BusinessDay 17 Oct 2018 by BusinessDay

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news you can trust I **WEDNESDAY 17 OCTOBER 2018 I vol. 15, no 163 I N300

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Nigeria urged to adopt longterm contracts for oil sales ISAAC ANYAOGU

igeria is struggling to sell oil cargoes, even as Iran, despite the threat of sanctions has convinced India to buy nine million barrels worth of oil for Novem-

As it struggle to sell oil cargoes Unsold oil cargoes signal economic loss

ber. Analysts say India’s ability to get buyers to commit to taking its crude is an indication that

Africa’s top oil producer should offer generous incentives as well sell its oil on long term contracts.

Nigeria doesn’t have any long term contract with any buyer Continues on page 46

MICHEAL ANI & ABIMBOLA AKEREDOLU

or the second consecutive month, average prices of goods and services in the country continued to rise in the month of September after 18 successive months of decline, signaling a likely tightening of the monetary policy rate, analysts say. The annual inflation rate, which tracks the average rise in the prices of goods and services, rose to 11.28 percent in September from 11.23 percent in August, the National Bureau of Statistics said in its consumer’s purchasing index report yesterday. This Continues on page 46

Inside 2019: Why PDP picked Saraki to lead Presidential Campaign P. 46

L-R: Emeka Okwuosa, chairman/GCEO, Oilserv; Dada Thomas, president, NGA; Patrick Olinma, executive director, asset management and new energies, Total E&P Nigeria Limited, and Jeffery Ewing, chairman/MD, Chevron Nigeria Limited, during the 11th International Conference and Exhibition, theme “Shift to Gas Economy: Pace and Scale of Innovation in the West Africa Sub-region” held in Abuja, yesterday. Pic by Tunde Adeniyi

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How Trump, Saudi crown prince cold war could impact oil prices DIPO OLADEHINDE & MICHEAL ANI

n what was considered abominable for over four decades, the threat by Saudi Arabia to use oil as weapon, is putting industry players and the oil market on the edge in the ongoing scandal over the disappearance of Washington Post columnist, Jamal Khashoggi. Energy watchers are closely monitoring Brent, which has pulled back from recent multiyear highs but remains firmly established above $80 a barrel as questions arises weather the world’s largest oil exporter, a close ally of President Donald Trump and the de facto leader of OPEC, would make good a threat to shut down its oil wells, a step it has not taken since the Arab oil embargo of 1973-1974. Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER) said the only way Saudi Arabia can threaten other countries is by shutting down some of its oil wells, which could lead to a spike in oil prices. “Saudi Arabia economy is dependent on a 10 million barrel of oil production, which they can reduce to eight million barrels leading to a multiplier effect of shortfalls in world supply, forcing oil prices to go up which Trump would not like,” Henry team leader at FOSTER told BusinessDay. Emmanul Afimia, an energy analyst at Afimia consulting said Saudi Arabia has made a long term commitment in the past not to use oil as a weapon because of its huge consequences on the global economy. “Yes, its more money for Saudi Arabia and other oil producing countries when oil prices rise but it will be in the short run. In the long run, the economies that heavily rely on oil will start looking for alternatives and accelerate their plans for renewable energy,” Afimia, an energy analyst said. The US and the Saudis are already engaging in a bid to bring down the rising tension threatening to lead to a spike in global oil prices. On Wednesday, U.S. Secretary of State, Mike Pompeo arrived in Riyadh to discuss Jamal Khashoggi’s disappearance two weeks ago. The Saudi government is said to be considering saying Khashoggi died in a botched interrogation, according to media reports. Fears of an oil price rose in the international markets after Riyadh made what many read as a veiled threat to use the kingdom’s oil wealth as a political weapon, something unheard of since the 1973 Arab embargo. Saudi Arabia produces about 10.5 million barrels of oil per day, equal to more than 10 percent of global crude demand and also claims to have about 260 billion barrels still to extract. It exports about seven million barrels a day of oil, depending on the month. So far this year, the price of oil has surged more than 25 percent, prompting some investors to bet that a return to triple-digit prices could be just around the corner, which is good news for OPEC members. Khashoggi, a U.S. resident who wrote several columns for The Washington Post critical of Prince Mohammed, disappeared October 2 on a visit to the Saudi consulate in Istanbul. Turkish officials have offered no evidence, but say they fear

the writer was killed and dismembered by a Saudi team of 15 men - an operation that, if carried out, would have to have been authorized by the top of the Al Saud monarchy. The Kingdom describes the allegation as “baseless,” but has provided no proof that Khashoggi ever left the consulate. In an interview with CBS program “60 Minutes” aired over the weekend, President Donald Trump warned that Saudi Arabia would face “severe punishment” if they were to blame for the missing journalist. This came after U.S. lawmakers raised the prospect of applying sanctions against Saudi individuals meant to punish human rights abuses. The Saudis vehemently denied involvement saying on Sunday they would retaliate against any punitive measures with even “stronger ones,” Bloomberg News reported, citing a statement carried by the official Saudi Press Agency. Later, the Saudi embassy in Washington moved to temper the rhetoric in a tweet, saying it appreciated that the Trump administration, and others, had refrained from “jumping to conclusions on the ongoing investigation.” Late Monday, the Wall Street Journal, citing people familiar with the matter, reported that the Saudis were weighing whether to say that rogue operatives killed Khashoggi, in a move that could help the royal family avoid direct responsibility for his disappearance, but it was unclear if and when the Saudi statement would be released. The scandal has caused businesses, influential individuals and media companies to drop out of this month’s Future Investment Initiative, a conference in Riyadh meant to attract investment in the kingdom. The United States and European nations have threatened punishment if Saudi Arabia is found to be behind Khashoggi’s alleged murder. Goldman Sachs, a leading global investment firm said the world should not overplay the potential of a Saudi-induced price spike and further warned that focusing on near-term geopolitical tensions and trading volatility, risks missing the core reason for being long on commodities late cycle. “They are a hedge against rising interest rates and are one of the few assets which outperform in the late-cycle.” Looking further ahead, Goldman expect prices to decline to $70/ bpd next summer as a wave of new Permian production comes online, and expects Brent-WTI spreads to remain wide until such new capacity comes online as Brent prices need to outperform to cover the costs of sending crude to the United States Gold coasts (USGC) by rail. But Gbolahan Ologunro, an Industry Research Analyst at CSL Stockbrokers Limited said the oil market appears to be caught in a frenzy of reinforcing forces that could trigger a rally in oil prices. “The confluence of hurricane in the U.S, expectation of a reduction in output in Iran, owing to Trump sanctions, coupled with the recent standoff between Saudi Arabia and U.S, which has added to the layers of geopolitical tensions in the Middle East, could precipitate an uptick in oil prices towards $100 a barrel,” Ologunro told BusinessDay by Phone.

Insight

R-L: Shola Tinubu, president, Nigeria-Britain Association (N-BA); Paul Arkwright, British High Commissioner, and Stephen Forbes, vice president, Nigeria Britain Association, at the send-forth dinner in honour of Paul Arkwright by the Nigeria-Britain Association.

FG retirees stranded over N67bn unpaid pension ... remittance received last in August 2017 Modestus Anaesoronye

ederal Government employees who retired from service since August 2017 to date have been left stranded as they are unable to access their pensions for retirement. This is following the inability of the Federal Government to pay pension accrued rights now totaling over N67 billion, which adds to total pension accumulations of the retirees to enable Pension Fund Administrators (PFAs) managing the Contributory Pension Scheme(CPS) to pay them. Sources at the National Pension Commission (NAICOM) have told BusinessDay that the accumulation is due to poor budgetary provision by federal government as well as the delay in release of approved funds to enable PFA commence payment to the retirees. Farouk Aminu, director Supervision, National Pension Commission (Pen-Com) confirmed at a retreat organised by Pension Fund Operators Association of Nigeria (PenOp) for members of the Joint Committee for

Establishment and Public Service of the Senate and House of Representatives Committee on Pensions held in Calabar, that the last payment only covered August 2017. He had disclosed that “From 2014, the amount needed to pay accrued rights was slashed by two thirds, so we were given just N2.5 billion from January 2014. So by the time 2014 ended we only paid pension up to June 2014 and since then we are yet to recover. And payment normally is on first come, first serve bases so we don’t jump and because we have to follow this sequence and this year unfortunately, we had this issue and as at December 2017, the amount paid was still short of what was to be paid and again from January 2018 we have not been receiving the accrued pension because of budget delay.” “The National Assembly just passed the budget in June and it was signed into law in July or so. So it is when we are able to get this money that we will be able to pay. In essence, the federal government has been paying. Only that the amount is not enough to cover the accrued pension liability”.

Session 15 (1)of the Pension Reform Act 2014 provides that “as from 25 June, 2004, being the commencement of the Pension Reform Act, 2004, the accrued pension right to retirement benefits of any employee who is already under any pension scheme existing before the commencement of that Act and has over 3 years to retire shall – (a) in the case of employees of the Public Service of the Federation where the scheme is unfunded, be recognized in the form of an amount acknowledged through the issuance of Federal Government Retirement Benefits Bonds by the Debt Management Office in favour of the employees and the bond issued under this subsection shall be redeemed upon the retirement of the employee in accordance with section 39 of this Bill and the amount so redeemed shall be added to the balance of the retirement savings account of the employee and applied in accordance with the provisions of section 7 of this Bill;

•Continues online at www.businessdayonline.com

Economists expect a slump in non-oil sector in H2 EMEKA UCHEAGA

ising crude oil price, foreign exchange stability and passage of the 2018 budget have failed to convince economists of a positive outlook for the second half of the year. While economists are confident the oil sector expanded in the third quarter and will continue to do so in the fourth quarter of the year, they appear to be less optimistic about the non-oil sector. This looks like a reverse of events from the economic performance in the second half (Q2) of 2018 when the nonoil sector expanded by 2.05 percent and the oil sector slumped by -3.95 percent year on year due to a significant drop in oilproductionaftertheTrans-Forcados pipeline was shutdown. “The economy in the third quarter is expected to perform fairly above the previous quarter with its strength mainly from the oil sector.

The non-oil sector on the other hand is not expected to record a significant growth” said Robert Omotunde, head of research, Afrinvest. “The oil production issue has been largely resolved and we expect the production to rise to its previous level earlier in the year,” said Omotunde. According to data obtained from National Bureau of Statistics (NBS), average daily oil production dropped to 1.84 million barrels per day (mbpd) in Q2 from 2.0mbpd achieved in Q1. “The economy is expected to record a full year growth of 2.1 percent considering the current economic environment” said Omotunde There seems to be a consensus by economists for 2018 economic growth to settle around 2 percent growth. Renaissance Capital lowered their 2018 growth forecast to 2.0 percent from 2.9 percent previously and lowered their 2019 forecast to 2.5 percent

from 3.0 percent. International Monetary Fund (IMF) also lowered its economic growth forecast to 1.9 percent from 2.1 percent earlier in the year. With crude oil price rallying this year to as high as $86 per barrel for the first time since 2014 and foreign exchange stability allowing for easy access to investors and exporters seeking to enter and exit the country, it seems shocking that the non-oil sector will fail to thrive in such an economic environment. Henry Ogbaku, group head, asset management at GDL said, “I expect a decline in Q3 and a further decline in Q4, because the only thing that is happening now that is good for us, is crude oil price, but if you look at our reserves, it has been on the decline because the Central Bank of Nigeria (CBN) has been trying to defend the currency.”

•Continues online at www.businessdayonline.com

Wednesday 17 October 2018

BUSINESS DAY

Wednesday 17 October 2018

BUSINESS DAY

Wednesday 17 October 2018

BUSINESS DAY

Wednesday 17 October 2018

BUSINESS DAY

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COMMENT SMALL BUSINESS HANDBOOK

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

igeria holds general elections every four years, and before you say Jack, it is another election year. These elections are very important, at least for the political organization of the country. Besides, they create opportunity for the citizens to evaluate their leaders, with regard to their election promises, and to re-elect or reject them and elect new ones. That, at least in theory, is the ideal behind elections, and it is up to the electorate to maximize the gains of the opportunity or waste it. As to how well the Nigeria electorate have used the opportunity, we leave that to political analysts, and we have many of them. Most election days are work free days in Nigeria, and that is the part that creeps near to the concerns of this column – implications of frequent work – preventing elections that compound the worsening condition of the poor. For some reasons, government bans anyone from engaging in their lawful socio-economic activities on election days. CHARACTER MATTERS WITH DAPS

DAPO AKANDE Graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

ometime last year while in the waiting room of a clinic I saw an article in one of the newspapers that caught my attention. I instantly snapped a picture of it and sent it to my wife with the caption, “Baby, just as I’ve been saying”. The supposed article wasn’t really an article at all though but a short quote by Professor Muyiwa Falaiye, the Dean of Arts at the University of Lagos and it went like this: “Over 60 per cent of those in universities today ought not to be there in the first place; they ought to be somewhere else. Unless we have a change of mindset about this, things will remain the same.” I’m reminded of something my late father once told us. He regaled us with so many wonderful stories; some hilarious, some tinged with a little sadness but all instructive and

Wednesday 17 October 2018

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Nigeria’s general election as a variable in SMEs development equation Nigeria is one of the few countries in the world where this is still being practiced for every election. Even state governors who, rule for eighth years without elected local government chairmen, now declare work-free days on the eve of their departure in order to hand-pick local government helmsmen, who will help them rig elections and become problems to the incoming government. People are prevented from going to work or doing their legitimate businesses because they cannot be trusted to be of good behaviour on election days. Well, the authorities may be justified to take radical measures in a country where ballot boxes are still being carried away by thugs and criminals; where election umpires are so partisan that their members do the bidding of their chosen contestants by forging results in favour of some parties.The authorities believe that one sure way to rid the streets of criminals and overzealous party faithfuls, who might foment trouble, is to compel everyone to sit at home on election days. The implication of the “no work” order is that the machinery of work, revenue creation and the making of livelihoods is put on hold. Contracts are freely breached and incomes are lost. The fact that people are forced to stay indoors becomes a good excuse for people to shirk their responsibilities. Without doubt, the loss to the nation is extensive. Unfortunately, the burden falls more on the poor and less privileged members of society, who go out each morning to write their own pay cheques. A day out

‘

of work means so much to them and their many dependants. In a hand-to-mouth economy like Nigeria’s, with more than half of the over 180 million people living below the poverty line, it is callous to prevent daily paid workers from earning a living because government says they should do nothing but vote for politicians. Even more caring governments, like those in Europe and America, which pay unemployment allowance to their people, do not make such demands of them. Granted that so many things could go wrong if the no-work order is not implemented, the point is that the elections do not benefit everybody equally for all to pay a uniform personal price for it. For the politicians who win, a new day dawns in which public treasury will, in one sudden afternoon, transform and

become private property for one man to dispense without recourse to anybody or law. That is worth everything imaginable. But for the poor voter, say an okada rider, a taxi operator, sellers of perishable goods in the local market and itinerant labourers, it is total loss. Many of these people actually do not come out to vote because they are busy managing their deteriorating wares that could have been sold on the election day. So it is not totally correct that compelling people to stay off work makes them come out to vote. Some are home licking their wounds. Microenterprises in Nigeria, which according to the SMEDAN, make up 36.9 out of the total of 37million MSMEs in Nigeria as at 2013, and producing about 50 per cent of our Gross Domestic Product, are at the receiving end of almost everything wrong with Nigeria. The worst is that quite often, after all the sacrifices, the poor wake up to find that they never voted for the man that won. Some have actually argued that the nowork order is a ploy to free the roads, nooks and crannies of the country for politicians to freely rig elections. This may sound extreme but not completely outlandish. After all, those sitting in the comfort of their homes, even after voting, are not going to be around to make videos and take pictures of security operatives and INEC officials who have serially been implicated in election malfeasance. We have signally overlooked the impact of elections on the welfare of our people. Not only are available resources moved away from MSMErelated activities to politics thereby creating a draught in other sectors, governments often stop making

payments to contactors, sometimes more than one year to the elections. All resources being saved for politicking and its attendant vices, including vote-buying, kidnapping and sundry violence. Perhaps, we could find some creative ways of mitigating the losses suffered by the citizens each time they vote. Some have talked about the huge sums we expend in organizing elections and insist that these are monies that could be used to provide infrastructure but are wasted on elections that hardly bring mush change to their lives. Others think that the elections come too closely because of the four year terms. Over the past several months since political campaigns began, the most patronized business has been the art of begging. The number of calls, which local philanthropists receive have multiplied. So much has been written about the challenges facing small business in Nigeria; lack of access to finance, hostile policies like multiple taxation, difficult operating environment bereft of functional facilities, fraud (sometimes official) and insecurity. So much has also been done to improve the environment though with minimal success. In considering setting up a small business in Nigeria, factors outside the control of the entrepreneur are overwhelming. How to incorporate the frequent election disruptions in Nigeria into the challenges facing small businesses and find mitigant is a community service we need not delay any further.

this as a result of operating in auto pilot or simply because of a tendency to follow the crowd? Is it an exercise in keeping up with the Joneses as we are wont to do? Or maybe this harsh economic climate has led us to believe the only thing to separate the “men” from the “boys” is the all conquering university degree certificate. Don’t get me wrong, I’m not in any way denigrating or even trying to minimize the critical role university education is playing to advance our nation. I simply want us to acknowledge the gaping hole in our level of development in spite of it. In the property development industry alone over one hundred billion naira was spent last year to employ the services of foreign masons; Togolese and the like. Is this because they were born with greater abilities? Certainly not. It’s just the logical result of better training. The typical Nigerian parent wants his or her child to acquire a university degree whether this is what’s best for him or not. The home truth is, just as it is in the developed nations we look up to, we’re not all cut out for university. For some young individuals, a purely academic pursuit may not be their thing so coercing them to university may be doing them a great disservice from which they may never fully recover. A more practical training combined with classroom education may just be up their street. I do believe we need a total overhaul of mindset for our nation to take its rightful seat amongst the

progressive nations. It’s time we begin to look at what truly matters and pursue it with wisdom. It’s time we place greater premium on substance and content and less on frivolities such as appearance. Unfortunately our status as an import dependent nation isn’t limited to just the importation of goods but to also the “importation” of expatriates. And why is this so? Truth be told, there’s a remarkable dearth of Nigerians in possession of the technical expertise required to take us where we want to go. Imagine the quantum of resources the nation can save if only we had enough home grown technicians. I’ve often wondered why we don’t take a more serious look at the vocational education and training system, better known as the dual education system; made famous by that European industrial giant, Germany. I’m far from an expert to proffer modalities on how to make this model work here but I’m convinced it could go a long way to claw us back to where we should be. This German style dual education has been replicated with great success in several countries, developed and developing countries alike. Among the developed countries other than Germany are Switzerland, Austria, Luxembourg and Denmark; notable among the developing are Malaysia and India. Upon further investigation I wasn’t at all surprised to discover that in addition to high level skills, Germany and Austria have the lowest unem-

ployment rates amongst European Union countries accompanied by Switzerland which lies outside the union, consistent with its national policy of neutrality. Is this a mere coincidence? I think not. The appeal of dual education at a vocational training college or at times at a university of cooperative education lies in the fact that it combines theory with practice on the job. The modalities may vary from one institution to the other but as an example, a student trainee may spend two days of the week attending lectures at the college and spend the other three to four days working as a trainee in an appropriate business or industry. The student trainee is paid an allowance by the company, a cost mitigated by what it subsequently benefits from its trained apprentice. Because the cost of this scheme can be quite burdensome on the participating companies the government who actually emerge the ultimate beneficiary when skilled labour increases and the unemployment rate drops as a result of more jobs being created, could do well to consider giving the companies involved some sort of tax break to encourage increased participation. Naturally, this would provide added incentive.

In a hand-to-mouth economy like Nigeria’s, with more than half of the over 180 million people living below the poverty line, it is callous to prevent daily paid workers from earning a living because government says they should do nothing but vote for politicians

’

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Love is...Part 3 pregnant with wisdom. He said his mum one day came to him and it was evident by her demeanour that she wanted to say or enquire about something. She had the pained look of hesitancy on her face so he knew he would need to draw her out on this one. Ever so gently he asked her with all the respect an African child could muster to ask his doting mother if anything was the matter. At first, yet unable to speak but by the mere shaking of the head she managed to gesture “no”. Suddenly it burst out as if to contain it a second longer would choke her, “Babafemi, when will you too attain the sort of scholastic heights that will require you to wear glasses?” I paraphrase in English. Daddy almost fell off his chair, or was it his àpótí, a traditional African stool? Not to appear rude or to mock his illiterate mother’s obvious ignorance he quickly pulled himself together. He later came to realise that her reluctance to just come out with it was because in spite of her burning desire to see her son become “eeyan nla” (a successful person) she didn’t want to appear to belittle her “village boy done good’s” already commendable achievements and in the process possibly offend his sensibilities. Many a time in our quest to see our children succeed we misdirect our efforts by pushing them in a direction which if only we took a little time to ponder over, would realise wasn’t in their interest. Is

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7 things Atiku must do to win the 2019 presidential election

BELL IHUA Dr. IHUA holds a PhD in Management from University of Kent, Canterbury, United Kingdom. He’s a public opinion pollster, social researcher and evaluation expert based in Abuja.

igeria is currently at a Kairos moment, an opportune and defining time in history, where posterity would judge every citizen aged 18 and above, on the role they played to help shape a better future for the nation, especially our children and those yet unborn. Whether you’re independent and non-partisan, or you’re a party loyalist; we must all agree that the country isn’t on the right trajectory. This current path is not sustainable. Real change must happen for us to take our rightful place in the league of nations. As a political watcher, one can easily decipher that the 2019 general elections would not be business-asusual. Something must give, something must break. The same way Isaac said to his son Esau in the scripture that “when you become restless, you shall break of the yoke from off your neck”. From the perspective of an experienced opinion pollster, I can tell Nigerians have become restless, and something is about to break. Thankfully, the political space has opened up, there’s been some significant new entrants spicing up to the political process and tackling genuine issues that touch the heart of our common existence. I have particularly enjoyed Kingsley Moghalu’s erudition on tackling the economy; Tope Fasua’s articulation on the digital economy, artificial intelligence and the urgency of purpose; Fela Durotoye’s discourse on rebuild-

ESOSA JOHNSON-OMOREGBE Johnson-Omoregbe is a Public Policy Analyst based in Lagos

n February 2018, Vice President of Nigeria, Prof. Yemi Osinbajo described MTN as a classic example of the many success stories FDIs in Nigeria. Osinbajo noted this much during the launch of a policy laboratory aimed at accelerating the intervention of the Economic Recovery and Growth Plan (ERGP). The ERGP initiative is catalyst for the required $35 billion to bridge Nigeria’s massive infrastructure gap over a six to seven year period. The deficit in Nigeria’s infrastructure is the main reason it was listed as the country with the largest number of poor people in the world. As the pressure from a lack of resources in power, roads, education, healthcare and industrial capacity continue to erode the quality of life for an exploding population, our government officials – career

ing a new image for Nigeria; Chika Ukaegbu’s 3 pillars of Education, Entrepreneurship and Technology; and Sowore’s radical nonconformist campaign approach (not on legalizing marijuana though!) amongst other aspirants, now candidates. Do these guys have a chance? Yes, they do, but not necessarily in 2019. For one, they are fragmented, and the lack of cohesion will not give them the critical mass needed to win an election of this nature. By and large, the current contest comes down to a two-horse race between the incumbent, President Muhammadu Buhari, and former Vice President, Atiku Abubakar. Are they the best candidates Nigeria can have? I don’t believe so; but we must understand that this is the reality of our current political system and structure. Former VP Atiku emerged winner and candidate of the PDP from a seemingly well-organized presidential primary in Port Harcourt last weekend, and as the campaign begins, I’m led to share some thoughts on 7 things Atiku must do to emerge victorious in the 2019 presidential election. Now, these are my thoughts and strong personal convictions and I believe everyone is entitled to theirs. Whether or not Atiku Abubakar would become president of Nigeria come May 29, 2019 would be largely dependent on the clinical and strategic execution of most, if not all, of these 7 interrelated points discussed below. 1. Elevate campaign into a national movement : Up until now, the focus of most aspirants has been to pick up their party candidacy. Now done and dusted, candidates can now settle down to commence the real work of campaign and selling themselves to Nigerians. It is my firm believe that leaving the campaign as a twohorse battle between APC and PDP is a recipe for failure. Atiku and his campaign team need to raise the conversation far and above party lines into a national movement wrestling for the heart and soul of the nation. With almost 11 million Nigerians newly registered to vote in the 2019 elections, it is clear that

‘ Beyond rhetoric, Atiku

needs to enlist the support of all interested Nigerians, home and abroad, who are keen to see real change in the country. Anyone who has great ideas on how to move any sector forward should be welcome to contribute

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young people aged between 18 and 35 years would be a strong factor in deciding who emerges President. For most of these youths, particularly first-time voters, there’s never been a rallying-point or ideology to inspire them to action. There may have been a glimpse of hope in the call for “change” that heralded the emergence of President Buhari. But, in truth, much of that hope has long been dashed. So, elevating the campaign into a movement means giving fresh hope to all Nigerians, especially these young folks. A message that can inspire a new Nigerian dream. One that inspires hope in a brighter, greater and prosperous future for all. Atiku’s campaign slogan already captures this #ANigeriaForAll; however, it now needs to move from being a mere slogan to an ideology embodied by a critical mass. 2. Let the big ideas & statements start flowing: Now, beyond the usual unrealistic campaign promises such as equating one Naira to one Dollar, Atiku and his campaign team need to come up with big, bold, realistic and actionable ideas that can inspire hope in Nigerians and send clear signals to both local and international partners that the true giant of Africa

is set to wake again. We need clear ideas on what Atiku would do to create jobs for Nigeria’s brewing time bomb, the massive unemployed youths. Everyone knows that civil servants in Nigeria are poorly paid, but decry corruption in the system. Atiku needs to be clear on what his administration would set as the new sustainable minimum wage. Would Atiku commit to working with the best brains Nigeria has in every sector? Would he commit to granting significant political appointments to young emerging leaders less than 40 years old? Would he commit to 50:50 gender parity in cabinet positions and appointment slots? How many new “graduate” police officers and armed forces personnel would his administration recruit within the next 4 years? What is Atiku’s practical action plan to tackle the country’s unending security challenges? How much would his administration commit towards genuinely funding MSMEs and youth entrepreneurship? How does Atiku plan to reduce our excessively burdensome cost of governance? With 13.2 million out-of-school children in the country, would Atiku commit to ensuring that no Nigerian child will be out of School? What are the genuine social safety nets and poverty alleviation programmes that his administration hopes to implement? The list is endless; but the ideas I’m talking about have to be really big and bold enough to inspire meaningful hope. 3. Call for support & ideas from all interested Nigerians: As I often say, for governance to be effective, it has to be inclusive and participatory. Beyond rhetoric, Atiku needs to enlist the support of all interested Nigerians, home and abroad, who are keen to see real change in the country. Anyone who has great ideas on how to move any sector forward should be welcome to contribute. There should be a dedicated email and team, responsible for genuinely sifting through the emails and responding to the emails as well. This email should not be only for the purpose of campaign, but should run through his

administration on assumption of office. It would also serve as a tool for capturing Nigerians opinions and assessments of his administration and its reform efforts. Atiku’s campaign needs a unit in charge of public opinion, to help navigate his campaign strategy through the nuances of public attitudes and opinions; particularly at a time like this, where rumours and fake news are rife, and perceptions can easily be swayed like a pendulum by politicians whose only aim is their personal interests. 4. Going across party lines: The task of rebuilding Nigeria is too great and enormous to be left in the hands of a single political party or group of politicians and their associates. Atiku needs the collective effort of a critical mass. It is time to go across party lines to identify and recruit Nigerians from all walks of life to help realize his dream of rebuilding a new Nigeria, #ANigeriaForAll. It is time to rise above nepotistic politics of party loyalists, cronies and kinsmen; and seek out honest, dispassionate and detribalized Nigerians, irrespective of creed and tongue, to join in the process of rebuilding our fractured nation. I really do not intend to mention names, but permit me. For instance, why would you have a Pat Utomi or Nuhu Ribadu caught up in the murky waters of crooked party politicking, when they can be called on to contribute those grandiose and lofty ideas? Certainly, there should be room for some of Utomi’s “Asian Tiger” economic philosophies, and ideas of connecting the nation by high speed rails and turning LagosIbadan express road into a massive 12-lane regional corridor with immense capacity for creating an economic revolution. It isn’t rocket science! What I’m simply saying is that all “discerning” hands must be on deck, and not left to political jobbers and rent seekers to determine who gets what, when and how. Note: The rest of this article continues in the online edition of Business Day @ https://businessdayonline.com

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Nigeria’s FDI potential and it undoing civil servants and political appointees alike – play hard and fast with one of the most globally effective tried and tested mechanisms for bridging these gaps; public private partnerships (PPP) backed by foreign investment. Anyone doing business in Nigeria runs up against what might be termed institutionalized gridlocks, with enormous political demands bordering on coercion and outright intimidation. A case in point is Dr Wale Babalakin (SAN), chairman of the Resort Group, and a leading proponent of the PPP project, who has received some of the worst battle scars at the hands of government officials over his investments in critical sectors of the economy. Today, his ‘MMA2’ airport terminal is the first to be built in Nigeria with private funds under a build, operate and transfer (BOT) agreement with the Federal Government. This same Federal Government through a parallel agency, daily violates the exclusivity terms of said agreement by running a domestic

aviation terminal in direct competition with the privately funded one. Apart from government pressure, one finds that PPPs are faced with a high degree of cynicism and public backlash from civil society and labour groups due to a perceived lack of transparency. These critics argue that privatising key public sector services violates the Nigerian constitution. Private investors who usually have a high degree of foreign debt who will often find themselves dealing with the multiple pressures of inconsistent and unfavourable government policy as well as a high degree of public opprobrium from vested interests and fifth columnists which further undermines investor confidence. Additionally, many foreign investors are in a perennial battle to legitimize their existence in the eyes of the media, frequently trying to explain to the people why their presence in the country is beneficial in the long term. It is probably impossible to analyse Nigeria’s complex mix of business,

politics and cronyism. Venturing into these parts can be quite a risky business. UAE-based environmental utility group, Visionscape found themselves in the eye of a sociopolitical storm when it became clear to all that embattled governor Akinwunmi Ambode had not adequately addressed the convoluted political patronage systems (designed at Bourdillon?) that were being supported by the previous ‘PSP’ system. One can only imagine the calls between Lagos and Dubai held after Speaker of Lagos State House of Assembly, Mr. Mudashiru Obasa, referred to the company as ‘a ghost not known to the state’! This disclaimer came on the heels of the foreign company emerging after a controversial tender process which saw a number of local and international firms compete for Lagos state’s domestic waste collection amid a liberalisation of the waste management industry which many have argued is tantamount to destroying local investment.

Krispy Kreme was recently faced with consumer backlash and jeopardy of their multi-million-dollar investment by the Babatunde Irukera-led Consumer Protection Council who chose to investigate allegations of the US doughnut franchise using expired mixes in a ‘trial by social media’. Subsequent investigation by NAFDAC – the relevant agency for food and beverage regulation – found that the goods were within legal limits and tests proved the food products were fit for consumption. In other climes, this admission would have been announced with the same fanfare as the criticism but alas, our officials are accountable to no one. Krispy Kreme is now left to clean up the mess and do its own explanation to an already skeptical public. Note: The rest of this article continues in the online edition of Business Day @ https://businessdayonline.com

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Fuelling poverty through import ban

h e f e d e ra l g o vernment recently announced that it plans to close Nigeria’s border with Benin Republic to tackle the menace of rice smuggling into the country. The minister of Agriculture, who announced the move, said shutting the borders had become necessary to encourage local production and sustain the economy of the country. The federal government and even the president had been claiming that Nigeria was on its way to self-sufficiency in rice production as the country’s rice import was down by 90 percent. The president also boasts that rice import will be completely stopped later this year to encourage local production. Well, rice importation through the ports have been technically banned since 2015 as a discouraging 70 percent tariff more or less effectively dissuaded importation through the ports, while it remained totally banned through the land borders.

The reality though, as BusinessDay findings have shown is that, as legal importation to Nigeria drops drastically, neighbouring countries such as Benin, Cameroun, Niger and others have seen their parboiled rice imports increasing. Ironically, these countries mostly consume white rice (another variant of the staple), whereas they import more parboiled rice, which, consideration their population, can last them for a decade. However, they continue to import parboiled rice every year while legal imports continue to decline in Nigeria as smuggling increases exponentially. Data by the Thai Rice Exporters Association shows that Benin Republic’s rice imports from Thailand from January to November 2017 stood at 1.64 million metric tonnes, a 32 percent increase from 1.24 million metric tonnes within the same period in 2016, and an increment of 104.45 percent from 805,765 metric tonnes exported to Benin republic in 2015. Cameroun also imported 663, 667 metric tonnes of parboiled rice

from Thailand between January and November 2017, a 47.64 percent increase from 449, 513 within the same period in 2016, and 449, 297 metric tonnes in 2015. It is safe to say that most of the imports to these countries end up in the Nigerian market through smuggling. An investigation carried out by BusinessDay some months ago also shows that smuggling is rife along the official border points and despite the fact that rice importation is banned through the borders, traders continue to import the commodity through official border points usually after settling customs officials. What is more, the prices of the smuggled rice are way lower than those of locally produced rice. Consequently, poor Nigerians have continued to patronise the imported rice, which they feel is also of higher quality than locally produced rice. Now that the reality has dawned on the government, it is planning to shut the border with Benin Republic and also use drones to monitor smuggling so as to prevent or stop

them. But we need to ask: does the government also plan to shut the borders with Niger Republic, Chad and Cameroon also? Does it plan to expel all the custom officials at the borders that connive with smugglers to bring in the rice? We must stop chasing shadows. We cannot at one instance, be advocating for free trade and at the same time putting barriers to free trade all over. Secondly, the government cannot be stifling competition just so to support and protect some inefficient but big cartels of local rice producers. The government cannot be claiming to be interested in addressing poverty and at the same time encouraging or supporting monopolies that always results in higher prices. Imported rice have continued to appeal to Nigerians because they are way cheaper and of more quality than the local ones. Instead of fighting the wars of the local rice cartel, the government would do well to improve their operating environment to be able to compete favourably with imported rice.

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Wednesday 17 October 2018

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African Circle acquires 16 new trucks for waste management at ports

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

SoFresh raises 300, 000 euros for equity investments to drive growth SEYI JOHN SALAU

s part of the impact investment initiatives to drive expansion, So Fresh Neighbourhood market, a fastgrowing indigenous brand that provides healthy mean options recently signed a €300, 000 equity investment from Inclusive Impact Investment (Triple-I), a move that saw it open a new outlet in Yaba, Lagos. So Fresh is Nigeria’s number one premium healthy food chain for a wide range of fresh, delicious, nutrientrich and healthy meals. The indigenous brand which started 10 years ago has grown geometrically, building a standard of consistency, as it position itself as an international brand out of Nigeria, providing support for smallscale holders farmers. Olagoke Balogun, the managing director/CEO of So Fresh Neighbourhood Market said, the transaction is in line with Triple-I’s goals to increase social impact in developing countries, hence So Fresh is strategically placed as a recipient of the investment, as a small and Medium Enterprise (SME) in Nigeria.

“We are very excited about this growing partnership. By investing in us, they can continue to chart out a path to meaningful growth and create a brighter future with a large social impact footprint that is greater employment, higher income equality and better access to relevant services and products for people living in poverty. On the other hand, So Fresh will grow its business profitably and sustainably, while fulfilling its mission of ‘Inspiring everyone to live fresh and live healthy. “We seek to bring the So Fresh healthy life closer to the people by expanding our reach and opening more outlets across the country. The Yaba outlet being the sixth is an evidence of our desire to build a healthy nation,” said Balogun. Abimbola Balogun, the chief operating officer (COO) said So Fresh aims to create over 150 new jobs, open 10 new outlets across multiple Nigerian cities. According to her, the growth goal is to reach small holder farmers, as the organisation expands its supply chain locally. “So Fresh is always eager to give the customers a memorable healthy life experience and as such, the company encourages her

L-R: Oluwaseun Bamisile, managing director, Integrated Cash Management Services Limited (ICMS); Debra Adara, assistant director, currency operations department, Central Bank of Nigeria (CBN); Priscilla Eleje, director, currency operations department, CBN, and Charles Nwodo Jr, chairman, ICMS, during the visit of the Central Bank of Nigeria (CBN) team to the new ultra-modern facility of Integrated Cash Management Services Limited (ICMS) in Lagos.

customers to make it a daily lifestyle of living healthy especially through what is consumed into the body. In the contribution to the UN Sustainable Development Goals (SDGs) 2 and 3, So Fresh is committed to making healthy food accessible

WaterAid sees economic benefits in hand-washing, good food hygiene CHUKA UROKO

and-washing with soap and good food hygiene together bring health and economic benefits, WaterAid, an international not-forprofit organisation that works in 34 countries to change the lives of the poorest and most marginalised people, has said. Theorganizationwhichisworking to make clean water, decent toilets and good hygiene normal for everyone,everywherewithinageneration,explainsthathand-washing with soap is essential for health workers, improving quality of care and reducing risk of cross-infection. Handwashinghabit,itadds,also makes children healthier, allowing them to go to school and learn, and helps adults remain healthy to go to work and earn a living or care for their families. ChiChiAniagolu-Okoye,WaterAid Nigeria country director, noted in a statement in Lagos on Monday that as the world marked Global Hand-washing Day (Monday, October 15), that there was need for improved investment in improving hand-washing practice and access. “We advocate improved investment in basic hand-washing access and also for citizens to join in making this happen by using

the power they wield in their hands to vote in the coming elections for leaders who pledge commitment to improving WASH access”, the country director said. In most societies, especially in the rural areas, only 1 in 5 people wash their hands after going to the toilet, despite an established fact that washing hands with soap and water reduces cases of diarrhoea by almost 50 percent and, on average, aroundtheworld,only19percentof people wash hands with soap after defecation. The theme of this year’s Global Hand-washing Day commemoration, ‘Clean hands: A recipe for health’, focusses on the link between hand-washing, food and nutrition, creating awareness on the need for hand-washing with soap at critical times such as after using the toilet, before cooking, eating, or feeding others. “The simple act of washing hands with soap can save lives, helping to keep food safe, prevent diseases and help children to be able to grow strong and healthy. It contributes to child survival, good nutrition, the ability to successfully attend school, and the economic benefits of greater productivity. Yet globally only one in five people wash their hands after going to the toilet, significantly increasing

the risk of contamination and diarrhoeal sickness”, AniagoluOkoye said Children with diarrhoea not only eat less but are less able to absorb nutrients from food and research has shown that wasting and severe acute malnutrition can be linked to poor hygiene practices. Food borne illnesses are a major cause of death in developing countries like Nigeria, leading to illnesses which are harmful, especially for children, pregnant women and those with compromised immune systems. Hand-washing with soap is estimated to reduce diarrhoeal diseases by between 27 percent and 48 percent.Combinedwiththeuseofclean drinkingwater,itcouldreducetheloss of nutrients and stunting in children under five by up to 15 percent. It is an important hygienic practice that keeps food safe for consumption and protects from food related diseases. Critical food-related times for handwashing with soap include before cooking or preparing food, before eating, and before feeding someone, including before breastfeeding. It is important caregivers in schools, hospitals or at homewashtheirhandsatallcritical times, modelling and enforcing good hand-washing behaviour for children.

and ultimately ensures good health and wellbeing for all Nigerians,” said Abimbola. So Fresh currently has five stores across Nigeria, starting out with an investment of €10, 000 and three persons, eight years ago; the healthy food chain has

grown to become the prime destination for fresh healthy food, employing over 100 persons. However, with the investment from Triple-I, So Fresh will receive technical support to further pursue its strategic transformational

goals, in line with its mission to ensure that healthier food options are available to Nigerians across the country. The investment is expected to help increase the supply and delivery options for fresh, safe, nutrient-rich food in Nigeria.

