appointment of three new members. A statement by Gboyega Akosile, the governor’s media aide, lists the eight cabinet portfolios affected by the redeployment to include ministries of local government, ministry of special duties, wealth creation and employment, tourism, arts and culture, home affairs as well as waterfront infrastructure. Others are the Central Business District (CBD) and urban development. According to Akosile, Sanwo-Olu has moved three commissioners around, while two special advisers have been assigned new roles as commissioners. The affected commissioners and their new portfolios are: Wale Ahmed commissioner for special duties, who has now been moved to local government and community affairs; Yetunde Arobieke, formerly commissioner for local government and community affairs has been moved to the ministry of wealth creation and employment. Also, Uzamat AkinbileYusuf has been moved from

How Nigeria’s falling oil production may affect 2020 budget revenue DIPO OLADEHINDE

… as OPEC expects lower demand for its oil

the benchmark of 2.18 million bpd is not good for Nigeria’s revenue,” Akinbobola said. During the course of 2019, Iraq and Nigeria repeatedly flouted their agreed production cuts and were held up as examples of under-compliance by Saudi Arabia - OPEC’s de facto leader. “I have had a series of meeting with the leadership of Nigeria and Iraq and they have assured me they will be faithful to their obligation,” Mohammed Barkindo OPEC’s SecretaryGeneral told Bloomberg TV. “There is no unilateral action that will be taken by both Nigeria and Iraq; I have been in contact with the countries.” Production data based on secondary sources and cited in the OPEC report showed that the cartel’s production fell by 161,000 barrels a day in December, with Saudi Arabia cutting 111,000 barrels and Iraq--OPEC’s second-largest producer - cutting 76,000. Those figures contrasted with OPEC’s official production data which showed a drop in Saudi production of 296,000 barrels a day, while Iraqi and United Arab Emirates (UAE) production declined 60,000 and 25,000 barrels respectively. Production in Angola whose delegates stormed out of last month’s fractious cartel meeting in Vienna - rose by 96,000 barrels a day in December. In its closely scrutinised

igeria’s projected revenue from oil sales in the 2020 budget may come under threats if the country’s crude production level continues its current downward trend. Crude oil production by Nigeria fell for the third month in a row in December, 2019 to a new low of 1.5m bpd, against a target product level of 2.18 million bpd at $57 per barrel, used in the budget. Oil currently sells at about $63 per barrel. In the 2020 budget, the federal government projected about N3.73 trillion as oil revenues out of total revenue of N8.1 trillion. The country’s output declined by 95,000 bpd between November and December, according to Organisation of Petroleum Exporting Countries (OPEC) figures. Nigeria’s crude production in December was in line with its OPEC quota of 1.77mn bpd. In the month of October, Nigeria recorded an oil production of 1.78 million bpd which decreased from 1.87 million bpd in September. “It’s actually production decline and not restraint; we can’t really do much more than that. The numbers will get worse pretty soon without new projects to compensate,” Charles Akinbobola, an energy analyst at Lagos-based Sofidam Capital said. “Producing below the OPEC production quota and below

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monthly oil market report gave no official figures for Iranian production in December, and referred euphemistically to broader geopolitical “tensions” and “uncertainties” at the end of December as affecting oil markets. Also, Vienna based OPEC lower demand for its crude oil in 2020 by 0.1 million barrels per day to 29.5 million which would be around 1.2 million bpd lower than in the whole of 2019 and in line with December production. OPEC said it had raised its overall 2020 oil demand growth outlook by 0.14 million bpd to 1.22 million bpd from the previous month, reflecting an improved economic outlook and booming demand in India and China. If that growth materialises it would be 30percent stronger than in 2019. It raised its forecast for nonOPEC oil supply growth in 2020 by 0.18 million bpd to 2.35 million bpd, up from 1.86 million bpd in 2019. “The continued accommodative monetary policies, coupled with an improvement in financial markets, could provide further support to ongoing increases in non-OPEC supply,” OPEC said. OPEC increased its 2020 world oil demand growth forecast by 140,000 barrels to 1.22 million barrels a day, while also nudging its global economic growth forecast to 3.1percent for the year ahead. https://www.facebook.com/businessdayng

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the ministry of home affairs to the ministry of tourism, arts and culture as commissioner. Two former special advisers, Anofiu Elegushi and Kabiru Ahmed are now assigned to the ministries of home affairs and waterfront infrastructure as commissioners, respectively. The governor, according to Akosile also announced portfolios of the new cabinet members. They are Tayo Bamgbose-Martins, commissioner-designate (special duties), Oyerinde Olugbenga Olanrewaju, special adviserdesignate (CBD) and Ayuba Ganiu Adele, special adviserdesignate (urban development). G overnor Sanwo-O lu thanked members of the Lagos State House of Assembly for believing in the executive and carrying out the ratification of the cabinet nominees in a manner devoid of mere political considerations other than the interests of the electorate, assuring that his action is in line with his administration’s vision of delivering good governance to the residents of Lagos. The new appointments and redeployments, SanwoOlu said are intended to create a new energy and vivacity for continued delivery of values to the government of Lagos and provision of service to millions of Lagosians.

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‘Nigeria First’ is new foreign policy thrust as FG lists nine priority areas

It takes 5yrs for a depressed person to see an appropriate expert - psychologist

... urges envoys to channel all diplomatic issues to Foreign Ministry

ANTHONIA OBOKOH

Innocent Odoh, Abuja

ederal Government of Nigeria on Thursday unveiled nine priority areas of President Muhammadu Buhari’s secondterm administration, stressing that these areas are encapsulated in ‘Nigeria First’ as the new foreign policy thrust of the government. The minister of foreign affairs, Geoffrey Onyeama, made this known while briefing the diplomatic corps in Abuja in Thursday. He noted that the key areas include: building a virile economy, enlarging agricultural output, energy sufficiency, expansion of transport and infrastructure, among others as the new focus of the administration. The minister told the inter-

national community that during the first term of President Muhammadu Buhari, security, fight against corruption and job creation were the priority areas of the administration. He added that the second term of President Buhari would be expanding the focus which would guide the policy direction over the next four years. “This second mandate, we have nine priority areas the government has identified. And these are to guide our policy direction over the next four years. “One is building a thriving and sustainable economy; enlarging agricultural output for food security and export; attain energy sufficiency and power and petroleum products; expand transport and other infrastructure development; expand business growth, en-

trepreneurship and industrialisation; expand access to quality education, affordable healthcare and productivity of Nigerians; enhance social inclusion, reduce poverty, build systems to fight corruption; improve governance and create social cohesion and improve security for all,” Onyeama said. Onyeama stated further that the government would pursue a realistic foreign policy that will reflect domestic realities of the country. “So, you can also call it a ‘Nigeria First Policy’. But that will not be very original because I think somebody else might want to claim a copyright on using first for a country having interest or promotion of foreign policy. But basically, it is going to be a ‘Nigeria First Foreign Policy,” Onyeama said.

clinical psychologist says it takes about 5 years for somebody experiencing depression to see an appropriate expert for treatment. Rotimi Coker, consultant psychologist and psychiatrists with Lagos State University Teaching Hospital (LASUTH), states this while discussing on Doctors on-Air focusing on depression and its consequences on Classic FM 97.3. According to Coker, we have the physical or body signs of depression. They are not the confusing aspect of depression. “At the onset of depression, the individuals affected may start to have symptoms that are similar to those of malaria, like weakness, back pain, chest pain, inability to sleep properly, loss of appetite and loss of weight,” he says.

He explains that when such people visit a medical officer, what they feel is malaria or typhoid and this may go on for a year or two before a clever medical officer may suggest would you like to see a psychiatrist?, noting by then it would have gone from the moderate to a severe kind of depression. “Today, it takes about an average of 5 years for somebody who is experiencing depression to see the appropriate experts, like the clinical psychologist or the psychiatrist. “One of the ways we can handle this is to keep on training the family physicians, general practitioners, and medical officers on how to quickly recognise those that are frequent in their clinics for symptoms of malaria or typhoid,” Coker says. Meanwhile, depression is the most common form of mental disorder globally af-

fecting millions of persons. Depression is a huge disorder that affects the tone of emotion of an individual and the person feels unhappy, sad or sorrowful for a period. According to World Health Organisation (WHO), depression causes mental anguish and impacts on people’s ability to carry out even the simplest everyday tasks, with sometimes devastating consequences for relationships with family and friends and the ability to earn a living. “Advocacy is very important for mental health related issue. Many people are actually unaware of the symptoms, they do not really know that they need to see a psychiatrist or clinical psychologist because the symptoms look like that of medical illness for them,” says Adejoke Abiodun, consultant psychiatrist.

N5bn libel suit: I don’t have evidence that Dokpesi stole N2.1bn - witness Felix Omohomhion, Abuja

edia assistance to minister of information and culture, Segun Adeyemi, defence witness in the N5 billion defamation suit instituted against Minister of Information and Culture, Lai Mohammed, and AttorneyGeneral of the Federation and Minister of Justice, Abubakar Malami, said Thursday, he had no evidence that the chairman of Daar communication plc, Raymond Dokpesi stole N2.1 billion from the nation’s treasury. Dokpesi instituted the libel suit against the backdrop of the March 30, 2019, press conference where Mohammed libelled Dokpesi, among other Nigerians, as thieves, who stole money from the nation’s pulse. In the suit, Dokpesi alleged that during the press conference, Mohammad and Malami defamed his character by the inclusion of his name on the treasury looters’ list that portrayed him as “a corrupt and crooked person, a dishonest man and a thief”. And that the minister’s action negatively affected his reputation and image, which made him suffer considerable distress and ridicule in the

political corridor. He therefore urged the court to grant a perpetual injunction restraining the defendants or theirs agents and representatives from further writing or publishing the defamatory words about him. He also want the court to order the defendants to tender an unreserved apology to him in all the major electronic and print media outlets in the country. He also demanded from the defendants the sum of N5 billion for damages. When the case came up yesterday before FCT High Court, Adeyemi said he is a special assistant to the president and office of the Minister of Information, as a speech writer. Under cross examination by the counsel for the claimant, Mike Ozekhome, the witness said his duty is to write speeches, press statements and advice the Minister on media related matters. He said he was present on March 30, 2019, when the Minister addressed a press conference in Abuja. When asked if he has any of the media publications which were tendered as exhibits and the paragraph where the Minister named Dokpesi as looter, he answered in the negative.

National grid records first collapse in 2020 HARRISON EDEH, Abuja

he national electricity grid has recorded its first collapse in the year. The grid collapsed about 13 times in 2019, causing power failure across the country with its corresponding effects on socio-economic activities. The Transmission Company of Nigeria confirms this development in a statement on Thursday, assuring that efforts are underway to restore power across the country.

The system TCN says to have collapsed around 12:37pm on Wednesday resulting in power outage in some parts of the country. “Dear Customer, present outage affecting all is a TCN System Disturbance on the grid. Power to be restored as soon as available,” the company said. “ D e a r Cu st o m e r, t h e outage which occurred at 1237hrs is due to a TCN system collapse affecting Lekki, Ibeju and environs. The team is working to restore power. Please, bear with us.” www.businessday.ng

L-R: Theodore Anyanwu, head, client network coverage, CSCS plc; Harriet Thompson, The British Deputy High Commissioner Lagos; Adeyinka Shonekan, DH, business development, CSCS plc; Abiola Rasaq, head, corporate strategy, CSCS plc; Yemisi Ipaye, head, corporate communications, CSCS plc, and Ihuaru Akachukwu, head, stakeholders’ engagement, CSCS plc, at the Nigerian British Chamber of Commerce’s January Breakfast Meeting themed “2020 Economic Outlook” in Lagos

Increased inflation, border closure, VAT hike to further pressure consumers’ purchasing power in 2020 DAVID IBIDAPO & GBEMI FAMINU

he narrative on pressured consumer purchasing power is not looking to change soon as the forecast for headline inflation shows a continued upward trend possibility, amid the border closure as well as the newly signed Finance Act introducing a VAT hike. The November 2019 headline inflation published by the National Bureau of Statistics (NBS) settled at 11.85 percent year-on-year after a 2-month continuous increase from a 43-month low moderated rate of 11.02 percent year-on-year in August 2019. Although the December figures are not available yet, analysts forecast an inflation rate in the 12 percent range. “Ahead of the publication of the December 19 inflation report, we expect inflation rate to trend northwards to 12.1 percent due to the border closure. Also, increased spending linked to the year-end festivities is likely to pressure general price level northwards,” this is according to the daily market commentary by

United Capital Research. Analysts also believe that the maintained stance on border closure, the festive period spending coupled with the recent signing of the 2020 budget accompanied with the Finance Act are factors most likely to see inflation tick towards the 12 percent region. “Looking into 2020, headline inflation rate is likely to climb in H1-2020 to peak at 12.16 percent; the structural issue that may sway the increase remains tighter conditions around all land borders. “Also, possible implementation of minimum wage and cost-reflective electricity tariffs in Q1-2020, as well as monetary expansion by the CBN during the period. It however, may potentially moderate to an average of 11.06 percent in H2-2020,” they say. Furthermore, despite its position of a large market and a large economy, data World Poverty Clock has revealed that 91.8 million Nigerians, which approximately is 46.5 percent of Nigeria’s population, live in

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extreme poverty pushing Nigeria to become the poverty capital of the world. The recent signing of the 2019 Finance Act – which aims at increasing government revenue and financing minimum wage implementation - came with significant changes on tax issues and finances for citizens. The Act stipulates an increase in VAT to 7.5 percent from 5 percent, while it exempts several basic items. However, despite the exemptions to cater for the over 90 million citizens living below $1.90 a day, the increase would still be borne by the masses in the form of higher price. This is because mediumand large-scale enterprises will pass on the extra cost incurred to final consumers in terms of higher prices - being a consumption tax -, and this will further put a strain on already shrinking wallets of consumers and lower further their purchasing power. Furthermore, while government’s actions to check the activities of smugglers and boost local production through the border @Businessdayng

closure yield positively for some domestic manufacturers, it also caused a 0.83 percentage points drop in consumer’s purchasing power, as consumers bore the brunt of inflationary pressures. Impact of the border closure caused an upsurge in the prices of commodities such as rice, vegetable oil, among others, which further increased during the festive periods and thereafter. Going forward, analysts maintain that the trend of price increase of food, goods and services will continue on the back of supply shortages. In addition to this, implementation of the new minimum wage from N18,000 to N30,000, will fuel aggregate demand as it is expected to stimulate consumer spending, unfortunately, due to heightened inflation as well as market sentiments, the purchasing power of consumers will remain low as prices of goods will surge. In 2019, consumer’s loyalty to products offered by popular and listed firms shifted to products offered by unquoted firms due to shrinking wallets.

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Friday 17 January 2020

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IMPACT INVESTING

In Association With

Impact investing is hot right now. Here’s why Tracy Mayor

lenges, and also can and deserve to be profitable.” “Impact investing is valuesdriven finance — you allocate capital to align with the world you want to see,” said Amrita Sankar, MBA ’20, co-president of the MIT Impact Investing Initiative. “My generation has grown up watching the world’s most intractable problems become only more exacerbated — poverty, climate change, social injustice, and more. We see impact investing as an opportunity to use markets to correct for these kinds of issues by providing positive social and environmental returns.” For all its appeal, the concept can be hard to nail down — the phrase “impact investing” itself is ambiguous, said Gita Rao, a member of the MIT Sloan finance faculty who teaches a class on social impact investing. “In a sense, the term ‘impact investing’ is an oxymoron, because all investing is inherently impactful: you are investing with a specific objective,” said Rao, who is

“

the faculty advisor for the Impact Investing Initiative and has managed socially responsible portfolios for two decades. “That’s why my course is titled ‘Social Impact Investing,’ because we’re focusing on the impact that investing has beyond financial return. In addition to financial return, you’re hoping to generate an environmental or other impact.” The evolution of impact The idea of investing with intention beyond financial return isn’t new, Rao said. “Faith-based organizations have been investing in accordance with their values for a very long time,” she pointed out. Rao managed a global equity portfolio for a large endowment in the 2000s under what were known colloquially as “Catholic constraints”— no guns, no tobacco, no pornography, as might be expected. But the exclusion criteria additionally affected investment decisions in areas one might not expect, Rao said. For example, the portfolio could

Impact investing is valuesdriven finance — you allocate capital to align with the world you want to see www.businessday.ng

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“

Why It Matters nvesting in companies that are measurably helping to solve global issues wins you not just brownie points, but financial returns too. In August 2019, leaders at some of the world’s largest companies took the notable step of redefining the purpose of a corporation, adopting a “modern standard” for corporate responsibility that promotes “an economy that serves all Americans.” The 181 CEOs who signed the statement from Business Roundtable, an association of chief executive officers headed by JPMorgan Chase’s Jamie Dimon, pledged to run their companies “for the benefit of all stakeholders — customers, employees, suppliers, communities, and shareholders.” The statement marks a notable move away from the adherence to shareholder primacy — the belief that corporations exist principally to serve shareholders — which the group had embraced since at least 1997. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term,” Dimon said in prepared remarks. That pivot should catch the eye of a growing number of organizations committed to impact investing, the practice of investing in companies, organizations, and funds with the intention of generating not just financial returns, but measurable social and environmental impact as well. Underlying that philosophy is the belief that private capital is critical to tackling the world’s most pressing environmental, social, and governance (ESG) problems, an ethos echoed in the Business Roundtable statement of purpose, which said, “We believe the freemarket system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment, and economic opportunity for all.” That dovetails with views shared at an impact investing panel held last year, part of the 2019 MIT Sloan Investment Conference. “It’s one of the fastest-growing areas of the investment business,” said panel moderator Liqian Ma, head of impact investing research at global investment firm Cambridge Associates. “The goal is to invest in products and services that serve a need, address real chal-

not invest in Total, a large French energy company, because one of the by-products of oil refining is rubber, which is used in contraceptive products. Similar guardrails guide Islamic investing, which has seen significant growth in the Middle East as well as Asia, said Rao. Intentional investing is alternatively known as corporate social responsibility, socially responsible investing, and sustainable investing, among other terms. The most common of these — ESG — refers to the environmental impact, social impact, and corporate governance of a company. Investment professionals use ESG ratings to evaluate how specific companies are performing along these dimensions, and how well those companies align with their own values. There is a distinction between impact investing and ESG-based investing. Investing for impact is often described as investing with a “double bottom line” — that is, financial return and a clear, wellarticulated set of impact goals often, but not always, aligned with the United Nation Development Programme’s 17 sustainable development goals. ESG-based investing evaluates companies on a set of criteria defined by the investor, and the business model of the company need not explicitly incorporate social impact. ESG investing typically has a strong shareholder advocacy component; with what Cambridge Associates’ Ma called “a cohort of @Businessdayng

thoughtful investors” actively work to influence companies’ direction. “It’s not just a matter of excluding the not-so-responsible companies, but of engaging them,” said Ma. “Some clients may still have mining, oil, and gas in their portfolio, for example, but they will be asking those companies where they can make improvements.” Climate at the head of the pack Climate change is increasingly top of mind for impact investors, some of whom, like Ma, have a personal interest in climate-conscious investing. Growing up in China, Ma experienced firsthand the effects on air quality when households burned coal for heating and cooking. “I needed coal to survive as a child, and every time I go back [to China] I see the environmental effects of burning that coal. I encourage people to think about it,” said Ma, who categorized resource efficiency as one of the fastest growing areas of actionable investing. Rao agreed. “Climate change in all its ramifications not only affects people profoundly, but it affects [markets] on a geopolitical level. From an investor’s perspective, climate change poses a material risk, which is often not incorporated into the pricing of securities. It affects the business strategy that companies have to adopt going forward,” she said. Playing the long (long) game Finally, there’s the question of investment horizon. Impact projects by their nature tend to need long development cycles to come to fruition. Investors may have much shorter time horizons and lower risk tolerance. “The market punishes or reward stocks based on whether they can meet or beat earnings,” Rao said. “Impact projects involve upfront costs with the benefits often accruing over the long term. Investors need to be patient.” Ma, who once authored a report titled “Risks and Opportunities from the Changing Climate: Playbook for the Truly Long Term Investor,” believes that longest view is in harmony with Cambridge Associates’ fiduciary responsibility to its clients. “If you’re really being thoughtful and authentic, long-term is how you should think of the world,” he said. “Our clients are stewards of capital that they want to preserve for decades, for a few hundred years. We would not be doing our jobs if we weren’t identifying risks and opportunities with those timeframes in mind.”

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The Angel of History and the Ghost of Biafra THE NEW WEALTH OF NATIONS

Obadiah Mailafia

ednesday 15 January marked 50 years since the end of Nigeria’s bitter civil war. That was the day that Colonel Philip Effiong submitted the articles of surrender to Yakubu Gowon at Dodan Barracks, Lagos. Gowon famously declared that there were “no victors, no vanquished”. By a curious coincidence, January 15 was also the date when, in 1966, the first military putsch led by Major Chukwuma Nzeogwu that a set the tragic set of events culminating in civil war from 1967 to 1970. As a child I recall when the thick of night dozens of Igbo families turned up at my parents’ modest home in the parsonage in Murya. One of the women had just put to bed. Daddy did all he could to protect them from a wicked pogrom that consumed more than a hundred thousand defenceless people. I have never seen such fear in the eyes of grown men. After barely a week, my parents received death threats. In the thick of midnight, the refugees tearfully disappeared into the bowels of the primeval savannah. Never to be seen again. Their memory still haunts me to this day. The debate on whether the January coup was an “Igbo coup” or a nationalist uprising is in idle debate. Fact is, it was both. Nzeogwu, Ifeajuna and their friends were patriots with probably honest intentions. But their coup was very one-sided in execution. Circulating pictures of the slain Ahmadu Bello with the boots of

Nzeogwu on his chest was deeply offensive to the Northerners. To add insult to injury, most of Ironsi’s ministers and advisers were Igbo. His infamous Decree No. 34 summarily creating a unitary state intensified Northern fears. In July 1966, Northern officers struck in a “revenge coup”. Rumours had been rife that they were about to be killed en masse. The lot fell on a 31-year-old colonel Yakubu (Jack) Gowon. He confesses that he accepted the heavy yoke only after long, agonizing prayers. I am persuaded that destiny prepared Yakubu Gowon for the singular role of keeping our country together. The son of Anglican missionary parents born in Wusasa in 1934, he was outstanding student of Barewa College – Head Boy, football captain and star athlete. He had intended to pursue a career in engineering and teaching, but his British teachers saw in him the potential of a great military commander and convinced him to tow that that path. He attended Sandhurst Royal Military Academy where he acquitted himself with distinction. Gowon was engaged to an attractive young Igbo woman, but could not marry her because his colleagues warned him that it was impolitic in a time of war to marry from the enemy. Contrary to popular misrepresentations, Gowon never waged a genocidal war against Biafra. This cannot, of course, be said of field commanders such as Murtala Mohammed and Benjamin Adekunle. He and Awolowo have been blamed for the economic blockade that might have cost the lives of a million Biafrans. But we must weigh the counterfactual – in terms of how much more devastating the war would have been if it had lasted for many more years. History will absolve Yakubu Gowon. He is the Abraham Lincoln of modern Nigeria; a man of compassion, justice and restraint. He towers heads and shoulders above all our leaders, past and present. He is the greatest leader Nigeria

has ever had. Biafra is dead, but its ghost continues to haunt our country like a phantom that refuses to go away. Ever since 1970, there has been an unwritten conspiracy that no Igbo man can be trusted to assume the high magistracy of our federal republic. It is an affront to the highly gifted Ndigbo, with their ingenuity, sagacity and can-do spirit. Part of the problem is that Ndigbo themselves have been their own worst enemies. Betrayal is common among them. The people of the Blessed Cyprian Iwene Tansi and the venerable Cardinal Francis Arinze have become a godless people who put money and individualism before anything else. There is no guarantee that the people will still be united even if they were given Biafra on a platter. Their presumptuous attitudes have also alienated the Ijaw and other South-South minorities who do not want to hear the name of Biafra. I am sorry to be so harsh. I speak as a friend of Ndigbo. Only a genuine friend can tell you unpalatable home truths. With the benefit of hindsight, Biafra was a tragic misadventure. Neither Gowon nor Ojukwu expected what they regarded as a skirmish to end up in a war that took the lives of millions. It is in the nature of human conflict that it is capable of assuming a dynamic of its own while moving into unforeseen directions. Ojukwu’s ego stood on the way of a genuine settlement. He saw himself as this golden boy from a wealthy family who drove a Rolls Royce as an Oxford undergraduate. He saw Gowon as an ignorant peasant boy from the rustic backwaters of the North. He under-estimated the man to his tragic discomfiture. A man with a lion heart, Gowon spoke little but carried a big stick. Ojukwu took his people on a tragic misadventure in the single-minded pursuit of personal power. With such great constitutional theorists as Kalu Ezera, Edwin Nwogugu and B. O. Nwabueze, why didn’t Biafra operate a viable con-

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We can only bury the ghost of Biafra through genuine repentance and reconciliation. We must repent as a country for the horrendous crimes we have committed against Ndigbo and against God and Humanity

stitution? Was Biafra just another African autocracy anchored on personal rule? Was it true that Nzeogwu was set up to be killed at the war front because he was seen as a threat? Were Emmanuel Ifeajuna, Victor Banjo, Philip Alale and Sam Agbam executed because they differed with Ikemba on political policy? Why did he abandon his people at their hour of defeat in such a cowardly manner? Albert Einstein observed that “God does not play dice with the universe”. God did not make mistake in placing the Igbo people among us. There is no one to rival their commercial acumen. My own people always say that wherever you go and you don’t find Igbo people there, leave the place immediately! Nigeria will not be Nigeria without Ndigbo. I sympathise with Nnamdi Kanu and his IPOB movement. A government that operates on the basis of exclusionism and virulent discrimination provides a rationale for resistance and rebellion. Matthew Hassan Kukah, Bishop of the Catholic Diocese of Sokoto, is right when he says that our government has created the atmosphere that provides fertile ground for the murderous activities of Boko Haram. Ndigbo continue to suffer disproportionately whenever our Northerners resume the madness of their ritual bloodbaths. We can only bury the ghost of Biafra through genuine repentance and reconciliation. We must repent as a country for the horrendous crimes we have committed against Ndigbo and against God and Humanity.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Dr. Mailafia is a former Deputy Governor of the Central Bank of Nigeria, a development economist and public finance expert with a DPhil from Oxford obmailafia@gmail.com; 08036590990 (text messages only)

The quest and necessity for Nigerian President of Igbo extraction

n Nigeria, we have had our own fair share of conflicts, which are not unconnected to Nigeria’s multi-ethnic composition. Nigeria, a heterogeneous country, is composed of over 250 ethnic and linguistic groups, such as Ijaw, Kanuri, Fulani, Gwari, Bini, Nupe, Urhobo, Hausa, Ibibio, Igbo, Yoruba, and many others. It is Nigeria’s multi-ethnic nature that informs our adoption of federalism, which is believed, will guarantee the speedy development of the various units that make up Nigeria, with federalism making it easy and possible for the to embark on developmental initiatives based on their cultural peculiarities. However, our adoption of the federalist structure has not hastened the development of Nigeria, rather, political conflicts traceable to ethnic rivalry, which has existed among its citizens have been rocking Nigeria. Before Nigeria became a politically independent country, the foundation of our country’s unity was shaken with the northern people’s threat of secession in the 1950s.More so, the political parties that existed in the first republic were not truly and wholly nationalistic in outlook and orientation, rather they were more or less ethnic-based political parties. The Action Group (AG) was to the western region what Northern People’s Congress (NPC) was to the northern region. And, the NCNC was thought to belong to the Igbo people of the eastern region. The formation of ethnic-based political parties from the first republic to the fourth republic shows that Nigerians are deeply conscious of their ethnic origins. More so, Nigerians, who belong to diverse ethnic groups, are suspicious of one another. An

Igbo man views Yoruba and Hausa people with distrust because he is prejudiced against them. Likewise, people from other ethnic groups are very wary of the Igbo people and will impute bad motives to their actions. So, when the young army officers executed the January 15, 1966 coup, which caused the death of Alhaji Tafawa Balewa, our prime minister then, it was tagged an Igbo corp. Because Igbo military officers and top politicians were not killed in the putsch, it reinforced the belief and theory that it was an Igbo coup. They said that the coup was executed to enthrone the Igbo political hegemony and dominance of the Nigerian politics and leadership architecture. Consequently, there was a counter-coup in July 1966, which led to the death of Aguiyi Ironsi, who was Nigeria’s head of state. Thereafter, there was genocidal decimation of the Igbo population in the northern part of Nigeria. It was that egregious state of things that prompted the military administrator of the eastern region, Chukwuemeka Ojukwu, to lead the Igbo to embark on a secessionist war, which raged between 1967 and 1970. The war caused the death of millions of people and destruction of property. But, after the end of the Nigeria-Biafra war many years ago, has the rest of Nigerians forgiven the Igbo people for fighting a secessionist war? Are the Igbo people not viewed with distrust and treated as second class citizens in Nigeria? And they are stereotyped as corrupt. And when sectarian violence breaks out in the north, they’ll be targets for extermination. To make matters worse, Nnamdi Kanu’s resuscitation of the pro-Biafra sentiments has not helped the Igbo cause in Nigeria. Until its

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proscription, the Independent People of Biafra (IPOB) members’ calls for the creation of the state of Biafra, which were strident, threatened the continued existence of Nigeria as one country. Their agitation for the creation of the state of Biafra elicited this question: what does the Igbo want, Nigerian Presidency or the Republic of Biafra? At this juncture in our country’s political odyssey, what Nigeria needs now is a Nigerian president of Igbo extraction. Since the inception of Nigeria, save for the brief period when Aguiyi Ironsi was the head of state of Nigeria, no Igbo man has ruled Nigeria. In the first republic, when we practised parliamentary system of government, Nnamdi Azikiwe couldn’t become the Prime Minister because the departing British overlords helped Tafawa Balewa to become our prime minister. They believed that Tafawa Balewa, as a prime minister, would be amenable to the dictations of the British imperialists. And in the second republic, Nnamdi Azikiwe’s attempts to win the Presidential election on the political platform of NPP ended without success. In the fourth republic, the Igbos fluffed a golden opportunity to produce a Nigerian president of Igbo extraction when they betrayed the late Alex Ekwueme at the PDP convention in Jos in 1998. At that time, he was in a pole-position to emerge as the PDP Presidential candidate in the run-up to the 1999 Presidential election. Had he won that PDP Presidential ticket, he would have become the president of Nigeria as PDP was the most formidable political party in Nigeria, but his Igbo compatriots who were top members of PDP sold him down the river for

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Chiedu Uche Okoye pecuniary and selfish reasons. Since the end of the civil war, the Igbo people have not reached a consensus on an issue, not to talk of their fighting to achieve a common objective with single-mindedness and uncommon resoluteness. Now, they work at cross-purposes regarding issues that are critical to the development of the South-East, this has become a major drawback in their quest to produce a Nigerian president of Igbo origin. But, above all these, fairness and political equity demand that all political parties should present only Igbo politicians as their presidential candidates in the 2023 presidential election, if the political parties do this, it will be re-enactment of what happened in 1999. And, it will assuage the Igbo people’s feelings of hopelessness and disillusionment and assure them that Nigeria belongs to them, too. We should remember that the Yoruba and Hausa/Fulani had taken turns to rule Nigeria. So, let us help the Igbo people to produce the President of Nigeria: it is a path that will lead to the deepening of our national unity and cohesion. Okoye is a poet, writes from Uruowulu –Obosi, Anambra State

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Ekwegh is a private legal practitioner with over 15 years

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Naira Marley and the ‘Marlian’ counter-culture HumanAngle

Femi olugbile

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aira Marle y” is a twenty-five-year-old Nigerian musician. His musical genre is described as “Afrobeat”, although it would appear more appropriate to label it “African Rap”. Afrobeat, of course is a term made famous by the eternal and irrepressible “Abami Eda” – Fela Anikulapo, whose value to Nigerian and World culture can be seen from the fact that his footprint looms large to this day. Naira Marley’s real name is Azeez Fashola. He was born in Agege, a suburb of Lagos that has grown into a densely populated, essentially proletarian city in its own right. He moved to Peckham, a troubled heavily black neighbourhood of London, at the age of eleven, and spent several years there before returning to Nigeria. The young man from Agege is rapidly becoming a potentate on the Nigerian musical scene. Last month, he headlined his own massive show, titled “Marlian Fest”, and launched his record label – “Marlian Records”. And just last weekend, he won an international music award. Naira Marley has a huge fan base. They call themselves “Marlians”. They

are a rambunctious presence anywhere he performs. They revel in being “outsiders’, and as a trademark, they are disrespectful of rules and agents of law enforcement. Already in his young life, Naira Marley has had some celebrated run-ins with the Law. Sometime last year, he was arrested by Police on suspicion of being a “Yahoo” boy. He was detained in prison custody, before he eventually secured bail. His travails in prison, as well as his dismissive attitude to social mores, are celebrated in the heavily loaded lyrics and visuals of his hit song “Soapy”. …ole l’everybody …eni le mo ba sa ni barawo… (…Everybody is a thief… The crime is in being caught) But the controversial musician’s personal escapades are as nothing compared to the alarm occasioned by the cult-like following he seems to be acquiring among the young, not just in the heavily populated poor neighbourhoods where his motor-park, street language with its many slangs is the accepted medium of communication, but event in the well-heeled circles of Ikoyi and Victoria Island. The craze of proudly pronouncing themselves “Marlians’ and damning the consequence is spreading through schools and neighbourhoods among teenagers and young adults, and it has left many parents scratching their heads. The defining attributes of Marlians are roughly said to include the following: “NO MANAZ” – any effort to behave like “decent” youth is frowned up; No Belt: Marlians would not be caught dead wearing a belt on their trousers; Smoke Weed, and perhaps use other drugs of abuse, such as “Coke” and

