BusinessDay 17 Oct 2019

FG approves $300m investment in digital, e-Customs project for port efficiency AMAKA ANAGOR-EWUZIE

P

resident Muhammadu Buhari has approved the engagement of a consortium of four firms to enter into a 20-year

…engages Huawei Nigeria, 3 others as SPV for 20-year concession concession arrangement with the Nigeria Customs Service (NCS) and the Infrastructure Concession Regulatory Commission (ICRC) for a Customs modernisa-

tion project and establishment of digital and paperless Customs administration.

The firms include Bionica Technologies West Africa Ltd

as lead sponsor, Bergman Security Consultant & Supplies Ltd as co-sponsor, Africa Finance Corporation, lead sponsor, and Huawei, lead technical service

provider. The firms are to establish a project special purpose vehicle (SPV) to implement the

Continues on page 38

businessday market monitor

Biggest Gainer

Biggest Loser

NESTLE N1220.00 0.40pc

STANBIC N36.25 -2.16pc 26,472.20

Foreign Reserve - $41.07bn Cross Rates - GBP-$:1.28 YUANY-N 51.03 Commodities Gold

Cocoa

US$2,515.00

Tragedy in Onitsha as mother, son, trader die in petrol tanker inferno …13 buildings, 15 vehicles burnt Emmanuel Ndukuba, Awka

A

t least three persons, including a mother and child, were burnt to death in a fuel tanker inferno at the highly populated Ochanja market in Onitsha, Anambra State, on Wednesday.

Parts of Ochanja market stalls, about 13 houses, including three

₦2,982,082.05 +0.23pc

Crude Oil

I

N300

Foreign Exchange

Buy

Sell

$-N 357.00 360.00 £-N 442.00 454.00 €-N 382.00 392.00

$1,488.81 $59.39

news you can trust I * * THURSDAY 17 OCTOBER 2019 I vol. 19, no 415

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

g

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

www.

fgn bonds

Treasury bills

362.36 306.90

3M -0.12 11.71

NGUS DEC 24 2019 362.68

g

6M

5Y -0.16

-0.25 12.09

14.13

NGUS MAR 25 2020 363.53

10 Y -0.25

20 Y -0.01

14.18

14.66

NGUS OCT 28 2020 365.50

@

g

Foreign insurers back local subsidiaries on recapitalisation F as Allianz raises capital to N20bn

Continues on page 38

Inside

Buhari slashes travel costs for ministers, others to curb leakages P. 2 L-R: Syed Tanzim Rezwan, marketing director, Reckitt Benckiser (RB), West Africa; Suleiman Hussein Adamu, minister of water resources; Ebele Okeke, former head of civil service, and Emmanuel Awe, director of water quality, Ministry of Water Resources, at the Dettol Global Handwashing Day event in Abuja.

Modestus Anaesoronye

oreign insurers with presence in Nigeria, including Allianz and SUNU Group, have thrown their weights behind their local subsidiaries in the ongoing recapitalisation exercise set for underwriting firms in the industry.

The foreign investors, which have continued to reaffirm their commitment to the Nigerian market, said they are willing to conform to local regulations that ensure their stability and growth in the continent.

The Allianz Group, one of the world’s largest investors managing around €673 billion, said Allianz Nigeria, its local operating entity, will recapitalise to N20 billion by close of account in 2019.

Coenraad Vrolijk, regional chief executive officer, Allianz Africa, during his recent visit to Nigeria

Continues on page 38

2

Thursday 17 October 2019

BUSINESS DAY

news Electricity consumers to pay N75,000 for single phase prepaid meter

President Muhammadu Buhari with Ahmed Lawan, senate president, at the launch of the 2020 Armed Forces Remembrance Day emblem at the Presidential Villa in Abuja. NAN

W

Increase non-oil tax revenue for infrastructure, social spending, IMF tells Nigeria HOPE MOSES-ASHIKE in Washington DC

T

he International M o n e t a r y Fu n d (IMF) on Wednesday asked Nigeria to increase non-oil tax revenue that will contribute to providing space for infrastructure, human development, and social spending.

Vitor Gaspar, director, fiscal affairs department at IMF, said this while presenting the Fiscal Monitor Report at the ongoing IMF/ World Bank annual meetings in Washington DC. He said this move is important because Nigeria’s interest payments as a share of tax are very high – around a third for overall and two-thirds for the Federal Government.

“And that is not because interest payments are particularly high. It’s because the denominator is incred-

ibly low; Nigeria has one of the lowest tax-to-GDP in the world. It is not because Nigeria does not have big development problems, Nigeria has a large need for education and health spending. It has some very low indicators in that area and the demographic projections,” Gaspar said.

Nigeria is projected to be the third most populous country in the world by 2050, and so addressing those challenges is really important, Gaspar said.

He said major economies should be prepared for coordinated action in case of a severe downturn.

According to him, in emerging markets and lowincome developing countries, public debt ratios are high and rising. The cost of servicing debt is also increasing, unlike advanced economies where low in-

terest rates have compensated for high debt levels.

Some countries are vulnerable to exchange and interest rate shocks.

Gaspar said fiscal policy has an important role to play in the development agendas of many countries, which need to substantially raise spending to meet the SDGs by 2030, particularly lowincome developing economies.

Th e s p e n d i ng mu s t b e framed in the context of a comprehensive growth and development strategy.

Building tax capacity is necessary to enable a country to generate the extra revenue that underpins inclusive development. And improving the efficiency of a country’s spending is a crucial aspect of good governance.

It is also necessary to ensure complementarities

between public finance, private investment, and official development assistance, he said.

He said Fiscal Monitor is now fully digital, contributing to limiting global warming. Fiscal policy plays a central role in managing the synchronised slowdown; preparing for downside risks; contributing to financial stability; financing the Sustainable Development Goals and, finally, addressing climate change.

It is important to realise that current pledges under the Paris Agreement are not enough, Gaspar said. They will limit global warming to 3°C. This is well above the safe level.

To limit global warming to 2°C or less (the level deemed safe by scientists), finance ministers need to take further substantial fiscal policy actions, he said.

Buhari slashes travel costs for ministers, others to curb leakages TONY AILEMEN, Abuja

I

n fulfilment of plans to curb leakages and ensure efficiency in the management of government resources, President Muhammadu Buhari on Wednesday approved cuts in the number of travels by ministers, permanent secretaries, chairmen of extra-ministerial departments, chief executive officers and directors to not more than two foreign travels in a quarter.

Boss Mustapha, secretary to the government of the federation, who announced the cuts, said the policy which would be “immediately implemented” was part of the “additional cost saving measures aimed at instilling financial discipline and prudence, particularly in the area of official travels”.

“Except with the express approval of Mr. President, ministers, permanent secretaries, chairmen of extra-min-

ment should allow the local manufacturers to increase ith the current the prices of their products imposition of 45 as they need to break even.

He said local manufacturpercent import tariff on prepaid ers are supposed to increase meter by Nigerian Customs, the price of their products the price of a single-phase because they would need meter will now be around money to purchase foreign N75,000 while the price for exchange and buy diesel, two-phase meter will be in which price fluctuates anyhow, to run their generators. the region of N100,000.

The Federal Government They will still need to import had stipulated N37,000 and some of the components N75,000 as prices of single- that would be used in asphase and two-phase me- sembling their meters.

Other challenges he said ters, respectively.

With the jacking up of the manufacturers are facing import tariff, however, con- include going to banks to sumers will have to spend borrow money at a very high extra N38,000 to purchase interest rate, variation in a single-phase meter while foreign exchange, and clearthose looking for double- ing the goods from the port pha s e m eters w ill pay which has become an uphill around 25,000 extra to get it. task that gives the importers The imported meters are nightmares.

Following the introducmeant to complement the local manufacturers of me- tion of the Meter Asset Proters who cannot currently vider regulations in May, meet the meter needs of the a plan to have third-party country of around 5 million. investors finance meter purThe local manufacturers chase and recoup proceeds are not also going to escape from customers’ retail payfrom increased import tariff ment for power, the Minon meters as many of the istry of Finance reviewed components they assembled upwards the import levy in the country are imported. on electricity meters from Muyideen Ibrahim, ex- 10 percent to 45 percent ecutive secretary, Meters and the Nigerian Customs Manufacturers Associations Service began immediate of Nigeria, who spoke in his implementation. personal capacity, told Busi•Continues online at nessDay that the governwww.businessday.ng

Olusola Bello

isterial departments, chief executive officers and directors are restricted to not more than two (2) foreign travels in a quarter,” Mustapha said in a statement signed by Willie Bassey, director of information, Office of the SGF. “Also, when a minister is at the head of an official delegation, the size of such delegation shall not exceed four (4) including the relevant director, schedule officer and one (1) aide of the minister.

Every other delegation below ministerial level shall be restricted to a maximum of three (3),” the statement said.

On the class of air travels, the president also approved that ministers, permanent secretaries, special advisers, senior special assistants to the president, chairmen of extraministerial departments and chief executive officers of parastatals who are entitled continue to fly business class, while other categories of pubwww.businessday.ng

lic officers are to travel on economy class.

“Also, travel days will no longer attract payment of estacode allowances as duration of official trips shall be limited to only the number of days of the event as contained in the supporting documents to qualify for public funding.

“Henceforth, all ministries, departments and agencies (MDAs) are required to submit their yearly travel plans for statutory meetings and engagements to the Office of the Secretary to the Government of the Federation and/or the Office of the Head of Civil Service of the Federation for express clearance within the first quarter of the fiscal year, before implementation.

“They are further required to make their presentation using the existing template and also secure approvals on specific travels as contained in the plan, from the appropriate quarters,” Mustapha said.

On the nature and frequency of travels, he said all public funded travels (local and foreign) must be strictly for official purposes backed with documentary evidence.

All foreign travels must be for highly essential statutory engagements that are beneficial to the interest of the country, he said, noting that the Auditor-General of the Federation has been directed to treat all expenditures that contravene these guidelines as ineligible.

Buhari had while presenting his 2020 budget to the National Assembly last week stated that “the respective heads of MDAs must ensure strict adherence to government regulations regarding expenditure control measures”.

This is to help government work within the budget limits, given that the 2020 budget

https://www.facebook.com/businessdayng

Continues on page 38

Nigerians spend 60% more for a pot of Jollof rice than 3yrs ago - SBM …experts blame border closure, foresee bleak Christmas BUNMI BAILEY

N

igerians are spending 60 percent more on average for a family pot of Jollof rice than they did three years ago, according to the 2019 July Jollof Index by SBM Intelligence, Nigeria’s leading geopolitical intelligence platform, and experts have blamed it on the partial closure of the borders.

Ayodeji Ebo, managing director, Afrinvest Securities Limited, said the spike in the Jollof Rice Index over the past three years mirrors the rise in the general price of food products.

“The recent partial and subsequently full border closure can be blamed for the current rise in price of rice, a major variable in the index,” Ebo said.

“The land borders account for the major channel for importing rice into the country which will have significant weighting on the index. With food accounting for over 50 percent of total trades (N300 billion) within the Seme, Cameroun and Benin borders as at 2014, the border closure will have significant impact on food @Businessdayng

prices,” he said.

The SBM Jollof Index is a composite index that tracks how much it will cost to make a pot of Jollof rice across 12 markets in seven states in the six geopolitical zones for a family of five or six, the average rural and urban family size in Nigeria.

The July 2019 edition of the SBM Jollof Index chronicled the trend of the index over the three years from July 2016 to June 2019.

“Since April 2019, there has been a slow rise in the Jollof Index. Even during the Sallah festivities, this slow increase trend continued.

However, from late July and August, the Jollof Index has been driven to the highest it has ever been, eclipsing even the 2016/2017 highs, fuelled by the drastic measures the government took to curb smuggling of rice and inadvertently poultry and vegetable oil,” the report said.

In August, Nigeria announced the closure of its land border with Benin Republic in order to tackle cross-border smuggling of rice and other commodities.

From July-September,

Continues on page 38

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

3

4

Thursday 17 October 2019

BUSINESS DAY

news Osinbajo’s office not in charge of NSIO’s accounts - Uwais

Dangote Refinery trains 200 youths in Ibeju-Lekki on vocational skills

....laments shortfalls in budgetary releases for SIPS

ISAAC ANYAOGU

Tony Ailemen, Abuja

I

ndications emerged Wednesday that the office of Vice President Yemi Osinbajo was never directly involved in supervision of the expenditure of the National Social Investment Office (NSIO).

Special adviser to the President on Social Investment, Maryam Uwais, disclosed this while briefing the minister of humanitarian affairs, disaster management and social development, Sadiya Umar Farouq, on the activities of the NSIPs in her office in Abuja.

The clarification became necessary following recent reported presidential directive that the Social Investment Programmes (SIPs) of the Federal Government be relocated to operate within the Ministry, from the Office of the Vice President.

Uwais had, while briefing the new minister whose Ministry is now in charge of NSIO activities on the structure, financial standing, level of implementation of the various components and challenges of the SIPs, stated that the “NSIO expenditure has strictly remained consistent with the financial work plan defended and approved by the National

Assembly.”

According to Uwais, “The NSIO reported consistently to a Steering Committee comprising 9 ministers, chaired by the Vice President.

“Ministry of Budget and National Planning was the custodian of all our budgetary releases. It served as the accounting and procurement arm of NSIO. No funds were hosted by us and all of our expenditure had to be budgeted for because the Ministry kept an eye to ensure that the right thing was done. To this end, our expenses were totally in line with the work plan that we defended before the National Assembly. “ The presidential aide told the minister that insufficient budgetary releases remained a major challenge in the execution of the SIPs in the last three years.

“Budgetary releases have remained insufficient for NSIO activities because the beneficiaries are growing at a much faster rate than the funding available. With the Support of the Budget and National Planning Ministry, we have made huge strides and intend to continue to explore how the monthly releases we get cover essential needs, because there are many things we are unable to do,” she said. www.businessday.ng

A

bout 200 youths from Ibeju-Lekki community in Lagos State have acquired various vocational skills such as plumbing, welding, iron bending, auto mechanics and electrical works through a programme organised by the Dangote Petroleum Refinery.

The programme, put together by Dangote Petroleum Refinery and facilitated by the National Directorate of Employment (NDE) and Nigerian Content Development and Management Board (NCDMB, is another level of Dangote Petroleum Refinery’s intervention targeted at providing vocational skills to the teeming youth population in its host communities, the company said in a release.

Devakumar Edwin, Dangote Group executive director, strategy, capital projects and portfolio development, said the initiative was a demonstration of Dangote Refinery’s commitment toward capacity-building and youth empowerment in the country.

Edwin urged the beneficiaries to be more focused and diligent in whatever they do and serve as frontier to

others, saying, “With the tools given to you today, you can be good ambassadors of this great community. So many graduates outside are still searching for jobs, but yours is different because you have been trained.

“We are good to give you our maximum support to ensure you are employed in our operations, as our host communities remains our priority. The skills given to you today can take you to various places and attract better opportunity if managed effectively.”

He also said they should commit themselves to continuous learning and development as the business environment changes frequently, and promised to assist them to succeed.

According to Edwin, as the petroleum refining and fertilizer complex comes on stream, it is expected that will be a population boom in the surrounding communities, who requires the services and services of the trainees.

Babajide Sanwo-Olu, Lagos State governor, promised to employ the 200 youths of Ibeju-Lekki community who graduated from various skill acquisition in the Lekki Free Trade Zone at the event.

https://www.facebook.com/businessdayng

Nigeria celebrates creativity in quality management in Africa Daniel Obi

N

igeria will next week hold the 2019 African Quality Achievement congress where awards will be conferred on companies, personalities and productsthatapplyqualityculture and management best practices to the analysis. The congress and award will be held in Lagos.

