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news you can trust I **TUESDAY 17 JULY 2018 I vol. 15, no 97 I N300

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$-N 358.00 361.00 £-N 475.00 483.00 €-N 412.00 420.00

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Foreign Exchange Market

Spot $/N

I&E FX Window 361.85 CBN Official Rate 305.80

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Auditor-General’s report reveals rot in MDAs, FG P M

Importers to pay more demurrage as gridlock returns to Apapa

DIPO OLADEHINDE & SOBECHUKWU EZE

resident Muhammadu Buhari came to power in 2015 vowing to fight corruption which had been undermining the country’s economy and entire society, but sadly, that has not happened as a recent report from the Auditor General’s office

NNPC fails to remit N4.07trn to Federation Account as public sector corruption remains under Buhari

shows.

The Auditor-General’s office whose fundamental function is to protect public interest by performing a detailed and objective examination of public accounts

and also scrutinise Ministries, Departments and Agencies (MDAs) expenses showed there was huge corruption and mismanagement of funds during the first full year in office (2016)

of 75 year old president Buhari who is also seeking re-election in Africa’s biggest oil country.

“Deficiencies were noted in Continues on page 34

ANALYSIS

Lessons from Ekiti governorship election

anufacturers and importers will likely pay more on demurrage as chaos returns to Apapa following the withdrawal of naval personnel who have been helping to decongest the Apapa-Ijora Bridge.

The Nigerian Navy Ship (NNS) Beecroft, it was learnt, pulled its men from the road last week, in protest against what a source called ‘sustained blackmail’ by truck drivers, encouraged by ship-

Inside IMF raises SSA growth outlook on improved Nigeria prospects Pg. 2

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Continues on page 34

JOSHUA BASSEY & ODINAKA ANUDU

Continues on page 34

OWEDE AGBAJILEKE, Abuja

he governorship election in Ekiti State has come and gone, it also left some lessons for critical stakeholders in the Nigerian democratic project.

Despite the tension and threats that preceded the election, the exercise was generally peaceful. It would be recalled that the situation became worrisome when the INEC Resident Electoral Commissioner (REC) in the state, Abdulganiyu Raji,

…Navy withdraws personnel from traffic management

L-R: Omobolanle Victor-Laniyan, head, sustainability, Access Bank plc; Frank Mentrup, Mayor of Karlsruhe; Seyi Kumapayi, chief financial officer, Access Bank plc, and Amaechi Okobi, group head, corporate communications, Access Bank plc, at the Karlsruhe Awards in Germany.

UK Arbitration Court ruling has nothing to do with Oando - Tinubu Pg. 35

APC loses Benue as Ortom dumps party Benjamin Agesan, Makurdi & James Kwen, Abuja

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he ruling All Progressives Congress, APC has lost its control of Benue State, bringing the number of states governed by the party to 23.

This as Governor Samuel Ortom on Monday announced that he is no longer a member of the APC. Ortom disclosed that he is currently exploring a new party platform to actualise his future ambition.

The Governor stated this on Monday at the Benue Peoples

House, Makurdi while swearing in his Special Adviser on Local Government and Chieftaincy Affairs, Jerome Torshimbe.

He noted that he was consulting with relevant stakeholders, stressing that he would soon make his next move known to Benue people.

Governor Ortom charged the new appointee to justify the confidence reposed in him through hardwork and commitment to duty and to imbibe the core values of his administration which include transparency, account-

ability, justice and equity.

The Governor stated that Torshimbe’s appointment was based on his capacity to serve especially at a critical time like this, even as he charged him to reach out to all.

The Special Adviser while pledging to justify the confidence reposed in him, also promised to give his best for good governance at the third tier of government and to reposition the traditional institution in the state.

He solicited the support of all to enable him succeed in his new assignment.

Also today at the Benue Peoples hole, the APC National Chairman House, Governor Ortom received has denied the purported red card Sankara Food Sellers Association given to Governor Samuel Ortom on a courtesy call where he prom- of Benue State by the party.

Governor Ortom was Monday ised them a trailer load of fertilizer and yam pounding machines to be said to have announced that he given to them as loans in partner- is no longer with the APC as the party has issued him red card. ship with Bank of Industry.

“As for party, I’ve been given The association, under the leadership of Esther Dam-Ayali, the red card and I’m now outside had earlier applauded Governor the pitch. So, if I have been given Ortom for standing firm against the red card and I’m standing open grazing of livestock, stressing outside, that means I’m a free that as food sellers, the law was a man,”Ortom had stressed. step in the right direction.

Meanwhile Adams Oshiom- Continues on wwwbusinessday online.com

2 BUSINESS DAY NEWS

IMF raises SSA growth outlook on improved Nigeria prospects ENDURANCE OKAFOR

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ub-Saharan Africa’s economy will probably expand 3.8 percent in 2019, the International Monetary Fund (IMF) said in its World Economic Outlook update released Monday. That compares with a 3.7 percent prediction in April.

The upgraded forecast “reflects improved prospects for Nigeria’s economy” and an increase in commodity prices. Gross domestic product in Africa’s largest economy will probably rise 2.3 percent, it said, lifting its estimate from 1.9 percent in April.

Nigeria’s economy is recovering from the worst contraction in 25 years in 2016, which was caused by lower oil prices and output and shortages of foreign exchange to import raw materials.

The IMF held its predictions for South Africa’s economy, saying it will expand 1.5 percent this year

and 1.7 percent the next.

“Despite the weaker-thanexpected first-quarter out-turn in South Africa, the economy is expected to recover somewhat over the remainder of 2018 and into 2019 as confidence improvements associated with the new leadership are gradually reflected in strengthening private investment,” the fund said.

South Africa, the continent’s most-industrialized economy, hasn’t grown at more than 2 percent a year since 2013. GDP shrank the most in almost a decade in the first quarter as former President Jacob Zuma handed the reins to Cyril Ramaphosa. Zuma spent close to nine years in power, during which time the nation lost its investment-grade credit rating and policy uncertainty and unemployment increased.

Nigeria and South Africa’s economies account for about half of the region’s GDP.

Weak bank credit worries construction, real estate sector …remains mired in recession OGHOGHO EDOSOMWAN

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he property and construction market in Nigeria seems to depend heavily on commercial bank’s lending to fund its operations, as the decline in lending to these sectors has hindered their performance.

Total bank lending to Construction and real estate sector declined by 11 percent from N4.81 trillion in 2015 to N4.2 trillion in 2017, according to data from the National Bureau of Statistics (NBS).

“The economy was in recession from second Quarter 2016 and so, lending to most sectors declined.

Also, Banks saw other sectors viable enough to give credit because they were more certain to get their return from those sectors in order to prevent bad debt which is not good for their books,” an analyst who asked to be quoted on the condition of anonymity told Business Day by phone.

Bank lending to construction and real estate sectors in Nigeria have remained dismal when compared to the likes of South Africa the continent’s most-industrialized economy.

With a population of about 55 million, mortgages in South Africa account for almost 30 percent of total credit, the largest component of banks’ assets, which amounted to about 5.14 trillion Rand ($387 billion) at the end of January, according to central bank data.

The country’s GDP slowed in the first quarter of 2018 to 1.95 percent from 2.11 percent in the previous quarter (Q4).

Anot her a na lyst h ow e ve r pointed out the importance of bank lending to both construction and real estate sectors; “These two sectors of the economy are the kind of sectors that are in steady need of liquidity and long term capital, when not made available to them, they will continue to be in the position they are now,” the analyst said.

He concluded by saying the

economy needs to also grow some more in order for sectors like the two under review to feel the impact.

“However, the economy has to expand some more, as this will rub off on the purchasing power of the citizens and as such there will be the demand for the products from these two sectors,” the analyst added.

According to the National Bureau of Statistics, real growth rate of the construction sector in the first quarter of 2018 was -1.54 percent (year on year), 1.68 percent points lower than the rate recorded the previous year.

Relative to the preceding quarter, there was a decline of 5.67 percent points. Quarter on quarter, the sector grew by 0.25 percent in real terms.

Its contribution to total real GDP was 4.04 percent in Q1 2018, lower than its contribution of 4.18 percent the previous year but higher than in the preceding quarter where it contributed 3.49 percent.

In the same vein, real estate sector real GDP growth recorded in the sector in Q1 2018 stood at -9.40 percent. Quarter-on-quarter, the sector grew by -30.57 percent in the Q1 2018.

It contributed 5.63 percent to real GDP in Q1 2018, lower than the 6.34percent it recorded in the corresponding quarter of 2017 and lower than the 7.03 percent in the preceding quarter.

Professionals ascribed this to the constraints placed on the accessibility of foreign exchange that affected the construction industry, which is profoundly import based, and the unbalanced economic climate, which has affected the general inclination to invest in the country’s real estate sector.

“The government has a larger role to play in the aspect of policy. If the government is able to develop and implement policies that are favorable to these sectors, definitely, they will see a boom in it”.

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MARKETS

Oando’s shares down 9.37% to October lows on London court ruling Bunmi Bailey & Abdullateef Eniola-Giwa

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ando declined 9.4 percent at the end of Monday trading on the Nigerian Stock Exchange (NSE), to the lowest since October, after a report that the London Court of International Arbitration ordered two companies owned by Oando CEO Wale Tinubu and his deputy Mofe Boyo to pay $680m to Ansbury Investment Inc. Oando’s share price opened at N6.40, however at the close of market yesterday the share price had dropped to N5.80.

Analysts are expecting the decline to continue further on the back of the effect of negative press on investors’ confidence.

“I expect that the company’s share price will continue to decline. Any negative news will have a significant issue on its shares as investors shy away,” Ayodeji Ebo, MD, Afrinvest securities limited told BusinessDay in telephone interview.

On Sunday, 15th of July 2018, Oando, one of the major downstream companies in Nigeria was issued an award against its Chief Executive Officer, Wale Tinubu and deputy Mofe Boyo to pay a total debt of $680 million an equivalent of N244.8 billion to Ansbury Investment Inc, which is owned by Gabriele Volpi.

The award is equivalent of 91 percent of the company’s total outstanding equity as at March 2018.

In its ruling on July 6, 2018, LCIA held that Ocean and Oil Development Partners, OODP, British Virgin Islands, which owns 55.96 percent of Oando Plc through a holding company named Ocean and Oil Development Partners Nigeria Ltd, is indebted to Ansbury Investment Inc. to the tune of $600 million (N216 billion).

An international lawyer and counsel to Ansbury Investment, Andrea Moja, confirmed the LCIA award in a release on Sunday. According to Moja, the Arbitration Court also held that Whitmore As-

set Management Limited, whose ultimate beneficial owners are Wale Tinubu and Mofe Boyo, are indebted to Ansbury Investment to the tune of another $80 million (N28.8 billion). This brings the total debt owed by the Oando managers to Ansbury Investment to $680 million.

The documents indicate that a final award in which the court will pronounce on accrued interests on the debts owed and legal expenses incurred by Ansbury will follow in the next few days. The LCIA award has been communicated to the parties concerned since July 9, 2018.

The technical suspension placed on Oando shares in October was lifted in April by the Nigerian Security and Exchange Commission (SEC). The energy company came under scrutiny after a SEC review found alleged corporate governance failures and financial mismanagement, which Oando denied.

L-R: Ayoola Olukanni, director-general, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA); Olusola Olubi, head, specialised markets, Union Bank of Nigeria; Vice President Yemi Osinbajo, and Okechukwu Enelamah, minister, industry, trade and investment, during the 8th Presidential Quarterly Business Forum at the State House in Abuja, yesterday.

FG tackling impediments to signing AfCFTA - Osinbajo Tony Ailemen, Abuja

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ederal government Monday said it is tackling issues identified as impediments to getting maximum benefits from the signing of the Africa Continental Free Trade Agreement (AFCFTA).

Vice President Yemi Osinbajo, stated this in his keynote address at the 8th Presidential Quarterly Business Forum (PQBF) held at the State House Banquet Hall, Abuja, on Monday.

Osinbajo who noted that “there are clearly huge advantage for us”, said “Africa sees the enormous advantage of Nigeria’s participation, everybody is waiting for us naturally and that is because they see a huge market, there are advantages of our being there.”

T h e V i c e P re s i d e n t h o w ever cautioned that government “must ensure it gets the best p o s s i b l e t e r m s f o r Nig e r i a n trade and commerce.”

He noted that government em-

barked on an extensive consultations with trade groups, manufacturers and organized labour in all the six geo-political zones.

According to Osinbajo, “I have noted the various studies that MAN will like to see done, I think those background checks are important as to what works and what doesn’t work and what is going on with the industry.”

Osinbajo described the concerns as “very crucial adding that “I think many of them are being done already.

“The only way to go is that we must fix the gap, we must keep the engine running, there is no time for us to say let’s wait, take down the entire time just to prepare. I think this is the time to plan ahead and do something about it while we are taking into accounts all the issues that have been raised and making sure that we are negotiating well.”

Osinbajo who revealed that he has been involved in many of Federal government negotiations, said this is the first time the country is

setting up a serious trade negotiation process as well as setting up an office for trade negotiators.

He noted that Nigeria is actually positioned today in Africa as the largest economy, adding that “we also want to position as the leader in innovation, business, and industry and to do so we have to have the right people that are competent, must be ready to work and must also understand this is how the environment works.”

Minister of Trade and Investment, Okechukwu Enelamah, said government is going to take the Manufacturers Associations of Nigeria (MAN ) and other stakeholders to join the working committee for smoother engagements.

Enelamah who stated that the “idea of not signing the agreement actually disadvantages us, it weakens our position, said “the agreement is a ticket to play and I mean not buying the ticket to play is suicidal in a market where the consequences will be there.”

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Tuesday 17 July 2018

Executive Order 6 to affect 155 corruption cases involving N595bn – FG

Why IMF sees Nigeria’s inflation rising in H2 2018

ederal Government says thePresidentialExecutive Order Number 6 of 2018 will have immediate effect on 155 high-profile corruption cases involving over N595 billion.

Ministerofinformationand culture, Lai Mohammed, disclosed this at a media briefing inLagostodrumupsupportfor the Order signed by President MuhammaduBuharionJuly5.

Mohammed, who described the Order as “the administration’s most potent weapon against corruption to date,” noted that, expectedly, there had been pockets of opposition to it.

“Those opposed to it say it is unconstitutional, dictatorial andamountstotheusurpation of the powers of the legislature and the judiciary.

“The truth is that, having realised the potency of the Order in giving muscle to the fight against corruption, the corrupt andtheircohortshavebecome jittery. They have every reason to be. Henceforth, it won’t be business as usual.

“This is a huge amount by any standard. It is higher than the N500 billion allotted to the Administration’s Social Investment Programme in the 2018 budget. It is also higher than the N344 billion allocated for the construction and rehabilitation of roads nationwide in the 2018 budget,” he said.

The minister reiterated that the Order was not unconstitu-

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tional,dictatorialandultravires as claimed by the opposition.

“The President has the power under Section 5 of the 1999 Constitution as amended to abolish all corrupt practices and abuse of power.

“This extends to the execution and maintenance of the Constitution, all Laws made by the National Assembly (including but not limited to Section 15(5) of the Constitution.

Executive Order Number 6 is constitutional. Anyone who feelsotherwisecanseekredress in court,” he said.

He said Buhari was not the first democratically elected President to issue Executive Order, adding that former Presidents Shehu Shagari and Olusegun Obasanjo issued such Orders.

“In 1980, then President Shagari issued an Executive Order to modify the Public OrderAct.Thiswasunsuccessfullychallengedincourtbythen Governors of Ogun and Borno states.

“In 1999, then President Obasanjo issued Executive Orders to abolish the Petroleum Trust Fund (PTF) and to proclaimMay29asDemocracy Day. “It is also important to state thatpastandpresentpresidents oftheUnitedStates,afterwhich our presidential system of government was fashioned, have been issuing Executive Orders since the time of the country’s first President, George Washington,” he said.

I&E Window hits $31.14bn amid CBN’s FX intervention in July 2018 ENDURANCE OKAFOR

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he year-to-date transaction of Nigeria’s autonomous foreign exchange market - the Investors’ and Exporters’ (I&E) Window hits $31.14 billion (N11.2trn) at week ended July 13, 2018.

Market analysts link the high transaction recorded in the window to Central Bank of Nigeria’s (CBN) periodic dollar interventions.

“The central bank have helped in eliminating the pressure on the FX market, ensured exchange rate stability and eliminated currency speculators,” an analyst said on the condition of anonymity.

The apex bank intervened through its periodic supply of dollars in the FX market, offering $100 million at a marginal rate of $/N344 via a Single Secondary Market Intervention Sales (SMIS) - wholesale session held during the week ended July 13, 2018.

The apex bank also maintained its intervention for Small and Medium-Scale Enterprises (SMEs) and Retail Invisible transactions supplying $55 million each for both interventions.

Meanwhile, the total val-

ue of trades recorded in the I&E window for the week ended July 6, 2018, stood at $0.86 billion. This represented an increase of 8.86 percent ($0.07bn) when compared with the $0.79 billion traded in the previous week, bringing the total value traded at the window year-to-date to $31.14 billion, as compiled from CBN website.

The naira exchange rate has remained stable since last year when the central bank commenced the FX sales.

The CBN introduced a new exchange rate window in April 2017, the Nigerian Autonomous Foreign Exchange Fixing Mechanism (NAFEX), commonly known as the Investors’ and Exporters’ (I&E) window.

The I&E window and the interbank market have been seen as the main exchange rate windows utilised in foreign currency trading.

For the week ended July 13, 2018, the naira appreciated at the I&E FX window, gaining N1.42 to close at $/ N361.16 when compared with $/N362.58 recorded the previous week, resulting in a spread of $/N0.16 between the BDC market rate and I&E FX window rate.

MICHEAL ANI & CYNTHIA IKWUETOGHU

he rate at which goods and services are sold in Africa’s largest economy, which has cooled for the 16th consecutive month at 11.6 percent, is seen heading north in the second half (H2) of the year, according to the International Monetary Fund (IMF).

The IMF stated this in an emailed statement after a team led by the senior resident representative and mission chief for Nigeria, Amine Mati, visited the country from June 27 to July 9, to discuss recent economic and financial developments, update macroeconomic projections

and review reform implementation.

BusinessDay gives an indepth insight on why the USbased global lender (IMF) projects the rate of inflation that has been declining from as high as 18 percent in January 2017, after the economy slipped into its first recession in 2016, to see an upward trend beyond the first half of the year.

The first reason is on declining agricultural output that is likely to put pressure on market prices for goods and services.

In Q1 2018, growth in the agricultural sector stood at 3 percent, representing a 1.23 percentage points decline when compared with the

4.23 percent growth recorded in the last quarter, and a 0.39bps fall from the 3.39 percent that was recorded in the first quarter of 2017.

In 2016, it reached 4.1 percent and in 2017, 3.5 percent, while over the past eight quarters the highest growth rate has been 4.5 percent y/y in Q3 2016, and the lowest 3 percent in Q1 2018, defying the transformation of the sector, which has been the priority of the current and the previous administration.

The reason for this decline in the sector is not farfetched, especially giving the crisis that is being seen in the northern part of the country that are major producers of this farm produce.

The insecurity challenges in the food producing states in the country may be responsible for this development, and if the trend continues, food supply may drop leading to escalating prices. Thus, both local and imported food prices may place upward pressure on inflation rate.

On a month-on-month basis, food inflation unsurprisingly rose for the third consecutive month to 1.33 percent in May 2018 from 0.91 percent in the preceding month. In the same vein, price levels for imported food items rose by 6bps to 1.22 percent month-on-month in May 2018 from the 1.16 percent in April.

L-R: Femi Otedola, chairman, Forte Oil; Aliko Dangote, president/chief executive, Dangote Industries Limited, and, Joseph Makoju, group managing director/chief executive, Dangote Cement plc, during Makoju 70th birthday celebration in Cement Golf Course Shagamu Ogun State.

ICAN urges Reps to discard bill seeking parallel bodies

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nstitute of Chartered Accountants of Nigeria (ICAN) has urged the House of Representatives to discard the bill seeking to establish Chartered Institute of Forensic and Investigative Auditors in order to safeguard the integrity of the accounting profession and its various areas of specialisation.

The Chartered Institute of Forensic and Investigative Auditors Bill 2018 (SB584) has already been passed by the Senate and awaiting the concurrence of House of Representatives.

Razak Jaiyeola, 54th president of the institute, said as a responsible professional organisation, ICAN had a public interest mandate to discourage and resist dilution of professional standards and quality.

Jaiyeola, while speaking at a press conference in Lagos, said the functions and responsibilities in the proposed Bills for Chartered Institute of Forensic and Investigative Auditors in Nigeria and Chartered Institute of Forensic Accountants of

Nigeria were already contained in the 1965 Act that established ICAN. According to Jaiyeola, “Forensic accounting is adequately covered within the scope of the training that ICAN provides, and therefore, the quest for a separate Institute for just Forensic accounting is totally uncalled for.”

He further said the establishment of a separate Institute just to enable an individual to practise as an auditor (conventional or forensic) was against international best practice, and was needless in Nigeria.

“We wish to emphasise that virtually every aspect of the functions that the Bill is seeking to address has been adequately covered and is practically being implemented by ICAN,” he said.

To him, there is therefore no knowledge or professional gap that the proposed body would fill. Whatever perceived lacuna this Bill seeks to fill has been adequately covered within the scope of services that ICAN members render.

Tourism reform: Edo lists more tourist sites for upgrade to boost economy

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do State government has pencilled down more tourist sites and destinations for revamp, following the positive disposition of private developerstoinvestinthesector.

Commissioner for arts, culture, tourism and Diaspora affairs, Osazee Osemwingie-Ero, disclosed this to journalists in Benin City, the state capital.

According to OsemwingieEro, “We have visited several of our prized tourist sites and destinations,someofthemhave long been abandoned, some need maintenance while some need revamp, which we intend to do through public private partnership (PPP).”

He said his team had also “visited the Crocodile Lake in Lampese, the Somorika and Ososo Hills. About a year ago, we identified 56 of these sites and work is ongoing on some of them.

“We have identified some of the monuments around Ring Road in Benin City, the state capital,whichledtoourmeeting withthelocalgovernmentchairmen, in line with the directive of Governor Godwin Obaseki to reclaim and beautify them, which we are working on.”

He further said, “At Ugbine on Ekenhuan Road, we have identified and secured the grave

site of the late Captain Philip, who was among the Europeans that were at the centre of events that led to the 1897 Benin massacre by the British.

“We have cleared the site, erected a big sign post there to identifytheexactlocation.There is someone there who ensures the place is maintained daily.

“Alsoclosetothegrave,down Gelegele, is the Oba Ovonramwen stop-over place before he was moved to Calabar through the Gelegele waterways. These places are sites where tourists can visit, and we are working round the clock to reposition them for domestic and foreign tourists.”

The commissioner added: “We have three investors who are ready with their proposals to develop the Sokponba Blue Water Resort. It will increase the economic activities in the area, create jobs, and generate revenue for the state government.

“In Edo Central Senatorial Zone, we have the Udo Resort in Igueben, we have visited the site, and there is a lot of work to be done there.

We have the Amao Water Fall in Igueben, where the water from Orhionmwon River meet the clean water in Igueben without mixing.”

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Tuesday 17 July 2018

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Nigeria: Breeding the culture of revenge & reprisals

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

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ast week, Nigeria’s killing fields expanded North westwards. Indeed the entire North seems to have been partitioned by three non state actors into three fiefdoms.

On the Northeast, we have the Boko Haram insurgents bombing and snuffing out lives and occasionally making territorial forays into the Borno, Yobe and Adamawa areas. In the North central, including parts of Southern Kaduna and Taraba, the militant herdsmen hold sway killing the innocent, destroying farms and property and in the Northwest a band of marauders are freely raining terror.

For a while, it seemed they were only interested in Zamfara state. But last week, they expanded their theatre of influence to parts of Kebbi & Sokoto and when they were finished on this first assault, 32 citizens of Nigeria were dead, compounding the increasing statistics of the violently dead in these times.

Naturally the President was distraught with this new development and was actually short of words. He was thoroughly exasperated or so it seemed. You could hear his exasperation but he struggled to give hope and then he said “I wish to assure all Nigerians that their security is receiving the greatest attention from

STRATEGY & POLICY

MA JOHNSON Johnson is a marine project management consultant and Chartered Engineer. He is a Fellow of the Institute of Marine Engineering, Science and Technology, UK.

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his article is a reminder to those in the government that there is limit to the wealth of a nation without science and technology. And without sustainable economic growth, there can be no economic development. What Nigeria needs to grow its economy is the capacity to produce goods and services.

If Nigeria could work towards achieving a sustained economic growth, it would have a positive impact on the national income and level of employment. This will further result in higher standard of living.

Factors that affect the economic growth of a country include human capital, natural resources, capital formation, technological development,

this administration and there is no compromise in this commitment. I appeal for your patience while my security teams crack their brains to put an end to this horrendous violence.” And I was lost. My hope dimmed and my emotions ran riot.

After 3 years of going through this chronic insecurity, our security Chiefs are just now cracking their brains, perhaps wondering what to do. I thought we had a plan! Well, since the President is satisfied with their performance, how can anybody help? My only note of advice to the President is that he must realize that those Nigerians who are unhappy with the situation are transferring their unhappiness to him. If therefore I were him, I would rather that these cracked brains are broken and discarded. Naturally the President is not obliged to accept this advice or any other. He is the President and takes full responsibility for the actions or inactions of his appointees- with or without cracked brains!

This distressing spectre became depressing last week, when I watched Governor Ayo Fayose with collar on his neck and his hand in a sling, weeping like a baby on national television. I am naturally a sympathetic person and easily identify with the underdog or mistreated. I felt sad and sorry for Ayo Fayose. I also felt sorry for Nigeria’s democracy. How could a governor that enjoys immunity be so treated and humiliated in the public? Some people said he was acting. May be Ayo is theatrical but he is also macho. He gives the impression of a tough guy and does not sound like a guy who would show weakness by crying or indeed wailing in the public. But even if anyone would give the benefit of doubt to such absurd acts of theatre, when you listened to the testimony of his

So, as is the way of the world, and more so of Nigerian politics, the principle of tit for tat must apply. But as it always happens, vengeance often goes beyond the level of the original injury and creates a cycle of vengeance & reprisals deputy governor and PDP governorship candidate for the elections held over the weekend you would dismiss such thoughts. Also when I listened to the rambling explanation of the police Commissioner I was sad. How could the police be talking of unlawful assembly of people or talking of obtaining permission for political campaigns in the last week before an election. It was clear that the police was on an assignment to assault the PDP politicians and their supporters. They were on a kind of revenge assignment to punish Ayo Fayose for the trouble he has been causing Mr President, especially the one he did a day before.

I always had the feeling that trouble was brewing in Ekiti. Four years ago, Ayo Fayose who was a returning Governor defeated Kayode Fayemi, then of ACN. After that, ACN and latter APC tried everything legal and extralegal to stop him from governing.

He was chased around and harassed

by EFCC and other security agencies.

That Ayo Fayose survived to complete

his term is a testimony to his ability to fight and the extraordinary grace of God. Now the time has come to stop Fayose by all means. Though he is actually not running for another term, but it is as if he is running. His loyal Deputy Governor -Prof Kolapo Olusola whom he personally selected to replace him is running. Ordinarily APC will do everything to replace a PDP governor as they did in Ondo last time, but more so Ayo Fayose (the enfant terrible) or his chosen successor. I was sure the desperation of APC to replace Fayose and his PDP would lead to some form of violence and that’s what is playing out. Certainly I was not alone in this prediction.

The situation that unfolded last week was aided by previous and present events. In 2014, when Fayose was campaigning to displace Fayemi as governor, his party PDP was in power in Abuja and we know what help the government gave him. We know the effort made to stop the APC politicians from attending the closing campaign in Ado Ekiti. We heard of the closing of the Akure Airport to prevent APC bigwigs from flying easily to Ekiti. There was also a large contingent of security forces sent to Ekiti. So, as is the way of the world, and more so of Nigerian politics, the principle of tit for tat must apply.

But as it always happens, vengeance often goes beyond the level of the original injury and creates a cycle of vengeance & reprisals. Secondly, the day before this debacle when Fayose was prevented from moving freely and got gassed and rough-handled by security officers, he was alleged to have motivated transporters in AdoEkiti to park their vehicles so that the supporters of APC would either trek to the stadium or stay at home. To me this was an unnecessary affront to the APC which controls the federal government, more so when the president was at the campaign rally. I

knew there was going to be a reprisal and it came speedily the very next day. My people say that one should not touch the tail of the lion whether it is living or dead! Ayo decidedly stirred the bees and got stung!

Now we are running a nation of tit for tat. The Beron youth are alleged to steal 300 cows belonging to the Fulani and the Fulani kill 200 Beron men, women, youth and children.

The Benue state government enacts an anti-open grazing bill and the cattle herdsmen open attack on everybody in the community, including Reverend fathers. An Igbo drug dealer cheats another, and he sends assassins to go into the church and kill all in sight. Can a nation survive this kind of primitive interrelationships?