Dangote cement to expand market share with new “BlocMaster” brand MICHEAL ANI

frica’s biggest cement producer, Dangote Cement is set to expand its market share in the Nigerian cement market, thanks to the launch of its new high quality brand “Blocmaster”, Joseph Makoju, group managing director (GMD) for the cement maker said. The new Portland limestone cement “BlocMaster”, according to Makoju is the final answer to the yearnings and expectations of Block and concrete makers who desire a new product that could combine all the qualities of the existing range of cements in the market. “Ultimately, the launch of this new brand will translate to higher revenue for us and will also increase our market share in the cement industry”. Makoju said at the side-line of the launching of the brand. Dangote has maintained its dominance in the Nigeria domestic cement market accounting for 65 per cent of the Nigerian market volume. With this new brand, the cement maker said it will increase its revenue, improve profitability and maintain the firm’s vision as being the leading brand in the cement manufacturing space. Makoju explained that Bloc-

Master is a product of intensive research, laboratory and field tests and regulatory authorities’ approval. According to him, the new cement comes with a difference and value for money. He stated that all stakeholders involved in the value chain of cement were part of the research and the eventual formulation of the BlocMaster saying “all stakeholders were involved, blockmakers, the regulatory agencies and the customers alike. We took samples to them to test before we finally concluded on the product. “We identify an opportunity and a gap that has to be filled and we went ahead to design and formulate the BlocMaster. In addition, we are giving the product out at the best price that gives the best quality”, he said. Explaining the qualities of the new product, Oare Ojeikere, chief marketing officer for Dangote Cement Group, said Dangote BlocMaster is a premium high strength Portland limestone cement that gives users up to 50mpa in compressive strength after 28 days. He pointed out that the product is Ideal for concrete applications that require very high final strength and durability. Oare stated that dangote cement is made in Nigeria but

loved across Africa because of its high quality. “And it is because we can vouch for our products high quality that is why we are in so many African countries. “We are the king in this business as we control more than 60 per cent of the cement market. We introduced to you 3X 42.5R, 3X 42.5R, we have Falcon, and now we are rolling out BlocMaster, as the name suggests we want the name to resonate anywhere cement is mentioned, that is why we called it BlocMaster” He said the Unique Selling Proposition of the new Cement are its unparalleled strength as its 15 per cent stronger than any 42.5 grade presently available in Nigeria market. “Its 50 per cent stronger after one day. This means that blocks made could be quickly remoulded, and will be ready for sale faster, increasing the speed at which block makers can meet customer demand. “BlocMaster with its higher compressive strength will deliver stronger blocks at the same mix ratio as used currently, and can deliver more blocks, if same quality blocks as achieved currently are desired. BlocMaster is a high grade technical product that allows users achieve higher concrete strength qualities with less cement, lowering in the process, users’ concrete cost.”

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Business Event

African Circle acquires 16 new trucks for waste management at ports AMAKA ANAGOR-EWUZIE

etermined to fulfil its mandate as contained in the agreement signed with the Federal Government, the management of African Circle Pollution Management Limited (ACPML) has acquired 16 new modern trucks. The trucks which were built with the latest technology, were manufactured by Mercedes Benz, and are expected to enhance the operations of the company in the nation’s seaports of Lagos, Calabar, Port Harcourt, Warri and Onne. The procurement of the trucks was in line with the requirements of Maritime Pollution (MARPOL) 73/78, a key guideline of the global maritime watchdog, the International Maritime Organisation (IMO). With the provisions of MARPOL 73/78, the management

of the Nigerian Ports Authority (NPA) is mandated by IMO to provide adequate waste reception facilities for handling waste generated in vessels calling in Nigerian ports. Unveiling the trucks in TinCan Island Port Complex, Apapa, Lagos, Hadiza Bala Usman, managing director of NPA, commended the management of African Circle for the strides achieved since it signed the Build, Operate and Transfer (BOT) agreement with the Federal Government. Usman, who was represented by Nasir Anas Mohammed, general manager, Security, stated that the new trucks would go a long way in enhancing its operations in the months ahead. He said the move would help Nigeria to meet the requirements of the IMO as regards the evacuation of waste generated in Nigeria territorial waters. Ahmadu Fidi Ahmadu, acting

co-coordinating officer, ACPML, said the firm procured the trucks to meet the increase in the demands for its services over the years. He disclosed that while eight of the trucks would be used in the ports situated in Lagos, the other eight would be used in Onne Port Complex, Onne, Rivers State. According to him, Mercedes Benz is known for efficiency, performance and safety. We usually have service level agreements (SLAs) with an authorised distributor/dealer for training, service and support for our personnel. Latifat Ibrahim, district manager, ACPML, stated that the firm has the support of the Federal Ministry of Transportation and the NPA in the discharge of its mandate. She reiterated the readiness of ACPML to live up to expectations of stakeholders in its areas of operation.

L-R: Omotayo Kabir Atunde, treasurer, Defence Industries Association of Nigeria (DIAN); Amal Ahmed, financial secretary; Bamidele Ogunkale, chairman; Ade Ogundeyin, vice chairman, and Kola Balogun, general secretary, during the inauguration of the Association in Abuja recently.

Heritage Bank, NIMASA partner on global maritime safety standards

eritage Bank Plc, one of Nigeria’s most innovative banking service provider, and Nigerian Maritime Administration and Safety Agency (NIMASA) have joined forces to educate stakeholders about the maritime enforcement global benchmarks. The training session, which had as its theme: Maritime Enforcement Safety: Current Global Benchmarks, had representatives of these organizations present: Nigerian Navy, Nigerian Ports Authority, Lagos State Safety Council, Shippers Council, Marine Insurers, Maritime & Dockworkers Safety Inspector and Marine Police. Addressing participants at the workshop held at the premises of NIMASA in Apapa, Victor Amakwe, group head, Private Banking, Private Wealth Management, Heritage Bank; said at Heritage Bank, we under-

stand the importance of health safety, which implies that every working environment or workplace is kept in an organized, uncluttered, and hazard-free condition. According to him, the benefits of doing this are far-reaching, and affect not only workers’ safety but also their health and productivity. “Improvements in worker health and productivity, in turn, lead to lower operating costs thereby providing benefits to both the workers and the employer”, he stated. In his speech, Dakuku Peterside, director-general/CEO, NIMASA, acknowledged that the mandate of his organization is to ensure that any vessel using Nigeria’s waterways, both onshore and offshore, are safety conscious. According to him, as a safety administrator, NIMASA cannot be enforcing safety when it is not

operating in a safety environment. He emphasized that the safety standards are globally set and managed for the benefit of all nations. Peterside though noted that unlike before, there has been tremendous improvement in the way NIMASA staff and other stakeholders in the maritime sector adopt the global safety standards, there is room for improvement. “We are itching closer to it every day’, he stated. The NIMASA boss explained that the workshop was organized to promote a culture of safety in operations of all stakeholders; for self-examination of each operation environment; and to evaluate the global best practices. “In NIMASA, we are determined to give you every support you require to ensure a new culture is put in place in our workplaces”, he concluded

CDMB partners Dangote Refinery on local content implementation DIPO OLADEHINDE

igerian Content Development and Monitoring Board (NCDMB) has applauded the management of Dangote Petroleum Refinery and Petrochemical Free Trade Zone Enterprises (DPRP) over compliance to the local content law in the execution of its projects. “Dangote Refinery project is a very important project and NCMB is willing to partner with the company to ensure full implementation of the local content policy and affirmed more commitment towards implementation of the Local Content policy in the country,” NCDMB’s director of Monitoring & Evaluation Akintunde Adelana, who represented the board’s executive secretary Simbi Wabote said. Wabote noted that part of what we see today is part of NCMB’s efforts towards ensuring

the company and its contractors comply with the local content policy and they have put in a lot of efforts in this regard. “We embarked on this journey with the company a long time ago and we are ready to partner with the Dangote Group,” Wabote said. Speaking further, Wabote described the Local Content Act as the quantum of composite value added to, or created in the Nigerian economy by a systematic development of capacity and capabilities, through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry. NCMB’s executive secretary said the country recorded loses prior to the enactment of the local content policy, which he noted, came from jobs executed abroad by International Oil Companies (IOCs), operating in the country. “The narrative then was that

nothing can be done in-country. Plants and modules were fully fabricated offshore without any structure in place to achieve knowledge transfer. Before 2010, we had no active dry-dock facilities,” Wabote said. “The few we had were abandoned and left to rot away. Today, we have four active dry docking facilities in Port Harcourt, Onne, and Lagos.” He said the board’s mandate is to develop local capacity in key areas such as manufacturing and fabrication and promote indigenous ownership of assets and utilization of indigenous assets in oil and gas operations. Wabote added that the board’s responsibility also include linking the oil and gas industry with other sectors of the economy, enhance multiplier effect of oil and gas investments in economy and develop pool of competitive supply chain rooted in oil bearing communities.

L-R: Wasiu Adumadeyin, president, National Association of Proprietors of Private Schools; Yetunde Odejayi, representative of the deputy governor of Lagos state; Kayode Oni, chairman NAPPS week 2018; Agenga Williams, director, private education and special programme, ministry of education, and Omotayo George, senior manager, youth segment, MTN Nigeria, during the grand finale of the NAPPS week 2018 in Lagos.

L-R: Obabiyi Fagade, senior brand manager, Heineken; Omoyemi Akerele, creative/managing director, Style House Files, and John Mago, head information security, FETS Limited, at Heineken Press Cocktail in Lagos where Heineken was announced headline sponsor of Lagos Fashion Week 2018.

L-R: Morufudeen Bolanle Odetokun, chairman, fellowship awards committee; John Funso-Adebayo, national chairman, Nigerian Institution of electrical and electronics, and Morenikeji Ayodele Aniye, awardee, during the 5th conferment of fellowship award by the institution in Port Harcourt.

BUSINESS DAY

Wednesday 17 October 2018

CityFile Indimi Foundation donates to Borno IDPs DIPO OLADEHINDE

Members of Labour Room Initiative (youths) during a peaceful protest against political violence and thuggery in Zamfara on Monday. NAN

ver 600 Internally Displaced Persons (IDPs) in Bama, Borno State, including women and children are celebrating a long-awaited movement from camps to fully-equipped new homes of as Muhammadu Indimi Foundation has donated housing units to the IDPs. The Muhammadu Indimi village for IDPs in Bama was commissioned in October 2018 by Governor Kashim Shettima who also flagged off the Gamboru-Ngala phase of the resettlement initiative by the foundation. The village is a community with modern facilities, including 100 solar-powered 3-room homes, clinic, school, community centre and marketplace. One of the beneficiaries, Mohammed Mustapha with a family of 17 had been living in Dalori camp in Maiduguri for more than four years. We had forgotten what it is like to have a home again, the good life. I will never forget this,” he said with excitement. Muhammadu Indimi, founder of the foundation, said the Borno Elders’ Forum worked closely with the foundation to select the one hundred families. “People in North-East Nigeria have been through difficult times; we sympathise greatly with them. Our goal is to create and support initiatives with long-term impact. It is no small responsibility, but we will remain committed to finding sustainable, life-changing solutions for our people,” Indimi said.

Hope rises for erosion ravaged Imo seals deal with Chinese firm to generate power communities in A/Ibom SABY ELEMBA, Owerri

…as state adopts control measures ANIEFIOK UDONQUAK, Uyo

eprieve is expected for some communities ravaged by gully erosion in Uruan local government area of Akwa Ibom State following control measures to prevent the natural disaster from crippling economic activities in the area. So far eleven communities including Ituk Mbang and Nung Ikono Ufok in the southern part of the local government are affected with a major link road washed off. Ephraim Inyangenyen, the state commissioner for works, who confirmed the devastation caused by the erosion said work would soon start on the erosion site to enable the people go back to their businesses. “We will go back to Ituk Mbak and within the next one month you will see

the difference. We shall work there to ensure that the people are not cut off anymore,” he said. According to Inyangenyen, there was a similar scenario in Ewet in Uyo, the state capital in which the state government had declared the area a disaster zone. “We declared a place a disaster zone; we did not knock down those houses. I told them if you stay there and it rains, landslide could occur, once we have money, we will take down the buildings and sand-fill it,’’ he said. Checks revealed there are many erosion sites in Akwa Ibom State in which many communities in Oron, Mbo, Itu and Uruan are badly affected. Further findings showed that apart from the terrain of the areas which makes them prone to erosion, human activities have also contributed to the disaster being witnessed in parts of

the state. The commissioner, who appealed to the people to support the efforts of the state government in checking erosion menace, assured that relevant agencies of government including the ministry of environment and the road maintenance agency have been given the responsibility to implement measures that would ensure safe and clean environment. He reiterated the commitment of the state government to completing all ongoing road projects before May 2019, saying some of the road projects initiated by the present administration and that of the previous administration were at various levels of completion. He listed the roads that would be completed soon to include the Uyo-Ikot Ekpene road, many of the internal roads in Oron metropolis and Etinan Ndon Eyo road to link the East West road.

Edo records over 200 fire outbreaks in 9 months IDRIS UMAR MOMOH, Benin

do State government says over 200 cases of fire outbreak were recorded between January and September this year in the state. Mika Amanokha, commissioner for youth and special duties disclosed this in Benin, the state capital, on Monday, adding, however, that no life was lost in any of the cases. Amanokha said a total of N15.3 million was generated internally by his ministry against the targeted revenue of N24 million. He said the revenue was generated from

renewal fees by social clubs, voluntary organisations, churches among others. He, however, attributed the low revenue generation to the ongoing renovation of the Samuel Ogbemudia Stadium. He expressed optimism that the targeted revenue would be realized within the months of the year, as more social activities do take place during the Yuletide period. Kabiru Adjoto, speaker of the state House of Assembly, urged the ministry to improve on its revenue generations by exploring all necessary avenues within its jurisdiction.

Adjoto, however, raised the alarm on the influx of commercial sex workers around the House of Assembly legislative quarters and its environs from 9:00 pm till dawn, and urged the ministry to urgently put measures in place to check the trend. Responding to this, the commissioner said it was not within the purview of the ministry to stop the commercial sex workers from the areas. He noted that the information at the disposal of the ministry indicated that the commercial sex workers were business people and the ministry has no right stop them from their business.

mo State government has signed a memorandum of understanding (MoU) with Elion Global Resources, a Chinese firm to generate power and develop agro-based ventures in the state. Mark Uchendu, secretary to the state government, signed the agreement on behalf of Imo State while the CEO of Elion Global Resources, Xu Weihu signed for the firm. Wang Wenbiao, president of Elion Global Resources, led his team to meet Governor Rochas Okorocha in Owerri, the state capital where the event held last weekend. Speaking, Okorocha said Imo needed a major player like the Chinese firm to aid the development of industrial parks in the state “We have the gas and gas is power and we need a credible a company like this to move our gas into power for the greater and mutual benefits of the state and country”.

Police to pay N10m to man over rights violation

ederal High Court, Maitama Abuja, has ordered the Nigeria Police to pay N10 million as compensation to one Aondofa Shenge, for violating his fundamental human rights. The judge, John Tsoho, in his judgment on Monday, also restrained the police from further arrest and detention of Shenge. Tsoho upheld the prayers of the counsel to the applicant, Matthew Onoja, and dismissed the preliminary objection raised by counsel to the police, Matthew Omosun. Onoja had earlier told the court that his client was arrested by some police officers in Makurdi in August 2017, and held in detention for more than a year without charges. Onoja said his client who is a businessman, was arrested and detained in the NPF Special Anti-Robbery Squad (SARS) office in Makurdi, until January 2018 when he was formally transferred to Abuja. He said when the police failed to release the applicant on bail; the matter was taken to the court. Onoja said the case of fundamental human rights abuse was formally filed in April 2018.

BUSINESS DAY

Wednesday 17 October 2018

Politics & Policy Wednesday 17 October 2018

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BUSINESS DAY

Third Force: NIM, Agbakoba, Duke, Mimiko, Ezekwesili, Moghalu, others set for consensus candidate INNOCENT ODOH, Abuja

eader of the People’s Trust (PT) and cofounder of the Nigerian Intervention Movement (NIM), Olisa Agbakoba, has mapped out strategies to collaborate with some opposition political parties to form a consensus candidate to stand against President Muhammadu Buhari, candidate of the ruling All Progressives Congress (APC) and Atiku Abubakar, Presidential candidate of the main opposition Peoples Democratic Party (PDP) in the 2019 general election. Some of the Presidential candidates of the parties angling for the consensus include; the Presidential Candidate of the Social Democratic Party (SDP), Donald Duke; Presidential candidate of the Zenith Labour Party (ZLP), Olusegun Mimiko; Presidential candidate of the ACPN, Oby Ezekwesili and the Presidential candidate of the Young Progressive Party (YPP) Kingsley Moghalu. Others are; the Presidential Candidate of the African Democratic Congress (ADC), Obadiah Mailafia, Gbenga Olawepo Hashim of (APT), Sina Fagbenro Byron of Kowa Party, Ali Soyode of Yes Party among others. The parties’ candidate and leaders of the Third Force, in the country have already perfected plans to shortlist

Agbakoba

and settle for a fresh breed consensus Presidential candidate for the 2019 elections. A statement signed Debo Adeniyi Head, Media Bureau of (NIM), noted that this development was contained in a communiqué issued after a tactical exploratory meeting of the promoters of the initiative on Sunday in Abeokuta, Ogun State Capital. The Director of Strategy and Publicity Bureau of Nigeria Intervention Movement, NIM, Olusegun Awe Obe, disclosed that

Kwara APC primaries: AbdulRaheem vows to reclaim ‘stolen mandate’ SIKIRAT SHEHU, Ilorin

huaib Oba AbdulRaheem, Professor of English and a governorship aspirant in the just concluded controversial primaries of the All Progressive Congress (APC), in Kwara State and Taliban of Ilorin, on Sunday vowed to reclaim his ‘stolen mandate.’ The former chairman, Federal Character Commission (FCC), who appealed for calm amongst his supporters, condemned the process of the primaries which according to him, “was an attempt to undermine the tenets of democratic process”. After a failed attempt to announce the party’s governorship candidate, 48 hours after the primaries were held in Kwara State, the national working committee of the APC in a statement by its national publicity Secretary, Yekini Nabena named AbdulRahaman Abdulrasaq as its flag bearer, development which triggered anger and protest from at least 5 of the

aspirants including AbdulRaheem. In a statement issued to Journalists in Ilorin on Monday, the former Unilorin Vice Chancellor attributed what transpired to what he called “unpatriotic roles of certain elements within the hierarchy of the party”. The statement reads: “on behave of Professor Shuaib Oba AbdulRaheem, Taliban of Ilorin wishes to thank our numerous supporters and well- wishers for their display of courage in protesting and resisting unpatriotic roles of certain elements in the hierarch of our party, APC in the just concluded Kwara gubernatorial primaries. “While condemning in its totality the mindless and provocative attempt to undermine the tenets of democratic process, we wish to appeal for calm in the face of outright display of open and direct robbery of our collective victory at the polls. We are engaging with all patriotic persons in both party and government in order to restore our stolen mandate”

Ezekwesili

the parley resolved to align all serious Presidential candidates of the third force political parties into a common platform for the purpose of upstaging the two Presidential flag bearers of the old order in All Progressive Congress, APC and People’s Democratic Party, PDP at the 2019 elections. The statement said the move is especially inspired by the recent pacts for structural merger signed by the Olisa Agbakoba led People’s Trust, PT and the Obasanjo’s African Democratic

Congress, ADC on one hand and the strategic alliance ratified last month between the Peoples Trust, PT and the Olawepo Hashim’s Alliance for New Nigeria, ANN, on the other, which already set the tone for the emergence of a consensus Presidential candidate of the Third Force against Muhammadu Buhari of APC and Atiku Abubarkar of PDP. The round table to shortlist consensus Presidential candidate of the third force, Awe Obe said, is billed to hold in Abuja in the last

week of this October to be chaired by a frontline leader of the civil society and Chairman of NIM, Olisa Agbakoba, (SAN). The tactical committee in conclusion stated “we have to come to a very firm realisation that none of us in the third force, fresh breed political parties in Nigeria, can go it alone against the two behemoth, hence the necessity for a consensus among third force political parties to take the country back to the people in 2019 from the ruthless grip of APC and PDP.

Imo: SDP tips Eligwe-Ude, former UN consultant, for House of Reps KEHINDE AKINTOLA, Abuja

ocial Democratic Party (SDP) has offered its House of Representatives’ slot for Oru East, Orlu and Orsu federal constituency of Imo state to a Christiania Eligwe-Ude, a former consultant at the United Nations (UN), in the 2019 general election. According to the time-table released by Independent National Electoral Commission (INEC), the House of Representatives election is to take place simultaneously with the Presidential election. Eligwe-Ude, who served also as the Consultant to the House of Representatives Committee on Sustainable Development Goals (SDGs), delivered the education response to the Zero draft at the UN intergovernmental negotiations on the post 2015 development agenda on the 24th June, 2015. In a chat with select Legislative Correspondent, Eligwe-Ude maintained that she has garnered requisite international and na-

tional experiences that will reinvigorate Orsu, Orlu and Oru East Constituency. “l briefly worked at the UN through a nonprofit l started in 2011 called Reading Hamlets. I do recall that l wanted to solve problems, I wanted to help people, I wanted to make a difference but l just didn’t know how. “The consultancy job l held at the United Nations exposed me to alot, more especially how different governments around the world operate and what we could do to make the world a better place. “After l had finished the consultancy job at the UN, I then worked at the House of Representatives Abuja as an SDG consultant, which sealed my decision to join politics and serve my people at the governmental level. “Haven ample experience is very important, a lot of people don’t know this, without experience, there’s no way you would be able to handle any job efficiently. I have a lot of experience under my belt, both international and national experience and I will be ready from day one, once l resume

as a legislator. “I strongly believe that education, dedication, integrity and experience in service are some of the determinants we require to run for office not how much money you have or how good you can talk. I’m educated, the wisdom and knowledge that l learned in the financial, insurance, and educational sector, National Assembly and the United Nations uniquely situates me to understand my geopolitical situations and solutions.” While responding to question on the level of women participation in Nigerian politics across the country, she said: “l believe we should have electoral and political party quotas like other countries have. Quotas have worked in Austria, Ethiopia, Rwanda, Burundi, Guyana, Mexico, so why not Nigeria? “The United Nations has also identified different ways to increase the participation of women in politics, among them is the introduction of quotas like l said earlier and marshalling grassroots community.”

BUSINESS DAY

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Politics & Policy

Atiku/Obi ticket is pro-business, reassuring to int’l partners - Ononuju INNOCENT ODOH, Abuja

A chieftain of the People’s Democratic Party (PDP) Katch Ononuju, has said that former Vice President and the presidential flag bearer of the PDP in the 2019 elections, Atiku Abubakar, made a strategic choice of picking former governor of Anambra State, Peter Obi, as running made, describing the ticket as “pro- business and reassuring to Nigeria’s international business partners”. Ononuju told BusinessDay on Saturday that Atiku believes that the most important language of 2019 election is the economic condition of the poor and Peter Obi being an economic and frugal manager and a builder of wealth is qualified to do the job. “Obi is picked because of his frugal management of funds in Anambra, his growth of industry and on a personal level the fact that he is the country’s largest individual brewer today. So Atiku is looking for somebody who can manage the economy, we have gotten to the extent of understanding that the Vice President is statutorily in charge of running the economy. “So instead of making a mistake let us find somebody who has run and managed businesses successfully. What Peter Obi built in Anambra is the reason he has been picked by Atiku. He is successful bank chairman, a successful busi-

Atiku

nessman. So what you actually have on this ticket is a business ticket that at least will make people believe that this is for prosperity and economic growth,” he said. The public intellectual said further that President Muhammadu Buhari failed to manage the Nigerian economy and refused to take advice from good economic managers, adding that this was the reason former President Olusegun Obasanjo complained so much about Buhari’s inability to take advice and refused to endorse him

Obi

for a second. “Obasanjo recognised that he (Buhari) is not a good economic manager, Buhari also refused to allow those who understand economics to advise him, Buhari does not believe in the private sector being the engine of growth to drive the economy. He thinks that we should go back to the days of government control of enterprises, like recreating the Nigerian airways building refineries in Katsina owned by government. No, we should al-

low the private sector to drive economic growth. “So, what you have now is a business minded -ticket. Atiku is sending a message to the international and business community that this new ticket is a pro-business ticket. So I think this will reassure our international economic partners that this ticket is for business. “The biggest problem of Nigeria today is economy; we are now going into two recessions in a specter of three years of Buhari’s Govern-

EO6: PDP charges CJN to protect judiciary from fascism

he People’s Democratic Party (PDP) has called on the Chief Justice of Nigeria, Justice Walter Onnoghen, to immediately protect the institution of the judiciary from the unconstitutional and repressive fascist policies being foisted on the system by the President Muhammadu Buhari Presidency. The party in a statement issued by its National Public Secretary Kola Ologbodiyan on Monday said the admission by the Buhari Presidency, on Sunday, that its obnoxious Executive Order 6, as well as the travel ban and trailing of citizens, are devised to directly interfere in judicial processes and stifle accused persons of resources, under the guise of speedy trial, has left no one in doubt that the nation is fast sliding into fascism. PDP noted that the Buhari Presidency has commenced an attack on the independence of the judiciary, using the instrument of blackmail and aspersion on its integrity and capacity to effectively and timeously dispense justice. “In trying to use his Executive Order 6 to determine the process, procedures and progression of cases in court, the Buhari Presidency directly seeks to usurp, commandeer and appropriate

Ologbondiyan

the constitutional powers of the judiciary and then arm-twist the courts and use them as “slaughterhouses” for opposition members and perceived political opponents. “We invite Nigerians to further note that the action of the BuhariPresidency is a direct attempt tosuspend sections 6 (6)(b), 36 (5), (6)(d) and 37 of the 1999 Constitution (as amended). “While section 6 (6)(b) provides that judicial powers of the court shall ‘extend to all matters

between persons, or between government or authority and to any person in Nigeria, and to all actions and proceedings relating thereto, for the determination of any question as to the civil rights and obligations of that person”. Section 36 (6) (d) provides that, “every person who is charged with a criminal offence shall be entitled to be given adequate time and facilities for the “preparation of his defence”. “Moreover, Section 36 (5) provides that, “every person who is

charged with a criminal offence shall be presumed to be innocent until he is proven guilty”. “Furthermore, Section 37 stipulates that ‘the privacy of citizens, their homes, correspondence, telephone conversation and telegraphic communications is hereby guaranteed and protected,” he said. The PDP said the travel ban, trailing of citizens and attempt to regulate the processes of the court is therefore an attempt to shortcircuit the constitutional powers of the judiciary and foist a fascist regime where the Presidency becomes the investigator, prosecutor and the judge in determination of trumped-up charges against innocent Nigerians. “The PDP rejects this attempt by this administration to return our country to pre-1984 military dictatorship where siege mentality and suppression of rights of citizens was the rule rather than the exception. “We therefore urge the Judiciary as the last hope of the common man, to immediately insulate itself from the evil machination of the All Progressives Congress (APC), which is now trying to turn the judiciary into an instrument of oppression against Nigerians,” the statement added.

ment. The only time when we got into recession was when he was head of state in 1983. So the only other time we are now going into recession is now. So if Buhari is a poor economic manager and for that the country and the people have suffered, let us find a team that can revive the economy and allow the nation to grow. “So by taking Peter Obi, the emphasis is on economic growth, on productivity, job creation for the mass of the Nigerian people,” Ononuju said.

ADP candidate for Edo South Senatorial District, Owie mourns OsatoIze-Iyamu

andidate of the Action Democratic Party (ADP) for Edo South Senatorial District in the 2019 election, Ese Owie, has mourned the death of late Osato Ize-Iyamu, who passed away recently. Owie in a statement at the weekend eulogised the late IzeIyamu, saying “Following the demise of my brother and friend, Sir OsatoIze Iyamu, I condole the IzeIyamu family particularly my sister - his wife- Ifueko, the children and the Chief Mourner of the family, Pastor Osagie Ize Iyamu. My most profound condolences go to the Ize Iyamu and Asemota families and I pray that the Almighty, the Most Benevolent graciously grants them the fortitude to bear this irreplaceable loss.” Owie said further in the statement that “As colleagues in the Cabinet of the Edo State Government led by Comrade Adams Oshiomhole, he will be remembered as a great leader who treated everyone with respect. Never once did I hear him raise his voice. He valued people and welcomed ideas. We collaborated closely on public service initiatives.”

BUSINESS DAY

Wednesday 17 October 2018

SHIPPING

LOGISTICS

MARITIME e-COMMERCE

STOAN accuses Customs of not paying 25% statutory charge on auctioned containers Stories by UZOAMAKA ANAGOR-EWUZIE

erminal operators under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN), have accused the Nigeria Customs Service (NCS) of not paying them the 25 percent statutory charge of the value of auctioned containers, meant to cover for the cost of moving the containers while in their terminals. The operators, who condemned the process of Customs action over what they described as ‘lack of transparency’, lamented that for several years now, Customs has failed to keep to the agreement, which mandated it to pay 25 percent charge from the value of all auctioned containers in the country. Bolaji Akinola, spokesman of STOAN, said in a statement that was sent to BusinessDay, that container terminals incur huge costs associated with the handling of overtime containers especially with the positioning of containers selected by Customs for auctioning, without any commensurate

Hadiza Bala Usman (m), managing director of the Nigerian Ports Authority (NPA); Olayiwola Shittu (r), the Celebrant and his wife during the Colloquium and Book Presentation in honour of Shittu in Lagos on Monday.

benefit even after auctioning such containers. “Usually, it is after selling the auctioned containers that they are supposed to pay the statutory 25 percent. But for years, they have been moving containers to Ikorodu without paying us the statutory 25 percent of the auction value,” he alleged. C o n t i n u i n g , h e e xplained: “It costs about $10 to lift a container once. For example, we may have to

move seven or more containers to get to the one requested by Customs for auction, and this comes at a huge cost. So, it is causing big operational cost for us that need to be catered for.” Akinola further stated that containers are selected haphazardly for auction. “When overtime cargoes are to leave the port, Customs should not pick a container that is 500 days and leave a container that

Bello, Sarumi call for professionalism among Nigerian freight forwarders …As practitioners lose millions of project cargo to foreigners

takeholders have called for professionalism among Nigerian freight forwarders to reduce the rate at which indigenous freight forwarding practitioners lose jobs to their foreign counterparts. Speaking on Monday in Lagos during the Book Presentation and Colloquium in honour of Prince Olayiwola Shittu @ 68, Adebayo Sarumi, former managing director of the Nigerian Ports Authority (NPA), said that several million tons of cargos enter Nigerian waters without Nigerian freight forwarders benefiting from clearing such goods from the ports. Sarumi, who was the chairman of the event, listed such cargo to include project cargo, saying that cargo owners in most cases call on their foreign partners to clear such cargos without given the job to Nigerians.

He urged the freight forwarders to allow the Act of the Council for the Regulation of Freight Forwarders in Nigeria (CRFFN) to work. He also called on freight forwarders to reduce the high level of personality clash and extreme unionism in the profession, which according to him, degrades the profession. Hassan Bello, executive secretary of the Nigerian Shippers Council (NSC), who presented a paper on freight forwarding practise in Nigeria, identified lack of professionalism as the major hinderance to the growth of the profession in Nigeria. “The freight forwarding practice in Nigeria has been accused of non professionalism due to lack of institutional framework. There is also lack of synergy among the freight forwarding associations and the regulating body, which is the CRFFN,” Bello said.

Bello, who acknowledged the role of freight forwarders in cargo clearance at the ports, said that movement of cargo from one point to another must be done with efficiency in line with global best practices, thus the need to professionalise the handlers of cargos. To ensure effective regulation, Bello suggested that the associations must do away with touts and quacks, whose activities give bad image to the profession. “Nigerian freight forwarders must be professionals and to achieve this, there is need to create freight forwarding institute regulated by National University Commission (NUC) for the training of practitioners,” he advised. He also called for effective collaboration among players in the port industry to help grow and advance the course of port industry in Nigeria.

is 1,000 days old. Customs should abide by the contract and regulation guiding auction,” he said. Akinola also urged Customs to as a matter of urgency, commence the auction of overtime cargoes, which he said, has become a threat to the space at the terminal. “The problem of abandoned and overtime cargo is not just affecting terminal operators alone, but it affects the entire shipping industry.

When you have a port that is congested with overtime containers, it is a recipe for disaster. For example, a terminal that has a capacity of 500,000 Twenty-foot Equivalent Units (TEUs), but has been made to restrict its capacity because of the congestion, is really a cause for worry. Akinola however pointed that there are several export containers which have been abandoned in the port that are also taking up spaces. If, we can get rid of these containers, we can take more boxes in, free up the Lagos road and congestion will not be at the port.” Recall that Lucky Amiwero, member, Presidential Task Force for Reform of Nigeria Customs Service (NCS), has earlier last week, called on the Presidency to decongest the port by removing un-cleared and seized cargos from various terminals in the seaports. He stated that the cargos need to be moved to the federal government warehouse at Ikorodu by Customs, as statutorily provided in the Customs and Excise Management (CIMA) Act C45 of 2004.

Group protest alleged extortion of N100, 000 at Clarion bonded terminal

group of freight forwarders and Customs agents doing business at the Clarion bonded terminal operated by Clarion Shipping W.A. limited, has on Monday, protested the alleged extortion of N100, 000 on every container cleared at the terminal. According to them, the money was for payment of a fee tagged ‘comptroller watch list’. They called on the Comptroller General of Custom (CGC) to intervene to help save their businesses from high cost. They also alleged double extermination by Customs, an act that have been long abolished, even as they questioned why an Assistant Comptroller will be posted to man the Clarion terminal. Ejike Metuselah, publicity secretary of the Association of Registered Freight Forwarders of Nigeria alleged that competitors were behind what is currently happening at the terminal. “If you are going to equity, you must come with clean hands. We are in a competitive market and this is a conspiracy of a particular man in competi-

tion with Clarion,” he said. Okechukwu Ogbonna, the CEO of Artix Autolinks services said the agents have been having problems clearing their goods from the bonded terminal for about two year ago. “Whenever you import, to clear will be a problem and if you struggle to clear it; to get a truck to move it becomes a bigger problem. Customs does not care and they can put your work on hold without caring what is being paid on it as demurrage. I have lost up to N10 million to demurrage and extra money paid to Customs,” Ogbonna claimed. Some of the placards carried by the group read: “Our documents are trapped in Clarion Tin-Can office since last week and Comptroller Musa administration has increased our cost of operations beyond understanding.” “Before, we transfer our containers at almost no cost. Now, we pay as high as N50,000; N150, 000 and N200, 000 before it would be approved by the Comptroller. This has never happened in the history of Nigerian Customs,” they further alleged.

NPA wins 2018 Maritime Cup competition

he Nigerian Ports Authority (NPA) has emerged the winner of the 2018 edition of the Annual Ships & Ports Maritime Cup Competition after defeating the Nigerian Maritime Administration and Safety Agency (NIMASA). NPA team, fondly called ‘Hadiza Warriors’, defeated NIMASA 4-1 to lift the trophy for the first time since the competition started in 2009. Also, 2017 champions, the Nigeria Customs Service defeated the Nigerian Navy 4-0 to win the third place match. The matches played at the NPA Sports Ground Bode Thomas, Surulere, Lagos witnessed a large crowd and supporters of both teams. NIMASA scored the opening goal in the 4th minute through Anderson Onye but NPA equalized in the 9th minute through Bashiru Yusuf, who also gave NPA the lead in the 20th minute. Kabiru Zakari netted the third goal for NPA in three minutes into the second half while Henry Nwosu sealed NIMASA’s fate with a 4th goal in the 36th minute of the second half. The NPA team qualified for the final match on Saturday after beating the 2009 champions, the Nigerian Navy. Adewale Adeyanju, president general, Maritime Workers Union of Nigeria (MWUN), who kicked off the final match, lauded Ships & Ports for conceiving and sustaining the competition over the years. He promised that the union would support and also be part of the 2019 edition. A total of 62 goals were scored in this year’s edition of the competition out of which Abubakar Mikaili of Customs scored seven to become the highest goal scorer. Okafor Emmanuel, coach of NPA, expressed appreciation to Hadiza Bala Usman, managing director of NPA, for given the team the opportunity to participate in the competition. “We appreciate Ships & Ports for putting this together because all work and no play make jack a dull boy. We hope others who are yet to join the competition would participate next year to enable us have up to 20 teams in the tournament,” he added. This year’s competition was supported by Dangote Ports Operation and Morbod Group. Past winners of the Maritime Cup are Nigerian Navy (2009); Micura Services (2010); Customs (2011, 2012, 2013, 2016 and 2017), NAGAFF (2014) and ANLCA (2015).

20 BUSINESS DAY Financial Inclusion

& INNOVATION

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Wednesday 17 October 2018

Supported by:

Payment Banks: All you need to know IBUKUN TAIWO & OLAYINKA DAVID-WEST

ver the years, we have discussed various constraints limiting financial inclusion whose targets were established in the 2012 National Financial Inclusion Strategy (NFIS). One of the critical inhibitors - access to financial access points through agents - was often pitched against the progress in other markets where telcos operate mobile money services. While the direct participation of telcos in Nigeria’s mobile money licensing regime was restricted, the Central Bank, after years of consultation and engagement is exploring a new mechanism to enhance financial inclusion. Borrowing a play from the Reserve Bank of India’s playbook, the CBN is exploring the introduction of a new bank model - Payment Service Banks (PSB). W ha t i s a Pay m e nt [Service] Bank? The Payment Service Banks (or simply Payment Bank as they are called in India, is a new category of bank with smaller scale operations and the absence of credit risk and foreign exchange operations. In addition to accounts (current and savings), PSBs can also offer payments and remittance services, issue debit and prepaid cards, deploy ATMs and other technology-enabled banking services. Think of them as basically stripped-down versions of our traditional deposit money banks, with limited functionality and a focus on onboarding more of the excluded and marginalised population.