According to Ijeoma Emeka, secretary-general, Award Committee, the event is initiated by African Quality Institute in collaboration with World Quality Alliance,aglobalqualityorganisation consultant, with the support of Chartered Quality Institute (UK), and Pan African quality organiSation.

Emeka says the quality journey is one that all organisations travel, whether consciously or unconsciously, under the title of quality of something else, as all organisations use and need quality.

As competition and complexity of the global market grow, more organisations are embracing the need to think differently and inspire their employees. Some look to grow the number of tools and techniquesattheirdisposalsothat they may find solutions they seek.

Others may search for implementation strategies that produce the best results, and still others may look for methods to sustain the results they have already achieved. Those organisations @Businessdayng

that are established in the journey understand that the key to their success lies within the culture of their organisations.

She states, “They have found ways to establish, transform and sustain environment in which innovation is fostered, leadership is shared, and all are aligned to a common vision. They have seen the results that these cultures produce and creativity they inspire.

They have discovered the key to establishing a culture of quality.”

The influence quality today is broaderthananyothertimeinhistory. The ability it has to transform organisations and communities continues to be demonstrated in a growingnumberofways.Itiswithinthissettingthatthe2019,aforum of ideas and international network of thought, leaders, experts and peers who are eager to share their bestpractices,testedsolutionsand proven results, is birth.

AfricanQualityCongress2019 is set to be an informative and inspiring day of new idea, stimulating debate and renowned speakers, dedicated to driving forward the quality agenda. The congress will be providing delegates with greater understanding of how operational effectiveness and efficiency to vital organisational success can be achieved. The conference is aimed at anyone lookingtoimprovetheirorganisational performance and networking opportunities.

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

5

6

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

7

news

‘Connecting reporters with experts will improve quality of Nigeria’s science reporting’ ANTHONIA OBOKOH

… as ASLN seeks way to better educate today’s science reporters

ddressingeconomic challenges, bridging knowledge and skill gaps and building solutions will help drag out the staggering Nigeria’s health sector that has left the implementation and dissemination of findings of health and science researches owing to weak collaborations and lack of funding within the healthcare sector, experts say.

Nigeria continues to experience an all-time decline in the quantity and quality of its research output, which according to them, also appears that there is a gap between scientists and journalists reporting researches.

These are some the responses from the African Science Literacy Network (ASLN) targeted at bridging the gap between scientists and journalists as well as providing them with a platform where they can collaborate in researching, sourcing and communicating science to the wider world effectively.

“The US spent 3 percent of its Gross Domestic Product (GDP), about $529 billion on research development, added that Nigeria have a long way to go with its 0.3 percent GDP voted for research in which TEDFUND spent about N3 billion in 3-5 years,” said Isa Marte Hussaini, a world-renowned cancer researcher and professor of pharmacology at the University of Maiduguri, in his keynote address titled “Science as driver of development: The importance of communication” in Abuja, recently.

According to Hussaini, sci-

ence develops the whole world, as research and development is what brings innovation, as “any country that really neglects research and development is doomed to fail.”

Evaluating the government ineffectiveness towards promoting research and scientific study in the country, Hussaini said Nigeria had no competition and no value for research and development. “Lot of universities lecturers are just teachers, they do not do research and don’t have their own laboratory. In Africa, countries like South Africa are already forging ahead, they breed science, but in Nigeria we are interested in finished products, nobody is interested in research,” he said.

ASLN, an initiative of the TReND in Africa, an organisation set up by African scholars in the University of Sussex to promote science in the continent, in close collaboration with the University of Sussex, Francis Crick Institute (London), Yerwa Express News and Science Communication Hub Nigeria.

“There are no level of awareness in science research models and inadequate science infrastructures in our schools,” said Mahmoud Bukar Maina, TReND’s director for outreach and the team leader of the organiser of the workshop, noting that with better support for science and with better scientific communication, “we will be able to take Africa o the next level.”

According to Maina, journalists indeed have more access to the public and as such there must be collaboration between them and scientists for effective

A

communication of research findings.

“To take our continent to the next level, we must do this. We must liberate science in Africa. ‘I am aware of the high level of cultural and religious misconceptions about science in Nigeria, but a partnership between sci-

entists and journalists in this workshop seeks to achieve help in tackling the problem,”’ he said.

In an attempt to improving research and strengthening its capacity in Nigeria, research findings from institutions and individual are disseminated effectively, stakeholders and

institutions heads at the plenary session say the workshop will help the journalists understand the role of Solution Journalism in driving positive social change in reporting researches. This also gives the journalists an opportunity to collaborate, learn from researchers and scientists in Nigeria and get access to re-

Nigeria’s BUA Group announced as main sponsor of 2020 Africa CEO Forum Seyi John Salau UA Group, one of Africa’s foods, mining and infrastructure conglomerates, has been announced as the main sponsor of the 2020 edition of Africa’s largest private sector forum, the Africa CEO Forum, holding in Abidjan, Côte d’Ivoire, in March 2020.

This was revealed at a joint press conference between BUA Group, the Africa CEO Forum and the Jeune Afrique Media Group held at the BUA HQ in Lagos, Nigeria, to announce the partnership. In attendance were the Group Chief Operating Officer, BUA Group, Chimaobi Madukwe, and the founder/ president of the Africa CEO Forum, Amir Ben Yahmed, and senior executives from both organisations.

In his opening, O’tega Ogra, Group Head, Corporate Communications, BUA Group, said the partnership with the Africa CEO Forum is in line with BUA Group’s “Africa by Africans for Africa” vision.

According to Ogra, “BUA Group is proud to partner with the Africa CEO Forum which has over the years, cemented its place as the largest Africa Focused business summit.

It is our expectation that this partnership between BUA Group and the Africa CEO Forum will unlock opportunities in Africa by championing

B

private sector-led growth, leading discussions around innovative public policies and sustainable business.”

In his comments, Chimaobi Madukwe, Group Chief Operating Officer of BUA Group who signed the agreement on behalf of the company, said that the partnership was timely and BUA was pleased to be the main sponsor of the Africa CEO Forum 2020.

According to Madukwe, “this signing will mark the first time a Nigerian company will be main sponsor of the Africa CEO Forum. It is also significant because it will be the first Forum since Nigeria signed the African Continental Free Trade Agreement. “As a key business and investor in Nigeria and Africa, one of the many ways to show BUA Group’s commitment beyond our numerous investments and social impact initiatives is to support platforms that will encourage business-business and business-government engagement whilst proffering workable solutions to Africa’s development needs”.

Also speaking, Amir Ben Yahmed, President and Founder of the Africa CEO Forum as well as the Managing Director of Jeune Afrique media group, welcomed BUA Group as the main sponsor of the 2020 Africa CEO Forum in Abidjan. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

search findings to help develop their stories.

They say that Nigeria needs to communicate the little researches carried out and training personnel that can translate and enlighten the public, especially in health related issues, will go a long way to developing research publication.

8

Thursday 17 October 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

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

briu@businessday.ng

08098710024

How Nigeria’s export sector performed in Q2 2019 ISAAC ESOWE

N

igeria has the largest market in Africa with a population of approximately 200 million people.

In 2017, the Economic Complexity Index ranked Nigeria as the 49th largest export economy in the world and the 124th most complex economy. The country’s foreign trade statistics, which is the export and import value, shows how it has competed in the global market place.

Nigeria exported $52.9 billion worth of goods around the globe in 2018. This value represented a decline of 46.7 per cent since 2014 but an increase of 29.9 per cent from $46.8 billion in 2017. However, exported products in 2017 increased by 27 per cent when compared with preceding year 2016. The increase in trade value had a positive trade balance of $12.7 billion in net exports, as compared to a trade deficit of about $538 million in 2016.

Trade as of 2017 accounted for 26.3 per cent of Nigeria’s GDP which amounted a 6 per cent increase compared with 2016. Put differently, the country recorded a trade growth of 11.56 per cent compared to a world growth of 1.50 per cent, thus, GDP for the considered period stood at $375.7 billion. Nigeria exports of goods and services as a percentage of GDP was 13.17 per cent and imports of goods and services as a percentage of GDP is 13.18 per cent in 2017.

This improvement could be attributed to the Economic Recovery and Growth Plan (ERGP), launched in early 2017, which led to

Source: NBS, BRIU

omy. This led to an increase in capital inflow (the sum total of the foreign direct investment (FDI), portfolio and other investment equal $12 billion in 2017, more than doubled of the previous year value.

The National Bureau of Statistics’ (NBS) recent report on foreign trade in goods statistics shows that the value of total exports increased by 1.34 per cent in Q2 2019 against the level recorded in Q1, 2019 and 2.06 per cent when compared with its value in Q2, 2018.

The value of exports for the first half of 2019 fell by 1 per cent compared to the first half of

Source: World Bank, BRIU

policies amendment and new policies were enacted to help exit Nigeria from the recession that hit the country in 2016. These policies included the Investor and Exporter Foreign Exchange Window (IEFX) and a tightening of the monetary policy, decrease in inflationary rate.

And again, the combination of higher oil revenues and positive policy decisions also contributed to the rejuvenation of the econ-

to Q1 2019 and 62.27 per cent against the corresponding quarter in 2018; the exports of energy goods dropped by 12.31 per cent in value compared to Q1 2019 and 15.15 per cent when compared with Q2 2018.

And again, the value of manufactured exports decreased by 77.05 per cent when compared with the value recorded in Q1 2019 but increased by 51.75 per cent compared to the corresponding quarter in 2018; the value of crude oil exports in Q2 2019 was 16.52 per cent higher than in Q1 2019 and 4.40 per cent higher than in Q2 2018 and the value of Other

per cent), Netherlands (10.41 per cent), United State (7.68 per cent), and France (6.4 per cent).

From a continental perspective, the percentage total of export to European countries accounted for approximately 46 per cent or N4,385.3 billion, which is almost one-half of the total exporting value, while N1,270.8 billion worth of goods were exported to 28 per cent. The Asian continent represented approximately 28 per cent , while (14 per cent or N638.5 billion, Africa (11 per cent or N508.95 billion) was exported to America and Africa continents respectively. The Oceania accounts for 1 per cent of the total export value.

Components of Nigerian export basket Crude oil continues to dominate Nigeria’s export basket. It accounted for more than half of the total export value N4.6 trillion with a share total of 86 per cent. Consequently, revenue from crude oil sale ccounts for 90 per cent of federal government income During the review period, the total trade in agricultural goods stood at N323.4 billion out of which exported agricultural goods accounted for N73.5billion, which translated to 22.7 per cent. However, this value was 14.66 per cent lower than Q1 2019 and 14.48 per cent lower than Q2 2018.

The value of trade in solid mineral goods stood at N36.7billion in Q2, 2019. By implication, 21 per cent of the value was exported which represented N7.6billion while the value of manufactured goods traded in Q2, 2019 stood at N2,577.9 billion. The export components stood at N106.1 billion. This indicated that 4 per cent of the manufactured products

Source: NBS, BRIU

2018, the decline recorded in the first half of 2019 is as a result.

The value of agricultural exports was 14.66 per cent lower than in Q1 2019 and 14.48 per cent lower than in Q2 2018; the value of raw material exports was 14.52 per cent lower than the value in Q1 2019 and 1.71 per cent lower than in Q2 2018; the value of solid minerals exports declined by 15.53 per cent compared

www.businessday.ng

oil products exports decreased by 21.69 per cent compared to Q1 2019 and 15.92 per cent against Q2 2018.

Nigeria top export partners Data from the report indicated the Nigerian major export trading partners for Q2 2019. As at the reviewed period, 53.42 per cent of products exported from Nigeria was bought by five major countries: India (17.27 per cent), Spain (11.97

https://www.facebook.com/businessdayng

were exported majorly to Cameroon, Argentina, and Namibia at N27billion, N12.6billion and N3.3billion respectively.

Also, the value of total trade in raw materials stood at N377.6billion. The export components stood at N31.1billion. The value of raw material exports in Q2 2019 was 14.52 per cent lower than the value in Q1,2019 and 1.71 per cent lower than in Q2 2018.

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

9

10

Thursday 17 October 2019

BUSINESS DAY

comment is free

COMMENT

Send 800word comments to comment@businessday.ng

Fela: ‘Something must kill man and …customer service indeed!’

F

ela was an original and undiluted prophet, who, unfortunately and like our Lord Jesus Christ, was not recognised by his people (Mt 13: 53-58 Lk 4:16). As the 2019 version of Felabration holds this week, I pay homage to the irrepressible and pro-people enigma (abami-eda) with this article, which was published in almost all our national dailies at the first anniversary of his death in 1978 (that was 21 years ago; for instance See Guardian, 7/8/98, page 29).

How time flies! It is now one year since Fela, a unique Nigerian who lived a unique life, died in a unique way and was also buried in a unique way. I remember Fela today and I wish to start that with a 20-year story.

One of my lecturers in the University of Ibadan (now a Professor of Public Finance and in charge at a first-generation university) was always setting his heart on fire” with the burning stick (cigarettes). Just before he came into the class one day, a Scripture Union student (we now call them born- again) went to the chalk-board and wrote “Smoking kills.” The lecturer entered the class few minutes thereafter, saw the admonition on the board, paused briefly and declared with a professorial finality: “Something must kill man.”

That was in 1978.

The cause of death is just a mere instrument in the hand of God. After death comes two types of judgment; the judgment of God and the judgment of man. I will leave the judgment of God to Him and rather concentrate on the judgment of man.

Fela was the first Nigerian, and a notable one for that matter, publicly confirmed to have been aided to death.

All sorts of self-righteous opinions followed his death – how he lived a

depraved life, how he was a bad example to the youth, what a never-do-well he was and how he would rot in the hottest part of hell. But last August (1997), Tafawa Balewa Square in Lagos was almost not enough for his funeral ceremonies and tributes flowed from all parts of the world: the people spoke by the way they mourned him.

Truly, Fela was an enigma. He moved about in sparse clothing, smoked the “forbidden weeds”, married 28 wives officially at a go, constituted a nuisance to his neighbours and his sexual life was something else.

No one can say exactly when his nonconformist tendencies started. But by the time he read music instead of medicine, established his band (Koola Lobitos, Africa 70 and Egypt 80), became the chief priest of his own shrine and president of his own republic, it became really clear that the son of a revered gentleman and a fiery female activist was “mad”. But there was style, sense and mission in Fela’s “madness”.

There was a burning desire for justice and relentless support for fair play, an opposition to all sorts of man’s inhumanity to man and a disdain for all sorts of sacred cows. He used his music as an instrument of social and political activism. He looked at Nigerian politicians and declared Dem All Crazy and saw the political process as “demonstration of craze”. He took a swipe at our women for jettisoning the highest ideals of African womanhood under the pretext of playing lady, berating them for bleaching and self-imposed “yellow fever” and for their unnecessary shakara. This was long before Baba Fryo came up with Dem Go De Denge denge dem go do pose! He also had a word for teachers; “don’t teach me nonsense!”

Like all those who are against the establishment anywhere in the world, Fela had his own share of officially induced troubles He was probably the most prosecuted Nigerian, with up to 250 cases hanging on his neck by the time he died. The most popular was the E Don Beg affair while the last was the “weed smoking” case preferred against him by the National Drug Law Enforcement Agency (NDLEA).

One of the most repeated criticisms of the man was that he misdirected the

youth by his antisocial behaviours. But those “wasted” by Fela, if any, were those already on their way to ruin.

Most of those who ended up in Fela’s shrine in the first instance were without parental control. In any case, Femi, Fela’s first son, is a perfect gentleman. He lived with Fela, played with Fela and yet lives a disciplined life.