And then the Beron cow thieves, the Fulani Herdsmen and the Igbo drug dealers, those who caused the problem and those who retaliated are all walking around free, planning their next moves, while many innocent people have been despatched to untimely and violent death. What really is the purpose of government in our country? This is actually a depressing reality in today’s Nigeria. Can anything be done? Let me recommend to Prof Kolapo Olusola and Dr Kayode Fayemi (whoever wins the election and survives the inevitable legal tangle) to make a decision to break this cycle in Ekiti and let us pray that whoever becomes the President of Nigeria in 2019 will change this debasing and depressing spectre. And one sure way to proceed is to agree to drastically restructure the country in all ramifications and make the resultant governments take full responsibility for protecting the lives of their citizens in word and deed, and without favour or ill will.

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Primacy of science and technology in economic growth as well as social and political factors.

Regrettably, Nigeria is not doing well in all these areas. It is not a secret that Nigeria is one of the countries that has not been able to attain rapid and sustainable economic growth in recent years. In fact, a professor of technology policy once told this writer almost two decades ago that Nigeria’s economy is “inert.” The country’s economy, he says, hardly reacts positively to economic stimuli.

The philosophy of Bill Gates on Nigeria’s slow economic growth profile still resonates with this writer.

The American multi-billionaire and philanthropist says that “if you invest their health, education and opportunities- the “human capital” we are talking about today-then they will lay a solid foundation for sustained prosperity. If you don’t, however, there will be a sharp limit on how much the country can grow.”

Technological development is one of the critical factors that will make the economy grow faster. Research has proven the contribution of technology to economic growth.

On the contribution of technology to economic growth, a qualitative analysis was done by Professor Robert Merton Solow of the Massachusetts Institute of Technology.

Solow, an economist, conducted a

study for more than 40 years to measure the contribution of technical change to economic growth and found that the output of man doubled during the period. He attributed only about four-fifths of the growth in US output per worker to technical progress. That is, about 20 percent only of the growth was due to more capital, while the remaining 80 percent was attributable to advances in technology.

Several scholars have confirmed the validity of Solow’s findings, albeit in different ways. Since Solow’s initial work in the 1950s, many more sophisticated models of economic growth have been proposed, leading to varying conclusions about the causes of economic growth. Since then, many governments have invested huge funds towards improving their nation’s technological capability because they strongly believe that technological innovation will enable them break out of recessionary cycles, enhance competitiveness, drive economic growth and ultimately provide jobs for a lot of their citizens.

Today, economists have accepted the primacy of technology in economic growth. The technology referred to in this article is the systemic knowledge of technique of production embodied in people such as skill, experience, managerial techniques amongst others. The use of appropriate technology

by entrepreneurs will enable them survive today’s competitive landscape occasioned by globalization. Adoption of science and technology as a way of life in Nigeria is one of the tough choices that the nation has to make in order to be relevant in the Twenty-first Century.

It was 48 years ago, precisely in May 1970 that the highest level of government in Nigeria demonstrated awareness of the role of science and technology in national development.

It was Yakubu Gowon, Head of State who first made a policy statement on Science and Technology (S&T) and its relevance to national development as follows: “It is my hope that today will similarly symbolize the beginning of a great future for the development of science and technology and their application to the constructive exploitation and utilization of our national resources.”

In January 1980 almost 10 years after Yakubu Gowon’s policy declaration, Shehu Shagari, former President of Nigeria and Commander-in-Chief of the Armed Forces also had this to say: “It is no accident that the Science and Technology Bill is the first bill my administration presented to the National Assembly. It is a conscious act to give practical expression to our desire to promote science and technology

without which rapid development of our country cannot be possible. We had already indicated the importance we attach to the promotion of science and technology by creating the first fully fledged Ministry of Science and Technology in Nigeria.”

In 2011, the former President of Nigeria, Goodluck Jonathan, made a statement of commitment on S&T as follows: “We are going to run our economy based on science and technology…..because nowhere in this world now that you can move your economy without science and technology. For the next 4 years, we will emphasize so much on S&T because we have no choice, without that we are just dreaming…”

On February 2, 2018, the Buhariled government signed Executive Order Five which if implemented faithfully is expected make Nigeria have an economy that is knowledge and innovation-driven. This Executive Order will not translate into innovation if the complex interaction between the industry and society are unresolved.

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Reporter’s notebook: At the Afreximbank annual meetings (#AfreximAM18)

RAFIQ RAJI “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

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n the week past, I was in Abuja for the annual meetings of the Cairo-based African Export-Import Bank (11-14 July.) Afreximbank was also celebrating its silver jubilee; it was established in 1993.

It was a hectic four days. Even so, I still managed to do a few things outside of the meetings. To do so, I had to forego what turned out to be some good speeches or panel discussions, however.

Otherwise, one would never get the time or the opportunity to do so; especially as with almost all events, the schedule is dynamic – as the presence of invited special guests are confirmed or not, for instance. Thankfully, there were more than a tad eminent person-

alities that graced the occasion. I wish Rwanda’s Paul Kagame and Ghana’s Nana Akufo-Addo were able to attend, though. But as the South African president, Cyril Ramaphosa, opened the meetings, it was just as well I guess.

Tweets matter I was a little surprised by how relatively few participants livetweeted the meetings. Monitoring the news and markets from my workstation in Lagos most of the time, I have found such generous tweets to be most helpful for following key international events; the IMF/World Bank meetings, for instance. Thus, I make it a point to do likewise whenever I attend one. And I did; to the extent I could. Since not everyone can attend these often exclusive events, tweets from participants tend to be much followed by those either not attending or cannot attend. I do not know if it is a deliberate refrain

by Nigerian media practitioners, but there is a lot that is missed even for participants otherwise.

For even if the entire event were to be filmed the entire time – as indeed this one was – and the videos readily available, it is doubtful anyone other than the video editors would have enough

Ironically, people from these parts often bandy about aphorisms like“no man is an island” and so on; often to serve a selfish purpose. But the egalitarianism that is supposed to be the consequence of such a lesson is rarely put to action by most time to watch them all.

Ironically, people from these parts often bandy about aphorisms like“no man is an island” and so on; often to serve a selfish purpose. But the egalitarianism that is supposed to be the consequence of such a lesson is rarely put to action by most. The key question is what is the best way in media to be of service to as many people as possible in the most efficient way? Before the internet and social media, there were not that many options. Privileged journalists, analysts and the like, who hitherto were amongst the very few that could “let other people in” into

these exclusive events wielded their power often to their benefit.

With social media, that privilege is now available to anyone who wishes it.

Even so, I have observed a certain level of conservatism amongst some journalists from these parts. Not all of them. On the final day (14 July) of #AfreximAM18, as I sought a good position to get a good picture snap of the Nigerian president, Muhammadu Buhari, as he exited after his speech, it was the not so conservative few in the room that enabled me get a sense of what was happening inside the hall before. Why was I outside?

I arrived late; deliberately. The only key event of interest to me that final day was the president’s speech. However, I thought, as is often the case in these parts, the VIP would arrive late. Mr Buhari was prompt. And in line with protocol, the doors were shut once he got inside. It was a pleasant surprise. “Nigerian time”, the deliberate tardiness of Nigerian VIPs has become such an institution that it is taken for granted. How did that come about? During the military era, and even now, secret service agents (or other security or private agents of VIPs) would survey a venue ahead of the ar-

rival of their principals. This was done (and still is) for security reasons and social ones as well; if the event is not well-attended, the VIP might choose not to attend, for instance.

Threads for those interested If you are interested in getting a good feel of the 4-day meetings, you could go to my Twitter handle (@DrRafiqRaji) or search these two hashtags together (“#RR #AfreximAM18”). In the thread, you will find slides from some very excellent presentations. You would certainly find the one on “Nigeria’s Trade & Investment Prospects” quite useful. Another, on the “Investment Prospects for ECOWAS under the AfCFTA”, is also quite rich. You might also want to check my live-tweets (“#RR #AdebayoAdedeji”) of the memorial symposium held in Lagos on 7 July 2018 by the United Nations’ Economic Commission for Africa (UNECA) in honour of their former executive secretary, Prof. Adebayo Adedeji, who died recently. If God wills, I should do a reporter’s notebook on it in due course. But now, I have articles to write. Till next time.

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On the intellectual ‘clarity’ of the Nigerian masses

MOHAMMED DAHIRU AMINU Mohammed Dahiru Aminu (mohd. aminu@gmail.com; @mdaminu) wrote from Bedford, England.

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abatha Coffey, who is originally from Australia, hosts a US television show on Bravo—an American cable and satellite television network headquartered in New York.

She was quoted to have said that “We should all feel confident in our intelligence. By the way, intelligence to me isn’t just being book-smart or having a college degree; it’s trusting your gut instincts, being intuitive, thinking outside the box, and sometimes just realizing that things need to change and being smart enough to change it.”

Still on intelligence, in another quote, Carl Sagan, the famous American astronomer, cosmolo-

gist, astrophysicist, astrobiologist, author, science popularizer and science communicator for astronomy and other natural sciences, was attributed with a quote on the dangers of not thinking clearly. According to Sagan, “The dangers of not thinking clearly are much greater now than ever before. It’s not that there’s something new in our way of thinking – it’s that credulous and confused thinking can be much more lethal in ways it was never before.”

In today’s Nigeria, there is no doubt that the Nigerian masses think differently from the Niger ian elites ; and it explains the reason the elites have exploited the masses for their own advantage to dominate them squarely and most promptly. This is the reason that poor peasants in northern Nigeria may think that it is important for them to show absolute solidarity to a rich and retired army general from the north who may obviously not share any common interest with them. The minds of the peasants could even be maneuvered with to the extent that they presume that their solidarity for a rich elite— who has no interest in their wellbeing—is a religious duty that could earn them paradise

when they move on to the next life. This is the case when you study the elite-commoner relations across all parts of Nigeria.

In an article entitled “Fuel price hike: The language and grammatical illogic of a regulated deregulation” which was published on May 15, 2016 (see link: https://www.farooqkperogi.com/2016_05_15_archive. html), Farooq Kperogi, Associate Professor of Journalism and Emerging Media at Kennesaw State University, argued that while Nigerian elites are “incredibly artful masters of hegemonic narrative construction”, everyday Nigerians may be “some of the dumbest, most malleable people on earth.”

Kperogi noted that the average intelligence quotient in Nigeria is 67; a figure that other parts of the world consider as mental retardation. Kperogi was vilified across print and online media because of what he wrote, especially by people who believed that there was no scientific basis of his claim. However, to defend Kperogi, others likene d his deployment of mental retardation as a mere figure of speech in which his claims should be merely symbolic and must not be literally applicable.

Well, if you care to do your research appropriately, you will

realize that there is a correlation that exists between intelligence and social/economic class from a scientific perspective even with a case study from Nigeria.

As far back as 1975 for instance, there was a scientific study by one M.D. Janes (Journal of Tropical Pediatrics and Environmental Child Health, vol. 21, no. 1 B, pp. 26-30) from the Institute of Child Health at the University College Hospital, Ibadan, that linked intelligence of Nigerian children to the social/economic statuses of their parents.

Two groups of Nigerian children from the highest and lowest socio-economic backgrounds in Ibadan were studied, and results showed that the poor children had good potential for intelligence initially; which were very similar to that of the elite children.

But, at least before attaining 10 years, there was an early decline of the poorer group of children across all aspects of their intelligence; with no sign of them catching up on the elite children. By the time the children of the poorer group and the elite attain physical and psychological maturity in adulthood, they will have completely different worldviews.

In that study, it was concluded that to have a well-

thinking Nigerian society, a lot of investment must be made in all aspects of improving, first and foremost, the environmental conditions of the masses so that they will not only be able to think clearly, but they should also compete favorably with the elite children in taking advantage of the educational opportunities that may be available to them.

It is this intellectual weakness of the Nigerian masses that the elites constantly exploit to their advantage. The elites make sure that they do not provide healthy living conditions that will allow the masses to have the intellectual clarity that enables them to ask the right questions during electioneering campaigns. For example, the right questions that the electorate should ask aspiring leaders are those that border on ideas that would build nations rather than ones that promote parochial interests and unhealthy politics of identity. That said, it is highly likely that the Nigerian elites will continue to use the advantage of intellect to keep on suppressing the thinking processes of the Nigerian commoners for a continuous total domination and oppression.

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Tuesday 17 July 2018

The sad narrative of poverty in Nigeria

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igeria slipped into infamy in June by being named the poverty capital of the world, a tag previously worn by India. The report by the Brookings Institute, drawing its data from the World Poverty Clock, shows that Nigeria now has over 87 million of its citizens living in extreme poverty compared to India’s with just 73 million. But whereas, India, with a population of 1.35 billion, has continued to see a rapid decline in the number of its population leaving under extreme poverty, Nigeria, with just a population of under 200 million, has continued to see its desperately poor population rising at an alarming rate. According to the report, extreme poverty is growing by six people every minute in Nigeria while poverty in India continues to fall.

This is not too dissimilar from the report of the National Bureau of Statistics, which, in 2016, estimated that over 70 percent of Nigeria’s population then (112 million) live below the poverty line.

Although the Buhari administration has continued to operate in denial of the reality of the growth of extreme poverty in Nigeria, it is clear from the indications and economic

indices that Nigerians have never been this poor and desperate since independence. And make no mistake about it, the poverty problem in Nigeria is directly a result of the nebulous and illintentioned economic policies the Buhari administration has pursued, which have squeezed enterprises and even more, citizens, have seen their real income more than halved in a twinkle of an eye and prices of food, goods and services skyrocket beyond the reach of most Nigerians.

The problem started shortly after the president took over in 2015. His ascension of office was followed with a groundswell of optimism and the markets reacted appropriately hoping the president would urgently roll out the promised market reforms and provide direction for the economy. But the president did nothing, allowed the economy to continue to drift without any direction or leadership whatsoever and when the tides began to turn and the markets started reacting appropriately, the administration rolled out a series of damaging command and control policies which sought to control the foreign exchange market and the economy. The effect was that foreign investors were forced to repatriate their investments and halt new ones, resulting in a crippling foreign exchange scar-

city that led to severe job losses, hyper inflation, and severe dislocations in the economy.

But despite these clear evidences, the government continued to live in denial, choosing to blame the past administration for the economic downturn and recession.

What is more, the administration’s import substitution policies that have seen it ban the importation of some agricultural products and food in preference for promoting local production has been one of the leading factors increasing poverty in Nigeria.

The world over, the standard means of lifting people out of poverty is ensuring that their disposable incomes are enough to buy them food and other necessities. So, governments that have successfully lifted most of their people out of poverty do cash transfers to their poorest or ensure the prices of foods are especially low so that the poor could be able to afford them.

But Nigeria is not only discouraging free trade, which has the capacity to lift people out of poverty, but is encouraging monopoly and the flourishing of inefficient local industries that exploit the poor by unnecessarily raising food prices. Take for instance the unwise decision to ban the importation of rice into the country to encourage

local rice producers. The result has been the skyrocketing of the prices of local rice, which is way beyond the reach of most of Nigeria’s poor. What is more, most consumers have continued to shun local rice because of its low quality compared to imported ones. No wonder the smuggling of rice from across the border is rife. And to show the government is hell-bent on increasing the misery of the poor, it is succumbing to the demands of the Nigerian rice cartel to shut the borders and employ drones to monitor and totally stop the import of rice into the country to allow the cartel the freedom to continue to squeeze the poor out of existence.

No serious government that wants to address poverty will at the same time be encouraging or supporting monopolies in food production that always results in higher prices of food for the poor. No wonder an OECD report on Nigeria avers that “Nigerians would save 30% of their income if they bought their food at Indian prices.”

For the country to make any progress on poverty alleviation, the government needs to accept the realities on the ground and begin to fashion policies that not only tackle the fundamental reasons why poverty is spreading at an alarming rate, but ensure productivity and competitiveness.

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Havas Africa, expands to Nigeria, takes equity stakes in Boomerang Solutions

CSR: Retail firm, Auto medics partner to train 50 mechanics

… Forms Boomerang Havas Africa, Nigeria Stories by Daniel Obi Media Business Editor

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avas Africa, a subsidiary of Havas Group, one of the largest communication groups worldwide based in France has expanded its operation to Nigeria as it takes equity stakes in Boomerang Communication Solutions Limited, a 360-degree Integrated Marketing Communication (IMC) firm based in Nigeria.

The management of Boomerang said the equity stakes in the company is within the laws prevailing in the IMC industry in Nigeria. The law states that foreign advertising companies cannot have equity stakes more than 25% in any local advertising firm.

Havas Africa which operates in some other African countries on partnership bases provides media strategy, media buying and digital marketing, branding, experiential, sports marketing, events solutions and content development. The partnership makes them to become

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t is to the delight of every company to air a TV commercial that resonates with its target audience.

The ‘Legend’ commercial by Glo telecom is one. The commercial is not only inspiring and exciting but keys into the moment of the time.

From beginning to the end, the commercial which showed African football legends display their skills in a colourful background, juxtaposed with African culture, music and dance is simply captivating and interesting to both football fans and nonfootball lovers.

The 60 seconds TV commercial opened with the royalty and celebration of African kings and stars, starting in Morocco to Ghana. It captured and used the African heroism celebration in Tunisia as symbolism for Africa and show of greatness in Senegal to depict African culture.

With seamless connection of the narrative to football, the TV commercial which, at the middle, started showing African football stars that have made marks in the round leather game said “In Africa all heroes are legends’’.

The commercial employed Daniel Amokachi of

Boomerang Havas Africa.

The partnership also brings together two wellestablished communication firms and enhances their collective ability to bring superior service at creating meaningful connections between people and brands through creativity, media and innovation for clients.

Speaking on the partnership, Chief Executive Officer of Boomerang Havas Africa Nigeria, Lanre Oyegbola said that the partnership was borne out of the company’s desire to build better equipped industry in terms of skill sets and manpower.

He revealed that, “Boomerang Havas Africa Nigeria

will be able to tap into Havas Group to deliver expertise to businesses in Nigeria from helping brands to know where to play, how to play and how they can get the best return on their investment all the way from media, production, content development, design, mobile marketing, digital solution”

L-R: Chairman, Boomerang Havas Africa Nigeria, Tola Bademosi; Chief Executive Officer, Havas Africa, Olivier del Pozo and Chief Executive Officer, Boomerang Havas Africa Nigeria, Lanre Oyegbola during the signing of partnership agreement between Boomerang Communication Solutions Ltd and Havas Africa transitioning to Boomerang Havas Africa Nigeria.

‘African Legend’ Advert underscores Glo’s status as supporter of Football Nigeria who is today respected for his skills; Sammy Kufour of Ghana who displayed his skills for his country and abroad; Rahdi Jaidi of Tunisia who played as a centre back; El Hadji Diouf of Senegal and Mustapha Hadji of Morocco, now assistant manager of the Morocco national team., showing their skills even in royal attires in a pitch against opponents. These are African legends and the TV commercial summed it up that ‘legends never leave the game’ The TV commercial is simply a demonstration of the strength of Glo Data and promotion of the product, inviting its target audience to ‘experience the legendry game with Glo data unmatched’.

Coming at the time of 2018 World Cup, the commercial which resonates with the time, is a perfect connection to allow its consumers enjoy football with Glo data.

With creative intention,

however, the creators of the advert also played up African unity and underscored Africa as powerhouse in football, notwithstanding that the African representatives in the World Cup crashed out early in the tournament.

Also embedded in the message is that African legends have done their respective countries and Africa proud in football and can do it again.

Though Morocco, Egypt, Tunisia, Nigeria and Senegal exited early in the first round of the competition, the TV commercial is sending a strong message to Africans not to despair but to look back and see the strength and height the African legends have attained. Africa is blessed with great men. Glo is leveraging that strength in its data for consumers.

It is not clear why the TV commercial showed cultural displays and used representatives of all other four African countries in the World Cup and left Egypt and a legend

from that country out of the equation. Instead Ghana was displayed that did not go to the World Cup. An analyst described it as oversight.

However, the chief creator of advert and CEO of X3M Ideas, Steve Babaeko, an agency that has won many awards both locally and internationally said the idea of the TV commercial was to show Glo as the great supporter of African football. The challenge it faced was how to push the African agenda and pride in a time of World Cup when Africans countries were eliminated in the first round of the World Cup. It however saved the day with good conception of bringing in the legends. An analyst said this is perhaps the biggest production by any brand during the World Cup. This is interesting and a big Ad that underscores Glo’s status as a giant telco brand in the African continent.

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nyo Retail and Supplya customer-focused and te chnolog ydriven, fuels retailing company in partnership with Auto Medics a foremost motor mechanic consultancy and training outfit has trained 50 mechanics to be professionals in Auto repairs.

This is part of Enyo Retail Company’s Corporate Social Responsibility.

Abayomi Awoboku, The Chief Executive Officer of Enyo, urged the graduates to make sure that what they have learnt should be put into work. According to him this Entrepreneurial skill will help these Individuals to be selfemployed and professionals in vehicle repairs.

Oluwakemi Bose, FRSC commander Lagos chapter, said “this is a welcome development as it will help to reduce gridlock and accidents on the road”. According to her there are many unprofessional mechanics and this makes

drivers move faulty vehicles on a highway which is a risk to the drivers and other road users.

She appealed to Auto mechanics to obtain drivers’ license to enable them for testdriving the vehicles they fixed.

The training partner and Chief Executive Officer of Auto Medics, Kunle Shonaike, believes Nigeria is very important to the global automotive business as nearly all brands in the industry compete for a share of the market. He however lamented the challenges of automobile maintenance in Nigeria.

Other stakeholders also applauded Enyo retail for this initiative of training Auto mechanics to be professionals in vehicle repairs. The graduates also thanked the company for giving them the opportunity to acquire more knowledge about vehicles.

Modion Communications CEO, emerges Nigeria’s ‘Outstanding PR Personality of The Year’

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he Chief Executive Officer of Modion Communications, Odion Aleobua, has another feather on his growing list of achievements as he emerged Nigeria’s ‘Outstanding PR Personality of The Year’ at the just concluded 2018 edition of the Marketing Edge Brands & Advertising Excellence Awards in Lagos.

The annual Marketing Edge Brands & Advertising Excellence Awards is targeted at celebrating creative agencies, brands, media personalities and media establishments in the Nigerian advertising, media and communications industry.

The awards seeks to impact the lives of many professionals and shapes a more diverse, inclusive, and highly skilled marketing industry with each honoree exemplifying outstanding leadership, innovation, creativity and a commitment to giving back through supporting marketing education.

At this year’s edition of the award, Odion Aleobua, who leads one of Nigeria’s fast growing integrated communications agency, Modion Communications, was singled out for recognition. The

announcement drew a wide applause from top brand and communications experts present who further gave credence to the creative ingenuity of the personality awarded in the midst of many.

Commenting on the recognition, Odion who expressed his delight on being celebrated as Nigeria’s Public Relations Personality of the Year dedicated his award to his team members in his young creative agency for giving the needed support to birth his ideas. “I am pleased and humbled to have been recognised by the industry for the work we do. This is another milestone for the PR agency we founded in 2015, just three years ago; for me and my young team considering we were on the same stage a year ago as the outstanding young PR agency of the year. We have now graced this podium twice in two years, back-to-back, year-onyear in the three years since our establishment. This is an indication that we are driving our vision of being Africa’s most respected PR agency in the right direction and must continue to produce compelling and superior ideas for our clients,” Aleobua said.

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Guerrilla Marketing is the next frontier

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ow and again every agency has to think up a campaign for a brand. The brainstorming session, one expects, is likely to be based on how the agency answers a single question: How do we get the most with little? Each time the most effective answer should be guerrilla marketing.

The term was brought into marketing lexicon by Jay Conrad Levinson’s 1984 book and has since been gobbled up by eager companies and brands.

When young men and women on roller-skates swarm traffic, leaving flyers in their wake, they are practicing a form of guerrilla marketing. Individuals scribbling numbers on walls at night for potential clients to call are engaging in a presumably illegal guerrilla marketing move.

In Ruben Östlund’s 2017 film The Square, a museum gets two admen to help with publicity for a project. What the duo thinks up is perhaps the most ridiculous deployment of guerrilla marketing in a fictional milieu. Because it involves mayhem and shock, the ad inevitably goes viral.

The museum gets the attention it seeks but it also gets infamy.

There is a lesson in that turn of events: the challenge for real life companies and brands is how to get the former and none of the latter. It is here a company’s philosophy and an agency’s own moral compass become factors. Put differently how does a brand alchemise surprise into cleverness so confident and impactful that the viewer/listener/reader wants to tell her neighbour?

This, naturally, depends on setting, but since it is the dominant event at the moment, let’s take a look at the ongoing World Cup. Every brand on earth realises that June to July this year is World Cup season. Suddenly

Spectranet W/Cup promo: First set of winners emerge

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Oris Aigbokhaevbolo

leather balls and their lessprofessional versions get all the attention on the streets and in the media.

But where other brands received official approval from the Nigerian Football Federation, there are brands that would rather do without official blessings (and hence official strictures and demands).

The superior ad in this regard this season is the recent one from Globacom.

You might have seen an ad featuring scenes of African dance connecting with certain football moves. A dancer hopping transitions into a footballer nodding; an acrobatic move segues into a bicycle kick; the outstretched hands of a dancer ease into a shot of goalkeeper diving to keep a ball out. The ad is a marvel of editing but a masterpiece of conceptualisation. It succeeds as a complex idea expressed simply: the roots of African football skill and its potential success in world football are connected to the shared history of the peoples of the continent.

If dance prefigures football, then inheritance is, in a sense, promise. And if patriotism is one of the key things brought into focus by a global sports event, the ad widens the scope to encompass ancestry. Arguably, it could be aired anytime but, cleverly,

the agency responsible for making it, SO&U Limited, has chosen to air it during the World Cup. Bear in mind that Globacom, despite its sponsoring of Nigeria’s supporters’ club, is not an official partner of the World Cup. “Guerrilla marketers do not rely on the brute force of an outsized marketing budget,” Levinson writes in a recent edition of his book. “Instead, they rely on the brute force of a vivid imagination.” As competition in the Nigerian marketing space among wealthy brands gets increasingly heated, emphasis is bound to shift from big budget to vivid imagination, from brawn to brain.

Companies like SO&U, which already have demonstrated an investment in thinking of marketing this way, are ahead of the Nigerian pack.

The firm, as led by Udeme Ufot, has had a history of memorable campaigns. It is the reason Nigerians remember the nostalgic Guinness ad starring a man named Udeme, a not very popular name that became a popular nickname for the stout brand. It was the work of SO&U and a partner agency. The agency was also responsible for the Mother’s Day campaign, featuring household items converted to scolding tools, which went viral earlier this year. With the new ad going the guer-

rilla route, SO&U has charted a fresh path in its own history.

As it is, much of the literature on guerrilla marketing is focused on the glories of brand association but there is value in the glancing engagement guerrilla marketing engineers.

So even as the upshot of the Argentina game means the Super Eagles have been knocked out of the 2018 World Cup, consider how that has also worked in favour of the Glo campaign. Brands that optimistically based their campaigns on the national team have effectively been blindsided. It’s possible to imagine families skipping a certain milk brand for some time just to avoid mixing some defeat into their beverage each morning.

By not directly, officially, associating with the Nigeria’s national team, the commercial

by SO&U has avoided being tarred with defeat. The Glo call can be made, its data package used without emotional interference. Barring an unpatriotic impulse during the ads production, this was almost certainly not considered by the developing agency. But you could say it’s a welcome by-product. Unconventional thinking, via guerrilla marketing tactics, has led to unexpected benefit.

Oris Aigbokhaevbolo is a culture critic. He writes about film, music, books, and brands.

Tuesday 17 July 2018

eeping to the promise of engaging and rewarding customers, foremost internet service provider, Spectranet 4GLTE has rolled out the first set of winners in its World Cup Promo.

Out of thousands of subscribers that participated in the promotion, 216 subscribers emerged as winners from a transparent draw observed by representatives of lottery regulatory bodies- National Lottery Regulatory Commission, Consumer Protection Council and the Lagos State Lotteries Board.

O lanrewaju O lapade emerged as winner of the star prize, Trip to Dubai. Five customers comprising Bakare Abiola and Nzete Promise got unlimited Data for one year.

Nzei Uche, Akinsipe O laoluwa and Victor ia Obenoh were among 10 subscribers rewarded with 42” LED TV just as 200 subscribers were handed the privilege to choose either 7GB Data or Bluetooth speakers for purchasing Spectranet devices and subscribing to data plans

in June when the promotion commenced.

Dubbed ‘Connect &Win Big’, the promotion drummed support for Nigeria’s male national team as they jostled for honours at the 2018 FIFA World Cup. Prior to the commencement of the draw, the chief Executive Officer Spectranet Ajay Awasthi said, “The innovative nature of Spectranet led to the initiative of rewarding customers for supporting the Super Eagles team in the World Cup”.

Ajay further revealed that Spectranet is committed to excellent service offering with renewed and upgraded facilities that will continue to improve the subscribers’ experience of the brand even after the World Cup. Commenting on the essence of the promotion, Head of Marketing, Mike Ogor said, “In the spirit of the World Cup, we took a decision to make subscribers enjoy the moments that the competition brings. Our fast and reliable internet services have made this possible.