Tramadol; Respect nobody; Eager to go clubbing every weekend; Crazy hairstyle – dreadlocks or scruffy; Don’t fear anything, even death (MAFO); Must love Naira Marley’s music and be ready to stand up for him; Not to pay excessive attention to studies (most “Marlians’ are students); Strong focus on sex, including masturbation – another theme depicted in “Soapy”. The Marlian sociological epidemic is catching the eyes of school administrators, including the high-brow private Universities where many of the male and female “Marlians” come from. Parents of secondary school children are terrified by stories that their wards may be taking off their underwear and heading for Marlian parties instead of going to school. Apparently, young ladies are not supposed to put on underwear to class on certain days of the week. Older Nigerians who lived through the travails of Fela at the hands of Obasanjo and the humourless BuhariIdiagbon diarchy may be tempted to feel a sense of déjà vu, comparing the idiocy of barely letter SARS officers arresting young Nigerians with dreadlocks and computers on the streets and extorting money from them under the threat of being hauled in as “yahoo boys” to Fela’s all-too-many arrests and beatings, and the military invasion of his home in Idi Oro, following which he was dragged naked through the streets. Not many days after the last event, of course, Fela, wearing a cap fashioned to conceal the still-fresh wound in his head, and with one arm in a sling, was launching his new song “Kalakuta Show” on stage. The crowd, high and low, were dancing with a frenzy. The song is played in different parts of the world, to this day, as part of a big stockpile of protest

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It would be excessive flattery to even speak of Naira Marley in the same breath as Fela, but it is pertinent to ask, for whatever it is worth – what is the young man’s cause? And how should a sane society counter the “Marlian” subversion of its values?

songs – Zombie, Alagbon Close, Pansa’ that have become part of the treasure of world culture. Nowadays everybody loves Fela, and even the denizens of the establishment who would not be seen dead near the marijuana-infested air of the Shrine in those halcyon days claim him for their own. It would be excessive flattery to even speak of Naira Marley in the same breath as Fela, but it is pertinent to ask, for whatever it is worth – what is the young man’s cause? And how should a sane society counter the “Marlian” subversion of its values? Coming out of prison, Naira Marley sang “Soapy” which basically says everybody is a thief, so get off the backs of Yahoo boys. And in Tesumole, the “religious” anthem of “Marlians”, he openly admits procuring “coke” for his sex partner and smoking cannabis himself. Death, he implies, will come anyway. Why fear? The musicianship is passable, the beat danceable. The message is outrageous, which is why it is winning souls even of mainstream Nigerian youths. Countering the “Marlian” counterculture cannot be by the dour righteous Buhari-Idiagbon formula all over again. Society needs to rediscover, reaffirm, and operationalise its values day to day, before it can save its children from a counterculture that does not believe in anything and sees no lofty good to strive for except money, sex and drugs. In the event, just the public venting of parental outrage or – God forbid, giving renewed fillip to Police to enforce a morality they don’t have themselves will only help to stoke the counterculture further. Olugbile is a writer and psychiatrist. synthesiz@gmail.com

The law of leadership

020 require you to lead. Lead it and others. A leader is defined as the one that knows the way, goes the way and shows the way. It’s beyond competence, its sustainable through others. Be on or stay closer to one so it rubs off. Be close to the greater ones you know for their lives and success stories hold templates to where you need to be. Get a mentor or get closer to the one you already have. Follow the steps of great leaders and successful people before you. In the words of Lao-Tzu “a leader is best when people barely know he exists, not so good when people obey and acclaim him, worse when they despise him. But of a good leader who talks little when his work is done, his aim fulfilled, they will say: We did it ourselves.” Leadership isn’t always about being on top or in front. Basic level of leadership is about how many people are actually following you, the advanced level looks at how many leaders and not followers that follow you. Practical Applications and Tips: Volunteer to lead a pack. Know the way, go the way and more importantly show the way. Stay off ego. Real leaders travel light, not carrying the heavy weight of self-centeredness and ego. The law of marketing Sell yourself to the world in 2020. Let them know you and what you can offer. In marketing, positioning is everything – create the right PERCEPTION for yourself in 2020. For you to grow you may need to identify your market first of all. And then have sets of differentiations with a specialization. While at it, take out distractions. Build a tribe using a strategic inner circle model to have your own community. It’s called concentration. When it comes to marketing, know your market. There are always three major competitors in any free market within any one

industry. Knowing your position in the market (alongside your product lifecycle and the BCG Market Share (x axis) - Market Growth (y-axis) quadrant should determine your strategy. By market share, we can divide the categories of companies into the following: Number 1 firm: it fights for total market domination (Use Defensive Marketing) Number 2 firm: it fights for increased market share (Use Offensive Marketing) Number 3 firm (rest of them): it fights for profitable survival (Use Flank and Guerrilla Marketing) Practical applications and tips: Try to sell something today. And then try it again tomorrow. And then every day. The law of perseverance Don’t give up for 2020 is a much better year. If you do what you need to do and then try your best one more time, you’d succeed this time around. Perseverance is trying 19 times and succeeding the 20th. Perseverance is the hard work you do after you get tired of doing the hard work you already did. Its 1 percent inspiration and 99 percent perspiration. – In 2020, be in STEADY DETERMINATION Practical Applications and Tip: Practice. Grit. Do you remember that time you thought you couldn’t survive? Well you did and you can do it again. Stay long enough at whatever you’re on, starting from reading this entire article again when you are done. You’d immediately discover what happens when you focus deeper. The law of excellence and growth Have an attitude for excellence in 2020 and let it show. Have an attitude, the result of always striving to do better – ASPIRE TO BE OUTSTANDING The law of demography Create your own niche in 2020. For what you do, strategically find and map out the people

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that need what you have to offer and you’ve found the business and product to succeed. Just like the local market woman in the ghetto knows that the success of her trade for the day depends on where she puts her stool and tray to exhibit her goods, so should every business person. Ineffective marketing most times comes from picking a strategy that does not match your company’s realistic market position or target market. In 2020, understand demography, its projection and then go further ahead to conceive how they can fit into the picture they have. They just don’t conceive new products; they preconceive the customers for those products. Demography usually involves the study of human populations in relation to behavioural patterns and characteristics, including their size, growth, dynamics, lifestyles, density, patterns of distribution, and statistics regarding people. But, at this point, we might be tempted to ask ourselves; “what is the link between demography and business. You’d have to ask -who are your customers and who will they be in the future. Also, ask, how can you affect a fraction of them, where are the aspirations, chances and threats of your business/market? The law of profitability Learn how to make and stack up your gains this year. Be more financially intelligent. Pay attention to the battle between your earning power and your spending culture. Ensure that you don’t spend more than you earn, and as for earning, maybe now is the best time to create another channel of income else just find the best ways to begin to add more value, more profitably. Add value but profitably. And in that value, ensure that your expenditure is less than your income else you may be climbing a business ladder that is leaning on the wrong wall.

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EIZU UWAOMA

This year differentiate between business and favours. In whatever you do, if it’s not for free, then…MAKE WORTHY THE FEE. The law of generosity The truth is, it’s another year and we are not getting any younger. It’s a New Year means that we have one more year less to live. As we grow older, great people realize that a good life and success comes from not how much we can take but how much we can give. Maybe this year is the best time to see what you can also begin to give back to life and others. As we grow older, what we have done for ourselves alone dies with us; what we have done for others and the world remains – SHARE MORE IN 2020. The law of legacy As we grow older, understand that the true test of whatever you are building is succession. The greatest use of life is to spend it for something that will outlast it. In 2020, be a deeper and more matured person. Begin to take more seriously, the things that matter, legacy. Begin to Live to Be Remembered for Good. Like I’d always ask, if we were to leave where we are right now and never return, would growth be sure without us, would the things we stand for and the inventions and plans we made continue? What is your current legacy? Uwaoma is a start-up, corporate restructuring and strategy consultant. contacteizu@gmail.com

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Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti 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)

Unbundling mass communication, tough but surmountable

oremost higher education regulator the National Universities Commission in December announced the unbundling of the popular mass communication course offered in over 140 universities and polytechnics. From one course called mass communication, the universities now have the task of teaching seven courses. NUC was responding to developments in technology that have changed the nature of the discipline as well as the demands of experts in the field. Many challenges will attend this unbundling. Already, a respectful body of the best photographers in the land has entered a word for the inclusion of photography as one of the courses. If NUC heeds their call, mass communication would then birth faculties of communication and media studies with the potential for eight departments. The courses approved by NUC from the unbundling are Journalism & Media Studies, Public Relations, Advertising, Broadcasting, Film & Multi-

Media Studies, Development Communication Studies, as well as Information & Media Studies. NUC acted on the recommendation of a committee of no fewer than 78 scholars in the field. Their opinion must count for much. Mass Communication was the discipline that captured all the theory and practice of the academic interest in the new technology and methods of reaching large numbers of people in the wake of urbanisation and technology. Big cities had large populations. The new technologies of radio and printing facilitated the means of reaching them. Technology continues to be the driver of the new age of communication, where the mass audience that mass communication served has become interactive media users. New technologies are driving new definitions, audiences, markets and disciplines. Yet the discipline still revolves around the institutions and products of the era of mass media. These are newspapers and magazines, radio and television, film (still or moving picture) and the “support” industries of public

relations and advertising. Cynics have claimed that the unbundling follows what various other disciplines such as Medicine and Law did only to birth faculties that ended up granting the same LL. B or MBBS degrees. The unbundling of the courses is a bold step. Some would describe it as overambitious given the state of play in academia. While some universities abroad offer these courses at undergraduate levels, the tendency is to serve them as postgraduate courses and areas of specialisation. NUC and its advisers chose to jump into the deep end of the pool and to swim from there. Tough. But. There would be many challenges. One would be the availability of human resources. The strictures the same NUC has placed on the engagement of professionals to support the institutions in preference for PhD holders would worsen the workforce challenge. Large lacuna. Another problem is the inadequacy of facilities in the universities. How do you teach broadcasting without studios and edit suites? How do you do

Information Science without high-end computers where students learn coding, animation and all the tricks and gizmos of the information age? How do you do media studies at this age without dedicated Internet facilities for staff and students? There would be the challenge of funding to equip the faculties for these new courses. Who will bell the cat? Recently alumni had to rally to raise funds to enable a first-generation mass communication department to buy equipment and facilities to meet the requirements for APCON accreditation to teach advertising. Specialisation should be one way to tackle the challenge in the immediate. The universities do not have to teach all the seven courses. They should specialise in the three or four areas for which they have strength in human resource and facilities. Renown for excellence in some areas should then attract support. Before then, both the NUC, federal and state governments must mobilise to fund the departments adequately. Past performance predicts a tough call.

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Joe Biden represents a welcome portal to the past for US allies The former vice-president’s record is woven into the tapestry of Nato and the old trade consensus

Janan Ganesh

o thrilling is America’s Democratic presidential primary, so rich in drama, that the man who led by 10 points a year ago is winning by just the eight now. If Joe Biden does not slow this rate of decline, he stands to forfeit pole position as early as 2024. How to explain the impertinent survival of the former vice-president? The media has made clear its preference for a fresher candidate. Even loyalists wonder about his robustness at 77. He is said to have “electability” — but then a man who was said to lack it now roams the White House, and he must have got in there somehow. Whatever the source of Mr Biden’s resilience — in national if not state polls — allies of the US should hope it lasts. Of all the Democrats, he is the surest and perhaps the only way back

to the world they once knew. Because Donald Trump, a Republican, has so scuppered the international order, it does not follow that any Democratic president would restore normality. Some of the party’s hopefuls would just bring a different kind of abnormality. While no pacifist, Vermont senator Bernie Sanders would be more reluctant to use military force than any president since 1945. And to no universal cheer abroad. Robert Kagan’s old line about peace-loving Europeans and martial Americans always simplified a more ambiguous reality. It was the first who pressed the second into Kosovo in the 1990s and into Libya in the last decade. Just this week, Emmanuel Macron, the president of France, urged Mr Trump against a partial withdrawal of US forces from Africa. Under Mr Sanders, these schisms would be far more regular, and far less liable to end in American climbdown. In his own way, he would be as large a shock to the international system as Mr Trump has been. As for his rival senator, Elizabeth Warren of Massachusetts, the dread for US allies would not be a philosophically war-averse America so much as a distracted, inward-looking one. The corollary of her fluency on domestic social reform is a certain terseness

about the outside world. A year into her candidacy, we do not know if she thinks it is US business to stymie the rise of China, a question with as many implications for allies caught in the tussle as for either superpower. The worry is that there is more of indifference than indecision about her vagueness. These are not just the foibles of two candidates. These are expressions of a deeper change on the American left. What began as dismay at the “forever wars” has widened into doubts about, say, the wisdom of spending half of the discretionary federal budget on defence while citizens fall through the sieve of a welfare state. “Nation-building at home”, Mr Trump’s predecessor Barack Obama once called it, but he was always more internationalist than that. To revisit his speech in the bellwether district of Berlin Central in 2008, he was messianically so, even as a mere candidate. The post-Obama left seems to mean its domestic focus this time. And with cause. No one who has walked through Skid Row of late could dismiss the moral case for a turn inward, at least for a while. Were I American, I would vote for it. Foreign allies have their interests, though, and they are so plainly served by an outward-looking, burden-bearing US. How telling that even Mr Macron, a sort of European nationalist, who wants a strategically “autonomous” EU, views

‘

Robert Kagan’s old line about peace-loving Europeans and martial Americans always simplified a more ambiguous reality. It was the first who pressed the second into Kosovo in the 1990s and into Libya in the last decade

Life may be priceless, but healthcare is not

ver 1.3 billion people around the world live below $2 a day - 91 million of those people live here in Nigeria. Poverty means vulnerability, and when combined with poor health, it can have devastating consequences. When you consider that people living below the poverty line also face a disproportionate propensity for illness, the picture becomes even more dire, and urgent. When poor people fall sick, the inability to pay for treatment can result in the preventable loss of life. This is especially true for people with sickle cell anaemia, who routinely fall sick. Nigeria is recorded to have the highest prevalence of sickle cell disease across the globe – every year, 150,000 children are born with the disease, and with nearly 50 percent of the nation living in extreme poverty, it is clear that a significant portion of this group are from low income households. Sickle cell comes with numerous serious medical complications and often requires a wide array of serious medical interventions inhibiting the sufferers from working, further affecting their financial ability to access healthcare. In my capacity as the founder of the Samira Sanusi Sickle Cell Foundation, I provide a safety net, covering the cost of medication and hospital treatments for low-income families living with sickle cell. I am almost always a last resort for people who have nowhere else to turn. People like Asiya, a young woman living with sickle cell in a small village in Katsina State. Even though her husband owns and runs a local farm, both Asiya and her husband are financially excluded - they do not have bank accounts and the little income they make is used for food and shelter. Every time Asiya falls ill and needs to be admitted to hospital, she has to get in touch with the Foundation through relatives - a process that can take time. If Asiya is ever in a life-threatening situation, the time it will take for her to access the funds to pay for the critical care required may mean that Asiya will die. An hour or two could literally be the difference between life and death. Even though it may not seem like it, Asiya is one of the lucky ones - she has a safety net in the Foundation that many low-income fami-

lies do not. While we help where we can, the Foundation’s net cannot cover everyone and many people are often left without the help they desperately need to access healthcare. The costs of healthcare can be prohibitive to its access. How can we democratise access to basic healthcare so that the lives of people like Asiya are not hanging in the balance? How can we ensure that there are basic health care provisions for people who have no access to a safety net like the Samira Sanusi Sickle Cell Foundation, but need health care? How do we reduce the number of preventable deaths, incidents of people’s loved ones dying because they are unable to afford the health care required to save their lives? These are the questions that keep me up at night – questions I know we must find answers to if we are to increase the quality of life for millions of Nigerians across the country. The healthcare structure in Nigeria is heavily weighted towards the private sector, with private healthcare being the predominant form of healthcare delivery over the last decade. About 66.8 percent of services are offered by private practitioners, and only 33.2 percent offered by public practitioners. Even where the provider is a public practitioner, there is often a cost for services which can be beyond the affordability threshold of low-income families. One particular method, which I have become a strong advocate for, is health-focused savings; though it can be challenging, especially for lowincome individuals, targeted savings plans can contribute to preparedness for health-related shocks and increase the likelihood of a positive outcome. In Burkina Faso, health-specific savings accounts have proven to be an effective method for poorer populations to increase their financial preparedness for the medical expenses associated with health shocks, should they occur. Réseau des Caisses Populaires du Burkina (RCPB), a federation of credit union networks, the largest microfinance institution in Burkina Faso, offers a voluntary health savings product whereby clients agree to deposit a set minimum amount of at least $1 per month into a special account devoted only to health expenses. The client will only have access to the funds upon www.businessday.ng

presentation of health expense proof such as a receipt or doctor’s form specifying treatment. Here in Nigeria, as it relates to sickle cell sufferers, this may mean that they are able to access critical care when they are in “crisis”, thus safeguarding their lives. Even more so, financial products like health insurance have the potential to help families avoid the catastrophic consequences of health shocks but most private health insurance products cost too much to be truly inclusive. This is evidenced by the fact that In Nigeria, at least 90-95 percent of the population do not have access to health insurance coverage and over 100 million Nigerians cannot afford to pay bills for treatment of illnesses in public health facilities. Health insurance products need to be affordable so that people at the bottom of the pyramid - the very people who need it most - can benefit from it. Additionally, the routine exclusion of pre-existing conditions like sickle cell by traditional insurance providers means that many sickle cell sufferers like Asiya would be unable to benefit from traditional insurance products, even if the cost barrier was sufficiently addressed. The Nigerian National Health Insurance Scheme (NHIS) was established under Act 35 of 1999 by the Federal Government of Nigeria to provide access to health care to Nigerians at an affordable cost. The scheme includes packages which sickle cell sufferers can benefit from, albeit not in a comprehensive way. The Vital Contributors’ Social Health Insurance Programme (VCSHIP) is a lowcost package designed for individuals who do not belong to an NHIS community. It costs N15,000 per annum and covers the cost of access to basic medical services like blood work and medication. Even though the NHIS has the potential to deliver a sustainable healthcare financing framework for Nigeria, the scheme, which officially launched in 2005 (six years after the establishment of the Act), has so far failed to deliver against its main objective – to make healthcare accessible to all Nigerians, with only 3 percent access directly attributable to the scheme. A lack of political will is the main reason for the failures of the scheme in Nigeria, exacerbated by a lack of government funding, existing limitations on which the scheme was founded, as well as poor implementation. There are many les-

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American tentativeness with so little relish. Perhaps US allies could have a reprise of the pre-Trump world under Pete Buttigieg. So very little can be said with confidence, though, about a 37-year-old mayor from Indiana’s fourth-largest city. Neither he, nor many active politicians anywhere, are as woven into Nato, the trade consensus and the rest of the institutional tapestry of the postwar order as Mr Biden. The wrong kind of experience, Mr Sanders and Mrs Warren say, citing his vote for the Iraq war. But an 18-year-old mistake should trouble other countries less than the parochial left. The most “European” candidates — the most social democratic — are the least helpful to European interests. European or otherwise, America’s foreign friends will not decide the outcome of the Iowa caucuses next month. They will not brave high-school gymnasiums in winter and traipse into corners marked Biden, Sanders, Warren or Buttigieg, according to preference. If they were let in on this pageant, though, with its equal measures of drama and bathos, their favoured candidate should be obvious by now. Mr Biden is just a portal into the past, say his radical challengers. For US allies, that is the point.

Samira Haruna Sanusi sons that can be gleaned from the last decade and a half, but how can we apply these learnings in a way that reaps dividends for the millions of Nigerians currently left without access to health care? The reality is that sickle cell patients are guaranteed to fall ill - and sometimes in ways that are life-threatening. Even with the type of basic cover currently being offered under the NHIS (and which the vast majority of people are not covered by), sickle cell patients will still be left without care should they have a “crisis” or fall seriously ill. There is a need to explore alternative forms of comprehensive healthcare financing that can deliver the access to healthcare required to safeguard against preventable loss of life. There are many examples from other developing countries like India, China and the Philippines who have mirrored the models created by more developed countries like Japan in offering social health insurance. Success rates have varied, but a critical factor is that the quality of the policies and regulatory frameworks on with these health initiatives are built have a direct impact on their success rates. With regard to pre-existing conditions, in some countries, waiting periods are imposed while the extent of a patient’s needs is reviewed and assessed ahead of providing a package to accommodate their peculiar needs. Health insurance in some form is the key to democratising access to health services across Nigeria, but in a country where 91 million people are living below the poverty line; where 60 percent of people are financially excluded and don’t have bank accounts; and where up to 3 percent of Nigerians (up to 6 million individuals) suffer from sickle cell disease – we must be innovative in creating inclusive health-related financial products and combine these products with the education required to ensure that their benefits are understood.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Sanusi is founder, Samira Sanusi Sickle Cell Foundation.

@Businessdayng

Friday 17 January 2020

BUSINESS DAY

MONEYINSIGHT

Three personal finance rules of thumb to adopt in 2020 STEPHEN ONYEKWELU

n average Nigerian family comprises seven persons – two parents and five children, each competing for the perceived scarce family resources. In addition, an average Nigerian family spends more than half of its earnings on food, leaving little or no room for saving and investing. This applies as well to individuals. Budgeting is one way families can figure out how to escape from the rat race and move towards financial independence. Budgeting means balancing among needs, luxuries and investing. Needs vary from one family to another but they generally are the basic elements, without which a family will be unable to sustain a certain standard of living, such as house rents or mortgage, school fees, grocery, medical insurance premiums

and repayment on car loans. Luxury expenses may consist of optional costs associated with eating out at a newly opened quick-service restaurant and buying the latest gadgets. It surely recommended treating the family to these good things

in life. A critical revolves around what portion of the family’s income should be spent on each of these categories. This is the point where the three rules of thumb come in handy. Under the excitement of a salary increase or some wind-

fall, these three rules of thumb help in keeping the emotions under control. They are reliable principles. This serves as a starting point. The thumb rule recommends that 50 percent of the earnings after tax go towards necessities. Then, 30 percent can be earmarked for luxuries or wants. Finally, 20 percent of the earnings ought to be saved and invested in your financial goals. Overall, the 50/30/20 rule can be a sound budgeting method for some people. But whether the system is right for you depends on your specific circumstances. Having just three categories to track might help you focus on fine-tuning your finances instead of getting bogged down in the process of categorising each individual expense. For others, the lack of structure could make it harder to find ways to improve their spending habits. Ultimately, you need to decide whether a budgeting system that is less

detailed or more highly detailed will be best for you. Another potential issue with the 50/30/20 rule budget is the breakdown of money allocated to needs, wants, and savings or debt. Depending on your income and where you live, 50 percent may not be a large enough percentage to cover your needs. For instance, people who live in areas with a high cost of living may have to put a large part of their income toward housing, making it almost impossible for them to keep their needs under 50 percent of after-tax pay. Finally, some critics of the plan say the 50/30/20 rule budget does not work well for higherincome earners, because it calls for too much spending on wants versus needs or savings and debt. The ‘50/20/30 budget rule’ was popularised by Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan (originally published in 2005).

Digital transformation in financial services (1) SUSANNE CHISHTI

utty Sark, United Kingdom’s legendary sailing ship built in 1869 transported tea and cocoa beans across the world. Lots of incremental innovations and design improvements made the clipper to one of the fastest sailing ships in its time. Cutty Sark made several journeys to Africa. Unfortunately, the owners did not see the disruption coming when steam technology took over and soon steamships came to dominate the global trade routes. As a result Cutty Sark became a training ship and today you can admire her, beautifully restored at a dry dock at Greenwich, east London overlooking the shiny skyline of London’s financial centre. Will banks, asset managers and insurance companies face a similar fate, will it just be a question of time until some of them turn into museums as one author of The FINTECH Book (published by WILEY) predicted? Disruption is part of our lives: What happened to the American company Kodak and its film business when they missed to respond to the trends towards digital photography? What happened to European telecommunications giant Nokia who owned 49.40 percent of the global mobile phone market in 2007 and ignored the launch of Apple’s iPhone that same year? Disruption has started in financial services – summarised by the term FINTECH. JP Morgan CEO Jamie Dimon warned of the growing competition by FinTech

start-ups when he said in a letter to shareholders in 2015 “Silicon Valley is coming….” There are hundreds of start-ups with a lot of brains and money working on various alternatives to traditional banking.” The challenge - all of us who work in Financial Services face - is that digital transformation and corporate innovation is really hard. It is very difficult for financial services companies to come up with commercially successful innovation and to build an organisation which can remain innovative on an on-going basis. www.businessday.ng

Already in 1942, the Austrian economist Joseph Schumpeter researched unexpected, rapid spurts of entrepreneur-driven growth and introduced the term “creative disruption”. The importance of this concept has grown steadily with an increased speed of change how companies disrupt and displace each other. Profitable big incumbents normally have a blind spot towards disruption especially when it comes from smaller, more innovative players outside their traditional set of competitors. These fintech firms lack the

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incumbent’s fear of disrupting existing profit streams and do not have the burden of old legacy systems, or the high-cost structure of existing banks, investment managers or large insurance companies. In large financial services organisations, the “innovation muscles” are often weakened by growing bureaucratisation, loss of tolerance for risk, commitment to existing financial products and services and fears about cannibalising those, adherence to current business models, reliance on financial metrics to measure innovation and lack of innovation culture and leadership. Therefore it is estimated that 70 percent of organisational change, efforts fail. (“Cracking the Code of Change”, Harvard Business Review, May-June 2000 by Nitin Noria and Michael Beer). The FINTECH Circle Institute works with financial leadership teams on Digital Transformation challenges both in the UK and globally via our FinTech MasterClasses. Below, I share a summary of the most important concepts of how digital transformation can become a success including the important role the top leadership team has to play. Scale alone is not an impediment to innovation capability. In 2007, when Apple launched the iPhone, it was already 30 years old and it was number 123 on the Fortune 500 list. So what are the lessons large banks, asset managers and insurance companies can learn – how can they digitally transform their organisations? Digital innovation strat@Businessdayng

egy It all starts with the leadership commitment to innovation and to embrace change as a matter of survival long-term. All financial services companies need to develop an innovation strategy to set the priorities between different types of innovation options and to manage the trade-off between short- and long-term innovation opportunities. It is also required to set the “tone from the top” and to align different parts of a complex organisation towards common objectives. A good digital innovation strategy should provide direction so employees know in which direction the organisation wants to go and why. At the end of the day, innovation strategy is about action and should be specific enough to help execute in terms of how to allocate the company’s budgets and where to focus on. A good innovation strategy focuses on both technological innovation and business model innovation, as not just the technology or legacy infrastructures can become obsolete, but also business models can become out-dated. So, corporate innovation can be defined as a process that established businesses go through to introduce and implement new opportunities into their existing working practices. Larger organisations will often have a dedicated team to identify what the current trends and opportunities (both from a technology and business model point of view) are.

Susanne Chishti, CEO FINTECH Circle

Friday 17 January 2020

BUSINESS DAY

AGRIBUSINESSINSIGHT Market Insights

Analysis

Commentaries

Experts/Industry Views

Commodities watch

Policy Reviews

Send in Commentaries to caleb.ojewale@businessdayonline.com

Six agricultural commodities to watch out for this year (2019/2020 season) Stories by CALEB OJEWALE Twiiter: @calebtinolu

oybean was described as the “star commodity” of the 2018/2019 marketing year, closing the season at a price appreciation of 20.44 percent from the opening price of N120,000. This disclosure, which was contained in the 2019 Annual Commodity Review by AFEX Commodities Exchange Limited, further stated that the key driver of the (soybean) commodity was the increasing demand for it from industrial off-takers in the animal feed and baby food business. The commodity reflected the typical high risk/ high return profile with seasonal volatility of 50.69 percent in the 2018/19 marketing year. As experienced in the maize production areas, AFEX stated that soybean production was favourable as conducive weather condition stimulated an expectation of higher production in the country. On the demand side, however, activities have been heightened as more players participate in the domestic sourcing of the commodity. Prices in the 2019/20 season are expected to spike with conservative estimates as high as 25-30 percent as the season progresses. In the Nigerian market, maize and soybeans remain the most liquid commodities owing to the diverse use of the commodities across industries in the country. Despite the historical importance of cocoa, trades have declined significantly with the international market spurring the greater proportion of trades. In addition to the three commodities mentioned, sorghum, paddy rice, sesame and ginger have become economi-

cally important as the increased demand by industrial users; locally (Sorghum and Paddy rice) and internationally (Sesame and Ginger) prompt the attention of stakeholders along the value chain. This is according to AFEX, which the Securities and Exchange Commission describes as Nigeria’s only fully functional commodity exchange platform. Price outlook for some major commodities The AFEX report apart from giving an overview of market trends for the past year, also gives insights into expectations for the current season. As clarified in a phone interview with Yusuf Ogunbiyi, head of research at AFEX, the commodity year starts on December 1. As such, the projections below apply to the commodity year starting December 1, 2019 to November 30, 2020. Soybean – 25 to 30 percent increase in prices The demand for soybeans is projected to remain strong as more players flock into the demand creating industries. The demand dynamics in this season is expected to be more complicated as the closure of land borders with neighbouring countries

increase the demand for poultry products which in turn place some pressure on the soybean market. AFEX anticipates a conservative growth of 5 – 6 percent in soybeans consumption in Nigeria. The interplay between the demand and supply forces are already visible in the market as farm gate prices are set to support levels at NGN115,000, NGN100,000 and NGN110,000 respectively in Benue, Taraba and Kaduna states. This provides a glimpse of the price appreciation expected in the soybean market this year. AFEX holds the opinion that prices will rise by as much as 25 – 30 percent following the factors described above. Maize – 19 percent increase in prices According to the report, there has already been an increase in prices of maize with price settling at N90,030 at the beginning of the last season. This indicates a higher price level as against the same period of 2018. It is anticipated that the aggressive push by industrial users to procure as much maize as possible will push up prices of the commodity, spiking by 19 percent at the peak of trading this year.

Rice – 15 percent increase in prices The closure of the borders has set the pace for a rather volatile price environment in the paddy rice markets with intra-month gains in October 2019 climbing up by 9.80 percent. This price behaviour has shifted the support for paddy rice prices from NGN125, 000/MT as witnessed at the end of the past marketing year (2017/2018) to NGN140, 000/MT in 2018/2019. By implication, supply-side agents (farmers, traders and merchants) are faced with a more profitable year in 2020. Outlook for paddy rice prices in 2019/2020 marketing year is that of a 15 percent rise in prices as the impact of demand spike is expected to be mitigated, albeit marginally, owing to improved weather conditions in core producing areas across the country. Cocoa - 40 percent increase in prices Activities in the cocoa markets have reached multi-year highs with local buying agents, exporters, aggregation companies and local industrial users flocking the core producing areas for supplies. The market condition is further compounded by the less than stellar output witnessed at the end of the production season. Prices have appreciated by more than 10 percent so far with market participants anticipating further price increases in the coming weeks. Preliminary evaluation of the demand-supply situation in the market indicates a spike in the number of demand agents – cocoa supply ratio. Also, the number of open contracts as measured by failed or declined sales have increased as more farmers hoard the com-

modity in anticipation of further price increases. In addition to domestic market sentiments, increased grinding activities in Sub Saharan Africa and Asia as well the likelihood of price floor establishment by Ivory Coast and Ghana have stimulated the demand for cocoa beans. It is estimated that prices will increase by up to 40 percent from N650,000 witnessed at the beginning of the current season. Ginger - 25 percent increase in prices Given the export potential of ginger and the influx of agents sourcing on behalf of international buyers, the ginger market has gained significant impetus closing the last season (2018/2019) at about 75.33 percent high. Prices started the 2019/2020 marketing year at N430,000 – N450,000 per metric tonne for cleaned ginger, representing about 80-87 percent higher than prices at the beginning of the 2018/2019 marketing year. From all indications, prices will appreciate significantly in the 2019/2020 marketing year with the possibility of hitting N600,000 very rapidly. The increased demand elements from international buyers will dominate the outcome of the markets. Sorghum – 4 to 5 percent increase in prices Following the demand-supply expectation for sorghum in the current season, it is anticipated that sorghum prices in the 2019/20 marketing year will be largely subdued with a meagre gain of 4-5 percent. This is due to the favourable weather condition, which is expected to boost production and the lacklustre demand pattern building up so far. It is predicted that will limit the appreciation possible for the commodity.

Nigeria’s agricultural output likely to decline under AfCFTA - NESG

gricultural output is projected to decline in Nigeria when the African Continental Free Trade Area (AfCFTA) is operational, owing to a number of factors including predicted decline in investments, lower costs of production in other countries, and the threat of dumping if adequate measures are not put in place. A policy brief by the Nigerian Economic Summit Group (NESG) titled ‘Effects of the African Continental Free Trade Area Agreement (AfCFTA) on the Nigerian Agricultural Sector’, gave this insight using four different scenarios. It detailed several assumptions relating to the gradual removal of tariffs, introduction of special products, increase in government invest-

ment in key sectors and inflow of Foreign Direct Investment (FDI) and labour into strategic sectors. The document stated that under AfCFTA, one major reason for the decline in agricultural output is largely as a result of the lower level of investments into the sector. This is because imported produce become cheaper and creates a disincentive for investment and local production in the sector. On the investment aspect, the report states; countries will now have to compete for investments since there is a common tariff and more likely, countries with more favourable investment climate will attract large investments than others. The issues of high cost of doing business occasioned by poor infrastructure, www.businessday.ng

poor power supply and concerns relating to poor standards of local and exportable produce will play a major role in influencing investments and outputs in the agricultural sector. Nigeria has a lot of catch up to do in these areas. For Nigeria to leverage and maximise the benefits of the AfCFTA in the agricultural sector, the NESG policy brief made the following recommendations: • Government needs to identify key agriculture and agroprocessing commodities that Nigeria can build competitive advantages over the medium to long term and summon the political commitment to implement business support reforms. There are several agricultural products with great market value

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and potential, which have remained untapped and explored either as a result of poor market information or limited government support. Several studies have revealed the potential of produce such as tomato, cassava, cocoa, fish products etc, however, the government and stakeholders must collaborate to address specific challenges across these products’ value chain. • Proper monitoring and enforcement of standards for agricultural produce by government agencies such as SON, NAFDAC, NAQS among others needs to be prioritised. There are no local standards for produce such as tomatoes, yam, garri etc, which are large consumables in Nigeria. To improve safety of Nigerians, local standards must @Businessdayng

be established and enforced for both locally made goods and imported products. In addition, to improve market access of Nigerian agricultural produce, regulatory agencies need to step up particularly in areas of process simplification and monitoring & enforcing standards for exportable produce. • One major risk for Nigeria when the AfCFTA comes into force is the abuse of rules of origin, a situation where traders or producers disguise that goods are produced within Africa so they can qualify for tariff-free treatment. To address this risk, there is need for strict and enforceable mechanism within the trade agreement. Nigeria must also improve border scrutiny and security to prevent dumping.