One thing with Fela was that he lived an open life; he had no dual personality; there was no hypocrisy and he did not hide any aspect of his life from the public. Many Nigerians live two lives – public and private. Surely, if all of us were to live openly, many Nigerians, including the high and mighty, may well be “madder” than Fela.

In the judgment of man, what matters ultimately is the legacy of the dead. Since Fela’s death, there had been many “big” deaths around the world and each was caused by “something” different.

Incidentally, I do not know where Fela’s Shrine is; I never attended any of his shows and I have never seen Fela “live” before. I have some of his old tracks, though. But I wish Fela were still alive. Nigeria lost a rare personality in the man’s death. Everything about him was rare, including his politics and how he settled personal scores. He lived his life with a purpose. In the judgment of man, he definitely passed in flying colours. As to the judgment of God, I am not competent to comment. I will only plead with the Almighty to have mercy on his soul.

‘

The cause of death is just a mere instrument in the hand of God. After death comes two types of judgment; the judgment of God and the judgment of man. I will leave the judgment of God to Him and rather concentrate on the judgment of man

Other Matters: Customer Service week indeed!

Organisations exist to achieve predetermined SMART objectives. Whatever the objectives of a commercial organisation may be, it must include an element of profitability; at least enough to maintain its wealth creating capabilities, to continue to be in business and to be able to pursue the other objectives.

But profits can only be made when there is a mutually beneficial exchange between the organisation and its customers and this exchange becomes more beneficial to both parties when the relationship is satisfactory and continuous. Resultantly, the ultimate major objective of every organisation is to acquire, satisfy and retain customers.

Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Why did Buhari close Nigeria’s borders?

The President says it’s about rice. But is it? id-August, without any warning, the Nigerian government enforced a partial closure of its western border with Benin Republic under the guise of an anti-smuggling operation codenamed “ExSwift Response”. The operation, which was later extended to sectors of the border with Niger Republic and Chad involved a whole host of security agencies: Customs, Immigration, Police and the Army. Given the surprise nature of the move, many citizens of Nigeria and Benin were left stranded on opposite sides of the border which led to an official plea by Benin’s President, Patrice Talon for the restrictions to be relaxed. In response, the Nigerian president noted that the operation was necessitated by a surge in cross-border smuggling from Benin with specific mention of rice.

The timing of the operation as well as the reasons appear curious as over the last year, the Muhammadu Buhari government has consistently claimed sizeable increases in rice production which had naturally defeated cross-border smuggling. So, what has changed over the last month to justify mobilising several security agencies in a massive operation to clamp down on rice smuggling?

It’s the economics As always with Nigeria, the answers are root-

M

ed in economics. The Nigerian-Benin border is around 700 kilometres long and has existed in the present form since 1889 when the British and French colonists agreed to draw lines in the sand. Given the absence of natural boundaries like lakes or mountains coupled with fairly large cities (Lagos and Cotonou) in close proximity with a long history and strong cultural ties, the necessary conditions for trade across the Nigeria-Benin border are largely in place. Add divergent forex and economic policies across both sides of the line and you have all the sufficient conditions for significant trade linkages even with official efforts to discourage it.

Depending on whichever product is mispriced via currency or policy, trade flows between Nigeria and Benin are significant across a host of items: fuel, chicken, rice, cars and everything in between.

Rule 1 - all currencies move (the naira is exempt from this rule) Let’s start with the currencies. Over the last year, the CFA franc – the currency used by Benin and the eight francophone countries in West Africa – has weakened against the USD. The CFA franc is effectively pegged to the Euro under a deal with France which guarantees full convertibility between the CFA and Euros (EUR). Effectively, what this means is that any movements by the EUR are mirrored by the CFA franc. In

www.businessday.ng

But this is not a straightforward affair. Other organisations are also targeting the same customers and in this era of liberalisation and globalisation, organisations everywhere are targeting customers everywhere. In addition to the intensity and pervasiveness of competition, the customers themselves are becoming more knowledgeable, enlightened, informed and increasingly difficult to satisfy and disloyal. Thus, importance of customers and the need to court and honour them, is indubitable. That was why the Customer Service Week was instituted, to celebrate the importance of customer service and of the people who serve and support customers. It is usually celebrated in the first full week of October (7-11/10/19) In 1992 the U.S. Congress proclaimed Customer Service Week a nationally recognised event. The theme of 2019 CSW is The Magic of Service.

On 9/10/19, I went to one of my banks, an old-generation regional bank. I noticed that the cashier, a very friendly and conscientious young man, was wearing a very fresh native shirt. I complimented him but then, I noticed that the few staff in that branch (3 of them) were also equally “yoked” I then asked, whatsgwan and he informed me that it was CSW! So, I asked him what is in it for the customers and he showed me a tea plate with about 10 pieces of tom-tom!

So, the service providers were worth a fresh attire but somebody like myself who had banked with them for 15 years.

Was worth just a piece of Tom-Tom! And nobody mentioned anything about the CSW until I started asking questions. I went to another bank, the one which recently and mercilessly swallowed another bank, and where I had banked for 23 years and there were also a teaplate of tom-tom like candies. Nobody mentioned anything about CSW and as I was leaving, I saw them hanging 4 pieces of balloon at the frontage.

FAYE & FRASER 2018, the US Federal Reserve hiked its interest rates four times, which increased demand for the US dollar and thus greatly strengthened it.

Though the Fed has since abandoned its hawkish bias for a dovish one, concerns over a global recession have continued to drive a strong demand for the US dollar which in turn has fuelled a bullish run against other global currencies. As a consequence, the Eurodollar (EURUSD) has fallen from €1.16 to €1.09 to US$1. This move has been mirrored by the CFA which has weakened around 4 - 5 percent.

Viewed from its high in February 2018, the CFA has lost 11-12 percent against the USD. Meanwhile over in Nigeria, even with all the above described turmoil across global currencies, the naira has remained unchanged since 2017 at the NGN360/ $1 level enforced by the Central Bank of Nigeria (CBN). Using the implied cross-rates, the development means that the Naira has strengthened against the CFA franc by around 11-12 percent. Or to put it simply, goods from the CFA franc region are now up to 12 percent cheaper relative to the naira produced goods compared with 2018 levels. And all that is before including the noncompetitive nature of Nigerian goods due to the country’s high cost environment.

Get your trade on With the economics now aligned in favour

https://www.facebook.com/businessdayng

of the Benin-to-Nigeria trade, more individuals have a profit motive to shift goods across the line-in-the-sand borders which will result in a pick-up in smuggling. Faced with this upsurge, it is easy to see why the Nigerian government is resorting to this high-handed tactic of closing the border. While this move will generate airplay in the coming days, left unsaid is whether any short-lived gains of imposing a border closure outweigh the economic costs of dealing with symptoms.

The naira has remained static for nearly three years and its relative strength means Nigerians have enough purchasing power to demand cheaper priced goods from across the Benin border. This will be worsened by the inevitable price increases in Nigeria on account on the border closure (there are already reports of sharp price increase of chicken and other goods).

Until the FG addresses this imbalance, the current blockade looks no more than another in the long series of whack-a-mole policies that Nigerian policy makers routinely apply to deal with trade problems.

Faye & Fraser is a Lagos-based investment research/risk analysis firm

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

COMMENT

11

comment is free

Send 800word comments to comment@businessday.ng

How Nigeria walked into a disastrous independence and why Azikiwe never became prime minister

T

his week, our history series focusses on two years before Nigerian independence, when its postBritish political fate was decided. Throughout 1958, Obafemi Awolowo ramped up his calls for Nigeria to be divided into more than three regions before independence.

He stated colonialism meant the Yorubas, Igbos, Hausa-Fulanis and others had been “lumped together by our British overlords without the knowledge or consent of the people concerned, and with little or no regard to their cultural, linguistic and ethnological differences.”

Awo stated “there is more in common between a Greek villager and a British villager than there is between a Sokoto villager and an Ijaw villager.”

While the Greeks and Brits shared a culture “derived more or less from the same source – Christianity – when you consider the relationship between the Sokoto man and the Ijaw man, where is the connection? There is none at all, either in language or in culture. They do not even derive their culture from the same source,” he argued.

Interestingly, though bitter political rivals, Ahmadu Bello shared Awo’s view on northern and southern Nigerians being fundamentally different. “They (southerners) get their civilisation from over the sea; we get ours from over the desert,” Bello told

Manchester Guardian in 1956. He saw southerners as western-oriented while the north looked to the Islamic world for inspiration.

However, because Bello viewed the north as being in a dominant political position by the late 1950s, he was not overly worried about what would happen to his region in an independent Nigeria. In March 1958, he was confident enough to declare before the northern House of Chiefs that the aim of his “Northernisation” policy was to have “northerners gain control of everything in the country.”

Nnamdi Azikiwe, meanwhile, argued that cultural differences between Nigerians were not an obstacle to nation-building.

Zik and Bello are famously said to have had a meeting at which Zik said to Bello, “Let us forget our differences” to which Bello responded, “No, let us understand our differences. I am a Muslim and a northerner. You are a Christian and an easterner.”

This exchange encapsulates the vast difference in approach to Nigeria’s ethno-cultural diversity between Bello (and Awo) on the one hand, and Zik on the other. Awo and Bello were both clearly more realistic about what Nigeria was while Zik appeared to overestimate the ability of rhetoric to constitute reality.

Nevertheless, having lost his battle for a reconfiguration of Nigeria before independence, Awo, like Bello and Zik, turned his focus to the all-important general election of 1959, which would determine who controlled Nigeria’s political centre after Britain left. Electioneering kicked off in earnest with Awo and other Action Group (AG) leaders crisscrossing Nigeria in helicopters, campaigning hard in the seat-rich north and in the east, where they hoped to make enough in-roads with

regional minorities to be able win a majority at the centre.

AG’s 1959 campaign was described in foreign press as “the most expensive and most professional” political campaign ever conducted in Africa at the time. Yet, ultimately, all that expensive campaigning had little effect as election results revealed voting along largely ethnic lines. Zik’s National Council of Nigeria and the Cameroons (NCNC) party won all 50 seats in the Igbo constituencies of the east. Bello’s NPC dominated the north, capturing virtually all the available seats in upper-north constituencies populated mostly by Hausa-Fulanis. Awo’s AG won 32 of 47 available seats in the Yoruba sector of the west. Additionally, AG won 14 of 23 available seats in eastern minority areas, and, in alliance with the United Middle Belt Congress, 25 seats in the lower north. Similarly, NCNC won 14 of 15 seats in nonYoruba western Nigeria. Factor in independents plus small parties and all told, Bello’s NPC commanded 142 of the 312 seats in Nigeria’s federal House of Representatives, NCNC 89 seats and AG 73 seats.

This parliamentary arithmetic meant any two of the major parties could form a majority coalition. Awo sent emissaries to NCNC offering a coalition agreement in which Zik, as leader of the bigger party in parliament, would become Nigeria’s first independent prime minister while Awo would be finance minister.

However, just after the results were announced, but before any coalition deal had been reached, British Governor-General James Robertson appointed Tafawa Balewa prime minister on grounds he represented the largest party in the House of Representatives and could form a coalition.

‘

It is worth mentioning that despite his strong opposition to Bello and northern elites, Awo approached not just NCNC for a coalition, but NPC as well. However, northern elites were so bitterly opposed to Awo, largely because of his consistent campaign to break up the north, that they ruled this out and chose NCNC instead

Balewa specifically requested this favour from Robertson to strengthen his hand in coalition negotiations.

Balewa told Robertson he was sure Festus Okotie-Eboh, an NCNC man who opposed an NCNC-AG coalition since that meant Awo as finance minister, a job he wanted for himself, would break away from NCNC with other party members and join an NPC coalition even if Zik opposed it.

NCNC, a coalition of numerous unions and movements, was never as disciplined a party as Awo’s AG or Bello’s NPC. Moreover, the days when Zik’s authority in the party went unquestioned were long gone by 1959. In the immediate years preceding independence, while Zik remained an important symbolic figurehead for NCNC, he was never fully in control of the party. Outside, he tried to create the impression he was, but insiders knew he wasn’t.

To further complicate matters, most Yoruba members of NCNC said they would never accept a coalition in which Awo would play a prominent role. They threatened to dump NCNC if Zik tried to push through AG as coalition partner.

Add to this the fact many NCNC members recalled bitterly their years of rivalry with AG in the south, didn’t trust AG politicians and feared the potential threat of northerners not accepting an all-south government, perhaps even seceding, and we see how an NCNC-AG coalition that would have made Zik Nigeria’s PM became a non-starter.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington

How did our universities become centres of sexual harassment?

D

uring my university days, I watched with horror as lecturers victimise and harass female students sexually. I tried to mobilise some fellow students to take action by gathering evidence against one notorious lecturer and presenting it to the relevant authorities. That was when I discovered the exact reasons why virtually no one borders to report or take up sexual harassment or even rape issues in our universities.

Although there are robust provisions in the law books against academics who abuse their powers, they are practically unenforceable except when there is a falling-out and/or management wants to get rid of an academic.

Lecturers are quite united and act in consort to protect one of their own who gets into trouble for sexual harassment or abuse of power.

Besides the authorities looking the other way even in the face of mounting evidence against an academic, his colleagues will also conspire to punish any student that dares report a colleague. I barely avoided getting into trouble and decided to face my studies in peace.

Even when there is overwhelming evidence against an academic, he resigns or is advised to resign honourably so that he can move on to another university to continue from where he left off. Thus, we have cases of serial sexual predators moving unchecked from one university to another. When some foreign Nigerian academics, concerned with the problem in Nigeria, tried to lobby for one of such known and notorious sexual predators to be fired by

the university where he currently teaches, the authorities asked one of them a simple question: “do you really want the professor to lose his job because of sex?”

I came face to face with the rot in the system during my national youth service days when I was posted to a private university in the South South region. I worked as a graduate assistant, teaching some introductory courses and handling the departments’ exams records (I got to know leakage of exams questions and alteration of marks was a problem in the department and since I came highly recommended, they decided to trust me with the task).

While there, I saw another variant of sexual assault and abuse of power. Whereas academics in public universities can pick on any student because university education is free or greatly subsidised by the state or even because there’s zero accountability in the system, in private universities, for obvious reasons, academics target mainly vulnerable or unserious students, who, although, fee-paying students themselves, struggle with their academics or want an easy way out without putting in the required hard-work. And in this particular university, the latter happen to be in the majority.

So, for males, it is all about money while the females had to either pay in cash or kind. And these were done so brazenly and without fear of repercussions – and there was none for the duration I was there.

Any thoughts I had of insulating myself from the madness around me ended when

www.businessday.ng

exam period came around. First, I was shocked how very few students attended classes whereas many registered for my course. A week or two to exams, the class was full. I later got to know that was the period for sorting, blocking, or exchanging sexual favours for marks.

When I proved difficult to deal with, I started receiving calls and visits from lecturers with pleas and offers to pass particular students in my course(s). My lodge also became a Mecca of sorts for students who wanted to get the questions for their forthcoming exams from me.

It didn’t take long for me to become a public enemy both to students and academics. It became obvious to me I had only two options to survive in the place: join them or get out. Of course, that marked the end of my association with any conventional university in Nigeria.

For those who know, our universities have long become centres of sexual harassment, rape and transactional sex. So bad is the situation that in a pilot study of corruption in the university system in 2012, by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) the National Universities Commission (NUC) ranked sexual harassment and exploitation of students as the most prevalent corrupt practice in Nigerian universities.

In fact, the rampant cases of reported cases of sexual harassment in our tertiary institution forced the Senate in 2016, to propose a bill, known as the Sexual Harassment in Tertiary

https://www.facebook.com/businessdayng

CHRISTOPHER AKOR

Education Institution Bill, which prescribes a 5 year jail term for lecturers and educators convicted of sexual harassment of either their male or female students and also ban lecturerstudent relationships altogether. But the Academic Staff Union of Universities, ASUU, was at the forefront of the lobby to squash the bill. According to them, the bill unnecessarily targeted educators. They proposed rather, a legislation on dress code.