33” Export names Judges for ‘Pen Down for Friendship’ competition

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3” Export has announced a t h re e - ma n Jury for the Pen Down for Friendship Competition for Journalists and Bloggers.

The City of Friends event which is in commemoration of the United Nations’ World Friendship Day set for July 30th, is in line with “33” Export’s brand positioning as Nigeria’s foremost friendship beer.

The judges are 3 acclaimed writers - Anthony Kan, Pelu Awofeso and Olabisi DejiFolutile.

Anthony Kan Onwordi popularly known as Tony Kan is an author, public relations senior executive and teacher.

He is co-founder of This is

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Lagos and Sabi News and was the winner of the NDD/Ken Saro Wiwa Literature prize, awarded by the Association of Nigerian Authors (ANA) in 2009.

Pelu Awofeso, often described as “Nigeria’s foremost travel writer” is a Nigerian Journalist, publisher, travel and culture writer. He is a winner of the CNN/Multichoice African Journalist Awards in the “Tourism Category”.

Deji-Folutile is an experienced journalist, columnist.

She is currently the Editor, Saturday Punch. She has worked in different media organisations including the News Agency of Nigeria and the African Newspapers of Nigeria, publishers of the Tribune titles.

Spar Nigeria wins Retail Brand of The Year Award

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PAR, chain of hypermarket stores, has clinched the 2018 Retail Brand of the Year award at Marketing Edge awards in Lagos recently. The award presented to SPAR Nigeria was in recognition of its excellent service delivery and immense contribution to the Nigerian retail sector through its stores located across the country.

Marketing Edge Brand and Advertising Excellence Awards is an annual event that recognises and celebrates outstanding personalities and brands for their contributions in their various industries. The award ceremony, since inception six years ago, has been recogniz-

ing and celebrating talents and milestones in the integrated marketing communication industry in Nigeria.

Head of Marketing, SPAR Nigeria, John Goldsmith stated that “SPAR Nigeria is delighted to be recognized as the Outstanding Retail Brand of the Year. SPAR is deeply grateful to the Marketing Edge, the organizers of the Awards for putting together a magnificent platform for Brands to be recognized. We are humbled by this award and see it as an incentive to serve our customers better. It means a lot, especially to the members of staff, these are the people who have built the brands. It’s not a prize for

one department, it’s for the entire organization and we see it as a real honour.”

According to him, Our brand philosophy of “My Nigeria My SPAR” is a reflection of our total belief in Nigeria and we would continually provide quality products and services that will enhance the quality of lives of our customers. We will never relent in making meaningful contributions to retail industry at large. ” Other awards that have been won by SPAR Nigeria include the African Quality Achievement Awards and the Brand of the Year 2016-2017, Supermarket Nigeria by World Branding Awards, London.

L-R: John Goldsmith, Marketing Director, SPAR Nigeria receiving the award of the Outstanding Retail Brand of The Year from Dr Olajide Idris, Hon Commissioner for Health, Lagos State and Emmanuel Isangediok, Marketing Manager, SPAR Nigeria at the Marketing Edge Brand and Advertising Excellence Awards that took place in Lagos recently.

Tuesday 17 July 2018

BUSINESS

COMPANIES & MARKETS

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‘There is a huge opportunity in the gas space’

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Co m pa n y n e w s a n a ly s i s a n d i n s i g h t

Lotus Capital ETF beat peers, returns up 211.76 percent ytd Cynthia Ikwuetoghu

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n Exchange Trading Fund (ETF), Lotus Capital Halal has delivered the biggest return among its peers so far, with a year-to-date (ytd) (Januray – July) 2018 return of 211.76 percent more than any of the 9 ETFs with a positive three month return of 198.71 percent according to Bloomberg.

Stanbic Ibtc ETF 30 led the ytd return with 10 percent. New Gold ETF, a South African (SA) index with a secondary listing on the Nigerian Stock Exchange returned 3.31 percent ytd, Vetiva Banking ETF has a ytd return of 0.42 percent, and Vetiva Griffin having a return of 0.11 percent.

However, three ETFs being managed by Vetiva fund manager trailed behind posting negative ytd returns. Vetiva industrial ETF, Vetiva consumer goods ETF and Vetiva S & P Nigerian Sovereign bond delivered negative ytd return of 2.48 percent, 7.18 percent, and 1.54 percent respectively.

An ETF is an investment fund traded on stock exchanges, much like stocks. It combines the valuation feature of a mutual fund or unit investment trust, which can be bought or sold at the end of each trading day for its net asset value.

ETF accounts for 1.20 percent of the total Net Asset Value of collective investments in the market with a one week growth rate of 3.91 percent from N7.12 trillion and finished at N7.39 billion last month 29th of June, 2018.

SEC latest NAV report reviewed that Vetiva Griffin 30 ETF, money market remains the largest ETF with a lion share of N2.99 billion or 40.41percent of the capitalization. SIAML ETF 40, with market shares of 15.36 per-

cent, displaced New Gold ETF to become the second largest ETF with N1.14 billion. Stanbic IBTC ETF 30 Fund came third position with market capitalization of N664.07 million or 8.98 percent.

Also traded during the week were a total of 79,304 units of Exchange Traded Funds (ETFs) valued at N1.491 million executed in 18 deals, compared with a total of 25,220 units valued at N454,438.90 that was transacted last week in 4 deals.

Lotus Capital Halal ETF was launched on November 2014 and was the first Sharia compliant ETF in sub-Saharan Africa. It is an open ended fund that tracks the yield and performance of stocks under the NSE Lotus Islamic Index (NSE LII), which was initially developed

by Lotus Capital in 2009 and publicly launched in conjunction with the NSE in 2012. Its NSE LII index value was up by 0.62 percent to 2,561.61 at the close of the exchange on 13th July, 2014.

L-R: Ituah Ighodalo, pastor, Trinity House; Ayo Adebanjo, guest speaker; Toyosi Akerele-Ogunsiji, founder, Rise Network/speaker; Gbadebo Rhodes-Vivour, speaker, and Afolabi Oke, pastor incharge, youth church, Triune Centre, during the one year anniversary of the Triune Centre in Lagos, yesterday.

Pic by Olawale Amoo

Coronation Merchant Bank names Adegbohungbe ED/COO

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he Board of Directors, Coronation Merchant Bank limited has announced the appointment of Banjo Adegbohungbe as an executive director/ chief operating officer of the Group. He will be responsible for the Operations; Information Technology; Digital Channels and Administrative Divisions of the bank and its subsidiaries.

He joins Coronation Merchant Bank having worked over eleven years at Access Bank Plc in various leadership capacities including Group Head, Global Trade; Group Head, Global Payments and most recently Group Head, Corporate Operations. He began his career in Citibank Nigeria (formerly Nigeria International Bank Ltd) in April 1993 and rose through the ranks to become an Assistant General Manager in charge of the bank’s Trade Operations – a position he occupied before joining Access Bank in March 2007 as a Deputy General Manager.

In 2011, he was promoted to General Manager, a position he held until his recent appointment as Executive Director/Chief Operating Officer of Coronation Merchant Bank.

Banjo is a seasoned banker with over 25 years of banking experience, covering various aspects of banking

including Technology, Payments, International Trade, Fixed Income, Loans, Process Improvement and Product Management.

He holds an MBA from the International Institute for Management (IMD), Switzerland and is an alumnus of Obafemi Awolowo University, Ife where he earned a B.Sc. in Mechanical Engineering.

He is an Honorary Senior Member of the Chartered Institute of Bankers and has also attended several executive management and banking specific developmental programs in leading educational institutions around the world.

Announcing the new appointment, the Chairman of Coronation Merchant Banking Group, Babatunde Folawiyo stated that: “As a Bank, we maintain high corporate governance standards and ensure that Board appointments are in line with global best practices and industry standards”. He further stated, “Banjo brings to us a rich portfolio of experience garnered over the years in various leadership capacities. He could not have joined us at a more promising time in our journey to become Africa’s premier investment bank. I am confident his appointment will further strengthen and position the group for improved performance“.

Halogen, Babcock boosts capacity on security, Access Bank again emerges winner of Karlsruhe Sustainable Finance Awards risk management for industry Endurance Okafor

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n view of the worsening security situation in the country, Academy Halogen- the school of security management, which is the institutional arm of the Halogen Security Company in partnership with Babcock University, has put together training programmes to help equip professionals in the security industry.

Wale Olaoye, the managing director of Halogen Security said the partnership with Babcock university to equip security professionals with knowledge capacity is the company’s own support in helping nation building considering the security issues across the country, that as such it is obvious Nigeria is in dire need of partnership

between the private security agency and the government security agencies.

“Nigeria is in dire need of private sector engagement and private sector expertise in complimenting the efforts of government in national security frame work. This is just a little drop of water in an attempt to redesign or reinforce private security practice in our country in a way that we are able to contribute our quarter in raising the next generation that will be able rise up against the security challenges that is facing our world today,” Olaoye said.

The partnership between the private security agency and Babcock University is aimed at redefining the academics of the security agency in order to have a blend of both theoretical training with the practical field capacity in equipping of the security industry of Africa’s most

populous nation.

This was disclosed during the graduation of 47 students from Academy Halogen – a school of security and management technology, the institutional arm of the security group company- Halogen Security in collaboration with Babcock University.

The graduating students were awarded diploma certificates after the completion of a six-month programme in security management.

Speaking at the graduation ceremony, Adekunle Ajanaku, the special adviser on security and intelligence to governor of Lagos State, appreciated the initiative of Babcock Universities and Halogen School of security management in developing this needed partnership to equip middle level managers in private security sector, with the required skills and capacity.

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HOPE MOSES-ASHIKE

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ccess Bank Plc. has again received top honours at the 2018 Karlsruhe Sustainable Finance Awards in Germany, emerging as the winner across 2 categories. This recognition comes barely 24 hours after the Bank bagged the Euromoney Awards for Excellence as “Africa’s Best Bank for Corporate Social Responsibility” in London.

The awards ceremony held in Germany.

Access Bank received the Karlsruhe award for “Outstanding Business Sustainability Achievement” in recognition of the Bank’s impressive success in holistically embedding sustainability across all aspects of operations. This marks the third consecutive win for Access Bank, and further reinforc-

es the institution’s status as an industry pioneer in sustainable development.

Herbert Wigwe, group managing director of Access Bank was also honoured for his remarkable leadership and commitment to sustainable development with the “Sustainable Leader of the Year for Africa” award. The award was presented in recognition of Wigwe’s exceptional leadership in driving business transformation through incorporating social, environmental and economic values in the Bank’s operations.

“We are honoured to receive this level of recognition,” Wigwe said. “At Access Bank, sustainability is a part of our DNA and we promise to continue to be the face of social, economic and environmental developments that facilitates an inclusive and vibrant economy, business transformations

and increase our shareholders value for tomorrow” In attendance at the awards ceremony were CEOs of leading global financial institutions, senior executives, top German government officials, policy makers, regulators and key sustainability stakeholders.

Access Bank began its sustainability journey in 2008 and has led various initiatives in line with the United Nation’s Sustainable Development Goals. In 2012, the Bank championed the implementation of the Nigerian Sustainable Banking Principles, which have now been adopted nationwide.

The Bank was also the first indigenous Nigerian Bank to join 25 leading global banks to develop the Global Sustainability Banking Principles that set out to align the sector with the UN Sustainable Development Goals (SDGs) and the Paris Climate Agreement.

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Tuesday 17 July 2018

COMPANIES & MARKETS

‘There is a huge opportunity in the gas space’

EBIAHO EMAFO is the Managing Director, Eroton Exploration and Production (Eroton E&P) Company Limited, an indigenous energy company and operator of Oil Mining Licence (OML) 18.In an interview with FRANK UZUEGBUNAM, editor, West Africa Energy Intelligence, on the sidelines of The Nigeria Oil & Gas (NOG) Conference in Abuja, he talks about his optimism and hope that the Petroleum Industry Governance Bill (PIGB) will address some of the uncertainties in the sector when passed into law amongst other issues. Excerpts:

A lot has been said about where the country’s oil and gas sector should be heading at this point in time.

What is your own perspective on that? s a country, best practice has to be in place for us to be able to grow the sector.

We have been having challenges in contracting cycle and approval delay, but recently, it has improved.

We need to have some improvement in terms of time of contract.The time within which all the necessary approval will be given should be looked at. Also, efficient project execution is another aspect. The deficiencies in that area need to be wiped out.

Again, there has to be a decision to what is best for the industry in terms of financing as well.We are gradually moving from cash call regime to alternative funding regime, which is good in itself.Unfortunately, not all the operators have signed on to the alternativefunding regime.

It is a good idea, especially with the joint venture arrangement so that when you are ready to embark on a project, you are not waiting for cash call funding, because you have already sourced capital to be able to execute your project.

If you have a system whereby you are given free hand to start a contract from the beginning to the end, there will be efficiency.

We have to be able to secure our pipelines and the life of the workers.At the end of the day, if you don’t have security on the line, you would be losing a lot of reserve.

Another key area is if more money is spent in developing a community like providing roads, water, and basic infrastructure, not lying solely in the hands of the operators, it will help to halt vandalism.The situation is so bad, and government really needs to do something about it.

Do you see the Petroleum Industry Governance Bill (PIGB) addressing some of these challenges you mentioned?

I am hopeful that the

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PIGB will be able to clear some of the challenges, but when the PIGB will be signed into law is another question.

The intention of the PIGB is to make it easier for people to do business within the oil and gas space, but we have been waiting for several years for the PIGB to be signed into law.

One aspect of the bill that will help us is in area of production to be recorded in terms of calculation of royalties, not at the well end but at the export end.This is because for us, we quickly have loss of production on the line due to sabotage and theft.At a time, we were losing over 40 percent of our production due to crude oil theft. When we started, we were losing 9 percent of our production, but it went up to 46 percent but now, it has dropped to about 23 percent loss on the line.

There is nowhere in the world you will buy an asset and factor in a loss of 40 per cent; that is huge, and alarming in terms of production.

You factor in a loss of one to five per cent. But when you go as high as 50 per cent, it is a challenge to any business.

Be it manufacturing or oil and gas.

Meanwhile, royalties are calculated at the well end (production), not at export and this leads to losses to us in the business. Nobody invests in an asset with the thought that these amount of losses would occur.

Fiscal regime is important

Ebiaho Emafo

to make it comfortable for oil and gas operators to play in the Nigerian space.We have challenges with a lot of multiplicity of taxes that oil and gas companies have to pay; development fund for NDDC and other areas where oil and gas companies are contributing towards the communities they operate.

We are hopeful that all of us will benefit if the PIGB is signed because more oil will be produced.

I wish it hits $120, but the reality is that it will be difficult. I think the price will hover around $60 to $80 per barrel.If it goes up to $100 then there must be something fundamental that will change.Though everybody wants the price of oil to go high, but we have to be realistic about it

What of the security challenges?

Security is a big challenge. There is a lot of security problem in the Niger Delta area.

On our own part, we engage and work closely with communities since we started and contributed immensely to the development of the community.For instance, school rehabilitation, medical care, and we also provide them with scholarships.We just finished a programme whereby 12 students went to the USA to obtain a degree programme.We do WAEC sponsorship. We do empowerment. So working with the communities has helped us to have some form of security within our own operational area.

We pump all our crude oil into the line that is not controlled by us; third party controls the line.They maintain and provide the line we use to pump our crude oil.So even if we have all the efforts currently ongoing with the community, we are still not able to guarantee the security on the line because it is not within our control.

For the last three, four weeks, we havenot produced

crude oil because we donot have storage for crude oil.We were only able to produce non-associated gas, and nobody envisaged that.

Are you planning for crude oil storage facilities any time soon?

It is something we may think of in terms of looking for alternative evacuation option. Storage for crude oil is a big challenge for us. We may think in terms of looking for alternative evacuation options. Right now, we donot have visibility of how long the pipeline will be out and we need to look for alternative means of evacuation.

We have seen an endless postponement to the award of marginal fields licence in the country. What is your take on that?

It would be prudent for the government to open the marginal field, as it will bring revenue for the government.

I donot know why it is taking too long.It should be awarded through a transparent process, and when the people who are beneficiaries start work, it will contribute towards the production quota of the country and more additional revenue for the government to be able to grow the country.

Do you see the price of oil hitting $100 anytime soon?

I wish it hits $120, but the reality is that it will be difficult. I think the price will hover around $60 to $80 per barrel.If it goes up to $100 then there must be something fundamental that will change.Though everybody wants the price of oil to go high, but we have to be realistic about it.

The major thing is to have the ability to export irrespective of the price of oil.

Let’s talk about Eroton.

Eroton Exploration and Production (Eroton E&P) Company Limited, is a leading Nigerian indigenous energy company, incorporated in August 2013, and began full operations in 2015.

We won the bid for the 45 percent total interest in OML 18, previously held by the Shell Petroleum Development Company, Total E&P Nigeria Limited, and Nigerian Agip Oil Company Limited.The asset was producing 10,000 barrels per day (bpd).

Consequently, we became operator of OML 18 asset in October of 2014, in a joint venture between Eroton and the Federal Government of Nigeria, represented by NAPIMS. We have been able to improve the production to about 65,000bpd.

To date, there are over 11 developed fields comprising the following; Alakiri, Akaso, Asaritoru, Buguma, Bille, Cawthorne Channel, Orubiri, Krakama, Ibibio, Tema, and Awoba.

We currently provide 50 about million Standard Cubic Foot (SCF) of gas per day to fertiliser plant in Onne area of Port Harcourt for Notore.

What are your projections for the company?

We have been able to achieve a growth basically by rigorous intervention.

The plan is to start drilling actively.We intend to bring in a drilling rig to start drilling in the last quarter of 2018.

We see ourselves growing in terms of oil production by adding additional barrels through drilling activities.We also see ourselves growing in gas space as well, increasing our gas production because there is a huge opportunity in the gas space.

You have the gas-to-power for the power industries; gas to industrial companies, and you also have gas for export.We want to grow the gas business moving forward to next year in a really short time. We need to grow incremental barrels in terms of oil production.

We currently produce 60 million standard cubic feet (scf ). We delivered about 50mscf, and we intend to grow that to 100 mscf. However, there are challenges with recovery in terms of payment for gas-to-power.

So we are not just going to increase the output of gas without commercial justification for that.

If we grow our gas business to about 100mscf, that would be dependent on commercially viable options.

There is equally a potential of us having gas-based industries. But again in the gas business you have to look at the structures as well as challenges in infrastructure.

Tuesday 17 July 2018

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COMPANIES & MARKETS Firms back SEED on increased access, funding for private schools BUNMI BAILEY

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terling Bank, First Central Credit Bureau FCCB, Lagos State Employment Trust Fund(LSETF) ,Lotus capital, Jessefield Microfinance Bank and FINT have partnered with Sustainable Education and Enterprise Development (SEED) on how to enable private schools access funding.

SEED founded by W-Holistic business solutions is an organization that provides integrated training, mentoring, business development and access to finance solution for revolutionising the emergence, growth, success and sustainability of Education Micro, Small and Medium Enterprises (MSMEs) particularly private schools, whether pre-school, primary, secondary or vocational schools.

In its maiden edition of the event with the “Financial Inclusion for Affordable Private Schools” saw presentations

from LSETF, Sterling Bank, Jessefield Microfinance Bank, Lotus Capital and FINT. “The SEED project has been on for over five months and has culminated in this clinic to improve schools access to finance, which is probably the biggest challenge for most private schools,” Olanrewaju Oniyitan, CEO, W-Holistic Business solutions said during the maiden clinic event.

The Clinic also featured a presentation by Nigeria’s first licensed credit bureau, First Central Credit Bureau who started that the lack of credit history, existing non-performing loans and poor credit rating, among other factors, as reasons why private schools were denied loans Olanrewaju Agbede , head of sales and marketing, First Central Credit Bureau said, “It is important for schools to know their credit ratings before accessing finance, as a lack of knowledge on their credit ratings will limit them in their quest for funds for their school

improvement plans and thereby disadvantageous to them.”

The clinic was well attended

by Ifejola Dada, the President of Association for Formidable Educational Development (AFED), Misbaudeen Zakariyah, Lagos State Chapter chairman of Association of Model Islamic Schools (AMIS) who also made their own presentations, and other notable dignitaries According to SEEDs, access to finance is a biting challenge not only for private schools, but also for small and medium scale enterprises (SMEs) in Africa’s largest economy and in the month of May, lack of access to cheap finance was the largest inhibiting factor cited by SMEs in a central bank survey, for the 15th month running.

Commercial banks charge close to 30 percent in interest rates on loans, scaring off most SMEs and denying them from access to funds to grow their business, a situation that is made worse by a lack of credit history for most SMEs seeking credit.

BUSINESS DAY

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Business Event

L-R: Margaret Banasko, SSA Country marketing lead, Uber, Banky W; Uber brand ambassador and Lola Kassim; general manager, West Africa, Uber at the uber boat cruise held recently in Lagos.

Ogawork unveils virtual job solution platform OBINNA EMELIKE

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gawork Limited, a technology and business solution company, has unveiled Ogawork, a virtual job solution platform targeted at revolutionalizing home services by assembling a pool of qualified service providers and connecting them to clients that need their services across Nigeria.

The revolutionary home services platform, which offers OgaApp makes it easy to get chores done, connecting customers who need chores completed with self-employed providers who are able to earn money using their skills.

Speaking at the unveiling of the platform at the Ikeja corporate office of Ogawork recently, Jim Iyke Esomugha, CEO, Ogawork Limited, noted that Oga-

work is the only on-demand home services business, which provides a virtual office support and publicity and pre-defined chores for services providers.

He noted that there are over 400 chores available for order through the platform, including popular options like home lesson tutors, personal fitness trainers, house cleaning, lawn mowing, furniture assembly, handyman repairs, junk hauling, barbers among others.

“The idea of creating an app is to create comfort, security and give better quality for money.

And that is what OgaApp is about. We are the middlemen between artisans, skilled and service providers. So, we are committed to finding a client an artisan or a service provider closest to where the client lives, we go further than that to make sure all our service providers go through a vetting system in collaboration

with the police”, Esomugha said.

Explaining how the app works, the CEO said: “Simply identifying your category. You can visit www.ogawork.com to see the entirety of what we provide, you can go to Google Play Store or Apple App Store to download our app and find that category of a certain service provider you are and register.

When you register, that makes you are eligible to be call upon to become service provider. We will find you the end users because we have customers who are registered under our profile. For instance, if any of our customers ask for a plumber, we will call and link you up with the customer to go carry out the service”.

Esomugha disclosed that the service, which kick off in Lagos runs across the country through the online platform and is also free for the first two months for the first 5,000 subscribers.

L-R: Franco Maria Maggi, marketing director, NB PLc ; Bisi Deji-Folutile, jury member “33” Export Pen Down For friendship competition Kufre Ekanem, corporate affairs adviser NB Plc.,Anthony Kan Onwordi, head jury, “33” Export Pen Down For Friendship Competition, and Pelu Awofeso , jury member “33” Export Pen Down For friendship competition, at the unveiling of “33” Export City Of Friends in Lagos. Pic by Pius Okeosisi

L:R: Aderemi Adetona , trade marketing execution manager, Nigerian Breweries West; Kola Oluborode , regional business manager, Nigerian Breweries South; Abdullahi Sulaiman Olabode , winner Star Lager United We Shine Millionaires Promo; Orukpejoja Patrick, winner Star Lager United We Shine Millionaires Promo; Adebola Adeyemi and Ope Oluwalusi, zonal business manager , Nigerian Breweries West, at a regional presentation in Lagos recently.

AXA Mansard Insurance named Insurance Company of the Year

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XA Mansard Insurance Plc, a member of the AXA Group and global leader in insurance and asset management has emerged as the Insurance Company of the year. The announcement was made at the 6th edition of the Marketing Edge Brand and Advertising Excellence Awards which took place in Lagos. The award presented to AXA Mansard Insurance Plc was in recognition of its excellent service delivery and immense contribution to the Nigerian insurance sector as well as the country at large.

Marketing Edge Brand and Advertising Excellence Awards is an annual event that recog-

nises and celebrates outstanding personalities and brands for their contributions in their various industries. The award, in the last six years, has become the benchmark for recognizing and celebrating talents and milestones in the integrated marketing communication industry in Nigeria.

Speaking on the recognition, the Brand Strategy and Communications Manager, AXA Mansard Insurance Plc, Emeka Muonaka, said, “We are truly thrilled to be recognized as the Outstanding Insurance Company of the Year. This award is recognition of our unwavering commitment to provide effective service to our

customers and we promise to never relent on making meaningful contributions to the growth and evolution of the Nigerian insurance industry.”

Recently, the organization launched MyAXA Mobile App, an application designed to bring real value to the life experiences of its users by providing a more convenient way to purchase and manage their AXA Mansard product plans. The app is available for free download on the App Store for IOS users and Play Store for Android users respectively. The app is secure, all payment information is strictly confidential and global security standards have been employed to protect users’ information.

L-R: Pamela Emodi, education portfolio manager, MTN Foundation, Babafemi Adedugbe MTN Foundation awardee 2018, Nonny Ugboma, executive secretary MTN Foundation, Ekong Udobang, senior manager, program implementation, MTN Foundation, Ige Opeyemi, MTN toundation awardee 2018, Ayodeji Salami, education portfolio coordinator MTN Foundation at the MTNF-MUSON Music Scholars programme 11th graduation concert and ceremony

18

BUSINESS DAY

C002D5556

Tips & Talking Points

Harvard Business Review

How to say no to office housework

TALKING POINTS Is #MeToo Changing the Workplace?

56%: In a survey about changes in the workplace following the #MeToo and #TimesUp movements, 56% of respondents say they’ve seen improvement toward making the office safer from sexual harassment. + Mobile Money Thrives 118 million: Mobile money was launched over 10 years ago. Today, there are more than 118 million active accounts that use mobile money services worldwide. + Stunted Growth 70%: CEB surveyed employees from various industries and found that 70% of employees expressed dissatisfaction with opportunities for career advancement at their companies. + Where Hackers Hit Hard 60%: According to a study from CAPS Research, cyberattacks made through the information technology systems of third parties account for over 60% of reported attacks on publicly traded U.S. companies in 2017. + How to Train an Executive $1 billion: IBISWorld published a report that revealed the business coaching industry is growing: In 2017, U.S. firms invested $1 billion in business and relationship coaches, a 20% increase from 2012.

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o one likes “office housework” — lowimportance tasks such as ordering lunch and taking notes in meetings.

But research shows that certain groups of people, including women and people of color, are more likely to be assigned this kind of work, and that taking it on can hurt their careers. When faced with office housework, what should you do? First, have a prepared answer about how your time would be better spent: “I was hired to do X, and this new task would take away time from completing X well.” For

on-the-spot requests like ordering lunch, you might say, “I really need to be present during that meeting, as it’s critical to what I’m working on.” When you say no to housework, offer to do something higher-value instead. And if you can’t say no, make sure that people are aware of the extra work you’re doing and that you at least get credit for it.

(Adapted from “Women of Color Get Asked to Do More ‘Office Housework.’ Here’s How They Can Say No,” by Ruchika Tulshyan.)

Perfectionists, Think about when you’ve succeeded imperfectly Being a perfectionist isn’t easy, especially if your desire for everything to be just right causes you to put off decisions, worry over sunk costs, or ruminate over failures and weaknesses.

To help yourself ease up, try focusing on and learning from your successes. Ask yourself: Have I always done everything flawlessly? (Probably not.)

Have I always been certain of success in advance? (Unlikely.)

Remembering times when you succeeded despite being imperfect will give you the confidence to tweak your processes and decisions based on what has worked in the past. This can be especially useful if you tend to carefully research and plan your approach to work before starting it. You can also identify a successful role model who keeps their perfectionism in check. How is that person able to be effective without succumbing to perfectionism?

Observe what they do and learn from it.

When joining a company, figure out how decisions are made

Help your boss bBe aware of what’s happening on the team

Yes, your phone can help you build better habits

hen you join an organization, you have a short window of time to adapt to its culture. And one of the most important aspects of a work culture is how decisions are made. Does your new company have a bias for action, or a bias for analysis and consensus?

In organizations with the former, decisions are made quickly and attention spans tend to be limited. If you’re pushing for an initiative in these companies, present your position clearly and give stakeholders the information they need to make a decision. Other company cultures prefer a more protracted discussion of options, models and strategies. In these companies you’ll likely

osses have a lot to deal with, so it’s not hard for them to miss day-today issues with their employees. If your team has a problem, and your boss doesn’t seem to understand what’s going on, try to help them catch up.

Without being overly blunt or critical, provide a social reading of the situation that your boss is missing. For example, you could offer observations such as: “Did you notice that Isabel is a bit down this week?” or “Have you noticed that everyone seems stressed out lately?” You could also say something general, such as: “Would you

e often blame o u r phones for our worst habits, from multitasking to poor spelling. But our phones can just as easily help us build better habits by triggering a desired behavior.

Start by considering when and where you want the habit to happen.