Subsidiaries of mobile network operators (aka telcos), mobile money operators, retail chains (supermarkets) and banking agents are welcome to apply for the PSB license, provided they can meet certain requirements, including a 5 billion naira capital base, and a combined 2.5 million naira application and license fee (which are non-refundable). A Brief History of Payment Banks India’s high unbanked population has been the subject of much discourse, locally and internationally. In a bid to reduce the number of Indian citizens without bank accounts, the Reserve Bank of India (RBI) began exploring different interventions. The concept of Payment Banks was first introduced in 2013 when

a committee on Comprehensive Financial Services for Small Businesses and Low Income Households was formed, and the committee recommended a new bank category called Payments Banks. In 2014, invitations were sent out for interested parties to apply. The following year, the RBI granted licenses to 11 applicants, despite receiving a total of 41 applications. Of the 11 licensed PSBs, 3 have surrendered/given up their licenses, while 6 PSBs have commenced operations, albeit only 4 are prominent. What differentiates a Payment Bank from other financial service providers? One peculiarity of PSBs is they are not permitted to offer loans or credit

facilities to their customers - they can only receive deposits. Thus, Payment Banks cannot entirely replace traditional Deposit Money Banks, but they can serve as intermediate providers of financial services to new customers. Payment Banks can issue debit cards but not credit cards. Also, unlike traditional banks, you can keep a limited sum in a payment bank account. Payment Banks offer interests on customer deposits, though the rate of interest is still unknown/yet to be decided. Unlike deposit money banks (DMBs) and microfinance banks (MFBs), from day one, PSBs have a heavy reliance on technology via digital financial services, complemented with a strong agent bank-

ing model, which is meant to reduce overhead costs. The Payment Bank document is still under review, but it appears the ecosystem is going to welcome a new type of financial service provider in the coming months. What impact will this have on financial inclusion? Could this be the magic bullet we have been waiting for? How disruptive will this new entry be and what impact will it have on the entire ecosystem in general? Advantages - Reduced currency circulation: While it’s too early to speculate, the PSB model may be the tool to reduce paper currenc y circulation (in favour of digital currency), hence promote the Cashless Nigeria initiative. - Low-risk: With limitations on credit, PSBs will be shielded from notorious credit risks. In addition, the investment of PSB deposits in treasury bills and government-issued instruments also reduces their market risks. - Deposit safety: all deposits in the PSBs will be insured by the Nigerian Deposit Insurance Corporation (NDIC). - Lower cost of operations: PSBs are expected to rely on technology and existing retail footprints, providing them with the foundational infrastructure to provide financial services to rural and unserved customers at lower costs. - KYC: the existing SIMReg database and KYC automatically supports the onboarding of all mobile phone owners as PSB customers. - Enhance the reach of Social Investment Programmes: the success of welfare programmes such

as the conditional cash transfer (CCT) that provides a monthly stipend to the poorest of the poor has been constrained by cash management (distribution). The existence of PSBs in rural communities will ensure that these payments can reach designated beneficiaries. - Financial education: the ubiquity of financial services through PSBs will enhance financial literacy. Challenges The existence of PSBs is not without its own set of challenges. These include: - Revenue model (earning potential): the inability of PSBs to lend/give credit limits their earning potential. - High competition: even though electronic payment systems are still nascent to underserved customers, the competition with cash would require behavioural change that would enable a truly cashless society. - Irregular saving pattern among target segm e n t : t h e r e ’s l i m i t e d knowledge of the savings patterns and profiles of the underserved; hence, PSBs will need deep understanding of their market segments to enhance and deploy product-market fit. - I n f r a s t r u c t u re : the nationwide availability of power, telecoms and other requisite infrastructure may increase the cost of PSBs and reduce their reach. - High setup and operational costs. Dr Olayinka David-West and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative of the Lagos Business School

Whither financial inclusion as microfinance banks struggle to survive CHRISTOPHER AKOR

he model of Micro finance banking involves the provision of financial services to the poor and low-income earners. It is also a vehicle for the financial inclusion of the large number of people who operate in the informal sector of the economy. This makes micro-finance banks critical elements in the financial

inclusion of the poor. However, microfinance banks thrive more in times of economic growth. They are not like businesses that thrive in times of austerity. They deal with the poor. They are engaged in a battle with poverty. So anything that accentuates poverty weakens these banks. The current recession and stagflation is having an adverse effect on these banks and putting them under extreme pressure.

When the going gets tough, loan repayments become difficult and delinquency will escalate and bad loans will mount, creating huge problems for the banks and their customers alike. In August 2016, the Central Bank Governor, Godwin Emefiele announced that non-performing loans (NPLs) in the banking sector rose by 78 percent year-on-year to N649.63 billion. Generally, non-performing loans in

the banking system have been put at 20 percent as against a best practice threshold of under 5 percent. If this is the situation with the deposit money banks, with all their machinery for loan processing, disbursement and management, then one can only imagine how terrible microfinance banks are faring. It is therefore not unlikely that some of these banks may begin to take panic measures and apply strin-

gent loans and recovery measures that may worsen the plight of the industry, the poor and very small businesses and entrepreneurs, and ultimately, harm efforts to ensure financial inclusion of the unbanked in Nigeria. Even in normal times, micro-finance banks in Nigeria put high and sometimes unscalable barriers before their customers could access loans, usually at very high interest

rates. That worsened with the economic recession. Although we are gradually exiting the recession, the business outlook is still not rosy and the banking industry is still groaning under the weight of nonperforming loans. The result is that only very few people can now access loans from microfinance banks as they demand collaterals in forms of land, vehicles, and even house items and electronics.

Wednesday 17 October 2018

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Financial Inclusion

& INNOVATION

BUSINESS DAY

Supported by:

Addressing the problem of financial inclusion USORO USORO

inancial inclusion refers to the portion of a population that has access to quality financial ser-vices, provided at affordable prices, in a convenient manner. A lack of access to affordable financial services makes it difficult for people to make transactions swiftly and easily, affecting industry and the economy as a whole. The problem of financial inclusion is not a new one; it has been a dominant theme in Nigeria for almost a decade. However, despite it not being a new problem, and despite efforts to address it with government policies and other interventions, it remains a prevalent problem in Nigeria with little progress to speak of. There are fundamental issues in the financial system that cause this exclusion, with one of the most prominent being the physical proximity to a bank branch or other financial service provid-ers. Bank branches can be largely found in cities, towns and other urban areas where the re-turns cover their operational costs as well as give a tidy profit. This means that there is a lack of incentive to operate branches in areas

where this may not be possible, leaving large portions of the county un-served. Agent banking presented a solution to address it. The purpose of these agent banking networks was for independent operators to act as branchless banks or serve as a proxy for banks. There has been limited success to the rollout of this scheme however. Currently, there are no more than 25,000 active agents, and they operate predominantly in semi-urban and urban areas, still neglecting rural areas. To address this slow growth, the CBN and other financial institutions launched the Shared Agent Network Expansion Fund

(SANEF) Initiative, to introduce an extra 500,000 agents by 2020 to cater to a further 60 million Nigerians in rural and underdeveloped areas. Recently too, Nigeria’s largest telecommunications operators — MTN, Globacom, 9mobile and Airtel — made a resolution to deliver access to financial services to 90 million customers over the next 30 months and deepen financial literacy across the country through a financial inclu-sion secretariat within the Association of Licensed Telecommunications Operators of Nigeria (ALTON). According to the NCC, the telecommunications industry has a reach of 86% of the country’s citi-

zens, with a combined 162.3 million customers and presence in 773 LGAs across the country. They possess up to 1,000,000 unique agents selling airtime across the country — a strong distribution network that can quickly be converted to established mobile money agent networks. The combined impact of the Bank and Telecommunications initiative is what Nigeria needs to transform the delivery of financial services to the financially excluded. Essentially, all stakeholders working together to deliver on the goals of financial inclusion. Another significant barrier to access to financial

services in Nigeria is the problem of proper identification. Account-opening requirements are stringent and require new entrants into the system to present some form of identification to qualify for bank accounts. When the CBN launched the National Financial Inclusion Strategy in 2012, one of the tools mapped out to achieve this were tiered Know-YourCustomer (KYC) requirements, which would enable financial institutions to verify the identities of new account owners, thus limiting money laundering activities. The base tier – low value accounts – is targeted at those without any means of identi-fication; the KYC policy removes the requirement for a minimum deposit fee, and allows for customer identification to be verified using other existing official databases such as the National Identity Management Commission (NIMC), mobile phone accounts, etc. This information usually includes passport photographs, a place and date of birth, address, and a telephone number; all or some of which most unbanked Nigerians are often unable to provide. In addition, Nigeria is yet to develop a truly inclusive national identity system, and furthermore, there has been some difficulty transi-

tioning from paper-based identity systems to digital, which requires a significant amount of investment from the government. Other barriers to the implementation of effective financial inclusion in Nigeria include a lack of trust in the financial services sector, which has led to many taking up the option for less con-ventional means of storing accumulated monies; widespread financial illiteracy; and affordability of existing services – monthly costs like account and card maintenance fees are incredibly significant to the 50% of Nigerians who live in extreme poverty. Overcoming these barriers is no small feat, it also requires all institution and Agencies of gov-ernment with disparate databases to work together to harmonize the various databases and also harmonize the standards for registering new people. If the country is to reach the goal of 80% by 2020, there has to be a shift from small isolated initiatives within the financial services space, to large crossindustry cross-stakeholder alliances that are able to achieve maximum impact. Usoro Usoro is the General Manager for Mobile Financial Services at MTN Nigeria.

Growth in e-payment channels slows in blow to financial inclusion CYNTHIA IKWUETOGHU

fforts to include the financially excluded segments of the society into formal financial system in Nigeria has suffered a minor setback after the slow growth in electronic payment channels this year, especially in mobile transfer and Point of Sale (POS). Digital financial services have been adopted with great success in countries with low financial inclusion rates whether it is in Kenya or India. The ease of transactions on digital platforms have endeared many to them and slowing growth in digital transactions in Nigeria is a dampener on efforts to revise the tide of low financial inclusion where only 41 percent of bankable adults have bank accounts. Data compiled on Epayments channels by the Nigeria Inter-Bank Settlement System plc (NIBSS) showed that the volume

and value of mobile transfers grew 3 percent and 2 percent, respectively in the nine months between January and September 2018 compared to a growth rate of 5 percent and 3 percent respectively in 2017. Only 6.50 percent (i.e. 3.84m) of customers out of 59 million active account holders used the mobile money transfer in 2017. This compares with 9.08 percent (i.e. 5.54m) of customers out of the 61 million active account holders that used mobile money transfer in 2016. The growth in the volume and value of POS was also higher at 6 percent and 3.4 percent last year from January to September, as compared with 5 percent and 3.1 percent in the same period this year. NIBSS Instant Pay (NIP) had a growth of 5.4 percent in the previous year and 5.3 percent this year in its volume while its value had a positive growth of 2 percent in 2018 and a negative

growth rate of -2 percent in 2018. Likewise, E-bills had a higher growth in both volume and value this year than last year. “Reform the regulatory framework to allow subsidiaries of mobile network operators (MNOs) to apply for mobile money operator’s licence,” World Bank suggested in a blog ‘Five ways Nigeria can realise mobile

technology potential for the unbanked.’ However, government has prevented network operators from applying for mobile licences that will enable consumers make cash transfers without having a bank account. This has led to more people in the country becoming unbanked. “Expand the agent network,” World Bank further

suggested. Agents are small shops that offer basic services to mobile money users like deposits, withdrawals and transfer. Also, digitise routine cash payments as data from World Bank Global Findex 2017 showed that nearly one in 10 unbanked adults in Nigeria worked in the private sector and received wage in cash, including about 4 million who had a mobile phone. The country also needs to adopt inclusive enrolment methods such as the acceptance of less formal proof of identity and the use of both male and female enrollers to encourage marginalized populations to participate. Currently, the country has 21 mobile money operators licensed by the CBN with over 70,000 new financial access points created, nine operators currently party to SANEF, six super agents; Interswitch; Capricorn; Innovectives; In-

laks; Unified Payments and Xpress Payment Limited. The country has a target of about 100,000 agents for third quarter and 150,000 targets for fourth quarter. The volume of POS, which has been on an increase since February 2018, declined marginally by 1 percent in September. In the same proportion, the volume of NIP dropped in the same month. Mobile transfer also decreased by 8 percent while the volume of e-bills increased by 42 percent. According to the Word Bank’s Universal Financial Access 2020, 30 percent of adults used an e-payment instrument to transact in 2017. Furthermore, Inlaks, a financial technology company stated that globally, mobile payment would most likely be main e-payment channel in future although; some catalysts were needed to speed up the growth in Nigeria.

PRIVATEEQUITY & FUNDRAISING 22

BUSINESS DAY

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Wednesday 17 October 2018

VCs, PEs close deals worth $162b in Q3

...as Chinese startups again outcompete their American peers EMEKA UCHEAGA

apital seems to be flowing at breathtaking pace this year as third quarter result shows that venture capital and private equity funds backed a total of 5,099 deals worth $162 billion in Q3, according to data released by Preqin. Analysts say the rise in startup and public company valuations as well as increased risk appetite in the venture capital space are the main reasons for a surge in deal value. VCs alone closed 3,894 deals worth $69 billion in Q3, bring total year to date deal making to $195 billion. This surpasses total value of VCs deals in full year 2017 which was around $189 billion. Thus, cementing investors confidence in growth companies. Private equity deals chilled in Q3 as total deals dropped to 1,205 worth $93 billion from 1,274 deals

worth $129 billion in Q2. However, year on year analysis shows that PE deals rose significantly in the preceding quarter from its level in Q3 2017. Deals in private equity space has slowed down, causing dry powder to exceed $1 trillion as PE firms struggle to find deals as fast as they are able to raise cash. Dry powder refers to money already raised by PE firms but yet to be invested in companies. According to Bloomberg, “valuations of potential targets are high and PE firms are facing increased competition from strategic acquirers for the best assets.” PE deals in Q3 were predominantly in North America as the region accounted for almost 55 percent of the total private equity deals. On the other hand, VCs looked to Asia for opportunities as China accounted for 6 of the 10 largest deals announced in Q3 compared to US who only accounted for 2. Together, the

two largest economies attracted 80% of the top 10 VC investment in Q3. In Q2, Chinese startups accounted for 9 out of the top 10. The largest VC deal in the third quarter was the acquisition of Hangzhou Mouth by

Alibaba Group and Softbank for $3 billion. Singapore based ride hailing firm Grab’s $2 billion Funding round in August was the second largest VC deal during the period. Nigerian firms were not left out of the startup binge. In Q3,

Nigerian based payment solutions providers, Paystack raised $8 million while ISP startup raised $3 million. EdTech startup, PrepClass also raises $1 million as VC interest to local startups continue to increase after previous successes.

Nigeria missing among African countries for PE-backed IPOs MICHEAL ANI

he Nigerian market is nowhere to be found in the list of top five exchanges for Africa Private Equity-backed Initial Public Offerings (IPOs), both in value and volume between 2010 and 2017, according to key finding from a survey by global consulting firm, Price Waterhouse Coopers. An IPO has been considered to be “PE-backed” when a financial sponsor classified as a private equity firm had direct influence over the issuer through equity ownership preIPO. It also includes investment holding companies and investment structures that operate in a private equity capacity. Over the period from 2010 to 2017, African PE-backed IPOs as a percentage of total IPOs averaged just 16 percent in terms of volume and 23 percent in terms of value; in comparison, over the same period, PE-backed IPOs in the United States and the United Kingdom averaged 39 percent and 36 percent in terms of volume, respectively, and 44 percent and 45 percent in terms of value, respectively. The largest number of African PE-backed IPOs, by both volume and value, was in 2010, with five IPOs valued at $1.1bn. This included the single largest PE exit by value, the $681m IPO of Life Healthcare Group on the Johannesburg Stock Exchange (JSE) by Old Mutual Private Equity and

Top five exchanges for Africa PE-backed IPOs by value (2010—2017)

Brimstone Investment Corporation (Brimstone). Second in terms of value of PE exits was 2015 at $620m, which included the $334m May 2015 IPO of Integrated Diagnostics Holdings on the London Stock Exchange (LSE), an exit by Abraaj Capital Ltd (Abraaj). “While the capital markets have been an important exit route for private equity houses around the globe, we have noted that PE exits via an IPO in Africa have tracked below other markets” As with equity capital markets activity in general, the JSE led African exchanges as an exit destination for PE backed IPOs in terms of value, with a total of 9 IPOs worth $1.87 billion North African exchanges, including the Egyptian, Casablanca and Tunis stock exchanges, occupied the next spots after

the JSE with two, four, and nine IPO exit worth $307 million, $204 million and $198 million in terms of value of PE-backed IPOs respectively. Outside of Africa, London leads as the preferred destination for PE exits of African portfolio companies, with a total of two IPOs worth $600 million. A comparison of free float between PE and non-PE-backed IPOs indicates a slightly lower free float for PE-backed exits during the period, which may suggest a strategy of private equity firms exiting investments in stages. Examples of these phased exits include Actis LLP’s (Actis) partial exit from Edita Food Industries in its 2015 IPO and Abraaj’s partial exit in the 2016 IPO of Cleopatra Hospital. In comparing share price performance of IPOs over a one-year time horizon from list-

ing date, sub-Saharan African (SSA) PE-backed IPOs outperformed their North African counterparts, with an average increase from offer price of +27 percent, compared to zero percent for North African PE backed IPOs. The lower average performance of North African PEbacked IPOs may be related to economic impacts and market volatility following political and security events in the region, which began in 2011. Post-listing performance of North African non-PE IPOs appears relatively more stable over the period, though this is driven by strong price performance of three IPOs launched in H2 2016 and H1 2017 after regional markets had regained some stability. Though a gap in price performance was observed for Sub

Saharan Africa (SSA) PE-backed IPOs, as compared to SSA nonPE IPOs, over the first three months post listing. However, this gap narrows significantly over the one-year time horizon. For the top five volume of IPOs per PE fund manager, Abraaj and Actis led the field of financial sponsors in terms of volume of PE exits via IPOs between 2010 and 2017 with three IPO exits each, while Actis raised the highest proceeds, primarily driven by the 2014 $348m IPO of Alexander Forbes and the 2015 $267m IPO of Edita Food Industries. Over the period 2010 to 2017, the consumer goods sector represented the largest number of African PE-backed exits on the capital markets, with seven IPOs raising $544m, largely driven by the 2015 Actis exit of Edita Food Industries via a dual listing on the EGX and LSE, raising $267m. Next was the financial sector with seven IPOs raising $468m. Included in these proceeds was the 2014 $348m return of Alexander Forbes to the JSE, which involved an exit by Actis, Ethos Private Equity, and Harbourvest Partners. In terms of value, the healthcare sector represented the highest proceeds raised, with $1.1bn, or 38 percent of all proceeds raised between 2010 and 2017. Of the $1.1bn raised, Life Healthcare Group’s 2010 listing on the JSE accounted for over 56 percent 0f the proceeds raised.

Wednesday 17 October 2018

C002D5556

BUSINESS DAY

Tax Issues

As Executive Order on VOARS becomes effective IHEANYI NWACHUKWU

e c e n t l y, P r e s i d e n t Muhammadu Buhari signed an Executive Order (EO 008) on Voluntary Offshore Assets Regularisation Scheme (VOARS) mandating Nigerian taxpayers who hold offshore assets and incomes to voluntarily declare those assets and incomes within a period of 12 months, and pay income tax on them. The Executive Order became effective from Monday October 8, 2018. Based on the Order, affected taxpayers who truthfully and voluntarily comply with the conditions of the Scheme will be granted immunity from prosecution after paying either a one-time levy of 35 percent on their total offshore assets, or the outstanding taxes, penalties and interest determined based on a forensic audit of such assets and income. Defaulting Nigerian taxpayers who fail to take advantage of the Scheme will be required to undergo investigation and enforcement procedures concerning offshore assets held by them upon the expiration of the Scheme. This will be based on information obtained by the government through automatic exchange of information between Nigeria and foreign countries where the assets are located. VOARS is open to all persons, companies and their intermediaries holding offshore assets and are in default of their tax obligations, including those who are not already under investigation by law enforcement agencies in Nigeria or any other country and those who have not been charged with any crimes (ranging from theft of public funds to obtaining the assets through corrupt practices).

President Buhari

The Federal Government intends to set up a VOARS in Switzerland for all categories of taxpayers who have defaulted in declaration of their offshore assets and payment of taxes due further to the terms and conditions of the Order. Tax experts’ views PwC Nigeria According to the new order, eligible persons who hold offshore assets and income are expected to declare voluntarily within 12 months and pay either a one-time levy of 35 percent or the applicable taxes plus penalties and interest. Benefits to taxpayers who take advantage of the scheme include immunity from prosecution for tax offences and illicit offshore assets. Persons already under investigation for financial crimes or other corrupt practices in respect of such offshore assets are not eligible. Andersen Tax The signing of the Order, which will apply to all taxpayers who are resident in Nigeria for tax

purposes, is consistent with the FIRS’ recent aggressive tax drive. Similar to the recently concluded Voluntary Assets and Income Declaration Scheme, this Scheme provides some form of clemency to taxpayers who would take the opportunity to regularise their tax affairs. However, there are concerns regarding the basis vis-à-vis legality of the one-time payment of 35percent on assets in exchange for immunity for prosecution for tax offences. This is because the Nigerian tax laws specifically provide applicable tax rates on taxpayers’ income and not on the value of their properties. Furthermore, although the FIRS Chairman had previously stated that the recent assessment of properties to tax is only a form of deemed turnover assessment for taxpayers that do not declare their income or file returns, the imposition of 35percent on the value of assets differs significantly from the presently appli-

Are better taxes the key to more inclusive growth?

ax reform will not be a catch-all solution for social inequality, but if applied properly it can provide the foundations for dynamic and equitable global growth according to insight by EY Multidisciplinary professional services organization. Nobody likes being taxed. Nor are taxes necessarily good for growth. All taxes are broadly distortive to the way a normal economy functions, as they bypass classical rules of supply and demand. This means that they are theoretically a drag on economic activity. Nevertheless, they are essential for funding those public projects and services that keep the world turning – for everyone. Therefore, fiscal legislators the world over must aim for an approach to taxation that can balance the need to sustain global growth, while making sure that the fruits of that growth are shared more inclusively among the global population. The OECD has identified four key elements for building an equitable, progrowth tax system, that would satisfy these conflicting goals: Broaden tax bases: Not all taxes are created equal. It’s generally recognized that taxes on consumption, rather than on production, are best for the economy, but this can’t work all the time – a government would simply not generate enough revenue on consump-

tion tax alone. Therefore, policy setters should look a setting low taxes, but over a broader range of activity. “The consensus has been that, for income taxes, low rates plus a broad base favor economic growth.” says Victoria Perry, Assistant Director, Fiscal Affairs Department, IMF. Broad tax base measures include VAT and real-estate tax. These moves should be accompanied by policies that redistribute tax along a similarly broadened social security base. Not only is this good for equality, but it also supports a wide range of consumer spending, stimulating the wider economy. Most jurisdictions are constantly adjusting the proportion of revenue from different levies to obtain the revenues they need without impeding growth. Strengthen overall progressivity of the fiscal system: A progressive tax system is one where the rate of tax increases as the taxed amount grows, and policymakers should try and ensure this approach is applied throughout their tax codes, even beyond personal income tax. For a tax system to be truly progressive, it’s also important that policymakers strengthen the link between taxes paid and benefits received. Shaping pre-tax behaviuors and opportunities Tax can also be used to shape the behavior of those being taxed, by alternately penalizing and encouraging certain activities in ways that promote

growth. “Tax policies that support innovation and R&D, and which invest in people, will underpin future growth,” says Polman. Taxes that promote this can include R&D grants, tax breaks on innovator wages, and lower rates of taxation on recently patented products. Enhance tax policy and administration: Just getting better at collecting already-existing taxes can help realize public spending with implementing economically distortive practices. This includes making sure new taxes are designed to be easy to implement, strengthening the administrative architecture around taxation, tackling tax avoidance and evasion, and improving how statistics around taxation are collected and analyzed. As the increasing level of global inequality and the anger it engenders demonstrate, total growth should not be the only priority for government and business. It’s also important this growth is truly inclusive enjoyed by everyone. Tax reform will not be a catch-all solution. But if applied properly it can provide the foundations for dynamic and equitable global growth. “Today’s world is an uncertain one: economic growth is patchy, while income inequality is on the rise. As governments look for solutions, we’re once again seeing an increase in protectionist measures,” says our Global Chairman and CEO Mark A. Weinberger.

cable rate of 6percent in cases of turnover assessments. Moreover, given that corporate taxpayers typically prepare, file comprehensive audited financial statements that capture their entire assets and pay appropriate taxes on the relevant tax bases, it is unlikely that this Order will apply to them. More so, computing 35% of asset value as a waiver appears to reflect a mismatch given that the amount would be significantly higher for individual taxpayers than the actual applicable tax rate (including interest and penalty) on the relevant income, except for cases of accumulated penalties and interests. Thus, the VOARS may not be sufficient incentive for taxpayers that fall within this category. Besides, it is noteworthy that both the Companies Income Tax Act and the Personal Income Tax Act (PITA) provide for exemption of income derived from dividend, interest, rent and royalties, brought into Nigeria through

government approved channels, from tax. Specifically, the PITA goes further to exempt fees and commission, received by a taxable person abroad, from tax, provided such fees and commission are brought into Nigeria through government approved channels. It is also unclear if the VOARS is simply intended as an extension of VAIDS or as a means to clamp down on corrupt practices. However, all affected taxpayers should endeavour to engage their tax consultants and review their records to ascertain the benefits to be derived in taking advantage of the Scheme. Deloitte Nigeria While this is a good development, implication of VOARS on taxpayers that took advantage of the VAIDS Scheme is unclear. It is also not clear what period the assessments would cover and how far back the audits and investigations would go. We expect that the Federal Government will provide more information that will clarify these issues as soon as practicable. In the meantime, taxpayers are advised to review the components of their offshore assets and incomes to ascertain potential tax exposures that may arise therefrom and settle any outstanding taxes or take advantage of the Scheme by making a one-time payment of 35percent on the total value of the offshore assets. KPMG Advisory Services Like the recently concluded Voluntary Assets and Income Declaration Scheme, the VOARS has the laudable objectives of expanding Nigeria’s tax base, boosting government revenue, and stemming tax evasion, corruption and money laundering.

Platform for collaboration on tax discusses domestic resource mobilisation challenges

he four partner organisations to the Platform for Collaboration on Tax (PCT) discussed critical challenges and opportunities for mobilising domestic resources to meet countries’ development priorities at the just concluded IMF-World Bank annual meetings in Bali, Indonesia. The four organisations include the IMF, OECD, the United Nations, and World Bank Group. Strengthening tax systems – policy and administration – is a key development priority, and a core part of the Sustainable Development Goals (SDG) framework and the Addis Ababa Action Agenda. Together they set a challenge to raise significant additional tax revenues, in fair and efficient ways. In the event on Tuesday 9 October titled “Stepping up to the Challenges on Domestic Resource Mobilisation – the Power of Co-operation”, the principals of the PCT addressed the challenges that countries face to mobilise taxes and other

domestic resources for meeting their development goals. In 2016 the IMF, the OECD, the United Nations and the World Bank Group, the leading international actors on tax, created the Platform for Collaboration on Tax, as a central vehicle for their enhanced cooperation, enabling the development of common approaches, the delivery of joint outputs, and as a response to demands for a global dialogue on tax matters. The four PCT partners each support country-led efforts through policy dialogue, technical assistance and capacity building, knowledge creation and dissemination, and input into the design and implementation of standards for international tax matters. The PCT also produces guidance and tools on key issues of capacity building and international taxation, and has developed the Medium-Term Revenue Strategy, which is an approach for coordinated and sustained support to comprehensive country-led tax reform.

BUSINESS DAY

C002D5556

Wednesday 17 October 2018

In Association with

Increase banks resilience, IMF tells central banks Stories by HOPE MOSES-ASHIKE

n the 10 years since the global financial crisis, regulatory frameworks have been enhanced and the banking system has become stronger, but new vulnerabilities have emerged, and the resilience of the global financial system has yet to be tested. Financial conditions in advanced economies have remained accommodative, while conditions have tightened in emerging markets. This was the position of the International Monetary Fund (IMF) as was published in its 2018 Global Financial Stability Report (GFSR) and discussed at the just concluded IMF/ World Bank Group annual meetings in Bali, Indonesia. Looking at the banks globally, 10 years since the onset of the global financial crisis, a number of reforms have been implemented to strengthen the banking system. The banking systems in some countries are exposed to a highly indebted nonfinancial private sector. Nigerian banks are are cautious when it comes to

lending to agricultural sector of the economy and the Small and Medium Enterprises (SMEs) due to the sectors’ high risk. However, the banks still heavily exposed to oil and gas sector of the economy in spite of the continued rise in the prices and production of crude oil. concerns were raised that the adverse consequences of the policy will eventually spread to Europe and could create more problems for emerging market economies. For emerging market economies, it was observed that the adverse consequences of the US policy normalisation has resulted in capital flow reversals, particularly for emerging markets, resulting in some cases, currency depreciation in those economies. Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) noted that this could resulted in interest rate hikes and monetary policy tightening measures in these economies as well. Because the emerging market economies are price takers, it is expected that public debt service would rise for the emerging market economies,

Godwin Emefiele, governor, CBN

possible resulting in weakening of assets in various banking system and weakening in financial conditions in the emerging and frontier economies. IMF stated in its GFSR that given elevated financial vulnerabilities and increased

downside risks to the global growth outlook, there is a greater urgency for policymakers to build buffers, strengthen resilience, and tackle longstanding problems. Advanced economy central banks should continue to gradually withdraw monetary

accommodation, where appropriate, and communicate intentions clearly. Countries with high public sector debt burdens should aim to improve debt sustainability and enhance fiscal buffers. Jurisdictions with high and rising nonfinancial sector leverage should mitigate attendant vulnerabilities through a combination of macroeconomic and prudential policies. To further increase bank resilience, micropruden- tial policies should aim to bolster bank balance sheets against solvency and liquidity risks, IMF said Regulators should continue to monitor bank lending to highly indebted private nonfinancial and sovereign borrowers, as well as exposures to opaque or illiquid assets, and take measures to reduce banks’ excessive risk taking. To lessen the risk of funding strains, regulators should develop currency-specific liquidity risk frameworks, while central bank swap lines should be available to provide liquidity in periods of stress (see the April 2018 GFSR). Net stable funding ratios could be implemented in more countries.

Simplifying account opening, Fidelity Bank’s new savings campaign tells more

igerian lender, Fidelity Bank Plc on Monday unveiled a novel account opening initiative, just as it launched a new savings promotion campaign aimed at rewarding new and existing customers of the bank. The new account opening initiative, the first of its kind in the Nigerian banking industry, enables members of the public to open online savings accounts through a Quick Response (QR) code which can be scanned from any of the promotional materials such as roll up banners, fliers, posters and newspaper adverts. This is expected to significantly ease the process of enrollment of new accounts and deepen the penetration of the

new savings promo tagged; Get Alert in Millions Season 3 explained Executive Director, Shared Services and Products, Fidelity Bank, Chijioke Ugochukwu, during the launch ceremony at the bank’s corporate Head Office in Lagos Monday. “This new savings promo is the 8th in 11 years. As with the previous ones, we are motivated to continue to empower our customers by rewarding them with cash and gift items, whilst at the same time promoting the savings culture, in line with the financial inclusion drive of the Central Bank of Nigeria (CBN)” said Ugochukwu, who doubles as the Chairperson of the Promo Committee. Speaking shortly before formally flagging off the promo,

Fidelity Bank CEO, Nnamdi Okonkwo thanked customers, stating that the bank is motivated to continue to incentivize them for their patronage. He said it was imperative to acknowledge the contributions of customers to the growing fortunes of the bank. “Last week, we joined other institutions across the world to observe the 2018 Customer Service Week and I want to use this opportunity to again thank all our customers. Our impressive half year results attest to your support and with your continued patronage, we are on course to delivering on our financial targets for the year” he said. As a customer-centric bank, Okonkwo said Fidelity Bank would continue to leverage

technology, in line with its digital retail strategy, to better serve customers, through innovative products, services and solutions. He reeled our some of the products to include the newly upgraded Fidelity Online Banking, *770# Instant Banking and Flashkey. “Our online banking solution enables you to transfer foreign exchange seamlessly just as we are the first bank to introduce a chat banking solution that is known as Flashkey. This solution enables you to effect monetary transfers whilst on any social media platform, without recourse to the online banking platform installed on your mobile device” he stated. GAIM Season 3, as the new savings promo is called, is expected to run for 9

months till June 2019. The bank, within this period will give out over N120 million in cash and consolation prizes, including weekly airtime rewards. To participate, Head, Retail Banking, Fidelity Bank, Richard Madiebo said “customers can open a savings account and grow it to N20, 000 or top up an existing account with N10, 000 or more to qualify for the monthly draws to win N1million or N2 million. To qualify for the star prize of N3m, he explained that customers are expected to grow their account balances by N50, 000 monthly whilst accounts that maintain a minimum of N200,000 qualify for the grand prize of a whooping N10 million. “

Grooming Centre emerges as Africa’s best microfinance institution

ioneering microfinance rating agency, MicroRate has rated Nigeria’s Grooming Centre as the only microfinance institution in Africa to make the top institution rating released by the world body. MicroRate is the and the only specialized rating agency that is authorized by the Peruvian Superintendent to rate all type of financial institutions and since its inception in 1997, MicroRate has performed more than 1,200 ratings throughout the world, in Latin America and Africa, Asia and Eastern Europe. In a statement released by MicroRate, Grooming Centre made the A+ rating alongside others from Brazil, Guatemala and Honduras while the B+ rating was awarded to microfinance institutions from Mexico, Argentina and Brazil. According to the statement, “MicroRate is pleased to announce the financial institutions (FI) that obtained the best international grades in institutional rating (MIR) and social rating. The list includes regulated and non-regulated entities. In the top social rating, Grooming Centre made the rating but was ahead of Lapo Microfinance in the ranking. The MIR evaluates the overall performance regarding the best practices and sustainability in the long term. “We are also pleased to recognize the effort in the social performance management, which confirms the responsibility of these FI towards their customers, employees, the community and the environment,” the statement stated. Grooming Centre is a NonGovernmental Organization (NGO) founded in December 2006, and registered with the Corporate Affairs Commission (CAC) Certificate Number CAC/IT/NO 24198, to address the near absence of financial services to the large population of economically active poor people engaged in small trading and micro productive activities in many parts of Nigeria.

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BUSINESS DAY

Nigeria, India to Strengthen Bilateral Trade ‘Village Headmaster’ will storm screen soon’ 26

AfDB Partners Technology Stakeholders to Address Africa’s Gender Gap with Digitalisation

Reinventing organization for competitiveness

27-28

Unending EEG fuss Exporters are being pushed into greater financial distress with their banks and financiers as a result of non-payment of N350 billion EEG claims, reports SIAKA MOMOH

he Federal Government Export Expansion (EEG) scheme has been engulfed in a fuss since its creation. It is a fine scheme designed to enhance the fortune of the Nigerian non-oil export and by extension non-oil exporters; but it has been a victim of abuse and practical challenges. The scheme has been suspended more than a dozen times directly or indirectly, since it was created. The good news is that the scheme has been reviewed. The Federal Government, vide the Nigerian Export Promotion Council (NEPC), issued the revised guidelines for operation of the Export Expansion Grant scheme about the close of 2017. This move follows the decision of the government to reintroduce the Scheme, which had been suspended since 2013. Commenting on handling violations in its report, Deloitte said , in its trade newsletter: “…Whilst we expect the new guidelines to address a lot of the abuse and practical challenges that led to suspension of the erstwhile Scheme, all eyes must now be set on ensuring that challenges arising from implementation of the new guidelines are properly addressed”. Exporters in pains over unpaid claims But a peculiar challenge has recently cropped up. What is this challenge? In spite of this good intention espoused by the new EEG, exporters now have a problem with it. Non- Oil exporters who have acted in good faith in relying on the extant government policy of the scheme in making their investment and pricing decisions in their business, are currently reeling in pains over non-payment of N350 billion EEG claims. In spite of fulfillment of required due process relating to the claims by these concerned exporters, the EEG papers are stuck in the National Assembly. According to Chief J.P. Olanrewaju, secretary general of Organised Private Sector Exporters Association, who revealed this to Realsectornow, the exporters have taken on debts to service these receivables and these debts are incurring further interest with the continuing delay. “This”, he said “is pushing the exporters into greater financial distress with their banks and financiers”. Chief Olanrewaju explained: “Exporters are owed approximately N350 billion towards EEG claims that are due to them for the year 2007 to 2016; the proposal to issue Promissory Notes in lieu of EEG claims for the legacy EEG claims of non –oil exporters was approved by FEC in 2017; the EEG claims of non-oil exporters, referred above , has been processed and approved at the series of meetings

of the EEG Implementation Committee(EEGICM); the Committee checks and clears each EEG claim during the meeting.” EEG Implementation Committee The EEG Implementation Committee is comprised of members from Federal Ministry of Finance ( FMF); Federal Ministry of Industry, Trade and Investment( FMITI); Central Bank of Nigeria ( CBN); Nigeria Customs Service ( NCS); Federal Inland Revenue Service ( FIRS); Federal Ministry of Budget & Planning and Nigeria Export Promotion Council( NEPC). According to Olanrewaju, “The EEG claims payable to the individual exporter depends upon the value and volume of products exported ( as outlined in the EEG Policy Circular of Federal Ministry of Finance) and the individual rating as per the company baseline data ( also outlined in the EEG Policy

Circular of the Federal Ministry of Finance). Appeal to National Assembly The non-oil exporters are therefore appealing to the National Assembly to “expeditiously clear the payment of Promissory Notes so that non-oil exporters can get the much needed relief and succour and rededicate themselves to growing the export sector thereby contributing to the creation of jobs and livelihoods and growing the valuable foreign exchange reserves of Nigeria”. What EEG is? EEG is a post-shipment export incentive scheme that is designed to encourage non-oil exporters whose minimum annual export turnover is N5 million. It is a scheme designed to assist exporters to expand their volume and value of non-oil exports, diversify export markets and make them more competitive

Advertise here

in international markets. The EEG was originally introduced by the FGN in 1999 pursuant to the Export (Incentives and Miscellaneous Provisions) Act of 1992. Beauty of EEG Though the management of this laudable scheme has been a subject of criticism, to some extent, we have seen the good side of EEG. Informed stakeholders like Femi Boyede, CEO of Koinonia Ventures Limited said “With the EEG the non-oil export sector has grown at double digits growth rate compared to single digit growth rate of Nigeria’s GDP. This momentum has to be sustained and improved if Nigeria is to progress meaningfully towards achieving Vision 20: 2020.” For him, unlike many other government concessions and subsidies, EEG scheme is for the en-

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Leisure

‘Village Headmaster’ will storm screen soon’ Some members of the cast and crew of Nigeria’s legendary TV drama series told SIAKA MOMOH in an exclusive interview in Surulere, Lagos, that this longest running TV drama programme, will hit the screen soon, shortly after the celebration of its 50th anniversary wish will hold this month.

illage Headmaster was born 50 years ago but was rested in the late 1980s by the Nigerian Television Authority (NTA). This legendary TV drama series started as a radio programme in Ibadan in 1958 with late Chief Segun Olusola as creator and producer. In 1968, it hit the screen under the direction of Sanya Dosumu who later became the Olowu of Owu Kingdom. An attempt was made to re-launch it as New Village Headmaster in 2013. It was a bold plan that was to take into cognizance the current modernization in the entertainment business space - the repackaged series was to come out in three formats, but would still be retaining its unique form and without compromising its original concept and the road-map designed by the late Segun Olusola, while taking cognisance of the modernisation that has occurred over the years. Chief Tunde Oloyede, who passed on recently, the longest serving producer who produced and directed 364 episodes of The Village Headmaster between 1972 and 1979, was appointed as the producer of The New Village Headmaster. But this bold effort did not see the light of the day because sponsors support was lacking.

organisations and individuals who are interested in sponsoring the programme to come and help. Said Dele Osawe: “This was a programme loved by everybody and we are therefore sure that many people will be willing to sponsor it”. He explained the crew’s gathering at the Oloyedes’ office in Surulere “is to assure everybody that we are prepared to come back”. “We need to let our fans know that many of us that make up the crew are still alive because the impression that some people have is that we are all dead.” Explaining further, he said “If we look at the concept somehow, Village Headmaster is set in a village and in a village, people die and people are born, so the village cannot die, it cannot become extinct.” But the Village Headmasters oldies who are still around wouldn’t throw up their hands. They believe it is still doable. They are starting off with the series’ 50th Anniversary celebration which is due this month and this will be followed by the reentry of the Village Headmaster, according to Dele Osawe, one of the surviving members of the cast who played the lively Teacher Fadele in the series. Speaking to this writer at the Oloyedes’ office in Surulere, Lagos,

where the Village Headmaster cast was meeting he said, “Since Village Headmaster will be 50 years old this year October 2018, we are planning to celebrate ourselves. We have the hope that Village Headmaster is coming back. This is a group made up of veterans who made Village Headmaster. We are reaching out to people who will sponsor the programme.” Sponsorship The crew is appealing to corporate

Programme’s demise Osawe said they were made to believe that sponsorship handling was responsible. “But we know that politics was responsible and it is NTA that can tell you the politics involved,” he said. When told the advent of foreign films must have been responsible for the shutting down of the Village Headmaster programme, he disagreed. Said he: “Before the advent of foreign films, Village Head had

gone down or had been technically discouraged. In fact the information before us is that NTA does not have Village Headmaster’s tapes. Where are the tapes? If anyone is saying it is the advent of foreign films that caused Village Headmaster to go down, then the tapes should be in the archives.” Goodwill For Amebo, Chief Ibidun Allison, “The Village Headmaster programme has a lot of goodwill. That is why we want to flaunt that goodwill. First of all, we want to celebrate. This programme is not a programme you can just wish away. It is the pioneer of all other programmes of its type. It started 50 years ago. Nollywood was not even born then. I think it is proper we celebrate it and Nigerians should celebrate with us. We are thinking of a colloquium, an award night for members who have taken part in the programme, drama, etc. Celebration is billed for this month. “The celebration will be followed by a re-entry of Village Headmaster. When people see me on the street, they ask me, ‘When is Village Headmaster coming back?’ Tell them out there Village Headmaster will storm screen soon.”