At the root of the rape and sexual assault problem in our universities is the larger question of accountability - that hated word in all of Nigeria. Like in Nigerian politics where politicians want more and more powers without accountability, our mini-gods in the universities too cherish the powers they wield and often resist all attempts to curb their powers or make them account for the powers they wield. But like John Dalberg-Acton remarks, “power corrupts and absolute power corrupts absolutely.”

If this outrage does not lead to reforms and the erection of structures of restraints; and which will make academics account for the awesome powers they wield over students, we may not make any progress in curbing the vice.

@Businessdayng

12

BUSINESS DAY

Thursday 17 October 2019

EDITORIAL PUBLISHER/CEO

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

Bashir Ibrahim Hassan

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

Dear NERC, don’t burn down the house to check the menace of termites

T

he recent notice to eight electricity Distribution Companies (DisCos) by the regulator, the Nigerian Electricity Regulatory Commission (NERC) of its intention to cancel their licenses for failing to meet their obligated remittance to the market could derail the modicum of success recorded in the power sector hence, the need to exercise restraint.

To be fair, the situation with the DisCos has become like the proverbial fly perching on the scrotum. If you hit it too hard you run the risk of inflicting pain on yourself, assuming you didn’t end up shutting down the business of procreation altogether.

Though the DisCos’ market behaviour is irritating other market operators as well as the regulator, but you don’t burn down a house to address the problem of a gang of unruly termites.

The Commission in its October 8, circular said it has reasonable cause to believe that eight DisCos including the Abuja Electricity Distribution Company Plc, Benin Electricity Distribution Company Plc, Enugu Electricity Distribution Company Plc and Ikeja Electric Plc, Kaduna Electricity Distribution Company Plc, Kano Electricity Distribution, Company Plc, Port Harcourt Electricity Distribution Company Plc and

Yola Electricity Distribution Company Plc, have breached the provisions of the Electric Power Sector Reform Act, terms and conditions of their respective distribution licences and the 2016 – 2018 Minor Review of the Multi-Year Tariff Order (MYTO) and Minor Remittance Order for the year 2019.

“The Commission considers the action of the aforementioned DisCos as ‘manifest and flagrant breaches’ of EPSRA, terms and conditions of their respective distribution licenses and the Orders, and therefore requires each of them to show cause in writing within 60 days from the date of receipt of this Notice as to why their licenses should not be cancelled in accordance with section 74 of EPSRA,” NERC said.

The substance of the regulator’s grievance is that even though it has published a minor review of electricity tariff which was meant to address shortfalls caused by lack of non-reflective tariff, and which the DisCos have always clamoured for, the DisCos have not met the minimum remittance threshold agreed to take effect

by July 2019.

The increased tariff which takes effect from January 1, 2020, prescribes at least a 30 percent rise in tariff across the various customer classes.

DisCos were required to meet their obligation to the market, improve collections by metering customers especially government ministries and de-

partments and payback loans from the Central Bank. They were also required to reduce their technical and commercial losses but the data from the regulator show they have not met these obligations.

Since NERC published this order, we understand that there have been discordant tunes from the DisCos. This is to be expected in a sector, where both the regulator and the operators haven’t faithfully kept their end of the bargain.

Some DisCos are even considering dumping the licenses and declaring a force majeure. For these DisCos we also caution restraint, because an eye for an eye, will eventually leave everyone blind.

We encourage the DisCos to respond to the regulator’s order in good faith and provide a clear-eyed response to the query. It is even possible that in the course of providing a response, the regulator can see areas it can improve the market.

The fact that even Yola DisCo now operated by the government, isn’t even meeting its own obligations too should indicate that the challenges are quite fundamental. But by virtue of the law, this regulator has the power to issue this type of orders.

For a long time, NERC has been accused of lacking independence, its dictates frequently ignored by market players especially the DisCos, so we understand why the regulator will want to show that it means business. But it does not want to

bring down the market to force down the message that it is no longer business as usual. This will be counterproductive, like pulling out the roots to see how the sapling is faring.

The power sector is troubled by teething challenges that require creative solutions.

These include an inefficient market, obsolete and broken infrastructure manifested in a grid that collapses when there is too much or too little power and turbines lying idle because generation companies cannot get enough gas to them in a country awash with gas.

To address the broken electricity market, NERC has commendably effected a tariff increase but this is also in an economy characterised by slow growth due to the federal government’s remarkably aberrant economic policies.

DisCos who are charged with collections to pay the value chain collects poorly and remits even worse. Power theft abounds and their allowed investment threshold under the Multi-Year Tariff Order often makes it a tough choice either to buy more meters or correct defective base stations.

The electricity consumer in Nigeria will be worse off in a fight between the regulator and the DisCos and the clear winners will continue to be lawyers who seem to be the only ones having a ball while operators, regulators and the government make a sport out of suing each other.

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

ENQUIRIES NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

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

01-2799100 LEGAL ADVISERS The Law Union

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

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven.

• The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests.

• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Thursday 17 October 2019

comment is free

COMMENT

13

Send 800word comments to comment@businessday.ng

The ethics of the BBC sting on sexual predator lecturers THE PUBLIC SPHERE

CHIDO NWAKANMA

I

s it ethical? Does it not constitute an invasion of the privacy of the lecturers? Is it proper to pose as someone else so that you can trap these lecturers?

Commentators have raised these issues and more on various platforms concerning the trending BBC report.

Some go so far as to assert without fear of contradiction that the story is unprofessional because they supposedly crossed ethical boundaries. We attempt a look at the matter.

The BBC report is classic investigative journalism. I noted in my lectures to students of Advanced Reporting Techniques.

Journalism is the activity of gathering, assessing, creating, and presenting news and information. It is also the product of these activities, according to the American Press Institute.

Journalists find that people are generally willing to share information with them and have them tell their stories, mostly positive ones until…it involves investigative journalism.

Investigative journalism is reporting that uncovers and tells stories about which the persons involved would rather not have anyone know.

Investigative journalism draws from seemingly tongue-in-cheek definitions of journalism such as “News is what somebody somewhere wants to sup-

press; all the rest is advertising.” Lord Alfred Northcliffe, British publisher 1865-1922. Or “When a dog bites a man that is not news, but when a man bites a dog that is news.” Charles Anderson Dana, American journalist, 1819-1897.

Principal news values for investigative reporting are the unusual and the hidden.

Konrad Adenauer Stiftung’s Investigative Journalism Manual says investigative journalism involves producing new information or putting information in the public domain together to create new insights and revealing secrets or uncovering issues surrounded by silence.

Wole Soyinka goes beyond uncovering secrets to define investigative journalism as “the vital force for the restoration of human dignity”. Investigative journalism brings out “unpopular ideas and inconvenient facts” about society.

It reveals scandals and shames the individuals involved. The Forum of African Investigative Reporters (FAIR) asserts, “Our work moves beyond a simplistic focus on corrupt individuals in favour of a more systematic and contextualized exposure of corruption.”

What is the ethics behind a sting?

It is clear from the definitions that investigative journalism is a vital positive force for society. One of the trending misrepresentations against the Nigerian media is the claim that the BBC report shows they have lost steam and have neglected investigative journalism. Untrue and unfair.

Even on matters of sexual harassment, the Nigerian media have played their roles. An October 30, 2017 report in The Cable exposed the pimping of schoolgirls by security guards and teachers at Federal Government Girls College, Langtang, Plateau State. Old students of the school immediately set up a panel to investigate the matter, and the Fed-

eral Government followed afterwards.

The Cable also launched a campaign/ hashtag BreakTheSilence# to tackle the scourge of sexual harassment in schools Four ethical principles guide investigative journalism. They are The Golden Mean of Aristotle; the Categorical Imperative of Immanuel Kant; John Stuart Mill’s Principle of Utility; and the Judeo-Christian principle of Fairness and Reciprocity or Do unto Others…

When journalism calls people to order, it is playing a moral duty. It is also a constitutional one. The injunction in Chapter Two, Section 22 of the 1999 Nigerian Constitution requires that the media hold government and institutions accountable to the people.

Authorities have suggested two critical questions for considering the ethics of a report, in particular, difficult ones such as Sex-for-grades. Who will be hurt, and how many? and Who will it help and how many?

Various ethical codes, including the Ilorin Declaration of Nigerian Journalists (1998), embrace the application of sound principles such as truth, accuracy, fairness, transparency, proper representation, attribution and the right of reply. The code of the Society of Professional Journalists (Sigma Delta Chi) captures these concerns as; seek truth and report it, minimise harm, act independently, be accountable.

Note that the injunction is to “minimise harm” and not to avoid it. The investigative reporter would then apply the utilitarian ethics of how many persons would suffer pain versus the beneficiaries from the good that the story would do.

On that score, the story was ethical.

Privacy? Privacy is a newer area of press law generally but even more so in Nigeria. It has arisen in the age of social media and society publications.

The 1999 Constitution in Section 11,

‘

Journalists find that people are generally willing to share information with them and have them tell their stories, mostly positive ones until …it involves investigative journalism

Chapter 4, sub-section 37 guarantees the privacy of individuals thus: “37.

The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected.”

Privacy actions cover four key areas 1.

Intrusion or invasion of privacy is an infringement on someone’s solitude or property, either physically or electronically 2.

Disclosure of embarrassing private facts, such as medical or sexual records or old indiscretions that are no longer relevant.

3.

Placing someone in a false light, making an individual appear (through a photo or docudrama technique, for example) to be something different from what is true.

4.

Misappropriation of likeness, using someone’s name or image for commercial advantage without permission.

Permission is the primary defence.

Individuals waive their privacy claims if they formally invite journalists onto their property or sign consent forms.

This did not happen in the BBC story.

However, another defence is newsworthiness and relevance. It is a waiver for intrusion particularly where the person is involved in a matter of public interest such as the quality of university education, women’s rights and sexual harassment.

Finally, is a sting proper? Yes, it is if it is for the greater good of the public. They were right to pose as prospective students. Traps work to catch the intended because they are gullible and guilty.

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.

Still on the LAWMA Blue Box initiative

R

ecently, the Lagos Waste Management Authority, LAWMA, launched the Blue Box programme, aimed at promoting the culture of waste sorting at the point of generation. The launch of the innovative scheme represents a milestone in waste management in Lagos.

It has been discovered that the existing practice of dropping all wastes in one container had become old-fashioned, necessitating the need to replace it with a modern method, which involves keeping two containers at home: one for recyclable waste and the other for general waste.

The old system was expensive and cumbersome, and also denied the government a huge chunk of accruable revenue and the youth, a large share of prospect for employment.

At the launch of the fresh initiative, Babajide Olusola Sanwo-Olu, Lagos state governor, noted that the staggering volume of waste generated daily by the huge Lagos population dictated the need to explore a modern and profitable waste management method such as the Lagos Blue Box initiative.

The governor observed that the approximate 14,000MT of waste generated daily by more than 20 million Lagosians, needed to be creatively managed to turn it into a money spinner.

He said: “Rather than being a burden, across the world, waste has become a major fortune earner for governments; generating jobs and income for teeming youths, in what has become known as the circular economy in the modern world. The circular economy is the ‘cradle to cradle’ system, which encourages the use of another person’s trash as feed stock for another’s process, minimising

waste in society and generating income for the citizenry.”

The good news is that 50 percent of waste generated in the state contained re-usable resources that could be harnessed and channelled to strengthen the economy of the state.

LAWMA is, thus poised to drive the circular economy through active community engagement, to encourage effective use of recyclable materials, for creating a viable value chain, and ultimately opening new markets and business opportunities, for government and the people. Surulere and Iru, Victoria Island would be used as pilot schemes for the project.

Undoubtedly, the constant huge inflow of people from all nooks and crannies of the country had increased the volume of waste generated across the state and compounded the challenge of managing it. The small size of the state also implies insufficient space for landfill sites.

One of the major challenges being faced in Lagos State is, no doubt, its small land size in relation to its increasing population. This has impacted negatively on the availability of space for more infrastructural activities.

The dearth of sufficient land space has also adversely affected the state’s waste management strategy since it is unable to get adequate land space for landfill activities to accommodate the huge waste being generated on a daily basis, estimated to have grown from 10,000MT to 14,000 MT within a period of five years.

While doing a technical brief on the Blue Box programme, Olumuyiwa Gbadegesin, managing director/CEO of LAWMA, observed that the cumbersome nature of the old system of waste management, had robbed

www.businessday.ng

the state of handsome revenue and avalanche of jobs for the youth, in a properly structured waste management system.

He noted that the initiative took root in the electioneering campaign promise of Babajide Sanwo-Olu, where he envisioned a new era, when Lagosians would stop dumping all their waste and would rather sort at source, to extract maximum value and reduce pressure on the available landfills.

With the advent of the Blue Box, Lagosians are now to keep two waste bags at home, instead of one. Two colour-coded bags would be distributed to households by franchised recyclers and environmental volunteer corps.

The blue bag will be for recyclable waste items like plastic, water sachets, cans, etc, while the black bag will be for general non-recyclable waste.

The franchised recyclers would pick up the bags from various homes at designated days of the week; take them to their sorting hub in the area, and to the Community Recycling Centres (CRCs), for further sorting and sale to off-takers.

To qualify as franchised recycler, the individual must exhibit capacity to collect waste at local governments and LCDAs, by having at least one 5-ton or 10-ton truck, for collection of recyclables from door steps, in addition to owning a sorting centre, measuring a minimum of 1,000 square kilometers, in the area of operation.

The State and Local Governments would partner to provide space for CRCs, which would be a platform to harness the expertise of scavengers, where they would be re-orientated and re-integrated as resource managers, for continuity of their means of livelihood.

The several advantages in the Blue Box

https://www.facebook.com/businessdayng

FOLASHADE KADIRI initiative included capturing 50 percent of recyclables upstream by June 2021, with zero tolerance for scavenging. It would also attract major investors to strengthen the state’s economy; create more jobs (over 46,000 direct and indirect jobs); reduce carbon foot print and encourage zero waste generation for a healthier, cleaner and sustainable environment.

Efforts have since begun to ensure the successful take off of the initiative. Recently, LAWMA held a road show along Orile – Okokomaiko – Badagry Expressway, to distribute the colour-coded bags, as well as sensitise the public on the new waste management initiative and on environmental hygiene.

LAWMA also commenced the massive clean-up exercises along Orile – Badagry Expressway to ensure that the axis was rid of black spots and other forms of environmental nuisance.

It is important that Lagos residents support the state government in its bid to rid the state of waste. Most cities of the world experience environmental abuse as a result of the ignorance of the people. As a people, we need to really come to terms with the significance of an improved environmental habit. When we deliberately choose to act in manners that could endanger the environment, we are the ones that would certainly bear the consequences of such actions.

Kadiri is assistant director, public affairs, Lagos State Waste Management Authority.

@Businessdayng

Thursday 17 October 2019

COMPANIES&MARKETS

BUSINESS DAY

15

Business Event

TECHNOLOGY

Microsoft for Startups meets stakeholders to explore opportunities in Nigerian space DIPO OLADEHINDE

I

n a friendly and educative discussion, Microsoft for Startups recently met in Lagos with leading players in the Nigeria tech ecosystem and Investors Forum on how to explore mutual opportunities and foster collaborations needed to grow the Nigerian tech and startups space.

According to Startup Advocacy Lead at Microsoft Simona Cotin, Microsoft is excited to deepen its relationships with Africa’s emerging tech scenes, workwithrootcommunitiesand the organisation’s interest “to be heavily invested at the core of Africanstartupsoperationswhile collaborating and facilitating the developmentofproductsandsolutions that will grow the space.”