For example, if you want to start flossing your teeth every day, decide when you’ll do it (after dinner or before bed?) and where (bathroom or kitchen sink?). Then set a recurring alert to remind you. (A task manager or calendar app may be useful.) Your phone can also cue you based on

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need to send around materials and analyses, and perhaps even redo a presentation several times, before a decision is made. Once you understand how your new organization works, think about your own preferences and how they fit with the culture.

(Adapted from “When You Start a New Job, Pay Attention to These 5 Aspects of Company Culture,” by Allan H. Church and Jay A. Conger.)

mind if I shared some observations about Marco with you?” Make your suggestions with tact ; your goal should be to enlighten your boss, not to chastise or embarrass a colleague. By showing your manager issues they otherwise would’ve missed, you can be a lens through which they better understand the team — benefiting everyone.

(Adapted from “How to Work for a Boss Who Lacks Self-Awareness,” by Tomas Chamorro-Premuzic.)

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

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a specific location. If you’re trying to make mindfulness a habit, you can set a location-based reminder to take three deep breaths as soon as you get to the office. Devices can help us break bad habits — the key is to create new habits that replace them.

(Adapted from “How Your Phone Can Help You Set Better Habits,” by Alexandra Samuel.)

BDTECH

BUSINESS DAY

Tuesday 17 July 2018

19

In association with

Bluechip technologies aims to bridge gap in Nigeria’s data harmonization

ter to such high volume data to make sense of it and use the data to make informed decisions,” Tewogbade said.

“We are currently doing some work with Federal Mortgage Bank of Nigeria (FMBN) and we have also approached the (NIMC) and INEC to propose our data management platforms and data warehousing solutions that can solve the impending situation of data harmonization,” Tope Ajao, Director, Bluechip Technologies

Limited said.

Speaking on the milestone of the company in the past 10 years, Olumide Soyombo, Co-founder, Bluechip Technologies said: “We are so glad to be celebrating a decade of staying the course and developing the Bluechip brand.

We have come a long way from our humble beginnings in 2008; thanks to the tireless commitment of a team of people who have become instrumental to the Bluechip story. We appreciate all our OEMs, partners and customers; they have all been instrumental to our growth. As we look ahead, we are excited about what the future holds for us and for our industry at large, and to being a part of the continued proliferation of data analytics and management in Nigeria and the continent at large.”

In line with the company’s commitment to skill building and youth development, to enhance the potential of Nigeria’s technology sector, Bluechip revealed its plans to sponsor the first ever Inter-Campus Machine Learning Competition, driven by Data Science Nigeria (DSN) –a program designed to raise a generation of data scientists and Artificial Intelligence experts from Nigeria’s universities and polytechnics through a competitive process of tutorials and a residential boot camp.

have worked tirelessly over the years to grow the business into what it is today,” she added.

According to Boston Consulting Group research, just 0.5 percent of all retail on the African continent takes place online compared with about 15 percent in China—home to Alibaba Group Holding Ltd. — and 5 percent in India. But companies like Jumia are changing the economic landscape for many African entrepreneurs.

As part of the celebrations, Jumia has also launched an anniversary campaign titled, “Salebrate

With Us”. The goal of the campaign is to appreciate Jumia customers with over 1,000,000 exclusive deals, 500,000 free shopping vouchers, daily flash sales exclusive to Jumia app and free delivery on any item above N10,000 via Jumia Express in major cities (excluding large items). In addition, customers who make payments with Jumia’s secure payment platform ‘Jumia pay’ get 5 percent discount off their shopping during the anniversary. The Jumia anniversary sales commences on July 16 and runs till July 29 2018.

Stories by JUMOKE AKIYODE-LAWANSON

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luechip Technologies Limited, a business application and data management solutions firm has reiterated its commitment to continuously deliver data management expertise to guide the decision making capacity of financial, telecommunications, manufacturing and public sector organisations.

The company which recently celebrated its 10th anniversary with a series of events, including the launch of an endowment fund of 2 million naira at Matori Grammar School, Lagos, said that it has plans to continue to explore the numerous opportunities in data for the effective running of business organisations and government in Nigeria.

Through a suite of innovative propriety technology products and strategic partnerships with leading Original Equipment Manufacturers (OEMs) and multi-nationals, the company has tripled in size and impact in the past decade. Its products including Simplex – an end-to-end voucher-management software for telecommunications and energy companies; custom analytics models for banks; and Blueprime– a retail analytics platform that

L-R: Tope Ajao, Director, Bluechip Technologies Limited; Kazeem Tewogbade, Managing Director, Bluechip Technologies Limited; Olumide Soyombo, Co-founder, Bluechip Technologies Limited and Bolaji Afolabi, Vice President, sales and business development, Bluechip Technologies Limited, during the media briefing for the company’s 10th anniversary, held in Lagos on Friday July 13, 2018.

provides in-depth insights into customer behavior, trends, experiences, and sentiments, which was launched in December 2017 were all developed and built locally by Bluechip technicians.

Speaking to select journalists at a briefing held for the company’s 10th anniversary, Kazeem Tewogbade, managing director, Bluechip Technologies Limited said that it has become important for businesses and public sector organisations to know and understand

who their customers are and how to make informed decisions based on gathered data.

“Our solutions basically help to strengthen the delivery and increasing the capacity of the underlining infrastructure to deliver value to the business. With big data (high volume of data) it can be difficult to process and make sense of such high rate of data ingestion, this can make important data become useless. But there are new technologies that can ca-

Jumia Nigeria marks six years of creating sustainable impact

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umia’s six years’ anniversary celebration taking place throughout the month of July, aims at celebrating major milestones achieved over the period of its operations in Nigeria. These include, for instance, the listing of over 5 million unique products on the platform, supporting the growth of MSMEs (over 100,000 merchants active on the platform), and granting local customers access to new services in Nigeria.

“Over the past six years, we have created a sustainable im-

pact on the Nigerian economy, enabled access to new services on our platform, such as food ordering, hotel and flight booking, as well as finance solutions with Jumia Pay. We’re especially excited about these milestones; yet we’re challenged to do more and be more to our local vendors and customers,” said Juliet Anammah, Jumia Nigeria’s CEO. Reminiscing on the history of the company, Anammah noted that since inception in 2012 in Nigeria, “the company has now become Africa’s largest e-com-

merce platform selling goods and services to millions of customers. We have expanded from four to 14 countries, and our vendor network - from Lagos, Nigeria to Cairo, Egypt, and other African countries - has grown to 50,000 businesses offering their goods and services online.”

“It is important that we give credit to our team of dedicated and hardworking staff. Our story today is incomplete without mentioning the real drivers of the business. So our anniversary this year is a celebration of the Jumia talents who

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BUSINESS DAY

Tuesday 17 July 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Machine learning and artificial intelligence the impact of not doing so goes beyond financial to the brand of the companies.

It goes without saying that parents are highly motivated to raise their children well and teach them how to be responsible adults. Companies should feel the same duty of care towards their AIs.

NIYI TAYO – Managing Director, Technology Accenture Nigeria

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a c h i n e learning and artificial intelligence will be key enablers in a new era of digital experiences and value propositions, but the revolution needs a human touch. Keeping interactions between your artificial intelligence (AI) and your clients fair and unbiased will be critical to the success of your business.

Why are human values so important to the success of AI? AI is expanding into every facet of our lives, driving better business decisions and user experiences throughout a wide range of markets and industries. AI has effectively become a new user interface, making our interactions with the increasingly advanced technologies that surround us easier and more seamless. Intelligent digital assistants like Google Now in our smartphones, helping us reach out to others, find information, make notes and navigate the physical world.

Meanwhile, Amazon Alexa and Google Home have given us the ability to order goods and services without ever seeing a screen.

These developments are constantly making it easier to use advanced technology effectively. Instead of adapting to our machines, we are teaching our machines to adapt to us. But as we train our artificial intelligences to approve loans, identify job candidates and treat patients, we must be mindful of our responsibility to society. In a future where AI has the power to facilitate

Photo source: Datanami

every touch point from commerce to public services, we must strive to ensure it remains a force for good. We, therefore, have to nurture our AI as with great power comes great responsibility. We call it “Citizen AI”.

The Clear and Present Danger of Bias In the simplest terms, an AI is a learning system. It grows and matures through data, acquiring new insights and capabilities based on the inputs we feed into it. In order to guide the training process in the right direction, data scientists carefully tailor those datasets to promote the goals an AI is meant to achieve. But that data can also confer unconscious bias and hidden prejudice.

Last year, researchers at Carnegie Mellon found that Google’s advertising algorithms were six times more likely to display ads for highincome jobs to men than they were to women. And when ProPublica dug into the work-

ings of COMPAS, a tool used to predict recidivism rates among criminals as part of the parole process, they were shocked to discover it discriminated against minorities.

These are extreme examples, to be sure, but they illuminate a fundamental challenge in AI. As we continue to expand our use of these technologies, we must create a strong ethical framework for AI and maintain control over the choices it makes.

Unlocking the Black Box Training AI is a complicated process. Take deep learning, for instance: a pattern recognition method that mimics the way the human brain works and applies those principles to neural networking. This technique has allowed businesses to make substantial progress in highly complex fields such as image recognition. Where humans see a cat, a goat or a tomato, a computer will only see a field of pixels. Deep learning has given computers the ability

to recognize what those pixels represent – but we can’t fully explain how the system works, even though we programmed the basics ourselves.

Naturally, this lack of insight into the inner workings of AI is rarely a problem when the results are positive. If efficiency is up and users are happy, why worry? But the case of Microsoft’s Tay chatbot reveals that things aren’t quite so simple. Within just 24 hours of the chatbot’s Twitter debut, it had transformed from a capable conversationalist into an equally capable racist. Although the project was intended as an experiment from the start, it clearly illustrates the potential for disaster when AI is sent out into the world without proper guidance.

These AI examples can apply to biases in Nigeria as well.

Biases in terms of ethnicity, religion, place of residence, income levels etc. Ensuring that AI solutions deployed by organisations are free from these biases is important as

Raising Responsible AI In order to seize the growth opportunities that AI provides, your company will need to address core ethical considerations and establish a set of value-driven requirements to guide the deployment of your AI. At Accenture, we’ve developed the Responsible AI approach to help our clients create the proper governance frameworks to evaluate, deploy and monitor AI. Our methodology focuses on architecture and solutions that emphasize people and human values. Using this approach will help you guide the implementation of AI in a positive direction and establish the prerequisites for future growth.

Why Responsibility is Key In the coming years, organizations will have an enormous opportunity to weave technology into the fabric of our lives in ways that are responsible, empowering and fair. But your ability to reap the rewards of AI will depend on your ability to guide and control it.

This reaches beyond the realm of laws and regulations. If your business implements AI whose decisions will have an impact on the lives of your customers, you must be mindful of the values you instill in those autonomous systems.

eTranzact to deepen financial inclusion through expansion of mobile money operations JUMOKE AKIYODELAWANSON

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Tranzact, Africa’s premier e-payments solution provider, is set to deepen financial inclusion by expanding its PocketMoni service with 10,000 active mobile money agents, through the CBN-funded Shared Agent Network Expansion Facility (SANEF) initiative, within the next 24 months.

The SANEF initiative is an effort by the apex bank to spur quick growth in the level of financial inclu-

sion through availability of financial access points, especially in the Northern part of the country.

This is also intended to drive the Federal Government’s Social Investment Program (SIP) which relies on improved banking agent network coverage points.

To ensure effective results, eTranzact was certified as one of the 10 mobile money operators and super agents to roll-out 500,000 agent locations within the next 24 months. eTranzact has recorded success in its PocketMoni mobile money service

which has empowered over 9,000 agents and two million end-users with ready access to financial services, is well position to deliver on its new SANEF mandate.

According to Niyi Toluwalope, Acting MD/CEO, eTranzact: “As aglobal leader in the electronic and mobile payment industry, we are well-positioned to deliver and attain the goals set by the CBN for this project.”

Toluwalope stated that, “Over the next 23 months, eTranzact plans to leverage its Mobile Financial Services Business to deliver an additional 1,000,000 active

end-users, by deploying its innovative distribution capabilities anchored on its active agents.”

Under the SANEF initiative, eTranzact will deliver 10,000 new agents in the first phase. At a conservative ratio of one agent to 50 end users, these 10,000 agents are expected to enable financial services for 500,000 unbanked/underserved individuals.

Part of the project funding will also go towards filling critical human and technology resource needs and to improve eTranzact’s distribution capabilities

with additional agent activation centers in northern part of the country.

“As a proof of our commitment to provide a world-class, customeroriented service culture and environment, the company recently attained the world’s highest standards certifications - ISO 20000:2011 and ISO 27001:2013,” he said.

The company says it will continue to deliver secure, cost effective and innovative electronic and mobile payment services that are compliant with globally recognised standards.

Airtel to empower youths with ICT centre in Ogun state JUMOKE AKIYODELAWANSON

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irtel Nigeria says it has commenced plans to rehabilitate an ICT (Information Communications Technology) centre in Imodi-Ijebu, Ogun State, in line with its commitment to empower Nigerian youths.

In the fifth episode of the on-going Airtel Touching Lives (ATL) Season 4, representatives of the telco met with community leaders of Imodi-Ijebu to discuss how the company will support, empower and upskill youths in the area, leveraging ICT. Obafemi Onakoya, Executive Chairman of Ifesowapo Imodi LCDA, thanked Airtel for its commitment to touching lives and helping youths in the community, noting that he is positive that the new ICT centre will positively impact the youth and also accelerate learning and economic growth.

“In Ifesowapo Community, we have over 25,000 people with 70 percent as youths and students. We believe that the impact of an ICT centre will be huge on the youths and the people of the community in general. It will improve their social and economic activities, influence research and enhance knowledge”, he said.

Some of the students of the community also believe the ICT Centre provided by Airtel will help reduce poverty, enhance knowledge and empower the younger generation.

“As a youth in the ImodiIjebu community, we are faced with different challenges because we do not have access to the internet. Most times, we have to travel out of the community to access the Internet and to complete assignments given to us at school. With the new ICT centre, things will definitely get better,” Oluwatoyin James Mary, a community youth said.

Sodiq Oluwasegun, a student in the community noted that “If we are not opportune to get an ICT centre in our community, this town and the neighboring village will be lagging. Other cities that have an ICT Centre are already congested and having one to ourselves will make us truly happy and fulfilled. I am really excited that Airtel has come to our aid.”

Airtel’s intervention will include refurbishing the existing ICT structure in the community, provision of computers, scanners, copiers and a generator.

Episode 6 of the TV program was aired on Sunday July 15, 2018. Through the Touching Lives revolutionary CSR program, Airtel has been promoting the spirit of giving, self-sacrifice and love among Nigerians.

BUSINESS DAY

Tuesday 17 July 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

21

Human Capital

Why FG struggles to meet 26% budgetary allocation to education sector KELECHI EWUZIE

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he constant mention of education across the globe it vital because if there must be any meaningful progress across spheres, the intellectual capacity of the available human capital needs to be shored up.

For the record, medical doctors in the health sector need sound education to provide quality health services, the brains in the financial sector cannot be generated without a good educational background, lawyers need to spend many years being groomed in the ivory towers before graduating to keep the nation’s judicial system running, among others.

That notwithstanding, the Nigerian education sector has not received as much attention as it should in the last two decades. For instance, budgetary allocation to the sector has consistently fallen short of the United Nations Educational Scientific and Cultural Organisation’s (UNESCO) recommended 26 percent.

In the 2015 fiscal year,N392.2 billion was allocated to education, representing about 8 percent of the N5.068 trillion budget,

contrary to the recommendation by UNESCO and the situation was not much to write home about in 2016 with the Muhammadu Buhari led administration allocating N369.6 billion representing 6 percent of the total budget of N6.061 trillion. In 2017, it was N550 billion representing 7.4 percent of the N7.444 trillion total budget, while in the 2018 appropriation bill of about N8.612 trillion, only N605.8 billion was proposed for capital projects in the education sector representing 7 percent.

Analysis of budgetary allocation for education over the last six years has not even hit 15 percent; a situation which educationists say is reflective of how much importance successive government’s accord education.

Those who know in the education sector observe that the constant below par budgetary allocation to education has several notable downsides at all levels. They opine that Basic education is still characterised by low net enrolment as about 8.5 million children are out of school. School infrastructure has not caught up with increasing enrolment as reports document many pupils sitting on the floor for classes and some learning under trees.

Industry close watchers also

said that the secondary level is not spared the decay. There are infrastructural challenges including inadequacies in power and water supply. Over 65% of schools have no public power supply. ICT infrastructure is also poor at the basic education level. Inadequacies of classroom, laboratory and workshop facilities pervade the system. At all levels, teachers are inadequate in number and quality.

According to them, “The universities can exemplify the challenges at the higher education level. The 163 universities in Nigeria today are faced with a host of quality challenges which include the fact that majority of the universities are grossly understaffed, relying heavily on part-time and visiting lecturers, have underqualified academics and have no effective staff development programme outside the Tertiary Education Trust Fund intervention and the Presidential First Class Scholarship programme.

Florence Obi, former deputy vice chancellor, University of Calabar warned that any country that neglects knowledge resulting from educational activities sets itself back by a decade, noting that “any nation that does not pay attention to the educational needs of its

Siemens assures Nigerian students of commitment to support technology innovations Endurance Okafor

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iemens Nigeria Limited has assured Nigerian Students of it readiness to support their innovative ideas which are capable of solving the country’s technology problems.

Nasir Giwa, vice principal, Gas and Power, Siemens Nigeria, stated this at 2018 Prof Ayodele Awojobi Design Competition (PAADC) event organised by the students of engineering, University of Lagos, in memory of late Ayodele Awojobi in Lagos.

Giwa, who was a member of the panel of discussants at the programme, said that the organisation chose to support the competition to encourage innovation and creativity amongst the students, adding that this aligned with the

company’s slogan: ‘ingenuity for life’.

He said Siemens has a lot of opening for the students if they have idea and want to realise it. According to him, “Feel free to come to us, we will help you drive that idea.

The problem is no longer funding but courage. We want to assure you that we are your partners” Giwa further observe that Nigeria can solve her many technological problems only if the needed political will was applied. He said a country like Egypt was able to address her electricity challenges because the government was actively involved and created enabling environment for industries and innovators to come up with their ideas Otekaye Oluwatobi, the ULES president said ULES appreciate the effort, cha-

risma and intelligence of the outstanding faculty students and also the brilliant and resilient determination of the lecturers that brass the glasses with excellence and productivity.

He said second edition of the PAADC is more than just a competition as it is an opportunity to showcase the nation’s possession in terms of brains and minds.

The University of Lagos Engineering Society (ULES), one of the oldest students association in the university through its long standing vision for a national design competition, named Professor Ayodele Awojobi Design Competition (PAADC 2.0) empowered the winning team, which was examined to be the most innovative with funds and launched its sustainable business.

L-R: Fatuase Ruth Abiodun, head teacher, Abesan primary school; Ade Abatan, director, school support services, Lagos State Universal Education Board (SUBEB); Rotimi Morohunfola, business head, commercial banking and public sector, Ecobank; Dayo Osinowo, vice chairman, Mossan Abesan LCDA and Tunde Aderupoko, head, financial operations & cost management, both of Ecobank, at the official commissioning/hand over of Abesan Primary School Borehole project constructed by Ecobank in Lagos.

population is likely to face difficult times in the future.”

She further pointed out that higher education in Nigeria has been experiencing loss of facilities, deterioration of equipment and plants, and uncompleted projects as a result of financial crisis facing the system.

On his part Peter Okebukola, former executive secretary

of the Nigerian Universities Commission (NUC), said he expects the Muhammadu Buhari administration to improve funding across all levels of education.

He observes that such a move would increase capital development to aid teaching and learning, adding that the Nigerian education system is not up to the level it should be.

“A lot of improvement in research should be the focus by our universities in the next 10 years. There should be an improvement in our research infrastructure; there is the need to improve the capacity of our research for people to do quality research that will find their way into globally acceptable publication outlets,” he said.

Alumni celebrates Corona Apapa at 60 Josephine Okojie

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orona School, Apapa -alumni rolled out drums recently to celebrate their alma mater 60th anniversary of providing quality education for the Nigerian child.

Gbenga Sobo, deputy managing director, First Bank Plc an alumni of Corona Apapa, in his keynote address said that the school has survived over the years because of its strong values and ethics.

“Many of us today are in key position in various fields because of the right educational foundational we got from Corona,” Sobo said.

“We are all beneficiaries of the sound teaching inculcated in us by our teachers in Corona. We are happy and thankful to God that

this school has produced eminent personalities in our society and beyond,” he added.

Also speaking during the anniversary, Dolapo Osinbajo, wife of Nigeria’s vice president recalled her memories of the school in her special address.

Osinbajo expressed her happiness for being part of the school’s 60th anniversary celebration, while adding that Corona School, Apapa, had inculcated sound values during her formative years, a value that has continually helped in defining who she is today.

Similarly, Toyin Adeniji, executive director, Micro Enterprises, Bank of Industry (BOI) who is also alumni noted that in terms of values, the school is a rounded and has continued to produce well round-

ed children because of its strong values.

“It is no longer an institution. It has become a brand and the bench mark for academic excellence,” Adeniji said.

Grace Omoh Egbekuse, head of the school, expressed joy for being part of the school’s 60thanniversary, reiterating her commitment to making the environment more amiable for the growth and motivation of the students.

“As an institution we recount what we stand for; we rejoice on the occasion of this 60th anniversary, celebrating sixty years of developing the total child.

Our specific objective for celebrating this milestone is to tell our amazing story, to celebrate our achievements and refresh for the next leap into the future,” Egbekuse said.

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EDUCATION

Tuesday 17 July 2018

INSIGHT

Laterna ventures boost literary capacity among pupils 2018 Maltina teacher of the year extends entry deadline

...Donates books to Edgewood College KELECHI EWUZIE

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etermined to boost the literary skills of Nigeria pupils, Laterna ventures limited has donated set of books to Edgewood College Lekki Lagos as reward for one of their pupils Kelechi Onobia winning a spelling bee competition organised by the company in Lagos.

Nnaji Ugbaja, head of corporate affairs unit, Laterna Ventures limited while speaking at the books presentation said the spelling competition was designed as part of the children day celebration to inspire reading among pupils and teach them how to use the English language effectively.

This will in turn help pupil in identification and pronunciation of new words.

According to him, “The spelling bee session is unique and is a good platform to imbibe a healthy competitive culture in young children adding that beyond the reading, Laterna ventures is using the

Nnaji Ugbaja (middle), head of corporate affairs unit, Laterna Ventures limited presenting books to Kelechi Onobia, pupil of Edgewood College as winner of a spelling bee competition organised

by Laterna ventures limited in Lagos.

opportunity to expose the children to things that would give them overall development.

Nnaji said that Laterna ventures included spelling bee so that the children can practicalise whatever they have read, adding that this is not a deviation from the essence of reading, but an expansion of the frontiers of learning.

“Laterna is donating books

to the school library rather than give the book to the pupil who won the spelling; by so doing other pupils will have access to the books”, he said.

Fred Onobia, father of Kelechi said urged parents to start early to instill in children the art of reading adding that starting off early to imbibe the culture of reading among the children will help them in the

future.

On her part, Cheluchi Onobia, mother of the winner encourage parent to find a way to balance work with catering for the educational needs of their children.

“Parents need to support their children academically and not leave everything to the school because the school cannot do everything”, she said.

new window of opportunity has opened for teachers as the deadline for submission of entry for the 2018 Maltina Teacher of the Year has been extended to Friday, July 20, 2018.

Kufre Ekanem, Nigerian Breweries’ Corporate Affairs Adviser, explained that the extension due to pressure from teachers across the country who wanted more time to complete the process.

Ekanem enjoined interested teachers to avail themselves of the new opportunity by downloading application forms from the Maltina website adding that the 2018 Maltina Teacher of the Year will receive N1 million, a trophy and another N1 million every year for the next five years, and a block of classrooms built at the school where he or she teaches.

The first runner-up will have N1 million and a trophy, while the second runner-up will be rewarded with N750, 000 and a trophy. In addition, each state champion, including the winner and the first and the second runners-up will get N500, 000.

Since inception in 2015, the Maltina Teacher of the Year initiative has produced three grand winners: Rose Nkemdilim Obi, Anambra (2015), Imoh Essien, Akwa Ibom (2016) and Felix Ariguzo, Delta State (2017).

The Maltina Teacher of the Year, an initiative of Nigerian Breweries Plc-Felix Ohiwerei Education Trust Fund, identifies, showcases and rewards outstanding teachers in Nigeria.

The entry for this year’s edition opened on Friday, May 25, 2018 and was to have closed last Monday.

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Energy Report Oil & Gas

Power

Renewables

Environment

Eligible Customer: NERC receives 11 applications from investors ISAAC ANYAOGU

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he Nigerian Electricity Regulatory Commission (NERC) has received eleven applications from interested investors since the minister of Power, Works and Housing, last year declared eligible customer in the power sector, a provision that allows customers who require more power buy directly from electricity generation companies (GenCos).

However, no application has been approved yet, the commission said due to preparations to effectively roll out the plans.

James Momoh, in an address at the second edition of BusinessDay Future of Energy Series with the theme: Making the power market bankable, at Radisson Blue, Lagos, said through Olufunke Dinneh, general manager legal regulation and compliance said that the Commission was happy with the response it is getting from

interested parties.

Confirming this development to BusinessDay, Chiedu Ugbo, the managing director of the Niger Delta Power Holding Company Plc (NDPHC) told BusinessDay on the sidelines of the conference the company has re-

ceived a ‘some applications but right now no application has been granted.

Babatunde Fashola, minister of Power, Works and Housing in a release on July 9 said, “In order to accelerate supply to industries and heavy consumers,

Government, through my office, pursuant to powers conferred by Section 27 of the Electric Power Sector Reform Act (EPSRA) declared eligible customer, which was to enable people who consumed 2MW and above, who were not getting power

Stakeholders suggest solutions to myriad power problems OLUSOLA BELLO

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takeholders in the power industry have said that the solution to the power industry would be creating enough certainty , confidence look at the demand side so as to unknot many of the challenges the sector is facing currently.

The stakeholders who participated at the BusinessDay Future of Energy Series all agreed that there is need to find solutions the power problems if the country must move forward.

According to Kola Adesina, chairman, Egbin Power plc, he said, big economy needs big power and that if the country truly want to industrialize and also want investment in the power sector to create jobs, there must be enough certainty , and confidence.

Investors would come and invest in the power sector if they are given enough certainty and confidence.

He also stated that if the fundamentals of the market

are addressed the problems plaguing the industry would be solved.

Kolapo Joseph, general manager corporate finance and Corporate development, North South Power Limited said that the industry went into problems immediately the cost reflective tariff that was proposed by frozen the Nigeria Electricity Regulator Commission (NERC) was frozen, stressing that cost reflective tariff must be immediately implemented.

In addition to this he said that all sector debts must be settled by the government, saying that it is only after this that the sector can be revamped.

In her own contribution, Joy Ogaji executive secretary Association of power generation Companies said that the state of the market should be thorough studied to know what is required, especially the demand side.

On what to do find a lasting solution to the problems she said in the short term the country should optimised what is available in the short run while on the

long run the generation capacity of the country should be increased.

According to her about 17,000 megawatts of suppressed demands is currently available in the country.

Jamil isyaku Gwamna, managing director and chief executive offer of Kano Electricity Distribution company , while given an insight into some of the problems, said metering customers is the solution to the electricity problems. He said: “In an ideal situation meter is suppose to provide solution to the problems of revenue generation”.

He said metering is good for the Discos but the challenge they are facing is the cost of procurement.

“With capped expenditure Discos will not be able to procure meters and yet expand it their network. So metering as proposed for solution is just one half of the issues. “ Meter Asset Providers (MAP), he said will remove the burden of Discos as far as meter is concerned, but is it going to collect the rev-

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

enue, he asked. He added that MAP would be successful depending on how it is structured.

Chiedu Ugbo, Managing director of Niger Delta Power Holding Company, who spoke on whether eligible customers will resolve the liquidity challenge in the industry, said his company has received applications from some industrial clusters that want to take advantage of the eligible customers policy. He said currently out of the 3000 megawatts of electricity generating capacity only 700 megawatts are being sent out to customers .

He however stated that his company is working with the Port Harcourt Electricity Distribution Company to service some eligible customers from Calabar Just as it is planning to do same for Alaoji, and Omotosho.

The NDPHC boss stated that the eligible customers or off takers must however give a guaranty of payment for at least three months as there is also guaranty for security of supply.

because of lack of distribution equipment, invest in the provision of the equipment and take power directly from GENCOs who had the power.

However, the development did not go down well with the DisCos who said over 60% of their revenue could be threatened when some of their choicest customers leave their networks and buy power directly from GenCos. “The DISCOs initially resisted and are currently giving reluctant co-operation to a policy meant to supply power to people they cannot supply,” Fashola said.

Many industry experts have hailed the declaration and see it as a way of effectively utilising power generated by the GenCos which the DisCos lack capacity to distribute.

However the implementation of Eligible Customer requires tweaking the EPSRA 2005 says Idowu Oyebanji, a chartered power system engineer from the UK. “The EPSRA 2005 needs to be updated to reflect the obligations of licensees in

relation to the declaration.

By extension, relevant Grid Codes (transmission and distribution codes), standards, manuals and policies have to be updated.