Friday 17 January 2019

BUSINESS DAY

cityfile Taraba: Kidnapped NPC officials regain freedom NATHANIEL GBAORON, Jalingo

wo staffers of the National Population Commission (NPC), Gaddafi Ali Shehu and Isah Zaradeen, who were kidnapped on Friday, January 10 in Dan-Anacha village in Gassol local government area of Taraba, have regained their freedom. Federal commissioner, National Population Commission, Taraba State, Sanny Sale, disclosed this in Jalingo. Sale said the officials were abducted at about 3:45pm while on routine Enumeration Area Demarcation (EAD) exercise in preparation for the national census scheduled for next year. According to him, the officials were released on Tuesday after concessions were made, describing the period of their captivity as harrowing for their families and the commission. “The moment we were informed of their abduction through a phone call to this office by the kidnappers, we promptly contacted the relevant security agencies who mobilised to ensure their timely and safe release. “We went into intense negotiation with the kidnappers for the safe release of our colleagues. I personally took charge of the discussions on Monday until they were released,” he said. Sale thanked all security agencies in the State for their tremendous support in ensuring the release of the two staff of the commission. Speaking with journalists, one of the victims, Gadafi Shehu, said they were abducted on Friday while carrying out their work in the area. According to him, two men riding on a motorcycle accosted them and ordered them at gunpoint to climb the bike and were whisked away to an unknown destination.

Police nab 34 kidnappers, cattle rustlers in Oyo REMI FEYISIPO, Ibadan

he police in Oyo have paraded 34 suspected cattle rustlers and kidnappers arrested along Ogbomoso/Ilorin Expressway. Other suspects were linked to armed robbery, and stealing. Shina Olukolu, Commissioner of Police in charge of Oyo, while briefing newsmen in Ibadan, said five of the suspects were arrested in December 2019. According to him, 29 other criminals who specialised in armed robbery were arrested while the command recovered from them one diverted trailer two stolen vehicles. He noted that on December 23, 2019, information was received at SARS office, Ogbomoso operational base that some members of a notorious gang of armed robbers who specialised in cattle rustling and kidnapping were sighted with sophisticated weapons (arms) in Ogbomoso town, planning to strike. “Upon this information, a team of SARS operatives swung into action and laid siege at new Kara market area along Ogbomoso/Ilorin Expressway where they intend to attack, rob and kidnap members of the business community. The hoodlums later arrived at the scene and in the process, one of them who later identified himself as Abubakar Mohammed was arrested while his syndicate members managed to escape. One AK-49 riffle with seven live ammunition were recovered from the suspect. “During interrogation, he confessed to be a member of a criminal gang that specialized in cattle rustling, kidnapping and other violent crimes and this later led to the arrest of one other members of his syndicate who identified himself as Babuga Usman with three of the syndicate’s receivers who identified themselves as Rasheed Ganiyu, Taofeek Salawu and Abiodun Kehinde. Investigation is now in progress to arrest other fleeing members of the gang, the police chief said.

The ongoing junction improvement project at Allen junction to free traffic gridlock (three others on-going at Lekki 2nd Roundabout, Maryland and Ikotun).

What to expect from remodeling of Allen-Awolowo Way Roundabout JOSHUA BASSEY

mproved traffic flow and reduction in travel time are in the offing for Lagos motorists and commuters as construction works begin at the AllenAwolowo Way roundabout, in Ikeja. The massive roundabout which helps motorists and commuters to connect key areas like the Lagos State Secretariat, Alausa; Aromire Avenue, Allen and Ikeja Under-bridge linking the popular Computer Village, was in 2019 identified as a major cause gridlock on the Awolowo Way, and therefore, recommended for remodeling. The statues of Obafemi Awolowo, first premier of Western Region of Nigeria, and Fela Anikulapo Kuti, a Nigerian afro-beat legend (both late), erected at the roundabout have been taken down to allow work commence on the site. The headless ‘Liberation’ statue of Fela, and ‘Victory’ statue of Awolowo, according to officials would be

relocated elsewhere. The Babajide Sanwo-Olu administration last year identified 60 areas across the state where it hoped modify to allow for better traffic flow and reduce travel time. The work is starting with four out of the 60 identified traffic prone areas. The first four include Allen, Maryland, Ikotun and 2nd Lekki roundabout. The remodeling entails removal of the affected roundabouts and separate streams of traffic through Traffic Signal Lights (TSL). The work will synchronise all TSLs through intelligent traffic systems which will recognise the densities of traffic streams and give priorities accordingly. Frederic Oladeinde, the commissioner for transportation, said the idea is to reduce gridlock and increase the capacity of the roundabouts to accommodate increasing vehicular traffic. “We have since the early days of the administration of Governor Babajide San-

wo-Olu, committed ourselves to ensuring reduction in traffic congestion by resolving key gridlock points. “We started off through discovery of 60 gridlock junctions and areas across the state. Seven pilot schemes were unlocked, we progressed in the traffic management measures to 27 locations and now we are working on four major junctions by removing the roundabouts presently causing chaos during turning-movements. “The four identified roundabouts are Ikotun, 2nd oundabout on Lekki-Epe Expressway, Allen Avenue roundabout and Maryland,” said Oladeinde. According to him, apart from the pedestrian activities and chaos during turning at the junctions, the roundabouts have insufficient capacities to cater for the traffic volume during peak hours. The four roundabouts, according to the official, are billed to be delivered within four months.

Families of slain soldiers lament poor economic status GODSGIFT ONYEDINEFU, Abuja

idows and families of slain soldiers have called on Nigeria to come to their aid, saying they live in unsavoury economic conditions. Nigeria on Wednesday, January 15, marked the 2020 Armed Forces Remembrance Day (AFRD) to honour the memories of soldiers who died while defending the nation. The day was marked with the laying of wreaths by government officials, from federal to state levels. Among those who laid wreaths at the National Arcade, Three Arms Zone, Abuja, to honour the fallen heroes were Presi-

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dent Muhammadu Buhari, Vice President Yemi Osinbajo. Gift Runika, leader of the Widows Military Association, in an interview with Cityfile, said beyond a ceremony to honour fallen soldiers, the families of slain heroes were in need of economic empowerment and financial support. “It has not been easy, we call on Nigeria to empathy and come to the aid of the windows. Among us we have some young widows that need to go back to school, we want scholarships for them, their children and employment for our children”, she said. She, however, commended the Nigerian authority for remembering the

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supreme sacrifice paid by the soldiers for the peace of the nation. The director of Defence Information, Onyema Nwachukwu, said the military was implementing schemes to bring succour to the families of the fallen heroes and veterans who have been wounded in action, but called for more support. The armed forces remembrance day is observed in Nigeria on January 15 every year. It is to commemorate the end of Nigerian civil war which lasted three years, 1967 to 1970. The event is also used to honour veterans still alive as well solicit financial support for their wellbeing and the families of the fallen heroes.

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Friday 17 January 2020

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

In boon for borrowers, cost of credit can’t stop falling in Nigeria ...As GTB cuts interest rate on Quick Credit to 1.33% monthly LOLADE AKINMURELE

he cost of lending in Nigeria has picked up from where it left off last year as interest rates continue to crash, in what is a boon for borrowers. Nigeria’s biggest publicly listed bank, Guaranty Trust Bank, sent out emails Tuesday, Jan.14, saying rates on its Quick Credit product has been reviewed downwards to 1.33 percent monthly from 1.75 percent. “This means that the

effective interest rate on quick credit is now 16 percent per annum,” GTB said in the email to clients. This is coming from a peak of around 25 percent. Commercial banks have been put on their toes by the Central Bank of Nigeria (CBN) to lend more to individuals and small businesses in a bid to stimulate a sleepy economy. The CBN threatens steep transactions for banks that are unable to lend atleast 65 percent of their deposits. On 7 January, the CBN

circulated a directive that Nigerian banks must maintain a minimum 65 percent loan-to-deposit ratio (LDR) by March 2020, or CBN will impose a 50 percent cash reserve requirement (CRR) equal to the lending shortfall on deposits. The CBN in July 2019 imposed a minimum LDR of 60% for Nigeria banks and in September 2019 increased the minimum to 65%. As of October 2019, the system’s LDR ratio was 61.9%, according to the latest CBN data, indicating that

some banks do not yet meet the requirement. While the directive has forced banks to open the lending taps- which holds benefits for the economy as individuals and businesses have better access to credit, which tends to boost consumption- there are some risks in forcing banks to lend. Peter Mushangwe, a banking analyst at credit rating agency, Moody’s Investors Service, said the CBN’s directive may do more harm than good for the economy in the long term.

Although gross loans and advances increased 4% by October 2019 from July, when the regulation took effect, loans will need to grow by around NGN690 billion (about 5% of gross loans as of 31 October) to meet the minimum requirement by March 2020, according to Mushangwe. “Given Nigeria’s challenging operating environment, meeting the minimum requirement will be credit negative for banks because we expect them to make potentially riskier loans, which will

outweigh potential benefits from diversification as they lend to more granular borrowers and reduce their high single-name concentration risk,” Mushangwe said. Nigerian banks have limited exposure to SMEs and household borrowers, who have a combined contribution of lower than 10 percent of total loans. Consumer lending in Nigeria is hampered by weak household credit record history and higher incidence of nonperforming loans.

Friday 17 January 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

CONSUMER GOODS

Flour Mills to raise N50bn in bond program amid fallen rates OLUFIKAYO OWOEYE

lour Mills of Nigeria has announced plans to star t b ond sales to refinance debt and buffer working capital amid low borrowing cost. Andres Kristiansson, chief financial officer of Nigeria’s largest miller by market value said it is looking to raise around N50billion through securities, of this, N20billion is planned for the first quarter of the year. According to Kristiansson, the miller would issue the debt at about 11percent with a tenor of as long as five years. Nigeria’s local-currency bond yields have crashed into single digits since the central bank announced the new rule which restricts individuals and local cor-

porates from participating in its high-yielding, short term OMO sales at both Primary and Secondary market. This implies that only Deposit Money Banks (DMBs) and Foreign Portfolio Investors (FPIs) can participate in OMO sales. OMOs are issued by the central bank (CBN) for monetary policy management to control liquidity in the system. The restriction of local corporates and individuals from participation in OMO is positive for borrowing costs for corporates as yields are likely to moderate in the near term. The sale of OMO to FPIs is maintained at a relatively competitive rate as a strategy to preserve the external reserves and keep exchange rates stable. The makers of Golden Penny Pasta, Golden Fertilizer, Golden Sugar, raised N39billion through a rights

issue in 2018. The company delivered a 16percent surge in net profit to N5.9bn in its half-year result for the period ended 30th September 2019. Effect of t h e c o m p a n y ’s d e l e veraging strategy help drive the Finance cost lower by 21percent to N8.8bn compared to N11.2billion in the same period in 2018. Revenue from its food businesses was a d v e r s e l y a f f e c t e d by lower volumes, its pasta and Noddles recorded positive growth in base products while sugar business continued to show significant growth. Agro-allied business also continued to show improvements especially in the Animal feeds and fertilizer segments. Shares of Flour Mills traded flat on Wednesday at N24 on the floor of the stock exchange.

L-R: Awuna Titus, tutor, The Redeemer Nursery and Primary School; Oluwatomisin Omiyale, territory sales manager, PZ Wilmar, and Chinadu okonkwo tutor, Redeemer Nursery and Primary Schools, at the Mamador Breakfast school activation at Redeemer Nursery and Primary Schools in Abuja.

L-R: Mebh Vlueren, Turkish ambassador to Nigeria; Ruhsar Petean, Turkish minister of trade; Vice President Yemi Osinbajo, and Adeniyi Adebayo, minister of industry, trade and investment, at a courtesy visit by a Turkish business delegation to the Presidential Villa. NAN

BANKING

CBN gives ‘No Objection’ to Access Bank’s Cameroon expansion plans SEGUN ADAMS

ig lender Access Bank has obtained a green light from the Central Bank of Nigeria (CBN) for its planned expansion to neighbouring Cameroon, the big lender said on Wednesday. The proposed expansion to Cameroon, which is subject to approvals of regulators in the Central African country is part of the Access Bank’s continental and global push. “Access Bank is pleased to notify the Nigerian Stock Exchange that it has obtained the Central Bank of Nigeria’s ‘No Objection’ to its proposed expansion into the Republic of Cameroon through the setting up of a banking subsidiary,” the lender said in a note to the exchange. Access Bank operates in six African countries outside Nigeria namely Ghana, Congo, Zambia,

Rwanda, Gambia and Sierra Leone. The bank has branches in the United Kingdom (with a branch in Dubai, United Arabia Emirate) as well as a presence in international cities like Mumbai, Beirut, and Shanghai. An entrance into Cameroon is part of Access Bank’s strategic objective to become “Africa’s Gateway to the World”, the tier-one bank said. Access Bank on the back of its merger with Diamond Bank last year boasts of the largest customer base of any bank in Africa. The lender has around 29 million customers across over 600 branches and service outlets in 12 countries across the globe. Access Bank’s launch of its subsidiary in Cameroon will make it the 16th commercial bank operating in the country, competing with United Bank of Africa (UBA) in

the market. The entry for Access Bank will also follow a few years after the departure of Nigeria’s Oceanic Bank International from Cameroon, local Cameroonian news outlets report. Access Bank is said to be entering Cameroon with an initial capital of about XAF14.5 billion (N8.94bn) and the new subsidiary’s headquarters would in Douala, Cameroon’s commercial capital. After CBN’s ‘No Objection’, Cameroon’s Ministry of Finance and the Central Africa’s regional banking sector regulator, COBAC (Commission Bancaire de l’Afrique Centrale), are also expected to give their approval to pave the way for Access Bank’s entry. Shares of Access Bank declined by 2.86 percent to N10.20 per share in the day’s trading, as profittaking persisted on Lagos bourse after a remarkable bull-run that lasted almost two weeks.

L-R, Garba Abari, DG, National Orientation Agency; Abike Dabiri-Erewa, chairman/CEO Nigerian in Diaspora Commission, and Mike Omotosho, president, Hepatitis Zero Nigerian Commission, at the fifth edition of the foundation’s annual lecture in Abuja. Pic by Tunde Adeniyi.

Miranda Amachree (3rd r), representative of the director-general, National Environmental Standards and Regulations Enforcement Agency (NESREA); Tayo Taiwo (2nd r), convener, sustainability series; Damilola Adesina (3rd L), MD, Ecosphere Consultant Limited, and others stakeholders, at a one day stakeholders meeting on e-waste management in creating a road map for efficient management in Nigeria, Abuja. NAN

Friday 17 January 2020

COMPANIES&MARKETS

BUSINESS DAY

Business Event

CSR

Access Bank gives out N5bn to 20,000 customers in DiamonXtra savings scheme … Set to launch season 12 in February HOPE MOSES-ASHIKE

ccess Bank Plc has since inception of DiamondXtra savings promo in 2008 given out over N5 billion to over 20,000 loyal customers across the country. This is coming at the bank plans to launch the season 12 of the savings scheme by February this year. In season 11, which was concluded last year, over 4,300 customers benefited from the various prize awards, ranging from sala4life, education grant for five years, rent for a year and senior citizens among others. Robert Giles, group head, products insight and capabilities disclosed this at the DiamondXtra prize presentation ceremony on Wednesday in Lagos. “Salary for life is great that is the product that our customers ask for. Every year we add more prizes such as education allowance for five years, a senior citizen prizes, and prizes for rent for a year,” he said. Giles said DiamondXtra has been very successful for Access Bank in grow-

ing its deposit base. “It is one of the most successful deposit product in the country because people are inspired by not only getting a safe place to hold your money but also beyond the interest rate, the chance to win something transformational, to win salary 4life, win one million naira, win education grant for five years and there are so many stories. We are entering the 12 years of customers who have been able to use that fund to start business to automatically change their success”. Continuing, he said, “. It is part of our strategy for growing stable deposit. Deposits affect the bottom-line but customer relationship affects the botton-line more. It is not just storing you money with us but by making transactions with us and by us making banking more convenient by having a card that works or mobile app that works or be able to link you to other products and services. Also speaking Adaeze Ume, group head, consumer banking, “I am happy to say that from 2008 till now we have impacted

over 20,000 lives and for season 11, we have done over 4,300 customers we have rewarded with various prizes from education allowance for five years, the cash winnings as well as slary4life”. She said Season 12 is going to be much bigger because of feedbacks and insights received from customers in terms of what they want in season 12. “Diamond extra is a product that has been here for 11 years and we have a lot of strong followership and this season we want to build in what customers loved in season 11 and would want in season 12. It is a product for the customers because we are touching lives. Keep faith with us in February, we are going to launch the season 12 and it is going to be very big,” Ume said. “If you have a Diamond extra account, all you need to do is to fund it with N5,000 and you are qualify for a ticket. If you do in excess of N5,000, let’s say N10,000 you qualify for two tickets. So, the more you save the more you actually get more tickets,” she explained.

L-R: Mohammed Ndaliman, officials of the Department of Petroleum Resources in Cross River; Ibrahim Gado and Akpabio Utin, at the commissioning of the Department of Petroleum Resources’ laboratory for petroleum products analysis in Calabar.

L-R: Olukunle Iyanda, president/chairman of Council, Nigerian Institute Management (Chartered); Samuel Gowon Edoumiekumo, vice chancellor of Niger Delta University/guest speaker, and Pat Anabor, deputy president, NIM, at the 2019 Management Day Lecture of the Institute held in Lagos.

Wall Street aims for record highs as US and China ink trade deal MATTHEW ROCCO

all Street returned to record territory in anticipation of Donald Trump’s signing of a US-China trade deal. The S&P 500 jumped to a record intraday high by Wednesday lunchtime with investors cheered by easing tensions between the world’s two largest economies. The benchmark was recently up 0.4 per cent, setting a pace to register a fresh peak at the close. The Nasdaq Composite and Dow Jones Industrial Average also aimed for record highs. The tech-heavy Nasdaq gained 0.4 per cent. The Dow, which advanced 0.6 per cent, was in posi-

tion to close above the 29,000 milestone for the first time. Mr Trump and Chinese vice premier Liu He, along with other government officials, gathered at the White House to formally ink the phase one trade pact that calls for Beijing to increase American farm purchases and better protect intellectual property, among other measures. The Trump administration agreed last month to cancel new tariffs on Chinese goods. Shares in utilities, healthcare and materials led the rally in equities. Financials were the main laggard after Bank of America and Goldman Sachs reported quarterly results, with net profit at the former

falling from a year ago and earnings at the latter missing analysts’ estimates. Weaker-than-forecast holiday sales at Target weighed on the retail sector. The company’s shares were down more than 7 per cent, while Best Buy and Walmart each fell around 1 per cent. Toymakers Hasbro and Mattel also came under pressure. The dollar index dropped 0.2 per cent. The yield on the 10-year Treasury note fell 1.9 per cent to 1.7987 per cent. The main bourses across Europe were mixed, and the continent-wide Stoxx 600 was nearly flat. In Asia, the Hang Seng closed 0.4 per cent lower, while Japan’s Topix shed 0.5 per cent.

L-R: Salami Abolore, founder, Riby Finance; Mobolaji Onibudo, CEO, XendBit Digital Transaction Services Limited; Bola Orolugbagbe, chairman/president board of trustees, Co-operative Financing Agency of Nigeria (CFAN); Abubakar Lawal, MD/CEO, GTI Capital Limited; Eric Olo, director, EPercent Investment Resources; Dipo Odeyemi, CEO, Cavidel; Bola Ajomale, CEO, NASD Limited, and Ayo Banjo, director FinsureX Limited, at the sensitisation workshop on the establishment of a co-operatives shares exchange in Lagos.

Olamilekan Adegbite (m), minister of mines and steel development, flanked by Business editors, after the Minister’s interactive Session with them, in Lagos

Friday 17 January 2020

BUSINESS DAY

FINTECH News

Products Review

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Technology Review

Personality Review

Company Review

CBN can try, but banks as financial inclusion champion not happening soon FRANK ELEANYA

he Central Bank of Nigeria may have beating itself into a corner by expecting commercial banks to lead its financial inclusion drive of 95 percent Nigerians included by 2024. Experts have said that unless the apex bank includes telecommunication companies in the party, little would be achieved. “Current banks are woefully undercapitalized to achieve the scale our economy deserves in Nigeria,” said Victor Asemota, Africa partner, Alta Global Ventures. “This is why financial inclusion is a joke until telcos are fully involved. I have seen the telcos grow from scratch and achieve scale.” MTN and the rest of the telcos have been waiting for a Payment Service Bank (PSB) license promised them since 2018 by the CBN. Until date, the apex has only managed to issue a ‘Super Agent Licence’ to MTN and an ‘Approval in Principle’ to Glomobile and 9Mobile. There have been expectations that the licenses will be issued before the end of the first quarter of 2019. At the BusinessDay Inclusion for All summit which held earlier in 2019, Nurudeen Zauro, the Technical Adviser, Financial Inclusion Secretarial at CBN said to expect the PSB licences, “Most probably by the end of this first quarter.” In contrast, the CBN has practically moved the mountain to give banks a first-mover advantage. For instance, after it promised to issue licences to telcos in the third quarter of 2019, the banking regulator issued a guideline that allowed banks to operate mobile mon-

ey without requesting licences. The circular titled ‘Operation of Mobile Money Wallets by Deposit Money Banks’ signed by Sam C Okojere stated that “Deposit Money Banks (DMBs) shall henceforth not require prior approval to offer mobile money wallet services.” They are however expected to notify the CBN before the commencement of these services and are required to operate within the extant regulations on mobile money operations. It also issued an Approval In Principle for a PSB licence to Unified Payment (UP) a fintech company owned by banks. When that would not get the banks to move a needle in the unbanked numbers, the CBN moved to retail lending. In July 2019, it directed banks to increase lending to deposit

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ratio (LDR) to 60 percent. It was later to be jerked up to 65 percent with the compliance deadline set for 31 December 2019. The CBN has extended to March 2020. The goal is to force banks to lend more to businesses and by so doing drive financial inclusion. Chinyere Okafor, a financial services expert at Trium Networks, a Lagos based Venture Capital, argued in a Medium article that the LDR mandate does not, however, assuage the mind of the lenders or put measures or policies in place to guide against the risk associated with lending which includes unwillingness of some customers to pay back loans and the cost as the process of recovering such bad debts is arduous and expensive. “The banks may, therefore,

be more predisposed to pay the penalty of additional cash reserve than lose out on their money entirely,” she said. Although the CBN claims the mandate has unlocked N1.1 trillion in new loans to businesses between July and October, the apex has had to enforce a penalty twice for default. Apparently, not all banks are rushing to embrace retail lending or financial inclusion. “The CBN has been pushing (banks) with stringent regulatory measures but you can’t give what you don’t have. Our bankers are mostly of the Shashe type and there isn’t a shred of large-scale retail loans DNA in their body,” said Adedeji Olowe, CEO of Trium Networks and a financial services expert. He further predicted that

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“Come December 2020, the drive for retail credit would only have been marginal with banks turning their backside to collect the cane that the CBN would be using to whoop them for not expanding credits.” Access to credit is a big portion of financial inclusion. There are millions of people who require loans to carry out their day-to-day activities including running their small businesses, but lack of access to financial services means their productivity is drastically reduced. The federal government’s social assistance program in which it gives N10,000 to traders in rural places across the country lays bare the enormity of the challenge in retail lending. Lack of bank infrastructure in many regions of the country means a major share of the

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population lack access to financial services. While banks may be reservoirs for seemingly limitless cash deposits, it has been suggested that their shareholders will not be receptive to committing funds to build infrastructure from scratch in places where they don’t exist or repairing those that have broken. Asemota also said banks overdependence on relationships rather than efficiency is why they are not so interested in retail lending. “Running all your tech and branches on generators is one thing, giving perks and rewards to not very productive people to keep them because of their “relationships” is another huge cost factor. Relationships seem to run banks in Nigeria and not efficiency. “There is no bank that thrives on efficiency alone in Nigeria, they must have an angle they have secured and kept out of the reach of others. That is why you see 400 customers bringing 80% of the profit of a bank. It is senseless. Retail is not what they really do. It is a facade,” Asemota said. In terms of infrastructure, the telcos already have an edge through their extensive deployment of telecom infrastructure in rural communities which has led to deeper penetration of mobile phones and GSM services. Unfortunately, the telcos are exempted from lending to consumers even with a PSB licence. The CBN has kept that part of inclusion exclusively for financial services firms. With banks less disposed to retail lending, the CBN’s best option could be fintech companies who are quick to innovate and have brought simplicity and speed to retail lending.

Friday 17 January 2020

BUSINESS DAY

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Friday 17 January 2020

BUSINESS DAY

HEALTH BUSINESS&LIFE How to leapfrog health systems in Nigeria ANTHONIA OBOKOH

or many decades, Nigerians have lived with a lack of basic health services and poor infrastructure at basic health care centres and general hospitals, leading to needless deaths. This trend can be reversed by leapfrogging the country’s health systems. Leapfrogging means using new technology, operating model or pattern of behaviour to accelerate the development of a system (be it an organisation, industry or an entire economy) by helping it skip over development stages that had previously been unavoidable. It no longer news that Nigeria’s health sector struggles with unsatisfied demand for basic health services, weak health systems, limited public funding, poor infrastructure, insecurity, rising incidence of disease burden, low human resources capacity, elevated rates of infant and maternal mortality. Experts say technological innovations, alternative operating and financing models and new legal frameworks have potential benefits in improving access to health care services especially for those in hard-toreach areas. Technology can improve safety and quality of healthcare services and products, improve knowledge and access to health information for health workers and communities leading to better productivity of the health workforce, These experts say that digital technologies can improve efficiency and reduce the cost of health services delivery, facilitate the rapid transmission of public health information in real-time for timely decision making and enhance the capacity for monitoring the performance of programmes and the health system as a whole. Three types of innovation are critical to successful leapfrogging: new technologies, new operating models, and new behaviour patterns. How does it work to deliver healthcare to the public? According to the World Eco-

nomic Forum project supported by the Boston Consulting Group (BCG), in developed economies, techniques and structures that had been created to meet previous developmental challenges have tended to remain embedded in health systems, even after circumstances have changed or superior methods have become available. Leapfrogging in health systems requires certain enabling conditions. These include a minimum level of physical infrastructure, for example, basic sanitation and electricity supply and a minimum level of workforce sophistication. An environment or a mindset that encourages and rewards leapfrogging is also necessary. Key aspects of such an environment are: a policy framework creating a favourable environment for innovation, both within and outside the health system; the ability to adapt to new trends and evolving patterns of medical needs; and flexibility in the design and implementation of health policies to suit different contexts and cultures The other dimension of leapfrogging opportunities, represented on the horizontal axis, is made up of three innovation types – technology, operating model change and behaviour change – describing the kind of innovation that can induce leapfrogging within the seven categories. “Technology” encompasses new health-related activities and products. For emerging economies, the most powerful technological innovations are often those that are simpler, more affordable and more durable than existing solutions.

“Operating model” refers to any modification in the organizational set-up and process design of health-related activities. This includes, for example, changes to the roles, workflow, and incentives of health workers at a given service delivery point. “Behaviour change” refers to the evolution of the preferences and conduct of individuals (patients or health workers) and organisations (payers) acting within the health system. It could include the adoption of different lifestyles by individuals or changes in the way physicians interpret their roles within the health system How can leapfrogging strengthen Nigeria’s health sector? There are numerous examples of emerging markets using this leapfrogging strategy in areas unrelated to health care. The classic example is mobile financial services. In Nigeria, for instance, most people have extremely limited access to healthcare owing to Out- of pocket payment and absence of large coverage of health insurance. And yet, millions of people in Nigeria today use mobile phones. More and more aspects of health care are becoming information-based and are therefore able to be digitised. The more that digital information becomes critical to care, the more digital technologies have the potential to transform how care is organized and delivered—and the more emerging-market health systems have the potential to leapfrog previous approaches and models.

In this digital era, using digital technology to ensure access to quality healthcare is no longer an option; Ola Orekunrin-Brown, chief executive officer (CEO), Flying Doctors Nigeria observed that an innovative approach to healthcare in Nigeria, using telemedicine, remote support for para-clinical healthcare staff and institution of robust systems to manage patient journeys is also what we need. “In addition to this, embarking on protocolisation of common and easily preventable disease management guidelines, task shifting and efficient referral systems will transform healthcare in Nigeria by improving accessibility and reducing cost,” she said. Similarly, Adeyinka Adeniran, chief executive officer (CEO) Medflit, a leading health information technology platform said that telemedicine will enable people to access healthcare readily at an affordable rate lesser than the cost of hospital visits. In addition, telemedicine provides an added advantage in its ability to cater to the needs of patients anywhere and at any given time. “With the use of telemedicine, patients do not need to travel along distance to receive medical care; the prompt delivery of healthcare services would ultimately save lives,” he said. To illustrate the leapfrogging opportunity, it plotted health care expenditure per capita against health-adjusted life expectancy. Andrew Nevin, advisory partner, and chief economist, PricewaterhouseCoopers (PwC) said Nigeria’s life expectancy is relatively low at 54.3 when compared to other listed countries such as China at 84.7. This figure is linked to indicators such as; poverty and pollution which has reduced the nation’s life expectancy to 47 years. “Life expectancy at birth is one of the most frequently used health status indicators. Gains in life expectancy at birth can be attributed to a number of factors, including rising living standards, improved lifestyle and better education and better health facilities,” he said.

LASG to leverage technology to plug gaps in healthcare delivery ANTHONIA OBOKOH

agos State Government has said it would leverage the eHealth Information technology to plug the gaps in healthcare delivery in the state. The eHealth Information technology will enable the collation of all relevant data from all hospitals in the state through a single source to ensure proper and effective planning of precision healthcare for residents in Lagos. Babajide Sanwo-Olu , Governor of Lagos State has said that the State government will deploy technology to aid precision, faster and smarter healthcare services in all healthcare facilities as a means of achieving its health and environment mandate. The Governor who was represented by Obafemi Hamzat his deputy said this while declaring open a 3-day Smart Health Technical Symposium on e-Health themed “Lagos State Smart Health Information Platform, SHIP” stressed that the present administration is prepared to leverage on technology to improve health care delivery in the state. He said that the present administration is currently working on a 3000km of fiber optic network which allows accessible networks to all hospitals and public agencies, noting that the development of eHealth makes it possible to have a single source of truth with a solid database which makes planning effective. “It is important for us to establish and strengthen our health information platform as this will positively impact on our various health care system, health financing through our universal health coverage, biosecurity, biosafety which will

also lead to employment opportunities while opening doors for international collaboration”, the Governor said. Also speaking, Akin Abayomi, commissioner for Health said the conference on eHealth is geared towards strengthening the Smart Health Information Platform (SHIP) of the State which would further strengthen the State’s one healthcare record policy. “The advantages of SHIP to include precision medicine, accelerated human resource development, quality assurance, standardize the exchange of information and optimize operating procedures adding that SHIP is in furtherance of the efforts to ensure efficient and effective healthcare delivery in Lagos State,” he said. Abayomi explained that the Lagos State smart health strategy will improve efficiency, reduce wastage of scarce resources, improve income generation, drive the economy, accelerate human resource development, create global virtual health hub and prepare the State to enter the digital age of precision medicine. “We are trying to up the game; it is a matter of making what we have done more and cover more people. So a good and working digital health platform makes the health system run faster, make it more efficient and remove the delay that may arise from patient referral and transfer between health facilities,” he said. The Commissioner noted that one Lagos-One Health digital strategy will be owned by Lagos and partners will help deliver a road map, global benchmark standards, a business model, a technical working group, timelines to prototype and Income Generating strategies.

Ogun commits to sound healthcare delivery as Abiodun pledges to revamp facilities RAZAQ AYINLA

gun State Government is determined to ensure optimal health care for all citizens by revitalising the service delivery in all primary health facilities, to ensure quality services are delivered to the people, irrespective of their locations in the State. Bamidele Abiodun, wife of the Governor, stated this during the flag-off ceremony of the 2019/2020 Maternal, Newborn and Child Health Week (MNCHW), held at Odeda Primary Health Care, Odeda Local Government Area, saying this would be achieved through renovation, equipping and staffing, with

a flagship facility per ward, as qualified health personnel would be employed at these centers to address the shortage of staff being experienced over the years. Abiodun noted that the regular campaigns of MNCHW was paramount at ensuring progress in children’s right to good health care, as well as improving the well-being of the family, especially pregnant women and under-five children. Earlier, Tomi Coker, commissioner for Health, urged mothers and caregivers to avail their children and wards the opportunity of the various health interventions that had been specially designed to address maternal and child www.businessday.ng

mortality reduction rate, noting that it would go a long way at ensuring that the State continued to improve on the National Demographic Health Survey. Also speaking, Ayinde Adesanya, permanent secretary, Ministry of Health, explained that the State would continue to ensure availability of potent vaccines and other health packages, adding that health personnel had been trained to improve on service delivery. Contributing, Elijah Ogunsola, executive secretary, Primary Health Care Development Board, said 0-59 months’ children would be reached, highlighting some of the health packages and services to include, Vitamin A

supplementation for children 6 - 59 months; de-worming of all children from 12 months to 59 months; screening underfive children for malnutrition. He added that routine immunization for eligible children 0-11months and mothers; growth monitoring and promotion; HIV/AIDS counseling and services, as well as distribution of Long Lasting Insecticidal Treated Nets, to all under-5 children and pregnant women, who register during the week. According to Ogunsola, other interventions included, antenatal care registration (including immunization and IPT administration for pregnant women); promotion of key household practices, such

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as handwashing and basic hygiene, provision of family planning services to women and men of child-bearing age, while birth registration for children age 0-5 years, would be conducted by National Population Commission. In their separate goodwill messages, the representative, World Health Organization, Sunday Abidoye, the State Coordinator, National Primary Health Care Development Agency, Olatunde Odebiyi and the representative, United Nations Children Emergency Fund, Florence Molokwu, while commending the State Government in ensuring that the exercise was carried out, enjoined mothers and caregivers pres@Businessdayng

ent to inform others in their various communities to bring their children and wards for vaccination, as the exercise would not be the usual house to house visitation by health workers. Earlier in her address, the Head of Local Government Administration, Odeda, Local Government, Bola Oshin, appreciated the State government for various health programmes and interventions, which he said, had improved the overall wellbeing of the citizenry. BusinessDay reports that the week is scheduled to hold from Monday, January 13 through Friday, January 17, 2020, across the twenty Local Government in the state.