In his remarks, the Executive Director of TechCircle, Oo Nwoye stated the significance in the purpose and leverage such gatherings create and Microsoft remarkable activities on the continent.

“Microsoft is doubling down on the continent and it’s a great thing that they want to take inputs rather than move with their ideas. They are trying to engage critical stakeholders to find out

what interests them, how they could help and TechCircle is delighted to facilitate this maiden meetup for the Microsoft for Startups team,” Nwoye said.

The General Manager for Microsoft Nigeria and Ghana, Akin Banuso, noted that the event was the first of many platforms that Microsoft is deliberately creating to meet with, and understand the startup community, market developments and to see how Microsoft for Startups could support Startups.

“Now is a good time, the market is exploding and we as a company are open and ready.

We have the tools, expertise and experience of doing this globally, andweseethatNigeriaisayoung vibrant space,” Banuso said.

BanusonotedthatMicrosoft’s mission was to empower every organisationtoachievemore,and “we’ve realized that helping the ecosystem to grow will eventually grow the market and the region”.

“The more prosperous people are, the safer the environment is. Obviously, we’ve created superior solutions that startups using our platforms could leverage to scale exponentially,” Banuso said.

Managing Director of the Microsoft African Develop-

ment Centre West Africa (ADC) Gafar Lawal, also affirmed Microsoft’s intentions to spur the growth of emerging businesses and how the organisation has consolidated its commitment to the scene with the establishment of ADC. “We’reprobablythefirstcompany of our size investing in putting engineering centres in Africa and building what we sell right out of it. We’re using local talents and are actually amazed by the level of talents we’re finding locally. Currently, we have centres in West Africa (Lagos) and in East Africa(Nairobi)andplantocover the rest of Africa while looking for ideas we can support to improve thecommunitieswehaveoperations in,” Lawal said.

Lawal noted that Microsoft is always on the lookout locally, for features or product ideas with potential for global impact. “Such ideas interest us because our goal is to be good global citizens and to help develop potentials from everywhere we can find them. This goes in line with the vision of our founder to empower every person and every organization on the planet to achieve more.”

Continue online @www. businessday.ng

ICT

Why Nigeria needs ICT laboratories in Universities - Tranter IT TONY AILEMEN & FRANK ELEANYA

W

ith Nigeria’s internet penetration projected to peak at 86 percent of the population by 2023, there is a need for tertiary institutions in the country to prioritize Information and Communication Technology (ICT) education in order to meet up with 21st century realities. One way this can be achieved is through the creation of ICT laboratories in the various institutions.

Melania Ayoola, executive director, Sales, at Tranter IT says her firm is already speaking with some collaborators to make this a reality. According to her, Nigeria’s young population represents an opportunity for harnessing talents that will help the country compete globally and also export to other parts of the world.

With Nigeria’s current of 200 million, according to the World Bank estimate, the country has an annual Population growth rate of 2.6 percent with income per capita of $5,680, ranking 7th, globally and projected to hit 411 million people in 2050.

The country has a youthful population of about 54 percent, which means the government must collaborate with existing institutions to fill in the gaps in the educational system, if it must provide a sound education in the sector.

“For example, we have a

place for employment in every company, but what the companies are complaining about is that when the graduates come out, they don’t know anything,” Ayoola said. “But when they are properly exposed to practicals and experiments, it makes things simpler and create better confidence in the graduates” Tranter IT was founded about fifteen years ago as an outsourcing information technology (IT) company. The company currently has a staff strength of over 300 people among whom are 250 IT engineers. The company services nearly all the banks in Nigeria and other non-bank institutions.

Lare Ayoola, the chairman of the company says the goal of the is to help organisations reduce the enormous cost of production they bear from running an IT unit.

He also believes that Nigeria’s economic progress depends on its investment in IT development.

“We have an army of the smartest people in the world, that resource is our strength and wealth,” he told BusinessDay at a summit the company held in Lagos and Abuja recently. “The people are easy to train, English speaking, hardworking, conscientious, crave to prosper, possessed with an innate ability to succeed.

We have taken the potential impact of technology on our economy as a priority.”

With IT leading the world and corporate giants such as Amazon, Google and Apple, thriving in providing platforms where people can engage and transact, local opportunities for exposure for Nigerian youths are still very limited.

“There should be a system that will help us advance our own national pride. There has been social conversations as to how hard we are working, but I feel that if they make certain opportunities available, those who want to make use of them, will do so, especially if there are added push through incentives,” Melaniasaid.“Wehavetalentsall over, but we need to incentivize them, push them into the right perspective, instead of allowing them to either waste away or go out of the country through tough borders. All our talents are going out, we are losing them to other countries. There is not enough to appreciate them.

Such partnerships with IT institutions, she further said, will offer sound practical ICT training in universities and enhance the quality of graduates from those institutions.

Through its partnership program with Indian-based ManageEngine, Tranter IT train about 50 graduates at least three times per year for free. The ManageEngine brand has about 7,000 staff in their headquarters in India, these staff work on the messaging, support systems, development of the solutions.

www.businessday.ng

L-R: Uche Nwakanma, head of research & development, PZ Cussons Nigeria Plc; Hannah Oyebanjo, MD, Redwood Consulting; Yosola Odusanya; Stella Egwuchukwu Nweze-Akpa, representing Iyabo Philips, chairman, Chemistry Society of Nigeria (CSN); Chatapura Panganai, head of technical, PZ Cussons Nigeria Plc; Bisi Ibitayo, CEO, Limelight EduConsult; Charity Ilevbare-Adeniji, group brand and activation manager, PZ Cussons Nigeria Plc, at the recently concluded Teachers Development Seminar held to commemorate World Teachers’ Day.

L-R: Omotayo Azeez- Abiodun, PR manager, Tolaram Group; Niyi Ajibade, branch manager, OANDO Lawanson Station; Folake Mabawonku, a beneficiary; Oyeyemi Fagbemi, marketing manager, Minimie, at the official donation of Kiosk to a beneficiary In partnerships with OANDO filling stations.

L-R: Dare Okuntilu, client service director, Culture Communications Limited (Initiators of Food Tonight Foundation Entrepreneurship Programme); Yomi Benson, MD; Olawale Omotoso, founder and operations lead, Flair Underwears (winner of the Food Tonight Foundation Entrepreneurship Programme), and Nathaniel Ogbu, group account director, at the at the pitch and prize presentation of Food Tonight Foundation Entrepreneurship Programme in Lagos.

R-L: Chimaobi Madukwe, group chief operating officer, BUA Group; Amir Yahmed, MD, Jeune Afrique Media Group; Jean Haas, MD, Relais Consulting, and Carole Kruyt, strategic partner, Jeune Afrique, at the partnership signing ceremony by BUA Group and the Africa CEO Forum in Lagos

https://www.facebook.com/businessdayng

@Businessdayng

16

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

Investor

17

In association with

Helping you to build wealth & make wise decisions Market capitalisation

NSE All Share Index

NSE Premium Index

N11.721 trillion

Week open (4– 10–19)

31,924.51 26,987.45

N13.137 trillion

2,252.51

Week close (11– 10–19)

26,533.78

N12.917 trillion

2,206.54

Year Open

Percentage change (WoW) Percentage change (YTD)

-1.68 -15.58

2,241.37

-2.04 0.52

The NSE-Main Board

1,456.29 1,086.04 1,072.28

-1.27 -25.53

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

774.30

1,104.34 1,078.00

325.36

120.39

532.77

233.15

1,712.24

1,075.01

966.86

325.81

118.46

511.65

225.75

1,679.73

1,056.07

954.62

0.14

-1.60

-3.96

-3.17

-1.90

-1.76

-1.27

-25.31

-24.81

-14.69

-20.94

774.30

0.00 -2.46

-2.39 -23.93

-18.33

-6.34

-31.67

Value stocks’ new lows offer opportunities for bargain hunters Iheanyi Nwachukwu

S

tocks like Guinness N i g e r i a P l c (-59.2percent), International Breweries Plc (-58.7percent), GlaxoSmithK line Consumer Nigeria Plc (-51percent), Nigerian Breweries Plc (-46.2percent) helped fuel the negative returns seen this year at the Nigerian Stock Exchange (NSE). As at Friday October 11, they have witnessed in excess of 40percent negative return, INVESTOR checks show.

Other stocks that have underperformed remarkably this year are Forte Oil Plc (-44.3percent), Neimeth Plc (-48.7percent), Presco Plc (-40percent), PZ Cussons Nigeria Plc (-47.9percent), UAC Property Development Company Plc (-41.9percent), Unity Bank Plc (-41.1percent), University Press Plc (-47.2percent), and Champion Breweries Plc (-47.7percent).

Though the negative sentiment around some of these stocks persists because there are still no major catalysts, especially policies by the nation’s economic managers that can boost investor confidence, long-term investors stand to benefit from the longterm growth that they offers.

As a result investors with longterm investment horizon should begin to take position in some of these stocks at their current prices,

which market watchers believe offer significant upside potentials.

Stocks that recorded negative returns of over 20 percent this year are: CAP Plc (-26.7percent), Cement Company of Northern Nigeria Plc (-21.6percent), Conoil Plc (-33.8percent), Dangote Cement Plc (-24percent), Dangote Sugar Refinery Plc (-33.1percent), Eterna Plc (-33percent), and FBN Holdings Plc (-32.1percent).

W h i l e s t o ck s re c o rd n e w lows, the prices of most of the

www.businessday.ng

value counters among them offer opportunities for bargain hunting, according to analysts.

“With most bellwether stocks hitting new lows, we expect to see bargain hunting in some of the fundamentally sound stocks”, according to equity research analysts at Lagos-based Vetiva.

Fidson Healthcare (-27.3percent) has also failed to impress investors, having recorded negative return of over 20percent this year. Also

https://www.facebook.com/businessdayng

included are, Flour Mill Nigeria Plc (-36.1percent), GTBank Plc (-22.2percent), Honeywell Nigeria Plc (-22.7percent), Ikeja Hotel Plc (-22.9percent), Law Union (-26.7percent), Linkage Assurance (-29.2percent), Mobil Oil Nigeria Plc (-20.3percent), MRS Plc (-34percent), and NAHCo Plc (-36.2percent).

NPF Microfinance Bank has lost 27.9percent of its value this year.

Others in that category include Oando Plc (-28.6percent), Okomu

@Businessdayng

Oil Palm Plc (-27.9percent), RTBriscoe (-34.2percent), S t a n b i c I BT C H o l d i n g s P l c (-22.7percent), Thomas Wyatt Nigeria Plc (-91.1percent), Total Ni g e r i a P l c ( - 3 9 . 3 p e rc e n t ) , Transcorp Plc (-23.5percent), UACN (-26.7percent), UBA Plc (-23.4percent), United Capital (-24.5percent), Unilever (-27.8percent), and Zenith Bank (-22.1percent) have all lost over 20percent of their year-open values.

Stock market had recorded negative return of about 15.58percent as at trading week ended Friday October 11. The market however opened this week with all sectors closing higher except the Banking sector which declined marginally (-0.03percent).

While it is expected investors are still on the lookout for thirdquarter (Q3) 2019 earnings, research analysts believe this mood could cause some positive reactions in the market as investors position in stocks with sound fundamentals.

The negatives seen year-todate come despite remarkable capital appreciation seen in stocks like Dangote Flourmills Plc (+224.1percent), C&I Leasing Plc (+310.1percent), MTNN Plc (+44.4percent), Union Bank Plc (+25percent), Chams Plc (+30percent) and Lafarge Africa Plc (+28.5percent).

18

Thursday 17 October 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Investor’s Square

Equity Market: NSE-ASI tests new low

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

I

n the prior week, sentiments in the local equity market remained bearish, as the NSE-ASI lost points on all trading days. The broad market index tumbled -1.7percent week-onweek (w/w), closing the review week at a new low of 26,533.8 points.

Consequently, the year-todate (YtD) loss reached an allyear high of -15.6percent. Also, market capitalisation eroded N220.9billion in value, to close at N12.9trillion. Notably, a spike in activity levels was seen this week, as average value and volumes traded increased by 178.3percent and 70.7percent w/w, to close at N6.4billion and 281.9million respectively.

Performance across the major sectors was unenthusiastic, as four of five sectors under our watch closed in the red region. The Consumer goods (-4percent) sector topped the red chart, as NB (-8.2percent), CHAMPION (-9.6percent), NESTLE (-3.2percent) recorded sizable losses. The Oil and Gas (-3.2percent), Industrial goods

N318.9billion. Meanwhile, the retail FX refund that hit the system on Thursday was later mopped on Friday via the bi-weekly retail FX sales on Friday.

Accordingly, average interbank funding rates Open Buy Back (OBB) and Over Night (O/N) rates which traded around 5percent level for a major part of the week, tracked higher to close the week at 11.9percent.

At the primary market segment, the CBN was able to mop up 91.9percent of the OMO maturity that came in on Thursday. This was as the CBN pulled demand for the highly sought-after 364-day bills which saw a N1trillion worth of demand compared to N50bn on offer. With total bids at 20.0x the offered amount (previously 3.7x), the CBN was compelled to over allot N300bn. Meanwhile, demands for the other tenors were underwhelming (bid to cover, 91-day: 0.1x and 182day: 0.9x) and the CBN only sold N18.9bn worth of the 182-day bills. Thus, while stop rates on the 364-day bills fell marginally to 13.39percent

(-1.8percent) and Insurance (-1.6percent) sectors joined the losing train, owing to selloffs in OANDO (-3.5percent), DANGCEM (-4.5percent) and MANSARD (-5.9percent).

On the flip side, the Banking (+0.1percent) sector gained, due to price appreciation in ACCESS (+2.1percent) and GUARANTY (+1.1percent). In the Telecom space, MTNN and AIRTELAFRI both closed flat for the week.

I n v e s t o r s’ s e n t i m e n t remained lackluster, as market breadth closed at 0.6x, with 21 stocks advancing, while 32 stocks declined. This week, we expect investors to remain on the lookout for third-quarter (Q3) 2019 earnings, which could spur some reactions in the market as investors position in stocks with sound fundamentals.

Money Market: N1trillion demand for 364-day OMO bill Overall system liquidity stayed buoyant, as inflow from OMO maturities (N347.2billion) was netoff by an OMO sales worth

(previously 13.40percent), the 182-day stop was kept at the prior auction level of 11.79percent. At the secondary treasury bills market, the buoyant level of liquidity in the system spurred a buying spree that drove average treasury bills yield down 64bps w/w to 12.6percent.

This week, we expect the CBN to maintain its liquidity tightening stance as N585.9bn worth of OMO (N464billion) and NTB (N121.9billion) is scheduled to mature on Thursday. Also, given the small size of NTB supply at the primary market scheduled for the week, we might see some further buying interest at the secondary market segment.

Bond Market: Activities return to the secondary market Activities at the secondary bonds market picked up in the prior week as players were able to match buy-side interests at improved bid levels. The longer maturities witnessed the most demand pressure with significant trading seen on the 2028, 2029 and 2037 www.businessday.ng

papers. Thus, yields contracted at the longer end of the curve.

In all as average yield fell 8 basis points (bps) w/w to end the week at 14.1 percent.

In the Eurobond space, despite the recovery in crude oil prices during the latter part of the week and an intensified dovish chorus from the U.S Fed, we saw an increased selling interest for FGN dollar notes. As such, yields tracked higher across the cur ve, up 13bps w/w on average to 6.7percent. However, we observed a balanced sentiment in the corporate Eurobond space amid a mixed bag of buying and selling interest.

Consequently, average yield in the corporate segment dipped by 6bps w/w to 5.3percent.