“Aside from these, it must be anticipated that some players will be involved in anti-competitive acts to frustrate the implementation of the Eligible Customer regime and so a separate code of practice is required to forestall this and facilitate the smooth transition into retail competition,” said Oyebanji.

According to Oyebanji, the code should be administered by a seasoned administrator who would review technical challenges arising from the implementation of the declaration, establish an independent connections providers (ICPs), and the entrenchment of the roles of licensed electricity traders, Independent Electricity Distribution Networks (IEDN), and other relevant groups or players that will facilitate retail competition within the Nigerian Electricity Supply Industry.

Lumos donates 100 Solar Systems in support of the Nigerian Army’s quest for innovative solutions

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s part of its commitment to Nigeria and efforts at impacting communities in which it does business, Lumos, Solar Power and off-grid solar home systems provider has donated 100 units of customized Solar Powered Systems to the Nigerian Army.

The presentation which took place at the Monguno Army Barracks, Borno State, was part of activities to mark the 2018 Nigerian Army day celebrations.

Speaking at the event, Ojoma Okotie, Sales Director, Lumos Nigeria, said, “today, we are proud to show our support for the men and women of the Nigerian Army through the donation of the fully functional systems; we hope that it will contribute in whatever small way to the operational effectiveness of our troops in different theatres of operations”.

Speaking on behalf of Houssam Azem, CEO Lumos Nigeria, she pointed out the obvious synergies between the Lumos Mobile electricity service and the mobility of a modern fighting force, such as the Nigerian army: “As a highly mobile and proficient force, we are excited that the noiseless, smokeless and solar powered systems could become part

and parcel of the Nigerian Army deployment kit going forward”, this is part of our ongoing Social investments into the communities where we do business, what better way to flag this off than by supporting our troops” said he.

Also commenting at the presentation ceremony, the Chief of Army Staff, Lt. General Tukur Buratai expressed his appreciation for the solar systems provided by Lumos Nigeria, while acknowledging the pivotal role of innovation in shaping the Nigerian army of today and indeed the future; also present at the event were the Chief of Defence Staff, General A.G Olonisakin, and the Governor of Borno.

The Lumos Mobile Solar System and Electricity service, which comes with a 5-year after-sales repair service, is already being used by about 90,000 subscribers, impacting close to 450,000, across Nigeria, in the process. The system has also been lauded for helping small businesses provide affordable electricity for their basic energy needs, saving them on their cost of running and fueling petrol generators while on the other hand, increasing their profitability because of being open for business for longer hours, cost efficiently.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378;

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Osibanjo, Wabote woo US investors for Nigerian Oil and Gas OLUSOLA BELLO

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he Vice President, Prof Yemi Osibanjo and the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote and other top Federal Government officials were at the Silicon Valley, California, USA to canvass for foreign direct investment in Nigeria to over 25 key international players in the Information Communication Technology (ICT) industry.

The main objective of the visit was to promote the ample investment opportunities in the country’s key sectors like ICT, Oil and Gas, Power, Agriculture, Solid Minerals etc. The delegation also highlighted Nigeria’s market size, entrepreneurial spirit, vibrant young demography, fiscal incentives for pioneer investments.

Wabote was invited on

Yuan Guangyu, chief executive efficer, China National Offshore Oil Corporation (CNOOC) with Victor Adeniran, chief operating officer (COO), Ventures, Nigerian National Petroleum Corporation during CNOOC’s visit to the NNPC Towers.

the trip to expantiate on the NCDMB’s strategies to deepen collaborations and sectorial linkages between the Oil and Gas Industry and the ICT sector.

The Executive Secretary

used the opportunity to discuss with top fund managers, sister agencies and the founders of the start-up companies on the Board’s focus areas in Research and Development and support

Application for power generating license now by competitive tender – NERC ISAAC ANYAOGU

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enceforth, applications for licenses to generate power in the Nigeria will be procured through competitive bidding according to new rules that the National Electricity Regulatory Commission (NERC) is proposing.

In a speech at the 2nd series of BusinessDay Future of Energy Conference held in Lagos today, the Commission said that it had issued over 100 licenses out of which 62 are for grid connected power but almost all were unsolicited. This means that investors make proposals and regulators issue licences when they meet conditions without considering their capacity to utilise them.

“But going forward, the competitive procurement regulation has been enacted by the Commission, therefore the Nigerian Bulk Electricity Trader (NBET) will now do competitive procurement for new generation and will be done taking cognisance of integrated planning study to know how much power we need, where and how will power be sourced, re-

newable or on grid,” said Olufunke Dinneh, general mgr, legal mgt and licensing who represented James Momoh, the Commission’s Vice Chairman.

The Commission said it will make certain that generation licences would actually be utilised and power generated would be bought that there is an offtaker as this will enhance investment decision and ensure licenses are used in the places where power is most needed.

“Now there are so many licenses and the certainty of off takers is absent, this has to change, this is why we think that competitive tender is important for the sector.” said Dinneh.

The commission also said that it has appointed the Japanese International Corporation to carry out a study of projected demand for electricity in Nigeria to know where there are critical needs and the best source of power that would be appropriate for the location before licenses are issued.

“It is important because it can help us do a forecast and integrated planning,” said Dinneh.

Experts agree that there was need to curtail the pen-

chant of unutilised licenses but it is also important to protect private investments.

“I think competitive procurement is a way to go, the market is ripe but there are also capacities out there and projects yet undeveloped, we need to mop those projects, treat them as stranded assets, so that the private sector who has made the investment do not lose, we must have a to protect private capital. There is need to ensure projects are not just started and abandoned, there should be bankable documents that will help to ensure this,” said Rumundaka Wonodi, CEO, ZKJ Energy Partners Ltd. The Commission also said that it is planning to tackle debts by government ministries and departments by providing meters to measure their exact consumption. It further said that it is providing a credit advance system that will allow deductions to settle electricity bill after appropriations have been made.

Debts by government ministries and departments after a recent audit showed that they are owning about N27billion according to the minister of Power, Works and Housing in a recent press release.

for companies domiciled in Nigeria. The Board has developed a pathway for developing research and development capabilities in the Nigerian Oil and Gas Industry and is partnering

with various local and international stakeholders on the initiatives it is pursuing in this regard.

About Nigerian 11 startup companies in innovation and technology had the op-

portunity to make presentations to the foreign investors on their business models and the support they require. The presentations covered the application of technology and innovation to address challenges in logistics, procurement, healthcare, financial services and insurance.

T h e V i c e P re s i d e n t thanked the investors for honoring the invitation and the Nigerian delegation for the efforts put into planning the event to make it a resounding success. The delegation also visited the offices of Google and Linkedin in the Silicon Valley.

Other key officials in the Nigerian delegation included the Hon Minister of Industries, Trade and Investment and the heads of Bank of Industry (BOI), Nigerian Investment Promotion Commission (NIPC), Nigerian Export Promotion Council (NEPC), Nigerian Film Corporation (NFC), and Nigerian Information Technology Development Agency (NITDA).

China Offshore Oil Company to Invest $3bn in Nigeria ... as Oil prices down on back of Libya supply OLUSOLA BELLO

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he Management of China National Offshore Oil Corporation (CNOOC) has expressed readiness to invest additional $3billion in its existing stakes in offshore oil and gas operations in the Nigerian jurisdiction.

Leading a team of CNOOC top executives to the corporate headquarters of the Nigerian National Petroleum Corporation (NNPC), Yuan Guangyu, Chief Executive Officer of the Beijing based corporation, described its investment in Nigeria as the most strategic and important overseas business undertaking.

Accoprding to a statement signed by Ndu Ughamadu, group general manager, Public Affairs Divison, CNOOC had invested over $14 billion in its Nigerian operations, even as he called on the management of the NNPC to seek common grounds of beneficial interest with CNOOC for enhanced productivity.

Yuan Guangyu said Nigeria remained the largest investment destination for CNOOC. Responding, Maikanti Baru, group managing Di-

rector of the NNPC, who was represented by Victor Babatunde Adeniran, Chief Operating Officer (COO), Ventures Autonomous Business Unit of the corporation, thanked CNOOC for its interest in the Nigerian Oil and Gas Industry.

He said the corporation was open to new investments and would foster meaningful and mutually beneficial relations with credible entities like CNOOC. Founded in 1982, the China National Offshore Oil Corporation is one of the three big Chinese national oil entities. CNOOC is originally focused on offshore upstream exploration and production, whereas the China National Petroleum Corporation (CNPC) is slanted towards onshore upstream exploration and production. SINOPEC, the third of the tripod, is focused on refining and marketing.

Meanwhile, Oil prices have climbed over the last few weeks in large part because nearly 700,000 barrels per day (bpd) was shut down in Libya. However, that changed last week when the National Oil Corp. moved to lift force majeure on several export terminals, and said that it would begin restoring the disrupted

supply.

Oil prices fell sharply on the news, declining by more than 6 percent last week.

Meanwhile OPEC and its allies said they could boost oil production by more than the 1 million barrels a day agreed last month if needed, Russia’s Energy Minister Alexander Novak said.

“I can’t rule out that if there is a need for more than 1 million barrels we will be able to quickly discuss it all together and make all necessary decisions,” Novak told reporters in Moscow weekend. The producers have “all needed tools,” if necessary, he said.

Oil prices have remained near their highest in more than three years despite pledges by Russia, Saudi Arabia and their allies last month to boost production.

Supplies are being strained by deepening losses in Venezuela, erratic flows from Libya and the prospect of renewed U.S. sanctions on Iran which could curb its exports.

Novak didn’t comment on whether he discussed in detail the option of raising supply by more than the agreed amount with his Saudi Arabian counterpart Khalid Al-Falih during their phone conversation earlier this month.

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In association with

FDSH Asset management outperforms Union Homes, Skye Shelter Funds in H1 2018 ENDURANCE OKAFOR & OGHOGHO EDOSONWAN

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u s i n e s s D a y ’s Half year (H1) analysis of the real estate fund which has only three listed funds on the Security and Exchange Commission (SEC), shows that FSDH Asset Management Limited managing UPDC Real Estate Investment Fund outperformed other real estate fund managers.

The fund recorded a 0.6 percent increase in unit price from 11.84 in December 29, 2017 to 11.91 in June 22, 2018.

Explaining why UPDC had an increase in its unit price in the period reviewed by BusinessDay, industry experts cited the funds asset investment in real estate.

“This can be linked to the fund’s asset investment which are directly put into the real estate sector, like in properties and land,” an analyst who preferred to be quoted on condition of anonymity said.

Meanwhile, data compiled from the Bloomberg terminal showed that UPDC investment trust invests, at least, 75 percent of its assets directly in quality real estate in strategic locations across Nigeria.

This left SFS Capital Nigeria Limited managing both Skye Shelter Fund and Union Homes REITS in a down ward trajectory as they both recorded decline in their various unit price, as compiled from BusinessDay analysis.

Skye Shelter Fund had a 5-percent decrease in unit price from 100 to 95, while Union Homes REITS had a decrease of 0.04 percent from 45.22 to 45.20 both in the period under review.

Real estate funds, as indicated by their name, are special shares funds investing in good-quality real estate, either directly or via real estate companies.

An analyst contacted on why the two funds had decline in their unit price

said it only shows the negative performance of the real estate sector as a whole.

He, however, gave a hint that if the funds make a lot of asset investments, their performance in relation to their unit price will likely improve.

According to the report by the National Bureau of Statistics (NBS), the fourth successive quarter expansion of the Nigeria economy in the first quarter of 2018 was not inclusive enough to rub off on the real estate sector, as it was further deep into recession in the quarter.

The real estate sector contracted by -9.40 percent in Q1 2018 from -5.92 percent in Q4 2017 and -4.12 percent in Q3 2017.

The quarter’s contraction was -6.3 percentage points worse than the -3.10 percent reported in the comparable period of 2017.

According to a market survey, the real estate fund had the second largest share of the total Nigerian collective investment scheme, owning 7.73 percent, as at June 22, 2018.

Although, the Skye Shelter Fund had its Net Asset Value increased from

N2.3 billion to N2.4 billion, showing a 3-percent increase. Its share of the real estate fund also increased from 5.08 to 5.19 in the same period.

Similarly, Union Homes REITS, had its Net Asset Value increased by 0.98 percent from N12.6 billion to 12.8 billion. Its share of the market also increased from 27.20 percent to 27.26 percent in the period under review.

Meanwhile, UPDC Real Estate Investment Fund which is managed by FSDH Asset management had the highest share of the real estate investment fund, owning 67.55 percent. Its Net Asset Value also increased from N31.5 billion to N31.7billion in the period under review.

REITs are corporations or trusts that use the funds of many investors to purchase and manage income property and/or mortgage loans. It is traded on the Nigerian Stock Exchange (NSE) just like shares.

REITs offer tax advantages to investors and provide a liquid way to invest in real estate, which is an otherwise illiquid market.

Another benefit of REITs

is that they allow investors to share in non-residential properties like hotels, shopping complexes, malls, and industrial properties.

Also, REITs require no minimum investment and do not necessarily increase and decrease in value along with the broader market.

However, they pay dividends no matter how the shares perform.

In Nigeria, REITs are highly successful and provide less risky investment option in real estate to both small and big investors, regular and dependable income to the unit holders and attraction of massive Foreign Direct Investment (FDI) in the real estate sector.

It enjoys pockets of tax exemptions that attract investors and fund managers such as exemptions of investors from withholding taxes (WHT) as well as Value Added Tax (VAT) and Capital Gains Tax (CGT) on sales of these units or securities.

Real Estate Investment Trusts in Nigeria come from the Investment and Securities Act defining REITs as a kind of Collective Investment Scheme (CIS).

More troubles for housing market as developers forfeit Safetower Estate CHUKA UROKO

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t a time when the housing market is grappling with supply-demand imbalance, two collaborating developers have forfeited their multi-billion naira Safetower Estate project located at Ikate, Lekki, Lagos, following the order of a Federal High Court sitting in Lagos.

The 16 units of 3-bedroom apartments and two units of 5-bedroom Pent duplexes project, standing on three blocks of high rise buildings, was being developed and promoted

by Safetrust Mortgage Bank Limited and Macbosh Properties Limited.

The project was expected to be delivered within 24 months which would have made a significant addition to housing stock in Lekki axis, improved home ownership level and reduced the housing demand-supply gap in Lagos estimated at three million units.

But that dream has been dashed by an interim forfeiture of the project made

by Justice Sule Hassan on Wednesday last week following an ex-parte application filed by Nkereuwem Anana, counsel to the Economic and Financial Crimes Commission (EFCC).

In the ex-parte originating summons, the anti-graft agency has sought for an interim order forfeiting the parcel of land measuring 50027,147 square metres, situate lying and being of Lekki Pennisula Scheme, known and described as Block 116, Plot 3, Ikate Ancient City, Etiosa local council Lagos State in Survey Plan No BAS258/2013/130-1, pending the conclusion of investigation and prosecution.

The EFCC predicated its prayer on the ground that the court has the statutory powers under the provisions of sections 24, 28 of the EFCC Act 2004, Section 44 (2) (k) of the constitution of the Federal Republic of Nigeria and under the inherent jurisdiction of the court to forfeit property that is a subject of fraud or connected thereto.

According to the EFCC, the property sought to be attached are reasonably suspected and traceable to be

connected to economic and financial crimes. The application was supported with 19 –paragraph affidavit deposed to by one Isaac Gong, an investigative officer of the EFCC. In the suit, EFCC named Akintayo Oloko, Macbosh Properties Limited and Safetrust Mortgage Bank Limited as first, second and third respondents respectively. Oloko is the managing director of Safetrust.

In the affidavit, Gong contended that he was part of the team of operatives of the applicant assigned with the responsibility of conducting investigation on a petition received by the commission showing that the respondents herein are in possession of properties used in defrauding the victim.

He averred that upon the receipt of the said petition, same was analysed and found worthy of investigation. The EFCC contended that the petition itself revealed that Safetrust Mortgage Bank Limited proposed to construct three high-rise buildings to be delivered in 24 months.

According to EFCC, the third respondent thereafter offered to sell one of the high rise buildings to the victim, Kunle Ogunmefun at an agreed sum of N710 million. EFCC also averred that a non-disclosure agreement was thereafter executed between the victim and Macbosh Properties Limited on the understanding that Macbosh is an agent of the third respondent.

It was also the submission of the EFCC that the victim made a total deposit payment of the sum of N550 million with the understanding that the property will be delivered within the specified period of 24months from the date of the execution of the memorandum of understanding.

The EFCC stressed that after the victim made the payment to the 3rd respondent, the 3rd respondent till date refused to deliver the said property to the victim as agreed. According to the anti-graft agency, further investigation revealed that the third respondent was indebted to Sterling bank Plc and so obtained from the victim to settle its debt with Sterling Bank Plc.

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How real estate can make agribusiness more attractive to young entrepreneurs Stories by CHUKA UROKO

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radually but steadily, agriculture is becoming a sector of Nigeria’s economy to beat because of the business side being introduced into it and also for the special interest being shown in it by the federal government which sees it as a viable option to oil.

When oil was discovered in commercial quantity in Nigeria in the early 1970s, the regional policy that encouraged large scale farming and commodity competitive advantage between the three regions were abandoned as the country’s economic mainstay.

Traditionally, agriculture is the core base of the Nigerian economy, contributing 25.08 percent to the GDP in 2017; it is major source of livelihood for most Nigerians and a major employer of labour, accounting for over percent of the country’s labour force.

The sector is also contributes inputs to the processing sectors, and is a good foreign exchange earner for the economy.

The story of agriculture in Nigeria has, indeed, changed.

Ezekiel Oseni, chief risk officer, Bank of Industry (BoI), Lagos Nigeria, notes that, before now, the only professionals that went into farming were the military officers who did so after retirement.

“Now we see young graduates of various disciplines in agri-business, not really for want of jobs, but knowing that agriculture is where the fortune of gold lies”, added Oseni who spoke on ‘Agriculture Business And Real Estate: The Nexus And Value Chain’ at an economic summit organised by the Lagos State Branch of the Nigerian Institution of

L–R: Ahmed Dangiwa, MD/CEO, Federal Mortgage Bank Nigeria (FMBN); Bola Adeeko, Head, Shared Services Division, Nigerian Stock Exchange (NSE); Adewale Adeeyo, chairman, FMBN; Rahimatu Aminu-Aliyu, ED, Loans & Mortgage Services, FMBN; and Eucharia Alozie, Non-Executive Director, FMBN, at the closing gong ceremony at the NSE in Lagos recently.

Estate Surveyors and Valuers (NIESV).

Oseni sees a nexus between real estate and agriculture, especially in their value chain, pointing out that real estate has the capacity to make agriculture more attractive to young entrepreneurs and professionals.

“Real estate in Nigeria has been described as very lucrative and profitable. It has assisted in providing decent accommodation, improving land values, escalating development beyond the normal pace and contributing to the aesthetic views of some areas”, he explained.

In many ways, real estate can be used to solve some of the challenges facing agricbusiness in Nigeria just as it boost agribusiness and also its own sector. The partnership of both sectors can only be a win-win situation for each of them and also for the economy.

The real estate sector offers services and products which agribusiness benefits from and these include residential properties; non- residential properties (malls contributing to the retail sector); silo and

warehouse facilities; property management, among other services. “The least rendered and patronized of all the services and products are the silo and warehouse facilities”, Oseni pointed out.

The sector is however not without challenges which have to do with access to funding for developers to fund projects; inability of individuals to obtain mortgage facilities to acquire properties. There is also the issue of tedious legal procedures to acquire land and complete the process of obtaining title documents coupled with the challenges in obtaining Governor’s Consent to rate the property as legal mortgage to secure loan facilities.

Despite these challenges, real estate can still make agribusiness attractive in the area of valuation of farmland and the crops, insurance, lease, sale etc. It can provide farm houses; farm stores and warehouses in strategic locations within and outside the farm locations.

The sector can also aid agriculture through the provision of machinery sheds, livestock facilities, industrial

parks, silos, turnkey factories, fresh farm produce shopping malls, modern market stores, modern school buildings for framers kids.

Investors in agric business would need to know from the real estate service providers the value of the property and its income generating potentials; the number, size and condition of any building and items of equipment on the property; the size of the farm and its proximity to market.

The investors would also be made to know available amenities in the community the farm is located such as schools, hospitals, shopping malls, and agricultural input suppliers, just as they the investors would like to know existing government regulation over the land usage.

There is a number of positive impact of collaborations between real estate and agric business which Oseni says they have multiplier effects on the core businesses and across their value chain. “Agric business value chain will benefit tool and implement manufacturers, farm inputs, logistics service providers, and funding providers.

Infrastructure Maintenance With TUNDE OBILEYE Ways to achieve successful preventive maintenance programme

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reventive maintenance can be described as regular or routine maintenance to help keep equipment up and running. It prevents any unplanned downtime and expensive cost from unanticipated equipment failure. It requires careful planning and scheduling of maintenance before there is an actual problem as well as keeping accurate records of past inspections and servicing reports.

Preventive maintenance can be complex particularly where a lot of equipment is involved. It is more than simply performing routine maintenance; it also involves maintaining accurate records of every inspection and servicing.

Preventive maintenance has always created a discussion on the best approach to it with many facilities managers having diverse opinions. However, today’s article attempts to give some tips for successful preventive maintenance.

The first tip is to change the culture. Facilities managers need to create a workplace of strong accountability and discipline. Often times, we tend to perform effective preventive maintenance of what belongs to us but struggle to do the same when it comes to our professional work, thinking it is a waste of time.

The second one is to maintain an agreed schedule. Facilities managers should keep to an agreed schedule by not cancelling or allowing a late preventive maintenance procedure.

Establishing simple goals for the programme should be the starting point with

the goals raised gradually over time. To ensure the goals are achieved, facilities managers should link such goals to the annual performance appraisal of their staff and reward good performances with a bonus.

The third tip is to develop a dedicated preventive maintenance team with part of their work plan attached to preventive maintenance procedures. This will prevent technicians from being assigned to emergency or reactive work.

The fourth tip is to develop performance measures for the process. This is to ensure that the highest percentage of work carried out is in the area of preventive maintenance. This goal is very achievable if discipline and accountability are attached to it.

The fifth tip is to depend on data. Facilities managers with information can use it to motivate their staff to ensure a well-run preventive maintenance program. Providing the technicians with information on labour and parts costs together with cost of downtime that shows emergency or reactive work cost much more should be enough motivation for the maintenance team to establish an effective preventive maintenance programme.

Showing sustained discipline and accountability are components that will help in ensuring a successful preventive maintenance programme.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Surging shoreline erosion puts lives, properties in coastal communities at risk

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ives and properties in coastal communities, especially those living in areas around Alpha Beach, Okun Alfa and Lafiaji in Lagos, are presently at risk of being wiped away by surging shoreline erosion caused by rising water levels in the surrounding seas and Lagoons.

Besides changing climatic conditions which is wreaking havoc in various ways around the world, man’s development activities are also contributing a great deal to rising water level as such activities which, most times, involve land reclamation from the sea, push water bodies towards the shoreline.

Before land reclamation from the Atlantic Ocean in Lagos for the development of Eko Atlantic City, there was seasonal flooding that

gradually eroded the Bar Beach shoreline, narrowing the Ahmed Bello Bello Way and putting properties and businesses in Victoria Island at great risk.

The flooding and erosion of this shoreline was, according to environmentalists, caused by the construction of the Apapa ports which pushed the Atlantic Ocean waters westwards.

Though the construction of Eko Atlantic City has saved Victoria Island from being wiped away, the land reclamation in the city has forced water flow eastwards and the frequent flooding incident along that axis could be attributed to the development of the city.

Before now, coastal communities like IgboEfon,Okun-Ajah, Okun-Alfa, Lafiaji which were about 13,000 metres from the

Kuramo waters had no fear of coastal erosion, but that is no longer so. In one of these communities, there was a road along the shoreline.

Today, the road has been completely washed away.

As part of its advocacy campaign, the Nigerian Conservation Foundation (NCF) has raised concerns, warning of possible disastrous consequences if the erosion is allowed to continue unchecked by the governments.

Ede Dafinone, chairman of the Foundation, disclosed at a press conference addressed to draw attention to the ugly developments in the coastal communities that the Lagos State Government had started marking efforts at checking the erosion surge by constructing groins along the shorelines.

But these efforts, accord-

ing to him, are not enough, hence the call on the Federal Government to join hands with the state government to protect, not just lives and properties in the coastal communities, but also the wider economy for which coastal erosion has grave implications.

This call is in tune with the warning from the World Bank which says the cost of climate change-related flood damage around the world could rise $1 trillion a year if coastal cities do not adapt to the impact of changing climatic conditions.

In its quantification of present and future flood losses in the world’s 136 largest coastal cities, the bank notes that there are 10 cities at risk of flooding as climate change causes sea levels to rise, pointing out that five of this number is

more vulnerable in terms of the overall cost of damage.

“Coastal cities face a high risk from increasingly costly flooding as sea levels rise amid climate change. Their current defenses will not be enough as the water level rises,” the bank warns, forecasting that average global flood losses will multiply from $6 billion per city in 2005 to $52 billion a year by 2050 with just socioeconomic factors such as increasing population and property values taken into account.

Desmond Majekodunmi, a member of the NCF council, emphasized that it was the responsibility of the Federal Government to protect the shorelines as it is done in other parts of the world. “10 metres of the shoreline has been lost in just six months this year

which makes FG’s intervention to avert the impending disaster very urgent”, he stated.

Earlier, Muhtari AminuKano, the foundation’s director general, had described the shoreline erosion as an “emerging emergency”, calling on the FG to support the efforts of the Lagos State government and the NCF at containing the erosion to avert the impending but avoidable disasters.

He recalled that the first protective efforts at checking the erosion of the shoreline was done by the colonial masters which dates back to when the Apapa ports were constructed. He stressed that the time to take action was today, noting that just between April 14 to July 6, 2018, 22 metres of erosion happened in Okun Alfa to Lafiaji.

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STRATEGYBRIEFING IDEAS THAT POWER HIGH PERFORMANCE

The worst strategic error in business BRIAN REUBEN

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usiness leaders generally agree on the need for strategy. No business can survive without one because no matter how turbulent and intensively competitive an industry might be, the firm with the right strategies will always have superior results. Performing on top of the market requires a firm grip on strategy.

Sadly most executives are confused about strategy. They don’t know what it is. As I travel and interact with executives, I find one passion burning in the heart of many of them. I’ve seen them express it with intense passion, I’ve watched them blame everything from the government policies to climatic conditions to anything conceivable as being the limiting factor behind their inability to reach this goal.

What is the goal? The drive to be the best company or business in their industry. This is the competitive focus of many companies.

It’s not hard to know why. The society rewards ‘best’. We are conversant with phrases like, ‘the best graduating student’, ‘the best footballer’, ‘the best staff of the month’ etc. So we try to be the best bank, the best insurance company, the best school, the best furniture company.

Unfortunately that’s the wrong competitive focus because in the very first instance, there is no such thing as a ‘best’ company! There is no best car, no best bank, no best restaurant because a company could be best or otherwise depending on the need of the person accessing their products or services. What works for Charles may not work for Seyi. What works for Amara may not work for Zain. That’s just the way it is.

Superior performing companies don’t focus on been the best company. Consider the automobile giant, Toyota. Toyota’s competitive focus is ensuring that their products meet the highest expectations of the market and even exceed it . the Toyota production system strive for the absolute elimination of waste , overburden and imbalance in all areas to ensure smooth and efficient operations. Going the extra mile for them means providing customers with the highest quality vehicles , at lowest possible cost , in a timely manner with the shortest possible lead times. This defined their uniqueness. It emphasizes what make Toyota cars unique. You can get a good car at a low cost. Toyota is a unique car but by all means not the best car because there is no best car.

All superior performing cars follow the same path, their focus

is on being unique, not being the best. They focus on a segment of the market or may be on the whole market but with a unique offering.

It is this uniqueness that gives them a competitive advantage. The worst competitive error is to compete on being the best. You can’t be all things to all people and expect to be a superior performer. Competing on being the best can at best keep you struggling along with others.

You see behind the drive to be the best is the assumption that there is a best already which you intend to take out. Apparently there will always be a market leader in every industry. But one thing to understand is that market leadership is a result of offering unique value to the market. It is a natural consequence of a unique value clearly communicated to the right market. Of course this presents a question, which market is the right one? Well the right market is that whose needs fits best into the offering targeted at them. So they buy not because you have to sale but because they need to buy. Take the Swedish furniture company, IKEA for instance. People on budget buy from them not because IKEA wants to sale but because IKEA offers them the chance of owning good furniture at a low cost. The reason Honda could not capture the Indian

tricycle market even though it has a respected brand and may be better quality than local rival, Bajaj was simple: Bajaj configured its offering in a way its most beneficial to the Indian user. Honda had a good product and a respected brand but they lacked one key thing in their fight for the Indian marketunderstanding of what the ideal Indian customer wants in a tricycle.

Strong, reliable didn’t matter to the Indian user as easy availability of repair service and spare parts.

That’s was the Bajaj promise; that was why they won the Indian market and forced Honda out.