Friday 17 January 2020

BUSINESS DAY

HEALTH BUSINESS&LIFE NCDC activates 3 new laboratories to boost disease surveillance Cancer: Kwarans to enjoy GODSGIFT ONYEDINEFU, Abuja

he Nigeria Centre for Disease Control (NCDC) has announced the inclusion of three new laboratories to national yellow fever, measles, and rubella laboratory network. Chikwe Ihekweazu, director-general, NCDC, announced this in Abuja. He said before 2019, the center had only four laboratories in the network with no laboratory in the south zone and southeast zone, which affected the efficiency of the center and made disease surveillance a difficult task. He also recalled that in 2017, Nigeria recorded an outbreak of yellow fever in Kwara, 21 years after the last case had been detected in the country and have since

continued to record clusters of cases across the country. The DG expressed confidence that the new laboratories will build the capacity of Nigeria in line with global best practices. The three new laboratories according to him are the University of Benin Teaching Hospital (UBTH), Edo, University of Nigeria Teaching Hospital (UNTH),

Enugu and NCDC National Reference Laboratory, Abuja which will provide primary testing for yellow fever, measles, and rubella. Ihekweazu also informed that the NCDC National Reference Laboratory is working towards full accreditation to serve as a reference laboratory for yellow fever so that Nigeria will no longer send samples to Dakar, Sen-

egal for verification. He further announced that the NCDC is strengthening the state’s capacity to initiate and respond to disease which includes emergency operation centres, strengthening surveillance and risk communicating before interventions from the national level. The UNTH representative, Chioma Benjamin-Puja, assistant director, Medical Laboratory Services, said that the institution had since longed for inclusion due to the incidence of yellow fever in some parts of the South-East. Darlington Obaseki, chief medical director, UBTH, in pledged commitment to ensuring that the required leadership and resources were provided to ensure the full functionality of the laboratory.

IOSH to host West Africa conference to shape future of HSE in Nigeria ODINAKA ANUDU

he Institution of Occupational Safety and Health (IOSH) is partnering with the Federal Government and the Lagos State Safety Commission in Nigeria to run its first conference in West Africa. The event launches a range of training opportunities in West Africa, including the NCFE IOSH Level 3 Certificate in Safety and Health for Business, as well as marking the launch of ‘IOSHs No Time Lose’ campaign tackling occupational cancer. It is expected to shape the future of health, safety, and environment (HSE) in Nigeria. The event takes place on 22 January at the Lagos Oriental Hotel, Victoria Island. IOSH, the world’s only

Executive Travel Health

Dr Ade Alakija Q-life Family Clinic

lifeadvisoryservices@outlook.com

nternational travellers encounter extremes of climate to which they are not accustomed. Exposure to heat and cold can result in serious injury or death. Travellers should investigate the climate extremes they will face during their journey and prepare with proper clothing, equipment, and knowledge. Travellers who sit on the

HBL TEAM

chartered body for safety and health, and leading membership organisation for safety and health professionals help workers around the world to create workplaces that are safer, healthier and more sustainable. It is privileged to be partnering with the Federal Government of Nigeria and the Lagos State Safety Commission to support training and building competencies that enhance safety and health in Nigeria. This collaborative work is designed to address the negative social and economic impacts of poor safety and health at work. Speaking at this event are high-level representatives of the Federal Republic of Nigeria; Bev Messinger, IOSH chief executive; Kayode Fowode, IOSH vice-president; Funmi Adegbola, IOSH West Africa consultant; LanreMo-

jola, director-general of Lagos State Safety Commission, as well as the Nigerian Insurers Association and the Chartered Institute of Personnel Management of Nigeria. All registered delegates who attend will benefit from presentations by key business leaders, with workshops as well as panel discussions designed to build safety and health competencies and capabilities in Nigeria and beyond, the organisers said in a statement. To celebrate the launch of a major qualification, the NCFE IOSH Level 3 Certificate in Safety and Health for Business, in West Africa, Messinger said, “We are delighted to be building on the important memorandum of collaboration we signed in 2019 with the Lagos State Safety Commission to support the development of strong workplace safety cul-

tures promoted by businesses and government agencies.” He said the innovative event promises great opportunities to network with peers, share knowledge and ideas and enable Nigeria’s health and safety professionals to receive essential career advise and insights into making significant professional development progress. In Africa, cancer caused by work claims the lives of an estimated 46,494 people a year. Globally, at least 742,000 lives are lost to work-related cancer annually. The ‘No Time to Lose’ campaign launch in Nigeria will focus on two main occupational cancer challenges in West Africa— asbestos and diesel engine exhaust emissions— giving practical ways businesses can tackle these and keep workers safe and healthy.

comprehensive screening soon SIKIRAT SHEHU, ILORIN

aji Abdulrazak, Kwara State Commissioner for Health has disclosed that people of the state will soon enjoy comprehensive cancer screening to ward off the prevalence of cancer in the state. Abdulrazak, who stated this when the Civil Society for Cancer Eradication in Nigeria (CiSCANEN) paid him a courtesy call in his office recently in preparation for World cancer celebration, noted that efforts were underway for women, youths, adults and the aged to undergo cancer screening in the state. The commissioner explained that mass screening would allow the state government to discover the number of people with cancer and ensure necessary intervention as well as treatment using cryotherapy. According to him, there was a need for people to be sensitised on cancer to realise that there are environmental factors that predispose people to cancer. Abdulrazak assured that the state government would cooperate with relevant agencies in promoting health care services in the state. He describes cancer as a global challenge, pointing out that Nigeria was not an

exception. The Commissioner, however, emphasised the need for early detection and prevention through health education. Raji, had while warning that smoking is one of the causes of cancer, added that it was a predisposing factor to tuberculosis. He sheds some light that genetics also play a role in cancer through hereditary. Earlier, Banjo Famuyiwa, Coordinator of CiSCANEN, explained that the visit was part of the group’s activities to commemorate the World Cancer Day scheduled for February 4. Famuyiwa says the importance of the international day set aside to create awareness on cancer and collaborate with necessary stakeholders to bring about change. Adding that though there were cases of cancer-related deaths at the University of Ilorin Teaching Hospital (UITH), “however, there are no data to give the accurate number of deaths.’’ The coordinator decried the poor level of awareness on cancer-related issues and the cost of treatment. He, therefore, urged the state government through the state ministry of health to assist his organization in creating better awareness’s on the scourge of cancer in society.

Travellers in extreme temperatures beach or by the pool and do only short walking tours incur a minimal risk of heat illness. Those participating in strenuous hiking, biking, or work in the heat are at risk, especially travellers coming from cool or temperate climates who are not in good physical condition and not acclimatised to the heat. Cardiovascular status and conditioning are the major physiologic variables affecting the response to heat stress at all ages. Many chronic illnesses (in particular, those involving the cardiovascular system or the skin) limit tolerance to heat and predispose to heat illness; these include cardiovascular disease, diabetes, renal disease, and extensive skin disorders or scarring that limits sweating. Apart from environmental conditions and intensity of ex-

ercise, dehydration is the most important predisposing factor in heat illness. Dehydration reduces exercise performance, decreases time to exhaustion, and increases internal heat load. Temperature and heart rate increase in direct proportion to the level of dehydration. Sweat is a hypotonic fluid containing sodium and chloride. Sweat rates commonly reach 1 L per hour or more, resulting in substantial fluid and sodium loss. Minor heat disorders could be in the form of heat cramps, Heat syncope, Heat edema and Prickly heat. Water with a salty snack is usually enough to take care of heat cramps. But travellers can also make a simple oral salt solution by adding onefourth to one-half teaspoon of table salt (or two 1-g salt tablets)

to 1 L of water. Heat syncope—sudden fainting caused by vasodilatation—occurs in acclimatized people standing in the heat or after 15–20 minutes of exercise. They can lose consciousness, but this can rapidly return when the patient is supine. Rest, relief from the heat, and oral rehydration are adequate treatment. Heat edema is another minor heat disorder. It occurs more frequently in women than in men. Characterised by mild swelling of the hands and feet during the first few days of heat exposure, this condition typically resolves spontaneously. Travellers should not treat heat oedema with diuretics, which can both delay heat acclimatization and cause dehydration. Prickly heat (malaria or heat rash) manifests as small,

ANTHONIA OBOKOH / Reporters. Email: obokoh.anthonia@businessdayonline.com

red, raised itchy bumps on the skin caused by obstruction of the sweat ducts. It resolves spontaneously, aided by relief from the heat and avoiding continued sweating. Travellers can best prevent prickly heat by wearing light, loose clothing and avoiding heavy, continuous sweating. Life-threatening heat disorders can be in the form of heatstroke, heat exhaustion, and exercise-associated hyponatremia. Heat exhaustion can be relieved by rest and drinking of salt solution while heat stroke is an emergency requiring more aggressive treatment including hospital care. It is important to be able to recognise it. Heat Disorders can be prevented by heat acclimatisation. This requires 1–2 hours of exercise in the heat each day. With a

suitable amount of daily exercise, most acclimatization changes occur within 10 days. If possible, all travellers should acclimatize before departing for hot climates by exercising ≥1 hour daily in the heat. Physically fit travellers have improved exercise tolerance and capacity but still benefit from acclimatisation. If this is not possible, advise travellers to limit exercise intensity and duration during their first week of travel. It is a good idea to conform to the local practice in most hot regions and avoid strenuous activity during the hottest part of the day.

Ade Alakija, medical director Q-Life Family Clinic & Bukola Adeniyi, Consultant Family physician and travel medicine physician Q-Life Family Clinic.

I David Ogar, Graphics

Friday 17 January 2020

BUSINESS DAY

LEADINGWOMAN

Owen Omogiafo, proof that if you dare, you can rise will it be? If I could change something, it will be to have a ministry that is dedicated to Tourism. Nigeria is such a beautiful country, and we need to have policies that are focused on unlocking value for us, via the tourism route. We should take a cue from Dubai and our African counterpart Kenya, who have ministries dedicated to improving and expanding this key sector.

KEMI AJUMOBI

wen Omogiafo is the Managing Director/Chief Executive Officer of Transcorp Hotels Plc where she is responsible for driving positive transformation in Transcorp Hilton Abuja and Transcorp Hotels Calabar. Prior to joining Transcorp Hotels Plc, Omogiafo was the Executive Director, Corporate Services at Transnational Corporation of Nigeria Plc (Transcorp). Transcorp is Nigeria’s leading conglomerate with investment in Power, Hospitality and Oil & Gas. A Harvard trained executive, Owen is a certified Change Manager (Prosci Institute, USA) and a member of the Chartered Institute of Personnel and Development, UK. She holds a B.Sc. in Sociology and Anthropology from the University of Benin and an M.Sc. in Human Resources from the London School of Economics and Political Science. She is a member of the Institute of Directors (IoD) Nigeria and a member of the Board of Avon Healthcare, where she sits on the Board Finance, Investment & Risk Committee and Board Audit & Governance, in a NonExecutive capacity. Growing up Growing up was very interesting. I was born and bred in Benin City, at a time when the word “neighbour” really meant something. I grew up in an environment that had a mix of tribes, religions and income brackets. We interacted with everyone, treating one another with respect, consideration and there was a strong sense of family. We were raised on the principle of “A good name is better than riches” and that guides me till today in all my engagements. Transition at the various points in your career till where you are now, and what the experience taught you? From my initial roles as a Human Resources Director to my pivotal career moment of being appointed the Chief Operating Officer (COO) and subsequently, Deputy CEO (DCEO) of the Tony Elumelu Foundation, this has been my story. I was able to raise my hand and say that I can do it when each opportunity presented itself, and thereafter, justified the confidence of those who said go ahead by delivering on the job. When I was appointed MD/CEO of Transcorp Hotels, a year ago, it was because I had proven myself in the previous roles I occupied. The lesson I take from these transitions is the one that has gone a long way in guiding me through various decisions I’ve made. Be prepared and be ready to speak

up on your preparedness. I was raised to be daring and adventurous. As my dad would say when we were kids, “if you ask, you have a 50/50 chance of getting a yes/no, but if you do not ask, it is 100% no”. What is your take on gender equality? It is as important as breathing. I am fortunate to be part of a group that has gender equality ingrained in its values and actively pursues it. We just do not talk about gender equality, we live it and I am proud to say that more than half of our leadership are women. How important is the business of hospitality and how can it contribute to the economy of any nation? Hospitality and tourism are global driving forces for any country’s economy; they contribute to the transformation of a country not only by the income it generates for the Nation but also by the number of employments it creates and more. Taking a look at Dubai, I see an economy that was transformed by hospitality and tourism, they shifted their focus away from oil which was already dwindling and focused on developing its tourism centres and www.businessday.ng

hotels. Today, oil contributes to just 7% to its economy. This goes to say that tourism and hospitality can sustain a Nation and can transform Nigeria. We are hopeful that with the new visa on arrival policy for all African countries introduced by His Excellency, President Muhammadu Buhari, we will see great progress in making Nigeria a tourist destination for our African brothers and sisters. How is Transcorp Hotels promoting tourism in Nigeria? Domestic tourism is growing in Nigeria with an increase of local tour companies. According to research, it’s estimated that between 2018 – 2028, travel and tourism will contribute 4.3 per cent to the country’s GDP (N3.61 billion) year-on-year. This will definitely mean an increase in activities and products by responsible tourism and hospitality bodies. To this end, we launched the Weekender package at our hotels, offering special rates and tour experiences to encourage the inflow of guests looking to tour the cities we operate in. The introduction of our country-themed nights at our restaurants has given many a reason to stay back even after conducting their businesses in Abuja. In addition, we have ongoing

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tourism stakeholder engagements where we advance the cause of tourism development in Nigeria. In November, we partnered with the Federation of Tourism Association of Nigeria (FTAN) in hosting its 5th Nigeria Tourism Investors Forum and Exhibition which brought together various tourism stakeholders. In July, we also hosted the Tony Elumelu Foundation Entrepreneurship Forum which brought together thousands of attendees from 54 African countries. What is Transcorp Hotels looking forward to achieving in 2020? We will continue to derive value from our existing assets, whilst operating them efficiently, and at the same time explore new lines of business. Overall, we will continue on the pathway of being the leading hospitality brand in Nigeria, with a view to planting our flag across the continent. As part of our initiatives of creating more value for our guests, we will be launching a world-class spa at the Transcorp Hilton in 2020 and increasing our conference capacity. If you could change anything in the tourism sector, what @Businessdayng

How important is mentorship? How has it helped you and how are you doing the same? On this, I will say the need for mentorship cannot be overstated, especially for young people in their foundational years. Having a mentor at this stage helps guide your thinking, provides you with a “Devil’s advocate” who tells you the hard truth about situations/decisions and also provides you with resources such as access to their network. As a mentee, you also have a role to play in this relationship by being open, seeking feedback, actively prioritizing your personal development and following through on the commitments you have made to your mentor. I can say that I have benefited from such relationships as they helped form the foundation of who I am today. I had several mentors at every stage in my life, right from my university days till now. I am fortunate to have one of Africa’s best products, Tony O. Elumelu, CON, the Chairman of Transcorp and Heirs Holdings, as a mentor. He is passionate about the development of Africa and lives it through his various long-term investments in key sectors of the economy. He has been very instrumental in creating a purpose I now hold so dear, “contributing my quota to the development of Africa” and through his principles of Leadership tagged the TOE Way, I am able to be a better version of me. I also believe in paying it forward, people had roles to play in my getting here, so I am also playing roles in mentoring others. What day in your life is it that you can never forget and why? Having lived a very rich and eventful life, despite my age, it is difficult to answer this question. I have had quite a number of life-changing moments, from being told at the tender age of 29 that my pap smear showed signs of Cervical Cancer, to losing a much-longed-for child and on the other side of the spectrum having such mind-blowing successes of having a rainbow baby at the age of 38 and being appointed CEO at that same age. Life is a mixed party and we celebrate each day, being grateful to have family and friends through who, God’s love upon us is clear.

Read the concluding inspiring story about Owen Omogiafo on our website www.businessday.ng as she graces our Women’s Hub magazine cover for this week. You are just a click away!

Friday 17 January 2020

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

Spotlight on the loyalty economy: How to value a company by analyzing its customers DANIEL MCCARTHY, PETER FADER AND PEI-YUAN CHIA

n the weeks leading up to the initial public offering of apparel retailer Revolve Group, in June 2019, investors struggled to come up with a fair valuation. Several recent IPOs — most notably those of the ride-hailing firms Uber and Lyft — had been disappointing. Revolve had delayed its IPO for months because of a downturn in the stock market. Despite the headwinds, its IPO was priced at $1.2 billion — and it exploded by an additional 89% on its first day of trading, making it one of the best first-day IPO performances of 2019. What happened, and why did investors originally fail to see just how strong a firm Revolve was? Revolve’s premium valuation stemmed from the firm’s strong underlying fundamentals. This strength was less about top-line revenue growth and more about strong customer-unit economics: Simply put, Revolve not only acquired its customers profitably but retained them for many years, and that meant its longerterm profit potential was larger than its revenue growth to date had implied. Revolve’s IPO success illustrates the movement toward customer-driven investment methodologies. Using customer metrics to assess a firm’s underlying value, a process our research has popularized, is called “customer-based corporate valuation” (CBCV). This approach is driving a meaningful shift away from the common but dangerous mindset of achieving “growth at all costs” — and bringing a much higher degree of precision to the new loyalty economy. In this article, we explain how executives and investors can use the principles of CBCV to better understand and measure the value of a firm. The methodology works whether the company features a subscription-driven revenue stream (think of Netflix) or a base of active customers who place discretionary orders every so often (think of Uber). We also discuss how companies can benefit from providing investors with more of the right kinds of customer data — and how investors can avoid being fooled by vanity metrics. A MORE PRECISE WAY TO FORECAST REVENUE The premise behind CBCV is simple. Most traditional financial-valuation methods require quarterly financial projections, most notably of revenue. Recognizing that every dollar of revenue comes from a customer who makes a purchase, CBCV exploits basic accounting principles to make revenue projections from

the bottom up instead of from the top down. This brings more focus to how individual customer behavior drives the top line. What do we need to implement CBCV? In addition to the usual financial statement data, two things are required: a model for customer behavior (what we call the customer-base model), and customer data that we feed into it. The model consists of four interlocking submodels governing how each customer of a firm will behave. They are: 1. The customer acquisition model, which forecasts the inflow of new customers. 2. The customer retention model, which forecasts how long customers will remain active. 3. The purchase model, which forecasts how frequently customers will transact with a firm. 4. The basket-size model, which forecasts how much customers spend per purchase. Bringing these models together enables us to understand the critical behaviors of every customer at a firm — who will be acquired when, how much they’ll spend over time and so on. Summing up all the projected spends across customers gives us our quarterly revenue forecasts. Together, these models can produce much more precise estimates of future revenue streams — and from that, one can make much better estimates of what a company is really worth. PEEKING INSIDE THE BLACK BOX Although the CBCV methodology may seem daunting, it’s relatively simple to get going. Imagine you’re the founder of a young, fast-growing, subscription-based meal-kit company. In its first four months of operation, your company generated $1,000,

$2,500, $4,500 and $7,000 in total revenues respectively. You’d like to understand what this means for future revenues and the overall viability of your business. As a start, you want to forecast revenue in month five. Let’s suppose that active customers pay a flat fee of $100 per month for meal kits delivered over the course of the month, and that the company acquired 10, 20, 30 and 40 customers, respectively, in its first four months of operation (100 in total). Half the acquired customers churned out in their first month; all customers who did not churn out in the first month have remained. The first step in forecasting month five revenue is to figure out how much revenue will come from retained customers. Of the 100 customers acquired over the first four months, half, or 50, will still be with the company in month five if historical retention trends persist. Thus, the portion of month five revenue from retained customers is $5,000 (50 x $100). The next step is to forecast how much revenue will come from new customers. Assuming that acquisition trends continue, you can expect an additional 50 customers, representing $5,000 of revenue. By adding up the two forecasts, you arrive at a total monthly revenue of $10,000. Using the CBCV approach, revenue numbers no longer exist in a vacuum. Instead, they are a direct function of a small set of behavioral drivers — in this example, total customers acquired, retention dynamics and average revenue per user. LOOKING AT CUSTOMERS FROM INSIDE AND OUTSIDE The richness of the insights that can be derived from CBCV depends on how much access the

person performing the analysis has to internal company data. A corporate executive would have full visibility of all customer data. A private equity investor assessing an acquisition target would typically have access to transactional and customer relationship management data. For subscription firms, that would include the length of contracts, periodic payments and observable churn; for nonsubscription firms, it would include the timing and size of each individual purchase. For those on the outside looking in — hedge funds, Wall Street analysts and others — detailed customer data might be impossible to obtain on a regular basis. They may, however, have access to the firm’s customer cohort chart, or C3, which tracks revenue by acquisition cohort over time and shows how total customer spending changes as each cohort ages. Many large firms have begun to disclose their C3. A firm’s C3, along with the number of active customers and the total number of orders, is sufficient to give investors a good understanding of customer behavior. If a firm can’t or won’t release its C3, investors should press it to reveal four key metrics: the number of active customers, gross acquired customers over the most recent period, revenue and the number of orders. TRENDING TOWARD TRANSPARENCY Few companies currently provide all the data outsiders need to perform CBCV, for a variety of reasons. First, disclosure of customer metrics is voluntary, and companies feel little to no pressure to make them available. Second, there is little consensus about which customer metrics are the most informative and

how those metrics should be calculated and reported. And finally, policymakers and regulators have been largely silent about these issues, leaving disclosure to companies’ discretion. Unfortunately, executives often fear that additional disclosure could put them at a competitive disadvantage or open them up to potential litigation. Successful firms worry about how investors will react if the metrics they’re disclosing start going in the wrong direction. In the absence of investor pressure and regulatory standards, firms can arbitrarily choose which metrics to disclose, generally selecting those that paint an overly rosy picture for the investment community. If you are an investor, don’t ignore the customer-related metrics that may be tucked away in financial reports; seek them out. If the data you need isn’t disclosed, demand it, or find alternative sources. If you’re an executive and you aren’t currently disclosing your customer metrics, start thinking about the story they would tell if disclosure were required. If you would not be proud of your metrics as they stand, this is your opportunity to improve the health of your customer base.

Daniel McCarthy is an assistant professor of marketing at Emory University’s Goizueta Business School and a co-founder of Theta Equity Partners, a customerbased corporate valuation solutions provider. Peter Fader is the Frances and Pei-Yuan Chia professor of marketing at the Wharton School of the University of Pennsylvania, a co-author of “The Customer Centricity Playbook” and a co-founder of Theta Equity Partners.

Friday 17 January 2020

BUSINESS DAY

entertainment Remembering Amaka Igwe, the entertainment Amazon

OBINNA EMLEIKE

f you were at Haven Gardens Ikeja on June 9, 2014 for a tribute evening and service of songs for Amaka Igwe, you would have appreciated the accolades showered on the late entertainment mogul by her constituency, friends and the public. Amaka, the Nollywood and broadcast icon, who passed away on April 28, 2014, would have been 57 years on January 2, 2020. Six years after her death, the Nigerian movie industry still feels the vacuum her demise created, especially her creative ingenuity, doggedness and proactive approach to challenges in the movie business. She was one of the second generation filmmakers who pioneered the video film era of the Nigerian cinema and remained prominent figure in the industry until her death in 2014. In recognition of her contributions to the Nigerian entertainment industry, as well as, to mark her 57th posthumous birthday on January 2, 2020, Google honoured her with a doodle, which temporarily altered the logo on Google’s homepage with Amaka’s facial drawing that day. For those who do not know Amaka, she was everything a father, husband, children and even colleagues would wish a woman to be - a successful daughter, loving wife, caring mother, and an astute business/entertainment personality. If Isaac Ene, her late father, a retired civil engineer from Obinagu-Udi in Enugu State, was to be

Amaka Igwe

alive today, he would query death for snatching his best. Amaka was truly among the best in her chosen career. Madam BOBTV, as her competitors would call her; Amaka was a foremost producer, writer, director, an entrepreneur, teacher and a leading player in the Nigerian motion picture industry since 1992 until death. Considering some of her early works such as Checkmate, Fuji

House of Commotion, Violated, Rattle Snake, and The Barber’s Wisdom, shot on celluloid, one may ask where she got such amazing creative ingenuity from because then, they were rare in our clime. Those efforts till date have largely remained a watershed in the history of soaps and movie production in Nigeria. Even when ideas come in a flash of memory, she still captured them. While alive, Amaka

Joseph, premieres, unveils captivating story of one man’s journey to self-discovery

oseph, the anticipated dramatic movie, is set to premiere in Nigeria this January. An inspiring, trans-Atlantic story of self-discovery, Joseph chronicles one man’s journey as he breaks through parental, societal and cultural boundaries to find his true identity. Joseph trails the life of a young successful medical doctor in the

Caribbean whose curiosity about Africa drives him to set out for a world unknown. Defiant and rebellious, Joseph dismisses the warnings and threats of his affluent medically-inclined family to seek reconnection to his ancestral roots and discover his true purpose. Joseph surveys the central character’s journey to his land of origin, regaling viewers with tales

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of love, acceptance and freedom. The larger-than-screen production addresses misconceptions about Africa fed by global media, while observing the many similarities between life in the Caribbean and west Africa. In celebration of the Year of Return, Joseph premiered in Ghana to rave reviews, with Nollywood favourites, Mawuli Gavor and Sika Osei, and the lead actor, Kevoy Burton, who flew in from Jamaica. Also featured in the film are acclaimed singer/songwriter Shontelle (TShirt and Impossible) and Queen of Soca, Alison Hinds (Roll it Gal), as well as, several international actors, adding to the plumb of this highly regarded production. In addition, Joseph has been selected for screening at the largest Black film festival in the USA, the Pan African Film Festival in Los Angeles from February 11-23, 2020. Joseph will premiere in Lagos on January 22, 2020 at Filmhouse Cinemas, Landmark Village, and would be released in cinemas across the country from January 24, 2020.

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disclosed that she conceived Checkmate by watching Mirror in the Sun. She had written a script about an all conquering female hero like Queen Amina and had conceived it like a traditional stage play. But when she saw Mirror in the Sun, she decided to make it a modern all conquering female hero story. Her love for the motion picture industry was beyond the scripts she wrote, the movies she directed and the money that hit her bank accounts. Amaka also saw the need for a platform that converge all TV programmes in one-stopshop. She created one and tagged it BOBTV, an annual event that facilitated the buying and selling of audio-visual content, the brokerage of production deals, as well as, the facilitation of worldclass skills transfer and training for African producers. Best of the Best African Film and Television Programmes market (BOBTV) truly lived up to Amaka’s vision of providing a common access point for good and authentic movies and television programmes. The late Amaka was truly a successful entrepreneur. Beside founding and organising BOBTV, she was also the CEO of Top Radio 90.9FM based in Lagos mainland, managing director, Amaka Igwe Studios, and chairperson, Q Entertainment Networks, while preparations were underway to launch Q Networks, a DStv channel in a few weeks before her death. Even in death, Amaka remains grateful to the day she organised variety shows for her school house at Idia College Benin City, Edo State, which attracted a fee paying

audience. That was the beginning of her today successful journey in the arts, and from that single variety show, she taught and took her school group to perform the famous Atilogwu dance at the Ogbe Stadium in Benin City. Though she studied Education and Religious Study at the University of Ife, it was until she returned to Enugu after her NYSC that she learnt television at the studios of the Enugu State Broadcasting Service where classics such as Basi and Company and the New Masquerade were produced. Of course, her fans across Africa still mourn her, and even Africa Magic for being a giant in our world, a loyal supporter, a committed professional and a valued partner to M-NET Africa. Charles, her husband of 21 years, her three children, and an aged mother, all mourn her irreparable loss. However, Amaka, who died while on location for an Igbo soap opera in Enugu, left behind so many unfulfilled dreams, especially the quest to make Igbo films that would show regularly on Africa Magic like Hausa and Yourba movies. Gratefully, Africa Magic Igbo went live on April 2, 2015 at 19:00 CAT on DStv channel 159, barely a year after her death. She also wished that BOBTV would continue to provide a common access point for good and authentic movies and television programmes in Nigeria and Africa. She also hoped there would be people willing to continue where death stopped her and to sustain her legacy. Adieu Amaka, Madam BOBTV!

Vesta Orchestra thrills with Afri-Classical concert series

t was a night of bliss and splendor at the first-ever Afri-Classical concert series, which held recently at Terra Kulture Arena in Victoria Island, Lagos. The 21-man orchestra, conducted by Kehinde Oretimehin treated the audience, which consisted of both Nigerians and foreigners, to beautiful renditions from African music greats such as Fela Sowande and Fela Kuti’s “Akinla”, Bobby Benson’s “Taxi Driver”, Victor Uwaifo’s “Joromi”, Eleazar Arinze’s “Nike Nike”, Victor Olaiya’s “Baby Jowo”, Bode Afolabi’s “Eniyan”, Prince Nico Mbarga’s “Sweet Mother”, Adedeji Adetayo and Seun Owoaje’s “Erinlakatabu”, and a number of Kehinde Oretimehin’s compositions such as “Ogo ni fun Baba”, “Are you willing” and “Magbagbemi”. Carl Maria von Weber’s “Symphony 1” was also rendered to give foreigners a feel of home. The night ended with a rousing standing ovation from an @Businessdayng

obviously satisfied audience as they savored an encore of “Magbagbemi”. Earlier, Rosalyn Aninyei, CEO of Vesta Violins and The Vesta Orchestra, welcomed the guests to an evening of great music, thanking them for coming out to support the orchestra. She went on to commend the support from Terra Kulture Arena, which is now venue for the series in Nigeria, as well as, Bolanle Austen-Peters, founder of the outfit, for welcoming the orchestra with open arms and allowing them to premiere in her theater.

Friday 17 January 2020

BUSINESS DAY

entertainment ‘It has been exciting time for the Nigerian music market’ Paul Okeugo is the group chief operating officer and president, Chocolate City Group, one of Africa’s premier entertainment and media companies. In this interview w, the music entrepreneur speaks to Obinna Emelike on his drive, milestones, the music industry and other related issues. You seem a serial entrepreneur, what has been your drive? t is really a desire to be creative, to try new things and also, a bit of a restless spirit and not wanting to be defined by any one thing. There is an excitement that comes from creating something new, especially one that goes on to be successful. A lot of times that does not happen and you have some failures, but even those are part of the learning and growing.

in general to a place where we are driving real value to the whole ecosystem.

What are the challenges you have faced so far as a music executive and as a businessman? Any business in Nigeria has its challenges ranging from securing funding, having a legal system that works and support intellectual property, finding the right people to execute the vision, access to infrastructure (especially in an affordable way), and many other issues. But the important thing is that we keep improving and doing all we can to create the right value.

What is like to lead an entertainment company? It is tough, exciting, interesting and frustrating at the same time because sometimes failures are felt immediately. Do you think the entertainment industry is still burgeoning and also a business worth investing in? Absolutely! Now more than ever we are seeing Africa take the world stage. We are really starting to show our value. It is an exciting time for us universally as a market. Now more than before, and it will continue to be a huge contributor going forward, and we will not only contribute economically we will also be the most important medium in exporting our culture, people and products to the world. It could do better, but that

Paul Okeugo

applies to every industry as well. So far, we are recording the right kind of success, the future is certainly brighter. After the decision to start the music business, what were the first of things you needed to secure to make sure operations run as smoothly as possible? The main focus was doing things right, getting the structure right

and having clear goals matched with the right timelines. Of course, funding is important for any business but without those structures, funding is not enough. What would you say has been the highlight of your career as a music executive so far, and what milestone are you looking forward to? There have been many high-

lights, as well as, low ones. I am not sure I can pick a particular one; it has been a mixed experience. The most important thing is that while there are always some regrets and some areas where one could have done better or made a better decision with hindsight, we keep looking forward and trying to improve. I look forward to getting our business and industry

We imagine you have some amazing projects in the works. What is next for Paul? I do have a few projects that are important to me going forward, a lot of them having to do with growing the Chocolate City brand and the CCX brand as well, but also some that are closer to home relating to developing an ecosystem to support children and families living with autism. That is very important to my wife and me and we hope to be able to focus on that. Where do you see the company in the near future? We have high hopes, we want to go on to do greater things, and we are working hard to make it so.

The boys who stole the spotlight at Soundcity MVP Awards

t was another night of ‘Ye(s)’ for Burna Boy and the other boys at the 2019 edition of Soundcity MVP Awards held recently at Eko Convention Centre in Victoria Island, Lagos. Last year saw Burna taking most of the wins at the prestigious event, kick-starting 2019 on a good note for him. The winning streak continued at the fourth edition of the award show that recognised and rewarded talents on the African music scene. His first win of the night was the Best Male MVP. The category recognises male music artistes on the continent whose works exude musical excellence and creativity. Burna edged out other nominees like Davido, Zlatan, Wizkid, Diamond Platnumz from Tanzania, and Sjava from South Africa. His second award for the night was for the Song of the Year, a very competitive category that had raving hits of the year under review such as ‘Jealous’ by Fireboy

DML, ‘Soapy’ by Naira Marley, ‘Zanku (Legwork)’ by Zlatan, ‘Dumebi’ by Rema alongside hits from South Africa and Ghana. The winning song for Burna in this category is his duet with Zlatan ‘Killin Dem’. Though Burna was absent at the awards, he sent a strong message to his fans when he emerged the winner of the African Artiste of the Year. It is the second time he is winning in that category. His representative told the crowd that the Grammy nominated singer has only one word for them: Thank You! But he disclosed that Burna’s mother, who represented him last year at the event, was enthused by the recognition and reward and asked fans to experience more madness in 2020. The 2019 edition of the music awards show was sponsored by Nigerian Breweries Plc brands; Star Lager Beer and Star Radler. The Soundcity MVP Awards www.businessday.ng

was also a big night for Fireboy who took home the award for Listeners Choice. It was a welcome feat for the young dreadlocked artiste who was absent at the show.