We expect the bullish sentiments in the bonds market to be sustained into the early part of this week spurred by the general improvement in the liquidity levels. However, this should taper later in the week as players begin to price in the expectations of an OMO mop-up by the CBN as well as new bond issuances in the week that follows. Meanwhile, as events in the global space continue to unfold, the continued dovish chorus by developed market central banks should spur a recovery in foreign interests in FGN dollar notes.

Meanwhile, interest might be capped by the expectation of new Eurobond issuance by Ivory Coast as it is set to issue new Euro-denominated bonds at the international market.

Currency Market: FX rates regain some points, reserves continue to decline The naira rebounde d this week, as the local unit strengthened its position across two of three windows.

The FX rate at the I & E window appreciated the most, moving up by 18bps, to close at N362.1/$1. An analogous trend occurred in the CBN Official window, with the naira gaining 2bps, settling at N306.9/$1. However, the FX rate at the parallel market depreciated by 14bps, closing at N359.0/$1.

In terms of activity levels, as of Thursday, average daily turnover at the I & E window increased by 40.2percent w/w to $232.2million. Also, movements in the gross reserves continued to be swayed by increased outflows, evident by a decline of 77bps w/w, to $41.4billion.

This week, we expect the gross reserves to remain pressured, given the volatility in oil prices and slower foreign capital inflow. With the apex bank adamant on exchange rate stability, the value of the naira will continue to be maintained through interventions in the near term.

Economy & markets

Fixed income, currency market turnover drops month-on-month to N19.20trillion Iheanyi Nwachukwu

T

h e t u r n ov e r i n the Fixed Income and Currency (FIC) markets for the month ended September 30, 2019 was N19.20trillion, representing a month-onmonth (MoM) decrease of 17.28percent (N4.01trillion) on the turnover recorded in August 2019 (N23.21trillion) and a year-on-year (YoY) increase of 15.32percent (N2.55trillion) on the turnover recorded in September 2018 (N16.65trillion).

Treasur y Bills and FX product segments persisted a s t h e maj o r d r i v e r s o f turnover, jointly accounting f o r 7 8 . 4 2 p e rc e n t o f t h e total FIC market turnover in September 2019 and representing a MoM decrease of 0.91percent in the joint contribution recorded in August 2019 (79.33percent), driven by an increase in the contribution of Repurchase Agreements/Buy-Backs and U n s e c u re d P l a c e m e nt s / Takings to 15.05percent and 1.45percent respectively.

FX Market Total FX market turnover in September 2019 was $18.12billion (N6.56trillion), representing a 29.47percent ($7.57billion) MoM decreased from August 2019. Analysis of FX market turnover by t ra d e t y p e i n d i c a t e s MoM decrease across all categories, with MemberCBN trades recording the highest percentage MoM decrease at 47.61percent ($3.32billion), while MemberClient trades recorded the highest MoM decrease in dollar (nominal) terms, at $4.12billion (26.77percent).

Further, analysis by product type indicates that the MoM decrease in FX turnover wa s ma i nly d r i ve n by a 21.20percent ($3.04billion) and 39.90percent ($4.53billion) MoM decrease in FX Spot and FX Derivatives turnover respectively.

In September 2019, the Naira-settled OTC FX Futures Contract (NGUS SEP 18 2019) with a total open contract value of $1.29billion matured and was settled, and a new contract, NGUS OCT 28 2020 for $1billion at $/N365.50 was introduced.

https://www.facebook.com/businessdayng

This brings the total value of open OTC FX Futures Contracts to approximately $10.24billion, while the total value of contracts settled since inception to date at circa $19.58billion. In September 2019, the CBN Official Spot rate for $/N remained constant at $/N307.

Similarly, the parallel market rate remained constant at $/N360, while the Naira appreciated against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window by $/N0.70 to close at $/N362.23 in September 2019 Fixed Income Market (T.bills and FGN bonds).

In September 2019, total OMO bills issued was N15.22trillion, representing a MoM increase of 0.53percent (N0.08trillion), whilst average T.bills outstanding remained constant at N2.58trillion. Furthermore, average outstanding FGN bonds recorded a MoM increase of 0.68percent (N0.06trillion) to close at N8.83trillion in September 2019 from N8.77trillion reported in August 2019.

Trading intensity for T.bills decreased to 0.48 in September 2019 from 0.51 recorded in August 2019, similarly, trading intensity for FGN bonds decreased from 0.14 in August 2019 to 0.11 in September 2019.

Year-to-Date (YtD) Trading intensity for T.bills and FGN bonds stood at 4.09 and 1.22 respectively compared to 3.99 and 1.20 recorded in the corresponding period in 2018.

In September 2019, T.bills within the 3M - 6M maturity bracket remained the most actively traded a m o n g t h e s h o r t- t e r m securities (that is 1M – 2Y) accounting for 35.44percent of the total Fixed Income market turnover, while FGN bonds within the 15Y – 20Y maturity bracket were the most actively traded among the medium to long-term securities, accounting for 4.60percent of the total Fixed Income market turnover.

Weighted average yields on the short and long-term Fixed Income maturities decreased by 0.25percent and 0.09percent respectively in September 2019.

This can be attributed to the normalisation of @Businessdayng

activities in the fixed income market, relative to August 2019 where a significant increase in Foreign Portfolio Investment (FPI) outflows was reported.

Conversely, weighted average yield on mediumterm maturities increased by 0.10percent. However, inflation-adjusted yield remained positive across all tenors in the period under review.

Money Market (Repurchase Agreements / Buy-Backs and Unsecured Placements/Takings) Total turnover in the Money Market decreased MoM by 9.65percent (N0.34trillion) to N3.17trillion in September 2019, driven majorly by the MoM decrease in Repurchase Agreements/ BuyBacks segment by 15.46percent (N0.53trillion) to N2.89trillion in September 2019 from N3.42trillion in August 2019.

This can be attributed to improved liquidity in the system, evidenced by the decrease of the average Over Night (O/N) and Open Buy Back (OBB) rates by 204basis point (bps) and 201bps respectively to an average of 11.91percent and 10.83percent in September 2019 from 13.95percent and 12.84percent in August 2019.

Turnover in Unsecured Pl a c e m e nt s / Ta k i ng s i n September 2019 was N0.28trillion, representing a 215.44percent (N0.19trillion) MoM increase from the N0.09trillion recorded in August 2019, and a YoY increase of 652.48percent (N0.24trillion) from t h e t u r n ov e r re c o rd e d in September 2018 (N0.04trillion). This can be attributed to the increased liquidity in the inter-bank market.

Market Surveillance Total number of trades executed reported on the E-Bond Trading System in September 2019 was 13,226, representing a 29.09percent (5,426) MoM decrease in the number of trades executed in August 2019 (18,652), driven by a MoM decrease in T.bills and FGN bonds’ trades by 28.79percent (4,867) and 31.96percent (559) respectively.

Thursday 17 October 2019

BUSINESS DAY

19

Investor Helping you to build wealth & make wise decisions

Analysis

Will stock investors price in Seplat’s N172bn offer for Eland Oil? Iheanyi Nwachukwu

S

eplat Petroleum Development Company Plc (Seplat) on Tuesday October 15 disclosed that it is acquiring Eland Oil & Gas Plc for a recommended cash of £382million (N172billion). Seplat Petroleum Development Company Plc is a leading Nigerian independent oil and gas company listed on both the Nigerian and London Stock Exchanges. The Boards of Seplat and Eland reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat.

Terms of acquisition The acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act. The acquisition represents a premium of approximately 28.5 percent to the closing price per Eland Share of 129.2 pence on October 14, 2019 (being the latest practicable date prior to this Announcement).

It also represents a premium of approximately 32.6 percent to the three-month volume weighted average price per Eland Share as of October 14, 2019 of 125.2 pence; and a premium of approximately 32.7 percent to the six-month volume weighted average price per Eland Share as of October 14, 2019 of 125.1 pence. Eland Shareholders on the register at the close of business on October 18, 2019 will be entitled to receive and retain the interim dividend of 1 pence per Eland Share to be paid on October 31, 2019.

Seplat stock trading information At N517 which Seplat traded on Tuesday October 15, its share price was unchanged as against the preceding trading day. Seplat share price had reached a 52-week high of N700 and a corresponding week low of N397.70. With outstanding shares of 588,444,561 units, Seplat equity capital is in excess of N304.2billion.

Financing the acquisition The cash consideration payable under the acquisition is being wholly funded through a combination of existing cash resources of Seplat and a new loan facility available to Seplat. Citi, as sole financial adviser to Seplat, is satisfied that sufficient resources are available to Seplat to satisfy in full the cash consideration payable to Eland Shareholders under the terms of the Acquisition.

Seplat grew H1 profit by 15 per cent to $121million

Seplat recorded a rise of 15 percent in its half-year (H1) profit before deferred tax. In its unaudited consolidated half-yearly financial results for the period ended June 30, 2019 made available to the NSE and LSE on Tuesday, Seplat reported a profit before deferred tax of $121million (N37billion) from $105million (N32billion) reported in the first half of 2018. The Company’s revenue for the period also appreciated by four per cent to $355million (N109billion), which is higher than the 2018 half-year figure of $343million (N105billion).

On a similar note, the oil firm’s gross profit rose by 19 per cent to $207million (N64billion) from $174million (N53billion) reported in 2018 half-year. Operating cash flow hit $255million from $245million, indicating a four percent appreciation year-on-year. The market expects this positives to continue in the third-quarter (Q3) results which the Board will approve at its October 24 meeting in Lagos.

About Seplat Seplat is a leading independent oil and natural gas producer in the Niger Delta area of Nigeria, and a leading supplier of processed natural gas to the domestic market, fully listed on both the Nigerian Stock Exchange and the London Stock Exchange since April 2014.

As a full cycle upstream oil and gas exploration and production company, Seplat’s focus is on maximising hydrocarbon production and recovery from existing production and development assets, realising the upside potential within the portfolio through focused appraisal and exploration activities and farmin into new opportunities in Nigeria.

Seplat’s existing portfolio comprises of direct interests in five blocks in the Niger Delta area and a revenue interest in an additional block. Eland is an independent oil and gas company focused on production, development and exploration in West Africa, particularly the Niger Delta region of Nigeria.

Eland Eland was founded in 2009 with a strategy to deliver exceptional shareholder returns through a combination of development, production growth and exploration success. In 2012 Eland, through its joint venture company, Elcrest, purchased a 45 percent interest in OML 40 and in 2014 acquired a 40 percent. stake in a second licence, Ubima.

Led by its experienced senior management and operating team, the Eland Group took gross production on OML 40 from 3,338bopd average daily production for producwww.businessday.ng

ing days in 2014 to a peak 2018 production rate of over 31,000bopd, an increase of over 800 per cent. Eland’s headquarters are in Aberdeen, with additional offices in London, Lagos, Benin City and Abuja.

Analysts comment “Following this acquisition, we estimate an increase in 2020 production level. For context, our 2020E Seplat standalone production forecast prints at 33kpd (2019E; 24.6kbpd) while Eland has a working interest of 16kbpd (including new production at the Gbetiokun field in August). Seplat’s 2P liquids reserves is also estimated to increase by 41mmbbls to 268mmbbls, with its 2P Oil Reserves and 2C Oil Reserves expected to increase by approximately 65MMbbls to 330MMbbls, bringing total oil and gas reserves to 626MMboe”, said ARM Research team.

“The acquisition is scheduled for completion at the end of 2019, after which the two entities will continue to run separately in 2020 (but with consolidated financials) and then a full integration of the entities in 2021. Overall, we see this playing out positively for Seplat’s shareholders, given potential boost to earnings per share (EPS) on the long term. This, in addition to upcoming ANOH gas project further boosts the upside on Seplat of N828.90 which is a 69percent upside from current pricing,” according to the analysts at ARM. Stakeholders comment While commenting on the acquisition, George Maxwell, CEO of Eland said: “This recommended offer from Seplat represents the culmination of a very successful journey by Eland, the management

https://www.facebook.com/businessdayng

team and all of its stakeholders.

Since founding Eland, we have, jointly with our partners in Elcrest, acquired our interests in OML 40, a non-producing asset, achieved an all-time record production on this asset and become a significant independent producer in Nigeria’s E&P landscape and one of the biggest oil producers on London’s AIM market.”

“Eland has, in a period which has seen a significant cyclical downturn in our industry, outperformed most of its peers and the AIM Oil & Gas Index. This transaction represents a record share price for Eland and crystallises Eland’s stated goal to maximise shareholder value,” he adedd.

Also commenting on the acquisition Russell Harvey, Chairman of Eland, said “We are pleased to announce this recommended Acquisition by Seplat. Eland’s management team has done an excellent job executing our strategy. We have demonstrated a strong track record of operational delivery and value creation in Nigeria from our high-quality assets.

“This offer allows Eland Shareholders to benefit from an accelerated and enhanced realisation of this value through a cash offer at a significant premium to the current market value. In addition, the business will benefit from the opportunity to become part of a more significant player in the Nigerian oil and gas market. For these reasons, the Eland Board unanimously intends to recommend the offer to Eland shareholders.”

Also commenting on the acquisition, Bryant Orjiako, Chairman of Seplat said “Since Seplat acquired @Businessdayng

its first blocks and commenced production in 2010, we have increased oil and gas production and grown reserves in each year of operation, delivering significant growth and value for our shareholders. “We firmly believe that Eland is a complementary fit with Seplat and that there will be enhanced scale and a wider range of capabilities made available to the enlarged group through the combination. This acquisition signals the next step in our journey that will underpin Seplat’s ambition to be the leading independent E&P in Nigeria.”

Austin Avuru, CEO of Seplat, said, “We are pleased to have reached an agreement to acquire Eland and its portfolio of assets that will enhance our existing operations. Eland is an excellent fit with Seplat and the combination should achieve for us growth and increased profitability, creating value for our shareholders, employees and other stakeholders while offering an attractive upfront premium to Eland Shareholders.

“The Acquisition, made possible by our robust operational platform and headroom in our capital structure, is in line with a key part of our established strategy which is to pursue opportunities in the onshore and offshore areas of Nigeria that offer near term production with cash flow and reserves potential. The Acquisition reinforces Seplat’s status as one of Nigeria’s leading indigenous, independent E&Ps and will create a Nigerian E&P champion with the footprint and technical capabilities to further grow and consolidate in Nigeria.”

20

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

21

22

Thursday 17 October 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

MALLS

Tenants jettison Apapa Mall on menacing gridlock BALA AUGIE

D

isplayed on Apapa Mall are the insignia of Shoprite and 15 brands, but the reality is that nearly all the stores that housed them are vacant.

On the ground floor, eleven stores were permanently empty, eleven occupied, while Cash and Carry and Ruff and Tumble had vacated their shops, as most shoppers were going to Shoprite, apparently to buy basic food items.

When BusinessDay went upstairs, behold the place was too quiet for a mall. Only one shop, Spetranet, was open. The remaining 15 shops were sealed.

S ome spaces are big enough to be a conference hall while others can house three offices depending on the square kilometre. The Film House Cinema, located on the top floor is under lock and keys. Even the Samsung office on the same floor is vacant.

This means 26 out of 38 shops are empty, and more risk being dormant, according to experts.

Experts say a lot of tenants are exiting shops because of low patronage caused by weak consumer purchasing power and decrepit infrastructure in Apapa.

Adebunkola Taiwo, who manages the mall, said the menacing gridlock in Apapa has compounded the woes of retailers as many shop-

pers avoid the town while the high-end earners have relocated to other parts of the state.

The traffic in Apapa is discouraging many people from coming to the mall but if the roads can be fixed, more tenants will rent shops, but that may take some time, Taiwo said The deserted Mall is a representation of the deteriorating condition of Apapa, a town that was the pride of Nigeria. It is the home to the largest ports in the country.