Trade Matters

Nigeria, India to Strengthen Bilateral Trade

EFETOBORE EKUGBE

As Volume of Trade Hit $20bn

igeria and India have announced plans to strengthen bilateral trade, noting that the trade between both countries has been robust, enduring and profitable over the past 60 years. According to the Chairman, Nigerian Indian Chamber of Commerce and Industry (NICCI), Rt. Hon. Chevalier Uduimo Itsueli, there is need to sustain the depth of the relationship, adding that India companies are the biggest employer of labour after the

federal government. The Chairman at an anniversary of Diplomatic Engagement between Nigeria and India tagged “NigeriaIndia @60: People, Partnerships, Prospects” said Nigeria remains the biggest trading partner in Africa. He added that Indian export is also growing in leaps and bounds with its prowess on ICT and medicine. Meanwhile, the president, Lagos

Chamber of Commerce and Industry (LCCI), Babatunde Ruwase, said the trade volume between both countries has hit over $20 billion, maintaining that the trade has brought about strong bilateral trade relationship. He however charged Indian investors to take advantage of Nigeria’s agricultural, health and ICT sector, pointing out that there is more both countries can achieve in those sec-

tors. Also speaking at the event, the Minister of State for External Affairs, Republic of India, Mobashar Akbar, added that Nigeria and India both have a bridge of shared horizon, advising that both economies must complement each other rather than compete. He tasked the government of both countries to trade more, while also stating the need for Nigeria to add

value to its natural resources rather than exporting them in raw form. The Chief Executive Officer, Financial Derivatives Company Limited, Bismark Rewane, said Nigeria benefits more than India recording a $5.4 billion from the trade. He highlighted some of the challenges hindering trade between both countries as policy contradiction, trade restrictions, currency policy and misalignment.

Technology

AfDB Partners Technology Stakeholders to Address Africa’s Gender Gap with Digitalisation EFETOBORE EKUGBE

he African Development Bank (AfDB) has partnered stakeholders in the technology space to bridge Africa’s Gender Gap deploying the use of digitalisation. AfDB in a statement said bridging the digital gender gap is a critical step towards the vision of a thriving Africa. In a summit convened by AfDB in Ghana, tagged ‘Unlocking Africa’s Digital Future’ on Women and Girls in Technology (#TechWomenAfrica), saw over 250 participants in attendance at the three-day summit,

including Africa’s leading technology innovators, entrepreneurs, policy makers and change agents. The summit came as the world is set to reach 50 percent connectivity. Other co-sponsors of the summit were the Alliance for Affordable Internet (A4AI), Ghana’s Ministry of Communications, the Open Society Initiative for West Africa, the Internet Society, Facebook and the Federal Ministry of Economic Cooperation, Ghana. According to AfDB, discussions focused on the socio-economic, policy and regulatory issues around digital access, affordable broadband

access, digital education and skills. Women’s rights online, and digital entrepreneurship to ensure women and girls benefit from the opportunities afforded by emerging technologies, were also discussed. A key highlight of the event was the Bank-sponsored ‘power breakfast’ session on the role of incubators and venture capital financing in supporting female entrepreneurs in the technology sector. How to best support female entrepreneurs, policy and advocacy experts working in the technology industry also topped discussions. Addressing summit participants during the opening ceremony, Hon.

Vincent Sowah Odotei, Deputy Minister of Communications, Ghana said: “The Africa Summit on Women and Girls in technology offers a valuable platform to dialogue, share knowledge and experience and to collectively work towards designing solutions that will unlock a truly digital Africa where women and girls benefit from access to technology and the opportunities presented by the fourth industrial revolution.” Digital technologies continue to transform societies but many women and girls, especially in developing countries, remain locked out of the digital revolution, due to social, cultur-

al and institutional barriers. Research has shown that, globally, women are 50% less likely than men to be online. Across Africa, the connectivity gap is particularly acute, with nearly 75 percent of the population offline. The summit aligns with the bank’s Gender Strategy to increase the economic empowerment of women. It supports the Bank’s goals of poverty alleviation, sustainable economic growth, gender equality and entrepreneurship. It also aligns with three of Bank’s ‘High 5’ priorities, namely, Industrialize Africa, Integrate Africa and Improve the quality of life for the people of Africa

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Reinventing organization for competitiveness

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or her, organizations will witness positive disruptive changes; industry sectors are already re-configuring business models and skill sets—and will do so at an accelerated pace in the next five years—new tools will be deployed to acquire skills, office will no longer be a place but a space which is evident in the U.S. where a staggering 65 million of the workforce worked from home in 2016.’ The 12th Annual SME Conference of the Entrepreneurial Development Centre of Pan Atlantic University, which held at the close of September 2018, pulled experts from across Nigerian business space to brainstorm on this subject. Nireti Adebayo, CEO, Whytecleon Ltd, who delivered the keynote address, spoke on how to get organizations ready for future competition that would emerge in workforce space. She mentioned SMEs need to have the ability to be responsive and strategic in the rapid changing workforce for the future performance and competitiveness of organizations. She propounded that irrespective of the specific industry or driver of change, the pace of the transformation will be unprecedented. For her, organizations will witness positive disruptive changes; industry sectors are already re-configuring

business models and skill sets—and will do so at an accelerated pace in the next five years—new tools will be deployed to acquire skills, office will no longer be a place but a space which is evident in the U.S. where a staggering 65 million of the workforce

worked from home in 2016. She mentioned the evolving three generation in the workplace as: • Generation X – individualistic, self-reliant, entrepreneurial

BUSINESS DAY

Editor’s Note

t is another month with your must read magazine. As usual, we bring you thrilling and revealing stories. In our cover is the troubled EEG scheme. The ever recurring EEG fuss is still there. EEG is a fine scheme designed to enhance the fortune of the Nigerian non-oil export and exporters, but the scheme has for long, been a victim of abuse and practical challenges. The scheme, which has been suspended since 2013 (suspended more than a dozen times since it was created), was revised and reintroduced at the close of 2017. But nonoil exporters have axe to grind with NASS over non-payment of N350 billion EEG claims. Village Headmaster, longest running TV drama, born 50 years ago but rested in the late 1980s by the Nigerian Television Authority (NTA), is coming back soon, some members of the cast and crew of this Nigeria’s legendary TV drama series told Siaka Momoh in an exclusive interview in Lagos. He brings you the full story. For Nireti Adebayo, CEO, Whytecleon Ltd, organizations will witness positive disruptive changes; industry sectors are already re-configuring business models and skill sets, and will do so at an accelerated pace in the next five years; new tools will be deployed to acquire skills; office will no longer be a place but a space which is evident in the U.S. where a staggering 65 million of the work-

Siaka Momoh force worked from home in 2016. Her keynote address at this year’s EDC Pan Atlantic University’s SME Conference which held in Ajah, Lagos, dished out all these. Gilbert Efetobore brings you stories on the recent activities of multilateral banks and AfDB in the global space as well as a story on India/Nigeria bilateral trade that is being heightened. Read all above and more in our sweet offerings this month. Welcome on board. For advert placements, sponsorship, reactions editorial contributions, please contact SIAKA through siakamomoh@yahoo.com; 2348061396410; 23408023033988

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Unending EEG fuss Continued from page 25 tirety of the non-oil export sector and not for any particular individual company or set of companies. A Senate Committee in Investment presentation at an interactive forum on diversification of the Nigerian economy through non-oil exports in the past, discussed the disadvantages faced by Nigerian exporters and argued that “EEG is critical to offset several cost disadvantages faced by Nigerian exporters. The Committee’s list of cost disadvantages include high cost of power and need to set up own infrastructure; high finance cost and lack of long term funds; high transportation cost; high labour cost due to lack of skilled workers and low productivity; high cost of doing business (port delays, multiple taxation, etc.); and loss of preferential market access to the European Union. For the Committee, citing UNIDO study, when benchmarking a number of Nigerian input cost factors with a panel of countries, with which Nigeria competes,

it becomes evident that Nigeria has very high costs for the most important inputs. It said although this study was done for the textile industry however the results could be applied universally to the entire manufacturing sector in Nigeria. On cost of power, it argued Nigeria is the highest among competing countries. And on funding, it said “The cost of shortterm borrowing at the present rate of 18 percent is a major international cost disadvantage for the Nigerian manufacturers as the comparison clearly shows. Both India and Pakistan provide concessional funds to exporters at 3-4.5 percent points below above rates. Nigerian exporters face several disadvantages due to lack of an enabling environment reflected in policy implementation bottlenecks. The senate Committee drew attention to China and India, two countries that are doing better than Nigeria because of government’s supportive policies. For China, the Committee said, “International practices as per WTO report (2006), China introduced an elaborate package of incentives to attract FDI and boost

exports. Over 50 types of subsidies were notified to WTO...” Agro-allied products drive Nigeria’s non-oil exports with cocoa and leather contributing about 50 percent of total exports. Over 11 million Nigerians are employed directly and indirectly in agroallied non-oil sector, mostly in rural areas. Non-oil exports impact the lives of Nigerians in all geo political zones. Exporters have diversified the market base with entry to the US market in particular under AGOA. Present policy, according to the Committee, encourages exports to be conducted through official channels; 100 percent export shipments undergo pre-shipment inspection by private inspection agencies(PIA) to verify quantity, quality and value; all non-oil export proceeds are repatriated into Domiciliary account with the commercial banks; CBN confirms repatriation and monitors the utilization of export proceeds for eligible transactions; CBN Annual report contains the list of Top 100 non-oil exporters.

If the Senate or National Assembly is author of the comments above, then we should expect it should facilitate payment of the EEG claims in question. This should be even if the comments are coming from yesterday’s Senate; after all, there should be continuity in governance. Problem with EEG The EEG scheme has been the weeping horse of stakeholders who strongly believe it is being improperly managed. The Senate Committee presentation highlighted the following: • EEG disbursement involves cumbersome process spread over 12-18 months; • Policy instability and discontinuity have crippled the non-oil export sector; • Major policy disruptions in (200511); • 2005 blanket suspension of EEG & review by PWC and PCTM; • 2007-08 Suspension of all incentives and concessions; review by Udoma Committee;

• 2010 Customs Service alert to suspend acceptance of NDCC for duty payment; • Policy instability and discontinuity have crippled the non-oil export sector and is affecting Nigeria’s image as a reliable international trading partner. Different voices on EEG To some players in the industry, like Kamilu Ila, managing director, Globus Enterprise and member LPAN, the EEG scheme spelt a death sentence for the industry, especially to those industrialists with feeble financial clout. According to him, the many negative effects of the grant threw him and some 40 other industrialists out of business. But the National Association of Hides and Skin Dealers (NAHSD) would not agree with LPAN. Scrapping the scheme, according to the Association, “will be injurious to the economy”. Chairman of the association, Ali Abdu Gezawa said his association “represents the interest of ordinary Nigerians whose survival depends on activities in the hides and skin value chain”.

Multilateral development banks restate commitment to sustainable development in Africa EFETOBORE EKUGBE

eads of leading Multilateral Development Banks (MDBs) have restated commitment to work together to deliver infrastructure to achieve sustainable development in Africa. The MDBs said the move was apt following the tragic loss of lives and livelihoods in Sulawesi and Indonesia. This was the consensus when the MDBs met October 13, at the 2018 Global Infrastructure Forum (GI Forum) themed “Unlocking Inclusive,

Resilient, and Sustainable Technologydriven Infrastructure” The MDBs also agreed to joint efforts to increase technical assistance and advisory services for knowledge creation and knowledge transfer; disseminate knowledge through collaborative events that support the delivery of bankable projects; contribute to delivering sustainable infrastructure through the MDB Information Cooperation Platform; moobilize sustainable finance at scale; support sustainable public procurement; identify infrastructure and capacity gaps,

particularly in least developed countries, landlocked developing countries, and small island developing states and African countries. The GI Forum gathered private sector investors with representatives from the United Nations and leaders from the African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, European Bank for Reconstruction and Development, European Investment Bank, InterAmerican Development Bank, International Finance Corporation, Islamic Development Bank, New Development

Bank, and the World Bank. The forum comprised two opening sessions. The first looked at how technology, such as solar energy systems, blockchain, and big data, can be used to make infrastructure more sustainable. The second discussed how to increase private infrastructure finance. Other sessions looked at using technology to achieve the crucial but difficult “last mile” of getting services to end users, good practices in scaling up investments in infrastructure, ways of financing the global infrastructure gap, and maximizing innovative climate

finance for sustainable infrastructure. The infrastructure needs across the world are huge. An estimated 1 billion people have no access to electricity while over 660 million people have no access to clean drinking water. These needs must be met if the global community is to meet commitments to the Sustainable Development Goals. New technologies and approaches such as smart transport systems and innovative climate finance can help to fill the infrastructure gap. They can also help build infrastructure that can withstand climate change and natural disasters.

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Entrepreneurship

Reinventing organization for competitiveness Continued from page 27

• Millennial or generation Y -millennial represents the largest demographic group currently. By 2025, millennial are expected to comprise as much as 75% of the workforce. Digital Marketing Resource Center • Digital natives- Idealistic, Tech savvy, Emphasis on mobility – access to information on the move, Social media as a business tool, operating with liveliness, Digital natives work anywhere, anytime, and on any device. Nireti Adebayo cited the trends that would change the future of work as including: Knowledge, skill, technology, gender and rise of ethnic consciousness. She said, “What is certain is that the future is uncertain. It is, therefore, difficult (or counterproductive) to try and plan in detail for the potential changes that might affect the world of work in the years to come. “However, what important is to build irrepressible, friendly and adaptable organizations that allow employees to express their ideas, explore their potential, thrive and manage the transition in the workplace such that changes happen with the least possible disruption.” Tracks The delegates thereafter attended various tracks as follows: Growth Sectors- Collaborating to Win This track explored the best practical ways and opportunities for collaborating within various fields while still winning. The panelists in the session included Oluwakanyinsade Ademosu, CEO Seventh Space; Ayodeji Balogun, Country Manager AFEX Nigeria Ltd; Chibuzo Ike, Chief Executive InfoMall; Bolaji Olawoye, Managing Director HostVille Nigeria and Bayero Agabi, President Transatlantic Media Company. Conversations on the panel included the need for SMEs to digitise their processes, redefine the norm of sectors such as agriculture and IT so it is attractive to young people. Predominantly, what stood out across the panel discussion is digitalisation of processes, and making. Promoting young women’s entrepreneurship and innovation To eradicate poverty and push for gender parity, promoting women entrepreneurship and innovation cannot be underestimated. In this regard, we have seen many interventions spring up in order to contribute to global growth. This session highlights and addresses issues affecting young women entrepreneurs and the need to design innovative strategies that will help minimize barriers to their personal and career growth for a scale-up. The Forum consisted of 70 participants and was opened with a welcome address by Obianuju Okafor. She introduced the keynote speaker, Ndidi Nwuneli (MFR). Ndidi Nwuneli (MFR) is Founder, LEAP Africa; Managing Partner, Sahel Consulting Agriculture and Nutrition Limited (SCANL); Co-founder, AACE Food Processing and Distribution. She started off by thanking EDC and the dynamic set of women for their presence. She then went ahead to deliver her address by speaking on

some social and cultural norms that exist in the Nigerian context. She propounded that “it is a good time to be a Nigerian woman as there are vast opportunities that abound for women in Nigeria”. She mentioned that nowadays, “there are more training and funding opportunities with ample role models, women being part of boards, more industry and women’s networks to support women”. Ndidi stressed on the hard truths limiting women entrepreneurs such as the comfort in remaining small, being within fields that do not challenge the woman entrepreneur and the lack of savings. She exclaimed on the need for women to think big and broaden their visions, with great importance on the need to acquire new skills, support networks and stop letting access to markets, finance and land limit their potential growth. Moreover, she mentioned some social and cultural norms that are limiting the growth of women. After this, Ndidi shared some tips for navigating the social and cultural ddimensions while giving her personal entrepreneurial experiences. She shares how she was able to promote leadership and ethics through LEAP Africa while reducing food waste and malnutrition through AACEFoods alongside various social impact projects she has embarked on. Nonetheless, she urged the women to change their mindset from just a growth mindset to a legacy mode. Ndidi also illustrated ways in which women entrepreneurs can scale social innovation in Africa to create positive change. Lastly, she encouraged the women to always be innovative, accountable and collaborate with others in order to succeed. . Plenary session Following the Keynote Address, the plenary session took place thereafter. The panelists included Florence Opawoye, Director Win Win Kitchen; Abimbola Balogun, Co-founder So Fresh Neighbourhood Market; Joy Igbodike, Creative Director Jaebee Interior. The session was moderated by Nneka Okekearu; Deputy Director, Enterprise Development Centre. This panel celebrated and highlighted the innovative businesses that the group of dynamic women is ventured in. Nneka Okekearu opened up the session by introducing the panelists and opening the session. Discussions on the panel were centered around the various industry innovations and how they came about preferring the solutions. Some key highlights from the session were ways in which the panelists were able to formulate policies that puts the employees first, having a growth mindset and the various methods and processes they had to put in place to enable them to scale up and how to have that work-life balance. The panel was followed by a Q&A from the participants. Real estate and multi-level marketing model: path to success The event proceeded with a breakout session where one of the tracks featured the Real Estate sector. The track focused on ‘Real Estate and multilevel marketing model: Path to success. Speakers at the session include Julius Oyedemi – MD PWAN Plus,

Mike Okonkwo – MD PWAN Legend, Andy Chukwu – MD, PWAN Edge Funke Kehinde – a PWAN Benefactor. The session was moderated by Mike Akuete – MD, PHPAC. At the session, the participants were exposed to how PWAN has a real estate company has been able to create the multi-level marketing model and the strategy that has made this work effectively. The benefactor also described the benefit derived from been part of the team. Documentation, processes and financing- Export made Easy The track provided a platform where SMEs interested in export can meet with some of the regulatory organizations and entrepreneurs that are active in the export space. The panelist for the session consisted of National Agency for Food & Drug Administration & Control (NAFDAC) represented by Ogechukwu Ikenua, Nigeria Agriculture Quarantine Services (NAQS) represented by Ebenezer Idachaba, Nigeria Export Promotion Council (NEPC) represented by Babatunde Faleke, Fidelity Bank represented by Emmanuel Nwalor and Sable Badaki of Sheworksnow Global. The moderator for the event was Yinka Thomas-Ogboja. During the session, NEPC reiterated their commitment to making the process of getting the export license more user-friendly and prompt. Sable Badaki educated the delegates on how they can leverage on the African Growth and Opportunity Act (AGOA) of US government to accessing the US market. Similarly, Yinka ThomasOgboja also offered services where SMEs in Nigeria who are interested in export participate in exhibitions in the US at a much discounted price. Ogechukwu Ikenua also put the participants through on what are the requirements are for NAFDAC, she also made it clear that NAFDAC will inspect and verify every consumable product going out of Nigeria. For every fresh produce leaving the country, the NAQS ensures that they inspect the origin of the product from the farm gate to the point of export. Participants asked questions and then the session closed. The new workforce- skills, competencies and values expected of the emerging market The new workforce -skills, competencies and values expected of the emerging market in this time and age when millennial seeks gigs instead of jobs and pursue experiences, emerging markets need specialised skill sets amongst other strategies to mitigate the threat of artificial intelligence. As a business owner, this session shed more light on the challenges of engaging the new workforce and proffer action plans that will help in embracing the new work force. Conversation with the CEO This session shed light on the growth trajectory of successful business owners which served as a live case for the SMEs to learn from. The session featured Adetoyi Olabode, CEO Hi-Nutrients International Limited, who shared his very inspiring entrepreneurial journey with the delegates. This was followed by a Q&A moderated by Peter Bamkole, Director Enterprise Development Centre.

Strategies to small business success

e n d y Ha r r i s o f blackenterprise. com wrote about one LaTanya Junior, owner of TCB360. com. According to Wendy, Junior’s company, , which teaches large and small businesses brand development, strategic planning, implementation, marketing, and media, has nearly $1.2 million in revenue and an online radio show rated No. 26 in the world by Live 365, the largest distributor of Internet radio. “But business has not always been so highly lucrative,” Wendy remarked. Wendy narrated: “In fact, when Junior, 44, opened shop in her home in Brooklyn, New York, in 2001, she mentored small minority businesses through a column she wrote for a handful of African American publications. She also conducted 40 workshops in two U.S. cities and Canada, but did it all on her own dime and without securing a single fee. A year later Junior, who had worked more than a decade as a brand development and marketing executive for ad powerhouses Young & Rubicam, Grey Advertising, the Mingo Group, Stedman Graham & Associates, and Ogilvy & Mather, was still speaking for free, but a chance meeting with a brand icon gave her the client and clout she needed to take her company to the next level. “I flew in to Atlanta for an event, and when I got in the limousine, Dick Gregory, who was the keynote speaker at the event, was in the limousine. We had an hour together and he said that he would come to hear me speak later that day, and he did,” Junior says. “In fact, for the next three years, he showed up to all of my presentations that targeted larger companies. Then one morning he called me and asked me to meet him at the airport in Tennessee,” she adds. Junior was in New York when she got the call, but that didn’t stop her from getting a flight to the South.” The success stories followed: She was brought in to participate in a preliminary meeting about marketing a series of cleaning products with the George Foreman name. Two weeks later, Gregory offered her a three-year contract to develop the media and strategic planning for the products, a deal that earned her a $75,000 fee and 1 per cent of the product sales. Today, Junior has 60 clients under her belt, including Jackson State University, Arlene Weston, owner of Maroons Restaurants, Johnnetta Cole, Spelman College’s first black female president, and Anita Estell,

an adviser in the Clinton administration. Wendy Harris emphasized that preparation is a critical component to business success, “but keeping your shop afloat, especially in a down economy, requires innovation, strategic planning, and some basic business tools”. Here are five ways you can gain momentum and build more business along the way, as presented by Wendy Harris: • Develop a brand plan: “Defining yourself as a brand is what separates you in the market,” Junior says. But then you must develop that brand. Start by taking the characteristics of your brand and identifying those people most likely to be attracted to it and to your personality. Develop a marketing plan to reach this core group. Then, take every opportunity to push your product or service to the forefront of consumers’ minds. This could be in the form of holding speaking engagements to talk about your company, creating a Website to disseminate information, and other promotional tools. • Be innovative: Develop new and unique products or services that will create positive change for consumers. Junior’s vision to “manufacture intellect” evolved into TCB360.com, an online radio show that, through downloadable lectures, lessons, and expert interviews, teaches small business owners how to compete in the marketplace. “I thought that I don’t have to use radio to talk about news,” says Junior, whose program attracts listeners in Japan, China, Turkey, Israel, and Spain. “I can use it as an educational tool, so if I get on the radio every day for a half hour and give you processes that you can use, and then give you more information through lectures, then I have just manufactured knowledge.” • Stay connected: Don’t wait for the economic storm clouds to blow over before searching for new business. Get out there and network. Just make sure, Junior says, to attend only those functions whose attendees are in your “brand friend family.” Don’t waste time sharing information with those not likely to be attracted to your business or your brand. • Hire a business coach: It is money well spent. Business coaches or consultants can provide personalized information on how to develop your enterprise. They also offer a support system that many small business owners lack and need to gain ground in a competitive marketplace. Story source: Blackenterprise.com

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Wednesday 17 October 2018

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Nigeria needs political, collective commitments to tackle malnutrition, experts say …HarvesPlus to host nutrition fair in November JOSEPHINE OKOJIE

igeria needs both collective and political commitment to tackle issues of malnutrition and reverse the effects it has had on its Gross Domestic Product (GDP), a coalition of nutrition experts say. The experts say that urgent and coordinated efforts were needed to improve nutrition and end the N450billion annual losses in GDP owing to malnutrition. Beyond the losses in GDP, the experts stressed that the number of deaths and irreparable damage to the growth and development of children under-five and women caused by malnutrition were alarming. “Nigeria must come together to scale up access to nutritious food for all households. We need a political and collective will to tackle the issue and as long as we continue to neglect nutrition the country will continue to face a lot of crisis,” Paul Ilona, country manager, HarvestPlus says. “ Nu t r i t i o n i s a n e s s e nt i a l building block for growth and development, so reaching millions

L-R Paul Ilona, country manager, HarvestPlus; Francis Aminu, director-health and nutrition, Dangote Foundation; Femi Oke, chairman, All Farmers Association of Nigeria (AFAN), Lagos chapter and Chris Isokpunwu, head of nutrition, Federal Ministry of Health at the flag-off ceremony of the Nutritious Food Fair in Lagos recently.

with more nutritious food should be a top priority for us as a nation. Malnutrition will lead to increase pressure on national health budgets and a weak labour force,” Ilona says. He adds that deficiency of essential

micro nutrients in human diets can cause birth defects, physical and mental impairment, as well as increased risks of death among others. According to the United Nations International Children’s Emergency

Ajimobi tasks research institutes on agric development AKINREMI FEYISIPO, Ibadan

overnor Abiola Ajimobi of Oyo State has called on all agricultural research institutes and other stakeholders to create technologies that will enhance agricultural development in the country. The governor, who spoke at the State Agriculture Investment Summit and Exhibition held at the conference centre of the International Institute of Tropical Agriculture (IITA), Ibadan, said that the present administration is very focused on the development of agriculture, reiterating that the importance of agriculture in nation building cannot be overemphasized. He said that the summit with the theme: ‘Transforming Oyo State’s

Agriculture and Agro-Allied Industry: Private Sector Participation,’ was very apt at a time that the country is looking for a permanent solution to the problem of food insecurity, unemployment and retard in rural development as well as obsolete technology in our great nation. “It gladdens my heart that this summit is holding today and I am more delighted to note that though the State parades a lot of research institutions, this is the first attempt to synergize with the leading agrobased research institute in tropical Africa – IITA, from which we expect tremendous and realistic support and outcome,” Ajimobi said. “It must therefore be noted that once we succeed particularly by ensuring a demand driven solution, we would have consolidated our

mission. This summit became imperative in order to bridge the gap among farmers, processors, agro allied industries, Government, agricultural/commercial banks and other stakeholders with the ultimate aim to trigger the Oyo State’s agro and agro allied sectors,” he said. He disclosed that the 28,454 arable land areas in the state remain as a veritable investment destination for local and global investors. The governor added that the state government has made modest efforts to buttress its unflinching commitment and determination for further agricultural development including the exploitation of value addition in the agricultural chain in Oyo State. In his remarks, Kenton Dashiell, deputy director of IITA, called for motivation of agro dealers to create opportunities for private investors in the agriculture sector. In his address, Oyewole Oyewumi, the state Commissioner for Agriculture, Natural Resources and Rural Development, said that Agriculture is no longer being practiced for private consumption but now a major enterprise that drives the economy of developed countries He said this necessitated the reason why the state government commenced investigation on how agriculture could be used to benefit the industries.

Fund (UNICEF) about 2.5 million children under five are malnourished and have stunted growth in Nigeria. Francis Aminu, director-health and nutrition, Dangote Foundation says that the foundation has earmark

$50 billion to tackle issues of malnutrition in Nigeria and across Africa, he adds that the Dangote Foundation will partner HarvestPlus to end malnutrition in Nigeria. “Nutrition is connected to every area of our lives because it is multisectorial. It involves the collective efforts of every Nigerians to tackle,” Aminu says. “Improved nutrition is very germane at the Dangote Foundation and as a result, the foundation has earmark $50 billion to tackle malnutrition across Africa,” he adds. Similarly, Chris Isokpunwu, head of nutrition, Federal Ministry of Health commended HarvestPlus for its efforts in fighting malnutrition in Nigeria. While pledging the commitment of the Federal Government of Nigeria to improve the nutrition of women and children, Isokpunwu called for joint efforts from both the private and public sectors to help fight malnutrition. To create awareness for more collaboration, HarvestPlus will be holding a nutritious fair in Lagos to host 150 exhibitors of nutritious food, panel discussions and 32 secondary schools competing.

Stakeholders urge farmers to close gaps in agric trade with GCC IFEOMA OKEKE

takeholders in the nonoil sector have urged farmers to close the agricultural trade gaps that existed with the Gulf Cooperation Council (GCC), particularly in the area of connecting commercial growers to buyers within the region. The stakeholders spoke at the recent Meet the Farmers Conference (MTFC), organised by Crenov8, a management and consulting firm. The Gulf Cooperation Council (G CC) is a regional political organisation comprising the energy rich Gulf monarchies, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Using Dubai as a trade and logistic hub to form potential business partnerships across borders, most of the speakers at the conference confirmed that agricultural sector remains one of the fundamental drivers of the Nigerian economy. In his presentation, Olusegun Awolowo, executive director and CEO Nigerian Export Promotion Council (NEPC), said Nigerians need to export, so as to boost foreign exchange earnings, create jobs, balance trade, improve standard of living amongst other economic benefits. Awolowo who was represented

by Samuel Oyeyipo, chief trade promotion officer, NEPC said federal government has put up institutional supports for agricultural commodity sector through the Anchor Borrowers Programme, NIRSAL support for the agriculture sector, NEPC preshipment incentives, SMEDAN and ITF business development and training programmes, BoI, NEXIM financing facilities amongst others. Commending Crenov8 for the MTFC initiative, Awolowo pointed out that Nigeria needs to plan for a future with zero oil, adding that “the world’s longest exporters tend to be wealthier than other nations and only 3 countries in the top 20 exporters depend mainly on oil”. Advising farmers, Awolowo noted that efforts must be made to increase production and adhere to international best practices and standard requirements for effective market access. In his remark Abiso Kabir, chairman of Wal-Wanne group, said his agriculture outfit which is based in Kano is already adding value and reducing poverty in the North East. Kabir hailed the federal government for initiating the Anchors Borrowers Programme, noting that it has helped to generate employment for the displaced persons across the country.

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‘Africa must create effective policies to drive investments in nutrition’

Lawrence Haddad is the executive director of GAIN Alliance. He is a British-trained economist and food policy researcher who has been named as the 2018 winner of the World Food Prize. In this interview with JOSEPHINE OKOJIE, he spoke about malnutrition in Africa and what should be done to address the issue.

What has worked for Africa in terms of government policy for fighting malnutrition? he thing that works is commitment. There are so many effective actions that can be done to eliminate malnutrition, but it requires patience to figure out which are the most important for a given context, great skill to build coalitions with business and civil society to design them and then great persistence to deliver these actions. Commitment is required to sustain the collective effort to eliminate malnutrition. For example, Ghana, Kenya and Ethiopia have all reduced their stunting rates substantially over the past 15 years, reflecting a steely determination to act in and across a number of sectors such as agriculture and food, health, water and sanitation, education and gender equity.

What needs to be done in terms of government policy? Governments need to identify which policies would work best in their context work, cost them, implement them and then monitor and evaluate them and regardless of the specific policy mix, governments should: build demand for improved nutrition—at the household level, the business level and the national policy level, make existing development initiatives more nutrition sensitive that is making cash transfer programmes contingent on seeking nutrition care for pregnant women. Also, legislate greater funding for nutrition. At the moment most governments in Africa budget 2-3 percent to nutrition. Given the high benefit cost ratios to scaling nutrition programmes (16:1) this is a massive underinvestment, incentivize businesses to stop doing negative things for nutrition and do more positive things via initiatives such as nutritious foods business parks. How can blended finance have a role in tackling Africa’s malnutrition issues? The private sector, notably the local small and medium enterprises, already plays a major role in producing foods in Africa. In order to produce more nutritious and affordable foods, they need investment. In fact a 2017 study among agri-food SMEs revealed access to capital as the number on barrier to their growth. In

Lawrence Haddad

general private capital has a lower risk appetite than donor and philanthropic funds. Using the latter as part of a blended finance approach that shares costs and reduces the perceptions of risk or financial risk will help unlock the investment needed among agrifood SMEs so that they can grow and produce more affordable and nutritious foods. How can nutrition be turned into an asset class? By developing and streamlining indicators on nutritious foods, we can help to bundle investment opportunities together with similar characteristics in ways that are more likely to attract private capital. We are currently building a pipeline or deal flow among hundreds of African agri-food SMEs that we hope to match to investor requirements. In order for those businesses to be entered into the pipeline, they must of course meet financial and business criteria. But they must also meet our social impact criteria and be contributing towards the production of a nutritious food. Can you give some case studies, where private sector investments have helped address issues of malnutrition? Globally, GAIN has supported the development of complementary foods, and the improvement of high quality ready-to-use therapeutic and supplementary foods, by creating

additional demand and offering funding. To date, $9.5million of grant funding has levered over $25m of private investment in production and delivery of these products in over 10 countries. GAIN has also successfully managed the procurement of S$70 million worth of vitamins and minerals in 45 countries through public private partnerships. By offering extended credit terms to premix customers of up to 180 days, aggregating demand and running competitive tenders, scale and quality in premix supply has been achieved with less than 1 percent default rate. This has resulted in more nutritious foods available to 1 billion people, higher quality vitamin and mineral premix available and cost reductions of up to 20percent for vitamins and mineral products to African food

We are currently building a pipeline or deal flow among hundreds of African agrifood SMEs that we hope to match to investor requirements

industry. Through thematic funds established by GAIN with investment partners such as Acumen, LGT Venture Philanthropies and the International Finance Corporation, individual companies in Kenya, Haiti and Ecuador were able to grow the production capacities and market of their nutrition businesses. In Kenya, Insta Products Ltd received $1 million loan which expanded their production of fortified complementary foods to 12,600 MT per year. In Haiti, GAIN and LGT Venture Philanthropy jointly provided a loan of $732,000 with repayment terms tailored to Meds and Foods for Kid’s (MFK) situation. MFK was able to begin construction of factory much earlier than anticipated and began locally producing ReadyTo-Use Therapeutic Foods that increased treatments of Severe Acute Malnutrition from 7,500 to 50,000 treatments in 2 years. It also allowed technical assistance to be channelled to local peanut farmers that increased local sourcing by 20percent in the same period, thereby significantly increasing livelihood opportunities where they were needed most. How can the private sector play a vital role in the fight against malnutrition in Africa? Malnutrition is a massive problem in Africa. Food systems shape the food choices that consumers have and

businesses are the main investors and main participants in these food systems. So, businesses have to be part of the solution for malnutrition in Africa. But the big problem most businesses face, especially the small and medium sized ones, when it comes to engaging in the market is that they lack access to finance. GAIN works with businesses to develop their investment cases and deal flows, linking them to investors. This is the first real effort within Africa to make it easier for businesses to provide nutritious food by making it more readily available, affordable and accessible. There are two kinds of things that businesses should be doing to reduce malnutrition in Africa. First of all, companies that are producing nutritious foods need to be supported. They need more finance, better marketing, bigger demand and a more engaged enabling environment. On the other hand, companies that are producing foods which are tasty, desirable but not so nutritious need to be incentivised to reformulate their products to reduce levels of salt, sugar and fat. In terms of value, what is the worth of Africa’s nutrition sector? The Better Business, Better World report of 2017 from the World Business Council for Sustainable Development estimated that the food, agriculture and nutrition sector represented 14 of the top 60 best business opportunities in the Sustainable Development Goal era. The report estimates that food loss and waste alone represents an extra $685 billion world-wide of business opportunities through to 2030. African companies, economies and societies could and should claim a significant share of that. How can Africa drive investments for its nutrition sector? Governments could do a better job of establishing policy and fiscal environments that enable entrepreneurs and support the growth of SMEs. For example, g ov e r n m e n t s c a n w o r k w i t h local banks to set up financing mechanisms, such as portable guarantees or social success notes which help SMEs access capital if their outputs improve health and nutrition outcomes. This would both incentivise better performance by the private sector in terms of social impact, while also improving the consumption of nutritious foods.

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New PILA president promises continuity of group’s programmes

Major transformation taking place in insurance industry MODESTUS ANAESORONYE

here is major transformation taking place in the nation’s insurance industry, which when completed will position the industry for greater growth and competitiveness. Over 70 percent of the companies are embarking on raising fresh funds either through their existing and new shareholders or are ceiling big deals with foreign investors for new capital, which target is to play in the top Tier of the market in line with regulatory reclassification exercise already announced for the industry. Though there is a pending court order that restrained the National Insurance Commission (NAICOM) from going on with its proposed enforcement deadline for reclassification of the operating companies, firms were already doing themselves good to take position while the court case lasts. An operator told BusinessDay “Look, as company that wants to survive the regime, you can’t afford to fold your hands and watch developments; you must do something and wait for the time”.

We are raising new capital and we have communicated our regulator the Tier level we want to play, and we have given them our timetable, so we are keeping to our timetable. Yes, there is a court order instituted by group of owners of the companies. But, that will not stop a regulator from regulating the business, which is its core function, the CEO. But I can tell you, what NAICOM is doing is in the best interest of the Company and when it is concluded, the industry will be better for it, the CEO who preferred not to be mentioned said. In the new Tier-Based Minimum Solvency Capital, Tier 3 companies are those that falls within existing paid up capitals of N2 billion for life business; N3 billion for non-life business and N5 billion for composite business. Companies in this category will be limited to underwrite only risks in life business in the following areas - Individual Life, Health Insurance, Miscellaneous Insurances; while for non-life they will be limited to underwrite risks in these areas - Fire, Motor, General Accident, Engineering (only classes covered by com-

pulsory insurance), Agriculture and Miscellaneous Insurances. Tier 2 companies are those whose paid up capital has increased by 50 percent above the existing minimum capital. For life business, their paid up capital will be N3 billion and they are to underwrite all Tier 3 risks and Group Life Assurance (GLA); while for non-life, their paid –up capital base will be N4.5 billion and they will underwrite all Tier 3 risks, Engineering (All inclusive), Marine, Bonds Credit Guarantee and Suretyship Insurances. Tier 1 companies are those whose paid up capital has increased by 200 percent, above the existing minimum requirement. Life companies in this category will have capital of N6 billion, and will underwrite all Tier 2 risks and Annuity. While for non-life business, the paid up capital will be N9 billion, and will underwrite all Tier 2 risks and Oil & Gas (oil related projects, exploration & production), and Aviation Insurances. Composite companies in Tier3 will maintain N5 billion; Trier 2 N7.5 billion and Tier 1 will have N15 billion. Barineka Thompson, direc-

tor, Supervision, NAICOM had stated at the announcement of the scheme that the TBMSC Model – is a regulatory model designed for the application of proportionate solvency capital that support the nature, scale, complexity and risk profile of the business conducted by insurers, stressing that classification of business according to the present level of capital that an insurer possesses in relation to the risks that the capital can effectively be deployed to. He said the policy will enable soundness and profitability of insurers through optimal utilization of capital; encourage insurers to focus on the area of their strengths, encourage innovation and deepen market penetration, build investors’ and public confidence in the industry. Other benefits according to him, include, creating capacity for bridging insurance gap, optimizing local retention and minimizing capital flight; limiting significant systemic risks and building confidence in the insurance industry; supports the stability of the financial system and increase insurance contribution to the nation’s Gross Domestic Product.