This case is of a particular attention because it demostrates that a small local company in an emerging market can successfully root out a global force or at least control a share of the market. Of course that’s the importance of very purpose of strategy. If market situation is such that nothing stands

between you and your customer then there would have been no need for strategy.

So as the fight for market share intensifies in every industry, understand that if you are going to control the market you will need to rethink your assumptions about strategy and what it means to be strategic.

Strategic effectiveness begins by having a clear idea of your your customer, his needs and his constraints. Then you configure your product, its distribution and ownership in a way this customer finds it most useful while of course considering your chance of making a profit. Begin by identifying unmet needs you can take care of. There’s no way around it. You’re either going to meet the needs of the people in a whole new way or meet needs nobody cares to take care of. That’s what will give you the market leading position you desire. Yet there’s much more.

Brian is an author, advisor to business leaders, keynote speaker and an entrepreneur. He has trained and advised senior executives at renowned organizations including Africa Reinsurance Corporation, UAC, United Securities Limited, BusinessDay among others.

Brian is the Director of BusinessDay Training and sits on the board of a number of organizations in Africa.

This Page Is Open For Sponsorship, for details call 0708 234 5251.

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‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

Seplat PDC Plc: Resurrection of the oil major …Revenue hits five year high of $180.58 million BALA AUGIE

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eplat Petroleum Development Corporation Company (Seplat) Plc has just released its first quarter financial statement that showed improvement in key ratios as the firm reverted to the path of profitability after the sudden drop in crude oil price had squeezed earnings.

Investors shouldn’t fret about the financial health of the upstream oil and gas giant as an improvement in free cash flow means the firm can undertake all project with a positive net present value while dividend payments are guaranteed.

The strong financial position of the oil major validates management’s conservative strategy as they trimmed capital expenditure spend (CAPEX), a strategic decision that helped underpin free cash flow generation.

Higher oil price, favourable operating environment, underpins earnings Seplat’s revenue for the first three months through March 2018 stood at $180.58 million, this compares with $146.21 million recorded in the corresponding period of 2014.

Crude oil sales stood at $141.03 million in March 2018, this compares to the $120.08 million recorded in 2014. Revenue from gas stood at $39.55 million in March 2018, from $4.09 million recorded in 2014.

The uptick at the top line (revenue) was largely driven by a rebound in crude oil price and output and the relative peace in the Niger Delta region.

Sales were beaten down in the first quarters of 2016 and 2017 due to the shut in and suspension of oil exports that resulted in loss of production, and a drop in crude oil price.

The leading Nigerian independent oil and gas exploration and production company’s average total working interest production for the first three months of 2016 stood at 34,179 boepd, down 5 percent year-on-year.

Seplat recorded a profit after tax of $20.655 million at March 2018, the first impressive performance at the bottom line in 3 years.

Pretax profit was $58.81

million in March 2018, from a loss of $ $18.81 million recorded the previous year.

Operating profit otherwise known as Earnings before interest and tax (EBIT) was $83.77 million in March 2018 from a loss of $1.34 million recorded in the previous year.

The company is able to efficiently manage direct costs attributable to projects as evidenced in improved margins and in gross profit growth.

Gross profit stood at $92.86 million in March 2018, as against $29.63 million recorded in the 2016, thanks to consistent revenue growth and reduction in operating costs.

Gross profit margin stood at 51.42 percent in 2018, the highest since 2016. In other words, Seplat earns $51 on the dollar in gross margin.

An improvement in margins means the firm has enough money left after accounting for the cost of goods sold (COSG).

Seplat is able to turn each Naira invested in sales into higher profit as net profit margin improbed to 11.38 percent in march 2018 as against a (40.40 percent) recorded the previous year.

Leverage ratios improve on debt reduction Seplat’s leverage ratios have been improving since 2015 as management of the firm continues to intensify its debt refinancing strategies.

The oil major successfully refinanced existing $300 million revolving credit facility (“RCF”) with a new four year $300 million RCF at LIBOR + 6 percent; debut $350 million bond issue priced at 9.25 percent.

It also added that proceeds from re-financing were used to repay and cancel pre-existing indebtedness; it also settled cash of $75 million crude oil prepayments undertaken during the extended period of force majeure in 2016 and 2017.

Seplat’s interest coverage ratio is 3.17 times earnings; in other words, the company has enough money to pay interest expense.

The lower the ratio, the more the company is burdened by debt expense. When a company interest leverage ratio is only 1.50 or lower, its ability to meet interest expenses may be questionable.

Seplat’s debt to equity (D/E)

ratio fell to 35.29 percent in March 2018, the lowest since the all time high of 139.18 percent in 2015. A lower ratios means a firm is less susceptible to financial risk.

Total debt (short and long term) $536.43 million in March, this compares with $1.03 trillion recorded in 2015.

Valuation and share price Seplat share price have gained 40.10 percent since last year while it has a price to earnings ratio of 3.32 times earnings. Price to sales ratio is 1.72 times, signaling improved leverage ratio.

“We have made a good start to 2018. Our core production base remains strong and predictable, the gas business has once again set a new

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)

record for quarterly revenue contribution and the steps we took to refinance the balance sheet have significantly strengthened our liquidity position and will allow investments to be scaled up,” said Austin Avuru, Seplat’s Chief Executive Officer.

“Our debut bond issuance marks another key milestone for the Company, widening our long term capital base in support of our growth strategy while also reducing overall borrowing costs. Looking ahead we will return to drilling in the second half of the year as we re-focus our efforts on the numerous high-margin and short-cycle cash return opportunities we have in our portfolio,” said Avuru.

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Live @ The Stock Exchange Transcorp H1’18 results show pre-tax profit up by 164% Stories by Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) on Monday released the half year (H1) unaudited financial results for Transnational Corporations of Nigeria Plc (Transcorp) with impressive growth across top-to-bottom line numbers.

The company which recorded an impressive improvement within the last six months of opera-

tions achieved revenue growth of 58.3percent, to N54.089billion as against N34.173billion in H1’2017. Also, Transcorp reported PBT growth of 164percent compared to same period in previous year.

PBT stood high at N11.944billion from N4.532billion in H1’17.

The company’s current share price is N1.23, from a 52-week high of N2.80 and 52-week low of N1.15. Transcorp market cap is N49.997billion with shares outstanding

of 40.647billion units.

The company’s profit after tax (PAT) of N10.875billion in H1’18 against N4.163billion in H1’2017 represents increase by 161.2percent.

Shareholders’ Fund recorded a 14.3percent to N105.866billion in H1’18 from N92.661billion in H1’17. Earnings Per Share (EPS) (Kobo) increased by 199.74percent to 11.60, from 3.87.

Return-on Equity (ROE) increased to 10.27percent from 4.49percent in H1’17.

SEC restates commitment to robust capital market

N

igeria’s Securities and Exchange Commission (SEC ) has restated its commitment to collaborate with relevant stakeholders to further develop and deepen the capital market.

Mary Uduk, acting Director General, Securities and Exchange Commission said this when members of the Association of Stockbroking Houses of Nigeria (ASHON) met with management of the SEC in Abuja, weekend.

The acting DG noted that a well-functioning capital market was essential to Nigeria’s economic development, and to realise its full potential, the country must have a world class capital market that is strong, sustainable, effective, and plays a central role in economic development.

According to her, the SEC is open to suggestions and actions that would make the Capital Market vibrant but however added that such collaborative efforts would be with associations and persons that are fit and proper to operate in the market.

She said the SEC is willing to collaborate with the association to lift the market and re-position it among leading capital markets that meet international standards and best practices.

Uduk commended members of the group on their efforts so far in deepening the market especially for their support towards the financial literacy campaign of the SEC and assured them of the readiness of the SEC to continue to work with them.

“It is good that we work together to take our capital

market to the height we want it to attain. We are ready to engage with you to give us clarity on several issues relating to the market. We are open to discussions that will benefit the market, the market is the most important in all our engagements”, she said.

Patrick Ezeagu, chairman of ASHON pledged the commitment of the group to the growth of the capital market adding that whatever is done to make the market work is of concern to the association. “We have always worked with SEC and will continue to do so and accord you all the cooperation you require to succeed,” Ezeagu said.

On financial literacy, the ASHON chairman said the group will continue to collaborate in every way possible to reach financial illiterates in the country.

SEC takes e-dividend enlightenment to South-South

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n a move to further enlighten investors and the general public on the process and benefits of e-Dividend and to discuss other contemporary issues in the Nigerian Capital Market, the Securities and Exchange Commission (SEC), Nigeria through its Port Harcourt Zonal Office will be holding a Town Hall meeting with stakeholders and the general public.

This will also provide an opportunity to throw more highlights on investment opportunities available in Nigerian Capital market and how retail investors can benefit therein.

The meeting is scheduled for Wednesday, July 18, 2018 at Hall ‘C’, Landmark Hotel, 4, No. 4, Worlu Street, off Olu-Obasanjo Road, Port Harcourt, Rivers

State. Registration of participants starts by 9:00amwhile the main event starts at 10:00am.

The event will create an arena for the Apex capital market regulator to educate and enlighten the public on the above subject and also for operators, stakeholders and various investors to interact and discuss other issues surrounding the activities of the capital market.

Recall that the SEC in January 2015 commenced the e-dividend registration campaign in Abuja with a Road Show culminating in a Town Hall Meeting.

The Commission had announced that the e-dividend registration would continue seamlessly in spite of the expiration of free registration deadline which and also enjoined investors yet

to enroll, to continue with the registration at a cost of N150 only.

“Investors should continue to approach their banks or registrars, as usual, to seamlessly mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 would not be demanded from them at the point of registration.

“The N150 fee would not be demanded from the investors at the point of registration or submission of completed e-dividend mandate forms, divergent views have begun to trail the Commission’s stance that investors yet to register are to bankroll the exercise at a marginal cost of N150” the SEC added.

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How Baru is shaping a bright future for Nigeria’s oil and gas BASHIR IBRAHIM HASSAN

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etrol queues have become a thing of the past” the Managing Director/CEO of Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Kacalla Baru, reminded Nigerians during his keynote address at the recently concluded 2018 Nigeria Oil & Gas (NOG) Conference. But Nigerians will not forget easily how forlorn we became in the face of the horrifying ordeals of long petrol queues they have had to endure every time they wanted to fill their tanks some months ago.

My wonder is how many of us have cared to find out how the NNPC achieved the remarkable feat of resolving the crisis and who was the brain behind it?

The almost miraculous disappearance of the debilitating long queues was just a fraction of the numerous of achievements that NNPC has recorded in recent times.

But it is one every Nigerian can connect with.

It is down to the leadership of Dr. Baru, a first class graduate of Mechanical Engineering from Ahmadu Bello University, Zaria. The success story began from that point in October 2017 when NNPC effectively became the sole importer of petroleum motor spirit (PMS) into Nigeria, when the Oil Marketing Companies (OMCs) could not import due to the Open Market Price being much higher than the N145/ litre official selling price.

This situation cropped up as Naira exchange rate depreciated from N285/US$1 to N315/US$1.

This arose from increase in crude oil prices with the corresponding exponential rise in products’ prices, which combined to escalate the open market price of PMS. It became unprofitable for OMCs to import petrol and sell at N145 per litre. But with the benefit of hindsight, now, I am sure most Nigerians will prefer that NNPC remain the sole importer of PMS if that is what it takes to extricate Nigerians from the maze of negative multiplier effects of fuel scarcity.

The situation was exacerbated by unpatriotic elements in the oil industry—the hoarders and the oil subsidy scammers put out of business by the Buhari regime. In their folly they waited in vain for petrol price increases that never materialized. With a 60% increase in the pump price (from N87.5 to N145) only the previous year (2016), President Buhari mercifullyreasoned that Nigerians did not deserve another regime of price hike. So he dug his feet and tasked Barus to find a solution.

Cool, analytical, disciplined is how one acquaintance of Dr. Baru has described him. It is difficult to argue with this characterization. He navigates his ways around the complexity of NNPC multi-layer structure with ease, making decisions based on facts, and leveraging on his long years of experience working in key subsidiaries of NNPC.NNPC under his leadership successfully

Maikanti Baru

overcame the fuel shortage through the novel Direct Sales of crude oil and Direct Purchase (DSDP) of refined petroleum products scheme.

The corporation also stabilized the downstream sector, re-streaming critical distribution facilities like the Atlas Cove – Mosimi line, Port Harcourt-Aba line and the Kaduna – Kano line. Nigerians gratefully heaved a sigh of relief when the crisis was dramatically resolved. The solution, even if temporarily, has worked, while plans are afoot to revamp the refineries.

The revitalization of the refineries will in involve all the four (4) existing local refineries being financed with private capital under the Contractor-Financed model.

This will be within the commercial framework for midstream investment in Nigeria. With this model the strategic investors is expected to bring refining expertise and funding and partners with local partners who have downstream experience to actually go into the refineries. The investor brings money and within 24 months gets the refineries to achieve 90 per cent capacity utilization.

Within the new model, investors would be repaid from incremental production of the refineries on prior agreed terms.

If not for the strict adherence by our mass media to the classic definition of news as “Dog bites man” is not news; “Man bites dog” is news, our news outlets should be awash with news from NNPC due to the several milestones the corporation is achieving day by day.

Capitalising on global rebound

of oil prices, for example, NNPC has taken initiatives that would spur growth in the oil and gas industry, attract investment and provide returns to investors, ensure sustainable development and stability in the national economy.

This can be seen in the way the NNPC management under Dr. Baru has undertaken a paradigm shift in its business model to ensure that it attracts capital and sustain flow of investment outside traditional government funding.

Thus, in 2017 alone, the NNPC signed three funding arrangements of about $2.5Billion, namely: NNPC/ SPDC JV ($1Billion)- Project Santolina; NNPC/CNL JV ($780Million)Project Falcon; and NNPC/First E&P JV and Schlumberger ($700Million).

These three funding arrangements are expected to increase combined production of crude oil and condensate by 150,000bopd and

Dr. Baru’s journey to the top position in NNPC was purely merited. He had the benefits of working in both the oil and gas sectors

618MMscfd of gas with a combined Government-take of about $32Billion over the life of the projects.

This was not achieved without strategic thinking and planning.

Despite the biting recession the country is undergoing, Dr. Baru and his team realized the need to sustain confidence of the corporations’ joint venture partners to stay in the country during the difficult times. To engender this confidence the corporation undertook to settle all outstanding cash call arrears, which were successfully negotiated to $5.1Billion from $6.8Billion. This singular act restored confidence in the Nigerian Oil and Gas Industry and also encouraged the existing players in the industry particularly the traditional JV partners. This is the kind of result that comes out someone who knows the ropes.

It was on record that Dr. Baru, , who earned his Ph.D in Mechanical Engineering from Sussex University, UK, served in National Petroleum Investment Management Services (NAPIMS), a lucrative subsidiary of NNPC as the Manager Gas Department for four years. In 1997, he was appointed General Manager, Gas Development Division and during his stewardship of the Joint Venture Gas Projects, they were able to save over $575 million. That record was a repeat of an earlier rare display of honesty, transparency and accountability. When he became the Manager, Operations of Procurement Management Services (PROMAS) from 1991-1993, he saved the Corporation over $70 million in six months of operation.

No wonder Baru was at one time the anti-corruption Czar of the NNPC. And no wonder, professionalism and accountability and enhanced staff welfare found their pride of place in NNPC 12 business areas (BAFU).

Two other business focus areas of the NNPC have to do with Gas Development and Oil and Gas Infrastructure. Again, here Dr. Baru’s NNPC has recorded significant milestones. The corporation has been able to increase gas supply to power plants and industries in the country, through repairs of critical infrastructures and reactivation of shut down gas plants. All these have resulted in the doubling of domestic gas supply from an average of 700 mmscfd in June 2016 to 1,500 mmscfd currently. It has also completed and commissioned almost 600 km of new gas pipelines thereby connecting all existing power plants to permanent gas supply pipelines.

Dr. Baru’s experience of the gas sector dates back to July 1999 when he was appointed as the Executive Director, Operations, of the Nigerian Gas Company, Warri, where he was responsible for the smooth operation of all the facilities in the Nigerian Gas Company. He ensured uninterrupted gas supply to such big-time customers as NEPA. He left this position in 2004 and was appointed as the Managing Director Hyson (Nigeria) Ltd. Under his leadership Hyson was introduced into the domestic LPG business and grew rapidly, raking in N24m in 2004, N164m in 2005 and N400m in 2006.

Dr. Baru’s journey to the top position in NNPC was purely merited. He had the benefits of working in both the oil and gas sectors.

And what he makes of his position today goes further to buttress the merit base of his appointment. Till his appointment as the Group Executive Director, Exploration and Production, Dr. Baru was the Group General Manager LNG Division. In his capacity, he handled the commercial and administrative aspects of the LNG Investment Businesses.

He was also the NNPC’s Chief Technical Negotiator on the West African Gas Pipeline project. In March 2016, he was appointed Technical Adviser (Gas Matters) to the Minister of State for Petroleum Resources and on July 4th 2016, President Muhammad Buhari appointed him as the 17th Group Managing Director of the NNPC. Dr. Baru is one of the finest technocrats manning our high net worth institutions. He personifies humility in its deepest sense. Although he has ably represented the NNPC and the country in global oil and gas arenas, he prefers to address himself as Chief Steward of NNPC. And he wants, at the end of his tenure, to leave behind an NNPC that has the right structures, with the right people able to run in Nigeria as well on the global stage both upstream, downstream and midstream. I must confess, it was quite revealing and thought provoking, my interaction with him at the recent 7th OPEC Seminar in Vienna, Austria’s capital.

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Lessons from Ekiti governorship election Continued from page 1

said it identified 299 flashpoints among polling units in the buildup to the election.

But observers have attributed the violence-free exercise to the deployment of over 50,000 policemen and civil defence operatives in addition to other security forces of all stripes to maintain law and order during the election.

However, less impressive was the use of security operatives who were not only alleged to have teargassed the governor, Ayo Fayose and dispersed PDP supporters from rally but also arrested, intimidated and placed some PDP chieftains under house arrest.

With less than seven months to the 2019 general elections, analysts say the use of security agents to hound perceived political enemies of the Muhammadu Buhari administration portends danger and will send a wrong signal to the international community.

Clement Nwankwo, Convener of Situation Room - a coalition of over 70 civil society organisations - expressed these fears at a dialogue session with the Independent National Electoral Commission (INEC).

Even more worrisome in the Ekiti election was the increasing incidence of vote buying, a troubling flaw noticed during the last

governorship elections in Ondo, Edo and Anambra states.

Just like the previous three gubernatorial elections, heavy vote buying characterised the Ekiti poll as major contenders engage in naked supremacy battle, using money to curry electorates’ favour for votes under the watchful eyes of security agents.

The two major political parties in Ekiti State, the Peoples Democratic Party (PDP) and the All Progressives Congress (APC) were the most visible in the vote buying exercise code named “Operation See and Buy.” While the PDP was said to have bribed each voter with N3,000 each, APC paid between N4,000 and N10,000.

A chieftain of Social Democratic Party (SDP) and former Minister of Education Tunde Adeniran, attributed his party’s defeat in the just concluded election to its inability to engage in votes buying like some other parties.

Adeniran submitted that the SDP candidate, Akin Ayegbusi, would have won the election if the two major political parties - APC and PDP - had not resorted to inducing voters.

His words: “If there was no ‘see and buy’, SDP would have won the election, because people were anxious to have an alternative to the two parties (APC and PDP). Ekiti people preferred the SDP. “The people loved our manifesto and philosophy because they could

connect with us, especially with the Abiola experience. We are the

only party that is ideological in terms of philosophy, orientation and the policies we intend to pursue.

“We lost because we didn’t have the money to purchase votes like other parties, and the people have been pauperised, so they scavenge for what anyone brings. But we don ’t believe in such. We believe in

people voting according to their conscience”.

Adeniran’s allegations were corroborated by a former Deputy Governor of Ekiti State, Abiodun Aluko, who was also the governorship candidate of the Accord Party (AP) in the July 14 election.

According to him, the two major political parties engaged in a stiff competition to outdo each other in inducing voters with money.

Analysts have expressed concern that the electoral body is yet to find an antidote to votes buying despite assurances by the Commission that such incidences would not occur in the just concluded exercise.

Prior to last Saturday’s exercise, INEC National Commissioner supervising Ekiti State, Solomon Soyebi, had said the commission had put measures in place to checkmate votes buying that characterised previous Continues on wwwbusinessday online.com

L-R: Joseph Omokhapue, national sales manager, BMW, Coscharis Motors; Josiah Samuel, group managing director, Coscharis Group; Dumisani Radebe, director, BMW Sub-Saharan Africa; Cosmas Maduka, president, Coscharis Group; Tim Abbott, CEO, BMW South Africa and Sub-Saharan Africa; Abiona Babarinde, general manager, marketing and corporate communications, Coscharis Group; Darah Ladi, deputy sales manager, BMW, Coscharis Motors, and Festus Onyerika, deputy general manager, Abuja branch, Coscharis Motors, during a business visit by the BMW officials to the BMW showroom at the Coscharis office in Abuja recently.

Importers to pay more demurrage as gridlock...

Continued from page 1

truck drivers, encouraged by ship-

ping companies who profit from the Apapa chaos.

In Nigerian ports, an importer of 20-feet container is expected to get five days demurrage free from shipping companies, and upon the expiration of the free days, to pay daily charges of a minimum of N2, 850 for the first the 6-10 days; after which the money increases.

Shipping companies compel importers to deposit money for containers taken out of the wharf, which is then charged as demurrage if the containers are not returned within the five days’ window. With the lock-down on the bridge, it is impossible to return the empty containers within the grace period.

The chaos on the road/bridge is also encouraged by the fact that some of the shipping companies have reneged on agreement to provide loading bays for their containers.

For over six months the naval

personnel worked to bring sanity to Apapa, by preventing petroleum tankers and container-trucks from parking and taking over the bridge as had been the case for years. The naval personnel also worked in tandem with other stakeholders to enforce the callup arrangement which allows only trucks with valid documents/ permits to access Apapa for loading.

The Nigerian Ports Authority (NPA) last Friday suspended Maerskline, Cosco Shipping, APS and Lansal for 10 days for failing to comply with the directive to acquire and operate holding bays in line with agreement reached in November last year.

Shipping companies had agreed last November with the NPA to use holding bays in dropping of empty containers, according to a statement

by IsahSuwaid, assistant general manager, corporate and strategic communications of NPA. Hence shipping companies’ noncompliance with the agreement with the NPA coincided with truck drivers’ attack on the naval personnel,

fuelling suspicion that fingers should be pointed at shipping lines for not providing bays rather than the navy that reinstated sanity in Apapa.

Last week, the truck drivers allegedly went wild and mobilised miscreants against naval personnel whom they accused of ‘extortion and favoritism’. According to report, the drivers in a mob-like operation attacked the naval personnel on duty and vandalised the patrol vehicle of the Operation MESA. When the navy called for backup, Okon Eyo, a naval commodore and the commander NNS Beecroft, was said to have directed his men not attack the mob. Eyo was said to have

then ordered the naval personnel to withdraw from the bridge back to the base with the vandalised patrol van.

Amid the return of the gridlock on the bridge, manufacturers say more will be spent on demurrage and logistics. Raw materials will also take more time to arrive factories, compounding challenges of high production cost and uncompetitiveness of locally made products.

Continues on wwwbusinessday online.com

Tuesday 17 July 2018

Auditor-General’s report reveals...

Continued from page 1

the process for consolidating the balances of Ministries, departments and agencies into one economic entity…. the Consolida-

tion boundary for the Federal Governments Financial Statements is not adequately defined, and the justification for the exclusion of several significant balances was uncertain,” Anthony Ayine the auditor-general of the Federation said.

The Auditor General gave a Qualified Opinion (which is a statement issued after an audit is completed by a professional auditor) suggesting that the information provided is limited in scope and the Nigeria’s account has not maintained General Acceptable Accounting Principles (GAAP).

At the National Directorate of Employment (NDE), Abuja Contracts worth N1.2 billion were awarded to various contractors by the Directorate to supply skill acquisition materials to various State offices.

Despite contractors being fully paid, the audit exercise showed the items purportedly supplied were not physically sighted or received by the staff of the Directorate while Certificates of job completion were either issued by Senators or Ministry of Special Duties instead of the NDE. In 2011 and 2012 at the FCT Education Resource Centre (ERC), contracts were awarded to 7 different contractors at different locations for the total sum of N141 million with completion period of 4 to 12 weeks.

During audit verification visit to the project sites, it was discovered that the 7 contractors had abandoned the projects, some at zero and others at not more than 45 percent level of completion as the amount paid to the contractors could not be ascertained because relevant documents were not made available for scrutiny while the completion period was grossly violated.

According to the report, Ecological Fund which was set up for the amelioration of general ecological problems in any part of Nigeria was credited with N26 billion as the required 2 per cent deduction from the Federation Account in the year 2016.

Further Examination from FAAC 2016 records showed another N48 billion was received into the Ecological Fund which is the required 3 percent deduction from the Federation Account for the Development of Natural Resources.

The Auditor General observed that the N28 billion representing about 58 percent was paid out of the Fund as loan to carry out various activities that are not related to development of natural resources.

“We recommend that henceforth, the Federal Government should deploy these Special funds only for the stated objectives of the Funds,” the Auditor General said in the report.

The Auditor General also observes that there were various withdrawals from Funds by the Federal Government for “borrowing” which the purposes are unclear while the repayment plans are also not stated.

“The 2017 Budget did not include any appropriations for the repayment of these borrowings,” the Auditor General noted.

“We therefore further recommend that arrangements are clarified immediately, for the repayment of any funds not disbursed for the prescribed purposes of these Funds,” the Auditor General said.

Also, Stabilization Fund which

was created to provide financial support to States whenever they suffer an absolute decline in revenues due to factors outside their control received a total of N17 billion from the federation account in 2016.

The Auditor General however observed that during the examination of Central Bank of Nigeria (CBN) statements that the sum of N14 billion and N2 billion was released to the Federal Ministry of Defence and Nigerian Sovereign Investment Authority (NSIA) respectively.

Auditor General has however requested the Accountant-General to provide authority for the Funds Invested, tenor of the investment, rate of interest payable, certificate for the funds invested and forward same for audit verification.

“The Accountant General must explain the utilization of N14 billion for the purpose of funding a new army division contrary to the purpose for which the Fund was created, and also provide evidence of N17 billion refund back to the Stabilization Fund,” Auditor General said.

The Auditor General also noted during the examination of transcripts prepared by the Office of the Accountant General that it was observed from the examination of NNPC report to Technical SubCommittee of Federation Account Allocation Committee meeting held in December 2016 that a cumulative total of N4.07 trillion remained unremitted to the Federation Account

by NNPC as at 31st December 2016.

The total revenue unremitted as at 1st January 2016 from amounts payable into the Federation Account

by NNPC was N3.87 trillion . The sum of N1.198 trillion was due in revenue to the Federation Account out of the total generated in 2016, however, NNPC paid the sum of N1.00 trillion resulting in an amount withheld of N197.59 billion. This brought the total amount withheld by NNPC from the Federation Account as at 31 December 2016 to N4.07 trillion.

“It is of particular concern that the unremitted balance is increasing year on year. The Group Managing Director of NNPC has been requested to:(i) Explain why the sum of N4,076,548,336,749.75 had remained unremitted to the Federation Account by NNPC, contrary to constitutional provisions, remit all amounts due to the Federation account,improve on the record of

remittances of proceeds to the Federation Account.,” the Auditor General said.

The office of the Auditor General also noted that FAAC records showed that the sum of N443 billion was made for subsidy payments which is at variance with the N563 billion in the records of PPPRA as subsidy payments in 2016.

This implies there is a difference of N120 billions paid for subsidy through the federation account but which was never paid for. “The Accountant General of the Federation should explain the extra budgetary payment on subsidies during the year 2016,” Auditor General said.

At the Federal Ministry of Power, Works and Housing (Housing Sector) led by Babatunde Fashola, the Auditor General observed that Cash Advances

of over N26 million was granted to staffs in 2016 who have not retired as at the time of audit inspection in July 2017 while some officers were granted new advances without retiring the previous ones.

Continues on wwwbusinessday online.com

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Afrexim to launch $1bn Nigeria-Africa trade, investment programme Hawthorn Suites by Wyndham … as AU mulls single African airline to drive trade, market deals ONYINYE NWACHUKWU & HARRISON EDEH, Abuja

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heAfricanExport-Import (Afrexim) Bank has announced plans to launch a $1 billion Nigeria –Africa Trade and Investment Promotion Programme (NATIPP), which will promote trade in goods and services while providing risk mitigation instruments that support trade between Nigeria and other African countries.

NATIPP is being proposed to support finance of transactions including those that will be concluded at the Intra-Africa Trade Fair (IATF) holding in Egypt in December this year, Kanayo Awani, who is the managing director, Intra-Africa Trade Initiative at Afreximbank said.

Awani spoke in Abuja on Monday at the IATF engagement session ahead of the trade fair, which is hoped, would transform the way African countries deal with each with respect to trade issues.

She said Africa could do much more in terms of trade but needed to address huge infrastructure challenge, which had been a major impediment to intra-African trade. Lack of access to trade and market in-

formation was another huge challenge.