As a result of the gridlock, the economy loses N5 billion daily, while the federal government had awarded the contract for the reconstruction of the 35 kilometres Apapa-Oshodi Expressway

on September 12, 2017 at the cost of N72 billion, to be completed within 24 months.

According to Africa’s richest man, Aliko Dangote, the country losses N20 billion daily and N140 billion weekly as the logjam affect businesses across the country. It affects businesses across the country.

Underneath the bridges, shanties are sprawling, as trunk and tanker drivers make the place their abode, where they take their bath and cook. Of course, the new housing estate also houses miscreants and vagabonds, who smoke marijuana.

A visit to the Surulere Shopping Mall showed landlords are gnashing their teeth as the number of empty shops

mounts, but operators of the mall attribute the situation to a weak economy.

The economy doesn’t support growth and a lot of companies are closing down due to the high cost of production.

We don’t have the amenities and tenants can hardly survive, according to Otukoya Abiola, Centre Manager Leisure Surulere, and Lagos.

“Next year will be tougher because the Value-Added Tax (VAT) increase will result in an increased price of diesel, which means the service charge will further go up. The service charge would have gone down if there was no need to run the generator,” said Abiola.

Abiola said that Landlords bear the burden of overhead

cost so that tenants can stay.

“It is another form of subsidy.

Service charge costs as much as N120, 000 and N150, 000, but it has been increasing every year, according to a tenant show doesn’t want her name mentioned.

A total of 9 stores at the Surelere shopping Malls are under lock and keys, and some of them the vacant spaces are large enough to take 2 offices. The stores are on the same floor with KFC Foods, but the 26 stores at Leisure mall are occupied.

Over a decade ago, Nigeria was at the cusp of an economic boom as investors had wagered that the country’s rapidly expanding middle class and a copious young population that craved for consumption would spur growth.

Developers began to respond to the aforementioned benign environment and positive optimism by building American style shopping mall, home to famous end brand stores, movie theatres and large supermarket chains.

In short Chinese developers and other Asian investors were looking to invest in the country’s malls.

However, the economic recession of 2016 that stoked a severe dollar scarcity that paralyzed business activities have crimped consumer spending,9 and the oncethriving malls are not a shadow of themselves.

Nigerians are getting poorer as over 50 percent of a population of 200 million live on less than $1.98 a day; little wonder the country has overtaken India as the world’s

poverty capital.

The unemployment rate is at an all-time high of 23 percent, and to further exacerbate the already anaemic situation of consumers is the incessant fuel hike and devaluation of the currency.

The country’s economy has been growing sluggishly as GDP slowed to 1.94 percent in the third quarter, this compared to the 2.10 percent expansion in the second quarter of the year.

Experts are proffering solutions to of high rent for would-be tenant retailers, and they said has to formulate policies that will help spur consumer spending.

Dolapo Omidire, the lead researcher at Estate Intel, said investors would have to build less elaborate and smaller malls of around 7,000 square meters —around half of the size of typical large malls—and simply focus on delivering space at affordable rates. ”If I build a $100 million mall and people are showing up just to take pictures, then it’s a big problem,” said Omidire, in a recent interview with Quartz.

Experts say an optimal mix of tenants could attract traffic to malls and that people shouldn’t be selling identical products.

Malls in the United States, Asia and Europe houses recreational centres, big parking lots and lounges to relax.

“There are has to be banks, a nice car space, hyper supermarket where people can get what they want, and saloons,” said Abiola.

COMPANies

PZ Cussons streamline operations in Nigeria as economic woes bite BALA AUGIE

P

Z Cussons, the British manfacturers of homecare products and consumer goods, wants to stream line its operations in Nigeria as a weak economy continues to undermine earnings in its African market.

The United Kingdom (UK) based company said the simplification drive in Nigeria will lead to investment in fewer brands and categories over the coming years in order to streamline operations and control cost growth.

But experts are of the

view that the parent company decision to reduce its available brand and categories in Nigeria is likely due to increased competition from some fringe players and imported products.

PZ Cussons Nigeria has been floundering since 2016, when a precipitous drop crude oil price stoked a severe dollar scarcity that paralyzed business activities. A lot of companies couldn’t import raw materials and equipment to bolster operation because foreign currency was inaccessible.

The last time PZ Cussons Nigeria made a profit was in 2015 (based on its first quarter August results), www.businessday.ng

and it recorded losses in 2018/19 periods despite the introduction of a foregn exchange regime by the Central Bank of Nigeria (CBN) that eased the flow of foreign exchange in the system.

Analysts attribute the consumer goods giant’s deteriorating operating performance a weak consumer spending on home & personal care (HPC) items and durable electrical appliances (DEA), as preference has shifted to food.

A lot of unlisted companies, who produce close substitute at affordable price, are cannibalizing the sales of PZ Cussons Nigeria, while cheaply imported

products via the porous borders have remained a drag on revenue growth.

PZ Cussons (Global) had said that its slow sales in its African market has been a drag on Group earnings, but it is putting in measures to control costs. It said it incurred cost due to the menacing gridlocks at the Apapa Ports that disrupts operations.

Its cost of sales ratio was 65.48 percent in 2016/17 financial year, but it now stands at 82.31 percent, which means the company has spent more on input cost in generating each unit of revenue.

However, the company has a solid balance sheet

https://www.facebook.com/businessdayng

amid a tough and unpredictable macroeconomic environment. Its consistent dividend payment and a cash flow generated from operating activities of N1.16 billion (as at 19/20 financial period) means it can still fund future expansion plans..

Market sentiment towards PZ Cussons Plc (PZ) on the Nigeria Stock Exchange (NSE) has eroded value.

“Since 2017, market sentiment towards the PZ counter has been negative, with market capitalisation falling by more than half to N24.42bn (14 Oct 2019) from N57.57bn at the start of 2017,” said analysts at Cha@Businessdayng

pel Hill Denham Limited.

The sharp drop in stock price can be attributed to a weak macroeconomic environment, as Nigerians are getting poor, with over 50 percent of the population living on less than $1.98 a day.

Over the last six months, Nigeria’s real economic growth though remaining positive has decelerated for 2 consecutive quarters, posting GDP growth of 2.10 percent in the first quarter (Q1) OF 2019, a decline from 2.38 percent recorded in the fourth quarter of (Q4) 2018 and growth of 1.90 percent in the second quarter (Q2) 2019, which marked another decline from Q1 levels.

Thursday 17 October 2019

BUSINESS DAY

Retail &

23

consumer business

CONSUMER SPENDING

Stores woo high-end phone users with credit offers BUNMI BAILEY

O

n a Saturday afternoon, Sola A k e k e, ( n o t real name), a security guard at a Lagos bank went to a popular smartphone store at Ikeja, to check the latest smart phones in the market.

While there, he could see the latest Techno Spark 4 and is amazed by its features. He had the desire to buy but not enough money to purchase it.

Then a sales person introduces him to EasyBuy, a mobile device financing platform that gives him the choice of taking a brand-new phone home with a little down payment.

This latest development is now a reality as most tech stores across Nigeria are now giving the latest smartphones on credit through this new financial model gained broader appeal this year. Although 3C Hub, a popular smartphone store said that they started last year, others like Slot started about three-four months ago.

Stanley Magdaleye, a sales representative at 3C Hub said that they discovered that when a customer comes to the store and sees a new brand of Techo phone for N84, 000, he or she does not have the financial capac-

ity to buy the phone yet it is desired and that prompted them to introduce the EasyBuy platform to fulfil the desire of their customers.

“Nigerians are trendy and aspirational people and want to use the latest phones. We recently devised a financial model where you can buy a phone and pay over a period of some

months. We are adapting as quickly as possible to the market. In all, our watchword is integrity,” Nnamdi Ezeigbo, chief executive officer, Slot Systems said.

The EasyBuy platform was introduced by Transnet, a loan facility company, and a smart phone manufacturer, to help people buy their phones without stress. It pro-

vides POS loan to customers who want to purchase a mobile device. Clients can directly apply for a loan from the stores and payback in instalments. It only requires a minimum down payment of 20 percent. There are two loan terms which are three months with nine percent interest and six months with a six percent interest rate.

Abiola Gbemisola, research analyst at Lagosbased Chapel Hill Denham said, “Sellers have large number of phones that it ordinarily expects to have been sold, most of these phones probably are reaching their stale period (that is there are newer versions) so, the company wants to offload its phone portfolio, it sees credit

sales as a means to offload their stock and increases sales (in it financial statement, it would record the credit sales in receivables).”

Gbemisola said the impact would be higher revenue and profit but lower cash flows from operating activity.

Nigeria has the largest mobile market in Africa with over 172 million mobile subscribers in 2018, accounting to a penetration rate of 87 percent of its population and represented a 6.4 percent growth increase, compared to 162 million subscribers in 2017, according to a report released by Jumia, Africa’s online retailer.

“People are not buying phones again because they are expensive. So, it is better buy a used phone if necessary or keep the one you have,” says Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said.

Akinloye further said that low demand had started since 2016 when foreign exchange crunch happened, the prices of phones nearly doubled.

The requirements to access such a loan requires a valid ID that is International passport or national ID card or driving License or voters Card, Bank Verification Number, ATM card and the person must be a regular income.

Malls

Boost in retail development for Lekki with the launch of Admiralty Mall Jumoke Akiyode-Lawanson

T

he retail and shopping space in Lekki phase 1 is set to get a boost with the announced opening of a world class mall known as ‘Admiralty Mall.

The mall which is jointly developed by Dreamspaces Development Limited, Nigeria’s leading real estate development firm in conjunction with Horizon Capital Investment Limited a finance company has been described as a welcome development by the residents of Lekki.

Industry watchers and

estate managers have said, ‘once opened to the public, the mall would be the most iconic retail development in Lekki set to transform the retail space, significantly adding value to the environment and properties in the neighbourhood’.

According to the development company, construction work for the Admiralty Mall commenced in December 2018 and will be concluded by first quarter of 2020.

Speaking to the media, Tunji Abdul, the CEO of Dreamspaces Development Limited said “ With over 15 years’ experience in luxury property investment and

developments in Lagos and Abuja such as Art Hotel in Victoria Island, the Harrow

Park Golf Club in Abuja, Maryland Mall Ikeja, as well as other property develop-

ments in Lagos to mention a few, we have over the years developed strong capabilities in building world class facilities and meeting the high expectations of our customers whilst providing them the best shopping experience’.

“The Lekki Admiralty Mall is going to be a topnotch five-star project located in the prestigious area of Lekki phase 1, Lagos overlooking the Lagoon. The development features an exciting food court as well as 33 diverse retail stores with an average size of 30sm per store, set across four floors with ample parking space.

This development, which is

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

currently available for sale/ lease promises to have some of the most prominent local and global brands”, Abdul said.

Also speaking, Kolade Ojebiyi, a senior associate at Dreamspaces Development said; “The Mall is in close proximity to prominent hotels and establishments such as Lilygate Hotel, Sailors Lounge, Bay Lounge and Upbeat Activity Center. With the opening of this mall, we have tried to address the needs of most Lekki residents by bringing an enjoyable retail experience to their doorstep rather than going outside Lekki phase 1 for their shopping.”

24

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

sa s

Thursday 17 October 2019

BUSINESS DAY

25

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Dissecting NITDA’s Advisory Concerning Truecaller Under Nigeria’s Data Protection Regulations 2019 *Disclaimer: Author does not use Truecaller and was not able to technically verify the accuracy of information concerning Truecaller that is publicly available* Introduction n 23 September 2019, the National Information Technology Development Agency (NITDA) released an advisory to Nigerians through a press statement containing initial findings which allege a potential breach of the privacy rights of Nigerians by Truecaller.

In particular, these initial findings allege 3 instances in which Truecaller’s privacy policy were deemed incompatible with the Nigeria Data Protection Regulations 2019 (NDPR) issued by NITDA. In this article, I comment on the substance of NITDA’s allegation against Truecaller in relation to the provisions of the NDPR relied by NITDA as the basis for its initial findings. For the purpose of this article, I have confined my comments to only the allegations contained in the initial findings of NITDA as stated in said advisory.

What is Truecaller Truecaller is a service which can be downloaded as a mobile application and/or accessed online through Trucaller’s website at www.truecaller.com. Amongst its

O

INSIDE Ajayi, Fayokun, among IFLR1000 leading and “Highly Regarded” lawyers

26

Highlights from the Africa Legal & Tech (ALT) in Lagos 28

More finance officers from law firms are appearing before the Solicitors Disciplinary Tribunal, in the UK 29

Chukwuyere Ebere Izuogu

number. For the purpose of data protection, Truecaller processes the personal data of 2 categories of individuals; its users, who use the service; and non-users whose contacts and other personal data are acquired from the phone contact list of users and subsequently made publicly available via Truecaller’s reverse phone number

many features, Truecaller provides its users with caller identification for incoming/outgoing calls and reverse phone-number lookup whereby a particular number can be searched at Truecaller’s website or in the mobile application in order to reveal the name and other personally identifying data associated with the searched

lookup feature.

NITDA’s initial findings and my comments In the first instance, NITDA states that Art. 1.1 of Truecaller’s privacy policy which inter alia provides that “Truecaller may supplement the information provided

by You with information from third parties and add it to the information provided by You”, contravenes Art. 2.1 (b) and 1.3 (iii) of the NDPR which respectively requires that data collection and processing be accurate and valid consent must be specific.

My comment: The obligation of any data processor (or data administrator as used in the NDPR) to ensure the accuracy of personal data collected should be assessed in the context of the purpose of the data processing operation. For instance, if personal data is used to make decisions that may significantly affect the individual concerned or others, then more effort needs to be made to ensure that it is accurate. Under Truecaller’s privacy policy, Art. 2.1 describes the manner in which personal data collected may be used. According to NITDA a failure to ensure the accuracy of personal data can lead to “serious invasion” of privacy of Nigerians, in other words, a privacy risk potentially exists if the personal data supplemented by

Truecaller were to be inaccurate.

In disagreeing with NITDA, let us consider the hypothetical scenario where the credit rating of a once bankrupt but now solvent individual remains unchanged and only reflects his previous credit rating. This is likely to negatively affect him should he seek to apply for a loan, thus it is important for credit rating agencies to make special efforts to see that such personal data is accurate. In the case of Truecaller, it is not apparent how a privacy risk will result from processing inaccurate personal data of users having regard to the purpose of the data processing operation. Moreover, it is said that many names associated with manually searched numbers in Truecaller’s reverse phone lookup database are not real personal names but are intentionally saved in users’ contact list in a manner that aids easy retrieval. Asking Truecaller to ensure that these personal data are accurate would be an enormous task considering the resources to be expended to achieve this. In any case, Art. 6 of Truecaller’s privacy policy grants to users the right of rectifying inaccurate information about them held by Truecaller. This provision significantly diminishes any risk of Continues on page 26

NBA Lagos branch celebrates new SANs …Appreciates Akpata for continued support

T

he Lagos branch of the Nigerian Bar Association (NBA) at its monthly general meeting on Monday October 14th, 2019 celebrated members of the branch who were recently elevated to the rank of Senior Advocate of Nigeria (SAN).

Those celebrated are, Godwin Omoaka, SAN, of Templars; Doyin Rhodes Vivour, SAN; Chimezie Victor Chikwem, SAN; Leslie Arthur Nylander, SAN, and Emmanuel Adeyeye Oyebanji, SAN. Others are, Adedokun Makinde, SAN; Ebun-Olu Adegboruwa, SAN; Olatunji Abiodun, SAN; Olumide Aju, SAN and Segun Fowowe, SAN The monthly event, which took place at city hall, Lagos, was sponsored by the immediate past Chairman of the Nigerian Bar Association Section on Business Law (NBA-SBL), Olumide Akpata.