NAICOM/ADV/CA/2018/1955

L-R: Ohenhen Magdalene, representative of Edo State Governor, and Commissioner of Women Affairs; Jocelyn Oguokiri, outgoing president of Professional Insurance Ladies Association (PILA); Ose Oluyanwo, 12th President of PILA; Adejoke Orelope-Adefulire, guest of honour and senior special assistant to the President on Sustainable Development Goals; and Olufemi Ogun, past president of PILA during the Investiture of Oluyanwo as 12th President of PILA and Presentation of the Book the PILA in Lagos

se Oluyanwo, an assistant general manager and regional director at Consolidated Hallmark Insurance Plc has been decorated as the 12th President the Professional Insurance Ladies Association(PILA), a body whose objective is to promote and empower women for higher responsibilities in insurance and the corporate world in entirety. Presenting her acceptance speech, Oluyanwo said the thrust of her office would just be the sustenance of the legacies and programmes of her predecessors. “ I believe we must come to terms with the fact that governance or administration of a corporate institution or a collective like this should be a continuum. “ “Each regime must continually build conscientiously on the moulding blocks laid by previous administrations, of which, most times, they are part of. Suffice it to note that PILA already has in place solid programmes such as Mentoring programmes for the younger professionals and new entrants; Career Talk across educational institutions, and of course, most importantly the completion of our ultra-modern office Secretariat complex to give the Association a more formidable image. “ She said her administration will vigorously pursue the issue of effective data collection for the Association and its membership and the sustenance of ethical standards, without forgetting the Association’s international responsibilities under the nascent PILA Africa, which would be a light to other sister African countries. “I pledge that my team and I would devote ourselves unselfishly towards the actualization of these projects and embark on the diligent execution of our catch phrase “Together We Can”.” “We must be united to surmount our challenges, however daunting they may be. Of course, this corroborates the popular African proverb which says that “feeble as the spider web seems, when they unite, they could tie up a lion!”. May the good Lord help us” .

Wednesday 17 October 2018

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Pension Today

BUSINESS DAY

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Operators strengthen collaboration with Legislators for sustainable pension industry

he role of Lawmakers (Legislators) in the successful implementation of the ongoing reforms in the nation’s pension industry, as well as sustaining the achievements of the Contributory Pension Scheme (CPS), now in its 14th year, after enactment of the Act in 2004 cannot be over emphasidsed. Beyond passing the Bills that produced the Act in 2004 as amended in 2014, the law makers particularly the Joint Committees of the Senate Committees on Establishment and Public Service and the House of Representative Committee on Pension have critical roles to play in ensuring effective implementation of different sessions of the law, particularly where it affects the executive arm of government in terms of budgetary provisions and execution. This accounts for why the Pension Fund Operators Association of Nigeria (PenOp) last week in Calabar the Cross River State Capital held the maiden Retreat for the Joint Committees of the Senate Committees on Establishment and Public Service and the House of Representative Committee on Pension. Major fallouts of the Retreat was the importance of a regular interaction between pension operators and the legislators, so that the National Assembly Members can be regularly informed and updated on developments in the industry because of the importance and sensitivity of pensions to the overall welfare of the citizenry. According to the legis-

Ronke Adedeji, president, Pension Fund Operators of Nigeria (PenOP) (6th from left); Emmanuel Paulker, chairman, Senate Committee on Establishment and Public Service of the Senate(7th from left) flanked left and right by the Joint Committees of Senate Committees on Establishment and Public Service and the House of Representative Committee on Pension during the Maiden Retreat organized by PenOp in Calabar, Cross River State Capital.

lators, understanding the challenges, which the operators are going through in terms of funding of the scheme by government for her employees, as well as the private sector will enable early interventions and great oversights for sustainability and growth. During the Retreat, the legislators were taken through two key topics: “Understanding the Operations of the Contributory Pension Scheme in Nigeria” by Wilson Ideva, CEO, High Street Consulting Ltd; while the second topic “ Investment of Pension Assets in Nigeria” was taken by Dapo Akisanya, managing director/CEO, AXA Mansard Pensions Limited. Emmanuel Paulker, chairman, Senate Committee on Establishment and Public Service of the Senate said during an interview at the end of the Retreat that the event has offered the legislators the opportunity to better understand the operations

and workings of the Contributory Pension Scheme, as well as the gaps which he stated will assist legislators in their oversight functions. “I will advise that this interface with the operators is more regular because it has actually exposed us to some of the difficulties the industry is facing, which if we had sat in the comfort of our chambers we would not have been able to know” Paulker said, with what has been discussed here today, our oversight functions on the industry will be strengthened because we are better equipped with knowledge of the operations of the industry. He also promised to work closer with the PenCom and PITAD towards ensuring that government pays outstanding pension accrued rights, so that affected retirees who have left services and are stranded can start to receive their pensions, Paulker stated.

RC634453

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

“I will advise that this interface with the operators is more regular because it has actually exposed us to some of the difficulties the industry is facing, which if we had sat in the comfort of our chambers we would not have been able to know” Ronke Adedeji, president, PenOp said during an interview that operators are happy to have successfully organized this Retreat because you can not underestimate the value in this partnership with our legislators, who are our major stakeholders. She said, from now going on, there will be a lot more interactions because we need their interventions from time to time, to

ensure sustainability of the scheme. Speaking on the achievements of the CPS, Dahir-Umar, acting director general, PenCom said it is now fourteen years since the introduction of the CPS and i am pleased to note that appreciable progress has been made. Dahir-Umar stated that as at August, 2018, the pension industry membership has grown to 8.31 million participants, while the size of the Pension Fund Assets stood at N833 trillion. “The number of retirees receiving benefits under the CPS as at August 2018 was 245,657. Out of that number, 89.308 retirees are on programmed withdrawal and 56,349 have opted for annuity. In the same vein death benefits had been paid to 52,468 beneficiaries”, “These statistics she stated are clear evidence that the CPS has greatly improved access to retirement benefits for em-

ployees in both the public (Federal Government) as well the private sectors. lt has also helped to improve the issue of funding even though some work is still needed in that regard.” Wilson Ideva, managing director/CEO, High Street Consulting Ltd while responding to questions from the legislators said there is no idle fund in the pension industry as many people are speculating, stating the N8.3 trillion of pension assets has been fully deployed into different asset classes as provided in the pension investment act. Ac c o rd i ng t o h i m N709.511 billion equal to 8.62 percent has been invested into the capital market, stating that without this money the capital market would not have been what it is today. The key objectives of the scheme are to ensure that every person who has worked in either the public or private sector receives his retirement benefits as and when due; assist improvident individuals by ensuring that they save to cater for their livelihood during old age; establish a uniform set of rules and regulations for the administration and payment of retirement benefits in both the public and private sectors; and stem the growth of outstanding pension liabilities. CPS is contributory, fully funded, based on individual accounts that are privately managed by Pension Fund Administrators with the pension funds assets held by Pension Fund Custodians.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme. If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

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Need for insurance rises as flood risks ravage more states MODESTUS ANAESORONYE

ecent flood cases across the different parts of the country where thousands of residents were sacked out of their homes by flood and properties worth of millions of naira damaged, has underscored the need to embrace insurance for protection and risk management. This development which defies whatever religious believe anyone may have because it’s natural, has put many homes and farm lands across the country in more exposed areas under tension given the non predictability of the weathers. However, premium for flood insurance, which hitherto was given at almost free by insurers because it was almost nonexistent are rising up as result of increased awareness. After the Lekki, Victoria Island experience a few years b a c k w h e re m a n y h o m e s in that highbrow were submerged, awareness for flood cover became more. Now with the recent flood havoc again in Niger, Kogi, Anambra and Delta where thousands of people have been reportedly sacked from their homes, farmland destroyed, houses swept off, and lives lost, it is now difficult to be ignored. Just last week, the National Emergency Management Agency (NEMA) declared national disaster in five news states of Adamawa, Taraba, Rivers, Kebbi and Bayelsa, following devastating flood that ravaged the states. This, according to the agency, has brought to nine the number of states declared national disaster areas caused by the flood devastation. The agency had in Sep-

Shola Ajibade, general manager (Operations), Continental Reinsurance; SonnieAyere, non-executive director, AIICO Insurance Plc; Yetunde Ilori, director-General, Nigerian Insurers Association (NIA); BabajideArowosafe, executive director, Nigeria IncentiveBased Risk Sharing System for Agricultural Lending (NIRSAL); BukolaOluwadiya, Chairman, AIICO Insurance Plc; Edwin Igbiti, managing director/CEO, AIICO Insurance Plc; Isioma Chukwuma, managing director /CEO, Nigeria Reinsurance Corporation; Ken Aghoghovbia, deputy managing director/COO, Africa Reinsurance Corporation; Yen Choi, chairman, Ignitia - Tropical Weather Forecast; Femi Hassan, president, Institute of Loss Adjusters of Nigeria (ILAN) and Adewale Kadri, executive director (Technical), AIICO Insurance Plc at the Official Launch of AIICO’s Agriculture Insurance in Lagos.

tember 17, 2018 declared four states — Niger, Kogi, Anambra and Delta — disaster areas. NEMA, in a statement by Mustapha Maihaja, directorgeneral through the agency’s, Sani Datti, head Media and Public Relations in Abuja, said “It will be recalled that on 17th September 2018 national disaster was declared in Kogi, Niger, Delta, Anambra States. “In consideration of the data and information being received, in particular the Preliminary Damage Assessment (PDA) and guided by relevant NEMA policy documents, additional 5 states are observed to have been impacted severely by the disaster.” Flood insurance before now was never taken seriously in Nigeria because the risk exposure was almost non-existent. So, insurers could dash flood cover for free to the insured when they buy fire, burglary and home owner’s insurance

cover. So, flood cover is given as policy extension for fire policy, and so covers damage or loss to a property because of fire. It is a specific form of insurance in addition to homeowner’s or property insurance. Bu t t h e d y n a m i c s h a ve changed since t he recent which resulted to huge claims for insurance companies. “A lot of people are filling claims now as result of damages that arose from the flood, and so flood cover can no longer be taken for granted, said an operator. The operator noted that flood is often an extension of fire cover, adding that most insurance companies do offer the cover for free, especially in areas not prone to flood. “I have told my staff that going for ward, flood policies will be properly charged and if any one gives it away for free and there is claim, i

will take it from the persons salary, one of the insurance CEO’ s said. The CEO observed that, with recent developments, awareness about the benefits of insurance is growing because people can no longer allow themselves to be exposed dangerously like that, when they could pay small amount of money and pass it to the insurance companies. Nimi Akinkugbe, financial adviser and expert on money matters had said “ We live in uncertain times. Violent floods and storms, volcanic eruptions, earthquakes, tsunamis, hurricanes; the list goes on. Such disasters have one thing in common; they are “catastrophic risks” that are not likely to affect you in your lifetime, but if and when they do happen, the consequences can be devastating. Because such risks are so rare and unpredictable, often strik-

ing without warning, they can be badly underestimated. Yet just being prepared can save you from untold distress. “ According to Nimi, Insurance is a crucial instrument that sadly most Nigerians still ignore; that is, until they need it most.” Indeed, according to a US survey, 2 out of every 3 homes are underinsured. In Nigeria, the question isn’t about under-insurance, it is about how many Nigerians are insured in the first place; most are not.” “Are you one of thousands of Nigerians who suffered terrible damage to your property from the recent deluge of rain in July? There is no better time to revisit the issue of insurance than when we have a live and practical situation that brings home this critical issue. How well are you protected against flooding and, indeed, other disasters? You will find that the insurance premium is a small price to pay for the peace of mind of having your belongings insured.” In 2015, less than 20 insurance claims were filled by insurance consumers and about N150 million was paid as claims by the insurance industry. According to the 2015 Insurance Digest of the NIA, International Energy Insurance Plc paid the largest claim of N23.109 million, followed by Ensure Insurance Plc, which paid N22.562 million. Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands, floodplains and floodways that are susceptible to flooding.

NCRIB targets national poverty reduction through insurance

ith almost 87 million Nigerians reportedly living in extreme poverty, the Nigerian Council of Registered Insurance Brokers (NCRIB) has advocated Insurance as a veritable antidote to the spread of poverty and enhancer of grassroots development. Shola Tinubu, president and chairman of Council in a statement made available to Journalists expressed displeasure at the recent report by the United Nations Sustainable Development Goal (SDG), which expressed doubts that the mission of ending poverty in the country 2030 was doubt-

ful. According to him, the SDG report was a wakeup call to the Nigerian government to engage the instrumentality of Insurance, which is the transfer of risks, like other nations of the world to stem poverty growth and give room for holistic grassroots development. Tinubu regretted the government’s attitude towards insurance, stressing that at a time like this, one of the practical ways to tackle poverty headlong was to engage and encourage insurance as a vehicle for risk management and wealth creation. In order to give vent to the place of insurance in combat-

ing poverty, the Council would be rallying professionals at its 2018 National Insurance Brokers Conference and Exhibition to address the theme: “Insurance Industry: Survive, Thrive” and Grassroots Development and Poverty Alleviation: Insurance as an Alternative”. The Conference which is billed to hold in Lagos on Thursday is one of the largest gathering of Insurance professionals in Nigeria and will be preceded by the Annual General Meeting of the Council which is strictly exclusive to members of the Nigerian Council of Registered Insurance Brokers (NCRIB).

AdekunleOyinloye, managing director, Infrastructure Bank Plc will deliver the theme paper titled: “Insurance Industry: Survive, Thrive”, while the sub theme: “Grassroots Development and Poverty Alleviation: Insurance Alternative”, will be delivered by the President of National Association of Chamber of Commerce and Industry, Mines and Agriculture (NACCIMA), IyalodeAlaba Lawson. The Conference is open to all, as past editions had often attracted a good number of professionals from the insurance industry, the organized private sector, government and international delegates.

The Council is hopeful that this year’s Conference would achieve the desired intention of having penetrative insights and input from other critical sectors outside the industry for its growth and desired sustainable development.

Wednesday 17 October 2018

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LegalPerspectives

With

BUSINESS DAY

Odunayo Oyasiji

Case Review

Prof. Theophilus Adelodun Okin & Anor V. Mrs. Agnes Iyeba Okin (2016) LPELR- CA/IL/55/2015

What to note: his is a matter that was decided at the Court of Appeal. This matter deals with issues that bothers on creation and dissolution of partnership. Fact The 1st Appellant (defendant at the lower court) was the husband of the Respondent (plaintiff at the lower court). The Respondent was responsible for the management and day to day running of two educational institutions i.e. Kinsey Academy and Kinsey College of Education. The 1st Appellant claimed that the Respondent was running the schools on his behalf. He claimed that he had to disengage the Respondent from running the school due to her financial obsession which was affecting the administration of the school. The Respondent on the other hand claimed that she got married to the 1st Appellant in 1994. At the time of the marriage, she was a staff of Uthman Dan Fodio University, Sokoto. She stated that she retired after the marriage and relocated to Ilorin to start Kinsey Academy with the 1st Appellant between 1997-1999. She claimed that she invested all her retirement savings into the school and that all the furniture of her former private school in Sokoto was transferred to the school. All that the 1st Appellant invested in the school was his building which was on eight plots of land. The school progressed and other properties in the neighbourhood were acquired. The 1st Appellant and the Respondent were joint signatories to the account of the school. They registered Kinsey Academy as a partnership under Companies and Allied Matters Act in 2003. Also, they both applied and got approval for the establishment of Kinsey College of Education in 2012. The Respondent concentrated on the administration and day to day running of the school while the 1st Appellant focused on infrastructural facilities development in the school. The relationship between the 1st Appellant and the Respondent went sour in 2012 when the 1st Appellant solely decided to give the premises and structures of the school to Grace Owens University

owned by his junior brother. The Respondent opposed this move and this led to her disengagement and to the breakdown of the marriage. The Respondent challenged her disengagement at the Federal High Court, Ilorin on the ground that the school was run on the basis of partnership. She asked the court to dissolve the partnership, wind down the affairs of the schools, liquidate their assets and share them equally between her and the 1st Appellant. The Federal High Court ruled in favour of the Respondent and the appellants being dissatisfied with the judgement decided to appeal. Issues for determination The Appellants raised a sole issue for determination and the Respondent also adopted the sole issue. The sole issue raised was “whether from the evidence and findings of the lower court, the lower court was right to have held that, the two educational institutions were a business owned by the 1st Appellant and the Respondent jointly and to have granted the reliefs sought”. Submissions/Arguments The Appellant’s counsel argued that the lower court was wrong to have relied on the evidence

presented by the Respondent to show partnership. He stated that it was obvious from the evidences before the court that Kinsey Academy was established in 1997 while the Respondent joined the administration of the school in 2001. He further stated that marriage is not enough evidence to establish the fact that whatever one party owns is jointly owned by the couple. He submitted that evidence of joint ownership must always be shown to establish same. He stated that “the issue of joint ownership and partnership is a special contract and the Court only interprets any instrument to that effect made by the parties voluntarily “. He argued that a cordial relationship is in law not the basis to hold that two people are partners. The counsel admitted that partnership can be inferred but that the Respondent did not give evidence that can lead to such inference. Counsel to the Respondent contended that the Appellants did not give evidence to contradict the evidences given by the Respondent and that the implication of this uncontroverted oral and documentary evidence is that the court should rely on them and give judgement in favour of the Respondent. He urged the Court of Appeal to uphold the judgement of the lower court.

Judgement of Court The Court defined partnership as “a legally recognized organizational structure, an association of a business owned by two or more people who share the profits and are personally liable for all business debts. In partnership there may be a formal agreement, which may be expressed or implied between the parties of a partnership to endeavour to engage in business and how it is to be conducted, such as profit and loss sharing, capital contribution or more. In other words, partnership is a voluntary association or coming together of two or more persons who jointly own and carry on a business for profit”. The court summarised the argument of the Appellants as that the Respondent who is claiming partnership and joint ownership of the schools could not present any document in form of agreement to that effect. The court pointed out the fact that at least 12 of the Respondent’s statement on oath was not contradicted in the processes filed by the Appellants and neither were they discredited through crossexamination. Therefore, the evidences of the Respondent as to the co-ownership of the school remained intact without any form of contradictions or denial.

The court further held “the fact that the Respondent and 1st Appellant were married did not in any way disadvantage the fact that partnership could be implied by the way and manner they carried on the business of the school. The law indeed recognises family partnership, which is where two or more persons who are related, voluntarily ancestors, lineal descendants, siblings, and any trusts established primarily for the benefit of such persons”. On the effect of dissolution of partnership, the court held that “where as in this case, a partnership is for a period undefined, any of the parties can give notice or approach the Court for the dissolution of the partnership provided the right is exercised bonafide, not for the purpose of taking undue advantage of the business of the partnership. Whether such dissolution is by reason of the state of agreement of the partnership or by Court decree each party is entitled to be indemnified to the tune of expenses he had rightfully incurred on behalf of the partnership in the ordinary course of its business or for the preservation of the partnership. Then again every partner is in law jointly and severally liable with other co-partners for all debts and liabilities of the partnership. Consequently, I will add, each member unless there is a formal agreement stating otherwise, will be entitled equally to the sharing of both the physical or liquid assets of the partnership… to this extent therefore since the partnership in question was implied, I hold that the learned trial Judge was right when in his judgment he decreed that the Respondent and 1st Appellant share equally the capital and profits of the partnership since there was no implied evidence to the contrary.” The Court of Appeal ruled in favour of the Respondent and upheld the judgement of the lower court. Conclusion Partnership can be implied from the way parties conduct the business. This is also applicable in marriage. The implication of dissolution of partnership is that all partners are to partake in the sharing of both physical and liquid assets of the partnershipexcept where there is an agreement to the contrary.

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Leadership

Wednesday 17 October 2018

SHAPING PEOPLE INTO A TEAM

The scale of the climate catastrophe will depend on what businesses do over the next decade ANDREW WINSTON

obering news on the near future of our planet and species was recently announced. The Intergovernmental Panel on Climate Change (IPCC) issued an important new report about how dire the consequences of climate change are becoming, and how fast we need to move to avoid the worst. The report’s beginnings trace back to 2009, when the annual United Nations global climate conference resulted in an agreement that the world should hold warming to 2.0°C (3.8°F) — a level that seemed politically feasible, but still leads to vast damage, including the death of all coral; even more deadly storms and heat; and rising oceans covering lowlying island nations and major coastal areas. By the time of the Paris climate meeting in 2015, which resulted in the more robust global agreement now supported by every country in the world except the United States, it was clear that we needed to consider a more ambitious target, 1.5°C (2.7°F). The U.N. then asked the IPCC to study what it would take to achieve that goal. This week, the report came back, and it’s not pretty. The scientists put out a helpful document with FAQs, but in short, the primary conclusions are these: While the world has already warmed 1.0°C (1.8°F) since preindustrial times, holding the world to 1.5°C (2.7°F) is still technically possible. Keeping the world at 1.5 degrees will still result in devastation (e.g., 70-90% of all coral dying), but is far better for us than 2 degrees (both in terms of overall well-being and the economic impact ). Getting to 1.5 degrees will require “rapid and farreaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems” and this transition will need to be “unprecedented in terms of scale … and imply deep emissions reductions in all sectors.” We will need to cut CO2 emissions by 45% from 2010 levels by 2030, the report says, and get to no emissions

by 2050. Keep in mind that this would need to happen as the world most likely adds a couple billion people, with a billion or more entering the middle class. We will need to produce a lot more stuff to feed, house, clothe, and entertain everyone, but with drastically lower emissions. So, what should companies do? First, companies must accelerate ongoing efforts to decarbonize their businesses. The list of actions companies need to take is well-developed and documented, and most large companies do the following: Slash energy use and emissions in operations. This includes investing in more efficient lighting and HVAC systems; using new software and AI to make buildings and operations more efficient; improving fleet logistics and introducing greener vehicles; and reducing packaging and product weight. Engage employees, through awards and incentives, to innovate, find operational savings, and develop products that cut customers’ emissions as well. Embrace renewable energy. More than 150 big brands have already committed to use 100% renewable energy in their electricity. Set science-based carbon reduction

targets for operations. Nearly 500 companies have signed on to set emission reductions in line with science. Work with suppliers on systemic reductions across the value chain and set big goals for them as well. Set internal prices on carbon to incentivize reductions, preferably imposing an internal tax that collects funds or using “shadow” prices to influence investment decision making. These actions are becoming the norm because they’re just good business. But what this new report is saying, loud and clear, is that it’s not enough. With a few exceptions, most companies are only doing the things that pay off in traditional return-on-investment terms — for example, when solar and wind get cheap enough, they buy it. Really sticking to the latest science, however, requires an accelerating pace of carbon reduction. So, let me suggest four somewhat uncomfortable actions that companies must take to truly shake things up and accelerate climate action. LOBBY FOR AGGRESSIVE PROCLIMATE POLICIES AT ALL LEVELS OF GOVERNMENT. Today, most companies use their significant lobbying influence (on their own and through trade groups) to fight regula-

tions and defang government. But that has to change in the face of this crisis. The first priority — which the IPCC makes clear — is to put a price on carbon. Companies must lobby for escalating prices on carbon everywhere. In parallel, the way companies approach all regulation should shift. Consider the example of the U.S. auto industry. As soon as the 2016 election was over, an auto industry group asked the new administration to give them some more wiggle room on aggressive fuel efficiency standards established by the Obama administration. The current administration gave the auto companies way more than they wanted and froze the fuel efficiency levels. It puts companies in a weird position where they want to make improvements, but have no regulatory pressure that moves the whole sector upward.But imagine if auto companies approached the issue not through a lens of “how do we structure regulations to help us?” but through a lens that recognizes an urgent global climate crisis. They could say to government, “We need much higher fleet efficiency to help the world hold warming to 1.5 degrees. But we’re having some trouble selling the mix of cars that would get us there (people are buying too many big

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

vehicles). What policies can we put in place to make it much more attractive for buyers to get the EVs and smaller cars? Can the government help build the charging infrastructure? Provide aggressive tax breaks for EVs and good incentives for trading in older cars? Can we invest in public-private R&D to bring the cost of batteries down even faster? Could the government commit to buying EVs in all of its fleet? Or, even more radically, how can we work together to greatly increase the availability of all public mobility and transport?” PUBLICLY AND LOUDLY SUPPORT TRUTH, SCIENCE AND SCIENTISTS. In the era of claims of “fake news,” and attacks on science, companies must help support a key pillar of a working democracy and economy. Most companies let it be known clearly that racism or sexism is unacceptable — why not send a similar message to employees and suppliers about anti-science behavior? USE ALL AVAILABLE PLATFORMS TO ENGAGE CONSUMERS. It’s time to break some taboos on what mainstream companies can talk about; they can and should encourage consumers to make better day-to-day choices that reduce their footprint. RETHINK INVESTMENT DECISIONS AND HEAVILY BIAS THEM TOWARD CARBON REDUCTION. This could mean different things depending on the business, but we have to release ourselves from the arbitrary two-year hurdle rates and capital return ratios that hamstring more aggressive action. Solar and wind power are becoming easy investments, but there are always new efficiency techs that may not be “in the money” yet, like on-site power storage. None of this is easy, but the IPCC report shows we’re truly out of time now. We’re not talking about theoretical models on a computer, but larger versions of the weather horrors we’re already seeing around the world. Business can take the lead here. Andrew Winston advises some of the world’s leading companies on how they can navigate and profit from environmental and social challenges.

Wednesday 17 October 2018

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BUSINESS DAY

Toyota’s mobility focus shifts into high gear Stories by MIKE OCHONMA

oyota took advantage of CES 2018 to signal a major shift in its business, becoming what company president Akio Toyoda termed a “mobility service company” during his keynote presentation. Against this backdrop, Toyota seems poised to embrace mobility services as a core part of its overall business, rather than an offshoot or subsidiary concern, based on Toyoda’s comments and the vision of the future the company revealed when detailing how its new e-Palette dedicated mobility services vehicle and industry alliance will work. The vision Toyoda laid out was a compelling one, centered around its new e-Palette vehicle, which is basically a flexible blank slate on wheels with an electric motor and a fully modular interior design. The big reveal included simulated animation of the car operating in a variety of different capacities, including training multiple together in convoys of urban light-duty transport trucks, picking up as four passengers for shared transit, or just one for a mobile office, acting as a hotel and even delivering food, pizza

and packages without anyone on board. Videos of the concept cars rolling across neighborhoods with speed, efficiency and the ability to change purpose at virtually a moment’s notice, to fill a need from a different kind of client. It’s definitely an idealized projection of what’s to come, and things would be much messier in practice, but it’s definitely something worth pursuing and a smart strategy for an automaker to adopt in terms of figuring out what comes next, once autonomy and electric vehicle investments change the

face of transportation. Toyota has also been criticized in past regarding some of what analysts saw as laggard behavior in areas including electric vehicles, as well as mobility business. It would be recalled that, the automaker launched its mobility services platform in earnest last year, however, and now it’s making it clear that going forward; it will be putting a lot of investment and focus behind taking the platform and turning it into something with real commercial applicability and viability. Toyota’s presentation of this

vision, from something as basic as having Toyoda himself make the announcement, to the selection of its inaugural industry partners, which include Uber, Didi, Pizza Hut, Amazon and more, show a seriousness that should make the rest of the industry stand up and take note. It is expected that, Toyota’s moves here could lead to a significant market leadership position down the road, so long as it continues to invest in the area and is willing to do so with a long-term view of when its investment will result in significant return.

Boulos/Suzuki campaigns cleaner, healthier

s part of the company’s corporate Social responsibility (CSR)Boulos Enterprises Limited (BEL) in conjunction with Suzuki Motor Corporation of Japan is once again canvassing for a clean and healthy environment during the recent clean up the world campaign. This is aimed at improving the safety of the ecological system as well as reducing environmental pollution harmful to human existence which is the main reason this initiative is been organised. Over the years, Suzuki Marine has always aimed at providing customer satisfaction along with excitement on the water in a clean and healthy environment. And it was to fulfil this objection as Suzuki marine distributor in Nigeria, that BEL organised the 7th Edition of the Beach Clean UP Campaign at Inagbe Resorts and Leisure Island in Lagos. In the past few years, the BEL conglomerate has carried out this campaign in various fishing communities in Lagos State. In 2017, the campaign was taken to Epe beach as usual for the riverine populace. This clean up exercise was carried out by the staff of BEL in conjunction with fishing communities, the fisheries department of Lagos State ministry of agriculture and that of the ministry of environment and the general public around the riverine area where people enjoy boating and fishing exercises, for the propagation of better a sanitation society in order to ensure a healthier environment.

Revamped Kia Cerato stirs sedan segment …Ahead of contenders

nveiled at the 2018 New York International Auto Show in Manhattan, USA, the all-new Cerato has made a successful debut featuring its impressively enhanced exterior and interior design. Looking more dynamic and stylish, the all-new car’s design has moved in a sportier direction while preserving the original design elements from predecessors. Sophisticated yet sporty exterior, dubbed the Mini-Stinger, the All-new Cerato maintains its sporty and youthful image while evolving a more sophisticated appearance that nods to a number of sleek and dynamic styling cues inspired by the Stinger fastback sports sedan. Expected to make its Nigeria entry by the year-end, Jimoh Olawale, marketing manager, Kia Motors Nigeria is confident that the car will build on the outstanding success and market acceptance of the previous models. He stated that the all-new 2019 Cerato’s entry will be “premised upon the record-breaking success of the previous models in Nigeria. It has been redesigned with an entirely new aesthetic, taking the model to a notch higher in its segment with its refined sporty exterior and forward thinking technologically embedded inte-

rior, the sedan is set on a path to redefine the standards of sedans in the country.” The front end is more aggressive with a new sturdy version of Kia’s signature ‘tiger-nose’ grille and a Stinger-esque headlamp design, while the Cerato is the first model in its class to come equipped with full LED headlamps. The cowl point, base of the windshield, has been moved back to afford a more athletic and wellgrounded stance. Around back, the rear bumpers are designed to look connected like the Sportage compact crossover, it is now has a sleek horizontal trim piece that connects to the LED taillights. Gaining a more sophisticated design influenced by the Kia Stinger, the model remains one of the most appealing,

affordable vehicles on the market. As outstanding as its exterior design, the interior has been redesigned to provide an enhanced sense of spaciousness. In order to treat both driver and passengers to a more comfortable ride, the overall length, width, and height have been increased to allow for more head and legroom, as well as cargo room in the trunk offers a “class above” interior plus a higher level of comfort, fuel efficiency, and advanced driver assistance technology. Simplicity is the key to the luxuriousness of the Cerato dashboard. Again, drawing inspiration from the Stinger, the horizontal layout of the dashboard paints a picture of a wider interior. Minimizing clutter with clean lines and minimal buttons that

are intuitively placed below an 8-inch touchscreen adds a sense of openness to its high-tech look. Sophisticatedly built for versatile lifestyle. A more versatile, high-end sedan with an eyecatching design, the third-generation Cerato is more attractive to drivers seeking a compact sedan that can accommodate a versatile, active lifestyle. Also noteworthy are the new Cerato’s structural and safety enhancements. While the outgoing Cerato was already impressive from a safety standpoint, the new 2019 model features increased chassis rigidity and higher-quality steel in hopes of achieving its highest safety test ratings yet. And although the Cerato sedan has for quite some time presented an impressive value proposition, it continues to get even better for 2019. Thanks to a number of visual enhancements inside and out, the All-new Cerato is geared up to make any journey – whether a short commute or long haul – a more rewarding and decidedly upscale experience while providing a higher level of comfort. With improvements being made to nearly every aspect of the car, including the new and improved exterior design, the latest model according to company sources remains one of the best choices in its segment.

BMW X7 teased ahead of imminent reveal

MW’s first-ever X7 has shown its face in a teaser image, released by BMW ahead of the vehicle’s official debut, which takes place today. The frontal image practically confirms the accuracy of the leaked patent pictures that did their rounds on the internet back in August. With a design that remains relatively faithful the the X7 iPerformance concept of 2017, Bavaria’s new super-sized SAV avoids bearing too close a resemblance to the latest X5, standing apart with a blocky shape and an even larger grille, which is joined to the headlights. Sharing BMW’s CLAR platform with the aforementioned X5, the X7 will take on larger rivals such as the Mercedes-Benz CLS and Range Rover, and will no doubt offer more comfortable third row seating. All the official X7 details are still under wraps for now, but it almost goes without saying that it’ll inherit much of its technological and electronic content from the X5, including the new BMW Operating System 7.0 and BMW Live Cockpit Professional. On the engine front, the latest 340kW V8 and 250kW straight-six turbopetrols are likely contenders, along with that monstrous 294kW/760Nm quadturbodiesel that’s fitted to the X5 M50d.

38 BUSINESS DAY

MTRAVEL

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Wednesday 17 October 2018

odern

The impact of technology on the travel industry …. Internet and device connectivity makes it better

Stories by MIKE OCHONMA mikeochonma@gmail.com

new study reveals the impact of technology on travel intention, selection and timing. If you are one of the hundreds of millions people worldwide who will fly this year, your travel choices and selections are being influenced by the connected economy. Whether you are a smart and well-informed travel planner, a “relaxed nomad” ready to roam without stress or strife, or a deal-seeker on a budget, technology is transforming your travel experience, findings show, in a way that makes it even more accessible and frequent. According to new research ; entitled “What’s Changing the Way You Travel Today” undertaken by the CMO Council’s GeoBranding Center and AIG Travel, today’s diverse leisure travelers are smarter, more informed and better prepared than ever before. Beliefs, values and interests are influencing where, how and why people travel. Further to this, technology and service innovations are making it easier and cheaper to discover, reach and enjoy travel destinations. While deals, specials and promotions are driving desire and action, visually enriched and personalized digital content channels are making travel experiences more alluring and exciting. The research, centered around a survey of more than 2,000 leisure travelers by Pollfish this summer, yielded some notable statistics. Nearly half of those polled say the Internet and device connectivity makes travel better.

A further 42% believe technology innovations and advancements across all modes of travel have improved the experience, and 38 % say these tech advancements have helped them find deals, discounts and destinations more easily. More than 51% of travelers surveyed say great deals and discounts are what prompt them to make a travel booking. Easier, do-it-yourself travel planning is also a major factor for 32% of travelers. Other influences are referrals from family and friends (29%), exciting images or video (21%), and interesting stories or articles (21%). “We’re in the thick of a monstrous growth in global travel,” notes Donovan NealeMay, executive director of the Chief Marketing Officer (CMO) Council, which operates the GeoBranding Center. When asked to identify the top travel planning innovations and developments in recent years, 49 percent of those surveyed pointed to online travel booking sites and booking assurances, including insurance coverage.

An equal percent highlighted deal or discount availability. Other marketing strategies and inducements that also rated highly by respondents included; loyalty programs with upgrades, privileges, and travel benefits (34 percent), new ways to discover, source and receive personalized travel deals (33 percent) and promotional incentives and options (28 percent). Factors most influencing travel choices tended to be more about passions, selfinterests and destination appeal, rather than travel issues or concerns. These include special interests, hobbies and diversions (43%), security, stability and friendliness of destination (36%), adventure, recreation or sports pursuits (30%) culture and history of the local people (29%) and destination geography and diversity (29%). Surprisingly, only 15% relied on their social media networks to help shape their travel choices, and just 8% pointed to political ethics, human rights practices or prejudices in travel locales as

Marriott accelerates expansion plans across Africa

a consideration when choosing travel destinations. When asked to characterize the type of traveler they were, most respondents selected more informed, relaxed and deal-seeking to best describe their approach to travel. Most prevalent travel types included smart, wellinformed planner (31%), relaxed nomad easy-going and flexible (25%) deal seeker on a budget (22%). According to Jeff Rutledge, CEO at AIG Travel “Advancements in technology have revolutionized the way consumers can now customize travel to better suit individual trip preferences and budget, including how travel insurance is researched and purchased,”. “As consumers take more control over their travel booking process, all members of the travel industry must step up to deliver a seamless booking experience which, for the travel insurance segment specifically, means guiding travelers to the right products and services for their particular trip.” He stated.

rom the Africa Hotel Investment Forum (AHIF 2018) in Nairobi, Kenya, Marriott International announced rapid expansion plans across Africa. Strong demand for select-service brands and conversion opportunities are driving the momentum of growth for the company, amplified by five new hotel signings. Analysts say, the new signings will further consolidate Marriott International’s presence in Ghana, Kenya, Morocco and South Africa and mark the company’s entry into Mozambique. The signings put Marriott International on track to increase its portfolio by 50 per cent with over 200 hotels and 38,000 rooms by 2023 estimated to generate 12,000 new job opportunities. Marriott International’s planned growth reinforces its commitment to Africa and underscores the substantial emphasis that countries across Africa are placing on the travel and tourism sector. The company estimates that, the five new projects signed will drive investment of over $250 million by the property owners and will generate substantial economic activity. “Marriott International’s acquisition of Protea Hotels followed by the acquisition

of Starwood Hotels & Resorts Worldwide has given an impetus to our organic growth on the continent. “Today we are seeing strong owner interest in our brands, backed by our combined loyalty program, the collective strength of our global platform and our highly-experienced, local teams,” said Alex Kyriakidis, president and managing director, Middle East and Africa, Marriott International. “African economies have sustained unprecedented rates of growth, which have mainly been driven by a strong domestic demand, improved macroeconomic management and increased political stability. “The continent is still under capacity as far as branded hotel supply is concerned, presenting us with a fantastic opportunity to grow our brands and enhance our footprint,” he added. Today, Marriott International is present in 21 countries on the African continent: Algeria, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Kenya, Malawi, Mali, Mauritius, Morocco, Namibia, Nigeria, Rwanda, Seychelles, South Africa, Tanzania, Tunisia, Uganda and Zambia. The company is set to expand into new markets including Benin, Botswana, Ivory Coast, Mauritania, Mozambique and Senegal.

A380 programme with a US $16 billion deal for an additional 36 aircraft. The airline remains the world’s largest operator of the Boeing 777 and A380. In the last twelve months, the airline revealed its new Boeing 777-300ER gamechanging fully enclosed 40 square feet private suites. The new B777 First Class private suites showcased the latest in cutting-edge onboard technologies, including a NASA inspired ‘zero-gravity’ seating position, ‘virtual windows’ for middle aisle suites, and a personal video-call service, along with unique lighting and climate control features. The Emirates Boeing 777200LR fleet also underwent a

renovation with a new Business Class cabin featuring a configuration with wider seats in a 2-2-2 layout. Emirates’ new A380 OnBoard Lounge has also debuted with a revamped look, more seating options, mood lighting, and other technological features. Emirates customers enjoy regionally inspired dishes, and an abundance of entertainment options with the industry’s most comprehensive in-flight entertainment system, ice. The 14-time “best in-flight entertainment system” at the Skytrax awards offers an unparalleled 3,500 channels in over 40 languages, including close to 900 movies from around the world.

Emirates win MEA ‘Airline of the Year Award’

mirates, the world’s largest international airline, have won the Aviation 100 ‘Middle East & Africa Airline of the Year’, awarded by Airline Economics magazine. The Aviation 100 awards recognize aviation’s most outstanding performers in the last 12 months. The awards were held during the Airline Economics Growth Frontiers Dubai 2018 conference gala dinner. Emirates and its financing partners also won ‘Deal of the Year for Innovation’, which resulted from a leasing transaction of five Airbus A380s. Winners of the Aviation 100 awards are decided by an industry-wide survey, a rigorous vetting process and

editorial consideration. The Emirates Aviation 100 ‘Airline of the Year’ accolade was won based on the airline’s financial and revenue per passenger kilometers (RPK) performance, aircraft orders, as well as network and fleet

expansion activity. In the 2017-18 financial year, Emirates increased its revenue to US$25.2 billion, and posting a profit of US$762 million. The airline carried more than 58 million passengers and 2.6 million

tonnes of cargo. In 2017, Emirates also clocked in 289 million scheduled passenger kilometres flown (RPKMs). Emirates has progressively grown its network and today flies to over 160 destinations across 86 countries and territories, in addition to entering into several strategic partnerships, including an extensive codeshare with FlyDubai. Today, the codeshare partnership offers a combined network of over 200 unique destinations. At the 2017 Dubai Airshow, the airline announced a US $15.1 billion agreement for 40 Boeing 787-10 Dreamliners, with delivery commencing in 2022. In early 2018, Emirates reinforced its commitment to the Airbus

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Local and global rail news as it breaks

Railways to use ‘green’ composite sleepers instead of wooden sleepers MIKE OCHONMA

n a move to become more eco-friendly, the Indian Railways has decided replace wooden sleepers with composite sleepers that are not only lighter, but also stronger. Composite sleepers were first used by the Railways in the Muradabad division in 2003. They have an edge compared with the strength of wooden and channel sleepers. Comprising a mixture of steel and fibre plastic, Railways preferred them over wooden sleepers because of environmental issues that cropped up over the cutting of trees. According to a railway official, no complaint has been received till date about the use of these sleepers, which were deployed on a bigger scale from 2016 in over 10 zones. The official also pointed out, that composite sleeper, comprising a mixture of steel and fibre plastic, costs more as compared to the other sleepers. “The cost of a composite sleeper is about Rs 25,000, whereas a channel sleeper costs about Rs 7,000,” he said, adding that cost is the big factor. “This decision has been taken in the wake of a Supreme Court order imposing restrictions on cutting

trees. If successful, all wooden sleepers will be replaced with composite sleepers.” In June 2016, the Railway Board Executive Director (Track), in a letter to all the zonal offices, said that the Research, Designs and Standards Organisation (RDSO) was planning to replace wooden sleepers with those made of composite material. It would initially be tried on bridges. The primary function of a sleeper is to grip the rail to the gauge and to distribute the rail load to ballast with acceptable induced pressure. Pavwan Droliaa, Manag-

ing Director of Asterix Reinforced Limited, which deals in manufacturing of composite materials, said that fibre-reinforced foamed urethane (FFU) composite sleepers are made of rigid polyurethane reinforced with glass fibre. “As a lightweight, highstrength, environmentfriendly product, FFU composite is a cost-effective alternative to timber or concrete,” he said. Droliaa said that synthetic sleepers are currently widely used on different types of rail transport systems, particularly on switches, turnouts, bridges

or viaduct and other projects in high-speed railway and metro railway construction across the globe. He noted that, initially, the green and sustainable element is what attracts people, but people now realise its durability is beneficial because there’s no maintenance with this product once it’s installed. “It doesn’t have to be repainted, re-oiled, re-sanded... and it will last between two and three times longer than timber. Generally it is a much lower cost over that period of time; that is what appeals to councils and park authorities.”