She said the situation was better illustrated by the bank’s recent survey, which revealed, for instance, that Mauritius and Nigeria import leather from Italy and Belgium at much higher cost when compared with South Africa and Botswana who were also cheaper product exporters.

Speaking later at a panel session, Benedict Oramah, Afrexim Bank president, said the bank was targeting $25 billion intra-African trade deals at the upcoming ‎Egypt fair, which would provide countries and businesses to showcase trade, investments, tourism, and cultural creative opportunities.

“Trade fair presents a big opportunity to promote trade relations in Africa linking and Match-making African businesses. We expect more than 1,000 exhibitors, 70,000 visitors, and we are expecting ‘be to be’ meetings of various companies properly integrating their trade deals with other companies and various regions coming in more stronger,” Oramah said.

He reiterated the bank’s work towards a pan-African payment platform to address concerns

of multiple currencies among various business deals in the continent.

Earlier in address, Segun Awolowo, CEO, Nigerian Export Promotion Council (NEPC), commended Afreximbank for the $1.4 billion facility to Dangote Group and the Bank of Industry.

Two loan agreements were signed with the two organisations in the course of the bank’s annual meetings in Abuja, with the Dangote Group receiving $600 million for the Dangote Refinery in Lagos, while the BoI got $750 million for on-lending to Nigerian industries.

He added that Nigeria’s potential for export to African countries were huge and that the zero oil export plan of the Federal Government had already captured the four top imports of African nations from other regions of the world.

“We have found that four of Africa’s highest demand products are among Nigeria’s top 11 priority products identified to diversify our export base under our zero oil plan. These export potentials products signify investment opportunities along value chain for each sector.”

Albert Muchanga, commis-

sioner for trade and industry, African Union, also speaking at the panel assured that the political will to get things right ‎was now available with various African leaders getting more committed to pan-African issues.

“Political independence without economic independence is meaningless,” he said though. According to him, “African community economic blue print is being worked on assiduously. The Establishment of the Continental Free Trade Area is a major leap in driving Intra-African Trade and you could see the reaction of various African countries wherein up to 44 countries signed up to it in March. Currently, 49 have signed and six waiting to join soonest.” ‎According to the African Union representative, “Some of concerns we are dealing with are on market information. We are working assiduously on providing the needed information to all stakeholders to enhance trade relations.

“On Infrastructure improvement, we are considering and working towards having Air Africa,” he said.

Abba Bello, NEXIM Bank managing director, stressed that Nigeria needed to play more in the intra-African trade, and that the bank was working on provid-

Abuja appoints new GM

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anagement of Hawthorn Suites by Wyndham Abuja has announced the appointment of Amine Saad as the hotel’s new General Manager.

“It is my pleasure to appoint Amine Saad as the GM of our Abuja property as I feel managers like him will help ensure our hotel’s continued success,” Faruk Aliyu, managing director of hotel’s ownership company Shelter Suites and Hotels Limited, said in a statement issued in Abuja.

Prior to joining Shelter Suites and Hotels, Saad worked as a night manager at Hilton Hotel, Beirut, Lebanon, for four years, subsequently leaving to join American University of Nigeria and develop their Hotel in Yola, where he spent six years.

Hawthorn Suites by Wyndham Abuja is a 108 suite hotel offering guests single, double and suite accommodation. Property features, complimentary breakfast

UK Arbitration Court ruling has nothing to do with Oando - Tinubu

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L-R: Festus Adebayo, CEO, Abuja International Housing Show; Imeh Okon, senior special assistant to the President on Infrastructure; Mohammed Sanusi Daggash, former minister of works and housing; Mustapha Baba Shehuri, minister of state for power, works and housing, and Emeka Eze, chairman, organising committee, Abuja Housing Show, during the 12th Abuja Hosing Show with theme “Driving Growth and Sustainability in Nigeria’s Housing and Markets: Improving Structures and Policies for Impact” held in Abuja. Pic by Tunde Adeniyi

We must industrialise housing to make it affordable, create jobs - Fashola … as stakeholders heap blame for housing sector woes on government CHUKA UROKO

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inister of power, work and housing, Babatunde Fashola, saysoneofthesurest ways of making housing affordable is by industrialising housing development by laying greater emphasis on locally produced building materials.

Fashola, who was keynote speaker at the ongoing Abuja Housing Show (AHS) in Abuja, explained that industrialising the sector would not only drag down the cost of construction, material wise, but would also create jobs for those involved in the housing value chain, including input manufacturers, professionals and artisans.

But stakeholders in the sector, who affirmed the minister’s proposition,argued thatthe problems and challenges of housing

development in the country find explanation more on government’s failure to either initiate housingpoliciesandprogrammes or to implement existing ones.

“When you look at housing, you see that it is not something that government can look away from because it is very important forvariousreasons.Youlookatthe effect of real estate on GDP, which is about 7 percent; you also look at its effect on job creation, quality of life of citizens,” the stakeholders noted.

It is an established fact that, of the basic needs of human beings, after food, the next thing is shelter.

A man that does not have a home cannot be productive because his heart and mind are not at rest.

Housing also impacts on security because a man that does not have a house liveson the street and becomes a security risk to every other person. He is vulner-

able to attack and is also ready to attack other people out of anger, fear and envy.

These are part of the reasons the stakeholders said that government must perform its duty to make housing affordable by providinginfrastructureandcoming up with a policy framework in the financial sector that would make mortgage accessible and affordable through a significant reduction in interest rate.

The housing market behaves in a particular way; it gravitates where there is effective demand.

Government should recognise that the weakest demand comes from the low-end market and so should direct regulatory system towards that end with a view to making a policy to address that problem,” Femi Adewole, managing director, Shelter Afrique, Kenya, said.

Adewole said the government

should also adopt the zoning system through which it would discover areas where housing need was highest and the type of housing that they need, just as it should impose heavy tax on houses that were unoccupied to discourage further development there.

Hakeem Oguniran, outgoing managing director of UPDC, agreed , but advised that developers should look away from the traditional way of sourcing construction finance from the banks from the banks with their high interest rate.

“From my experience as a developer, finance constitutes about 15-18 percent of construction cost”, he noted, advising that developers should source funds from the capital market by raising bonds which reduces the interest rate and, by extension, reduce the price of houses.

and Wi-Fi, infinity pool, fitness centre, meeting spaces.

Rooms’ features include wet bars, expanded cable television, upgraded bedding featuring signature sweet suite bedding experience. The hotel is currently undergoing a multimillion-dollar renovation.

Hawthorn Suites by Wyndham hotels, member of the Wyndham Hotel Group family of lodging brands, are extended-stay hotels located throughout the world, featuring studio and one-bedroom suites with fully equipped kitchens and wet bars.

Standard amenities include complimentary highspeed wired and wireless Internet access, expanded cable television, hot breakfast buffet, daily newspaper and Wednesday evening social hour.

Select properties allow pets and offer meeting and fitness facilities, swimming pools, guest laundry, convenience store items, and valet and grocery services.

awyers representing Wale Tinubu and Mofe Boyo, the group chief executive and deputy group chief executive of Oando plc, and co-owners of Whitmore Asset Management Limited, have come out to say that contrary to a statement issued by the legal counsel to Ansbury Investment, Andrea Moja, the amounts owed to Ansbury Investments Inc, owned by Gabriele Volpi, is in fact $80 million owed

by Whitmore Asset Management Limited, while the balance $600 million is owed by Ocean and Oil D evelopment Par tners (OODP) BVI. Ocean and Oil Development Partners (OODP) BVI is owned by all three parties - Wale Tinubu, Mofe Boyo and Gabriele Volpi, hence the judgment by the London Court of International Arbitration (LCIA) implies that Volpi as part owner of OODP BVI owes himself by virtue of his ownership in the company.

This was made in a ruling on July 6, 2018 by the LCIA. OODP British Virgin Islands owns 99.99% of OODP Nigeria, which in turn owns 55.96% of Oando plc.

The principals have chosen to speak as there were concerns that Volpi’s press release implied that they, Whitmore Limited, had a total indebtedness of $680 million.

Sources have indicated that payment terms for the personal debt are being

ironed out by both parties, while payment terms for the $600 million owed

by OODP will be determined by the LCIA, which is reputed to be one of the world’s leading international institutions for commercial dispute resolution.

The dispute between Gabrielle Volpi and the principals of Oando has been ongoing for over a year, and has been a cause of concern for companies and individuals alike who look for investments to grow their business via individuals in the form of equity or debt.

Gabrielle Volpi, a significant shareholder in O ODP, invested in the company during Oando’s acquisition of ConocoPhillips Nigeria assets. At the time it would have seemed like the investment of a lifetime, unfortunately shortly after the price of oil crashed and saw many oil and gas companies fold.

That Oando is still alive today is testament to its principals’ resilience and hard work.

The assumption would be that against this backdrop Gabrielle Volpi would wait for OODP to start to reap the rewards of its investment.

Since the upturn in commodity prices, Oando has recorded six consecutive quarters of profits.

The company kicked off 2018 on a positive note also, through continued restoration of value to its shareholders via profits in the first quarter of the year.

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Implementation of local content to ramp Nigeria to developed nation JUMOKE AKIYODE-LAWANSON

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igeria can be underway to becoming a developed nation from being classified a ‘third world country,’ if Information Communication Technology (ICT) is properly leveraged to boost the country’s economy, experts say.

According to industry analysts, ICT can be a catalyst for economic growth in Nigeria, as in the case of India; if the policy for the patronage, use and encouragement of locally developed software and hardware technology is strictly implemented to generate revenue for the country.

The local content policy is a developmental initiative of the Federal Government necessitated by the compelling need to diversify the Nigerian economy from the oil and gas sector to ICT, which has been identified as a critical growth sector of Nigeria’s economy.

It was therefore developed in a patriotic and strategic drive to build the capacity of the indigenous IT companies to allow them take advantage of the opportunities in ICT. ICT ranks as one of the country’s major contributor to its GDP with about 11 per-

cent. However, industry players continue to worry that its growth has not yet translated into jobs and wealth for the nation, giving the simple reason that indigenous companies either lack the capacity or the opportunity to leverage this growth potential to participate significantly at many levels of the ICT value chain.

Stakeholders see the need for government to begin to look in the direction of indigenous players in the technology industry by implementing the local content policy.

It should be recalled that in 2012, the Federal Government mandated all Federal Ministries, Departments and Agencies (MDAs) to purchase computers by indigenous companies such as Zinox Technologies, Brian Technologies, Omatek Computers, Beta Computers and Veda Computers, among others, in keeping with its resolve to also promote local content in the ICT industry.

There was also a deadline that was placed on that directive, but six years after, indigenous technology companies are complaining that nothing was done to enforce these policies and make sure that the directive was strictly

adhered to.

According to them, over the years, we have seen series of national projects being carried out with HP, Dell and other foreign brands of computers being deployed.

A recent survey has it that 99 percent of indigenous ICT companies are short-lived because of government neglect; hence it is critical for government to reposition local content policy through a Public Private Partnership approach, whereby stakeholders will be involved in policy formation.

Florence Seriki, managing director/CEO, Omatek Ventures, said the main problem with the directive made by previous administration was that the policies were made without the involvement of key stakeholders in the Industry.

Chijioke Anthony Eke, cofounder/chairman, Sidmach Technologies, told BusinessDay in an interview that, “All we need in Nigeria’s ICT industry right now is policy direction. With that, something positive will clearly emerge in the next few years and those indigenous companies that can add value are those that will remain.

Getting the Nigeria electricity industry right OLUSOLA BELLO

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he ‘Recent future of energy series’ organised

by BusinessDay Media Limited was an eye opener to those that are not properly in tune with what is happening in the power industry. It also shows an indication that the country still has a long way to go as far as her bid for having reliable, stable and efficient power supply is concerned.

Already, the sector has a shortfall of about N1 trillion that will be required to right and resolve the myriad of issue associated with it.

It is however cheering that the Nigerian Electricity Regulatory Commission (NERC) is stepping in and has unveiled a comprehensive plan to tackle liquidity gaps in the sector, which includes auditing the books of operators and providing credit advance system to perennial debtors.

The other thing the commission is also trying to do is to carry out a forensic audit of the Discos to determine their income as well as costs. The forensic audit of the Discos would be in terms of what they really collect, spend and save.

According to John Momoh, vice chairman of NERC, the commission carried out an open book review and discovered that it was imperative to

actually carry out the forensic audit of the Discos.

Perhaps, this would finally put to rest the allegations and counter allegations between, especially management of Discos and the regulators over the level of revenue accruing to the Disco.

The Discos often say that they are not generating enough revenue because they are not allowed to charge reflective tariff. Through the planned steps by the NERC, it would be clear whether they are generating revenue or they are mismanaging the one they generate through spuriously paying board members huge sums.

The Discos settle as little of 15 percent of their market invoice. The audit will seek to determine what are the basic revenue baseline and the minimum they are allowed to remit, and develop appropriate basis for appropriation and disbursement of market funds.

These companies reported losses of over N196.23 billion to end the 2016 financial year.

This compares with a loss of N104.69 billion they recorded the previous year.

The commission’s proposal to review the tariff methodology will be commendable.

The current methodology has been in place since the last 15 years. The commission says

it will revisit the methodology on which Multi Year Tariff Order (MYTO) is placed to determine if it is the best way to go in terms of tariff for the sector.

Other stakeholders in the power industry have also suggested solutions that can help move the industry forward.

According to Kola Adesina, chairman, Egbin Power plc, big economy needs big power, and that if the country truly wants to industrialise and also want investment in the power sector to create jobs, there must be enough certainty, and confidence.

Investors will come and invest in the power sector if they are given enough certainty and confidence, he said, saying if the fundamentals of the market were addressed the problems plaguing the industry would be solved.

Kolapo Joseph, general manager, corporate finance and corporate development, North South Power Limited, said the industry went into problems immediately the cost reflective tariff that was proposed by the NERC was frozen, stressing that cost reflective tariff must be immediately implemented.

In addition to this, he said the government must settle all sector debts, saying it was only after this that the sector could be revamped.

Naira appreciates, gaining N1.42 in July 2018

Education reform: Edo Poly, BEDC hold career fair, deepen town-gown synergy

ENDURANCE OKAFOR

anagements of Edo State Polytechnic, Usen, and the Benin Electricity Distribution Company (BEDC) plc have e nt e re d i nt o a p a r t n e rship to deepen the input of the polytechnic’s Electrical/Electronics and Mechanical Engineering programmes, in the operations of the electricity company, starting with the hosting of a career talk and fair.

The event, which holds o n Ju l y 2 0 a t t h e p o l y technic’s premises, for the students, especially those in the departments of Electrical/Electronics and Mechanical Engineering of the institution, will host top executives of BEDC, who will be on the lookout for new recr uits for the company.

Rector of the Edo State Polytechnic, Biodun Falodun, who disclosed this in a chat with journalists, said that the institution is expanding its frontiers to explore sustainable partnerships with national and multinational companies and training students to not only be employable after graduation but also self-sustaining.

He s a i d t h e p a r t n e rship with BEDC is a first in the institution’s drive to court and deepen towngown collaborations, which are expected to boost the school’s capacity to better respond to the needs of the society.

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L-R: Adedotun Akande, founder/director, Patrick Speech and Languages Centre; Joyce Onafowokan, personal assistant to governor of Lagos State on social development; Oyinade Akegite, head, corporate communications and external affairs, GTBank; Camille Proctor, executive director and founder of The Colour of Autism Foundation, and Anna Lamikanra, executive director, Blazing Trails International Centre (BTIC) , at the press conference to announce the 8th annual Autism programme with theme, ‘Raising a child with autism: The role of family and the community’ in Lagos.

Pic by Pius Okeosisi

‘Tech will eradicate corporate debtors, boost economy’ JUMOKE AKIYODE-LAWANSON

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ollowing Nigeria’s plans for economic diversification, technology expert, Leo Stan Ekeh, has charged the Federal Government to leverage technology in reducing to the barest minimum the growing incidences of corporate debts, and usher in an era of unprecedented boom and sanity in the Nigerian economy.

Ekeh, who is the chairman of Zinox Group, made this assertion while delivering a guest lecture at the maiden edition of the 2018 Nigerian Online Merit Awards (NiOMA) held in Lagos at the

weekend.

“Technology will resolve much of the contemporary problems facing the Nigerian state if holistically applied, and the country will benefit immensely if the government turns to technology in its search for lasting solutions to the challenges confronting the economy,” he said.

According to Ekeh, the recent revelation by the Asset Management Corporation of Nigeria (AMCON) that, about 350 Nigerians account for 80 percent of its N5.4 trillion debt portfolio. The refusal of majority of these debtors to liquidate their indebtedness is an issue that can be easily

resolved through the application of technology if there exists accurate data of how these debts arose, he said.

Acknowledging that the present debt profile should be a case study for upcoming entrepreneurs or part of the issues to be dissected by data analysts on why some of these businesses failed, he noted that this might also reveal a lot of insider compromises on the part of the lenders so that sincere lessons could be learnt and better structure and systems put in place to avert a recurrence.

“Working in concert with the Nigeria Inter-Bank Settlement System (NIBSS),

the Central Bank of Nigeria (CBN), Attorney General of the Federation and the Economic and Financial Crimes Commission (EFCC) for enforcement purposes, AMCON can leverage a simple technology application that makes it easy to access the bank balances of debtors across all the various banks in Nigeria.

“This will be a mandatory requirement for the extension of loans and credit facilities and will foster more responsible borrowing as the lenders can easily debit the accounts of borrowers upon due date to recover sums extended.

or the week ended July 13, 2018, the naira appreciated at the I&E FX window, gaining N1.42 to close at $/N361.16 when compared with $/N362.58 recorded the previous week, resulting in a spread of $/ N0.16 between the Bureau de Change (BDC) market rate and the I&E FX window rate.

On the other hand, the spread between the BDC market rate and the CBN official exchange rate fell

by N0.10 to close at $/ N55.20, indicating a 0.18 percent decrease from the $/N55.30 recorded in the previous week.

The CBN said the recent appreciation of the naira against other currencies was the result of its market monitoring and intervention.

Meanwhile, the apex bank intervened through its periodic supply of dollars in the FX market, offering $100 million at a marginal rate of $/N344.00 via a Single Secondary Market Intervention Sales (SMIS) - wholesale session held during the week ended July 13, 2018.

The bank also maintained its intervention for Small and Medium-Scale Enterprises (SMEs) and Retail Invisible transactions supplying $55 million each for both interventions.

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FINANCIAL TIMES Stocks to watch: Hargreaves, Indivior, AA, GoAhead, Elisa, BofA

Theresa May rules out second Brexit referendum

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World Business Newspaper

Trump declares hope for a better US-Russia relationship US president begins private meeting with Putin in Helsinki DEMETRI SEVASTOPULO & HENRY FOY

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resident Donald Trump had a private one-on-one meeting with his Russian counterpart Vladimir Putin on Monday, saying he hoped the two men could have an “extraordinary relationship”.

The two leaders are in Helsinki for long-awaited talks aimed at kick-starting new bilateral relations, despite claims by US authorities that Russian intelligence officers hacked Mr Trump’s opponent in the 2016 election.

“We are two countries that frankly have not been getting along very well for the last number of years,” Mr Trump told a stony-faced Mr Putin. “But I think we will end up having an extraordinary relationship.”

After the meeting, Mr Trump and Mr Putin held an expanded bilateral discussion with their aides. The US team included Mike Pompeo, secretary of state, John Bolton, national security adviser, and Jon Huntsman, the US ambassador to Russia. John Kelly, White House chief of staff, and Fiona Hill, the top NSC Russia official, also attended.

Previously, Mr Putin had made a few bland remarks welcoming Mr Trump to Helsinki.

The Kremlin wants to portray the summit as the first step in de-escalating tension between Moscow and Washington.

While Mr Trump said the two men would discuss “everything” in their meetings, he notably did not mention the subject of Russian hacking of the US election.

Earlier, Mr Trump lashed out at his predecessor and the investigation into Russian meddling in the 2016 election for undermining relations with the Kremlin.

The criticism in two morning

posts on Twitter ignored Friday’s indictments against 12 Russian intelligence agents, who were charged with hacking the emails of Mr Trump’s Democratic rival. The accusations have led to renewed calls for Mr Trump to confront Mr Putin on the Kremlin’s role.

Mr Trump instead blamed the investigation, headed by special counsel Robert Mueller, for the state of US-Russia relations.

“Our relationship with Russia has NEVER been worse thanks to many years of US foolishness and stupidity and now, the Rigged Witch Hunt!” he wrote on Twitter.

Russia’s Ministry of Foreign Affairs responded on Twitter: “We agree.”

While Mr Trump has not formally accepted that Moscow interfered in the 2016 election, he blamed then-President Barack Obama for doing nothing to stop the alleged interference.

“President Obama thought that Crooked Hillary was going to win the election, so when he was informed by the FBI about Russian Meddling, he said it couldn’t happen, was no big deal, & did NOTHING about it. When I won it became a big deal and the Rigged Witch Hunt,” Mr Trump wrote in another post on Twitter.

The start of the meeting between Mr Putin and Mr Trump was delayed because the Russian leader arrived 30 minutes later than scheduled in Helsinki.

Mr Putin flew from Moscow on Monday after having attended the World Cup final in the Russian capital on Sunday evening.

In arriving late, Mr Putin was living up to his reputation for a lack of punctuality. The Russian president has in the past kept Angela Merkel, Queen Elizabeth II and Pope Francis all waiting for his arrival, a trait that some have attributed to his desire to dictate terms to his interlocutors.

Austria ramps up push for EU-wide digital tax on Big Tech Critics say plans deviate from internationally agreed principles JIM BRUNSDEN

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ustria is stepping up plans for an EU-wide digital tax on big tech companies such as Apple and Google, despite opposition from within the bloc.

Hartwig Löger, Austria’s finance minister, told the Financial Times that a priority during his country’s presidency during the second half of this year would be getting governments to thrash out the details of European Commission proposals for a temporary tax

on digital companies’ revenues.

The plans have been championed by some countries, such as France and Spain, which argue that they are a quick way to make tech companies pay more tax.

But the proposals have been opposed by other EU nations, including Ireland, Luxembourg and Sweden, which argue that the plans deviate from internationally agreed principles and would complicate efforts to reach a global deal on calculating the sector’s Continues on page A4

Donald Trump shakes hands with Vladimir Putin in Helsinki © AFP

Deutsche Bank profits surpass market expectations German lender releases bumper second-quarter results 9 days ahead of schedule LAURA NOONAN

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eutsche Bank made twice as much money as analysts expected in the second quarter of the year, offering a reprieve for the lender and a boost to new chief executive Christian Sewing after an unrelenting run of bad news.

The German lender made second-quarter profits of about €700m, so far in excess of analysts’ expectations that the bank announced the results nine days ahead of schedule.

“Management believes that these results demonstrate the resilience of the franchise,” Deutsche said.

Along with the €400m in expected net income, the figures were more than double the €321m pre-tax profits and €159m net income predicted by the average of analysts’ estimates.

Analysts, however, were quick to point out that the bumper profits

appeared to be driven by exceptional items and that the underlying earnings may actually have been below expectations. Deutsche’s shares still jumped almost 10 per cent.

Both profit figures are slightly lower, however, than the second quarter of a year ago, but the share price, which touched a high of €10.50 on Monday morning, is far below the €15.95 it was trading at a year ago.

The positive report comes three months after Mr Sewing took over from John Cryan. Mr Sewing, who was formerly the head of Deutsche’s retail bank, vowed to cut costs faster and take deeper action to reshape Deutsche’s investment bank.

Deutsche said it expected group revenues for the second quarter of about €6.6bn — €200m ahead of consensus estimates — which may calm fears that Deutsche’s cuts would have a disproportionate effect on its revenue base.

But analysts pointed out that those revenues include about €100m of gains from an asset sale and a technical item.

“While this result is undoubtedly positive, the revenue beat is driven by one-off gains and origination and advisory revenues being better than expected,” said Eoin Mullany, banking analyst at Berenberg.

Andrew Coombs, banks analyst at Citi, said the detail of Deutsche’s statement implied adjusted profits before tax of €400m “significantly worse than €714m consensus”.

A third analyst pointed to the weakness in Deutsche’s “engine room”, its sales and trading business, where the bank said revenues were expected to be down 15 per cent year on year. This compares negatively with the 13 per cent rise in trading revenues reported by JPMorgan for the same quarter and the 1 per cent fall in trading revenues at Citi on the same basis.

Iran eyes Asia buyers to protect oil exports from US Tehran looks to China as fears grow over embargo’s impact on the economy ANJLI RAVAL & NAJMEH BOZORGMEHR

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ran is pinning its hopes on Asian oil consumers as it battles to protect crude exports and shield its economy from tough US sanctions.

The US has been lobbying oil importers such as India, China and Japan to end crude purchases from Iran, as Donald Trump’s administration ratchets up the pressure on the Islamic republic. Washington has suggested waivers to consumer countries keen to continue buying Iranian oil will be in short supply.

Iranian analysts and western diplomats say that China, which is caught up in a spat of its own with the US over trade tariffs, could be the determining factor in helping Tehran withstand economic pressure when new sanctions on its vital energy industry kick in from November.

“If China . . . buys Iran’s oil, we can resist the US,” said one Iranian economic analyst, who declined to be named. “China is the only country which can tell the US off.”

China, India, Japan and South

Korea account for almost 65 per cent of the 2.7m barrels a day Iran exported in May, according to Kpler, the tracking company. Iranian crude is also exported to countries in Europe, Turkey and elsewhere in the Middle East.

However, Iran’s Mehr news agency reported this month that the state oil company expected exports to drop by 500,000 b/d this year.

Iranian officials privately predict a fall of at least 1m b/d, while some sector analysts warn it could be more than 2m b/d.

Mr Trump has adopted a tough stance with Iran, pulling the US from the nuclear accord Tehran signed with world powers over concern that the deal was one-sided.

In a sign they are willing to bend to US demands, South Korea, Japan and India have signalled their openness to cutting imports from Iran, while at the same time negotiating to secure exemptions from Washington. China, however, is more likely to object to any US demands that it stop buying from Tehran.

“The unilateral sanctions [in Iran]

should be abandoned because they are counterproductive,” a spokesperson for China’s foreign ministry said, adding that the country continued to support the nuclear deal.

Iranian officials hope that global supply dynamics and Mr Trump’s own concern over the effect of oil price rises on US consumers will strengthen their hand, even as Saudi Arabia and its allies have been called on to boost production by 2m b/d.

Hossein Kazempour Ardebili, Iran’s Opec governor, said the market could not afford to lose a significant number of Iranian barrels. “You will be a hostage to Saudi Arabia and Russia’s production capabilities and they will be able to do little,” he told the Financial Times in a statement directed at Mr Trump.

Russia, although not an importer of Iranian crude, could also have significant influence. Moscow has floated the idea of a goods-for-oil deal to trade Iranian oil, and Tehran last week touted $50bn worth of potential investments by Russian companies in its oil and gas sector.

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FT Austria ramps up push for EU-wide...

ZTE shares jump after Washington lifts ban on US purchases

Continued from page A3 taxable profits.

Berlin has also expressed reservations about the details of the commission’s proposals, despite being an early backer of EU action. Angela Merkel, Germany’s chancellor, and French president Emmanuel Macron made a joint call last month for “an EU agreement on a fair digital taxation by the end of 2018”.

Mr Löger, who worked in insurance for 30 years before joining the Austrian government last year, said the inability of national tax systems to capture fully the profits made by some of the world’s largest companies created an imperative to act.

“When we see . . . some actors who nearly pay nothing on a European or national basis, even when they are getting large turnover out of each country, it’s not OK,” he said. “I don’t think it’s the right approach to say that we wait until there is a solution on a global basis.”

Mr Löger admitted that “it’s not so easy to find the right definition”.

But while there is no guarantee that an agreement can be reached by the end of the year, “what we expect is clearness and . . . the basis for solutions”.

The commission proposed a 3 per cent tax on revenues in March from Apple, Facebook, Google and other companies with total annual worldwide revenues of €750m and EU revenues of €50m. It said the tax could target revenues from specific activities such as online advertising and selling users’ data.

Brussels estimated the proposal would affect about 150 of the biggest tech companies and could raise as much as €5bn per year — a figure critics view as optimistic.

The EU’s levy, which needs unanimous support from member states to take effect, is intended as a temporary measure while international negotiations continue within the Organisation for Economic Cooperation and Development.

Brussels estimates that factors such as mismatches between national tax systems and their difficulty in capturing the scale of companies with large online activity but with a small physical presence mean that digital businesses face an effective tax rate of only 9.5 per cent, compared with 23.2 per cent for traditional business models.

Austria’s ambitions are an attempt to revitalise a negotiation that seemed close to falling apart after a bruising discussion among finance ministers in April. At the meeting, Bruno Le Maire, the French economy minister, complained that his counterparts were being cowed, out of fear of provoking US president Donald Trump.

Mr Le Maire told the FT on Friday that the time had come for the EU to decide whether it had the political will to fully tax the big tech companies.