The category had heavyweight hits such as Burna Boy’s ‘Killin Dem’, Ghanaian DJ Mic Smith’s ‘Jama’, Rema’s ‘Dumebi’ as well as Joeboy’s ‘Baby’. It was the only win

JoeBoy, appreciating the audeince after wining the Best Pop category award at the Soundcity MVP Awards 2019

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for the Olamide signed artiste. Of the four categories, he was nominated, JoeBoy clinched only one award. He emerged winner in the Best Pop category that had Congolese singer Innoss’B, Tanzanian artistes, Nandy and Rayvanny, Kenyan Otilr Brown, as well as, Nigerian music stars including; Naira Marley, Teni and Kizz Daniel. Unlike the other boys, JoeBoy was available to pick up his plaque. Other male winners of the night include; Davido (Digital Artiste of the Year), Naira Marley (Viewer’s Choice), Khaligraph Jones (Best Hip Hop). The awards show marked the climax of the X100 concerts for 2019. It kicked off the Detty December programme with a four day festival that saw the best of fashion and lifestyle curated events, as well as, African music talents entertaining music fans at the Eko Atlantic Energy City in Lagos.

Friday 17 January 2020

BUSINESS DAY

FEATURE

NIMASA: Tackling marine pollution, piracy for safe shipping on Nigerian waters AMAKA ANAGOR-EWUZIE

pparently, about 90 percent of global trades is moved by sea using ships from ports of origin to the destination ports. This shows that shipping is a very sensitive international business that must be guarded jealously by ensuring the safety of lives and billions of dollars worth of property onboard vessels by maintaining pollution-free marine environment and reducing the menace of piracy. Marine litter can be described as any man-made object discarded, disposed of, or abandoned that enters the coastal or marine environment. It can be very dangerous, and has the capacity to threaten oceans and coasts, endangers marine animals and seabirds, affects navigation of vessels and also has health and safety implications on lives. BusinessDay search shows that about 1,964,175.63 kilogramme of garbage and 12,529 cubic meters of oily waste were collected in Lagos Ports by the Nigerian Ports Authority (NPA) from January to November, 2019 alone. These statistics speak to the fact that the amount of waste disposed in the nation’s territorial waters can become endangering if not properly managed. Also, it was discovered that about $13 billion worth of damage is caused annually to the marine environment by plastic pollution, which poses serious threat to the development of blue economy. Alarmingly, about 90 percent of ocean plastic waste originates from Asia and Africa, and can be traced to just 10 rivers, including River Niger, largely due to poor management of waste. To tackle pollution at sea and preserve marine resources, the International Maritime Organisation (IMO), an organ of the United Nations, saddled with the responsibility of regulating shipping activities globally, developed series of conventions that must be followed by maritime nations in order to ensure safe navigation of vessels and security of cargoes on international and local waters. These include the International Convention for the Prevention of Pollution from Ships (MARPOL); the Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter (London Convention), 1972, among others. In Nigeria, the Nigerian Maritime Administration and Safety Agency (NIMASA), the apex maritime regulatory agency, among other things, went as far as domesticating the relevant conventions of IMO, to enable it manage and control pollution at sea. Given insight into the activities of NIMASA on marine environmental management, Felicia Mogo, head, Pollution Control Division of the Marine Environment Department of NIMASA, stated that the agency embarked on the development of a global initiative on marine litter through the

MEM officers monitoring harvesting and evacuation of debris

execution of public education programmes for environmental stewardship and implementation of policies supported by government and private sector individuals. Mogo, who co-chaired the United Nations Environment Programme (UNEP) Global Partnership Action (GPA), UNEP-GPA Advisory Group on Marine Litter, said that NIMASA initiated action plan for coastal and beach clean-up campaigns in identified hot-spots. While promising that NIMASA will implement litter/solid waste management programme such as waste collection, wastes recycling, waste-to-wealth, installation trash traps, she stated that Marine Environment Management (MEM) officers carried out monitoring of initial inspection surveys, the actual removal and clearance at hot spots and post clearing at all the agency’s operational zones including central, Eastern and Western Zones. “Other activities carried out were, clean-up of the identified Marine Litter hotspots in Nigeria’s coastal states of Cross River, Rivers, Delta, Ondo, and Lagos (2019); supervision of the engaged 120 Marine Litter Marshalls and pre–Clean-up of Marine litter in Ogogoro Snake Island,” she stated. Meanwhile, Dakuku Peterside, director-general of NIMASA, dis-

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closed recently in Lagos, that the agency in conjunction with the United Nations Environment Programme (UNEP) Global Partnership Action (GPA) developed a national action plan for tackling marine litters and pollution at sea. “One of such actions was the launch of ‘Operation 30 Days at Sea’ which commenced from Tuesday, 1st to 31st October, 2019 and it had three targets namely: Pollution from vessels and offshore installations; land or river-based sources of pollution, impacting on the marine environment; and wastes trafficking through the ports,” he listed. According to him, the above mentioned operation enabled the agency to board a total of 87 vessels across the western and eastern zones. “This resulted to high compliance by stakeholders; detention of ships; less terrorism attacks onboard ships/ water; elimination of illegal bunkering activities; absence of human/drug trafficking; and absence of pipeline vandalism, among others.” He stated that the agency had through its MEM Department, successfully carried out hazardous wastes and dangerous chemical tracking programmes at all its operational zones under the International Maritime Dangerous Goods (IMDG) Code, an acceptable international guideline

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to safe transportation or shipment of dangerous goods or hazardous materials by water on vessel. In addition to that, it was discovered that NIMASA had also developed the IMDG portal and installation of exact Earth and Hazcheck Systems software for tracking of dangerous goods in Nigeria. This was in fulfilment of chapter seven of the SOLAS Convention and Annexes 2 and 3 of MARPOL Convention. “With this move, we have addressed the identified gaps in the management of chemicals and hazardous wastes within the maritime domain and we are currently, remodeling the Marine Pollution Laboratory to an internationally accepted modern,” Peterside said. This when completed, he believed, would cater for the laboratory analysis aspects of the relevant Marine Environment Conventions of the IMO including the Oil Pollution Preparedness and Response Cooperation (IOPC); Ballast Water Convention and Anti-Fouling Systems (AFS). Pundits believed that safe shipping cannot be achieved without the safety and security of both crew and cargoes onboard the vessel. Being one of the core mandates of NIMASA, it was also very crucial to the survival of the global shipping business. Recall that the International Maritime Bureau (IMB) had repeatedly reported various degrees of pirate and sea robbery attacks on vessels and kidnapping of crews onboard within the Gulf of Guinea (GoG), a region that houses Nigerian territorial waters. In order to stem this tide, NIMASA, in collaboration with the ministries of Transportation, Defence, the Nigerian Navy and other relevant security agencies, recently launched a multidimensional solution to the problem. The Federal Government conceived the Deep Blue Project involving a Total Spectrum of Maritime Security, which includes law enforcement, regional cooperation, response capabilities building, and enhanced maritime domain awareness for all organs of government responsible for maritime security. @Businessdayng

“To execute the Deep Blue Project, the service of the Homeland Security International (HLSI) from Israel was engaged to help Nigeria in the training of personnel and procurement of hardware for the safety and security of the country’s waterways and the Gulf of Guinea,” Peterside further stated. According to him, African leaders, who were concerned met at various times to brainstorm and find lasting solution to the security challenges in the region, with Nigeria taking the lead, to ensure a robust African maritime sector that will attract more participation from the international community. Despite the stride recorded by NIMASA in previous years in the area of marine pollution control and fight against piracy, industry close watchers believed that the agency needs to do more to ensure global best practices and to attract more investors that will help open up the nation’s blue economy to contribute to the nation’s GDP. Against this backdrop, the agency in 2018 started NIMASA Corporate Dinner and Awards Night, an annual event that rewards hard work and industry players, who played by the rule of complying to maritime regulations, thereby making Nigeria a force to reckon with in the comity of maritime nations. Already, this year’s event has been scheduled to hold tomorrow Saturday, January 18, 2020, to enable the Agency present awards to those who have imbibed best practices in the day-to-day running of the sector. The categories to be awarded include; Most Compliant ISPS Offshore and Onshore Facility; Best Terminal and Jetty Operator; Best Maritime Training Institution, and Best Shipping Company (Marine Environment Management). Others are; Overall Shipping Company; Best Cabotage Operator; Company with Largest Combined Tonnages and Best Maritime Financing Banks, among other categories of awards. Also, the award ceremony will reward staffs who have contributed meritoriously to the service Agency, ranging from fifteen to thirty years. “Our existence as an Agency is largely dependent on our stakeholders; without which we cannot achieve anything. Of a truth, there have been times of disparagement, sanctions and enforcement; all these were geared towards ensuring the right thing is done and laid down rules and regulations are adhered to. The Agency is therefore, poised to reward hard work and encourage more investments in the maritime sector by appreciating those who have done well,” the NIMASA boss stated. He further said that an independent panel of judges headed by Adebayo Sarumi, a former managing director of the Nigerian Ports Authority (NPA), will screen the award nominees in order to ensure transparency in the process.

Friday 17 January 2020

BUSINESS DAY

MADE in aba

Nigerians urged to patronise locally made products GODFREY OFURUM, Aba

e n A nya nw u , n a t i o n a l secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN), an association of shoe, bag and belt makers in the country, has appealed to Nigerians to patronise locally made shoes and other finished leather goods to stimulate growth in the sector. Anyanwu, in an nterview with BusinessDay in Aba, stated that a little action towards domestication of local footwear production would save Nigeria foreign exchange and provide jobs for the country’s growing population. The Aba finished leather sector, said to be the biggest in West Africa, with about 40,000 people directly engaged in the manufacture of shoes, belts and bags and a production capacity of about one million pairs of shoes per week, currently

produces for local and international markets, although unofficially. Aba-made shoes and other finished leather products are popular in Cameroon , Cote d’Ivoire , Ghana and other West and

East African countries. Anyanwu explained that about one million pairs of footwear are informally exported from Aba, to other African countries, through Cameroun, which serves as a transit market, weekly.

He, however, lamented that most locally produced finished leather goods are not traceable to Nigeria, because they often b e a r f o re ig n lab e l s, a development he attributed to Nigerians’ desire for

foreign goods. He urged local shoe manufacturers to be proud of their products by inscribing Made-In-Nigeria on their products, saying that proper branding of locally made finished leather goods and

formalisation of export trade in the sector would not only increase Nigeria’s gross domestic product (GDP), but would also help the Federal Government in economic planning and job creation.

Why Nigeria must implement NEXIM Sealink project GODFREY OFURUM, Aba

inished leather p r o d u c t m a n u f a c t u re r s i n Aba, the commercial hub of Abia State, have observed that the proposed Sealink Project, spearheaded by the Nigerian Export-Import Bank (NEXIM), will help formalise activities of the sector. The group, in its presentation at a town hall meeting organised by the Nigerian Shippers’ Council (NSC) in Aba, affirmed that government and sector operators are losing so much money due to the informal trade that goes on in the sector and urged NEXIM to ensure that the Sealink Project takes off as soon as possible. The Aba leather cluster said to be the biggest in West Africa, with about 40,000 people directly engaged in the manufacture of shoes, belts and bags and a production capacity of about one million pairs of shoes per week, produces for local and international markets. H o w e v e r, d u e t o unofficial export that goes

on in the sector, it has been difficult for policy makers to get accurate data to develop the industry and this is one of the issues. Ken Anyanwu, national s e cretar y, Ass ociation o f L e at h e r a n d A l l i e d Industrialists of Nigeria (ALAIN), an association o f s h o e, b ag a n d b e l t makers, in an interview www.businessday.ng

with BUSINESSDAY in Aba, explained that the data currently used for policy and advocacy in the leather sector are mere estimates, stressing that no accurate and verifiable information on the activities of the sector are available for use. These include finished leather goods needed by Nigeria annually, finished

leather produced and exported from Nigeria a n n u a l l y , N i g e r i a’s finished leather goods production capacity, quantity of products exported from the country and the accurate number of persons engaged in production in the sector. The proposed regional Sealink Project to connect

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West and Central Africa sub-regions, according to NEXIM, would foster indigenous participation of African nations in the maritime sector. Roberts Orya, managing director, NEXIM Bank, explained that the Federation of West African Chambers of Commerce and Industry (FEWACCI) @Businessdayng

would partner NEXIM on the project. Orya explained that the purpose of the Sealink project is to foster indigenous participation in the maritime sector through minimising of freight rate payment. He stated that the project would cut across West and Central Africa, providing immediate impact to the improvement of basic road infrastructure, which has slowed African and Economic Community of West African States (ECOWAS) trade levels by 20 per cent. “The total project cost is estimated at US$60million with US$36million to procure vessels, equipment, office space and other infrastructure. About US$24million will be the working capital to cover the general and administrative expenses,” he said. The NEXIM managing director also disclosed that the project would make Nigeria a maritime hub for West and Central Africa and enable NEXIM achieve its planned revenue growth by improving intra-regional trade levels to about 15 per cent annually.

Friday 17 January 2020

BUSINESS DAY

Corporate Social Impact

Armed Forces Remembrance Day 2020:

We can only remember yesterday’s heroes by enabling today’s soldiers Stories By ONUWA LUCKY JOSEPH

5th January every year, Nigeria remembers her fallen heroes. Soldiers, men and women who’ve worn the uniform with pride and distinguished themselves in different theatres, some never actually seeing action but doing the work that soldiers do: readiness for the call and willingness to go when the summon comes. As we must never fail to recount, our men and women in uniform have done some good work over the years all over the world. They reported for World War 1 and World War 2, the exposure they got eventually culminating in the struggle for independence, which Nigeria won in 1960. They were there in the Congo crisis that ensued after that country’s independence from Belgium. They were there in Lebanon, again as part of the UNIFIL contingent. There was a swell of recruits during the civil war, and on both sides. That unfortunate 30-month altercation was what made soldiers out of many a raw recruit, a good number of whom, sadly, did not make it out with their lives. Sierra Leone and Liberia arguably both owe their very existence today to the efforts of Nigerian soldiers who went in

Oldest Nigerian soldier Pa Aduku

there and enforced the peace. Even when for a long time no international body or world power would intervene, Nigeria sent a full complement of warriors who died in their hundreds as they went to do their country’s bidding and to be their brothers’ keepers. Were there wrongdoings? There were, as happens in every war, and on different sides; but the raw terror unleashed by warlords

like Yormie Johnson and Charles Taylor amongst others in Liberia and the super cruel Foday Sanko in Sierra Leone was brought to a close by the efforts of these gallant soldiers many of whom lost their lives as they strove to actualize their country’s quest. It is extremely unfortunate therefore that after intervening and bringing peace to other nations, our soldiers have largely

been unable to deal with Boko Haram in Nigeria’s North East. When this current government took over, the raging Islamist insurgency was one of their victory planks. They blamed Jonathan’s government for underfunding the military and therefore taking them sitting ducks for the enemy’s superior firepower. True or not, that resonated with the electorate who shooed Jonathan

aside for Buhari. But after that initial blitzkrieg that saw our soldiers liberate many villages from the vise grip of Boko Haram, the bad guys are back, stronger and bolder, and now not with a little help from ISIL. The authorities might justify the easy incursions by BH and ISWAP attributing the near routine routing of our soldiers to the asymmetrical nature of the confrontations, something our troops, trained for conventional warfare as they were, have been unable to adapt to. But our soldiers debunk this line of reasoning all the time. The problem now, as then, is lack of equipment. Period. The battle weary combatants need a lot more encouragement. Like the Bible says, ‘no man goes to war at his own expense’. These men and women who are lifting the heavy load for us all by taking on the insurgents should be adequately provisioned for by the government and people on whose behalf they are fighting. And so, even as we encourage government to play its role, it is incumbent on institutions and individuals to extend hands of support to our gallant soldiers who, whether we agree or not, are helping retain the territorial integrity of our country. It’s not enough for us all to bewail the death last month of Pa Adama

Roger Federer returns brutal climate change serve from Greta Thunberg

oger Federer cannot by any measure be described as the Teflon Don. He’s been so scandal free that the issue of any untoward thing sticking has never really arisen. Come on, we are talking about the all-round Mr. Nice Guy of Lawn Tennis. But the times, they are a-changing and Mr. Federer finds himself in the kind of hot water that did not quite exist until recently. And it all comes down to his sponsorship deal with Credit Suisse, something that’s been riling up climate change activists for some time now. The Swiss maestro is getting the flak from the activists as a result of what they consider his inappropriate relationship with the Swiss bank considered by many in the climate change circle as a major enabler of the fossil fuel industry. Well, this is not really about the Swiss/Swiss connection. It’s more about the disembowelment that the relationship is creating for an increasingly fragile global ecosystem. The activists, creative to the core, in order to put the right

Roger Federer

Greta Thurnberg

amount of heat on Federer undertook in November 2018, to play Lawn Tennis inside selected branches of Credit Suisse bank. What else immediately brings Federer to mind if not that? Simultaneously, they flagged their banners, one of which was worded “Credit Suisse is destroying the planet. Roger, do you support them?” Bringing more desired attention to the activists, a lot of them students, is the court case ongoing in Lausanne, Switzerland, where their lawyers are appealing the fine of 21,600 Swiss Francs. Their defense is that they were acting www.businessday.ng

as whistleblowers for the climate change emergency, something which, if not quickly handled, has potential for gravely imperiling the health of the world at large. This is happening at a time when the ageing Roger Federer is sweating profusely right there in Melbourne wiling his body to be one more grand slam trophy ready. Australia, or Blazing Australia as some now call it, is currently embroiled in an inferno of almost Armageddonian proportions: about one billion animals burnt to death, more than 25 lives lost and well over 200 homes destroyed.

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The great man must be wondering why all the wrong things are coming together at just the wrong time. And to add even more fire, Greta Thunberg proved to be no Federer friend when she, amongst over 700 folks, retweeted the revelatory tweet from 350.org Europe, a frontline activist group involved in the crusade: “Since 2016 @ CreditSuisse has provided $57 BILLION to companies looking for new fossil fuel deposits - something that is utterly incompatible with #ClimateAction,” the tweet reads. “@RogerFederer do you endorse this? #RogerWakeUpNow.” And how does Federer respond? He tried really hard to dodge some point blank bullets. In a letter that he sent to Reuters Roger said “I take the impacts and threat of climate change very seriously, particularly as my family and I arrive in Australia amidst devastation from the bushfires,” “As the father of four young children and a fervent supporter of universal education, I have a @Businessdayng

great deal of respect and admiration for the youth climate movement, and I am grateful to young climate activists for pushing us all to examine our behaviours and act on innovative solutions. We owe it to them and ourselves to listen. I appreciate reminders of my responsibility as a private individual, as an athlete and as an entrepreneur, and I’m committed to using this privileged position to dialogue on important issues with my sponsors.” Extremely well worded, won’t you say? No offence taken, no offence dealt. The maestro returns serve just as smoothly as he does regally on court. However, it’s clear that he’s now in the crosshairs of the movement. He can’t risk a takedown no matter how much the Credit Suisse deal is worth. It’s time he took another look at his sponsors and their portfolio and decided whether he wants to stake his hard earned reputation on the hazy, smog-filled future his sponsors are profiting from.

Friday 17 January 2020

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Australia sets Philanthropy Spirit Afire, Worldwide (Nudes-sharing Model Contributes $1million, Outdoes Bezos!) ONUWA LUCKY JOSEPH

he Australia fires, as happens with every round of tragedy, is bringing out the humanity in many a celebrity, organisation and other regular folks, worldwide. A few incredibly creative people (including those whose ways we many not approve of ) are coming up with eye widening stunts to swell the relief effort. The well-heeled are fully on board, giving in the millions. Not Jeff Bezos, though, who preferred the Australian million to US dollars in accounting for his contributions. The world’s richest man (whose net worth Forbes estimates at $116.7billion), caused not a little consternation when he dropped a ‘measly’ $690,000, when comparatively less endowed individuals are giving a lot more relative to their net worths. But it’s the creative takes that catch our attention. Kaylen Ward, a 20 year old Los Angeles based Instagram model who now styles herself “The Naked Philanthropist” is sending nude pictures of herself to anyone who donates at least $10. She claims to have raised a whopping $1million before Instagram shut down her account. Like her style or not, has she done some good or not? Nick Kyrgios, the Australian tennis ace will donate $200 for every ace he hits. We can only hope that’s an open ended prom-

Jeff Bezos

Nicole Kidman Keith Urban

Lewis Hamilton

Kylie and Danii Minogue

ise because even though he routinely hits aces, it would take quite a while to ramp up enough numbers for the kind of substantial contribution the effort requires. See below a list of some who have ploughed in their own contributions as related by ABC News. • Andrew ‘Twiggy’ Forest – $70m through his Minderoo Foundation • The National Australia Bank - $5 million • NAB $5m • Coles - $4 million • Leonardo DiCaprio via Earth Alliance $3.4m • HP - $2 million • AFL $2.5m • BHP $2m • Westpac $1.5m • Woolworths $1.5m

• Australian NBA stars $1m+ • Commonwealth Bank $1m • ANZ $1m • Rio Tinto $1m • Orica $1m • Pratt Foundation $1m • John and Pauline Gandel $1m • Elton John $1m • Chris Hemsworth $1m • Kylie Jenner $1m • Hains family via Portland House Foundation $1m •The Perich Group $1m Auction for Shane Warne’s baggy green cap (purchased by the Commonwealth Bank) $1m • Metallica $750k • Lewis Hamilton $730k approx • Kylie and Dannii Minogue $500k • Justin Hemmes $500k • Nicole Kidman and Keith Urban $500k • Pink $500k

Japanese billionaire gives away $9 million in ‘Social Experiment’ ALICE BRYANT

Japanese businessman is giving away $9 million to his followers on social media in what he is calling a “social experiment.” He hopes to see whether the money increases people’s overall happiness. Yusaku Maezawa will give $9,000 to 1,000 followers chosen at random from people who retweeted his January 1 message on Twitter. The money’s effect on the winners will be studied over time through questionnaires. “It’s a serious social experiment,” said the businessman on YouTube, adding that he hopes it will interest both researchers and economists. Yusaku Maezawa rose to fame in the Japanese fashion industry at an early age. He became rich thanks to Zozotown, a website that specializes in clothing sales. Maezawa is known for his high

Yusaku Maezawa

spending on art and sports cars but also his love for sharing ideas, like a world without money. In addition, he was chosen to be the first private passenger to fly around the moon with Elon Musk’s SpaceX. www.businessday.ng

With his giveaway, Maezawa hopes to spread the idea of basic income, or the theory of giving periodic payments to all citizens. The idea has gained attention in some political circles, even in the United

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States. A leading supporter is businessman Andrew Yang, a candidate for the Democratic Party’s presidential nomination. “Basic means a regular minimum amount offering a sense of security. What Maezawa is offering is totally different,” said Toshihiro Nagahama. He is an economist with the Dai-ichi Life Research Institute. Maezawa said that since he “has the money and free time” to make the payments, he is trying to fuel a debate in Japan over the value of a basic income. The idea of a universal basic income has gained support because of fears that technology will replace large numbers of jobs. But for now, that concern is not as big an issue in Japan with its low unemployment rate, said Nagahama. This is the second, larger, giveaway by Maezawa. In November, he got $900 million from the sale of his online fashion business. Maezawa now has seven mil@Businessdayng

lion Twitter followers. His tweets are an interesting mix of subjects, including his pricy purchases and thoughts on the meaning of life. He also recently made news headlines after his split from actress girlfriend Ayame Goriki. These days, he can also be found on YouTube, sharing things like a look into his private plane and a visit to the barber shop to get his hair colored. He even shared a video of him working on his finances after the November sale of his company. The debate over basic income comes as income inequality continues to grow in the United States. In recent years, some very wealthy Americans have promised to give away most of their wealth. They include Microsoft co-founder Bill Gates and investor Warren Buffett. (Adapted from VOA)

(Kindly send feedback to 08023314782 / csrmomentum@ gmail.com)

Friday 17 January 2020

BUSINESS DAY

ENERGYREPORT

Oil & Gas

Power

Renewables

Environment

Why liquidity crisis in electricity industry is sustained Olusola Bello

here are three challenges that have sustained the liquidity crisis and constrain new investments in the Nigeria Electricity Supply Industry ( NESI). These are the monopsony of the Nigerian Bulk Electricity trading company, the subsidy regime and the consumers distrust of the electricity market. The Nigerian Bulk Electricity Trading (NBET) Plc. was established to increase Genco investor confidence in the NESI by shielding the Gencos – and by extension, shielding the natural gas producers – from the significant Aggregate Technical Commercial and Collection (ATC&C) losses at the retail end of industry. However, NBET has been unable to shield Gencos and gas producers from the liquidity crisis. In the first half of 2019, NBET, on its own, met only 21per cent of its USD 914 million obligation to GenCos. Not only has NBET’s task proved undoable and unsustainable, it has also created an inhibitive and unproductive monopsony

at the wholesale end of the NESI. According to Fadekunayo Adeniyi of Centre for Development Environment and policy, SOAS,University of London, while making case for a parallel Electricity Market in Nigeria said NBET’s monopsony prevents competition and stifles productivity in the wholesale market. Gencos are unable to supply electricity to willing credit-worthy buyers through the national grid because the existing regulatory regime does

not support it. The current regulatory regime requires all on-grid electricity trade to occur through NBET. However, NBET does not have the fiscal capacity to facilitate all wholesale electricity trading because of the unsustainable (ATC&C) losses and non-cost reflective retail tariff. He said breaking NBET’s monopsony through the introduction of the parallel electricity market (PEM) will help to relieve NBET of its fiscal burden and pave the way for

Olusola Bello

igeria is expected to contribute a ro u n d 3 5 p e r cent of Africa’s total planned and announced oil and gas new-build trunk/ transmission pipeline length additions between 2019 and 2023. G l o b a l D a t a’s re p o r t , ‘Global Planned Oil and Gas Pipelines Industry Outlook to 2023 - Capacity and Capital Expenditure Outlook with Details of All Planned Pipelines’, reveals that Nigeria is expected to provide 6,601.5km of new-build pipeline by 2023. Most of the additions will constitute natural gas, at 6,460km, while crude oil pipelines will account for 142km. Varun Ette, Oil and Gas Analyst at GlobalData, comments: “In Nigeria, 11 newbuild pipelines are expected to start by 2023. Of these, eight are planned projects and the remaining three are from early-stage announced projects. Trans Saharan Gas is the longest upcoming pipeline with a length of 4,400km. This announced Olusola Bello, Team lead,

Graphics: Joel Samson.

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OLAMIDE SIKIRAT

ern and northern regions of Nigeria. It also aims to create a steady and guaranteed gas supply network between the northern and southern parts of Nigeria by utilising the country’s widely available gas resources. “The project will be executed in three phases, with phase one covering the construction of a 200km-long segment between Ajaokuta and Abuja Terminal Gas Station.” In addition, the development is expected to reduce the large volume of gas flared annually in Nigeria, as well as the subsequent environmental impact. N N P C o r i g i na l l y a n nounced tenders for the development of the AKK pipeline in July 2013. The pipeline is slated to originate from Ajaokuta and pass through Abuja and Kaduna, before ending at a terminal gas station in Kano. The project will be executed in three phases, with phase one covering the construction of a 200km-long segment between Ajaokuta and Abuja Terminal Gas Station at a cost of $855m.

total, the non-cost reflective tariff was responsible for about NGN 67 billion (48.8%) of the wholesale market shortfall. Instituting sector-wide cost reflective tariffs is a critical part of the solution to the liquidity crisis. The introduction of the PEM regime would move willing credit worthy consumers into a parallel electricity market, where they will pay above-cost prices. In addition to the issues above, billing and collection losses in the industry he said are major problems that sustain the liquidity crisis . He said the Discos sometimes attempt to solve this by using estimated billing systems, which unfairly charge paying consumers for electricity theft and unpaid electricity bills caused by others consumers “Despite this unfair practice, Discos still do not meet consumers’ expectations of electricity supply. In turn, this causes consumer apathy and energy theft, leading to lower collection rates and commercial losses. This circular causal loop is, paradoxically, a cause and effect of a lack of sufficient trust between the NESI operators and consumers”, he said.

Kwara govt embarks on massive electrification projects

Nigeria to contribute 35 per cent of Africa’s oil and gas pipeline in 2023 natural gas pipeline is expected to start operations in 2021. The Ajaokuta-KadunaKano (AKK) pipeline is a 614km-long natural gas pipeline currently being developed by the Nigerian National Petroleum Corporation (NNPC). It is set to be laid between Ajaokuta and Kano in Nigeria and forms phase one of the Trans-Nigeria Gas Pipeline (TNGP) project. The pipeline project is being implemented via a build and transfer (BT) publicprivate partnership (PPP) model, which involves the contractor providing 100% of the funding. The pipeline will cost an estimated $2.8bn and is currently scheduled for commissioning in 2020. It will feature a diameter of 40in and is expected to transport 3,500 million metric standard cubic feet per day (Mmscfd) of dehydrated wet gas from several gas gathering projects located in southern Nigeria. The project will result in the establishment of a connecting pipeline network between the eastern, west-

cost-reflective electricity trading to occur directly between Gencos and willing creditworthy consumers. Another of the challenges is the provision electricity subsidies to ease the burden of energy bills on vulnerable consumers which is a necessary and moral responsibility of the state. However, it must be done efficiently. The current electricity regime sustains a retail cross subsidy, which rightly attempts to ease the burden on consumers,

who consume lower quantities of electricity than others. However, the current non cost reflective electricity tariff regime, which is effectively an electricity subsidy, is inefficient because it subsidises the entire market, including those creditworthy consumers who are not only capable of paying a cost reflective tariff, but are often willing. The current regime prevents Discos from selling electricity to consumers at a cost-reflective tariff, preventing the Discos from reaching their required revenue targets and causing a liquidity crisis across the entire value chain in the NESI. While the Discos also have their own billing and collection inefficiencies, the non-cost reflective retail tariff remains one of the sector’s most critical issues. It not only prevents Discos from reaching their revenue targets, it also restricts the Discos capacity to deploy the investments required to reduce other ATC andC losses. In the first quarter of 2019, the wholesale market shortfall (Disco remittance shortfall) generated in the NESI stood at NGN 137.3 billion. Of that

purred by the desire to industrialise and create jobs at both the small and medium scale levels and to also provide power supply to the people of the state, the Kwara State government has embarked on massive electrification project across the state. The project when completed would be linked up to the national grid so as to guaranty steady power supply when stability returns to the national grid. The project which is state wide is however going to start with five communities in Pategi local Government. The communities are Fei, Koro 1, Rokan 1 and Kpada communities all

in Patigi Local Government Area of the state. According to Aliyu Kora Lafia, Commissioner for Energy, who disclosed this during a press briefing, in Ilorin, he said the state government had mobilised the technical team of Ibadan Electricity Distribution Company to the sites of the electrification projects. He said the state government is committed to liberating the communities that have been in darkness for close to a decade, stating further that another set of transformers delivered to the Ministry of Energy were immediately redeployed to areas in Patigi Local Government where the transformers are currently put to use. Kpada, he said is one of the many communities in Kwara that has suffered over a de-

cade of government neglect in infrastructure such as lack of road networks, lack of effective and affordable healthcare delivery, non-access to modern telecommunications services, over 10years of no power supply, lack of quality education amongst other basic infrastructural needs. These, he said, the state would strive to address for the benefits of all and sundry. The Community’s demand for good road networks received a boost as the state government deployed grading machines to the site which has since been fixed and have more reason to smile as the demand for electricity has also received prompt response after ten years of blackouts as promised by Governor Abdulrazaq who visited the community less than a month ago.

NIPS 2020: President Buhari to declare summit open Olusola Bello

resident Muhammadu Buhari is expected to declare open Nigeria International Petroleum Summit (NIPS) in Abuja from February 9 – 13, 2020. Also the Timipre Sylva, Minister of State for Petroleum Resources, has indicated his readiness to host

the global oil community in Abuja during the Summit. “I look forward to personally participant in Abuja for the Nigeria International Petroleum Summit (NIPS) on behalf of the Federal Government and the people of Nigeria”, says the Minister in a special podcast monitored on the official Federal Ministry of Petroleum Resources social media handles.

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NIPS, the official oil and gas meeting of the Federal Government, has over the years evolved into a must attend industry vent for all industry stakeholders, Sylva says adding that the focus of the upcoming NIPS 2020 edition will be on “widening the integration circle, emerging technologies and cross pollination of ideas as we build on the success of previous editions”.