Britain to retain EU rail standards after Brexit

ritain will continue to abide by European Union (EU) rail standards and protocols after it leaves the EU, even in the event of a ‘no deal’ Brexit, according to a statement issued by the Railway Safety and Standards Board (RSSB). “Regardless of whether the government strikes a deal with the EU or not, the legal requirements designed to promote common safety and technical principles across all EU railways will still need to be met by UK rail companies and suppliers,” RSSB states. This means European Technical Specifications for Interoperability (TSIs) will continue to apply during the transition period if Britain reaches a deal with the EU. If no deal is reached, TSIs will be adapted as domestic legislation, published as National Technical Specification Notices by the Secretary of State for Transport. RSSB says Network Rail and other main line infrastructure firms, rail freight operators, rolling stock leasing companies and suppliers should plan to continue using relevant cross-industry standards after Britain’s formal withdrawal from the EU, which is due to take place on March 29 2019. European standards

are only affected by EU membership if they are referred to in EU directives. According to RSSB, this only affects less than 20% of applicable standards. The application of European standards from CEN, CENELEC and ETSI, as well as international standards such as ISO, IEC and ITU, is unaffected by Britain’s departure from the EU. The current government’s policy is to maintain regulatory alignment with the EU for goods, which means there is unlikely to be any shortterm-divergence from EUderived requirements such as TSIs. “We have been working very closely with the Department for Transport over the past year to ensure that requirements derived from the EU framework are legally fit for purpose for application in Britain with workable solutions in place, even in a potential ‘no deal’ scenario,” says RSSB standards director, Tom Lee. “We want to ensure that day one post-Brexit, the British standards framework is suitably aligned to the EU for immediate continuity and is legally robust, whilst providing for possible future divergence, if beneficial’’. He stated.

Transnet tests world’s longest manganese production train

ransnet Freight R e i l ( T F R ) ha s successfully run a 375-wagon manganese train over a distance of around 861 km from Sishen to Saldanha Bay. This formed part of the testing of the 4-km long train, which will, once in operation, be a production train with the highest number of wagons in the world, and the longest manganese train in the world, with the highest volumes carried per train as well. This project is in line with TFR’s business objective of applying the heavy haul operating, maintenance, design, construction and best practice principles on general freight opera-

tions, and Transnet’s strategy of migrating traffic from road to rail. The project will maximise the manganese volumes railed between the mines in Hozatel through Sishen to Saldanha. TFR

iron-ore and manganese business unit GM Russel Baatjies explained that there was an option of increasing TFR’s manganese rail capacity to respond to customer demand by upgrading the

existing railway feeder lines and building new rolling stock. “That option would have cost us significant capital. The project team was challenged to explore the use of tech-

nology through Industry 4.0 solutions, to achieve the same objective at minimum cost.” Applying distributed power technology to increase the train length to 375 wagons will reduce

capital requirements by over 90% of the initial estimate. This is another breakthrough for the heavy haul railway industry. Rio Tinto, in Australia, recently started with the implementation of driverless trains on its ironore railway system. “The collaboration on technical research and sharing of best practice by heavy haul operations worldwide will surely keep pushing the operations, safety and rail capacity envelope to new levels through the application of breakthrough technology,” commented International Heavy Haul Association chairperson and TFR GM Brian Monakali.

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NEWSEXTRA

‘Emmanuel has fulfilled his campaign promises to Akwa Ibom people’ ANIEFIOK UDONQUAK, Uyo

overnor Udom Emmanuel of Akwa Ibom State has fulfilled his campaign promises as contained in the five-point agenda of the programme he enunciated before his election in 2014. One of the promises is political and economic inclusion as well as creating a favourable investment climate to attract industries. Charles Udoh, commissioner for information and strategy, said in an interview that the scorecard of the state government “is overtly impressive across all sectors,” adding that from health sector to physical infrastructure to industrialisation, to education, landmarks of development are dotting the landscape of the state. Udoh said the state government has also accorded security top priority which according to him has given room for the peaceful and serene nature of the state, “Security is also paramount, that is why today, in the last three years, we have had a peaceful environment which did not come by any dramatisation but through the efforts of government, lots of young men and women have been taken off the streets into gainful employment and that naturally translates into peaceful and serene nature of the state in the last three years,’’

L-R: Bisi Fayemi, wife of Ekiti State Governor; Kayode Fayemi, governor, and Justice Ayodeji Daramola, the state Chief Judge, administering the oath of office on the governor, in Ado-Ekiti, yesterday.

he said. He said in terms of political inclusion, the governor has allowed opposition parties in the state to make use of facilities for their campaigns, which is not so in other states of the federation. On the industrialisation agenda of the state government, he said many industries are springing up in the state, adding that a mini

industrial estate has already been inaugurated in Itu-Local Government area of the state which houses four cottage industries. “The syringe factory is thriving, the flour mill will soon be commissioned, the coconut refinery is nearing completion, all this are pointers to the fact that the state has been safe and secure,’’ he said. The commissioner, who de-

2019: OBJ’s endorsement of Atiku‘ll have no effect - RBM

pro-Buhari group, Reelect Buhari Movement (RBM), has described f o r m e r P r e s i d e n t ’s Olusegun Obasanjo’s endorsement of former Vice President Atiku Abubakar for President in 2019 as meaningless and of no effect. This is even as the group frowned at the presence of top clergy men, including Bishop David Oyedepo, Matthew Hassan Kukah, Sheik Ahmed Gumi and others at the event last week, noting that, “the endorsement will count for nothing in the next general election.” The RBM stressed in a statement by its convener, Emmanuel Umohinyang that “this is in view of the fact that the decision as to who emerges the next president resides with the Nigerian electorate.” According to the statement: “If endorsement wins votes, former President Goodluck Jonathan would have won the 2015 general election because under that era, we saw how humongous resources were expended to buy endorsement. “Today, Nigerians are not only wiser, they are properly informed on the right they have on the Election Day; so the endorsement of Atiku is neither here nor there, and nobody should take Obasanjo seriously on it. “Ex-president Obasanjo is one man who plays to the gallery.

He speaks from both sides of his mouth as he has shown again. In one breath, Atiku is a thief, and God will not forgive him if he supports Atiku. The next week you saw him telling you that Atiku has shown remorse. “I do not think Nigerians should take the Ex-president seriously. He is also one man who likes to control any government in power.” The group further said: “Ever since he left government, he has tried to bring in people and control them. When he endorsed this President (Buhari) before the 2015 election, some of us didn’t take it as anything because what electoral value does he have? Has he ever won his local government for any presidential candidate? So Atiku’s endorsement does not have any substance. “What Nigerians are voting

Atiku Abubakar

for now is performance, but the baba has forgotten that time has changed, the Kabiyesi’s kind of election has gone” The statement further said that the people look at the performance of the administration and cast their votes, saying, “these are the only people who can decide their next president in 2019 and so, we should not for any reason allow Obasanjo’s miserable endorsement distract anybody.” According to Umohinyang, the only concern is about people masquerading as clergy men, using their office to deceive people. “When I saw some clips of some charade in Abeokuta, I felt the way some of the men of God are going, sooner than later, they may easily lose whatever is left as respect from their followers. “Recall that sometime in 2015, there was an allegation that about N9 billion was released to some men of God to endorse former President Goodluck Jonathan and that the money was shared somewhere in Lagos. I don’t know what is wrong with our religious leaders. I think they should focus on God’s mission by trying to build the society “That does not mean they should not have their opinions but such should not be to teleguide their followers on who to vote for,” Umohinyang said.

cried the antics of the oppositions parties in the state drumming up imaginary situation of insecurity, said such was laughable, adding that in the last three years, Akwa Ibom State has remained one of the most peaceful states in the country. He disclosed that more than 200 youths who had taken up arms against the people in Ukanafun and Etim Ekpo Local Government

Areas of the state have voluntarily surrendered their weapons to embrace peace and the amnesty programme of the state government, explaining that the state government has taken steps to “see how they could be rehabilitated.” According to him, the assessment of the militants and the kind of need that would be suitable for them in terms of training and rehabilitation, adding that the state would harness their potentials in a positive way that would be beneficial to the society. It is a landmark achievement for the state government to be able to connect with the militants and ensure they voluntarily surrendered their arms describing it as a positive sign in which he said the state would continue to pursue “We are determined not to be distracted by the antics of oppositions groups in the state in their attempt to give the false impression that the state is not safe when they raise false alarm and fake news,’’ he said. The commissioner who also allayed fears that many of the aides to the governor have resigned their positions said that the governor has many personal assistants and aides, adding if a handful of them decided to resign, it would in no way significantly affect the chances of the governor in the next year’s elections. According to him, those resigning are clearly in the minority.

2019: Crisis rocks Lagos PDP over alleged imposition of candidate INIOBONG IWOK

head of the 2019 general election, a major crisis has erupted in the Lagos State chapter of the People’s Democratic Party (PDP) over method adopted by the party in selection of candidates for the 2019 general election. The PDP in the state had promised all aspirants who obtained the nomination and expression of interest forms that it would conduct primaries to select candidates for various elective positions in the state. However, some of the aspirants who spoke to BusinessDay yesterday, faulted the method adopted in selecting candidates, stressing that the party refused to conduct primaries for aspirants of various elective positions in the state, except the governorship position even when there was an agreement to that effect. An aspirant for the House of Representatives in Ikorodu Local Government Area (LGA) who did not want his name in print, accused the party of choosing candidates through a consensus arrangement which was organised to favour some particular aspirants, vowing to dump the party and work against its interest in next year’s election if the issue was not resolved. “A lot of us are not happy with the way the PDP selected candi-

dates in Lagos State and we are protesting. This is what often happens, it did not start today, they promised us fair primaries, but look at what happened. “A lot of us spend so much money and some leaders just met and selected some people and called it consensus arrangement; I am ready to leave the PDP I can tell you”. However, a Senatorial aspirant, Kunle Koye, said the leaders of the party in the state chose the party’s candidate through a consensus arrangement which they had a right to do, stressing that there would always be a winner in a contest. “ It was the leaders of the party that decided to have a consensus arrangement; it is not new in the country, even the APC uses that method, so it is normal for some people to complain this is like a game we all cannot be candidate of the party. There are leaders everywhere you can’t go against their decision, this people complaining often when it favours them they would not talk.” When contacted the Publicity Secretary of the party in the state, Taofeek Gani and Secretary of the party, Prince Dosunmu, said it was only the chairman of the party in the state that could speak on the issue. Several calls and short messages to the mobile number of the party chairman, were however, not responded to.

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46 BUSINESS DAY NEWS Nigeria urged to adopt long term contracts for... Continued from page 1

and usually sell on an going basis. Also, Iran is in a tough situation and will probably be making significant concessions to keep its buyers. It is easier and cheaper for an Indian buyer to buy from Iran than take shipment from Nigeria if there is a way around the US sanctions,” said Kareem Jubril Adedayo, an energy sector research analyst at Ecobank. In the first week of October, the Nigerian crude market saw an overhang of close to 20 unsold cargoes from the 58-strong October loading programme. Reuters further reported that there are almost 30 unsold cargoes from the August and September programmes citing discussions with traders in addition to newly released October loading programmes, underlining plentiful supply. At the beginning of each year, the Nigerian National Petroleum Corporation (NNPC), announces names of oil buyers who will buy Nigerian oil in crude term contracts that usually involve both local and international companies. For nearly a decade, these contracts have lasted for only a year with volumes of around 30,000 bpd. Analysts say this should change. “It is also important to rework the terms and tenure of crude term oil lifting contracts to enable more strategic relationship with crude buyers,”

counsels Chijioke Mama, founder and CEO of Meira Copp, an energy advisory and consultancy firm. Mama further said, “The new framework should provide the level of supply assurance that buyers typically yearn for in the long term both from commodity price and product supply perspectives.” Paris-based International Energy Association (IEA) says that oil producing countries like Nigeria, Venezuela, Libya, Iraq and Iran could drive a surge in global oil production but both OPEC and the IEA say oil demand growth will cool off with global consumption rising only by about 1.36 million bpd next year. Demand forecast for 2018 was put at 1.87m bpd. Nigeria’s September production grew 26,000 bpd in September to 1.74m bpd, according to OPEC figures but much of these oil is struggling to find buyers. The United States, Russia, Saudi Arabia are all ramping production portending the competition for market sharewillbefierce.USsanctionsonIran expected to kick in on November 4, is a blow to the country but it is meeting the challenge by offering buyers bigger discounts and generous concessions. To lure Asian refiners, Iran provided 90 days of credit for crude purchases, at least three times the amount of time given by other producers, it offered flexibility in terms of crude grades and

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loading dates to the refiners and it is catching their attention. “Iran unlike Nigeria has always had contractual agreement with Indian buyers. While it is true that these contracts can be voided by the US sanctions, the fact the US move is not globally supported, gives Indian buyers the opportunity they need to continue buying as long as the companies involved don’t have any operational or financial exposure the US can use to force their compliance,” said Kareem. The unilateral US sanctions may not have dire impact so OPEC nations may not easily snatch its market share. The European Union will not restrict insurance of Iranian oil tankers, making the commodity highly risky, which will discourage buyers. Asian buyers may also use other currencies apart from the dollar to rout payments through local or foreign banks to avoid the US financial system. Mama advised that Nigeria should increase local refining capacity to enhance domestic utilisation of crude. But Nigeria’s refineries are still performing less than 10 percent of their capacity as Dangote Refinery remains the only hope of local refining. Meanwhile, Nigeria’s cashstrapped economy needs all the oil income it can get. The country is looking to raise $2.86 billion Eurobond pushing its external debt stock to $24.9billion from the current $22.16 billion to fund the budget and fulfil government obligations.

Wednesday 17 October 2018

2019: Why PDP picked Saraki to lead Presidential Campaign OWEDE AGBAJILEKE, Abuja

etails have emerged as to why Senate President Bukola Saraki was appointed as Director-General of the People’s Democratic Party (PDP) Presidential Campaign Council. Those familiar with the matter, informed BusinessDay that the Senate President was picked as head of the 2019 Presidential Campaign because he is the highest political office holder on the PDP platform. In the Order of Protocol, Saraki is the nation’s Number Three Citizen, coming after President Muhammadu Buhari and Vice President Yemi Osinbajo. On why Gbenga Daniel, the Director-General of the Atiku Campaign Organisation was not included in the presidential campaign, a source in the party revealed that once a candidate emerges as the party’s presidential election, he becomes the “property” of the party. “As a presidential aspirant, Atiku can take any decision he wishes. But as a candidate, anything he does must have the input of the party. Even the name of his campaign organisation changes from Atiku Campaign Organisation to PDP Presidential Campaign Organisation. “Saraki was selected because he is the Leader of the party. Otherwise, Ekweremadu (Deputy Senate President) or any PDP governor would have been selected for the job. “However, with understanding of

both sides, both Atiku and PDP will be responsible for nominating members into the committee after due consultations,” the source who did not want his name mentioned in print, said. The source also debunked an insinuation making the rounds that Daniel may have been dropped because his name appeared on the list of 50 Nigerians affected by the Executive Order 6, saying, “That is not true; what has happened is exactly what I have explained to you. The former governor is going to play another big role in time to come.” A statement on Tuesday by PDP National Publicity Secretary, Kola Ologbondiyan, revealed that the National Working Committee also appointed six coordinators to oversee the six zones of the federation. The zonal coordinators include: Sokoto State Governor, Aminu Tambuwal, North West; Gombe State Governor, Ibrahim Dankwambo, North East; Benue State Governor, Samuel Ortom, North Central; Rivers State Governor, Nyesom Wike, South-South; Ebonyi State Governor, Dave Umahi, South East and immediate past Governor of Ekiti State, Ayodele Fayose, South West. While the former Minister of Special Duties, Tanimu Turaki is the Chairman, Legal Matters, Akwa Ibom state governor, Emmanuel Udom chairs the Fund Raising Committee. The party spokesperson explained that “the NWC will make further announcement on the composition and structure of the PDP Presidential campaign, in due course.”

Nigerians leaving the country out of desperation – Buhari Tony Ailemen, Abuja

L-R: Femi Fani-Kayode, former minister of aviation and a PDP chieftain; Nyesom Wike, governor, Rivers State; Ayodele Fayose, former governor of Ekiti State, and Mike Ozekhome, lawyer and human rights activist, at the Economic and Financial Crimes Commission (EFCC) office in Wuse, Abuja, where Fayose went to submit himself for interrogation, yesterday.Fayose arrived the EFCC office, wearing a t-shirt with the inscription, ‘EFCC, I am here’. NAN

CBN could raise interest rates as inflation... Continued from page 1

represent a 0.05 marginal increase from its August figure. The monetary policy committee of the Central Bank of Nigeria (CBN) has, at its last meeting in September, held its key interest rate at 14 percent despite the rise in August inflation rate, which was the first time inflation was rising after 18 months of consecutive decline after it soared to an 11-year high of 18.9 percent in April 2016, following a big naira devaluation and an upward review in the retail price of petrol. Explaining the reason for holding onto the rates, members of the monetary policy committee said it was an anticipatory move to control the effect of a likely increase in money supply from the build-up to the 2018 elections, and to keep foreign portfolio investors money in the country by offering them higher yields in government papers. But the decision to keep the benchmark monetary policy rate unchanged was not unanimous. Seven panel members voted to keep policy

unchanged at 14 percent and three favored a 25 basis-point increase as inflationary pressures built. Analysts now foresee a likely increase in the interest rate if inflation continuous in an upward trend. “I think the CBN might be tempted to tighten its key interest rate up from its current level if the inflation rate continues to go up.” Gbolahan Ologunro, a research analyst at Lagos-based CSL stockbrokers said. However, Ologunro said that the “increase in inflation rate was slightly below the consensus forecast of 11.5 percent.” The NBS also released data that could explain the rise in inflation. The NBS data show that the average price paid by consumers for premium motor spirit (petrol) increased by 1.9 percent year-on-year and 0.3 percent month-on-month to N147.30 in September 2018 from N146.90 in August 2018. Food prices also climbed 13.3 percent from a year earlier, faster than the 13.2 percent increase recorded in August. Price increases were not uniform

acrossallstates.Accordingtothereport, on a year on year basis, Kaduna state recorded the highest inflation rate of 12.93percent, followed by Ebonyi state with 12.86percent while Bayelsa state had an inflation rate of 12.83 percent completing the top three among the thirty-six states in Nigeria. Cross River, Plateau and Ogun recorded the slowest rise in headline Year on Year (YOY) with inflation rates of 8.42 percent, 8.77 percent and 9.22 percent respectively. Dolapo Ashiru, an investment analyst in a Lagos base investment bank said those states high fuel prices could have influence the price differences across states. “It is usually the Northern states that always have issues with the inflation in this situation; it is basically cost of energy that is behind the inflation rate in thes areas” Prices could still rise further before the end of the year as the International Monetary Fund forecast that inflation could rise to 12.4 percent this year. Late disbursements from this year’s budget of 9.1trillion naira ($25 billion) and election-related spending before the February vote may quicken price growth, central bank Governor Godwin Emefiele said.

resident Muhammadu Buhari has attributed reasons for Nigeria youths leaving their country to what he described as “sheer desperation” The President, had while speaking State House, Abuja, during a farewell audience with the outgoing High Commissioner of the Republic of Namibia, His Excellency, Peingeondjabi Shipoh, said that sheer desperation makes Nigerian youths dare both the Sahara Desert and the Mediterranean Sea” The President said all was in the bid to take up menial jobs in Europe, is hurting the pride of the country. Buhari however noted that “there were vast opportunities for Nigeria and Namibia to cooperate in areas like agriculture and trade” Buhari recalled the sacrifices made for the freedom of Namibia, particularly by the administrations of Generals Murtala Muhammed and those of former President Olusegun Obasanjo. Buhari decried illegal exodus to Europe, at grave risk to lives and limbs, and then pledged: “We will do our best to make our country live-able again.” The outgoing High Commissioner, who spent four years and eleven months in Nigeria, said the country had become second home for himself and his family, submitting: “I enjoyed great support in carrying out my duties. I return home with absolute satisfaction that our two countries are more than ready for intra-African trade and exchange of state visits by the leaders. Our two

countries have a lot in common, and Africa can only be developed by Africans themselves.” Shipoh wished Nigeria successful general elections in 2019. The President also on Tuesday assured Nigerians and international community that the forthcoming general elections in 2019 will be free and fair, saying it will usher the country into another clime of maturity, peace and unity. He stated this when he received Letters of Credence from four ambassadors at the State House, including the Ambassador of the Peoples’ Republic of Japan, Mr Yutaka Kikuta, said the country’s political and electoral institutions have continued to evolve in strength, skill and experience after each election. “We are currently at the threshold of another general election and after five general elections in the country since 1999, we expect that the 2019 elections will be free and fair. “The political system is good and if people work hard they will succeed,’’ the President said. President Buhari also said the increase in number of political parties that will field candidates in 2019 elections indicates more democratic consciousness among Nigerians and willingness to serve the country. Receiving Letter of Credence from the Ambassador of the Russian Federation, Alexey Shebarshin, the President noted that discussions on reviving the Ajaokuta Steel Complex, partnerships in agriculture and other bilateral interests in trade and economic development will be sustained.

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Explainer:

How pipeline sabotage short-changes Nigeria’s higher oil revenue DIPO OLADEHINDE

s the prices of Brent crude Nigeria’s biggest revenue earner hits fresh high of $86 last week; Nigeria major Oil companies are losing more output of up to 40 percent to Nembe Creek Line (NTCL) vandalism. The NCTL was the single largest project undertaken by the SPDC in the Niger Delta. It was commissioned in 2010 and cost $1.1 billion to construct as it was constructed to replace the ageing and often vandalized Nembe Creek Pipeline, which had suffered significant losses due to incessant fire outbreaks, sabotage and theft. The challenge of escalating pipeline vandalism has being one major issue confronting the Nigeria Petroleum industry since crude oil was discovered in Oloibiri, a small community in Ogbia local government area, Bayelsa state. Implication for Indigenous oil companies Aiteo, Eroton and Newcross, three of Nigeria’s oil independents are losing as much as 40 per cent of their crude production to oil theft along the Nembe Creek Trunk Line (NCTL), which has continued to be a favourite area for oil thieves and vandals, according to sources familiar with the happenings. Aiteo Group, one of the oil industry’s well positioned oil production companies in the country, which also jointly owns the Nembe Creek Trunk Line; Eroton Exploration and Production Company Limited and Newcross Petroleum all pump their crude output through the troubled 150,000 capacity pipeline which has up to 24 illegal bunkering points. The Aiteo operated pipeline has experienced long periods of shut-in this year, which led to decline in the country’s total crude exports. According to the company, “NCTL has been shut down for over 145 days and

an approximate deferment of 50.386 million barrels per day for the six injectors into the trunk line since Aiteo took over the operatorship in 2015.” Effects of Pipeline vandalism Analysis of NNPC monthly report for the month May showed NNPC gains of N180.7 million made by NNPCs upstream and gas processing subsidiaries such as the Nigerian Petroleum Development Company (NPDC), RETAIL and Nigerian Gas Processing Transportation Company Limited and Pipelines and Product Marketing Company (PPMC), were wiped off largely by its downstream subsidiary operations which recorded deficits north of N118.7 million according to figures from the organization’s operations and financial report for 2018 actual. The report also showed products theft and vandalism have continued to destroy value and put NNPC at a disadvantaged competitive position as a total of 1, 621 vandalized points have been recorded between May 2017 to May2018 which increased compared to the total of 1, 484 vandalized points have been recorded between April 2017 to April 2018. In 2018 alone, the NNPC have incurred a total cost of N49.1 billion in pipeline and maintenance cost as the month of April recorded the highest cost of N13.2 billion. Also, one of the major buyers of Nigeria light sweet crude, India have reduced its buying of Nigeria crude in the month of September as U.S grades and other rivals shift Nigeria out of the international oil market. Exports are expected to hit four month low. Solution Ayodele Oni energy partner at Bloomfield law practices said notwithstanding, the massive investment in refineries, the sub-sector is in a state of decay due to poor operating conditions, inadequate funding, vandalisation and bureaucratic interventions.

L-R Ayodeji Ebo, MD, Afrinvest Securities Limited; Ola Belgore, MD, Afrinvest Asset Management Limited; Ike Chioke, GMD, Afrinvest West Africa Limited, and Victor Ndukauba, deputy managing director, Afrinvest West Africa Limited, during the Afrinvest Nigerian banking sector report 2018 pre-launch press conference in Lagos, yesterday. Pic by Pius Okeosisi.

Government must allow cost-reflective pricing to stabilise gas market - experts FRANK UZUEGBUNAM, SOLA BELLO, HARRISON EDEH, Abuja

ederal Government must allow cost-reflective pricing to stabilise the Nigerian gas market to win investment into the promising sector, experts at the ongoing Abuja Nigeria Gas Association Conference say. The experts are worried that the government has not yet put its feet on the ground to win investors’ confidence with a cost-reflective pricing, as this has dragged down the development of the sector. Barth Nnaji, a former minister of power/CEO of Geo-metric Power Limited, said government must factor in currency exchange

rates in the cost-reflective pricing to align the domestic gas market towards investors confidence. “If the government is not revisiting the cost-reflective pricing with the current exchange rate realities and inflation rates, investors’ confidence would be weaken by this kind of development,” he said. Tunde Obaniyi, managing director, Investment Banking Business, at a panel, told the government to borrow a leaf from the telecoms sector and draw from the lessons of why it had worked and ensure same model was adopted for the domestic gas market. “Capital goes to where there is expectations of reforms. Infracredit and Guranco and other credit agen-

cies are there and we are not succeeding at the rate we are expected to, why,” Obaniyi questioned, saying, “Our Gas project must be bankable. Go for the best consultants to ensure you attract lending options.” Speaking further, Chike Onyejekwe, group managing director, Aiteo, said Nigeria’s maximisation of the gas resources was key since competition was growing even from other African nations. He said some of the key constraints in growing the domestic gas market were the forex exposure risks, as “gas supply contracts are denominated in dollar, but the project’s revenue is generated in reverse other in naira. So, there is a risk exposure in terms of paying

back and getting returns on investments. “Another critical concern is the project disalignment. We should try and ensure that there is project alignment between the critical stakeholders. This would improve the credit accessibility for the projects from lenders. “The project disalignment also ensures that power plants stakeholders and off-takers are on the same page in providing the gasto-power infrastructure. “We must look at revising the cost of tariff to increase the cost of Gas from the Nigeria Electricity Regulatory Commission. Tariff revising is of utmost importance to grow the sector appreciably and sustain the market confidence.”

Fayemi sworn-in, as Fayose reports to EFCC RAZAQ AYINLA & RAPHAEL ADEYANJU, Ado-Ekiti

ayode Fayemi, who was elected governor on Saturday, July 14, 2018, on the platform of the All Progressives Congress (APC), was yesterday sworn in as the new governor of Ekiti State. Fayemi succeeds Ayodele Fayose of the People’s Democratic Party (PDP), who has since made a voluntary visit to the Economic and Financial Crimes Commission (EFCC), which had accused him of having some corruption cases to answer. Fayose had before yesterday promised to visit the EFCC head office in Abuja to answer to whatever allegation the Commission may be having against him. His successor, who took his oath of office in AdoEkiti yesterday, declared that aggressive agricultural drive and agribusiness would take a full course in

rustic and agrarian Ekiti State as part of efforts to rebuild the economy and reclaim the lost socio-economic and political value of the state. Governor Fayemi said that premium would be placed on people’s rights and dignity; workers’ welfare and that the masses’ wellbeing would be prioritised as the payment of the backlog of workers’ salaries and arrears would be promptly addressed. Speaking shortly after the governor and his deputy, Bisi Egbeyemi were sworn in by Justice Ayodeji Simeon Daramola, Chief Judge of Ekiti State at the inauguration ceremony held at Ekiti Parapo Pavilion in Ado-Ekiti, Fayemi said that Ekiti people had had enough insults of lost human values as witnessed by the past government. At the inauguration ceremony which was graced by Federal Government delegation led by Boss Musta-

pha, Secretary to the Government of the Federation, Governor Fayemi flayed immediate past government policies that forced out series of investments in the state and replaced hitherto developing economy by infamous ‘stomach infrastructure’ as being practiced the Fayose administration. “Today, we reclaim our land from those that have held us hostage. We will

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thoroughly reveal and distribute documents of what happened in our state during the past administration.”

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This is to confirm that I, Abiloro Segun Peter is same person as Abiloro Oluwasegun as written in my First School Leaving Certificate and Abiloro Segun as writen in my NECO Certificate. All former documents bearing any of the names remain valid. General public please take note.

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Wednesday 17 October 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES Saudis weigh saying Khashoggi was killed by rogue officers

Why the pound is keeping its cool in a big week for Brexit

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World Business Newspaper

Emmanuel Macron unveils new cabinet in long-awaited reshuffle Overhaul of top team was prompted by string of high profile resignations HARRIET AGNEW AND DAVID KEOHANE

mmanuel Macron has elevated key ally Christophe Castaner to the job of interior minister, part of a long-awaited government reshuffle that aims to breathe a “second wind” into the French president’s mandate. Mr Castaner, a former socialist who was spokesman for Mr Macron during his 2017 presidential election campaign and most recently head of his La République en Marche party, replaces Gérard Collomb, a political heavyweight and early backer of Mr Macron whose resignation two weeks ago sparked the reshuffle. The move, announced on Tuesday, is an attempt by Mr Macron to steady the ship amid declining approval ratings and three ministerial resignations in as many months, including that of his popular minister for the environment, former television personality Nicolas Hulot. It also illustrates Mr Macron’s desire to press on regardless with the second year of his ambitious reform agenda, aimed at kickstarting growth and bringing down unemployment in the eurozone’s second-largest economy. An Élysée source said there was “a renewed team, dynamic, with a second wind”. But the “political mandate remains the same” and the government would go ahead with “the calendar of reforms for the coming months,” the person said. Overall four ministers have been ousted from the government, eight new people have joined and six members have changed their portfolios.

Didier Guillaume, a former socialist and member of the Senate of France, has been named minister of agriculture and food, while Franck Riester, a member of the National Assembly and former member of the centre-right Republican party, is the new minister of culture. Several big names in Mr Macron’s government kept their jobs: prime minister Edouard Philippe, finance minister Bruno Le Maire, minister for digital Mounir Mahjoubi and foreign minister JeanYves Le Drian. “It’s a reworking in exactly the same manner as Macron’s

first government,” says Philippe Moreau Chevrolet, head of MCBG, a c o m mu n i cat i o n s ag e n c y . “There’s a big mixture of the old political figures of the left and right, with some young people. One difference is that there are no longer any prominent civil society figures because Macron can no longer attract them. The moment of seduction and spectacle is over and we are in the age of reason and true politics.” Ever since Mr Collomb’s resignation there has been confusion surrounding the scope and timing of the government reshuffle. It had been expected to take place last

week but was postponed, prompting speculation of a disagreement between Mr Macron and prime minister Edouard Philippe, and difficulties in finding willing candidates. Mr Macron vowed to “take the necessary time, with calm” and his team said the delay was a result of ensuring a political and gender balance, and the candidate vetting process. Then yesterday the reshuffle was postponed by another day as the French president visited the flood-hit southwestern Aude region. Mr Macron’s approval rating stands at 33 per cent following

criticism of how he handled a scandal surrounding his private bodyguard and a series of verbal gaffes that have fuelled perceptions that he is out of touch with the lives of ordinary French people. Most recently he suggested that France would be better if people did not complain so much, and told an unemployed gardener to “just cross the road” to find a job. In an interview with Bloomberg last month, the French president insisted that he “is not poll driven” and pledged to “keep exactly the same pace” of reforms for the rest of his mandate.

frastructure projects, often working under pressure to hit high growth-rate targets. LGFVs acted as a primary channel for funding those projects, and a key driver of economic growth. While local governments have more recently been allowed to issue bonds, and the central government has sought to crack down on off-balance-sheet financing, LGFVs have remained active in

building up large amounts of debt, often through opaque financing channels. S&P said gauging the scale of debts was not easy given much of it was “hidden”. But it added the amount of debt that local governments kept off their balance sheets might be multiples of the publicly disclosed amount and could be as high as Rmb40tn ($6tn) or even more.

China faces ‘debt iceberg’ threat, warns rating agency S&P voices concern over ‘titanic credit risks’ amid infrastructure projects boom

DON WEINLAND

hina could be facing a “debt iceberg with titanic credit risks” following a boom in infrastructure projects at local governments around the country, rating agency S&P Global has warned. Local governments could have accrued a debt pile hidden off their balance sheet as high as

Rmb30tn to Rmb40tn ($4.5tn to $6tn) following “rampant” growth in borrowings, said S&P Global. The mounting debt in so-called local government financing vehicles, or LGFVs, hit an “alarming” 60 per cent of China’s gross domestic product at the end of last year and was expected to lead to increasing defaults at companies connected to small governments across the country.

“There are cities with hundreds of LGFVs,” said Richard Langberg, an analyst at S&P, noting that defaults at smaller vehicles would be tolerable. “But if they start to let the bigger ones go then we are getting into uncharted territory.” For many years, local governments were not allowed to raise debt in the capital markets and therefore resorted to creating separate vehicles to finance in-

BUSINESS DAY

C002D5556

NATIONAL NEWS

Turkey’s foreign minister wary on US ties after pastor’s release

Bond trading slump takes shine off strong Goldman earnings

Mevlut Cavusoglu says obstacles still stand in way of warmer Washington relations

Revenues in fixed income unit fall 10 per cent but investment bank surges

TONY BARBER

LAURA NOONAN

he bond trading slump has resumed at Goldman Sachs with fixed income revenues falling 10 per cent year-on-year during the firm’s final quarter under the stewardship of Lloyd Blankfein. The fixed income struggles — which matched the experience of JPMorgan’s but were worse than the rest of Wall Street — were overshadowed by a strong performance at Goldman’s investment banking arm. The firm posted total revenues of $8.65bn, comfortably above the $8.357bn expected by analysts polled by Bloomberg, and the $8.326bn a year earlier. Net income of $2.52bn was well above the $2.089bn in the Bloomberg poll and the $2.128bn from the third quarter of 2017. The firm has spent much of the last year revamping its fixed income, currencies and commodities businesses and saw good results in the first half of 2018. It attributed the third quarter fall-off to “significantly lower net revenues in interest rate products and lower net revenues in credit products and mortgages, partially offset by higher net revenues in commodities and currencies”. It also cited “an environment characterised by low client activity amid low levels of volatility” as a contributing factor to the performance of a business which is still one of Goldman’s biggest, with $1.31bn in revenues. Equities revenues were up 8 per cent year on year, to $1.79bn. Investment banking, the division where new chief executive David Solomon spent his career, was the standout performer once again, with revenues up 10 per cent year on year to $1.98bn. Investing and lending revenues were flat at $1.86bn. The results mark the last quarter under Mr Blankfein, the charismatic chief executive who led Goldman for 12 years before stepping down as chief executive on September 30. Last month Goldman suffered its longest losing streak since becoming a public company, highlighting how negative investor sentiment has been towards financial stocks. “Year-to-date earnings per share is the highest in our history and year-to-date return on equity is the highest in nine years, notwithstanding our continued investment in growth opportunities,” Mr Solomon said. Like other big Wall Street firms, Goldman has been aggressively buying back its shares, pushing up its earnings per share. During the third quarter, the firm repurchased 5.3m shares of common stock at an average cost per share of $234.93, for a total cost of $1.24bn.

Wednesday 17 October 2018

Saudis weigh saying Khashoggi was killed by rogue officers Pompeo arrives in Riyadh as kingdom hints at interrogation gone awry in consulate SIMEON KERR AND LAURA PITEL

he Saudi government is considering saying Jamal Khashoggi was killed in an operation gone awry, according to a person briefed on deliberations in Riyadh, confirming US media reports that the kingdom may claim the journalist died after being interrogated by rogue operatives. Repor ts that Riyadh was weighing up changing its stance emerged hours before Mike Pompeo, US secretary of state, met King Salman, the Saudi monarch, and his son Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, in the Saudi capital. An admission that Mr Khashoggi was killed by rogue operatives would mark a dramatic U-turn for Saudi leaders, who have for two weeks denied any involvement in the case. After King Salman’s meeting with Mr Pompeo, the US state department issued a conciliatory statement saying the secretary of state “thanked the king for his commitment to supporting a thorough, transparent and timely investigation of Jamal Khashoggi’s disappearance”. Mr Trump had described Mr Pompeo’s visit as a fact-finding mission, though the US president has also signalled he was pre-

pared to accept Saudi denials of responsibility. On Monday, the US president said that “rogue killers” could be responsible. Riyadh has come under international pressure after Turkish officials said they believed a team of 15 Saudis killed the journalist and dismembered his body in the kingdom’s consulate in Istanbul. The Saudi side said that in the king’s meeting with Mr Pompeo, “current situations in the region and joint efforts being exerted towards them were discussed”, according to a Saudi news agency statement quoted by the Arabiya media group. On Monday, the US president had a phone conversation with King Salman, who he said had “firmly denied” culpability for Mr Khashoggi’s disappearance. In his meeting with Mr Pompeo on Tuesday, Prince Mohammed said: “We are strong and old allies. We face our challenges together — the past, the day of, tomorrow.” The family of Mr Khashoggi issued a statement in the early hours of Tuesday demanding the formation of an “independent and impartial international commission” to investigate the circumstances of his disappearance and asking that his reputation not be damaged by the case becoming politicised. The suggestions that rogue killers may have been responsi-

ble were treated with scepticism by some analysts. Bruce Riedel, a former CIA analyst who has followed Saudi Arabia for decades, said it was suspicious that Mr Trump had floated the idea of “rogue killers” hours before the reports emerged that Riyadh was considering making a similar statement. “If this is how it plays out, it would certainly make a prima facie case that [Mr Trump] is complicit in the cover-up,” Mr Riedel said. “He has enormous stakes in this,” he added, referring to the strong ties between Riyadh and the White House and multibillion-dollar US arms deals with Saudi Arabia. The disappearance of Mr Khashoggi, who has not been seen since he visited the Saudi mission in Istanbul on October 2, has threatened to isolate the kingdom internationally and provoked large-scale withdrawals from its high-profile “Davos in the desert” investor conference next week. Mr Khashoggi, one of the Middle East’s most prominent journalists, had been living in self-exile in the US, where he has used columns in the Washington Post to criticise the direction Saudi Arabia is taking under the stewardship of Crown Prince Mohammed bin Salman.