“All of those in Europe who refuse to get results on the taxation of Google, of Apple, of Microsoft or of Amazon, will have to explain to their citizens why they reject fiscal justice,” he said.

Tuesday 17 July 2018

Rubio slams decision on Chinese telecoms equipment maker amid national security fears

EDWARD WHITE

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Prime Minister Theresa May

Theresa May rules out second Brexit referendum UK prime minister says there will not be a new vote under ‘any circumstances’ JIM PICKARD

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owning Street has ruled out a second referendum on Brexit under “any circumstances,” in a blow to those pushing for Britain to remain in the European Union.

The comments came on Monday morning just hours after former cabinet minister Justine Greening described Prime Minister Theresa May’s current strategy as “the worst of all worlds” and demanded a second EU referendum.

The inter vention by Ms Greening, former education secretary, is expected to be followed

by other Europhile Tory MPs — including Amber Rudd, former home secretary, and Dominic Grieve, former attorney-general.

Lord Mandelson, the pro-EU former Labour cabinet minister, also criticised the Chequers plan as a disappointing “halfway house” on Sunday.

The latest comments mean that Mrs May’s plan has been criticised by both wings of her party; it had already prompted the resignation of Eurosceptic cabinet ministers Boris Johnson and David Davis last week.

The idea of a second referendum — or a “people’s vote” — has so far been promoted mainly by opposition MPs and is viewed by Eurosceptics as a

device to overturn the original referendum.

The Labour opposition has not backed the idea but has refused to rule out the “possibility” of backing it.

Tom Watson, the party’s deputy leader, told the Sky News Ridge on Sunday programme that it would be “a mistake” to rule it out.

Scott Mann, a PPS — or parliamentary aide — to the Treasury, on Monday became the latest government figure to quit in protest at Mrs May’s strategy.

The Downing Street spokesman said: “The British public have voted to leave the EU. There is not going to be a second referendum in any circumstances.”

Brussels warns Airbnb over consumer rights European Commission says platform needs to be more transparent about its fees MEHREEN KHAN

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russels has warned Airbnb it has until the end of August to change its terms and conditions protecting users or face the possibility of legal action in the European Union.

The European Commission on Monday said the accommodation platform needed to align itself with EU consumer rights laws by making sure prices shown on the platform are inclusive of all fees, and should boost the powers consumers have to sue hosts who fall foul of the rules.

“Consumers must easily understand what for and how

much they are expected to pay for the services and have fair rules — for example on cancellation of the accommodation by the owner”, said Vera Jourova, EU commissioner for justice and consumers.

Airbnb has until the end of August to propose solutions to the commission’s complaints.

Should it fail to do so, consumer protection authorities in the EU’s 28 member states will be able to launch legal action against the “sharing economy” platform under its national laws.

In a statement, Airbnb said: “We take this issue seriously and are committed to being as transparent as possible for our

community”.

“Guests are made aware of all fees, including service charges and taxes, before confirming their decision to book a listing, and we will work together with the authorities to clarify the points raised.”

The commission also wants Airbnb to change its terms and conditions so the company does not “mislead” consumers by going to court in a different member state to the one in which they reside. EU authorities also want to prevent Airbnb unilaterally changing a customer’s terms and conditions without due warning or suspend contracts without proper explanation.

hares in ZTE rose more than 16 per cent in Hong Kong on Monday, after the Trump administration cleared the path for the Chinese telecoms equipment maker to restart operations.

Wilbur Ross, US commerce secretary, on Friday lifted an order that had stopped ZTE from purchasing critical equipment from the US, after the company paid a $1.4bn penalty following breaches of US sanctions on North Korea and Iran.

The seven-year ban was put in place in April and had effectively forced the Shenzhen-based company to halt operations.

The cost of the US move was underscored last week when ZTE unveiled a net loss of Rmb7bnRmb9bn ($1bn-$1.35bn) for the six months to June 30, based on preliminary numbers. That compared with a profit of Rmb2.29bn for the same period last year.

Despite Monday’s gains, ZTE’s Hong Kong share price remains 37 per cent below where it was trading before the ban was announced in April. The company’s Shenzhen-listed shares climbed by their 10 per cent daily limit.

The decision to allow the resumption of US technology sales to ZTE, which came after Chinese president Xi Jinping discussed the matter with US president Donald Trump, remains controversial in Washington, with Republicans slamming the deal as a concession to Beijing.

“ZTE should be put out of business,” said Marco Rubio, a Florida senator. “There is no ‘deal’ with a state-directed company that the Chinese government and Communist party uses to spy and steal from us where Americans come out winning.”

On Friday, Mr Ross said the commerce department would “remain vigilant” and “closely monitor ZTE’s actions to ensure compliance with all US laws and regulations”. The ban was lifted after ZTE placed $400m in escrow at a US bank, which was in addition to the $1bn penalty ZTE paid in June.

ZTE has also overhauled its board and senior management team as part of the settlement with the US, although the company is still led by longtime employees.

The new president served as assistant to his predecessor and has spent two decades at the company.

Many of the proposed new directors have filled party committee roles in the past. New chairman Li Zixue, for example, was general secretary of the party committee and general secretary of the discipline inspection committee at the Xi’an Microelectronics Technology Research Institute — a subsidiary of China Aerospace Science and Industry Corporation, a unit of which is a ZTE shareholder.

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Stocks to watch: Hargreaves, Indivior, AA, Go-Ahead, Elisa, BofA Micro Focus may be better in private ownership, says Credit Suisse BRYCE ELDER

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argreaves Lansdown led the FTSE 100 fallers after the Financial Conduct Authority proposed banning exit fees as a way to encourage investors to switch providers. The FCA’s Investment Platform Market Study found that around 7 per cent of all consumers tried and failed to switch.

The regulator will seek feedback on its proposed remedies then publish final conclusions in early 2019 “Any reduction in exit fees would likely only have a small impact on earnings for platforms such as Hargreaves Lansdown.

But increased ease of transfer between platforms could lead to a lower retention rate,” said Citigroup. “This has been stable, and high, at around 93 per cent for many years.”

Indivior rebounded after a US court granted the drug developer a preliminary injunction against Dr Reddy’s, which has been seeking to launch a generic version of the group’s Suboxone Film for treating opiate addiction. The injunction, which can be overturned at appeal, blocks Dr Reddy’s from selling its drug until a pending patent litigation concludes. Indivior had last week withdrawn 2018 guidance due to uncertainties around generics and a difficult launch for Sublocade, its next-generation treatment for opiate addiction.

“Given the slower than expected initial uptake of Sublocade, the injunction provides Indivior with more time to establish Sublocade as a leading new treatment for opioid use disorder,” said Stifel, which raised its price target on Indivior to 480p.

“Based on our revised forecasts, Indivior trades on a 2018 ratio of just 9.1 times earnings, a 50 per

cent discount to its peers,” it said.

Alfa-Laval, the Swedish engineering group, was among the Stoxx 600’s best performers after its second-quarter results beat forecasts on an acceleration of order growth.

The beat was largely thanks to much stronger than expected demand for marine pumps and exhaust gas cleaning systems, known as scrubbers, though management flagged up that demand in the third quarter would be “somewhat lower”.

Deutsche Bank rallied after its second-quarter trading update guided for a pre-tax profit of €700m, more than double the consensus forecast of €321m.

Analysts were nonplussed, saying the unexpected profit was flattered by non-operating items and was amplified by Deutsche Bank’s €6.5bn revenue base and its €1.4tn balance sheet. “The quality of the beat was low, with the majority stemming from lower restructuring and litigation charges as well as a one-off gain,” said Goldman Sachs. “Adjusting for these shows a beat at the underlying level of around 10 per cent versus consensus.”

RBC added: “While it is positive that Deutsche Bank managed to surprise positively after a long time of negative updates, the beat compared to a low consensus is not as high as we expected on an underlying level, and compared to our estimates there is less progress on costs . . . This pre announcement does not change our view on the stock and the long road ahead in our view to improve its returns.”

Bank of America reported strong growth in net income across its business divisions in the second quarter, but also saw soft revenue and declining net interest margin. Shares rose just under one per cent in premarket trading.

Arconic leaps 11% on media speculation of private equity interest PETER WELLS

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hares in Arconic jumped the most in nearly two years following media reports private equity firms are circling the metals manufacturer.

The company, which houses the downstream assets of the old Alcoa, in late April slashed its earnings outlook owing to soaring aluminium prices, which had been pushed higher by sanctions against Russia and the Trump administration’s steel and aluminium tariffs.

Shares were up 11.1 per cent at $19.31, their highest since April 27, and the biggest one-day leap for the company since it was split from Alcoa’s aluminium and smelting operations in No-

vember 2016.

Buyout firms including Apollo Global Management had expressed interest in the company, the Wall Street Journal reported at the end of last week. Arconic, when contacted on Monday, declined to comment.

As a core input of its parts business, Arconic’s results are sensitive to large increases or decreases in the price of aluminium. Ken Giacobbe, chief financial officer, said during an investor call in late April that the US sanctions against Russia, targeting the aluminium producer Rusal, had thrown a spanner in the works.

By early May the company’s share price reached its lowest level in more than two years.

Additional reporting by Eric Platt

© PA

Care home group Barchester put up for sale Appetite for real estate-backed healthcare assets rises since infrastructure funds starting buying GILL PLIMMER

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archester Healthcare, one of Britain’s biggest care home groups, is to be put up for sale in a deal that could earn its owners more than £2.5bn.

Barchester owns more than 200 care homes, housing 11,000 elderly people and employing 17,000 staff. The group’s owners — the Irish businessmen Dermot Desmond, JP McManus and John Magnier — have mandated investment bank JPMorgan to advise on the sale.

Several other UK groups are up for sale at the same time, including private equity-owned Care UK and HC-One. Meanwhile Four Seasons, which was owned by Guy Hands’ Terra Firma private equity fund, is in the process of being taken over by its creditors H/2 Capital Partners, a US-based hedge fund.

Appetite for real estatebacked healthcare assets has increased since infrastructure funds starting buying into the sector, driven by a lower cost of capital than traditional buyers and a belief that demand for elderly care will continue to grow as the population ages.

Stephen Collier, a former chief executive of the private hospitals group BMI Healthcare and chairman of Eden Futures, a small healthcare business, said: “Care home sellers are seizing the moment as there’s still a lot of hot money looking for a home in UK commercial property.”

BMI Healthcare, which has 59 hospitals in the UK, is also up for sale.

Infrastructure funds AMP Capital and Antin have made significant forays into the UK care market. Private equity investors such as KKR, as well as US real estate investment trusts and Asian insurers, are also

expected to be interested in the care home businesses.

Barchester is expected to be one of the more attractive on the market because it has a high number of privately paying residents at a time when care homes that rely on local authority funding are struggling to survive.

It is understood that several buyers have already expressed an interest, but sources close to the company said that only offers higher than £2.5bn are being taken seriously.

The businessmen own Barchester through their investment vehicle Grove Investments and a formal sale process could be started within weeks, sources close to Barchester said. Barchester’s latest accounts show that turnover increased 5.3 per cent to £563.9m in 2016, while operating profit was 5.6 per cent higher at £163.3m. Barchester declined to comment.

UK regulator proposes ban on fund platform exit fees Hargreaves Lansdown shares fall as FCA criticises obstacles to switching providers KATE BEIOLEY

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he UK financial watchdog has proposed a ban on fees charged to customers of online fund platforms moving their business elsewhere, causing worry for shareholders in Hargreaves Lansdown, the funds supermarket.

In the first stage of a major review of the £500bn online retail investment market, the Financial Conduct Authority said “competition was not working as well as it should for some consumers” and suggested exit fees should be banned and fund managers forced to publish transfer times.

Hargreaves Lansdown charges £25 per stock to move to another provider and controls almost 40 per cent of the online retail investing market. The company — whose shares fell 4 per

cent in early trading but ended down 1.9 per cent — said exit fees were “common amongst investment services” and denied the company would be hurt by a ban.

But in its interim report into competition and value for money in the market, the FCA said exit fees were to blame for low levels of switching among consumers and that it could introduce maximum timeframes for customer transfers.

Exit fees were one of the top three barriers to switching providers, the FCA said, and 90 per cent of customers choosing a provider without the help of a financial adviser were not aware they would pay such fees.

Magnus Wheatley, managing director of Charles Stanley Direct, which charges £10 per stock or fund to leave, said: “One of the biggest barriers to people transferring to us is the exit fees charged by rival platforms” but

said he was “cautious” about the idea of a ban because “the transfer process is not as easy as it looks”.

The FCA said customers were in some cases waiting “hundreds of working days” to move cash and shares. In the most straightforward cases, it should take only one working day.

Of the customers who switched provider in the past three years without the help of a financial adviser, it said, 11 per cent had experienced difficulties.

But aside from the potential fee ban, analysts said the FCA report would likely bring a “sigh of relief” from most investment companies.

The FCA launched its probe in July 2017, following a two-anda-half year review of the asset management industry. It was expected to be critical of fund supermarkets, which control an increasing share of the market.

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Tuesday 17 July 2018

BUSINESS DAY

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Politics & Policy

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Tuesday 17 July 2018

Youths better positioned to take over mantle of leadership - Onyeizu …As he declares to contest for Abia South Senatorial seat GODFREY OFURUM, Aba

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y signing into law the “Not-too-young-torun” bill, President Muhammadu Buhari’s administration, has removed all encumbrances that may have been standing in the way of the youth, to participate actively in politics.

Chinedu Onyeizu, an engineer by profession, made this observation in Aba, Abia State, at the weekend, during his declaration, to contest for Abia South Senatorial seat, on the platform of the All Progressives Congress (APC).

Speaking at the jam-packed main auditorium of Eldorado Hotel and Entertainment Centre, Onyeizu sought greater support from older generation of leaders, to ensure elaborate succession planning that will amplify the social contract between young leaders and the holders of highest offices in the country.

He further observed that Mr. President since assumption of office, has been laying solid foundation for the emergence of a new crop of Nigerian leaders, noting that youths are better positioned to take over the mantle of leadership in Nigeria.

He explained that his decision to run for the Senate was to contribute in the process of conceiving ideas that would impact positively in the lives of the greatest majority of Nigerians.

“This passion continues to grow

Former Vice President of Nigeria and frontline contender for the Peoples Democratic Party (PDP) presidential ticket, Atiku Abubakar and Governor Ibrahim Dankwambo of Gombe State when Atiku visited the governor at his office during his consultative visit to Gombe State on Monday.

for as long as the siege of hopelessness refuses to give way among my people of Abia South senatorial zone,” he said.

According to him, “I am fearlessly stepping forward to distort the old style of representation, which for 12 years has been characterised by selfish interest, as opposed to the betterment of the masses.

“With a track record of distinguished accomplishments at home and around the world, I believe that I have what it takes to make positive impact in the lives of my people.

“I started here in Aba and grew

Ortom dumps APC for yet-to-be-disclosed party BENJAMIN AGESAN, Makurdi

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enue State Governor, Samuel Ortom, on Monday disclosed that he has been sent out of his present political party, All Progressives Congress (APC) and is currently exploring a new option to actualise his future ambition.

The governor stated this at the Benue People’s House, Makurdi while swearing in his Special Adviser on Local Government and Chieftaincy Affairs, Jerome Torshimbe.

He noted that he was consulting with relevant stakeholders, stressing that he would soon make his next move known to Benue people.

Governor Ortom charged the new appointee to justify the confidence reposed in him through hard work and commitment to duty and to imbibe the core values of his administration which include transparency, accountability, justice and equity.

He f u r t h e r s a i d t hat To r-

shimbe’s appointment was based on his capacity to serve especially at a critical time like this, even as he charged him to reach out to all.

The Special Adviser while pledging to justify the confidence reposed in him, also promised to give his best for good governance at the third tier of government and to reposition the traditional institution in the state.

He solicited the support of all to enable him succeed in his new assignment.

Also today at the Benue People’s House, Governor Ortom received Sankara Food Sellers Association on a courtesy call where he promised them a trailer load of fertilizer and yam pounding machines to be given to them as loans in partnership with Bank of Industry.

The association, under the leadership of Esther Dam-Ayali, had earlier applauded Governor Ortom for standing firm against open grazing of livestock, stressing that as food sellers, the law was a step in the right direction.

up as an Aba boy, running around the streets, hustling like every other Aba boy. I am a witness to the daily routine of most young people in Aba. “However, today apart from being a graduate of the Federal University of Technology, Owerri, I have attended Ivy League schools, like the Harvard University and Massachusetts Institute of Technology, where I did graduate programme in leadership, governance and business”.

He promised that if elected as the senator, representing Abia

South Senatorial Zone that his approach of leadership and legislation would be different from what is obtainable today.

He explained that he has worked out what he termed a five-plus-one agenda programme that would focus on 5 sectors of his local economy and 1 critical sector of his local and national economies, respectively.

He stated that his main objective will be to accelerate economic development activities, by complementing the efforts of the federal and state executives, in bringing

sustainable transformation to the lives of the common man in Abia South senatorial zone.

Onyeizu, promised to champion policies and laws that will increase ease of doing business in the country and legislation that would put Aba on a special status in national commercial standing, if elected into the Senate.

According to him, the idea is to convince federal authorities to recognize the potential of Aba and establish commercial hubs in the city.

“My immediate priority, if I am elected as your senator, is to find a lasting solution to the high level of hunger and poverty among our people. I have already designed a workable roadmap to achieving that.

“With my Farm for Factory (FFF) programme, which I intend to avail you, we will certainly bid bye to poverty and deprivations in our constituency in a very short time.

“FFF is both data and value driven. It is designed to increase visibility to our agro-produce, using technologies like Block Chain and Internet trading platforms.

“FFF will act as a reliable partner and intermediary in negotiating higher returns for the produce of our hard working farmers”.

He observed that small and medium sized industrial park proliferation programme is ideal in attracting investment from all parts of the world, which he said he was familiar with the necessary steps, to take in other to achieving.

Your lack decorum, Kwara APC blasts Nabena SIKIRAT SHEHU, Ilorin

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he All Progressives Congress (APC) in Kwara State has blasted the Deputy National Publicity Secretary of the party, Yekini Nabena for attacking the Senate President, Bukola Saraki.

The party in a statement by its state publicity secretary, Sulyman Buhari warned Nabena to stay within the mandate of his new position, and stop his campaign of uninformed comments against Saraki.

The local chapter of APC was reacting to a statement credited to Nabena calling on Saraki to declare his stand on the R-APC. It asked the national deputy publicity secretary to clarify if he was speaking on behalf of his superiors in the APC National Working Committee (NWC) or he was running errand for some faceless mischievous elements who are his paymasters.

The statement reads: “The Kwara APC has taken note of the immature display of lack of decorum by one Yekinni Nabena in a statement he

issued, calling the Senate President names. Nabena needs to first clarify if he was speaking on behalf of the National Working Committee of the APC or representing some faceless mischievous elements who are his paymasters.

“Instead of embarrassing himself with his meaningless diatribe that demonstrates his lack of decorum and immaturity for the position he has accidentally found himself to be occupying, Nabena should focus on understanding what his current position entails. This is necessary because his preparedness and capacity have definitely been called into question by his antics.

He definitely cannot use Saraki’s name to get cheap popularity and buy relevance.

“At the right time, our leader, the Senate President, who remains one of the founding fathers of the APC and a deciding factor in our national politics today, will make his decision known to the whole world when he is ready.

“As a grassroots politician who believes in carrying everyone along and works in the best interest of the

people at the State and national levels, Saraki does not owe an unknown factor like Nabena any response or explanation. Instead, at the right time, I am sure that his friends, supporters, associates, all Nigerians and the entire world will know where he stands on issues regarding 2019 elections.

“Saraki that we know does not hide to play his politics. He plays in the open. Those who feel uncomfortable with his rising profile will continue to bell-ache for a long time to come. In fact, we enjoy the way he is making his opponents fret and suffer insomnia by his silence”, the Kwara APC stated.

“It also urged Nigerians not to be distracted by individuals who are fond of making statements to seek relevance or for personal gain. Kwara APC further stated that Nigerians should be rest assured that the Senate President, who is currently on his way back from the United States talking about how to improve trade relations with Nigeria and increasing the chances of our youth to get self-employed, will not be distracted by the needless noise.”

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NEWS YOU CAN TRUST I TUESDAY 17 JULY 2018

Opinion

Strategy of a firm: Who should formulate it?

FRANKLIN NNAEMEKA NGWU Dr Ngwu is a Senior Lecturer in Strategy, Corporate Governance and Risk Management, Lagos Business School, Pan-Atlantic University.

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n my numerous strategy sessions with MBA students, private and public organizations in Nigeria, a recurrent fundamental question is ‘who should formulate the strategy of a firm’? It looks like a very simple question which I think it is. It is however highly misunderstood and wrongly answered across all industries in both public and private sectors. The pervasive strategy problems across organizations in Nigeria are therefore not surprising. But what is strategy? There are many definitions, but a simple one is that Strategy is a set of plans to achieve the aim or mission of an organization. With this simple definition, the question then is who should formulate it?

There are generally three approaches: Top-down, Bottom-up and Hybrid.

While top-down is the approach where the senior management and the board of directors formulate the strategy and cas-

cade it down the line for execution, the bottom-up is somehow the opposite where the strategy is mainly formulated by the first line managers and their teams and then forwarded to the senior management and the board for input and approval. The hybrid approach is a mix of the two. It is where the strategy is formulated by both the senior management and the first line managers (with high input and consultation of all their team members). In this approach, the final approved strategy is achieved and agreed through rigorous back and forth between the senior management and the first line managers who effectively represent their teams through effective communication and consultation. It is an approach that somehow involves everybody or everybody feels a sense of involvement including the cleaners, gardeners, security guards and cafeteria staff.

Of these three approaches, which one should organizations use to achieve sustainable and long term value creation and possibly market capture? Across organizations in all sectors in Nigeria, the one generally used is the top-down approach.

But the problem with this approach is not only that it is the dominant one, it is the way it is understood and applied. One is that strategy formulation is perceived as a task mainly for the CEO and his senior management team with the board involved mainly for rudimentary approval or sometimes involved in the formulation. Second is the way it is agreed and cascaded down. It is generally done with little or no input from the junior employees and even the first line managers. A middle manager in one of the financial institutions described it as a watered-down militar y order of which his only contribution with his team is compliance to execute the strategy. Unsurprisingly, this particular financial institution downsized two times in one year! In a recent Gallup report, 30% of employees are likely to be searching for new positions while at work.

While 39% of employers think that their top performers might likely leave, 32% of firms lost their top performers. To add salt to injury, 75% of employees who voluntarily leave their jobs did so because of their managers. So the question and one of the biggest challenges organizations

face is how to engage with the ‘whole employee’. This is even worse in Nigeria where the level of employee engagement is only 12% with 65% of employees not engaged and 23% actively disengaged.

Using the top-down approach is arguably the reason why most organizations in Nigeria are characterised by in-effective m a n a g e m e n t a c t i o n s, increased cost and inefficiency, fire-fighting and reduced morale, loss of key staff and customer, business interruptions and failure, poorly motivated staff and below average organizational performances. Moreover, in trying to resolve the above challenges, most Nigerian firms do not address the root causes. They focus on the symptoms and are actually incapable of properly identifying the root causes due to flawed mind-set that creates wrong corporate cultures. A key cause of the above characteristics is the approach to strategy formulation and execution. If we recall that a formulated strategy is just a document that contains the plans of an organisation, the negative characteristics are unfortunately more observed not in the formulation of the strategy but in its ex-

ecution especially when it fails.

What majority of Nigerian firms fail to realise is that you cannot properly execute what you did not formulate. Research reveals that 9 out of 10 firms always fail in their strategy execution. While only 5% of the workforce understands the strategy of their organizations, 85% of executive teams spend less than one hour per month discussing strategy. To properly execute therefore, you need to properly formulate. Of the three approaches to strategy formulation, the one with the highest possibility of resulting to effective execution is the hybrid approach. As it requires the involvement of everybody in the formulation of the strategy, it instigates a high sense of responsibility and ownership not only during the formulation process but also the execution. When practiced and embedded as part of the culture of the organization, it mutates into a kind of movement as every employee irrespective of status feels that his/her voice is heard and the brain utilised. The created sense of responsibility and ownership not only sustains a high level of interest and involve-

ment, it also helps in the innovative mitigation of emergent risks (challenges and opportunities) common in strategy execution especially in a volatile business environment like Nigeria. In this scenario, just as the marketing director understands his/her contribution to the success of the organization, so will the cleaners. Not only will they understand the contribution of clean environment to the success of the organization, they will also be able to appreciate the need to be cost effective in their budgeting and recurrent expenditure given their involvement in strategy formulation and understanding of the need for cost minimization in organizational growth and performance.

With the high sense of belonging created through a hybrid approach, the full creative and innovative capabilities of majority of the employees are unleashed to surmount all organizational challenges.

If supported with a robust reward mechanisms and culture, the individual capabilities can be effectively galvanized to achieve sustainable growth and performance of the organization through consistent value creation and market capture.

Donald Trump creates chaos with his tariffs trade war

•The question remains whether other countries should box back in retaliation MARTIN WOLF Wolf is the Chief Economics Commentator of The Financial Times.

T

he leader of the world’s most powerful country is a dangerous ignoramus.

So how should the rest of the world respond? What makes this so difficult to answer is that Donald Trump has created chaos. It is so difficult to negotiate with him because nobody knows what he and his team want. This is just not normal.

The administration’s trade actions and announced intentions are, in this context, important in themselves and indicative of the wider dysfunction. The US has imposed tariffs on imports of solar panels, washing machines, steel and aluminium. If one adds two rounds of tariffs on China under Section 301 of the US Trade Act of 1974, the

affected trade comes to about 7 per cent of US imports.

If one allows for the threat of retaliation against retaliation, which could affect an additional $400bn of imports from China, as well as the possibility of tariffs on $275bn of imports of cars and parts, total affected imports reaches $800bn, or about a third of US imports of goods. The US actions have already caused retaliation.

US actions on steel, aluminium and, even more absurd, cars clearly violate the WTO rules. But if Canada is a threat, which country is not?

If cars are a security concern, what is not? “Protection will lead to great prosperity and strength,” Mr Trump said in his inaugural address. He meant it, alas.

The rationale for the Section 301 action against China is more obscure. Sometimes, the action seems intended to force China to eliminate its bilateral surpluses with the US. Sometimes its aim seems to be to halt its “Made in China 2025” programme.

Sometimes it seems intended

to remedy coerced technology transfer. The first aim is ridiculous; the second is nonnegotiable; the third is reasonable, but hard to achieve.

The administration has justified the actions already in effect on steel and aluminium by reference to national security. The same rationale is being used in an investigation of US imports of cars, launched in May. Fears over such abuse of the security exceptions are why the World Trade Organization’s rules are restrictive. Such exceptions are enumerated as relating to “fissionable materials”, or “the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment”, or “taken in time of war or other emergency in international relations”.

As if this were not confusion enough, Larry Kudlow, ostensibly Mr Trump’s principal economic adviser, has suggested the president is a free-trader and that the aim

is really to eliminate tariffs. In fact, like a two-year-old, Mr Trump is a “disrupter” without clear objectives. If he had wanted to rebalance the relationship with China, he would not have withdrawn from the Trans-Pacific Partnership and he would not have assaulted his own allies. He would instead have confronted China with a powerful global coalition. Instead, he has started fights with everybody.

Protection also tends to spread because users of protected inputs will call for it, because unprotected sectors will demand it and because trade will be diverted from protected markets.

China’s exports, for example, will shift from US to EU markets. The EU might feel forced to act against imports, too.

Yet, surprisingly, world output might not fall by more than 3 per cent. Such numbers rest on the assumptions of “computable general equilibrium” models, which ignore the disruption and uncertainty, as the structure of the world

economy is reconfigured.

They also fail to account for the lost dynamism, as global competition is reduced.

Last but not least, they miss the increase in ill will such a protectionist war would cause. Global co-operation would surely be shattered.

Yet Mr Trump has insisted that “trade wars are good and easy to win”. The argument that a deficit country will “win” in a trade war is not absurd. Ultimately, in any retaliation war, the other side will run out of trade ammunition sooner, simply because their imports are smaller.

But retaliation could go beyond trade, to investment for example. Once retaliation is taken into account, and the impact of higher tariffs on exchange rates, the benefit for aggregate domestic output is likely to be very small even for a country with huge deficits.

Every economist knows that the effective way to reduce a trade deficit in a country near full employment is a recession. That is presumably not the US objective, but it could

be the result of the uncertainty created by its policies.

Perhaps the biggest question is how other players should respond to the aggression from the White House. Mr Trump likes conflict. He might not respond to retaliation as a normal person would. He might even welcome the rise in protection that a spiral of retaliation would deliver.

At the same time, only retaliation might persuade him to change course. Furthermore, the gathering clouds of a trade war just might shock US business into effective action. The judgment of how far to pursue the cycle of retaliation, then, is no easy one.

Personally, I would retaliate, more because the alternative looks weak than in the belief that it would work.

Another thing the rest of the world should do is to strengthen their co-operation. But the most exciting — and risky — thing other high-income countries could do is to take up Mr Trump’s offer of tarifffree trade. Why not at least call his bluff? Who knows? It might even work.

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