Friday 17 January 2020

BUSINESS DAY

NEWS ANALYSIS

Resolute in the face of setback

Despite an attack from alleged fraudsters, Lekoil’s shares is clawing back value, writes Segun Adams.

n 13, January 2020, shares of Lekoil, an indigenous oil and gas company headquartered in Lagos, but listed on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE), were suspended from trading for reasons linked to an announcement the company made on 2, January. Before the close of business that day however, the shares were cleared to resume trading: A testament to AIM’s satisfaction with steps taken by Lekoil to handle the situation that led to its shares suspension. As expected, the shares took a beating the next day (14, January) but successfully clawed back some value in the early trade on 15, January (closing the day with double-digit price appreciation). Back to the events of 2, January. At exactly 7.00am on that day (2, January), Lekoil announced, through its website, that it had secured $184million in funding for the appraisal drilling and initial development activities on the Ogo field within OPL 310 based on a facility agreement signed with the Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar. The statement indicated that, the facility agreement was arranged by Seawave Invest Limited, an independent consultancy firm which specializes in cross-border transactions based in Accra Ghana. But 10 days later (12, January) facts emerged that questioned the validity of the deal. As a matter of fact, the QIA approached Lekoil’s legal advisers to draw attention to the lack of merit in the funding arrangement announced by the company. The beginning Lekoil’s journey to the 2, January announcement was a long one. And from the facts available, Lekoil acted like any other company seeking to raise funds for a major project, without diluting its shares. Lekoil was introduced to a broker, Seawave Invest Limited and seemed to engage in good faith with individuals who presented their credentials as QIA representatives. During the engagement the Company’s Non-Executive Directors, commissioned a third party was to conduct due diligence on SeawaveInvest Limited which seemed to find no proverbial “red flags”. It also appears that Lekoil sought advice in relation to the transaction from its counsels and advisers. However, these steps were unable to detect any falsehoods in the true nature of the facility being put together by Seawave Invest Limited. When however, the truth came to light,

Lekoil was quick to follow best practice and report finding to relevant authorities. A commendable response Lekoil took a number of strategic steps which earned its shares a place on the trading deck the next day. Firstly, it notified AIM of the true state of things given the new revelations. “The “Facility Agreement” or the “Transaction” seems to have been entered into by the company [Lekoil] with individuals who have constructed a complex facade in order to masquerade as representatives of the QIA,” the company said in a detailed press statement posted on its website and sent to the management of AIM. Secondly, the statement indicated that there will be a spirited attempt to get to the root of the matter so as to bring the culprits to book. “The Company [Lekoil] will be contacting the relevant authorities across a number of jurisdictions without delay, with regard to what appears to be an attempt to defraud Lekoil,” the published statement added. Thirdly, the board of Lekoil appointed Mark Simmonds and Tony Hawkins, who are Independent Non-Executive Directors of the Company, to investigate the origination and execution of the botched Facility Agreement, what steps can be taken to retrieve any monies already paid in association with the Transaction and the Comwww.businessday.ng

pany’s wider corporate governance practices. Simmonds and Hawkins were appointed to the Board after the signature of the failed botched Facility Agreement and did not have any connection with the origination or execution of the Transaction, making them suitable, in the wider Board’s opinion, to lead a fully independent review. They will be assisted by third party forensic investigators and legal counsel, as appropriate. What degree of exposure? The failed deal is a reminder of how musky the capital acquisition waters and business in the 21 Century are. In August 20019, Toyota Boshoku Corporation, a

‘

There are indications that Lekoil will overcome the setbacks associated with the failed QIA facilities bid. The size of the company’s assets suggests that it has done a great job of raising and deploying capital in the past

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major supplier of Toyota auto parts reported that it was fleeced of over $37million by fraudsters. In November of the same year, business email compromise (BEC) attacks costs American media giant, Nikkei $29million. The list of companies hit in similar manner in 2019 is much longer. “Clever fraudsters have invaded the business space too & it is not only cybercrime. Individuals & Corporates need to be constantly alert & on their toes; the fraudsters are getting smarter. Lekoil has become the latest victim. Lekoil must chin up & bounce back,” Atedo Peterside the Founder, Stanbic IBTC Bank Plc said in a tweet, in response to news about Lekoil and the development that have come to the fore. But the failure of the Lekoil deal naturally came with costs. There was the loss of $600,000 committed to the firm that brokered the failed deal and those associated with the deal (outside Lekoil). Apart from this, no capital commitment was made based on the anticipated loan drawdowns. The facility was not secured against any other assets or interest of Lekoil, including in particular, its interest in the producing Otakikpo marginal field. It is also important to note that none of the security documents, as part of the facility have come into effect. The future The events notwithstanding, Le@Businessdayng

koil has an attractive portfolio. Its management has vowed to secure the requisite funding to develop its assets. Production from Lekoil’s Otakikpo marginal field remains steady with a gross production of cira 5,700 bopd (2,300 bopd net to LEKOIL) with the potential to increase towards 20,000 bopd (8,000 bopd net to LEKOIL) following the execution of a Memorandum of Understanding (“MOU”) which was announced on the 1st of July 2019. The MOU was executed between the Otakikpo Joint Venture partners, Schlumberger and a Nigerian subsidiary of a major international oil company (“IOC”) which has been operating in Nigeria for more than 50 years to cover a project to provide comprehensive infrastructure sharing and a drilling programme around a group of marginal field assets, including Otakikpo, in OML 11. The development is expected to include drilling of up to five new wells with a total project costs of $170m ($68m net to LEKOIL). The funding for this programme is expected to be provided to the Otakikpo Joint Venture by a consortium made up of the IOC subsidiary and some financial institutions. The Company remains fully focused to generate value on this asset for all shareholders through organic growth initiative. Within its portfolio, LEKOIL acquired a 45 percent interest in the Production Sharing Contract (“PSC”) on OPL 276. The asset has four wells drilled in the licence area which resulted in four discoveries (two oil and two gas) with preliminary resource estimates, based on data from the four wells, of gross recoverable volumes of 29 million barrels of oil and 333 Bcf of gas, with upside of 33 million barrels of oil and 476 Bcf of gas (recoverable). Consideration for the acquisition of US$5m is to be paid in tranches which are linked to receipt of license extension and Ministerial Consent. There are indications that Lekoil will overcome the setbacks associated with the failed QIA facilities bid. The size of the company’s assets suggests that it has done a great job of raising and deploying capital in the past. Indeed, there will be many more capital; rasing and deployment efforts in the future. At exactly 5.24pm on 25, January, Peterside tweeted “I was on the Board of Lekoil until a few years ago. Focused & honest team led by Lekan Akinyanmi, Founder. Lekoil still have a producing oil field and successfully raised large financing in the past. I look forward to seeing them bounce back. They can.”

Friday 17 January 2020

BUSINESS DAY

POLITICS & POLICY

More pressure on FG over ‘Amotekun’ as PDP’s Makinde champions legalisation move …Governors kick off consultation with Obasanjo RAZAQ AYINLA

rom Ogun, Oyo, Osun, Ondo, Ekiti to Lagos State, there has been rising hue and outcry over the move by the Federal Government to outlaw the much-talked-about Western Nigeria Security Network (WNSN) which is codenamed ‘Operation Amotekun’. Operation Amotekun, a regional security outfit established by six Southwest states of Ogun, Osun, Oyo, Ondo, Ekiti and Lagos was launched and aimed to involve in the complementary operations with already established security agencies such as the Nigeria Police Force, Nigerian Security Civil Defence Corps, among others with a view to fighting insecurity in the six Southwest states. But, the recent pronouncement credited to the Attorney-General and Minister of Justice, Abubakar Malami that Amotekun was being established illegally, has attracted condemnation from the people and residents of the Southwest as various

groups have spoken up to show their disgust and surprise over Malami’s letter. Recall that socio-cultural groups such as Afenifere, Yoruba Council of Elders, Oodua People’s Congress as well as prominent lawyers, human rights activists, academics and others have been criticising negative body language and pronouncement of the Federal Government which outlaws the Western Nigeria Security Network. Meanwhile, as part of effort to change the approach by which Operation Amotekun was established the five governors of the region who are within All Progressives Congress (APC) were reliably gathered to have resolved to queue behind the People’s Democratic Party Governor Seyi Makinde of Oyo State to champion the face and struggle towards the legalisation and actualisation of Western Nigeria Security Network. Hence, Makinde of Oyo State has begun consultation in conjunction with the other five governors of the Southwest states, namely, Governor Dapo Abiodun of Ogun state;

Subject Amotekun to democratic control – Oyo ALGON tells South West governors REMI FEYISIPO, Ibadan

he South West governors have been urged to subject the operation of the recently launched Western Nigeria Security Network outfit code-named Amotekun to democratic control. The sacked chairmen under the auspices of Association of Local Government of Nigeria (ALGON) appealed to the governors to subject Amotekun to democratic control to prevent the outfit from being abused. The Chairman, Ayodeji Abass-Aleshinloye, while reacting to the launch of Amotekun said: “Let me state here that ALGON Oyo State supports Amotekun as we have been doing to create and support any move to address meaningfully the security of life and property as this is the fundamental objective and duty of government at all levels because without security there cannot be governance or development. Aleshinloye disclosed this while speaking at a programme organised to appreciate journalists in the state.

Present at the event were correspondents and reporters of various media houses in the state, All Progressives Congress (APC) Chairman in the state, Akin Oke, Minority leader of the State House of Assembly, Asimiyu Alarape, ALGON members and former Commissioner for Finance in the state, Bimbo Adekanbi. According to him, “we, however, wish to appeal to South west governors to subject the operation of Amotekun to democratic control and management of communities and local government authorities as elected representatives of the grassroots for Amotekun not to be abused and misused.” He urged the governors to look at all genuine complaints and suggestions to make Amotekun generally acceptable so as to achieve its set goal of providing complementary security to all. “The governors should also look at all genuine complaints and suggestions to make Amotekun generally acceptable so as to achieve its set goal of providing complementary security to all,” he said. www.businessday.ng

Seyi Makinde

Governor Babajide SanwoOlu of Lagos state; Governor Kayode Fayemi of Ekiti State; Governor Rotimi Akeredolu of Ondo State and Governor Gboyega Oyetola of Osun State, which is expected to aid the smooth take-off of the security scheme. Speaking on the proposed

change of approach as being championed by the Oyo state governor towards the actualisation of Operation Amotekun, an impeccable source from the Southwest, disclosed to BusinessDay that high-level consultation is ongoing underground to involve all living Yoruba elders and

statesmen to provide better way and workable solutions in order to outsmart President Muhammadu Buhari -Federal Government on the actualisation of the Security Operation. The source, who spoke to BusinessDay on condition of anonymity, recalled that a two-hour closed meeting held by Makinde with the former President, Olusegun Obasanjo in Abeokuta on Wednesday was based on guideline - way and manner to go about the Operation. He added that “The Yoruba and even some other tribes in the South who subscribe to regional security outfit such as Operation Amotekun in the face of rising insecurity in the country, are seriously working behind the scene to ensure that the Southwest Regional Operation Amotekun stay.” “Our governors have discovered that Federal Government doesn’t want the Western Nigeria Security Network at all despite the fact that five governors from our region were elected on the platform of the ruling

party - the APC, therefore, they (Southwest governors) have resolved to allow Governor Makinde, who is of People’s Democratic Party’s extraction to champion the whole thing. “It seems President Muhammadu Buhari and his cabal at the Aso Rock are being too powerful and what they think about is to have successors and if they perceive anything that works against their ambition, they want quickly crush it ahead of 2023 general elections, therefore, this is trying situation that are surely testing the resolve and might of our governors in Southwest. “So, if we are cowed, we are doomed. Hence, the guidance of Baba Obasanjo, Olu Falae, a couple of retired Generals in the region who have worked at that level before are strongly needed, as well as law and security experts that will be strongly involved in the actualisation of Amotekun. We must not allow the Federal Government to cow us, we are warriors in the Southwest and it is time to display that.”

Lagos ADC crisis: Stakeholders reaffirm Daramola as state chairman … As leaders vow to reposition party ahead 2023 Iniobong Iwok

he crisis rocking t h e L ag o s St at e chapter of the Africa Democratic Congress (ADC) appears to be over, as major stakeholders and leaders of the party across the state Thursday affirmed Tunde Daramola as the state chairman and leader in the state. The ADC has been rocked by leadership crisis just before the 2019 general election when the Tunde Daramola-led state executive was unceremoniously sacked by the national chairman of the party, Okey Nwosu for undisclosed reasons. Daramola had challenged the party’s decision in court, while seeking to be cleared of any wrong doing. He also said the national chairman of the party lacked the powers to unilaterally sack the Lagos Sate executive headed by him. The party then appointed Kayode Jacob to act as the national chairman for three months.

However, in a meeting by leaders and local government chairmen of the party held Thursday at Daramola’s residence in Magodo, the party leaders lamented the state of the party across the state, noting that the tenure of the caretaker committee headed by Jacob had expired in the last one year and that he was no more the party chairman in Lagos State. The leaders lamented that the party had been without any leader to direct its affairs in the last one year, while unanimously adopting Tunde Daramola as its state chairman and leader when cleared by the national leadership. The leaders, however, urged the national leadership to withdraw the sack letter issued to Daramola and recognise him as the party’s state chairman. Responding, Daramola said he was ready to serve the party in any capacity, but would only do so if the national leadership of the party withdraw the allegations against him and the

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state executive headed by him or there was a judgment on the matter by the court. Mea nw h i l e, to avo i d any vacuum, the leaders adopted the party’s former Publicity Secretary, Ogidi, to serve as its acting state chairman. In an inter view w ith journalists after the meeting, the head of all the party’s chairmen in the twenty local government areas in the state, Segun Adeiye said the party was ready to forge ahead which informed its decision to choose Daramola as its leader, while stressing that the tenure of the former acting chairman Kayode Jacob had expired. According to him, “The ADC met today and we resolved that the caretaker committee headed by Kayode Jacob is here dissolved because the tenure had expired almost a year ago. We are appealing to everybody not to have anything to do with that technical committee. And we are also appealing to the national @Businessdayng

chairman to please write a letter of withdrawal to the national executive in Lagos State. “And since we are not ready to create any vacuum we have resolved that Muhammed Ogidi should be the acting state chairman. And all correspondence pertaining to the party affairs in Lagos State should be directed to him. Nobody should have anything to do with Kayode Jacob,” he said. The acting chairman, Muhammad Ogidi promised to strive and reposition the party in the state, lamenting that the party had remained in the doldrums in the last few years. “The national chairman has said all efforts have been made to bring back the party; we are not tired; we placed second after the APC in the last elections. “For almost three years; we are nowhere to be found; nobody is helping us. ADC must come back. Kayode is out; Tunde Daramola has assured us that he would bring the party back on its feet,” Ogidi said.

Friday 17 January 2020

BUSINESS DAY

news Tony Elumelu donates tech centre to AAU

C L-R: Richard Iweanoge, general manager, brands and communication, MTN Nigeria; Esther Akinnukawe, chief human resources officer, MTN Nigeria; Rahul De, chief marketing officer, MTN Nigeria; Dakore Egbuson-Akande, Nollywood actress and MTN brand ambassador, and Mazen Mroue, chief operations officer, MTN Nigeria, at the media launch of MTN Nigeria’s (Turn it Up) campaign in Lagos. Pic by Pius Okeosisi

Buhari nominates Kingsley Obiora Deputy Governor, CBN ONYINYE NWACHUKWU, Abuja

re s i d e n t Mu hammadu Buhar i has s ent the name of Dr. Kingsley Isitua Obiora to the Senate for confirmation as Deputy Governor of the Central Bank of Nigeria (CBN) The nomination was contained in a statement by Buhari’s media aide, Femi Adesina which circulated on Thursday, in Abuja. Obiorah, an erudite economist is being tipped as the next Deputy Governor, Economic Policy at the CBN and would replace Joseph Nnanna -who retires on February 2, 2020- when his nomination is finally approved by the Senate. In a letter to President of the Senate, Ahmad Ibrahim Lawan, President Buhari said the nomination was in accordance with the provi-

sion of Section 8(1) (2) of the Central Bank of Nigeria (Establishment) Act 2007. Obiora holds a Bachelor’s degree in Economics and Statistics from the University of Benin, a Masters in Economics from the University of Ibadan, and a Doctorate in Monetary and International Economics, also from the University of Ibadan. He is currently an Alternate Executive Director in the International Monetary Fund (IMF) In Washington DC, United States of America. In this capacity, he is a member of the 24-Seat Executive Board, collectively responsible for conducting the daily operations of the IMF. He also assists to represent the interests of 23 African Countries, including Nigeria, at the IMF Board. He joined the IMF through

the globally-competitive “Economist Program” in 2007 and has worked on various countries in Europe, Africa, and Asia. Between October 2011 and May 2014, Obiora simultaneously served as Technical Adviser to the Nigeria’s National Economic Management Team and was also a Special Assistant to the President Jonathan’s Chief Economic Adviser. From June 2014 until July 2018, he served as Special Adviser on Economic Matters to the Governor of the Central Bank of Nigeria (CBN). In this capacity, he contributed significantly to the overall analytical and policy work of the CBN and led the team of several Technical Aides attached to the Governor’s Office. His extensive international and domestic economic experiences

were critical in helping the Bank understand the ramifications of, and deal with spillovers from, the external shocks emanating from the significant drop in global oil prices. He led the team that built the macroeconomic model underlying President Buhari’s Economic Recovery and Growth Plan (ERGP). Obiora equally holds several Certifications including; Management of Central Banks from the Federal Reserve Bank of New York; Financial Development, Regulation, and Growth; Financial Programming and Policies; Econometric Modeling and Forecasting all from the IMF Institute, Washington DC. He also had a Ph.D Course in Econometrics (Full Semester) at the George Washington University, Washington DC, among several others.

Nigeria’s MPR sits at 13.5% as South Africa cuts rate to 6.25% …But inflation remains a major issue ODINAKA ANUDU

outh Africa’s Reserve Bank took steps to boost lending and ameliorate the plight of consumers in the flagging economy, cutting repo rate by 25 basis points to 6.25 percent on Thursday. This contrasts with Nigeria’s Monetary Policy Rate (MPR) position which has sat at 13.5 percent since March 2019. One major reason for cutting repo rate in South Africa was electricity supply constraints which Reserve Bank governor Lesetja Kganyago said would likely keep economic activity muted in the near term. Repo rate is equivalent to Nigeria’s MPR, both of which

mean the benchmark interest rate or the rate at which the central bank lends to commercial banks. “What that means is that during an economic emergency, you should take emergency steps,” said Ike Ibeabuchi, managing director of a small-scale chemical company in Nigeria. In November 2019, Kenya’s central bank cut its benchmark interest rate for the first time in 16 months to 8.5 percent from 9 percent. In February 2018, Zambia’s central bank cut its benchmark lending rate to 9.75 percent from 10.25 percent. Ethiopia benchmark interest rate is currently 8 percent. At least the benchmark interest rate of most sub-Sawww.businessday.ng

haran African (SSA) countries have remained single digit, barring few, meaning that it is cheaper for businesses to access funds in those countries than in Nigeria. While the MPR was cut from 14 to 13.5 percent, most deposit money banks lend at 20 to 30 percent rates to businesses. “The reduction in the benchmark lending rate has not resulted in the lower lending rates due to the high cost condition occasioned by infrastructure deficits and other structural factors affecting doing business in Nigeria,” the Lagos Chamber of Commerce and Industry (LCCI), said in its 2020 Economic Outlook sent to BusinessDay. Ibrahim Maigari Ahma-

du, chief executive of Liverstock247.com, Nigeria’s first livestock online marketing and listing platform, said interest rate was high just as there were many gridlocks to access to funds. “Nigerian commercial banks are risk-averse. They put so many bottlenecks on the way when you want to access funds,” he said. “Interest rate is very high, which is a major inhibiting factor. Collaterisation is structured to knock you out,” he said. The Central Bank of Nigeria has taken punitive measures to prop deposit money banks to lend to businesses, raising loan to deposit ratio to 65 percent

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hairman of UBA Group, Tony Elumelu, has made the donation of a multipurpose information technology centre to his alma mater, Ambrose Ali University (AAU), Ekpoma, Edo State. Through the UBA Foundation, the corporate social responsibility arm of the United Bank for Africa plc (UBA), Elumelu has championed the construction of a state-of-theart multipurpose information technology building, which will benefit the students of AAU. The hall, to be named The Tony O. Elumelu Multipurpose Hall, is furnished with computers, desks and chairs, measures 839 square meters and has adjoiningofficesandconveniences. Elumelu highlighted his motivation: “Education is crucial to Nigeria’s human capital – whether our young people join our national institutions, the private sector or, as I did, take the entrepreneurial path, no one can afford to be cut off from the digital world. It has been a personal mission to ensure that the hall was delivered to specification, for the benefit of the students at the AAU. Success brings with it the duty to give back, and I am just grateful that I am now in a position to meaningfully help the next generation”. The multipurpose hall was formally handed over to the University, at a ceremony attended by members of the University’s governing council and staff, led by Vice-Chancellor, Ignatius Onimawo. Speaking at the commissioning,UBA’sDirectorateHead, South Bank, Chris Ofikulu, who represented the UBA Group Chairman, highlighted the contribution of UBA, through its

Foundation, to education and development across Africa. “As a pan-African bank, operatingin20countriesacrossour continent, UBA is committed to being a socially responsible institution, and a role model for businesses in Africa. The UBA Foundation actively promotes the socio-economic improvement of the communities in which UBA operates, with a particularemphasisondevelopment in the areas of Education, Environment, and Economic Empowerment. We believe in intervening and building capacity within communities, facilitating projects that will act as catalysts for social and economic development” he stated. “Tony Elumelu is a product of this great university and is conscious of the need to give back and there is no substitute for world class educational infrastructure, and this is what has informed the construction of these facilities, that will help equip the future leaders of our great nation Nigeria,” he said. The AAU Vice Chancellor, who expressed his heartfelt gratitude towards the gesture by theUBAgroupchairman,noted that one of the most pressing needs of the University for 2020 had been met, and thanked UBA and Elumelu.

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Eco faces uncertain future

… as WAMZ condemns adoption by Francophone West African states Onyinye Nwachukwu, Abuja

embers of the West African Monetary Zone ( WA M Z ) o n Thursday condemned in strong terms the decision by the French-speaking West African states to unilaterally rename the CFA Franc as “Eco” by 2020. Their concern was raised at the extra-ordinary meeting of the Ministers of Finance and Economy and Governors of the Central Banks of member states of the WAMZ Convergence Council held in Abuja. The meeting held under the chairmanship of Mamadi Camara, minister for economy and finance of the Republic of Guinea and hosted by Nigeria’s minister of finance, budget and national planning, Zainab Ahmed. Among other things, the Council recommended an Extraordinary Summit of the Au@Businessdayng

thority of Heads of State and Government of the WAMZ Member States be convened soon to discuss this matter and other related issues. According to a communiqué issued at the end of the discussions and read by Ahmed, “the meeting noted with concern, the declaration by His Excellency, Alasane Outtarra, Chairman of the Authority of Heads of State and Government of the West African Economic and Monetary Union (WAEMU) on December 21, 2019 to unilaterally rename the CFA Franc as “Eco” by 2020. “WAMZ Convergence Council wishes to emphasize that this action is not in line with the decisions of the Authority of Heads of State and Government of ECOWAS for the adoption of the “Eco” as the name of an independent ECOWAS Single Currency.

•Continues online at www.businessday.ng

Friday 17 January 2020

BUSINESS DAY

news For first time in decades, consumer credit ... Continued from page 1

form of consumer credit. Although any type of personal loan could be labelled consumer credit, the term is usually used to describe an unsecured debt that is taken on to buy everyday goods and services. Consumer credit or what most Nigerians refer to as “Pay-Day” loans is what most banks have started offering since the CBN started forcing them to grow their loan books last year. Banks sent out emails and followed them up with visits to millions of workingclass professionals at their offices to sell their pay-day loan products. While that has somewhat reflected on their loan books, the CBN wants more. Since mandating banks to lend at least 60 percent of their deposits, the CBN has returned to raise the bar to 65 percent and could even raise it higher this year. That has seen the banks put in more work to grow loans and retail pockets offer the fastest route to achieving that and avoiding the CBN’s hammer, according to Aderonke Akinsola, a banking analyst at Lagosbased investment bank Chapel Hill Denham. The competition for retail pockets among the banks is now so intense that some have started reducing the cost of lending. Nigeria’s biggest publicly listed bank, Guaranty Trust Bank, sent out emails Tuesday, Jan.14, saying rates on its Quick Credit product had been reviewed downwards to 1.33 percent monthly from 1.75 percent. “This means that the effective interest rate on quick credit is now 16 percent per annum,” GTBank said in the email to clients. This is coming from a peak of around 25 percent. Analysts expect other banks to follow suit in reducing the cost of credit to customers as competition for retail pockets heat up. As a result, working-class Nigerians are now weighing up the possibility of targeting relatively cheap personal bank loans amid the drastic fall in lending rates. “I am tempted to borrow some money to get a second car for use on the carhailing app Uber as a way of making some income on the side,” Ade Akinowo, a civil rights lawyer told BusinessDay. Although it comes with its risks, the impact of making consumer loans more accessible would be transformational on households and the economy as it stimulates consumption. Akinsola of Chapel Hill Denham said a lending boom could yet drive nonoil sector growth this year and that would be a welcome boost for an economy

still reeling from a recession in 2016. “Credit to the private sector has already started improving since the CBN’s aggressive lending push and that growth shows signs of continuing this year which could be positive for economic growth,” Akinsola said. “It’s the CBN’s LDR policy working magic here,” Akinsola added. “The policy has helped cut out traditional distractions for the banks and they are now forced to look for opportunities outside government borrowing and oil and gas lending.” On 7 January, the CBN circulated a directive that Nigerian banks must maintain a minimum 65 percent loan-to-deposit ratio (LDR) by March 2020, or CBN will impose a 50 percent cash reserve requirement (CRR) equal to the lending shortfall on deposits. The CBN in July 2019 imposed a minimum LDR of 60% for Nigeria banks and in September 2019 increased that to 65%. As of October 2019, the system’s LDR ratio was 61.9%, according to the latest CBN data, indicating that some banks do not yet meet the requirement. While the CBN directive has forced banks to open the lending taps- which holds benefits for the economy as individuals and businesses have better access to credit, it may have some downsides. Peter Mushangwe, a banking analyst at credit rating agency, Moody’s Investors Service, said the CBN’s directive may do more harm than good for the economy in the long term. Although gross loans and advances increased 4% by October 2019 from July, when the regulation took effect, loans will need to grow by around NGN690 billion (about 5% of gross loans as of 31 October) to meet the minimum requirement by March 2020, according to Mushangwe. “Given Nigeria’s challenging operating environment, meeting the minimum requirement will be credit negative for banks because we expect them to make potentially riskier loans, which will outweigh potential benefits from diversification as they lend to more granular borrowers and reduce their high single-name concentration risk,” Mushangwe said. Nigerian banks have limited exposure to SMEs and household borrowers, who have a combined contribution of lower than 10 percent of total loans. Consumer lending in Nigeria is hampered by weak household credit record history and higher incidence of nonperforming loans. www.businessday.ng

L-R: Akins Akinkugbe, executive director, Urban Vision; Tana Adelana, actress; Mo Abudu, CEO, Ebony Life; Osas Ighodaro, actress, and Tola Odunsi, executive producer/CEO, Urban Vision, at the Premiere of REDTV Series, Assistant Madams in Lagos.

PDP asks CJN to resign, says Supreme Court... Continued from page 1

governor of the state.

Secondus, while addressing a world press conference in Abuja, Thursday, said, “The Supreme Court no longer commands respect from Nigerians because it has tampered its integrity. “The fact is that, the Supreme Court, as presently constituted under Justice Tanko, has lost its credibility and no longer commands the respect and confidence of Nigerians. “If the people no longer repose confidence in the Supreme Court, then our democracy, national cohesion and stability are at great risk. The constitution of the panel that heard the appeal itself was a product of drama. “The panel was changed three times and any judge that showed signs of not agreeing to murder democracy in this case was promptly removed by the CJN. The result had to be unanimous to satisfy the script of rationality. But can any judge who sat on that panel go home and sleep well? Secondus questioned. He stated that the removal of Ihedioha was a grand plan by the APC hierarchy to remove all PDP governors from office, saying the judgment was a pointer to anarchy and chaos, and that Justice Tanko should immediately step down to avoid throwing the

country into crisis. Specifically, Secondus described the judgment on Imo governorship election as groundless and advised it should be quickly reversed. “In the light of extraordinary circumstances that vitiate that judgment as a product manipulation and a clear coup d’etat against the will of the people of Imo State, we demand that the decision of the Supreme Court on the Imo Governorship Election be reviewed and reversed in the interest of justice. “We demand that Justice Tanko Mohammed, the CJN and his colleagues on the Imo Governorship Panel recuse themselves from the remaining cases involving PDP in the Supreme Court. “We state for the records that the Supreme Court under Justice Tanko Mohammed shall be held responsible if there is any breakdown of law and order in any state as a result of judgments procured solely for political rather than judicial reasons as is currently happening,” he stated. He further said the judgment of the Supreme Court voiding the lawful election of Emeka Ihedioha (who scored 276,404 votes) and awarding fictitious votes to declare Hope Uzodimma of the APC, who scored 96,458 votes as governor of Imo State, was highly irrational, unfounded, a provocative product of executive manipulation and a

For first time in decades, consumer credit ... Continued from page 37

from 60 percent. The rate is expected to hit 70 percent this year. But entrepreneurs say the major challenge is that rates are high and the short tenor of funds (mostly one year) does not allow enterprises to grow fast. “Both access to funds and costs are big issues for me,” said Attah Anzaku, CEO of AgroEknor, exporter to Europe, Asia and the Americas.

“Even if you have the access, cost is crippling,” he added. Nigeria and South Africa are Africa’s two largest economies, but high unemployment and poor economic management plague both countries. Unemployment is 23.1 percent in Nigeria and 29 percent in South Africa. Both countries are plagued by energy crisis and ethnic divide which scuttle the economies. Inflation rate in Nigeria

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recipe for crisis, which should not be allowed to stand. “With the verdict, the Supreme Court executed a coup against the PDP and the people of Imo state as well as other Nigerians, and such must not be allowed to have a place in our democracy. “The question is, how many witnesses did Uzodinma/APC call from the 388 polling units from where the Supreme Court allocated votes to him. “The so called results from the 388 Polling units were rightfully rejected, in line with several decisions of the Supreme Court, bytheTribunalandCourtofAppealasitwasmerelydumpedon the tribunal in a Ghana Must Go bag,byapolicemanwhohadno mandateofthepolicetotestifyat the Tribunal. “The Tribunal did not even open the Ghana Must Go bags as there was no basis to do so. It is one of the great wonders of the world how the Supreme Court opened the bag, counted the results and added them to only the APC Candidate.What is more perplexing is the fact that INEC produced a schedule of reasons why results were not produced from the 388 units,” he stated. He further said it was on record that the votes analysis from the Imo governorship election as at March 11, 2019, the results were: Total Accredited Votes: 823,743, Total Valid Votes: 739,485, Cancelled Votes: 25,130, Total Valid Votes: 714,355, respectively.

He questioned the Supreme Court total of valid votes which increased to 950,952 and said it accounted for 127, 209 votes in excess of Total Accredited Votes of 823,743. Disclosing that the PDP had intelligence before the verdict on the Imo Governorship, Secondus revealed that the hierarchy of APC had decided that it must use the Supreme Court to capture the states won and controlled by the PDP such as Imo, Sokoto, Bauchi, Adamawa and Benue. “CanthePDPrightlytrustthe impartiality and independence of the panel headed by Justice Tanko Mohammed, the CJN, to adjudicate on the remaining cases involving the PDP like Sokoto, Benue, Bauchi, Adamawa, Plateau and others? “Is the same fate awaiting the Governors of these states that are controlled by the PDP and other states like Kano where the PDP clearly won and was robbed? “The PDP firmly holds that if the flawed judgment of the Supreme Court on Imo governorship election is allowed to stand, it would be a recipe for anarchy, chaos and constitutional crisis not only in Imo state but in the entire country. “Our party has it in good authority that Justice Tanko and his panel are working on instruction from certain forces in the Presidency to use the Supreme Court to take over states lawfully won by the PDP and award them to the APC,” he insisted.

was comparatively high at 11.85 percent in November 2019 while South Africa’s was 4.1 to 4.2 percent in 2019. Zambia’s rate cut was also attributed to lower inflation of 6 to 8 percent. Economists argue that interest rate is always higher than inflation rate. But Nigeria’s inflation rate, which was 11.2 percent in September 2019, is nearly 12 percent in November 2019 owing to the rising cost of foods fuelled by the closure of Nigeria-Benin border, through which some of the

foods are imported. “The composite food index rose by 14.48 percent in November 2019 compared to 14.09 percent in October 2019. This rise in the food index was caused by increases in prices of bread, cereals, oils and fats, meat, potatoes, yam and other tubers, and fish,” the National Bureau of Statistics (NBS) said in December 2019. Analysts say Nigeria’s closure of the Benin border will raise inflation the more, thereby making the prospects of single-digit lending rate impossible in the near term.

@Businessdayng

Friday 17 January 2020

BUSINESS DAY

Sports Africa’s richest man Dangote renews interest in buying Arsenal Anthony Nlebem

liko Dangote, Africa’s richest man (worth $10.1billion) has revealed his plans to buy Arsenal in 2021, when he has finished construction of one of the worlds largest oil refineries in Nigeria. The refinery is set to turnover billions of dollars in profits. Dangote, a staunch Gunners fan is determined to oust owner Stan Kroenke. The Nigerian boasts a net worth of more than £8.5billion and made his fortune after founding Dangote Cement, Africa’s largest cement producer - with the 62-yearold also owning stakes in publicly-traded salt, sugar and flour manufacturing companies. He had promised a take-

over bid in 2020 but, with his Dangote Refinery - set to be one of the world’s largest oil refineries - still under construction, he has moved the date back.

Arsenal fans’ frustration with current owner Stan Kroenke has been bubbling for years, with the Denver Nuggets and LA Rams owner rarely showing his face at

the Emirates, while Arsenal continue to look rudderless behind the scenes in their search for a route back to the top four. Fans would certainly wel-

come a change in ownership, and Dangote could radically change Arsenal’s fortunes. “It is a team that, yes, I would like to buy some day, but what I keep saying is we have $20billion worth of projects and that’s what I really want to concentrate on,” Dangote told the David Rubenstein Show. “I’m trying to finish building the company and then after we finish, maybe some time in 2021 we can. “I’m not buying Arsenal right now, I’m buying Arsenal when I finish all these projects, because I’m trying to take the company to the next level.’ Arsenal have been left languishing in 10th in the Premier League after a torrid end to the reign of former manager Unai Emery’s, but there have been signs of life after the appointment of

Mikel Arteta. Scrutiny on the Arsenal owners and board was ratcheted up during the miserable winless run that eventually saw Emery sacked. Stan Kroenke’s son, Josh, a director on the Arsenal board told fans to ‘be excited’ in the summer after the Gunners signed Nicolas Pepe for a club record fee, as well as Kieran Tierney and David Luiz. There has not been much excitement since the start of the season and banners calling for the Kroenkes to leave were on show once again. The pressure will be somewhat relieved if Arteta delivers on the early positives showed in the 2-0 win over Manchester United, but Arsenal fans will still be hoping Dangote follows through on the promise he made in 2018, saying: ‘Even if somebody buys, we will still go after it.’