LASG pledges to promoting healthy society …. Commissions Jibowu Recreational Park

he Lagos State government has promised to commit resources to enduring infrastructures that promote a healthy society and imprint a sustainable social and economic system in the state. Disclosing this at the commissioning of Jibowu Recreational Park in Yaba, the Commissioner for Environment, Mr. Babatunde Durosimi-Etti affirmed that the dream and desire to transform Lagos into Africa’s smart and industrial haven where individual economic and social operations can be met is one of the cardinal policies of this administration, noting that project represents a major milestone in fulfilling that objective. The Commissioner stated that in bequeathing to its citizens an environment that promote public health and wellbeing through adequate recreation and relaxation, the government is levitating an enduring system for social, economic and political development. “To underscore the administra-

tion commitment to sustainable recreational and relaxation centres, the state government has in the last three years commissioned the Rafiyu Jafojo Recreational Park (RJP) Shasha in Alimosho, Johnson Jakande and Tinubu Recreational Park (JJT) Park in Ikeja, Badagry Recreational Parks at Idale, Alfred Rewane Gardens in Ikoyi, among other smaller gardens adopted and upgraded by private concerns”, Babatunde affirmed. Babatunde said, government will continuously initiate and executive environmental policy and programmes that will not only endure but guarantee the psychological wellbeing of the residents of this beautiful state wherever they may be. He however implored all private organisations and relevant stakeholders to support the state’s government determination towards delivering a beautiful and greener Lagos to the generation unborn, adding that the state government policy of regeneration and transformation of the environmental

landscape is to solve all ecological challenges that could hinder the socio-economic progress of the state. In her opening address, the General Manager of the Lagos State Parks and Gardens Agency (LASPARK), Mrs. Bilikiss Adebiyi-Abiola described the project as one that will stimulate economic development and engender socialisation for the promotion of healthy living among citizens. “The concerted efforts towards the beautification and landscaping of road setbacks, degraded areas, gardens and open spaces by this government is realisation that a beautiful, greener and healthier environment is the surest way to achieve economic prosperity’’, she added. Commending the efforts of the governor for initiating and completing the project, Adebiyi-Abiola assured that the government will continue to deliver projects that will be pleasing to the sight and appealing to the sense of decency of the populace.

evlut Cavusoglu, Turkey’s foreign minister, has cautioned against interpreting the release of Andrew Brunson, a US evangelical pastor, as signalling a marked improvement in US-Turkish relations after a string of recent disputes. Speaking in an interview with the Financial Times in London, Mr Cavusoglu acknowledged “the atmosphere is a little bit better now” between Washington and Ankara after Mr Brunson was allowed to return to the US last week after two years’ detention in Turkey. However, he emphasised that Mr Brunson’s release was “not a signal from us [in Turkey] . . . The fate of one person alone cannot frame relations between two allies”. The cautious tone of the Turkish foreign minister’s remarks on Monday contrasted with an upbeat tweet last week from Donald Trump, who suggested Mr Brunson’s release “will lead to good, perhaps great relations between the United States and Turkey”. Mr Brunson was arrested on terrorism and espionage charges in Turkey in 2016 after a failed coup attempt against Recep Tayyip Erdogan, the Turkish president. A Turkish judge set the pastor free after sustained pressure from the Trump administration, including trade sanctions that undermined foreign investors’ confidence in the Turkish economy. Washington’s measures against Turkey, a Nato ally, included the doubling of steel and aluminium tariffs and sanctions against two senior Turkish government ministers. Mr Cavusoglu said important obstacles continued to stand in the way of warmer US-Turkish relations, above all Washington’s refusal to extradite Fethullah Gulen, a Pennsylvaniabased spiritual leader of a group that Mr Erdogan’s government accuses of masterminding the 2016 coup. “He is still living in the US. He is a putschist. He is responsible for the attempted coup in Turkey, and he’s not been extradited,” Mr Cavusoglu said. Mr Gulen denies any involvement. The foreign minister said another obstacle was US support for Kurdish militia in Syria that are linked to the Kurdistan Workers’ party (PKK), an armed insurgent movement in south-eastern Turkey which has fought an on-off battle against the Turkish state since 1984. “This is a very sensitive issue. It is a security issue for us in Turkey,” Mr Cavusoglu said. From Washington’s point of view, a third irritant is Turkey’s determination to buy and deploy a Russian S-400 air defence system, which Nato officials say could collect sensitive data on the F-35, the US’s new flagship stealth fighter jet. Earlier this year, congress began preparations to halt the sale of F-35 jets to Turkey in a bid to force Ankara to back down. But Mr Cavusoglu said Turkey, far from rescinding its decision, would deploy the air defence system in the second or third quarter of 2019. “It’s done,” he said. Mr Cavusoglu said Turkey had felt compelled to buy the Russian system because of foot-dragging by Nato allies. “If any one of our allies were ready to sell such a system to Turkey, we could start the process today,” he said.

Wednesday 17 October 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Why the pound is keeping its cool in a big week for Brexit Traders and investors have become used to living with the possibility of radically different Brexit outcomes KATIE MARTIN

terling has been described as the UK government’s unofficial opposition, delivering a series of thumbs-down responses to Brexit plans over the past two years. It is therefore perhaps fitting that as the divorce day grows nearer, like the official opposition, the currency appears to be trapped in the headlights. Despite the increasingly urgent tone of Brexit negotiations and the pressing concerns that no deal is near, sterling is stuck. If anything, it has a bias to climb, rising by around 0.5 per cent against both the euro and dollar on Tuesday in response to upbeat labour-market data. One pound now buys just over $1.32 and EUR1.14, and Rabobank calculates that it is the bestperforming major currency in the world over the past two months. “This performance appears to be out of step with the sheer volume of political uncertainty that can be connected with both Brexit and the tenuous position of the UK Prime Minister,” Jane Foley at the

bank drily observes. What explains the resilience? One keen watcher of the UK economy and bond market describes the environment as a ‘Quantum of Brexit’: a condition of living simultaneously in several states ranging from the likely chaos of a no-deal divorce to a smooth transition next March to a delay in actually leaving the bloc. For as long as all options remain in play, it is impossible to know which way to jump. James Bond-style epithets aside, this limbo gives tidbits of economic data the power to move the market, and they are generally positive. “The UK economy is not doing that badly, and in the event that we do get a deal, the UK will hike rates before the European Central Bank,” said Kit Juckes, a macro strategist at Societe Generale. “Sterling is very cheap and the market is very short and that means we need a lot of bad news to get it down.” In addition, while sterling has its flaws, other major currencies are holding their own in an ugly contest, particularly the euro with its long-running Italian budgetary drama.

Stocks to watch: Volvo, Johnson Matthey, Tesco, Ocado, Tilray, Intu

Patisserie Valerie is a warning for retail property developers, says Stifel BRYCE ELDER

olvo retreated after warning it had detected problems in its trucks that may cause engines to exceed emission limits. A component used in US and European markets was degrading more quickly than expected, Volvo said. It was not able to calculate the number of trucks affected but said the costs of a potential recall “could be material”. Johnson Matthey slipped in response to Volvo’s warning. The chemicals and technology group has a market share of about 60 per cent for heavy duty diesel catalytic converters, and does not identify its end customers. Merlin Entertainments led the FTSE 250 fallers after its third-quarter update revealed an unexpected slowdown in sales at its Legoland theme parks. The weakness, and cautious guidance on wage costs, offset “early signs of recovery” for Merlin’s London attractions following the anniversary of July 2017 terrorist attacks. Tesco was biggest faller among the UK supermarkets after industry data showed its sales growth deteriorating while discounters Aldi and Lidl took market share. Tesco’s sales for the four weeks to early October fell 0.2 per cent, compared with 0.9 per cent growth in the prior period, Kantar Worldpanel reported. McCarthy & Stone, which has a 70 per cent share of the retirement home market, rallied after the UK government proposed that retirement communities would be exempt from a cap on ground rents. Under the proposals the home-

buyer would be given the option to accept the ground rent costs or pay more upfront. “The government seems to have grasped the economics of providing a substantial amount of communal facilities within retirement development schemes which have been traditionally paid for by the capitalisation and sale of ground rents” Peel Hunt Stifel moved to “buy” from “hold” on Shaftesbury, Workspace, Safestore and LondonMetric in a property sector review, which favoured industrial estate developers over those with retail tenants. British Land and Capital & Regional were both cut to “hold” from “buy” while Land Securities went to “sell” from “hold”. “The wall of bad news from retailers will continue, with Patisserie Valerie the latest name on the verge of collapse despite creative accounting to try to conceal the true horror of the balance sheet. We expect poor retail property prospects to impact the diversified large-caps, though remain of the view that British Land’s proactive approach to its office portfolio, in contrast to Land Securities’ ‘do nothing’ strategy, will see the former outperform the latter” Stifel Merrill Lynch upgraded Ocado to “buy” from “underperform” on valuation grounds. Its target price on the grocery-delivery specialist was unchanged at £10.20. “With share price down by circa 25 per cent over the past four months, we regard Ocado stock as back to buying territory. The current share price is not reflecting the value of Ocado’s unique online grocery solution”

Three Brexit scenarios: a clean deal, a chaotic break or a muddle in which the UK keeps its cards hidden until the last moment

British American Tobacco trims profit and vaping growth forecasts Group warns currency effects will hit earnings as it cuts sales target on cigarette alternatives LEILA ABBOUD

ritish American Tobacco has cut its full-year sales target for cigarette alternative products by 10 per cent to £900m, blaming lower demand in Japan and a product recall in the US, and said it would pay down debt slower than expected through 2019. The FTSE 100 group also warned that currency effects would trim 7 per cent from earnings per share growth compared with 6 per cent predicted previously. The world’s second-biggest international tobacco company by revenue issued the update ahead of chief executive Nicandro Durante meeting investors on Tuesday, accompanied by his soon-to-be successor, company veteran Jack Bowles. Like other cigarette makers, BAT is navigating a period of change as consumers in developed markets such as the US and Germany smoke less, and young people turn to alternatives such as tobacco-heating devices and vaping. As companies

push further into smoking alternatives, regulatory scrutiny of the new products, particularly in the US, is also increasing. Mr Durante was the architect of BAT’s strategy to expand its portfolio from cigarettes to so-called reduced-risk products, which include its vaping brand Vype as well as oral tobacco and tobacco-free nicotine pouches. He also oversaw $69bn worth of deals, including the 2017 acquisition of Reynolds American that saw BAT return to the US market. BAT and others are investing heavily in the new breed of cigarette alternatives because they are less harmful to people’s health, and sales of the products are growing faster than traditional cigarettes. The World Health Organization estimates there are 1.1bn smokers globally, while market researchers estimate only about 50m vape. Yet the market has not rewarded BAT for its efforts: its shares are down 33 per cent this year, com-

pared with a 20 per cent decline for rival Philip Morris International and a 13 per cent decline for Altria. BAT shares are on track for their first annual decline since 2008. Shares in BAT were down 1 per cent in early afternoon trade in London at £32.90. The negativity among investors reflects scepticism that big tobacco companies will be able to increase sales of cigarette alternatives fast enough to offset declines in their core business. BAT predicts volumes across the industry will fall 3.5 per cent this year alone. In addition, so-called nextgeneration smoking products tend to be lower margin than tobacco so they could drag down profitability over time, analysts said. “The long-term investment case at BAT, and for the industry, is very opaque compared with what we have come to expect from tobacco,” wrote RBC analyst James Edwardes Jones in a note.

BlackRock reports lowest intake of funds in two years Chief Larry Fink cites market jitters for $30bn in third-quarter withdrawals OWEN WALKER AND ROBIN WIGGLESWORTH

inancial ructions, international tensions and an uncertain global economic outlook sent BlackRock’s inflows to a fresh two year in the third quarter, after increasingly anxious investors yanked money out of the world’s biggest asset manager. Redemptions were especially acute from institutional investors in passive management strategies — excluding exchange traded funds — who withdrew more than $30bn in the three months to October. These outflows were offset by almost $34bn of flows into the group’s iShares range of ETFs, but overall BlackRock reported longterm net inflows of just $10.6bn for the third quarter — the lowest since 2016. That sent its shares to the lowest since May 2017. Larry Fink, BlackRock’s chief executive and chairman, said redemptions were a result of institutional investors such as hedge funds, pension funds and insurers shedding market holdings due to their concerns over tightening monetary policy,

geopolitical uncertainty and signs that global growth may be turning. “Right now there are many new questions in many new areas of the world . . . [such as], are we at peak earnings?” Mr Fink said in an interview. This led to a “pause by investors looking to de-risk.” The global economy started 2018 on the front foot, buoyed by accelerating growth in the US. But a bout of turmoil in emerging markets, a slowing global expansion, climbing bond yields and rising concerns that the current corporate profit bonanza is as good as it gets has triggered renewed turbulence in financial markets this month. Bank of America’s latest survey of investors, released on Tuesday, revealed that a record percentage of fund managers think that the global economic expansion is on its last legs. The net percentage of those surveyed that think the economy will weaken over the next 12 months was the greatest since November 2008, and expectations for global corporate profits has

slumped to a two-year low. Mr Fink said he didn’t believe that corporate profits had peaked, but said that “these are questions we have to ask”, given the growth outlook, simmering trade tensions and the prospect for tighter monetary policy from the US central bank. “We have a lot of uncertainty around the Federal Reserve and interest rates. Do they hike twice, three times, four times more? That would probably slow down the economy,” he said. BlackRock’s fading growth is emblematic for a tricky period for asset managers, which have struggled to retain clients. This year’s performance stands in stark contrast to 2017, when the global asset management industry scooped up record assets. As recently as the second quarter of 2017, BlackRock reported inflows of $94bn. The world’s biggest asset manager has benefited from a broader suite of products than many of its big, more active product-oriented rivals, but also faces increased competition from Vanguard, the second largest shop, which is fast catching up.

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Oil companies groan under NAMA’s exploitation IFEOMA OKEKE

nternational Oil Companies (IOCs) owned airstrips in Nigeria have been constrained into paying extremely high cost for air traffic service provided by Nigerian Airspace Management Agency (NAMA) who have assumed the sole provider of air traffic services, despite the provision of the Nigerian Civil Aviation Regulations. NAMA deploys air traffic controllers to Eket airstrip in Akwa Ibom State, Focados airstrip in Delta State, Bonny airstrip in Rivers State, Escravos airstrip and Osubi airstrip in Warri, Delta State, which was recently shut down as a result of the air traffic service by NAMA. As a result of the monopoly enjoyed by NAMA, the agency is riding on this advantage to exploit and milk oil companies dry by charging them exorbitantly to provide air traffic control services that ordinarily would cost less than 500 percent of what they currently pay. In accordance with the provisions of the Nigerian Civil Aviation Regulations (NCAR), air traffic control is a service to be provided by private organisations that have met set standards and approved by NCAA. BusinessDay’s checks show that NAMA collects about N17 million every month from each of the private airstrip owned by these oil companies. The amount covers the cost for the provision of five or six air traffic controllers to

each of these airstrips. This implies that, for five private airstrips being operated by the oil companies in Nigeria, over N85 million monthly and N1.02 billion annually enters into the coffers NAMA, just for the provision of services of the air traffic controllers. In turn, the air traffic controllers are paid less than N300,000 to N350,000 each month for their services, while NAMA takes the chunk of the monies, some of which are not accounted for. A source close to the oil companies who craved anonymity told BusinessDay that this was part of the reasons why the Osubi airstrip in Warri was closed down, adding that the new operators of the airstrip could not afford to pay such huge sum to NAMA. The source wonders how an airstrip that uses less than five air traffic controllers can owe a huge sum of N600 million in less than three years. Only last month, air transport services at the Osubi Airport, Warri, Delta State, was grounded, as traffic controllers withdrew services over alleged N600 million debts. The action, sequel to the directive of NAMA, followed the facility’s managers’ failure to pay for its services. With the air traffic controllers not in the tower, no aircraft could land or take-off from the airport. BusinessDay’s checks show further that the aeronautical services debt had continued to pile up since

Shell Petroleum Development Company (SPDC) transferred ownership of the airport to an indigenous energy and infrastructure company in 2015. Another source who also refused to be mentioned specifically told BusinessDay that IOCs pay N17 million to NAMA every month for the provision of six air traffic controllers whose recurrent training was most times left overdue. “NAMA is only rash to be exploiting another government agency. 60 percent of the IOCs assets and liabilities are owned by the Nigerian National Petroleum Corporation (NNPC), which is also government owned. This invariably implies that NAMA is exploiting tax payers of Nigeria,” the source said. However, a source at NAMA told BusinessDay, “NAMA does not come up with charges without the approval of the Nigeria Civil Aviation Authority (NCAA). “The oil companies have continued to owed us and have refused to pay for services rendered by NAMA.” Sam Adurogboye, general manager, public relations, NCAA told BusinessDay that for now, NAMA remained the only agency approved to deploy air traffic controllers to airports across Nigeria. Adurogboye also disclosed that the Osubi airstrip might remain closed pending when the operator of the airstrip pays up its debt.

FG insists NLNG train 7 must comply with local content law OLUSOLA BELLO,FRANK UZUEGBANUM & HARRISION EDEH

n order to consolidate its local content drive, the Federal Government insisted Tuesday that the engineering, procurement and construction of the planned $4.3 billion Nigeria Liquefied Natural Gas Limited Train 7 plant would be done in-country by mostly Nigerian companies. Simbi Wabote, executive secretary, Nigerian Content Development and Monitoring Board (NCDMB), who disclosed this at a public workshop on the Nigerian content aspect of the NLNG Train 7 organised by the company in conjunction with the NLNG, was very emphatic about the government’s objective. According to Wabote, the era of building such projects in modules abroad and then shipped to Nigeria to be coupled, was over. “I know how we insist on some of these local con-

tent requirements (from the international oil companies (IOCs)). He said if they were left alone, they would build this Train 7 in modules and then ship them overseas and then take them straight to Bonny and put them together there. This, he said, is not going to happen, as “We are going to build the Train 7 in-country because we have the capacity.” The NLNG recently announced it was shopping for $7 billion to expand its operations. The expansion project will see to the construction of an extra gas processing train called Train 7 and investment in upstream gas that will ensure sustainable feed gas supply to its existing Trains 1 to 6. The target Final Investment Decision (FID) date is fourth quarter 2018. Tony Attah, managing director, said the company’s planned Train 7 Project, which will increase production output of its

plant by 35 percent from 22 Million Tons Per Annum (MTPA) to 30 MTPA, would lift Foreign Direct Investment (FDI) in the country. The company in a presentation on an overview of the Train 7 project said opportunities exist for incountry fabrication of pressure vessels, pipes, and flare stack, among others. In the area of procurement of equipment and materials, the company said incountry opportunities exist for Nigerian companies to supply cement, fuel, lubricants and vehicles including earth-moving equipment. In construction, opportunities exist in consulting services, installation, commissioning and inspection, testing and certification. The NLNG said Nigerian companies could take advantage of opportunities to supply logistics including marine and air transport for thousands of workers than would be engaged during construction.

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Nigerian maritime domain is constantly under threat of pirate attacks - FG AMAKA ANAGOR-EWUZIE

he Federal Government has raised concern over the high level of security confronting the entire Gulf of Guinea, which houses Nigeria’s maritime domain, caused by pirate attacks and other criminalities on Nigerian waters. Boss Mustapha, secretary to the Government of the Federation (SGF), said this in Lagos on Tuesday at the 2018 World Maritime Day celebration themed, “IMO at 70 Our Heritage: Better Shipping for Better Future,” aimed at celebrating the achievements of International Maritime Organisation (IMO) member states in ensuring safety of the maritime domain.

“The maritime industry in Nigeria and indeed globally has come under siege by criminal elements who orchestrate acts of piracy, sea robbery, arms proliferation, crude oil theft, terrorism, migration, illegal and unregulated fishing and oil theft in the Gulf of Guinea and within Nigeria’s territorial waters,” the SGF said, who was represented by Mustapha Baba Shehuri, minister of state for works, power and housing. According to Shehuri, the gains recorded via dredging of the water channels, amnesty and port concession exercises in Nigeria, have nosedived due to the unfortunate security, thus compelling some foreign shipping companies to request for government’s approval to enter Nige-

ria’s territorial waters with armed security personnel onboard. Despite the challenges, he further noted, government had not taking the issue of safety and security in the maritime sector lightly as it was also aware that the maritime industry must be protected to attract foreign investors and also preserve Nigeria‘s territorial integrity. “We commend the Federal Ministry of Transportation for confronting the matter with all the seriousness it deserves. A contract has been awarded for the Integrated National Security and Water Protection Infrastructure in Nigeria under the Deep Blue Project. “This project entails the provision of security infra-

structure and training of personnel for the protection of Nigeria’s maritime domain. It is envisaged that this project will comprehensively address the emerging cases of insecurity in the maritime industry and restore investor confidence,” he assured. Continuing, he said: “The treasures for our future growth and development lie in an improved shipping environment where safety and security of goods, services, seafarers and the shipping community is guaranteed. The lMO has been resolute in evolving strategies to facilitate efficient shipping and member countries should cultivate the benefits of the Blue Economy concept through creativity, innovativeness and collaboration.”

Africa’s nutrition drive attracts $82m worth of investment opportunity JOSEPHINE OKOJIE, Nairobi

T L-R: Tobe Okigbo, corporate relations executive, MTN Nigeria; Kola Oyeyemi, general manager, customer experience, MTN Nigeria, Olusola Teniola, president of ATCON; Tajudeen Omokhide, senior manager, mobile financial services, MTN Nigeria, and Hassan el-Chami, chief technical officer, MTN Nigeria, at the 2018 NTITA Awards where MTN received five awards including telecom company of the year.

Fashola to speak on power situation at Nigeria-South African Chamber breakfast meeting

inister of power, works and housing, Babatunde Fashola, will be the guest speaker at the monthly breakfast meeting of the Nigeria South Africa Chamber of Commerce, being sponsored by Phillips Consulting this month. Fashola will share his views on “The true situation of Electric Power today and prospects for the future.” The topic was selected because of the incessant national cry for the resolution of the electric power situation in the country and a need for clarity into the future, the organisers say. The event is being sponsored by Phillips Consulting, an indigenous management consulting firm, led by Foluso Phillips. The company will also be intro-

ducing to the public for the first time its new managing director, Robert Taiwo, who has been overseeing the affairs of the firm since the beginning of the year. Robert, as part of the transformation initiative taking place at Phillips Consulting, will present the firm’s new brand identity and speak briefly about the firm’s revised strategy for the future under his active leadership. While Phillips, the current chairman of the Nigeria South Africa Chamber of Commerce and also one time chairman of the Nigeria Economic Summit Group, has stepped down from the operational activities of the firm, he will continue to see to the internal development of the firm’s Consultants and focus on executive capacity building and mentoring.

“We are quite excited at this new phase in the life of our 26 year old firm. Its personally refreshing for me, to see my vision of building a sustainable institution to outlive us all, becoming a reality. With Rob at the helm of affairs and this redefinition of the firm as personified by a simple but refreshed brand image, I feel that a new generation is being truly born at Phillips Consulting. I believe there are exciting times ahead for us and our innumerable clients,” Phillips said. The invitation only gathering is scheduled to take place at the Eko Hotel on October 18, at an early breakfast meeting scheduled for 7:30am to 9:00am. The Chamber will also hold its annual general meeting immediately after the breakfast meeting.

he quest to tackle Africa’s malnutrition challenges and ensure that households across the continent have access to affordable nutritious food has attracted $82 million worth of investment opportunity. The Global Alliance for Improved Nutrition (GAIN), a Swiss Foundation, and Royal DSM - a purpose-led global science-based company in nutrition, health and sustainable living, are co-hosting this drive to generate greater investments to improve nutrition in Africa. The investment opportunity, which is currently being explored by over 60 fastgrowing small and medium enterprises (SMEs) across the continent often faced by the challenges of accessing affordable finance, would help in addressing the continent’s malnutrition problems. “Malnutrition is a massive problem in Africa,” says Lawrence Haddad, executive director, GAIN, who was awarded the World Food Prize Tuesday at the ongoing first Nutrition Africa Investor Forum in Nairobi, Kenya. “Businesses have to be part of the solution for malnutrition in Africa. The big problem most businesses face, especially the small and mediumsized, is that they lack access to finance,” Haddad says. “This is the first real effort within Africa to make it easier for businesses to provide nutritious food by making it more readily available, affordable and accessible,” he adds.

Wednesday 17 October 2018

Transcorp Group announces new executive, non-executive appointments

ransnational Corporation of Nigeria plc (Transcorp) has announced new appointments to its Board and executive management. Valentine Ozigbo has been appointed as the president/ CEO of Transnational Corporation of Nigeria with effect from January 1, 2019. He will succeed Adim Jibunoh, who is retiring on December 31, 2018. Ozigbo, currently the MD/CEO of Transcorp Hotels, owner of the prestigious Transcorp Hilton Abuja, will bring over 20 years’ experience in banking, business development, hospitality and corporate transformation. Owen Omogiafo has been appointed as the MD/CEO of Transcorp Hotels effective from January 1, 2019. She is currently the Executive Director, Corporate Services at Transnational Corporation of Nigeria. She has over 18 years’ corporate experience in organisational development strategy, human capital management, banking, and change and business management. She holds a B.Sc. in Sociology and Anthropology from the University of Benin and an M.Sc. in Human Resource Management from the London School of Economics and Political Science. Omogiafo is a member of the Chartered Institute of Personnel and Development (CIPD), UK and a Certified Change Manager with the Prosci Institute, USA. The Board of Transcorp also approved the appointments of Obi Ibekwe and Toyin F. Sanni as Non-Executive

Directors, following the retirement of Kayode Fasola and Abdulqadir Jeli Bello. These appointments are effective October 30, 2018. Oluwatoyin F. Sanni was group CEO at United Capital, a position she retired from in June 2018. She has over 25 years of experience in investor services, law and finance. Sanni holds a Bachelor of Law degree from the University of Ife, an LLM (Hons) from the University of Lagos as well as a professional qualification of the I.C.S.A. UK and the Chartered Institute of Stockbrokers (C.I.S) Nigeria. Obi Ibekwe holds a Bachelor of Arts degree in International Relations from Tufts University, Medford, Massachusetts, USA, a Bachelor of Law degree from the University of Lagos and an MBA degree from the Ross School of Business, University of Michigan, USA. She has over two decades experience in banking, holding senior executive and senior management positions spanning credit and marketing, credit risk management, human resources and customer service. Transcorp Hotels has also announced the appointment of Emmanuel Nnorom as the chairman of its Board, following the retirement of Abdulqadir Bello. Nnorom is the group CEO of Heirs Holdings, after retiring as the President/CEO of Transcorp. He brings over three decades of professional experience in the corporate and financial sectors, working with publicly listed companies. He is an alumnus of Oxford University’s Templeton College, and a prizewinner and Fellow of the Institute of Chartered Accountants of Nigeria. Speaking on these appointments, chairman, Transcorp, Tony Elumelu, expressed his confidence that the newly appointed chief executives and non-executive directors would further strengthen Transcorp’s core purpose of improving lives across Nigeria.

Emmanuel Nnorom

Owen Omogiafo Valentine Ozigbo

Oluwatoyin F. Sanni

Obi Ibekwe

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10,000 traders benefit from Trader Moni in Ogun ODINAKA ANUDU

L-R: Folasade Adesoye, Lagos State head of service; Temitope Akinsanya, human resources director, British American Tobacco (BAT), West Africa area; Tunji Bello, secretary to the Lagos State government; Toyin Suara, Lagos State commissioner for agriculture, and Nnnena Okoro, head consumer client coverage, Stanbic IBTC Bank, at the World Food Day Lagos Farm Fair in collaboration with BAT and Stanbic IBTC in Ikeja, Lagos. Pic by Pius Okeosisi

Apapa: FG, Lagos look away as roads infrastructure decay deepens CHUKA UROKO

ederal and Lagos State governments apathy to roads infrastructure in and around Apapa leaves nothing to the imagination that Nigeria is a failed state, where leaders and managers of the national economy are clueless on national problems that have the potential of snowballing into disasters. The fact that one party, the All Progressives Congress (APC), produced the government at the centre and in Lagos has changed anything in Apapa’s sorry state in the last 10 years. Again, not even the billions of naira revenue to these governments from ports activities in Apapa make them look in its direction. Recently, the Vice President of Nigeria visited Apapa twice to get a feel of the chaos and rot that define Apapa as the country’s premier

port city. The overwhelmed vice president left, but not without leaving a 72-hour presidential order to clear the gridlock on Apapa roads and bridges. After over two months of the order, Apapa remains the same, if not worse. In the last five months, the rot, decay and dilapidation that define the state of roads infrastructure in area have gone several inches deeper following the impact of heavy rains, wear and tear from heavy duty and articulated vehicles. Residents, motorists, commuters and businesses in this port city who are at the receiving end of this collapse, have described the government’s neglect as unfortunate. It was expected that with the federal and state governments produced by one political party, the politics of the past that rendered Apapa prostrate ought to have ended with the old order that defined owner-

ship of infrastructure along political party lines. Asides the major access routes, the inner roads have all broken down, making driving through them difficult. Whether it is about Liverpool Road, Point Road through North Avenue connecting Marine Beach, Creek Road, or many other inner roads, the story is the same decay. The little relief coming from the reconstruction of Wharf Road is easily neutralised by the state of Liverpool Road, which has become a death trap with countless ditches and gullies dotting its entire stretch from the Point Road junction to Liverpool Bridge Roundabout. The rehabilitation work on the Wharf Road is being undertaken by the trio of Dangote Group, Flour Mill Nigeria and the Nigeria Ports Authority (NPA). It is progressing but it’s already three months behind completion schedule owing largely to huge traffic challenge the

Kwara, Adamawa, Kebbi top September highest food prices BUNMI BAILEY

igeria’s general household food prices on a (monthon-month) basis was the highest in Kwara, Adamawa and Kebbi states, having 3.4 percent, 2.4 percent and 2.2 percent, respectively, according to the National Bureau of Statistics (NBS) September 2018 inflation report released Tuesday. Emmanuel Ijewere, vice president, Nigerian AgriBusiness Group (NABG), said, “One of the main things I feel may have been responsible is the flood that took place, which has wheedled down into so many places. Kwara is a junction place between the north and the south region of the country.” Ijewere further said, “And

by the time you add the cost of transportation there, it makes the prices go higher and I think that the same applies to Kebbi as well. Adamawa is the northeast region of the country, but it was indirectly affected. But this is just a temporary thing, which is a passing phase.” The continuous flooding in Nigeria, especially in the middle belt areas, has been a source of concern to players in the logistics chain of the agricultural business, upsetting distribution of farm products and causing an uptick in food price inflation. But states such as Katsina, Kogi, Nasarawa, Niger and Plateau had recorded a general decrease in the general price level of goods and services in September 2018. The general food prices in the country also rose by 13.3

percent in September 2018 compared with 13.2 percent in August 2018, which was caused by the increases in prices of potatoes, yams and other tubers, vegetables, fruits, meat, milk, cheese and egg, bread and cereals, and fish. Also, the consumer price index (CPI), which measures inflation, increased by 11.28 percent (year-on-year) in September 2018. This is 0.05 percent points higher than the rate recorded in August 2018, which was 11.23 percent. In September 2018, food inflation on a (year on year) basis was highest in Kwara, Bayelsa and Abuja with 17.0 percent, 16.6 percent and 15.7 percent, respectively, while Plateau, Abia and Ogun recorded the slowest rise having 8.8 percent, 10.1 percent and 11.1 percent.

contractor is contending with. Emmanuel Ameke, a port operator, says Apapa represents a dysfunctional system, and walking through the inner roads reveals a degraded environment and collapsed infrastructure that have forced many residents and businesses to flee to ‘safer’ places, leaving a large stock of empty buildings for the spirits and rodents to inhabit. For the wrong reason, Ameke adds, Apapa is always in the news. “It has become a metaphor for pains, anguish, stress and suffering because of its crippling, intractable and suffocating gridlock and bad roads that elicit endless (unanswered) questions from motorists, commuters and the few residents still staying put, hoping for intervention from government. Paul Ajibade, a staff of an old generation bank with an office on Creek Road, Apapa, agrees, asking, “does any government have responsibility for Apapa?” as he strug-

bout 10,000 petty traders in Ogun State on Tuesday accessed the ‘Trader Moni’ collateral free loan of the Federal Government to expand their business activities. Speaking at the activation of Trader Moni initiative at Sango Ota Market in Ogun, Toyin Adeniji, executive director, Bank of Industry (BoI), said that the programme was part of government’s efforts aimed at reducing poverty at the grassroots level. Adeniji said that the programme would be activated in various markets nationwide and would support two million Nigerians to grow their business through access to collateral free loans irrespec-

tive of their status or level of education. The Federal Government recently unveiled the programme under the Government Enterprise and Empowerment Programme (GEEP) in partnership with the Bank of Industry (BoI). Adeniji said that the goal of the scheme was to take financial inclusion down to the grass root whereby pure water seller, bread seller, food seller, okada rider, among others, can access micro credit to expand their business. “Trader Moni initiative is mobile phone driven, after your details have been captured by agent and sent to BoI system for validation, within 48 hours you will get cash notification in your mobile wallet account.

2019: Senate approves N53bn election budget for security agencies OWEDE AGBAJILEKE, Abuja

he Senate has approved N53.2 billion to enable five security agencies provide security for the conduct of the 2019 general elections. The approval followed adoption of the final report of the Senate Committee on Appropriations at Tuesday’s plenary. With this development, the upper legislative chamber has laid to rest controversy surrounding the funding of the forthcoming elections, as lawmakers approved the elections budget, three months after President Muhammadu Buhari submitted his request to parliament. Lawmakers had last week approved the sum of N189 billion for the Independent National Electoral Commission (INEC) for the

conduct of the exercise. However, contrary to Buhari’s request that the elections budget be sourced from the over N578 billion projects inserted by lawmakers, the committee recommended that the funds be sourced from Service Wide Votes of the 2018 Appropriation Act. In his letter dated July 11, 2018 President Buhari had requested that the elections funds be sourced from the over 1,403 projects inserted by lawmakers. Details of the budget passed on Tuesday revealed that a total of N53,237,777,707 was approved for five security agencies. Presenting the report, Chairman of Appropriations Committee, disclosed that while the Nigeria Police received the lion’s share of N27 billion, Department of State Services (DSS) was allocated N10.2 billion.

Poverty eradication: Edo faults old strategies, advocates tech-based solutions to break chain

STEPHEN ONYEKWELU

he Edo State governor, Godwin Obaseki, has faulted the age-old poverty reduction strategies adopted by some development experts and political leaders, which failed to prioritise and integrate modern technology. Obaseki made the submission on the occasion of the commemoration of International Day for the Eradication of Poverty, marked on October 17, each year. According to Obaseki, “With current global trends, development experts and political leaders that ignore the power and revolutionary force inherent in modern technology do so at their own peril.”

He maintained that it was time for development actors across the globe to embrace disruptive measures that thrive on modern technology to break the chain of poverty. Calling on world leaders to eliminate man-made barriers to prosperity, the governor said, “We all must rise against retrogressive practices such as corruption and cultural practices that disempower women; caste and other systems that stratify society, alienate and exclude some people from participating in socio-economic activities.” “Beyond culture, thought leaders must harness the manifest and latent gains in modern technology to solve problems

and create wealth through innovation,” he added. He explained that his “administration’s conviction about the power of modern technology informed the setting up of the Edo Innovation Hub, which is creating a new army of innovators that are their own bosses, creating jobs and solution applications worth millions of dollars.” He said: “To illustrate, the agricultural value chain beckons on our youth to tap into. By simply flipping your smart phone or tapping your keyboard, anyone can market agricultural produce in the internet-enabled market place, from the comfort of their homes. Same goes for other products and services.”

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NEWS YOU CAN TRUST I WEDNESDAY 17 OCTOBER 2018

Opinion

The new Polaris bank OPEYEMI AGBAJE opeyemiagbaje@rtcadvisory.com

ost readers who are familiar with this column will be aware that I have sustained an intermittent commentary on developments at the now defunct Skye Bank since the Central Bank of Nigeria (CBN) intervened in its affairs on July 4, 2016. I wrote in my first intervention on the subject titled “The Skye Bank Challenge” published on August 3, 2016 that “Skye Bank had some inherent potential…it had some relative post-consolidation success and had grown its industry relevance, brand positioning, branch network, ICT channels competences and franchise…” but this potential had been undone as “corporate governance

THE PUBLIC SPHERE

CHIDO NWAKANMA Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@gmail.com.

ontradictions in the politics of the Igbo of South Eastern Nigeria continued to play out through the weekend and into this week with what would ordinarily be good news instead brewing a storm. The nomination of HE Peter Obi as vice presidential candidate by PDP Aso Villa hopeful Atiku Abubakar received a mixed reception in Igboland. It also caused the trending of a negative narrative jumpstarted by Igbo middle-class types and groups and amplified by persons who do not like the ethnicity. Eminently qualified, Peter Obi earned his pips from doing outstanding work in Anambra State over eight years. He scored high marks in infrastructural development, education, healthcare, justice and in ensuring Anambra complied with the Millenium Develop-

and risk management standards were somewhat eroded” due to the “unrestrained ambitions” of “powerful shareholders”. However I categorically endorsed the appointment by the regulators of Messrs. M.K Ahmad and Tokunbo Abiru as Chairman and GMD/CEO respectively of the bank. As I wrote at the time, “…if there was any team that could be sent in the circumstances to stabilize, reposition and grow Skye Bank, it is without doubt, M. K Ahmad and Tokunbo Abiru.” Happily Ahmad and Abiru did not betray my confidence and those of the regulators. As I noted in my last article on the topic, “The Skye Challenge: A Renewed Mandate”, on June 13, 2018 “…two years into their mandate, the CBNappointed board of Skye Bank has normalized the institution, restored its prudential stability, embraced proper risk management and corporate governance and most importantly restored customers’ and depositors’ confidence, earning a well-deserved renewal of their mandate” Ahead of the second year anniversary of their appointment, the CBN extended

the tenure of Ahmad, Abiru and their colleagues on the board, in effect passing a vote of confidence on their efforts to stabilize the institution, and has now appointed them to steward the new Polaris Bank, the bridge bank established by CBN and AMCON to take over the assets and liabilities of Skye Bank. In my last two articles on Skye Bank, I focused on final resolution of the bank’s capital deficiency to ensure sustainability-in “The Skye Bank Challenge: An Update” published a year after the CBN intervention (July 19, 2017), I wrote that “… beyond stabilization, the bank would still require support from government and the regulator in putting the bank in a recapitalization-ready mode. While management may have succeeded in restoring stability, structural solutions beyond the current internal capacity of the bank will be required to cure the bank’s significantly eroded capital base in order to make it possible for investors to acquire the bank and provide capital for future viability”. I repeated the point in my conclusion in “The Skye

Challenge: A Renewed Mandate” earlier referred to above, “…all stakeholders, especially the management, regulator and government must now focus on a final resolution of the recapitalization imperative within the management’s extended tenure” That is exactly what has now happened! The establishment of Polaris Bank by CBN and AMCON after revoking the operating license of Skye Bank Plc offers a “final resolution” of the significant capital shortfall in Skye and provides an opportunity for long term sustainability of the new entity. It should

I am quite confident given the retention of the leadership of M. K Ahmad and Tokunbo Abiru that the sky may be the limit for Polaris Bank

be noted that given that Skye Bank was a large, “systemically important” bank, it was in the public interest to protect its depositors and indeed the stability of the financial system, especially in the context of a difficult political transition and an economy that continues to struggle with growth below 2% after an unprecedented economic recession! The injection of N786billion into Polaris Bank by the regulators takes care of the “hole” in the capital of Skye Bank and allows rational investors to invest in the bridge bank. It is of course the responsibility of agencies of government (EFCC, Police, CBN, AMCON, NDIC etc.) to hold any persons responsible for the initial capital deficiency to account for their actions. The work done by the CBN-appointed management of Skye Bank by way of accounting and forensic audits would facilitate such reckoning if anyone is truly committed to seeing that happen! I have seen comments in the media by some clearly mis-informed persons questioning the retention of the outgoing management of

Skye Bank in the new Polaris Bank-as I have mentioned earlier, it was the actions of the ownership board of Skye Bank which was removed by CBN in 2016 that led to the problems in the bank and the CBNappointed management of Ahmad and Abiru have actually rescued the bank and put it on a footing that now enables final resolution. They deserve our commendation!Unfortunately the victims of this affair are the retail investors in the bank whose investment has been wiped off due to no fault of theirs, while the larger investors may have extracted “rents” far beyond the value of their equity by other means! The new Polaris Bank starts on a good footing-with 370 branches, over 1,000 ATMs and other digital channels, a large retail customer base across the country and a strong management…and it is now fully-capitalised to the CBN minimum regulatory capital threshold of N25billion! I am quite confident given the retention of the leadership of M. K Ahmad and Tokunbo Abiru that the sky may be the limit for Polaris Bank.

instances in the past. It was not enough that Ohanaeze had immediately issued a statement affirming the nomination. Or that many groups did so. So much anger went the way of those perceived to be working against what in their perception was Igbo interest. Ebonyi State Governor Engr David Umahi and Deputy Senate President Ike Ekweremadu received the most flak. Many in the commentariat flailed them allegedly for being the black legs. Other political leaders, such as Senator EnyiAbaribe, Chris Anyanwu and co, issued statements affirming their support for the emergence of Peter Obi. Atiku and Obi had several meetings Monday with political leaders of the region. The information is that Peter Obi is in good terms with the leaders of the PDP in the South East, and did not misconstrue their statement as an attack on his person or his nomination. Consultation should happen on other matters of interest, including the region’s quest for restructuring as a priority item on the political agenda. They want the commitment of the AtikuObi team. A storm in a teacup over the Peter Obi nomination brings to the fore once again the growing divide between leaders and citizens in Igboland. The low credibility of the leaders with citizens means they receive statements and actions of leaders with a headpan of salt. Citizens are embittered and distrust them over the Python Dance episode and the ban of IPOB. We had pointed out the

efforts of IPOB in widening this gulf between the elected leadership and the youth demographic. On some matters, citizens would rather listen to the many Igbo socio-cultural and political determinism groups than the elected executives. It may create a political lacuna that people with not so good intentions may seize. The republican nature of the Igbo played out in the debates before and after the announcement. There was a consensus on the imperative of voting out PMB. The route there generated strong views, with some canvassing a willingness for the South East to sacrifice the offer of vice president to a South West candidate so long as it attains the goal of BuhariExit. The run-up to the 2019 elections would also be exciting to watch Igboland. Her sons and daughters feature prominently in other parties in the race for Aso Villa. Until the nomination of Obi, Prof Kingsley Moghalu attracted strong pan-Nigerian and South East interest. Then there is Madam Due Process, Oby the-principled-fighter Ezekwesili. Will the surfeit of choices be a challenge for the electorate in the South East? Since Nnamdi Azikiwe, they have always voted regardless of ethnicity, ignoring the otherwise admired Emeka Ojukwu for other candidates. The upshot is not to pigeonhole the electorate in the South East. Many factors will come to play in their choices in the coming elections. Whoever understands the sentiment will carry the day.

The politics of the Igbo ment Goals of the United Nations in its development path. Obi built from first principles. Back in 2010 as part of a United Nations Office on Drugs and Crime team on Justice Sector Reform, we were in Awka. Judiciary workers spoke with renewed confidence about the changes taking place in the state. In education, Obi was committed to rebuilding foundations and pursued getting accreditation for the state’s institutions long denied it. The results showed in WAEC and other examinations. Since he left office, Obi has represented the new desired face of the Nigerian politician. That image is one of youthfulness, prudence, commitment to the highest standards of delivery and of accountable government. He in other areas, however, embodied the challenge of politicking in Igboland. Peter Obi nominated and ensured the ascension of his godson to the Governor’s seat. Soon after, as has happened serially in Igboland, godfather and godson could not sit in the same room. It was vicious. He then went on a new trajectory as a public intellectual, speaking at various political and social engagements. At those events he shared his experiences in public office, making the case that it is possible to have a different narrative and practice of governance in our land. His stories, verified over and over, confirmed that the waste in Government Houses across the land need not be so, that Government House “is not a restaurant nor a bar”

The republican nature of the Igbo played out in the debates before and after the announcement. There was a consensus on the imperative of voting out PMB. The route there generated strong views, with some canvassing a willingness for the South East to sacrifice the offer of vice president to a South West candidate so long as it attains the goal of BuhariExit

where people engage in concupiscence. Obi was frugal. He appealed to young and reform-minded people across Nigeria. Results from Anambra State justified his accounts, and even the performance of his successor confirmed that the choice was right even if the chemistry no longer worked.

Abubakar Atiku’s nomination of Obi received widespread acclamation by Nigerians. Dissonance came only from the Igbo. Governors of the South East on the platform of the PDP issued a statement complaining about the process leading to the nomination. They said it was necessary for candidate Atiku to consult with leaders of the region. Many interpreted their intervention as an attack on Peter Obi and thus on the South East interest. The region had not come this close to the heartbeat of power in Nigeria in 35 years. The republicanism of the Igbo then kicked in on social media. Many groups and individuals took the leaders to the cleaners. They suggested as Chinua Achebe captured it in A Man of The Peoplethat the leaders were Joshua and “Joshua has taken away enough for the owner to notice”. The invectives were quick to come. Samplers. “Shame on this clique of selfish, greedy, corrupt, personal-interestmotivated, so-called “leaders” of the SE. They are not representing anybody but their avarice.” Another one: “On behalf of all Igbo youths, we herebyproscribe the Southeast PDP leaders. Since they desperately crave the role of Ezemmuo who must be consulted at all time, we offer them as burnt offering to Amadioha, the Igbo god of thunder.” Other voices pointed out that choosing a running mate was the prerogative of the candidate. It did not require such elaborate consultations, citing

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

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 17 October 2018

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BUSINESS DAY

POLICY

Libya: ENI signs accord with BP, Libya to take over EPSA operation

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finance people appointments

L-R: Prof Onyemaechi Ezechukwu, member panel of judges, 2018 The Nigeria Prize for Science; Prof Michael Adikwu, Prize Advisory Board member; Andy Odeh, NLNG’s Manager Corporate Communications and Public Affairs; Professor Alfred Susu, Chairman Prize Advisory Board; and Prof Barth Nnaji, Prize Advisory Board Member during the announcement of the 2018 winner of the prize, Dr. Dr. Peter Ngene, for his work “Nanostructured metal hydrides for the storage of electric power from renewable energy sources and for explosion prevention in high voltage power transformers” in Lagos recently.

Debrief

Saint Louis Petroleum to build the second largest tank farm in Ghana

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OPEC weekly basket price DAY

PRICE

12/10/18

81.84

05/10/18

83.17

28/9/18

80.64

21/9/18

76.71

14/9/18

76.59 Source: OPEC

Renewed US sanctions on Iran: The emerging scenario FRANK UZUEGBUNAM

ess than one month to November 5 date for the commencement of the renewed US sanctions on Iranian oil exports, traders say the impact are hitting much harder than most people predicted. “Iranian export losses have already accelerated faster than we expected,” said Paul Sheldon, S&P Global Platts Analytics’ chief geopolitical adviser with some projections going as high as 2 million barrels per day to be lost to the global market. Oil prices continued to be supported by the deadline and

the hardline enforcement expected by the administration of President Donald Trump with Brent hitting above $85/b. Here are what to expect in the coming months: There may be tight global oil supply in the fourth quarter as a result of Iran’s rapidly falling exports and Venezuela’s economic collapse have led some analysts to predict Brent futures will surge to $100/b. While Iran’s key oil customers are opting for more medium sour crudes from Saudi Arabia, Iraq, Russia and UAE, which is causing prices of these grades to soar and putting pressure on global refinery margins, prices of alternative Middle Eastern sour crudes surged to four-year

highs, with the Platts December Dubai crude benchmark rising to $82.95/b. Prices for Iranian crude, however, have not risen as sharply, as Tehran is luring less-risk-averse buyers with discounts. This is why Iranian grades are also showing their continued competitiveness in China, a market that could prove more resistant to sanctions pressure. There are projections that 1.7 million b/d of Iranian crude and condensate exports will likely leave the market by November, compared with April levels and Iran’s exports will fall to 1.1 million b/d in October according to Platts Analytics projects.

“The rate of reduction will slow thereafter, as sanctionsaverse buyers will be out of the market by November 5,” Sheldon said. Exports will fall to 800,000 b/d by the fourth quarter of 2019. Meanwhile, China and India are expected to continue to import some Iranian oil after November, while South Korea and Japan will likely halt purchases. Top buyer China continues to buy a significant share of Iranian crude, with flows averaging 660,000 b/d in JanuarySeptember, up from 602,000 b/d last year. Exports to India have averaged around 400,000 b/d in August and September, compared with 650,000 b/d in April-June.

02 BUSINESS DAY WEST AFRICA Outlook Brief Ghana: Tullow injects $30bn into Ghanaian economy

ullow Ghana Limited, operators of the Jubilee and TEN Oil fields has revealed that it made $2.5 billion in oil sales to the Ghana National Petroleum Corporation (GNPC) in 2017. Cynthia Lumor, Director, External Affairs and Social Performance at Tullow Ghana Limited, stated during a press conference that a total of $938 million, as of December 2017, was paid to the government in terms of royalties adding that Tullow Ghana alone paid $845 million as taxes to the state. Lumor said that Tullow and its partners have saved the Ghanaian government between $1.7 billion and $2.4 billion in supplying foundation gas to Ghana Gas Company Limited.

“One of the benefits is the fact that 200 billion cubic feet of gas is being supplied to Ghana Gas at no cost to the government of Ghana. So, when we look at 200 bcf for gas, the crude oil that you will need to generate that amount of gas, the value depending on what price you are using is between $1.7 billion and $2.5 billion”,she explained. She also disclosed that Tullow Ghana has awarded an amount of $15.1 billion worth of contracts to other companies in the oil and gas sector. Out of this, $5.6 billion worth of contracts have been awarded to foreign companies, $8 billion to joint venture partnerships between foreign and local companies, and a total of $1.5 billion worth of contracts awarded to indigenous Ghanaian companies, as part of their compliance and efforts to improve local participation in the oil and gas industry. “Given how relatively new this industry is and the fact that we are still learning as a country, we are still growing the industry as a country, not everything can be supplied by Ghanaian companies”.

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oil

Libya: ENI signs accord with BP, Libya to take over EPSA operation

talian oil major Eni signed an accord with BP and Libyan officials under which Eni will get a 42.5 percent interest in an exploration and operation sharing agreement in the North African country, as well as become operator of an area where exploratory activities were suspended four years ago. Mustafa Sanalla, Libyan National Oil Corporation (NOC) Chairman, Bob Dudley, BP chief executive and Claudio Descalzi, Eni chief executive officer signed a letter of intent to make this possible, according statements by both BP and Eni. BP currently holds an 85 percent working interest in the Exploration and Production (EPSA) sharing agreement in Libya, with the country’s Investment Authority holding the remainder. Negotiations related to the accord, which aims at resuming exploration by 2019, are to be completed by year’s end. “This is an important milestone that will help to unlock Libyan exploration potential by resuming the EPSA operations that have remained sus-

pended since 2014,” Descalzi said in a statement. The accord will help “restoring Libya’s production levels,” he added. Eni has existing exploration and production activities in an area close to three contracted areas under the EPSA agreement that had been awarded by Libya to BP in 2007. Two of the

EPSA areas are in the onshore Ghadames basin and one is in the offshore Sirt basin. The accord will make it possible to share Eni’s infrastructure. Libya had in February met its goal of producing 1.3 million barrels per day that it had established two years earlier. The country is working to recover

the production levels of 1.6 million barrels per day that it had before the 2011 revolution. Libya, which has Africa’s biggest reserves at 48.4 billion barrels, wants to increase production to 2.2 million barrels per day within the next five years, according to an Petroleum Economist report.

IEA predicts increased refinery competition on new capacity

he International Energy Agency predicted increased competition in the refining sector as “capacity additions surge between now and end2019.” In its latest monthly report, the IEA expects refinery runs to grow by 1.3 million b/d in 2019 against 1 million b/d product demand growth. This year global refinery runs are set to grow by 900,000 b/d, the IEA said. Capacity additions of more than 2 million b/d present a “looming challenge” as new refineries are set to come on stream from Q4 onwards, the IEA said. However, the “bulk of ad-

ditions” are likely to start ramping up operations in the second half of 2019. New capacity will mostly come from the East of Suez region with new complex refineries in China, Saudi Arabia and Malaysia. New capacity is also coming on stream in Turkey and Canada. Another new development is the “strong petrochemical orientation of the new refineries,” especially in China, the International Energy Agency said. Meanwhile, the new capacity coincides with a “truly unpredictable period” for refining margins, according to the report. The recent surge in crude prices has hurt refining

margins, which in late September-early October “fell to their lowest levels since the beginning of the year.” Further uncertainties come from developments around crude from Iran and Venezuela as well as the IMO 2020 sulfur cap for marine fuel. In September, the “rapid rise in crude oil prices” led to margins crashing in some regions, with complex margins halving in Northwest Europe and simple margins falling into negative territory “as fuel oil discounts to crude returned to double digits after a few strong months.”

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gas

ENERGY intelligence

Global LNG: Asian spot prices fall as November cargoes offloaded

WEST AFRICA

Brief

sian spot LNG prices fell as sellers struggled to offload the last of their November cargos and Chinese demand for December supplies failed to materialise significantly after a frenzy of Asian buying last month. November spot LNG LNG-AS fell 50 cents to $10.50 per million British thermal units (mmBtu) though trades were sparse and the bid-

BUSINESS DAY

linked to the oil index. Spot Asian LNG spiked last month in anticipation of winter demand after a hot summer depleted stockpiles. China was seen as providing support to prices after the country got caught short last winter with its storage capacity still low. However, that has not been the case so far this month. “China has been pacing down sup-

Egypt: Egypt to receive first Israeli gas as early as March

gypt will begin importing natural gas from Israel under a $15 billion deal as early as March if an undersea pipeline connecting the Mediterranean neighbors is found to be in good condition, moving the country closer to its goal of becoming an energyexporting hub. Mohammed Shoeib, chief executive officer of East Gas Co., a major Egyptian partner in the pipeline, said supplies would begin at 100 million standard cubic feet of gas per day in the first quarter of 2019 and gradually rise to a maximum of 700 million scf a day. “We expect the pipeline is in good condition. “We aim to reach the pipeline’s full capacity or maximum flow rate within three years,” Shoeib said. East Gas and the companies developing Israel’s largest natural gas fields agreed last month to buy 39 percent of the East Mediterranean Gas Co., which owns the pipeline connecting southern Israel to Egypt’s Sinai peninsula, clearing the main legal obstacle to the 10-year export contract signed in February. East Gas separately made a deal to buy a further 9 percent from MGPC.

The EMG pipeline was originally built to export Egyptian gas to Israel, but has been idle for about six years. The partners expect to begin testing the pipeline soon before modifying facilities to reverse the flow, Shoeib said, adding that the procedures were expected to take three to four months. Once the gas has been flowing for 30 days, the deal will close, he said.

Egypt halted supplies to Israel in 2012 due to a domestic gas shortage and repeated attacks by Islamist militants on a connecting overland stretch of pipeline in the Sinai. It was because of those stoppages that Egypt was embroiled in arbitration cases with some of EMG’s owners, which had threatened to delay the export plans. Those issues have been all but resolved because East Gas and its

partners bought out the litigants, but northern Sinai remains unstable. The army embarked on a months-long campaign this year to root out militants who killed more than 300 people at a mosque in November. “We are not worried about the security issue,” said Shoeib, who headed Egypt’s state gas company EGAS when the country decided to halt its exports. “We are confident that the army and police have secured the area well.” Shoeib, whose East Gas Co. also owns and operates a separate pipeline through Jordan, said that link could be used as a backup in case of problems with the EMG infrastructure or to pump additional quantities if needed. Egypt announced at the end of last month it had once more become self-sufficient in gas due to a six-fold increase in production at its own giant Zohr gas field. Egypt also has idle liquefaction plants that allow it to export any of its own surplus gas or re-export gas piped in from Israel or elsewhere in the region. For Israel, using existing infrastructure to export via Egypt saves it the cost of building its own facilities.

Kogas tapping LNG markets for new term contracts

offer spread was wide. December prices were cited as low as $10.50 although a trade was heard at around $11.10. Crude, which was heading for a first weekly fall in over a month as part of a global market rout, also weighed on LNG as many contracts are

plies, so as not to spike prices again,” said one LNG trader. “Storage is a fact but I guess they are replacing volumes a little wiser than last winter.” In the absence of a surge in demand, supplies were so far healthy going into the winter months, traders said.

outh Korea’s state-run Korea Gas Corp. has started preparations for new term contracts to replace expiring contracts, and has sought to diversify LNG supply sources beyond the Middle East and Southeast Asia, the company’s vice president said. “We are now tapping the market for new term contracts,” Kogas’ senior executive vice president Lim Jong-Kook said in Seoul. Kogas’ two long-term contracts worth 3 million mt/year expired in 2018, 2 million mt/ year from Malaysia’s MLNG II project and 1 million mt/year from Brunei’s BLNG. A 30-year contract with Indonesia’s Badak project under which Kogas had imported 1 million mt/year had also expired late last year. Seven more long-term con-

tracts, worth 17.28 million mt/ year, are scheduled to expire before 2030, such as 7 million mt/year from Qatar’s Rasgas, 4 million mt/year from Oman’s OLNG and 2 million/mt from Yemen’s YLNG. Kogas, the world’s secondlargest LNG buyer, imported 33.06 million mt last year, mostly under 15 term contracts, up

3.8 percent from 31.85 million mt in 2016. “We aim to secure necessary volumes for new term contracts using the current buyers’ market conditions,” Lim said. Kogas has been watching market conditions closely because global LNG demand is expected to grow, driven by increasing consumption in China and India. “Price is the single most important factor for new term contracts,” Lim said. “We will push to join hands with other buyers for greater bargaining power, while seeking to reduce risks of LNG import prices linked to crude oil prices.” “Kogas will deepen cooperation with other buyers in terms of swap, trading and joint uses of storage facilities as part of efforts to ensure stable LNG supplies to South Korea,” he said.

As part of efforts to ensure supplies, Kogas would import 700,000 mt/year of LNG from the LNG Canada project from 2024 for 40 years, Lim said. Kogas holds a 5 percent stake in LNG Canada; Royal Dutch Shell holds a 40 percent stake, followed by Malaysia’s Petronas with a 25 percent interest, and PetroChina as well as Japan’s Mitsubishi with 15 percent each. Kogas recently decided to invest $660.7 million in the LNG Canada project, Lim said, noting that LNG Canada is expected to start exports late 2023 or 2024. Kogas has increased its LNG imports to help meet South Korea’s growing demand, driven by nationwide efforts to reduce heavy reliance on coal and nuclear in power generation.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence China joins forces with IEA to boost its energy efficiency goals

he International Energy Agency (IEA) and the National Development and Reform Commission (NDRC) of the People’s Republic of China, have signed a Memorandum of Understanding on energy efficiency collaboration. Zhang Yong, Vice Chairman of the NDRC, and Fatih Birol, the IEA’s Executive Director signed the agreement at the IEA headquarters in Paris. The agreement sets out a strong framework for collaboration on activities and projects to accelerate progress on energy efficiency, both in China and around the world. According to a joint media release, the pair are looking for-

ward to collaborating on policy dialogue, joint research, data sharing and capacity building activities. The agreement comes at a critical time in the global efforts to rein in carbon emissions. Analysis from the IEA has long underscored the importance of energy efficiency in clean energy transitions, as well as China’s central role in the global energy debate. China has made strong progress on energy efficiency in recent years and has led energy intensity improvements globally. Given the importance that China has attached to energy efficiency under NDRC’s leadership, the IEA said it is looking forward to working with Chinese institutions and providing a platform for China’s engagement on energy efficiency, as well as sharing its successful experiences in this field. As part of its modernisation strategy, the IEA has been opening its doors to emerging economies and establishing itself as a clean energy hub, particularly on energy efficiency

IFC partnership assists developing countries with climate change solutions

he International Finance Corporation (IFC) and the government of Finland have joined forces in a new partnership to spur private sector financing for climate change solutions in lowincome countries and in fragile and conflict situations. The new partnership will identify and develop innovative projects to be supported by the Finland-IFC Blended Finance for Climate Programme and will help IFC undertake early-stage project development activities in new areas, such as battery storage. “Finland is committed to finding concrete and scalable solutions to the most pressing global challenges, of which climate change is the most urgent one,” said Anne-Mari Virolainen, Finland’s minister for foreign trade and development. “These early-stage project

development efforts, including piloting new technologies such as battery storage and wave energy or studying the feasibility of new business models such as innovative financing for forestry or biodiversity, will help IFC identify technological solutions and opportunities that would otherwise be a missed opportunity,” added Virolainen. The Finland-IFC Blended Finance for Climate Programme, launched in October 2017, implements climate-mitigation investments in renewable energy, energy efficiency, green buildings, climate-smart agriculture, and forestry. The programme will also seek investments that support developing countries in their efforts to adapt to the effects of climate change, such as creating risk-sharing facilities to provide financial protection following natural disasters from climate change-related events. The aim of the programme is to help IFC move ahead with innovative and high- impact climate projects.

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power

Kenya: Energy access initiative kicks off in Kenya

NICEF, in collaboration with Kilifi and Ga r i s s a counties, have recruited Energy 4 Impact in an institutional advisory capacity to support the implementation of Kenya’s Energy and Cash Plus pilot project. Designed to integrate into the country’s social protection programme, this 20-month pilot will support the government’s ambition to achieve universal energy access by 2020 for the most vulnerable segment of the population. Evidence shows that energy access at the household level can help alleviate poverty, improve income and enhance living conditions of the poorest parts of the population. The poorest households mainly rely on fuel-based sources for lighting such as kerosene and candles, which expose people, and especially children, to serious fire and health hazards. Recent studies also indicate a positive correlation between quality of lighting and time spent on more productive activities, including children increasing their studying time and improving their educational outcomes. Kenya has one of the most rapidly growing and innovative solar markets in the world, with over one million solar home systems sold in Kenya over the last five years. This growth is driven by private sector companies that operate across different parts of

the value chain. However, there is still a gap of 1.4 million households without energy access. This number is expected to decrease as current providers expand their footprint and new companies enter the market, yet challenges in affordability and access exist at current prices. Affordability and availability is particularly a problem among the most deprived and disadvantaged population of northern and eastern

Kenya. The Government of Kenya has made remarkable strides in building the National Safety Net Programme and expanding government Social Cash Transfer programmes to over 1.3 million households across 47 counties, with $40 being transferred to vulnerable households every two months. In order to ensure that the most vulnerable populations can afford

energy access, UNICEF is supporting the Kenyan government in the modelling of the Energy for the Poor providing a cash top-up to the existing cash transfer programme. This programme aims to enhance access to energy to the most vulnerable segment of the population, develop markets and increase energy penetration of households in the lowest quintile in the pyramid in Garissa and Kilifi county.

Wednesday 17 October 2018

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BUSINESS DAY

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ENERGY intelligence

Opportunity for cleaner alternatives as coal rallies to $100 a ton STEPHEN ONYEKWELU

atural gas use in the electricity sector has faced significant pressure in recent years, struggling to compete with coal and increased shares of renewables but this might be about to change. Coal’s push to $100 a ton in Europe may benefit the cleanest energy providers more than it does for miners. For Nigeria, greater investment in gas exploration, production and development will position it as strategic supplier to this growing demand for cleaner energy resources. Companies that provide alternatives ranging from renewable power plants to natural gas turbines are expecting a lift after the commodity reached a five-year high. Far from spurring a revival of the dirtiest fossil fuel, executives of energy companies that

provide an alternative expect the move to accelerate a shift toward cleaner power sources. Higher energy costs also put efficiency on the agenda of industry and policy makers, breathing life into technologies designed to squeeze more out of raw materials of all kinds. “It is an opportunity,’’ Paolo Bertuzzi, chief executive officer of Turboden SpA, a unit of Mitsubishi Heavy Industries Ltd., said at the Bloomberg NEF summit in London. “What’s important is not just the price but also the trend. If prices are rising, people start to think more about what to do about energy costs.’’ The surge in coal stems from record demand for energy in China, which has driven up the cost of power generation fuels of all kinds. That is drawn cargoes away from Europe and boosted electricity prices from Britain to Italy. Those governments already were working to limit fossil fuel emissions to rein in climate

change. As a result, many utilities have spent years re-positioning to draw supplies from wind and solar farms instead of coal plants. Higher coal and power prices make renewables look like a better economic bet against fossil fuels, according to Ignacio Galan, CEO of Iberdrola SA, which was the first big promoters of wind power in Europe. “Fossil fuel costs are increasing, and that is helping renewable energy,’’ Galan said in an interview at the BNEF conference in London. “It signals that if you invest in fossil fuel sources, you will be penalized.” Energias de Portugal SA made similar moves and largely draws its electricity from renewables. It expects to benefit from higher power prices and demand and it has fewer coal plants to feed than competitors such as Uniper SE and RWE AG. “The fundamentals on the power sector are going in the right direction,” said EDP’s CEO

Antonio Mexia. “Demand is growing, so frankly for us, especially for our portfolio, this is good news. It makes me more optimistic about the future.” Policy makers are taking note of the higher prices too. In Ukraine, which gets a third of its electricity from coal, the government is seeking alternatives such as nuclear and natural gas as a fuel for industry. Much of its coal is imported, since Ukraine’s mines were largely destroyed in

What’s important is not just the price but also the trend. If prices are rising, people start to think more about what to do about energy costs

its conflict with Russia. “Making coal great again is actually being paid for by the Ukraine,” said Dan Bilak, chief investment adviser to the nation’s prime minister. “The price of coal is going to compel us to invest in other sectors.” By contrast, higher coal prices will discourage companies from building more plants that use the fuel, said Gonzalo Garcia, co-head of the global natural resources group in the investment banking division at Goldman Sachs Group Inc. “There’s no new coal being built in Western Europe, and probably not in the US. Renewables are clearly going to be the largest share of the electricity market.’’ For now, higher coal prices don’t mean a boom in mining for the biggest producers. Anglo American Plc and BHP Billiton Ltd. have said they won’t spend money on new coal mines; Rio Tinto Plc has sold out of coal while Glencore Plc is philosophically opposed to building any new mines at all.

06 BUSINESS DAY

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ENERGY intelligence Brief Total, Saudi Aramco sign accord to build petrochemical complex

rance’s Total and Saudi Aramco inked an accord for the front-end engineering and design of a new petrochemical plant in an eastern province of Saudi Arabia. The agreement represents a $5 billion investment, and it is scheduled to start operating in 2024.

inally announced in April. The petrochemical plant will help “take advantage of the fast growing Asian polymer markets,” said Patrick Pouyanne, chairman and chief executive of Total. The joint petrochemical complex is the second part of a join investment that resulted in

Amin Nasser, president and CEO of Saudi Aramco, said during the signing event in Dhahran that the new plant “will deliver on multiple levels, from highvalue fuels and petrochemical products never manufactured in the Kingdom before, destined for consumers on three continents.” The petrochemical plant will have capacity of “1.5 million tons per year of ethylene and related high-added-value petrochemical,” the joint statement said. The plans were orig-

the Satorp refinery that started operations in 2014, where Saudi Aramco has a 62.5 percent stake and Total the rest. The refinery has capacity to process 440,000 barrels per day. In addition, the project contemplates providing feedstock “for other petrochemical and specialty chemical plants located in the Jubail industrial area and beyond, representing an additional $4 billion investment by third party investors,” according to the joint statement.

Wednesday 17 October 2018

finance people appointments

Saint Louis Petroleum to build the second largest tank farm in Ghana

he Saint Louis Petroleum Company is set to construct the second largest tank farm in Ahutuma in the Ahanta West Municipality of the Western Region. The $300 million tank farm when completed, would offer job opportunities to more than 2500 indigenes who are qualified to be engaged in the sector. Nana Kwame Nkansah, group chief executive, Saint Louis Petroleum company at the inauguration of a 12-member Compensation Committee said the company had engaged qualified evaluators to evaluate properties on the land acquired for the project for the payment of compensation to start to pave way for the first phase of the project in latter part of January 2019. The first phase also the operational phase, would consist of the construction of pipe-

lines from the Takoradi harbour to the project site, the building of the tank farm, offices and accommodation facilities to begin operations and pave way for the second phase to begin, which would be mainly

characterized by expansion works. Nkansah said though the company had the opportunity to site their operations in the Tema Municipality, he deemed it appropriate to bring the project to the

Ahanta and Nzemaland to open up the place and create jobs for the local people. The 62000 cubic meter tank would consist of three petrol tanks, three diesel and one kerosene tank.

Big oil traders struggling to expand asset-backed trading model

ajor oil trading firms are still keen to expand their downstream asset portfolios as earnings from core trading operations continue to thin but quality assets have become hard to come by as oil prices rise, executives from top oil trading houses said. With oil prices recovering to four-year highs of above $80/b, oil majors have switched from largescale asset divestment programs during the price downturn to become more acquisitive as cash flows jump. “Assets are very difficult to find, they really are very tough,” Ian Taylor, chairman of Vitol told the Oil & Money conference in London. “The oil companies have not only stopped disposing of assets,

with one or two exceptions, but they want to buy with the oil prices going up and they have a bit more cash,” Taylor said. Vitol has been active in buying downstream assets in Africa and Australia in recent years. Last year, the trader completed the acquisition of Petrol Ofisi, the largest retail network in Turkey. “I really struggle to see downstream assets with oil prices where they are right now,” Taylor said. Nevertheless, margins from conventional oil trading have become too slim to sustain without refining, distribution and storage assets, Alex Beard, the CEO of oil and gas at mining and trading giant Glencore, said at the event. “The investment in assets is

a logical, necessary step for trading companies,” he said. “Without that investment in the value chain I do not see any way to continue that trading business.” “We are looking for good opportunities and investments, I think there are still plenty out there,” he said acknowledging, however, that oil majors’ divestment programs are “slowing down.” Competition for downstream assets to enhance trading earnings has also become fierce, further complicating the current asset-backed trading model of most trading houses. “The place is clearly too crowded. There are too many companies doing the same thing,” said Torbjorn Tornqvist,

the CEO of oil trader Gunvor. Meanwhile, oil trader Trafigura is still looking to expand its

downstream asset base but on a more “measured basis,” potentially investing with partners in

areas where it can provide logistical services, its CEO Jeremy Weir told the event.

L -R: Emma Ewherido, Executive Director, Laddertop Limited; Betty Ugonna, General Manager LP Gas, NNPC; Nkechi Obi, Executive Vice Chairman, Techno Oil; Tony Onyeama, Managing Director, Techno Oil and Ken Abazie General Manager, Commercial, Techno Oil, at the the World LPG Forum in Houston recently where Techno Oil showcased its Made-in-Nigeria LP Gas Cylinder

07 WEST AFRICA ENERGY intelligence

Wednesday 17 October 2018

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marketinsight

Oil prices rise amid Saudi tensions, but demand

rude oil futures rose sharply as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked worries about supply, although concerns about the long-term outlook for demand dragged on prices. Crude markets were also supported in the wake of data that showed South Korea did not import any oil from Iran in September for the first time in six years, before US sanctions against the Middle East country take effect in November. Brent crude had risen 98 cents, or 1.22 percent, to 81.41 a barrel on track for its biggest daily gain since October 9. US crude futures climbed 80 cents, or 1.12 percent, to $72.15 a barrel, extending gains. “The market has again expressed concerns over geopolitical tensions in the Middle East after US and Saudi traded comments over the disappearance of the Saudi journalist, leading to a jump in prices,” Wang Xiao, head of crude research with Guotai Junan Futures, wrote in a research note. Saudi Arabia has been

OPEC Flakes OPEC remains ready to keep oil markets ‘fully supplied’ - Barkindo

under pressure since Jamal Khashoggi, a prominent critic of Riyadh and a US resident, disappeared on October 2 after visiting the Saudi consulate in Istanbul. The kingdom would retaliate against possible economic sanctions taken by other states over the case, its state news agency SPA reported quoting an official source. Meanwhile, South Korea stopped importing Iranian oil for the first time in years.

“South Korea’s move to stop Iran oil imports is giving the market confidence on prices,” said Chen Kai, head of research with futures brokerage Shengda Futures. Lingering geopolitical worries, trade concerns and a weaker economic outlook may pave the way for another week of volatile trading, Chen said. Putting downward pressure on oil prices, the International Energy Agency, the

West’s energy watchdog, said in its monthly report that the market looked “adequately supplied for now” and trimmed its forecasts for world oil demand growth this year and next. That comes after the secretary general of the Organization of the Petroleum Exporting Countries (OPEC) last week said the group sees the oil market as well supplied and that it was wary of creating a glut next year.

Top oil traders say Iran sanctions hit harder than expected anctions on Iranian oil exports are hitting much harder than most people predicted as the administration of US President Donald Trump takes a tough line on enforcement, said executives from the world’s largest

BUSINESS DAY

energy traders. Perhaps 2 MMbpd of Iranian crude could eventually be lost to the global market, said Jeremy Weir, chief executive officer of Trafigura Group Pte. While other traders including Vitol Group of Cos. and Gun-

vor Group saw the impact closer to 1 million, that is still twice as much as most people initially predicted. “Iranian exports of crude oil will be much reduced,” Vitol Chairman Ian Taylor said in a Bloomberg television interview. That is largely the cause of the severe “fear factor” in the crude market that’s driven prices up to $85/ bbl, he said. The traders speaking at the Oil and Money conference in London, which included Gunvor CEO Torbjorn Tornqvist and Glencore Plc’s head of oil and gas Alex Beard, were not universal in their pre-

dictions for prices. Crude futures at $100 or higher were possible by year-end, said Tornqvist, while Taylor saw the market drifting $5 or $10 lower by January. “We do not have a supply squeeze, there is plenty of oil around” right now despite the sanctions, said Taylor. With current prices, demand could start to weaken, he said. Efforts by the European Union to preserve the international nuclear deal with Iran by setting up a payment mechanism to circumvent US sanctions would not help oil buyers, the trading-house executives said.

urrent oil prices near four-year highs reflect market “perceptions” of a potential supply shortage rather than an actual inability of OPEC and its key producer allies to pump sufficient oil, Mohammad Barkindo, OPEC Secretary General said. The global oil market remains “well supplied” and the top oil producers are ready to produce more oil in the coming months as concerns over a further drop in Iranian exports from US sanctions continue to fuel prices. “The market has been reacting to perceptions of a supply shortage, it is not really as such. The balance may be fragile as a result of non-fundamental factors, but I remain confident that we will overcome,” he told reporters on the sidelines of the Oil and Money conference in London. Market concerns that OPEC will struggle to plug a supply gap from lower Iranian supplies and slipping Venezuela supplies helped pushed Brent crude to a new four-year high above $85/b.

“There is no doubt that the current market conditions are being driven by conditions elsewhere outside OPEC,” he said. Nevertheless, Barkindo also said that OPEC producers are “very concerned” about current spare production capacity in the industry but said the concerns are related to the slump in upstream spending since the 2014 oil prices slump. “We are very concerned, not just about spare capacity per se, but you have to look spare capacity within the context the sharp reduction in investments,” he said. OPEC’s top producer Saudi Arabia said it believes it can pump a further 1.3 million b/d if required to meet a shortfall from Iran and Venezuela.

OPEC oil output to average 32.46 million b/d in 2018 - EIA

he US Energy Information Administration boosted its Brent and WTI crude oil price forecasts on uncertainty over the impact of the looming re-imposition of US sanctions on Iranian crude exports. In its Short-Term Energy Outlook, EIA forecast Brent to average $74.43/b in 2018, up $1.59 from last month’s forecast, and WTI at $69.56/b in 2018, up $2.53 from last month. The agency forecasts Brent to average $75.06/b and WTI to average $69.56/b in 2019, up $1.38 and $2.20, respectively, from last month’s forecast. The jump in the price forecast was caused by “uncertainty about the amount that Iranian crude oil production could decline, and how much of the decline can be offset by other supplier,” EIA said in the report. Iranian oil output averaged 3.4 million b/d in September, down 120,000 b/d from the August EIA outlook and the country’s lowest output since February 2016. The latest S&P

Global Platts OPEC supply survey estimated Iranian output at 3.5 million b/d in September. The US is expected to reimpose sanctions on Iranian crude November 5, which caused oil prices to rise to fouryear highs in the second half of August and could lead to additional price increases, the agency said. “If the reduction in Iranian crude oil production and exports is larger than expected, the disruption to the crude oil market in the fourth quarter of 2018 could result in price increases,” EIA said. Along with Iran, Venezuelan oil output also continued to fall, declining to 1.23 million b/d in September, down about 30,000 b/d from August and down 1.17 million b/d from December 2015, when the monthly output decline began.

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Wednesday 17 October 2018

talking points

In association with

Is peak oil now a myth? ISAAC ANYAOGU

few years ago, the World Energy Council warned that peak oil, the point when the maximum rate of crude oil extraction is reached after which the rate of extraction is expected to begin to decline forever, is less than two decades away caused a stir in the world’s energy markets. Big oil producers like ExxonMobil and Shell have countered with their own forecasts showing rising oil by 2040. If you sell oil or are an oil producing nation, it is not difficult to see which side of the divide you will belong. On October 12, Paris-based International Energy Association (IEA), released its monthly oil market report which took a swipe at the concept of peak oil, using current trends and forecasts to question the very concept of peak oil. “Fifteen years ago, forecasts of peak supply were all the rage, with production from non-OPEC countries supposed to have started declining by now. In fact, production has surged, led by the US shale revolution, and supported by big increases in Brazil, Canada and elsewhere,” the IEA said in a release announcing the report. The IEA in its report debunked the fears about peak oil. “There is no peak in sight for demand either. The drivers of demand remain very powerful, with petrochemicals being a major factor,” it said. In a new IEA study “The Future of Petrochemicals”, the Agency pointed out that rising living standards, particularly in developing countries, are already underpinning strong demand growth for plastics and this will continue for many years to come. The concept of peak oil is also chal-

lenged by rising production especially in OPEC countries even as there is clamour for OPEC to dig into its reserves to meet expected production shortfalls from US sanctions on Iran. Also experts warn of the threat of geopolitical risks. In 2016, Niger Delta militants attacked oil and gas infrastructure in the region, knocking out a third of Nigeria’s production. Crises in Libya shut in nearly one million barrels of the country’s production and these events helped oil prices get off the floor. These kinds of risks will impact oil demand with consequences for peak oil. Since May, OPEC had boosted produc-

tion by 735,000 bpd as Middle East Gulf producers such as Saudi Arabia and the UAE more than compensated for declining output in Venezuela and Iran, which is facing US sanctions from next month. Both the IEA and OPEC say the oil market is well supplied and is wary of creating a glut next year. However, there are real threats to oil driven by growth in renewable energy adoption and fall in infrastructure cost, electric vehicles, deeper awareness of climate change impact increased global commitment to cut carbon emissions and until recently, slow recovery of oil prices. There is also a growing shift from capi-

tal intensive projects with long delivery dates to faster cycle time projects as exemplified by the US shale oil production which could either indicate awareness about the threat of peak oil or the need for quicker profit. The critical imperative for Nigeria and other developing countries is improving their fiscal and regulatory systems to benefit from the current hot oil market. Pragmatic actions to attract investors including providing them with comfort regarding sanctity of contracts, ease of doing business, transparency and reducing risk of investing in their countries.