North-West rivalry rekindle as Liverpool host Man Utd … A Preview of EPL, LaLiga , Serie A matches Anthony Nlebem

ootball fans can look forward to an actionp a cke d w e e ke n d starting from Friday, January 17 to Sunday, January 19 when their favourite teams will engage in another thrilling round of games in the race to become ultimate champions of their respective leagues. In England, the pick of Premier League matches this coming weekend is undoubtedly the clash between league leaders Liverpool and struggling Manchester United at Anfield on Sunday evening. The tasty clash involving the top two most successful teams in the country will see them reigniting the North-West rivalry which dates back almost 126 years, with United leading with 88 wins compared to

Liverpool’s 76. Both teams had played out a one-all draw when they met back in October 2019 at Old Trafford, with Marcus Rashford putting United ahead before Adam Lallana pulled Liverpool level with five minutes left to play. A win for Liverpool in this encounter would take them closer to a first league title in 30 years, and Jurgen Klopp’s men will be relishing the challenge. Other tasty clashes to look forward to in the Premier League include Manchester City’s showdown with Crystal Palace at the Etihad Stadium on Saturday, Watford vs Tottenham, West Ham vs Everton, as well as a potential thriller involving Newcastle United and Chelsea. In the Spanish LaLiga, Real Madrid will aim to leapfrog Barcelona in the LaLiga table

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which resumes this weekend after taking a break to accommodate the Copa del Rey, with a clash against Sevilla at Estadio Santiago Bernabeu on Saturday afternoon. This clash will give Zinedine Zidane’s team the chance to pull ahead of their archrivals who will begin life under new gaffer Quique Setién, following the sack of Ernesto Valverde. In Italy, the pick of the litter is a game involving Napoli and Fiorentina at Stadio San Paulo on Saturday night, January 18. Napoli are still looking to find their feet under new manager Gennaro Gattuso, but football enthusiasts will be hoping for a repeat of the teams’ last Serie A meeting which was a seven-goal thriller. The Neapolitans ran out winners in the away game, thanks to goals from Dries Mertens, Lorenzo Insigne (two) and Jose Callejon. La Viola’s goal scorers on the day included former Ghanaian international Kevin-Prince Boateng. In the English Championship which is widely regarded as one of the most entertaining and unpredictable leagues around Europe, SuperSport viewers will enjoy a clash between Fulham and Middlesbrough at Craven Cottage on Friday night January 17, as well as the clash between Queens Park Rangers and Leeds United at Loftus Road early on Saturday afternoon.

We are hosting to win 2020 National Sports Festival- Edo boasts Idris Umar Momoh & Churchill Okoro, Benin

do State Government on Wednesday said its priority is to host and win the National Sports Festival. The National Sports Festival tagged “Edo 2020” is scheduled to take place between March 20th and April 4th. Edo State Governor, Godwin Obaseki, who gave the assurance during the lit up of the Edo State Sports Festival Unity Torch in government House yesterday described the lighting up as unique. Obaseki said the selection of athletes to represent the state at the festival will be on merit, noted that the state is hosting to win. “We are not just hosting, we are hosting to win. We have no automatic shirts or boots for anybody. If you think you are

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a star, you should go to your local government and compete there. If you fit enough to represent the state, you will be selected. “The selection process will commence from the 18 Local Government Areas, proceed to zonal elimination in the three senatorial districts and then contest for position at the state level to make up the team that will represent Edo state in the National Sports Festival”, he said. The governor noted that the hosting of the third Edo State Sports Festival would help to produce a physically strong, fit and active team to face other 35 States of the federation in the forthcoming National Sports Festival scheduled to hold from March 20th to April 4th. He said the Torch of Unity will tour the three senatorial districts in the state and will end on 20th January, 2020 while the state sports festival @Businessdayng

is scheduled to begin on February 10 and end on February 16, 2020. “From Benin here, we are going to Akoko- Edo where we will handover the torch to the chairman. From there we will move to Etsako East and then to Etsako Central local government. “Tomorrow, we will start from Etsako West, move to Owan East and Owan West. By next week, we will move to Edo Central”,he added. Obaseki, however handed the lit torch over to the deputy governor, Philip Shaibu who in turn passed it to the chairman, Edo State Sports Commission, Godwin Dudu-Orume. Earlier, in his remarks, Edo State Sports Commission, Godwin Dudu-Orume said the state sports festival is designed to fully test sports facilities, prepare the ground and as well confirm the readiness of the state for the 2020 National Sports Festival.

Friday 17 January 2020

BUSINESS DAY

news

Nigeria still stagnant as global oil production cost falls DIPO OLADEHINDE

igeria’s 8 percent reduction in the cost of oil production in one year was well dwarfed by progressive oil producing countries that leveraged strategic planning and technology to cut costs by double digits. Over time, other oil-producing countries like Norway, the United States, Brazil and Organisation of Petroleum Producing Countries (OPEC) members have been innovative and taking proactive measures to reduce the cost of producing oil per barrel while Nigeria remains stuck. According to analysis from global industry consultant Rystad Energy, the United Kingdom reduced operational production costs by 31 percent, followed by Norway and the United States with operational expenses (OPEX) reductions of 19 percent and 15 percent, respectively. Nigeria could only manage an 8 percent reduction in oil production cost from $25 per barrel

in 2018 to $23 per barrel in 2019. The big fall in oil production costs globally that has eluded Nigeria makes other countries more competitive in attracting oil investments. “The reduction in operating expenditure is largely the result of offshore regions – such as the United Kingdom, Brazil, Nigeria, Angola, the Gulf of Mexico and Norway – feeling the squeeze of uncertain oil prices, which in turn has driven operators and contractors to nurture operational improvements in pursuit of lower unit prices,” Sara Sottilotta, oilfield service analyst at Rystad Energy says in the report. Sottilotta notes that the UK has experienced the greatest reduction in OPEX per boe, falling from more than $30 per barrel in 2014 to just $16 per barrel in 2019, which was as a result of general increase in production, and the falling share of production from mature fields as new fields came on-stream and old fields were shut-in. Analysis from Rystad Energy shows Brazil experienced the

second greatest drop in OPEX per boe, falling from $16 per boe in 2014 to $11 per boe in 2019, which was driven primarily by a significant increase in production, especially from the giant Lula field. While in Norway, OPEX per boe is among the lowest, helped by the rising exchange rate between Norwegian Kroner (NOK) and the United States dollar (USD), which grew from an average of NOK6.3 per $1 in 2014, to an average of NOK 8.3 per $1 in 2017. For OPEC giant, Saudi Arabia reveals in its last year prospectus that it offers the world’s lowest average cost of crude oil production, saying the average cost of crude oil production in the company amounted to SAR10.6 ($2.8) per barrel of oil equivalent in 2019. According to market analysts, low production costs are one of the main reasons Saudi Aramco is considered an attractive investment opportunity for energy investors, along with its massive reserves.

Africa’s economy will move without Nigeria in next 5 years - Brookings Institution … not to overburden consumers, NECA welcomes Act with caution

ENDURANCE OKAFOR

hile countries like South Sudan, Rwanda and Côte d’Ivoire are expected to top global economic performance and drive the African economy in the next five years to end 2024, Nigeria alongside its big African peers may be left behind, Brookings Institution’s annual Foresight report shows. Based on the 2020-2024 growth estimates by the Washington-based institution, Senegal is expected to grow by an average of 8.3 percent in the review period while Rwanda (7.9%), Niger (7.3%), Uganda (7.2%), Mozambique (6.9%) and Ethiopia (6.9%) are also projected to be among the top performers.

Whereas, these countries helped push up Africa’s overall average economic growth rate forecast to 3.8 percent, the average is weighed down closer to the global average (3.5%) by the two largest economies, Nigeria (2.3%) and South Africa (1.1%). The Big three economies in Africa led by Nigeria (South Africa and Angola) are expected to grow at an average of 2.3 percent, 1.2 percentage points less than the global economic outlook. According to Brahima Coulibaly, senior fellow and director, Africa Growth Initiative, Brookings Institution, seven of the world’s 10 fastest-growing economies will be from Africa, but performance will vary. “While economies of countries like Senegal, Rwanda, and Niger will grow at over

7 percent, the largest three economies (Angola, Nigeria, and South Africa) will continue to struggle,” Coulibaly said. The Nigerian economy continued to expand at a sluggish rate in the third quarter of 2019 after state data agency, the National Bureau of Statistics (NBS), reported a 2.28 percent growth for the period. Although that’s the fastest growth in four quarters, it’s unlikely to resonate with many Nigerians because even though the headline GDP seems to be expanding, it is shrinking in per capita terms. Since 2015, Nigeria’s GDP per capita has been on contraction mode every year and that helps explain why despite the growth in headline GDP, Nigerians are getting poorer.

CyberCLOUD Platform attains VMware verified status …target business transformation

yberCLOUD Platform, the first indigenous VMware Cloud Service Provider in subSaharan Africa (SSA), recently got extra accolades following the addition of the blue VMware Cloud Verified now added to its partnership logo with VMware. VMware Cloud provider programmes manager, SSA, Dave Funnell, who announced this, explained, “It means when you see the VMware Cloud Verified logo, you know you can easily access the full set of capabilities of VMware’s Cloud Infrastructure. Get the ultimate in cloud choice through flexible and interoperable infrastructure, from the data centre to the cloud. Support all your apps – from existing to cloud-native to SaaS – across private, public and hybrid clouds using services displaying the

VMware Cloud Verified logo.” Head, Cybercloud Business, Laurel Onumonu, speaking with newsmen on what this development means for business on the side-lines of the Cybercloud’s exhibition at the just concluded Zenith Tech Fair, in Lagos, said featuring the VMware Cloud Verified logo in any marketing campaigns and content signals to customers and prospects that foundational cloud technologies and services are based on VMware Cloud Infrastructure. VMware is the global leader in cloud infrastructure and digital workspace technology. According to Onumonu, we have domesticated VMware services locally and organizations can be rest assured of their data security, integrity and availability. We are aware of the Data Sovereignty Policy of the Federal www.businessday.ng

Government hence we built a VMware Verified Cloud Platform situated in a Tier 3 Certified Data Centre. We are proud to say that CyberCLOUD offers true first Software Defined Data Centre (SDDC) services in Nigeria. The National Information Technology Development Agency (NITDA) expressed readiness to comply with full implementation of this provision in the Nigerian setting. This means that sensitive financial and commercial data will no longer be hosted abroad. This is the void CyberCloud has stepped in to fill, as a company of forward-thinking individuals; we have taken the initiative to set up Nigeria’s first true Cloud Service with the features that meet the Nigerian Data Sovereignty stipulation, she said. https://www.facebook.com/businessdayng

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Friday 17 January 2020

BUSINESS DAY

news

Ooni of Ife launches initiative to acknowledge, celebrate outstanding Nigerian youths Kemi Ajumobi

he reality of Africa rapid population expansion is expected to reach 2.8 billion by 2060 according to the World Bank statistics, with 65% of these counted as young, an energetic and innovative driven demography. This demography is building multipurpose vehicles and economic application systems that are aiding new milestones of individual economic successes. Some distinct members of this demography are being celebrated by the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, Ojaja II, through his maiden edition of the Royal African Young Leadership Forum (RAYLF), he describes as an audacious mission of his peace and unity outreach. “As a nation and the whole continent of Africa, I can boldly say that the world is more reliant on us more than ever before because of the exciting young populations that abound. Our young populations remain the major catalysts in boosting Nigeria and the whole of African economic growth,” he said. For Oba Adeyeye, Africa is regarded as the next economic frontier in globalization and the eagle eyes of the global community continue to see a continent that is rich both in human and natural resources. The sheer size, young population explosion, innovation development, sophisticated creative culture and the continent diversity distinctiveness are true potentials he describes as attracting global attention into the continent. Through the Royal African Young Leadership Forum and its incubation device, Oba Adeyeye says “My mission is to transform the economic landscape and make it more inclusive and address the challenges of poverty, unemployment and access to free healthcare. It is against this backdrop that the theme of this year’s gathering, “Africa of the Future: Unleashing the Assets of Its Narratives,” resonates with Africa’s integration development and its vibrant economic vision. This is a formidable theme, I believe, given the context we currently

exist in, as a global community.” He said. Through the Royal African Young Leadership Forum (RAYLF), he is committed to redefining and resetting the ancient roles of Africa to the world civilization; governance, leadership, its long-established creative culture, and entrepreneurial rich resilience spirit of Africa which embodies many defining principles of its identity. According to him, “RAYLF remains a catalyst with finest aspirations of inspiring the future generations of the best and brightest transforming, shaping, reconstructing and anchoring a new economic frontier by establishing innovative clusters through various mechanisms which is able to give Africa a competitive advantage. Speaking on the awardees, he said, “I am using these 100 awardees all between the ages of 20-39 to showcase the hidden treasures and ground breaking feats that impeccable children are recording across Nigeria and internationally. This will act as a turning point for the country, pushing us to celebrate our own; If we do not tell our own stories, who would tell them for us? “I am personally celebrating all Nigerian youths that are publicly and silently redefining their socioeconomic environment through positive enterprises and inspiring mechanisms that are worthy of emulation.” The choice of the outstanding young Nigerian youths selected for the award are those he describes as breaking the ceilings, changing the status quo and birthing new speeds of visible and non-visible achievement across Nigeria. “Be rest assured that we are just getting started. I wholeheartedly celebrate you and all the greatness you represent both for this country and the continent of Africa. This week which is dedicated to your celebration marks another historical transformation of our continent through our collective vision. I wish you all the best of success in our noble commitment to the greatness of Nigeria, Africa and the black nations,” he expressed.

Sanwo-Olu warns against impact of population expulsion, open defecation on environment AMAKA ANAGOR-EWUZIE

overnor of Lagos State, Babajide Sanwo-Olu, has raised alarm over the negative impact of the increasing number of Nigerian population as well as effect of other manmade activities such as open defecation on the environment. Sanwo-Olu, who registered this concern in Lagos on Wednesday at the 18th edition of Chief S.L.Edu Memorial Lecture held with the theme, ‘The Role of traditional Leaders in Protecting and Restoring the Nigerian Environment,’ said the bigger challenge for Nigeria and the whole of Africa, was how to manage the growing population. According to him, African population is jumping massively

and by 2050, it was estimated that African population would become about 4 billion while population of other continents like Europe, Asia and America are declining. Represented by Kadri Obafemi Hamzat, deputy governor of the state, Sanwo-Olu stated that the landmass of Nigeria is about 923,707sqkm, but the livable part of that landmass is reducing due to erosion, flood, disaster encroachment and others. “In the 70s, Lake Chad was predominantly bordered by four countries including Nigeria, Cameroun, Niger and Chad. The surface of the water was 26,000sqkms while the depth was about 11 meters severing close to 40 million people. Today, the same water is 1,350sqkms which is a reduction of about 14,000 percentages. www.businessday.ng

L-R: Obinna Ekezie, former professional NBA player; Amadou Gallo Fall, managing director, NBA Africa/president, Basketball Africa League (BAL), and Olumide Ayodeji, former professional NBA player, during the BAL media roundtable in Lagos, yesterday. Pic by Olawale Amoo

Abuja-Kaduna, Lagos-Ibadan rail corridors to receive 44 new coaches, locos MIKE OCHONMA

here are strong indications that additional coaches would be deployed on the 186.5-kilometre Abuja-Kaduna rail corridor and the initial number of coaches deployed on the soonto-be completed 157-kilometre Lagos-Ibadan standard gauge rail lines following the acquisition of more coaches and wagons by the Nigerian government from China this week. A seven-man Federal Government delegation led by Hussaini Adamu, director of procurement in the Federal Ministry of Transport (FMoT) accompanied by other top officials of the ministry and the Nigerian Railway Corporation (NRC), returned from China Wednesday at the end of a trip for the final acceptance test of 44 units of coaches and loco-

motives. Passenger preference for the Abuja-Kaduna train service has been on the rise on the wake of reported frequent cases of kidnapping and killings and banditry along the ever-busy Abuja-Kaduna highway. The increase in number of travellers by rail with shortage of coaches has resulted to increase in train fares with ticket racketeering by railway staff becoming an embarrassment both to the FMoT and the management of the NRC. A breakdown of the 44 units being acquired by the government shows that 29 are standard and 15 executive, respectively, with additional 16-diesel multiple units (DMUs) already shipped and is being expected to arrive Lagos any moment from now. Already in use for the regular inspection on the LagosIbadan rail corridor are four VIP coaches and two Conference

coaches. The government on Tuesday said the Lagos-Ibadan railway line would be ready for commissioning April 2020. While speaking as a guest on Good Morning Nigeria, a current affair programme of the Nigerian Television Authority (NTA), Rotimi Amaechi, minister of transportation, underscored the importance of rail transportation to the economic revival of the country. Amaechi noted that the President Muhammadu Buhariled administration was laying a solid infrastructural foundation capable of redefining capital projects implementation since the country’s return to democratic governance in 1999. The minister said an estimated 30 million tons of goods get to Kano and Kaduna from Lagos annually, with over 90 percent of these goods transported by road, adding that

with railway back on stream, the roads would be less congested, thus minimising cost of maintenance for both federal and state governments. He said, “We have put the President on notice that we are ready to commission the Lagos- Ibadan railway by April. Probably, since we have democracy day in May, he may wish to commission during the month.” He recalled that when the current administration took over in 2015, the Abuja- Kaduna railway was 80 percent completed, but nearly abandoned. ‘’We had to address the issues, complete the project and commission it for usage within one year. We then commenced the construction of the Lagos-Ibadan railway and the Itakpe-Warri railway. If you go to Agbor yard, you will see the huge investment in the yard,” he said.

Obaseki’s road projects open up economic Royal fathers, others to meet at Okori opportunities in Edo rural communities Eleme as Appolus Chu marks 50

esidents in rural communities across Edo State have continued to pour encomiums on the Governor Godwin Obasekiled administration for the spread of infrastructural development to unlock economic opportunities in different parts of the state. Residents along IrueOke-Uhiere Road in Uhunmwode Local Government Area hailed the governor for the construction of the 39km road after it was abandoned for over four decades, adding that the road opens a new vista of life for them. A t r a n s p o r t e r, K e l l y Evbuomwan, said the road project in the area has improved socioeconomic activities of residents, with the project translating to more businesses for motorists and farmers in the area. John Imarue, a farmer said the road has made it easy for farmers to move

their produce from the farms to markets in urban centres. Another farmer, Philomena Omorogbe, said the road project has improved livelihoods of farmers who in the past suffered losses as a result of difficulty accessing their farms. Omorogbe commended the Godwin Obaseki-led government for keeping to the promise made during the 2016 campaigns in the area. Ralph Okun, a resident in one of the communities in Owan West LGA, applauded the Edo State Government for giving priority attention to infrastructural development in rural areas, which he said are catalysts to the economic growth of the state. Okun expressed appreciation to the governor for ensuring the construction of Eme-Ora Market Road, Ivbojekpen, describing it as economically strategic to the community.

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IFEOMA OKEKE

ll roads will lead to Okori-Ogale, Eleme, Rivers State, as Appolus Chu, Egbere Emere Okori Eleme, celebrates his Golden Jubilee birthday, tomorrow. Appolus Chu who clocked the Golden age precisely on January 15, 2020, a day a national event is marked in the country – The Armed Forces Remembrance Day - had to shift his birthday celebration to Saturday, January 18, 2020, scheduled to take place at the palace of the Egbere Emere Okori Eleme, at Okori-Ogale, Nchia, Eleme, Eleme Local Government Area, Rivers State. The birthday celebration, planned as carnival, will have friends, colleagues, well-wishers and family members from every part of the nation as well as neighbouring countries arriving Okori Eleme from Friday, January 17 in preparation for the day. “As you know, attaining the @Businessdayng

age of 50 is such a remarkable milestone in life. It is one I look forward to celebrating. I therefore ask that you come rejoice with me as I thank God for His mercies upon me through these 50 years of my journey on earth,” Chu had noted in a letter of invitation issued out to people. Meanwhile, tributes and congratulatory messages have started rolling in long ago from across Nigeria to commemorate the king. Also, Chu has made adequate arrangements to host and accommodate as many guests that would be coming for this unprecedented celebration of the decade. As an exemplary Royal Father and accomplished businessman who has contributed immensely to the growth and development of his kingdom and community as a whole, Chu’s unique sense of honour and duty not only to his people, state and nation, but also to his colleagues nationwide, is unparalleled.

Friday 17 January 2020

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Thursday 16 January 2020 Company

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Change

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Volume

Company

Market cap(nm)

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 362,561.30 10.20 -2.86 413 52,474,760 UNITED BANK FOR AFRICA PLC 290,695.08 8.50 3.03 431 31,969,428 ZENITH BANK PLC 670,315.14 21.35 0.23 572 31,554,525 1,416 115,998,713 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 251,267.05 7.00 -0.71 256 6,922,077 256 6,922,077 1,672 122,920,790 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,452,718.82 120.50 -2.98 114 1,005,371 114 1,005,371 114 1,005,371 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 - 63 304,428 LAFARGE AFRICA PLC. 241,616.93 15.00 - 140 5,140,710 203 5,445,138 203 5,445,138 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 346,005.40 588.00 - 21 80,020 21 80,020 21 80,020 2,010 129,451,319 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 9,338.94 3.50 - 6 55,065 6 55,065 6 55,065 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 6 55,065 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 5 2,000,000 OKOMU OIL PALM PLC. 62,958.06 66.00 - 14 86,697 PRESCO PLC 52,250.00 52.25 - 16 67,206 35 2,153,903 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 -9.09 8 302,540 8 302,540 43 2,456,443 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 2 660 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 43,899.83 1.08 4.85 75 17,855,896 U A C N PLC. 30,829.87 10.70 -3.17 208 6,280,598 285 24,137,154 285 24,137,154 BUILDING CONSTRUCTION ARBICO PLC. 521.24 3.51 - 4 106,005 4 106,005 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 28,842.00 21.85 - 32 466,392 165.00 6.60 - 0 0 ROADS NIG PLC. 32 466,392 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 9 49,768 9 49,768 45 622,165 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,672.91 0.98 - 0 0 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 66,149.56 30.20 - 17 36,666 INTERNATIONAL BREWERIES PLC. 78,222.34 9.10 -1.09 18 1,107,503 NIGERIAN BREW. PLC. 408,641.69 51.10 - 32 73,174 67 1,217,343 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 174,000.00 14.50 -2.03 61 1,230,477 FLOUR MILLS NIG. PLC. 98,409.11 24.00 - 79 506,223 HONEYWELL FLOUR MILL PLC 8,168.10 1.03 - 29 1,182,000 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,741.58 15.00 - 26 198,769 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 195 3,117,469 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 - 24 172,939 NESTLE NIGERIA PLC. 1,165,125.42 1,469.90 - 25 11,110 49 184,049 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,104.12 4.88 - 26 237,220 26 237,220 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,227.29 5.85 - 15 111,524 UNILEVER NIGERIA PLC. 103,410.10 18.00 - 11 94,984 26 206,508 363 4,962,589 BANKING ECOBANK TRANSNATIONAL INCORPORATED 132,116.77 7.20 -7.69 53 1,902,399 FIDELITY BANK PLC 63,165.06 2.18 3.81 97 6,343,656 GUARANTY TRUST BANK PLC. 935,911.50 31.80 0.63 255 6,063,670 JAIZ BANK PLC 18,857.12 0.64 -1.56 20 1,213,522 STERLING BANK PLC. 52,974.37 1.84 -3.16 96 6,518,456 UNION BANK NIG.PLC. 179,092.63 6.15 - 29 54,108 UNITY BANK PLC 8,416.32 0.72 - 4 3,503 WEMA BANK PLC. 27,387.87 0.71 -2.74 27 1,051,563 581 23,150,877 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 20 AIICO INSURANCE PLC. 5,336.26 0.77 1.30 21 5,272,983 AXAMANSARD INSURANCE PLC 22,260.00 2.12 -0.93 10 746,513 CONSOLIDATED HALLMARK INSURANCE PLC 3,170.70 0.39 2.63 2 150,311 CONTINENTAL REINSURANCE PLC 22,820.04 2.20 - 0 0 8,543.11 0.58 9.43 8 234,000 CORNERSTONE INSURANCE PLC GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,977.33 0.27 -7.41 25 6,125,606 2,148.17 0.50 - 1 5,250 LAW UNION AND ROCK INS. PLC. LINKAGE ASSURANCE PLC 3,840.00 0.48 -8.33 4 500,049 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 4 1,316,343 NEM INSURANCE PLC 10,825.03 2.05 - 3 2,883 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 2,906.58 0.54 - 1 10,171 PRESTIGE ASSURANCE PLC REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 -9.09 8 1,703,962 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 7,360 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 100 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,683.96 0.35 -2.78 30 777,746 121 16,853,297 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,812.56 1.23 - 6 55,000 6 55,000

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 1 2 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 1 674 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 676 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 9,200.00 4.60 - 43 379,272 34,997.09 5.95 - 5 20,084 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 540.00 0.36 - 0 0 38,021.20 1.92 -0.52 62 1,544,488 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,697.97 0.33 - 0 0 STANBIC IBTC HOLDINGS PLC 446,461.11 42.50 - 22 398,104 15,840.00 2.64 1.15 72 2,157,973 UNITED CAPITAL PLC 204 4,499,921 914 44,559,771 HEALTHCARE PROVIDERS EKOCORP PLC. 2,592.72 5.20 - 1 17 746.16 0.21 - 3 1,194,993 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 4 1,195,010 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 -10.00 3 126,773,565 3 126,773,565 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 5,424.54 2.60 -5.45 10 228,281 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,175.26 6.00 7.14 48 1,593,366 MAY & BAKER NIGERIA PLC. 3,743.76 2.17 - 10 109,255 968.57 0.51 - 3 27,497 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 71 1,958,399 78 129,926,974 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,323.81 0.45 - 2 600 2 600 IT SERVICES CWG PLC 6,413.06 2.54 - 1 2 NCR (NIGERIA) PLC. 437.40 4.05 - 5 85,402 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 4 9,034 10 94,438 PROCESSING SYSTEMS CHAMS PLC 1,596.66 0.34 2.94 15 3,864,448 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 15 3,864,448 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 12 858 12 858 39 3,960,344 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 9 44,645 BUA CEMENT PLC 1,286,845.45 38.00 -2.44 186 12,562,001 CAP PLC 17,500.00 25.00 - 17 23,362 MEYER PLC. 244.37 0.46 -8.00 3 101,999 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 215 12,732,007 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,518.69 1.43 - 15 195,052 15 195,052 PACKAGING/CONTAINERS BETA GLASS PLC. 32,448.18 64.90 10.00 18 252,009 GREIF NIGERIA PLC 388.02 9.10 - 0 0 18 252,009 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 248 13,179,068 CHEMICALS B.O.C. GASES PLC. 2,289.35 5.50 - 5 137,713 5 137,713 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 0 0 0 0 5 137,713 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 25 1,009,741 25 1,009,741 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,374.66 3.65 -3.95 65 1,587,644 65 1,587,644 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 12 1,417 CONOIL PLC 13,879.04 20.00 - 23 27,371 ETERNA PLC. 4,694.92 3.60 - 3 6,500 FORTE OIL PLC. 24,747.14 19.00 6.44 81 574,274 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 2 388 TOTAL NIGERIA PLC. 36,328.84 107.00 - 27 18,297 148 628,247 238 3,225,632 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 1 10 1 10 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 6 52,727 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 6 52,727 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 2 502 IKEJA HOTEL PLC 2,328.25 1.12 - 1 4,979 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 33,821.80 4.45 - 3 10,202 6 15,683 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 933.45 1.21 - 1 420 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 560.83 1.30 2.31 12 1,704,890 13 1,705,310 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 745.97 0.45 - 2 19,500 2 19,500 SPECIALTY INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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Friday 17 January 2020

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

TOM MITCHELL AND TOM HANCOCK

hen US trade negotiators arrived in Beijing in May 2018 for their first round of talks with vicepremier Liu He, they presented him with a strongly worded list of demands outlining their objectives. Chinese officials thought the tone of the complaint was insulting and would garner them sympathy at home and internationally, according to people involved in the discussions. So they leaked it to a Chinese journalist and it went viral. “We couldn’t believe how fast it got out,” one US official said. The document remains the best benchmark with which to measure the two sides’ “phase one” trade agreement against Donald Trump’s original aspirations for the talks — and an indication of how far the deal is from the US president’s stated ambitions. The document began by demanding a $200bn reduction in the US trade deficit by the end of this year, compared with 2018. According to the Office of the US Trade Representative, the US had a trade deficit with China of $378.2bn in 2018. Steven Mnuchin, Treasury secretary, subsequently told US embassy staff in Beijing that deficit reduction would ultimately determine whether the negotiations had been a success, according to people briefed on his meetings in the Chinese capital. But the strongest language called for an end to Beijing’s “marketdistorting subsidies and other types of government support”, as well as what the US characterised as “Chinese government-conducted, sponsored and tolerated cyber theft”. After almost two years of negotiations, tariffs and counter-tariffs, Mr Trump has achieved none of these objectives. Instead of a $200bn reduction in Washington’s trade deficit with China, the agreement calls for $200bn-worth of additional Chinese purchases of US commodities, manufactured goods and services over the next two years, compared with 2017 levels.

China views trade deal as welcome respite in US battle ‘Phase one’ agreement does not achieve many of Donald Trump’s goals

Chinese subsidies and alleged cyber theft were not addressed in Wednesday’s agreement, with US officials instead promising to tackle these in “phase two” talks that will begin later this year. Robert Lighthizer, the US trade representative, said the critical challenges that remained included “industrial subsidies ” and “cyber intrusions in the commercial sphere”. Chinese officials and state media said Beijing’s immediate focus would be on implementing the phase one deal rather than an ambitious second round of negotiations. They have also been careful not to celebrate this week’s agreement too much, calling it a welcome respite from more tariffs and “just the first round” of negotiations. In the interim, most of the tariffs imposed over the past two years remain, meaning both countries’ exports face an average 20 per cent tariff in the other’s market. Mr Lighthizer suggested China would use temporary tariff

“exclusions” to meet its purchasing targets. “There are still a lot of tariffs in place,” said Myron Brilliant, head of the US Chamber of Commerce’s international operations, at a briefing in Beijing this week. “That’s still leverage in the mind of the US government . . . but we want [both governments] to deal with the core issues that largely have not been dealt with in phase one and we want to see ultimately the removal of tariffs that we think are harmful to both economies.” Many analysts doubt, for example, whether China can force domestic food companies — many of which are privately owned — to deliver the promised $37bn-worth of US agricultural purchases this year. “What remains unclear is how China will reconcile its commitment to expand purchases of American agricultural products with agreements it has made with other nations,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai.

“We need more details on Chinese agricultural purchases to see if the numbers are realistic.” In order to reach that target, China would need to increase its purchases of US nuts to $2.5bn in 2020, compared with a record $390m in 2012, according to Chinese agricultural consultancy JCI. After the outlines of the agreement were published by the USTR last month, Three Squirrels, one of China’s biggest snack food companies, said it was “difficult to say” if it could boost US purchases due to uncertainty over tariffs. Companies that import pistachios and almonds have already adjusted their purchases away from the US. Shanghai Laiyifen, China’s biggest snack food maker, said it was easier to import from countries such as Australia and New Zealand that have free trade agreements with Beijing. Almost all other Chinese concessions outlined in this week’s agreement were either already in train or viewed by President Xi

Jinping’s administration as beneficial to China’s own economic development. These include increased protections for intellectual property and proprietary technologies, greater market access for US financial services companies and a longstanding pledge by Beijing to ensure the renminbi is fairly valued against the dollar. Over the past decade, China has gradually strengthened enforcement of intellectual property rules and increased punishments for violation, largely out of selfinterest as domestic companies become more dependent on income from patents and trademarks. “ T h e s e c h a n g e s w e re i n play before the trade war was launched, but had since been delayed,” Mark Cohen, an expert on Chinese property law at New York’s Fordham University’s law school, wrote in a recent note. “After much pain and drama, the [Trump] administration may yet be placing old wine in a new bottles.” Chinese courts have also delayed hearings on IP cases involving foreign companies since the onset of the trade war, according to multiple lawyers. Court officials, they said, were nervous to make judgments that might attract media attention or conflict with Beijing’s negotiating stance. “We see courts halting cases to see where the negotiations will go without any judgment or hearings,” said a Beijing-based IP lawyer. As such, companies are hoping that the phase one deal results in a return to business as it was before the onset of trade hostilities. “Hopefully Chinese courts will begin to move the cases again after the signing,” said a Shanghai-based IP lawyer.

Beware Trump’s admiration for Putin, Xi and Erdogan The US president has made little attempt to hide his respect for strongman leaders EDWARD LUCE

t is this time next year and Donald Trump is preparing for his second inauguration. Though he received 4m fewer votes than Joe Biden, his Democratic opponent, Mr Trump is already musing about a third term. “Democrats stole my first term with sham impeachment!” he tweets for the nth time. Apologists insist Mr Trump is just trolling the media. Either way, it is all about the family. Forward-looking Republicans are lining up behind either Donald Trump Jnr, his son, or Ivanka, the self-designated “first daughter”. It would be rash to dismiss the odds of this happening. The pressing question is what Mr Trump would do if it does. The answer is to pay attention to what he says since he usually means it. In particular, listen to the praise Mr Trump showers on auto-

cratic counterparts, such as China’s Xi Jinping and Russia’s Vladimir Putin. The first has removed China’s informal two-term presidential limit so that he can stay on after 2022. Mr Putin, who is in his fourth term, is overhauling Russia’s constitution, almost certainly to perpetuate his power beyond 2024. Mr Trump has repeatedly congratulated both men on their power. He called Mr Xi “president-for-life” — not a term anyone in China uses. “I think it’s great,” Mr Trump told donors. “Maybe we’ll have to give it a shot someday.” Against the advice of staff, he also congratulated Mr Putin on his re-election in 2018. It is notable that Mr Trump has not said a negative word in public about his Russian counterpart. Contrast this with the belittling language Mr Trump uses for his democratically elected counterparts in Europe and elsewhere. www.businessday.ng

The big lesson from Mr Trump’s re-election would be that he could say and do what he likes without paying a price. The idea of US checks and balances would be exposed as a confidence trick, since it relies on people valuing limits on executive power. Once they no longer think those guardrails matter, they could start to come undone. The best example of this would be the impotence of impeachment. Next week Mr Trump is set to go on “trial” in the Senate for the high crimes and misdemeanours of abusing his office and obstructing Congress. A few weeks later, he will almost certainly be acquitted. As the first president in history to be impeached in his first term, Mr Trump would be taking America into uncharted waters by going on to win re-election. The only court of appeal that matters would be public opinion. The effect on Mr Trump’s

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sense of his own power would be non-trivial, as economists say. The impact on aspiring, or actual, authoritarian leaders of being confirmed in power is instructive. It is typically the moment when the gloves come off. India’s Narendra Modi has dramatically stepped up the country’s shift towards illiberal democracy since his party was reelected in a landslide in May. Mr Putin took a more autocratic turn at the start of his second term in 2004. Mr Xi scrapped tenure limits in 2018, shortly into his second five-year term. It is close to an iron law. Similar step changes occurred on the first re-election of Turkey’s then prime minister (now president) Recep Tayyip Erdogan, Hungary’s Viktor Orban and Egypt’s Abdel Fattah al-Sisi. Mr Trump offered his “sincere congratulations” to the Egyptian leader after his 97 per cent landslide in 2018. @Businessdayng

What would Mr Trump want to do with a second term? You can search in vain for substantive policy aspirations. At this point, first-term US presidents typically talk about unfinished business. In Mr Trump’s case, the only example is completing the border wall with Mexico. Once or twice Mr Trump has mentioned a desire for a middle-class tax cut. Doubtless his team will cobble something together as this year’s election looms. But to judge by what Mr Trump says, his chief preoccupation is settling scores with his enemies. Throughout history, paranoia is a defining feature of strongmen. In Mr Trump’s case, it is about what the courts would do once he is out of power. As Thomas Jefferson said about slavery, the dilemma can be likened to holding on to the ears of a wolf. You want to let go but you fear what will happen if you do. Mr Trump will want to keep a tight grip on those ears.

44 BUSINESS DAY

Friday 17 January 2020

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

SEC’s top Democrat issues warning ahead of departure next month Robert Jackson fears new US rules could ‘make it harder for investors to speak their mind’ PATRICK TEMPLE-WEST AND KADHIM SHUBBER

he senior Democratic member of the US Securities and Exchange Commission has warned that shareholders’ ability to influence corporate boardroom decisions is under threat in comments ahead of his departure next month. Robert Jackson, whose exit has been expected after his term officially ended in June last year, told the Financial Times that updates to shareholder advisory and voting regulations “could make it harder for investors to speak their mind going forward”. “There is a movement afoot more generally to exclude investors from the ability to talk to the board of directors to determine the future path of American capitalism,” he said in an interview. “I’m hopeful that my colleagues will reconsider.” The changes, proposed last November by a vote of 3-2 along party lines, have been among the most controversial of Jay Clayton’s tenure as

sion had worked successfully across party lines. Mr Jackson also welcomed the tougher approach to stock market trading fees the SEC has taken. And he said the commission’s crackdown on cryptocurrency fraud had been a clear success. “I commend Jay Clayton for doing something very hard, which is getting out in front of an emerging issue and making sure investors got protected,” he said. Robert Jackson’s departure in February will leave only one Democrat on The relative comity at the the US Securities and Exchange Commission © Reuters SEC has been in marked contrast to other parts of Trumpera Washington, where agenSEC chairman. Mr Jackson’s next week. Although he criticised cies such as the Consumer departure will leave only one Democrat on the commission, recent deregulatory efforts, Financial Protection Bureau giving the Republicans to Mr including on proposed rules have been significantly roiled Clayton’s right greater sway that expanded small inves- by Trump appointees. Mr Clayton, whose term on enforcement matters and tors’ ability to buy private business-friendly regulations. securities, Mr Jackson compli- expires in 2021, is expected to Mr Jackson took office mented Mr Clayton’s willing- leave the SEC after the presiin January 2018. The White ness to work with Democrats. dential election in November. House has not yet named “I have won some, I have lost An independent, he had faced his successor, but it is ex- more, but I have always been pressure last year from Senate pected to nominate Caroline heard,” said Mr Jackson, who Republicans to move more Crenshaw, an adviser to Mr will be returning to New York quickly to implement changes desired by conservatives. Jackson, according to a source University to teach law. In a statement, Mr Clayton He pointed to the SEC’s familiar with the matter. Her confirmation is uncertain, changes to rules on exchange applauded Mr Jackson’s work however, given deep political traded funds, including guard- at the agency. “I thank Rob for his many divisions in the Senate as US rails around leveraged verpresident Donald Trump’s sions of the financial products, constructive comments and impeachment hearing begins as an area where the commis- questions,” Mr Clayton said.

UK regulators launch fresh push to switch away from Libor Banks have until September to stop issuing cash products linked to sterling benchmark CAROLINE BINHAM AND PHILIP STAFFORD

K financial regulators have stepped up warnings to major banks and insurers to sever their links with Libor, as part of a growing push to meet a 2021 deadline for moving away from the notorious benchmark. The Bank of England and Financial Conduct Authority put senior managers of firms on notice on Thursday that it is demanding to see “clear evidence of engagement” from next month that they are ending their Libor addiction, to make sure the switch from the scandal-tainted rate happens by the end of next year, when the benchmark should cease to exist. Regulators told firms that cash products linked to sterling-denominated Libor must cease by September. The BoE added that it was “keeping the potential use of supervisory tools under review” — a veiled threat that senior managers may be in the line of fire and that capital requirements for banks deemed to be taking too much risk could be toughened if the in-

dustry did not make progress on its preparations. The authorities also set a March 2 target for derivatives markets to stop using Libor in sterling interest-rate swaps, and to start using an overnight alternative rate called Sonia. Policymakers see a liquid derivatives market that supplies daily prices as a critical factor in the overall transition. Despite several warnings, UK regulators are concerned that not enough is being done to meet the 2021 deadline. Significant volumes of swaps contracts referencing Libor continue to be written, meaning the stock of Libor contracts is still growing. Thursday’s announcements “provide a level of detailed guidance that firms have been calling for as they prepare to transition away from Libor”, said Shankar Mukherjee, a partner at consultancy EY. He said the move was “the impetus the market needs”, providing a clear signal that firms should stop issuing sterling-linked Libor cash products by the third quarter of 2020. It is not just a UK issue: global authorities urgently

want markets to move off using Libor, which underpins the pricing of as much as $400tn of products around the world, from loans to derivatives contracts. Policymakers on both sides of the Atlantic argue the tainted benchmark is unrepresentative of modern markets, where banks rely less on unsecured loans for funding. Watchdogs are also seeking to restore public trust after a series of manipulation scandals, which have led to banks and brokers paying about $10bn in global penalties. But the shift is proving tricky. Libor, or the London interbank offered rate, has been in wide use since the 1980s. While derivatives and fixed-income markets are beginning to switch to other benchmarks, the lending and securitisation markets have barely budged. The Financial Stability Board, a Basel-based collection of regulators and central banks, said in December that there needed to be “significant and sustained efforts” by the official sector and companies to adapt to new benchmarks. New York Federal Reserve

president John Williams warned financial firms last year against “sticking their metaphorical heads in the sand” over the Libor deadline. A US industry group has selected the Secured Overnight Financing Rate (Sofr), based on transactions in short-term lending markets, to replace Libor. Policymakers also want banks and insurers to have a plan to address their thousands of existing contracts that will extend beyond 2022, whose terms may change if Libor vanishes. A UK industry working group also published a plan of action on Thursday, rubberstamped by the BoE and FCA. Its chair, Tushar Morzaria, who is also Barclays’ group finance director, said 2020 “will be a pivotal year in the transition journey, with critical focus on enabling the flow of new business away from sterling Libor”. Rating agency Moody’s published a report on Thursday arguing that overnight rates such as Sonia or the dollar-denominated Sofr were less volatile in stressed situations and less exposed to credit and liquidity risk than Libor.

Germany strikes €44bn deal to phase out coal use in energy supply Compensation agreed for communities and companies including RWE TOBIAS BUCK

he German government has struck a deal with the country’s coal-producing regions to phase out the use of coal power by 2038 in return for compensation and benefits worth €40bn. Berlin will also set aside €4.35bn for utilities such as RWE, which will close some of their coal plants early. The deal removes one of the last obstacles to a historic energy transition in Europe’s largest economy. Angela Merkel’s coalition government pledged last year to switch off all coal-fired power stations but has since battled to secure political support from federal states such as North Rhine-Westphalia, Brandenburg and Saxony, where Germany’s mines and power plants are concentrated. The deal, presented by senior ministers on Thursday, means Germany will end the use of nuclear and coal power at the same time, sharply increasing the country’s dependence on renewable sources of power such as wind and solar. Berlin wants to meet at least 65 per cent of its electricity needs with renewable power by the end of this decade. “Germany, which is one of the strongest and most successful industrial nations in the world, is taking giant steps towards leaving behind the fossil age,” said Olaf Scholz, the finance minister. Svenja Schulze, environment minister, added: “We are the first country that will exit from both nuclear and coal [power]. That is also an important international signal that we are sending out.” RWE alone is set to receive €2.6bn of the €4.35bn compensation package, with the remaining €1.75bn set aside for utilities in eastern Germany. Rolf Martin Schmitz, the RWE chief executive, said the deal was acceptable but would stretch the group “to the limit”. RWE said the early shutdown would impose financial costs of €3.5bn, significantly more than the promised compensation, and force 6,000 job losses by 2030. There would be no impact on the dividend, however. Shares in RWE were up 1.5 per cent in

afternoon trading. The accord presented on Thursday largely echoes the recommendations of a government-appointed coal committee last year, which brought together experts from industry, the environmental movement and politics to hammer out a compromise. Despite strong misgivings about the long transition phase, Green campaigners signed up to the deal at the time — but have since urged the government to speed up the shutdown. Berlin is now committed to a formal review of the phase-out plan at the end of the decade, with a view to ending the use of coal power in 2035. The timetable for plant closures agreed between Berlin and the regions calls for the first 300MW unit to be taken out of service at the end of 2020, with another 900MW due to go offline at the end of 2021. However, some of the biggest, most heavily polluting coal power stations will only be shut in 2028 and 2029. One area where the government deal departs from the expert recommendations concerns the newly built power station at Datteln, in western Germany, which has yet to start production. Billed by Uniper, its owner, as one of the cleanest and most efficient coal power stations in the world, it was nonetheless supposed to be shut down. Now, it will be allowed to start production as planned. The compensation package for coal states includes plans to move government institutions and military installations to the affected regions, in an effort to create jobs and revenues. Some sites will also benefit from the construction of new gasfired power stations. News of the agreement — and of the planned opening of Datteln — was met with disappointment by some campaigners. Olaf Bendt, chairman of Germany’s Bund environmental pressure group, said the government had pushed the bulk of power station closures back to beyond 2030. “Once again the government has shown that it has not understood the seriousness of the climate crisis.”

Friday 17 January 2020

BUSINESS DAY

ANALYSIS

Angela Merkel warns EU: ‘Brexit is a wake-up call’ In an exclusive FT interview, Germany’s chancellor says the bloc must be more competitive LIONEL BARBER AND GUY CHAZAN

t’s a grim winter’s day in Berlin, and the political climate matches the weather. Everywhere Angela Merkel looks there are storm clouds, as the values she has upheld all her career come under sustained attack. At the start of a new decade, Europe’s premier stateswoman suddenly seems to be on the wrong side of history. Shortly, the UK will leave the EU. A volatile US president is snubbing allies and going it alone in the Middle East. Vladimir Putin is changing the Russian constitution and meddling in Libya and sub-Saharan Africa. Trade tensions continue, threatening the open borders and globalised value chains that are the cornerstones of Germany’s prosperity. Ms Merkel, a former physicist renowned for her imperturbable, rational manner is a politician programmed for compromise. But today she faces an uncompromising world where liberal principles have been shoved aside by the law of the jungle. Her solution is to double down on Europe, Germany’s anchor. “I see the European Union as our life insurance,” she says. “Germany is far too small to exert geopolitical influence on its own, and that’s why we need to make use of all the benefits of the single market.” Speaking in the chancellery’s Small Cabinet Room, an imposing wood-panelled hall overlooking Berlin’s Tiergarten park, Ms Merkel does not come across as under pressure. She is calm, if somewhat cagey, weighing every word and seldom displaying emotion. But the message she conveys in a rare interview is nonetheless urgent. In the twilight of her career — her fourth and final term ends in 2021 — Ms Merkel is determined to preserve and defend multilateralism, a concept that in the age of Trump, Brexit and a resurgent Russia has never seemed so embattled. This is the “firm conviction” that guides her: the pursuit of “the best win-win situations . . . when partnerships of benefit to both sides are put into practice worldwide”. She admits that this idea is coming “under increasing pressure”. The system of supranational institutions like the EU and United Nations were, she says, “essentially a lesson learnt from the second world war, and

the preceding decades”. Now, with so few witnesses of the war still alive, the importance of that lesson is fading. Of course President Donald Trump is right that bodies like the World Trade Organization and the UN require reform. “There is no doubt whatsoever about any of that,” she says. “But I do not call the world’s multilateral structure into question.” Germany has been the great beneficiary of Nato, an enlarged EU and globalisation. Free trade has opened up vast new markets for its world-class cars, machines and chemicals. Sheltered under the US nuclear umbrella, Germany has barely spared a thought for its own security. But the rise of “Me First” nationalism threatens to leave it economically and politically unmoored. In this sense, Europe is existe ntial for German interests, as well as its identity. Ms Merkel therefore wants to strengthen the EU — an institution that she, perhaps more than any other living politician, has come to personify. She steered Europe through the eurozone debt crisis, albeit somewhat tardily: she held Europe together as it imposed sanctions on Russia over the annexation of Crimea; she maintained unity in response to the trauma of Brexit. The UK’s departure will continue to hang over Brussels and Berlin — the countdown for a trade deal will coincide with Germany’s presidency of the EU in the second half of this year. Berlin worries a post-Brexit UK that reserves the right to diverge from EU rules on goods, workers’ rights, taxes and environmental standards could create a serious economic competitor on its

doorstep. But Ms Merkel remains a cautious optimist. Brexit is a “wake-up call” for the EU. Europe must, she says, respond by upping its game, becoming “attractive, innovative, creative, a good place for research and education . . . Competition can then be very productive.” This is why the EU must continue to reform, completing the digital single market, progressing with banking union — a plan to centralise the supervision and crisis management of European banks — and advancing capital markets union to integrate Europe’s fragmented equity and debt markets. In what sounds like a new European industrial policy, Ms Merkel also says the EU should identify the technological capabilities it lacks and move fast to fill in the gaps. “I believe that chips should be manufactured in the European Union, that Europe should have its own hyperscalers and that it should be possible to produce battery cells,” she says. It must also have the confidence to set the new global digital standards. She cites the example of the General Data Protection Regulation, which supporters see as a gold standard for privacy and proof that the EU can become a rulemaker, rather than a rule taker, when it comes to the digital economy. Europe can offer an alternative to the US and Chinese approach to data. “I firmly believe that personal data does not belong to the state or to companies,” she says. “It must be ensured that the individual has sovereignty over their own data and can decide with whom and for what purpose they share it.”

The continent’s scale and diversity also make it hard to reach a consensus on reform. Europe is deeply split: the migration crisis of 2015 opened up a chasm between the liberal west and countries like Viktor Orban’s Hungary which has not healed. Even close allies like Germany and France have occasionally locked horns: Berlin’s cool response to Emmanuel Macron’s reform initiatives back in 2017 triggered anger in Paris, while the French president’s unilateral overture to Mr Putin last year provoked irritation in Berlin. And when it comes to reform of the eurozone, divisions still exist between fiscally challenged southern Europeans and the fiscally orthodox new Hanseatic League of northern countries. Ms Merkel remains to a degree hostage to German public opinion. Germany, she admits, is still “slightly hesitant” on banking union, “because our principle is that everyone first needs to reduce the risks in their own country today before we can mutualise the risks”. And capital markets union might require member states to seek closer alignment on things like insolvency law. These divisions pale in comparison to the gulf between Europe and the US under president Donald Trump. Germany has become the administration’s favourite punching bag, lambasted for its relatively low defence spending, big current account surplus and imports of Russian gas. German business dreads Mr Trump making good on his threat to impose tariffs on European cars. It is painful for Ms Merkel, whose career took off after uni-

fication. In an interview last year she described how, while coming of age in communist East Germany, she yearned to make a classic American road trip: “See the Rocky Mountains, drive around and listen to Bruce Springsteen — that was my dream,” she told Der Spiegel. The poor chemistry between Ms Merkel and Mr Trump has been widely reported. But are the latest tensions in the German-US relationship just personal — or is there more to it? “I think it has structural causes,” she says. For years now, Europe and Germany have been slipping down the US’s list of priorities. “There’s been a shift,” she says. “President Obama already spoke about the Asian century, as seen from the US perspective. This also means that Europe is no longer, so to say, at the centre of world events.” She adds: “The United States’ focus on Europe is declining — that will be the case under any president.” The answer? “We in Europe, and especially in Germany, need to take on more responsibility.” Germany has vowed to meet the Nato target of spending 2 per cent of GDP on defence by the start of the 2030s. Ms Merkel admits that for those alliance members which have already reached the 2 per cent goal, “naturally this is not enough”. But there’s no denying Germany has made substantial progress on the issue: its defence budget has increased by 40 per cent since 2015, which is “a huge step from Germany’s perspective”. Ms Merkel insists the transatlantic relationship “remains crucial for me, particularly as regards fundamental questions concerning values and interests in the world”. Yet Europe should also develop its own military capability. There may be regions outside Nato’s primary focus where “Europe must — if necessary — be prepared to get involved. I see Africa as one example,” she says. Defence is hardly the sole bone of contention with the US. Trade is a constant irritation. Berlin watched with alarm as the US and China descended into a bitter trade war in 2018: it still fears becoming collateral damage. “Can the European Union come under pressure between America and China? That can happen, but we can also try to prevent it.” Germany has few illusions Continues on page 46

Friday 17 January 2020

BUSINESS DAY

NATIONAL NEWS

How to avert a war over the Nile between Egypt and Ethiopia

South Africa cuts rates as economic slowdown persists

Addis has in the past rejected mediation, but the US has recently become involved

rivers whose use is theoretically regulated by a 1960 treaty. Dams in China have affected the flow of the Mekong river, which snakes through Myanmar, Thailand, Laos, Cambodia and Vietnam. For the Nile, no proper framework agreement exists. The Blue Nile, which starts in the Ethiopian highlands, flows northwards to Khartoum, capital of Sudan. There it joins the White Nile, which drains from Lake Victoria, through several African countries including Uganda, Tanzania and the Democratic Republic of Congo. Yet, according to a treaty orchestrated by the British in 1929, the Nile’s largesse is shared between just two nations: Egypt gets 75 per cent and Sudan (now split into two) the remaining 25 per cent. That division is untenable. Addis has accused Cairo of leaning on a colonial-era arrangement. The dam is located just 15 miles from the border with Sudan, which also originally objected to Ethio-

outh Africa’s central bank unleashed a surprise 25 bps interest rate cut as it braced for a deeper slowdown in the country’s blackout-plagued economy. Lower inflation in Africa’s most industrialised nation “opens some space to provide further policy accommodation” and triggered the unanimous decision to cut the main rate to 6.25 per cent, the South African Reserve Bank said on Thursday. Prospects for South Africa’s economy this year have been hit by increasingly intense power shortages as Eskom, the heavily indebted state electricity monopoly, skirts total collapse. South Africa’s economy is likely to have grown only by 0.4 per cent last year and might only manage 1.2 per cent in 2020, the Reserve Bank said in new forecasts on Thursday. This month the World Bank slashed its own prediction for South Africa’s growth this year from 1.5 per cent to 0.9 per cent, citing the danger of further Eskom blackouts. Pressure on the bank to cut rates has mounted in recent months as South Africa’s inflation fell to 3.6 per cent, the lowest in almost a decade and close to the lower bound of an official target.

dependent on one firm” in 5G. But “I think it is wrong to simply exclude someone per se,” she says. The rise of China has triggered concern over Germany’s future competitiveness. And that economic “angst” finds echoes in the febrile politics of Ms Merkel’s fourth term. Her “grand coalition” with the Social Democrats is wracked by squabbling. The populist Alternative for Germany is now established in all 16 of the country’s regional parliaments. A battle has broken out for the postMerkel succession, with a crop of CDU heavy-hitters auditioning for the top job. Many in the political elite worry about waning international influence in the final months of the Merkel era. While she remains one of the country’s most popular politicians, Germans are asking what her legacy will be. For many of her predecessors, that question is easy to answer: Konrad Adenauer

anchored postwar Germany in the west; Willy Brandt ushered in detente with the Soviet Union; Helmut Kohl was the architect of German reunification. So how will Ms Merkel be remembered? She brushes away the question. “I don’t think about my role in history — I do my job.” But what about critics who say the Merkel era was mere durchwurschteln — muddling through? That word, she says, in a rare flash of irritation, “isn’t part of my vocabulary”. Despite her reputation for gradualism and caution, Ms Merkel will doubtless be remembered for two bold moves that changed Germany — ordering the closure of its nuclear power stations after the Fukushima disaster of 2011, and keeping the country’s borders open at the height of the 2015 refugee crisis. That decision was her most controversial, and there are some in Germany who still won’t for-

give her for it. But officials say Germany survived the influx, and has integrated the more than 1m migrants who arrived in 2015-16. She prefers to single out less visible changes. Germany is much more engaged in the world: just look, she says, at the Bundeswehr missions in Africa and Afghanistan. During the Kohl era, even the idea of dispatching a ship to the Adriatic to observe the war in Yugoslavia was controversial. She also mentions efforts to end the war in Ukraine, its role in the Iran nuclear deal, its assumption of ever more “diplomatic, and increasingly also military responsibility”. “It may become more in future, but we are certainly on the right path,” she says. The Merkel era has been defined by crisis but thanks to her stewardship most Germans have rarely had it so good. The problem is the world expects even more of a powerful, prosperous Germany and its next chancellor.

“

o force can stop Ethiopia from building a dam. If there is need to go to war, we could get millions readied.” Thus spoke Abiy Ahmed, Ethiopia’s prime minister, in October, a few days after winning the Nobel Peace Prize. To be fair, Mr Abiy has made clear that hostilities between Ethiopia and Egypt over the Grand Ethiopian Renaissance Dam, the biggest in Africa and the seventhlargest in the world, can only be resolved diplomatically. The prime minister was seeking to rebut Egyptian rhetoric, thankfully receding, that if necessary Cairo could halt construction of Ethiopia’s mega-dam through military action. The stakes for both nations could hardly be higher. At its root is a fight over the resources of the Nile, a 4,100-mile river that flows through 11 African countries and without which more than 5,000 years of Egyptian civilisation — not to mention Egypt’s modern economy — would not exist. Plans are afoot to start filling the reservoir, which will eventually be the size of Greater London, this year, with the first power to be produced in 2021. For Egypt, damming the Nile upstream is an existential threat. Some 90 per cent of its fresh water comes from the river. Millions of farmers depend on its waters to irrigate their land. Egypt wants Ethiopia to fill the reservoir over 15 years — against Addis’s stated intention of four to seven — and

to guarantee that long-term flows are unaffected. For 110m Ethiopians, too, the dam is almost everything. With a capacity of a massive 6,500 megawatts, it will produce more power than the country currently consumes. Financed partly through patriotic bonds, it is the most important expression of the country’s hoped-for transformation — already well under way — from symbol of poverty and famine to Africa’s most dynamic economy. Plans for the dam were announced in 2011 when Egypt was reeling from the Arab spring and the fall of Hosni Mubarak’s regime. Some accuse Addis of deliberately picking this moment of maximum distraction to begin work on a project that would radically alter the Nile’s flow. The dispute is similar to others between countries that share important water systems. India and Pakistan have periodically clashed over Himalayan-sourced

Central bank votes unanimously to reduce main interest rate to 6.25 per cent

pia’s plans. Since then, Khartoum has been persuaded that the dam could actually help regulate the flow of a river that is prone to damaging floods. That leaves Egypt isolated. According to the Crisis Group, which produced an excellent report on the stand-off, Egypt and Ethiopia “could blunder into a crisis if they do not strike a bargain” soon. There are a few promising signs. Ethiopia has in the past rejected international mediation, but recently the US has got involved, with the US Treasury’s Steven Mnuchin taking a personal interest. Just last week, Mr Abiy asked Cyril Ramaphosa, South Africa’s president, to mediate in the dispute. The Crisis Group has sketched out a two-step solution. Ethiopia and Egypt would first agree to a flexible, technically driven timetable for filling the reservoir without disrupting downstream flows. Egypt would then rejoin the Nile Basin Initiative, which includes all the other Nile countries, to work out a long-term framework. That would govern the rights and obligations of nations when future dams are built and provide an institutional means of addressing the inevitable shocks that will result from climate change. We are far from such a happy outcome. Sections of the Egyptian media still claim the dam can be stopped. Ethiopia’s default position remains essentially unilateralist. No one wants a water war. Fortunately, that is not inevitable. With skilful diplomacy and a forward-looking agreement, the Nile need not be a source of conflict, but rather a force for co-operation.

DAVID PILLING

JOSEPH COTTERILL

Angela Merkel warns EU... Continued from page 45 about China. German officials and businesspeople are just as incensed as their US counterparts by China’s theft of intellectual property, its unfair investment practices, state-sponsored cyberhacking and human rights abuses in regions like Xinjiang. Once seen as a strategic partner, China is increasingly viewed in Berlin as a systemic rival. But Berlin has no intention of emulating the US policy of “decoupling” — cutting its diplomatic, commercial and financial ties with China. Instead, Ms Merkel has staunchly defended Berlin’s close relationship with Beijing. She says she would “advise against regarding China as a threat simply because it is economically successful”. “As was the case in Germany, [China’s] rise is largely based on hard work, creativity and technical skills,” she says. Of course

there is a need to “ensure that trade relations are fair”. China’s economic strength and geopolitical ambitions mean it is a rival to the US and Europe. But the question is: “Do we in Germany and Europe want to dismantle all interconnected global supply chains . . . because of this economic competition?” She adds: “In my opinion, complete isolation from China cannot be the answer.” Her plea for dialogue and co-operation has set her on a collision course with some in her own party. China hawks in her Christian Democratic Union share US mistrust of Huawei, the Chinese telecoms equipment group, fearing it could be used by Beijing to conduct cyber espionage or sabotage. Ms Merkel has pursued a more conciliatory line. Germany should tighten its security requirements towards all telecoms providers and diversify suppliers “so that we never make ourselves www.businessday.ng

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Friday 17 January 2020

BUSINESS DAY

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Women in Business

BUSINESS DAY Friday 17 January 2020 www.businessday.ng

By Kemi Ajumobi

Wendy A. Okolo

Iroghama B. Obuoforibo

Aerospace Engineer

Executive Director/Chief Operating Officer, Starzs Investments Company Ltd Founder, Hair Hairven Limited

r. Wendy A. Okolo is an aerospace engineering researcher in the Intelligent Systems Division at NASA Ames Research Centre, and is celebrated for receiving the “Black Engineer’s Most Promising Engineer in Government Award” at the BEYA STEM Conference in Washington D. C. Her focus is in the area of systems health monitoring and control systems design with applications to air and space components, vehicles, and systems. To that effect, she is a Sub-Project Manager for the System Wide Safety Project, leading a team to develop the technologies that will enable the safe and seamless integration of unmanned aerial vehicles (UAVs) into the U.S. national airspace. She also leads a controls team on a Space Technology project, Pterodactyl, to advance the guidance, navigation, and control capabilities that will make precision landing for deployable entry vehicles a reality for planetary exploration. Okolo obtained her secondary education at Queen’s College, an all-girls school in Lagos, Nigeria. At only 26 years old, she became the first black woman to obtain a Ph.D. in aerospace engineering from the University of Texas at Arlington, where she earned both her undergraduate and doctoral degrees. In her undergraduate, she was president of the society of women engineers in the university and as she pursued her graduate degree, she worked as a summer researcher from 2010 to 2012 in the Control Design & Analysis Branch at the Air Force Research Laboratory (AFRL), Wright Patterson Air Force Base, where she worked with the team that flew the world fastest manned aircraft which flew from coast to coast in a jaw dropping 67 minutes, for a trip that could take some of the world’s fastest aircrafts over five hours. She received her B.Sc. and Ph.D. degrees in aerospace engineering from the University of Texas at Arlington in 2010 and 2015 respectively. During her undergraduate studies, she interned for two summers with Lockheed Martin working on NASA’s Orion spacecraft, first in the Requirements Management Office in Systems Engineering and then with the Hatch Mechanisms team in Mechanical Engineering.

Her dissertation research was in the area of aircraft formation flight as a fuelsaving method of flight, working in the Computer-Aided Control Systems Design Laboratory. Specifically, she employed alternative trimming mechanisms such as internal fuel transfer and differential thrusting to trim induced aerodynamic moments on the trail aircraft, reduce the need for the drag-inducing control effector deflections, and increase the benefits of flying in formation. This research was funded by the AFRL, Air Force Office of Scientific Research (AFOSR), American Institute for Aeronautics & Astronautics (AIAA), Texas Space Grant Consortium (TSGC), Zonta International, and the University of Texas at Arlington. Okolo is working on the System-Wide Safety (SWS) project and a Space Technology Mission Directorate Early Career Initiative (STMD-ECI) project at Ames. For the SWS project, she led the task of predicting GPS faults in unmanned aerial systems commonly known as drones. On the STMD-ECI project, she leads the controls team to develop unconventional control techniques for deployable vehicles, to enable precision landing and improve maneuverability during the entry, descent, and landing phases of spaceflight. The STMD-ECI project is a $2.5 million-dollar project that she proposed and won as part of a six-member early- career scientist team. Her previous research has been recognized and funded by the Department of Defense through the National Defense Science and Engineering Graduate Fellowship; Zonta International, through the Amelia Earhart Fellowship; and the American Institute for Aeronautics and Astronautics through the John Leland Atwood Graduate Fellowship. Okolo worked with Langley Research Centre in Virginia to investigate flight data and facilitate data exchange across and within NASA centres. She says her sisters taught her the sciences with their day-to-day realities. She describes them as her heroes. Talk about a young and dynamic Nigerian during Nigeria proud internationally and she naturally comes to mind. Indeed with youths like her, the future is bright.

roghama graduated from the University of Massachusetts, Boston with a BSc. Biology and Psychology in 2007. In 2011, she completed her Master’s Degree in Health Promotion and Public Health from Brunel University, London. In the year 2014, Iroghama was recommended by a consultant firm, during a corporate restructuring of Starzs Investments Company Limited (SICL), to serve in an Executive capacity in the Company. In September 2014, she was officially appointed Executive Director and subsequently she assumed the role of Chief Operating Officer, SICL, a ship-owning and marine logistics provider with a fleet of vessels providing offshore support to various International Oil Companies. Her youthful and spirited personality combined with an unparalleled commitment to the vision of Starzs has immensely impacted on the overall growth of the company in a short while. Iroghama Obuoforibo is an alumnus of the Harvard Business School OPM program and a member of the Institute of Directors (IoD). She is also a Director of Eaglewatch Security Company, a security company that was established in 1999 to provide professional security services. In 2010, she founded Hair Hairven Limited, a company which manufactures hair care products for the maintenance of hair extensions and natural hair. The company has grown to include hair salons in its model by establishing multiple branches of “The Hairven Hair Bar” in Port Harcourt with plans to expand into other cities. In 2013, she emerged the winner of the MTN maiden edition of “The Next Titan”, an entrepreneurial TV reality show that was designed to produce one talented young entrepreneur in the country through effective accomplishment of various business tasks. She has received several awards for her business acumen and entrepreneurial spirit and has had a positive impact on youths through various platforms as she continues to strive for excellence. These awards include two consecutive Eagle

awards for Young Entrepreneur of the Year and The Future Awards Nomination 2017. Her entrepreneurial journey began years ago when she set up Hairven, specifically targeted to care for hair essentials. While trying to get her approval by NAFDAC to approve her hair care products, she stumbled upon The Next Titan in 2013, a reality TV show which aims to nurture emerging entrepreneurs. She applied and was lucky to be selected among other young entrepreneurs to go into the house. On the show, she got engaged in numerous business tasks over a period of three months with other 16 contestants, and at the end of the day, she emerged the winner and she went home with N5 million and a brand new Ford car which was a turning point in her business. It wasn’t an easy journey for her while going into her hairline business because her father was telling everybody back then that his daughter was studying medicine. He was disappointed when she told him she had dumped medicine for combined degrees. He was further confused when after graduation, Iroghama came back home with loads of human hair. Obviously, her father wasn’t happy about her choice of career and as such, in 2011, she was sent to London for a Master’s degree in Health Promotion and Public Health at Brunel University, London. He did not understand how she initially said she wanted to be a doctor and then she changed her mind to be in public health and later wanting to be an entrepreneur who wants to sell “shampoo and conditioner” as he put it. Like they say, the rest is history as she is doing outstandingly well in her line of work and business. In September 2014, Iroghama was officially appointed an executive director and subsequently, she assumed the role of the chief operating officer, SICL, a ship-owning and marine logistics provider with a fleet of vessels providing offshore support to various international oil companies.

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