The event also featured the branch’s monthly knowledge sharing series where renowned entertainment lawyer/talent manager, Oyinkansola Fawehinmi (FOZA) www.businessday.ng

NBA Lagos branch chairman, Yemi Akangbe thanking Mr. Akpata for his support

October birthday celebrants cutting their cake with the sponsor of the October monthly meeting, Olumide Akpata

spoke to members about specialization and current developments in the practice of entertainment law.

The new Senior Advocates were later treated to a cocktail party also sponsored by Olumide Akpata. In his remarks, the Chairman of the branch, Yemi Akangbe conveyed the branch’s appreciation to Akpata for his constant support for all branch projects and activities.

SOOB founding partner, Ebun Sofunde congratulating the new senior advocates at the meeting

https://www.facebook.com/businessdayng

@Businessdayng

26

Thursday 17 October 2019

BUSINESS DAY

LEGALINSIGHT

BD

LegalBusiness

Dissecting NITDA’s Advisory Concerning Truecaller Under Nigeria’s Data...

Continued from page 25

inaccuracy and is consistent with a data subject’s right of rectification provided for in Art. 2.13.7 of the NDPR. Regarding the consent limb of this allegation, my review establishes that Art.1.3 (iii) does not exist in NDPR, rather it is Art. 1.3 (c) which defines consent as “any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her.” Consent is one of the lawful basis for processing personal data under the NDPR and must inter alia be specific. Consent is specific if sought and obtained in relation to a specific processing operation. Where the processing involves multiple purposes, then consent must be obtained for each of the purpose, although consent may cover different data processing operations, it will be held to be valid if these operations serve the same purpose. In Truecaller’s privacy policy the use of personal data has been broadly described as for the provision, maintenance, improvement, analysis and personalization of services to users, partners and third-party providers in Art. 2.1 which in my view is specific enough to legitimise the grant of any consent obtained. Even if consent were determined not to be specific in this case and thus not valid, Truecaller may still be

able to rely on Art. 2.2 (b) of the NDPR which makes processing lawful on the basis of the performance of a contract between Truecaller and its users. At least this is arguable for some types of personal data processed in relation to the particular Truecaller service subscribed to.

In the second instance, NITDA states that the information collected from a user pursuant to Art. 1.2 of Truecaller’s privacy policy is excessive and invasive.

In putting this in context, NITDA explains that Article 2.3 (2) d of the NDPR provides that “when assessing whether consent is freely given, utmost account shall be taken of whether, the performance of a contract, including the provision of a service, is conditional on consent to the processing of personal data that is not necessary (or excessive) for the performance of that contract”.

My comment: Firstly, the foregoing quoted provision of the NDPR is identical to Article 7.4 of the General Data Protection Regulations (GDPR) applicable in the EU and requires that for consent to be regarded as freely given, it must not be conditioned on the provision of a service or bundled with the performance of a contract. As earlier explained, consent is one of the lawful basis for processing personal data under the NDPR (and GDPR). My understanding of this allegation is that NITDA regards the collection of information under Art.12 of Truecaller’s privacy policy as excessive and thus problematic,

however to trigger the application of the NDPR, these information must constitute personal data within the meaning of the NDPR. While it is arguable that the information collected may indeed be excessive, it should be noted that only a few of them constitute personal data. In addition, Art. 2.3 (2) d relied upon by NITDA as a basis for this finding does not exist in the NDPR, neither is the provision quoted which relates to the question of whether consent has been freely given, applicable to the excessive collection of personal data. Rather it is the principle of data minimisation which unfortunately is not provided in the NDPR that should have been applicable. The principle of data minimisation requires that personal data collected and processed should be limited to only what is necessary to achieve the overall purpose of the data processing operation.

Data mimisation thus prohibits the excessive processing of personal data in relation to the processing operation.

In the third and final instance, NITDA states that Art. 3 of Truecaller’s privacy policy which inter alia provides that “Truecaller may also share personal information with third party advertisers, agencies and networks” flaunts the provision of the NDPR which requires that users be informed of the possible third-party processors, their information may be shared with and for what purpose.

My comment: Art. 2.13.6 (e) of the NDPR requires that prior to

collecting personal data, a data controller (Truecaller is also a data controller) provide its users with inter alia; information concerning “the recipients or categories of recipients of the personal data, if any”. It should be noted that this provision is identical to Art. 13. 1 (e) of the GDPR and that the use of “or” in this provision is not cumulative but rather presents an alternative requirement that must be satisfied, thus Truecaller can choose to either disclose (by name) the recipient(s), or alternatively the category of recipients, which in the opinion of Article 29 Working Party (a body comprised of data protection authorities in the EU) could be by reference to the activities the recipient carries out, the industry, sector and sub-sector and the location of the recipients. To satisfy this requirement, Truecaller rather than name the eventual recipients has instead chosen to describe them as “third party advertisers, agencies and networks”. In the light of this, I do not see how Art. 3 of Truecaller’s privacy policy is incompatible with Art. 2.13.6 (e) of the NDPR having regard to the opinion of Article 29 Working Party concerning the interpretation of Art. 13. 1 (e) of the GDPR. This conclusion is however without prejudice to the principle of administrative deference enabling NITDA to offer a reasonable interpretation of any regulation it enforces.

Conclusion While this commentary has reviewed the initial findings of

NITDA against Truecaller, it does not in any way detract from the importance of data protection and the privacy of Nigerians. Indeed, for almost 10 years, I have highlighted data protection risks in Nigeria and called for the implementation and enforcement of proper rules that sets out the manner in which personal data is processed both online and offline. In this regard, it would be interesting to see whether NITDA would be commencing a more comprehensive investigation and the basis for any decision it may take. This no doubt would be precedential regarding data processing operations carried out in Nigeria and whether lawful basis indeed exists.

On a last note, enforcing data protection in Nigeria is a welcome development and gives some level of assurance that the personal data of Nigerians should be taken seriously. Although more work needs to be done about this, particularly sensitising consumers who are data subjects about the privacy risks of ubiquitous personal data collection practices of online platforms. Nonetheless, NITDA should be commended for taking a bold step, which I hope will be pursued to an accurate and logical conclusion.

Chukwuyere, formerly a Tech Policy Fellow at Mozilla Foundation and presently a Research Fellow at the African Academy Network on Internet Policy and Senior Associate at Streamsowers & Köhn.

DISPUTERESOLUTION

The seat of arbitration is more than where you sit (2) Continued from last week

T

he experience of the FRN so far in the P & ID case demonstrates just how critical the selection of the seat of an international arbitration is to the arbitration process. In practice and as Akinyemi J. rightly observed in the case of ZENITH GLOBAL MERCHANT LTD V ZHONGFU INTERNATIONAL INVESTMENT FZE [2017] ALL FWLR 1837, “parties do not usually consciously choose the law of the arbitration; what they often consciously choose is the seat.

Once they choose the seat, they automatically become subject to the law of the seat.”

Also, the possible confusion inherent in the fact that the words “place”, “seat” and “venue” of arbitration, which do not necessarily connote the same legal meaning but are often used interchangeably by parties, courts and even statutes, is an additional reason why the importance of a clear choice of the seat of arbitration cannot be emphasised. This point was keenly noted in the ZENITH GLOBAL case by Akinyemi J. in the following terms:

Mofe Tayo oyetibo

“While ‘venue’ is a feature of both domestic and international arbitration, ‘seat’ is obviously a peculiar phenomenon of inwww.businessday.ng

ternational arbitration. Due to inelegant drafting, and use of non-specific terms in relevant legislation, there is often a collision

https://www.facebook.com/businessdayng

between ‘seat’ and ‘venue’ in international arbitration disputes…

Sometimes too, parties and even laws, use the word ‘place’ instead of ‘venue’, when actually referring to the physical forum where the proceedings will take place. Such is the case with the provision of Section 16 of the Arbitration and Conciliation Act of Nigeria.”

See also NIGERIAN NATIONAL PETROLEUM CORPORATION V. LUTIN INVESTMENTS LTD (2006) 2 NWLR (PT. 965) 506 In this case the FRN had ostensibly gone into the arbitration with P & ID in the belief that the seat of arbitration under the GSPA was Nigeria. However, by the turn of events occasioned by the tribunal’s determination of the seat, notwithstanding that the court in Nigeria has held that the award is unenforceable and has set it aside, the FRN is unable to take any benefit from the decision for the simple reason that the seat of arbitration is not Nigeria.

Final Word The experience of the FRN in the P & ID V FRN Case is not entirely unique and is an example of a possible fallout of an arbitration agreement concern@Businessdayng

ing an international arbitration that is silent or ambiguous as to the seat of arbitration. Failure of parties to an arbitration agreement to expressly agree on the seat of arbitration or make an ambiguous agreement can result in significant complications for the parties even before the arbitration can get off the ground. More often than not, such scenarios increase the risk of parallel court proceedings or leave open an avenue for the award to be challenged on broad grounds in the courts, which may not be reliable or may be in a jurisdiction where one of the parties is either well-connected or has a significant advantage over the other party.

The dispute between the FRN and P& ID continues to rumble on and may do so in the judicial system for some time yet. At the centre of it all and having regard, on one hand, to the decision of the Nigerian High Court setting aside the arbitral award and that of the English High Court giving leave to enforce it, the question of whether the FRN will be ultimately be able to break its over $9 billion yoke is traceable to the resolution of the issue of the seat of that arbitration.

MOFESOMO TAYO-OYETIBO, ACIArb

Thursday 17 October 2019

BUSINESS DAY

27

LegalBusiness GREYMATTER New regulatory framework to govern electronic payment & collections, as well as issuance of bankers’ acceptances & commercial papers BD

T

he Central Bank of Nigeria (“CBN”) is the apex regulator of Nigeria’s monetary and financial sectors and has statutory powers to issue regulations for the administration of the financial market and promotion of a sound financial system in Nigeria. Recently, the CBN issued regulations in respect of two separate frameworks for governing operations of key stakeholders in the Nigerian Payments System and the Nigerian Financial System, respectively.

The first framework, issued on September 10, 2019, is titled: Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria (the “Regulation”); and is a revision of the “Guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria”, which was issued by the CBN in 2014. It provides all stakeholders with the operational procedures for end-to-end electronic payments and collections in Nigeria.

The second framework followed hot on the heels of the first.

Thus, on September 11, 2019, the CBN issued the Guidelines on the Issuance and Treatment of Bankers Acceptances and Commercial Papers (the “Guidelines”). The Guidelines set uniform procedures for the issuance of Bankers Acceptances (“BAs”) and Commercial Papers (“CPs”) in Nigeria, in order to ensure that they are correctly treated by banks and discount houses.

This article reviews the Regulation and the Guidelines (which both became operational immediately after they were issued) and provides a synopsis of the key provisions of each of them.

RE GUL ATION ON EL E CTRONIC PAYMENTS AND COLLECTIONS FOR PUBLIC AND PRIVATE SECTORS IN NIGERIA Objective The Regulation appears to be an offshoot of the CBN’s goal to fully align with the core objectives of the National Payments System Vision 2020 (PSV2020), which in effect, is to ensure availability of safe, effective and efficient mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple electronic channels. This way, significant reduction in the time and costs of transactions is expected to be achieved and leakages in revenue receipts minimized. Furthermore, implementation of the Regulation is expected to aid the provision of reliable audit trails which will ensure that the Nigerian Payments System aligns with international best practices.

Scope The Regulation applies to all CBN regulated Stakeholders and mandates the adoption, implementation and compliance with the directives on End-to-End Electronic Payments of all forms of salaries, pensions & other remittances, suppliers and revenue collections (including but not limited to taxes, levies, penalties,

recoveries, assessments, and the disbursement of funds for social programs payments bills, honorarium, scholarships, allowances) both in the public and private sectors of the economy. The Regulation also applies to, and defines the roles of, Other Stakeholders in electronic payments and collections.

According to the Regulation, End-to-End Electronic Payment refers to the seamless electronic processing of all forms of salaries, pensions and other remittances, suppliers and revenue collections on a CBN approved electronic platform which transmits the instruction to debit a payer’s account and credit a beneficiary’s account or any other electronic channels without depending on any third party, manual or semimanual means.

The Regulation also refers to CBN regulated Stakeholders as all financial institutions, Payments Service Providers and other entities licensed and regulated by the CBN; including Deposit Money Banks (“DMBs”), Other Financial Institutions (“OFIs”), Mobile Money Operators (“MMOs”) and Payment Service Solutions Providers (“PSSPs”)”. Similarly, the Regulation describes Other Stakeholders as all other players in the electronic payments and collections market which are not regulated by the CBN. Key Stakeholders Under the Regulation, the roles of the CBN, CBN regulated Stakeholders, and that of Other Stakeholders are clearly spelt out.

The main role of the CBN is to promote the adoption of endto-end electronic payment by all stakeholders. To this end, the CBN shall license, regulate and supervise the operations of the end-toend electronic payment solution, systems and service providers. The CBN is also expected to create and maintain a platform that will allow for constant interactions and engagements among the stakeholders while collaborating with other statutory and regulatory agencies for the effective implementation of the Regulation. In addition to the foregoing, the CBN is expected to maintain a help desk for the purposes of carrying out public enlightenment, receiving complaints and monitoring prompt resolution of the complaints while also adjudicating in cases of disputes among the stakeholders.

DMBs, OFIs and MMOs are to provide payers and beneficiaries with appropriate accounts with DMBs, OFIs or any other approved channel for receiving payments www.businessday.ng

(such as mobile money/electronic wallet), subject to the CBN’s approved Know-Your-Customer (“KYC”) limits. Furthermore, they are to process electronic payment instructions in accordance with subsisting payments system and clearing system rules. In carrying out the foregoing roles, they are to maintain customer service contact centers where enquiries and challenges can be promptly attended to within stipulated timelines.

Also, in the event of duplicated or excess payments, they are to establish a recovery process in line with appropriate CBN regulation. Whilst filing their mandatory monthly returns with the CBN, these key players are required to provide a set of transaction data, as may be specified, relating to salary, pension and tax payment.

PSSPs are to obtain operating licenses from the CBN and offer approved end-to-end electronic payment solutions, systems and services to all stakeholders. Similar to DMBs, OFIs and MMOs, PSSPs are expected to maintain customer service contact centers for resolution of complaints and publish the details via multiple media. Also, they are to provide, alongside their mandatory monthly returns to the CBN, a set of specified transaction data relating to salary, pension and tax payment. In carrying out their roles, PSSPs are to comply with CBN stipulated timelines for returns regarding transaction completion and unapplied funds.

The Regulation also prescribes operational standards for Other Stakeholders including Payers and Beneficiaries. Accordingly, Payers with a staff strength of twenty (20) and above are to adopt end-to-end electronic payment of salaries for their employees and maintain appropriate account with DMBs or OFIs. They are also required to adopt a CBN approved end-to-end electronic payment platform to be used for all forms of payments and collections. In addition to the foregoing, Payers are to remit taxes, statutory payments, contributory pension funds with associated electronic schedules only on a CBN approved end-to-end e-payment platform. For Beneficiaries (which include Employees; Pensioners; Suppliers; Revenues Collecting Organizations; Pension Fund Administrators and Pension Fund Custodians), they are to maintain appropriate bank or collection accounts with DMBs or other CBN approved financial institutions as may be applicable to them. They are also required to use or adopt a CBN approved

https://www.facebook.com/businessdayng

electronic payment platform while equally rendering required returns to the CBN, as may be specifically applicable, on all electronic transactions carried out.

Compliance Requirement & Sanctions for Non-compliance From the date of commencement of the Regulation, all DMBs are required to dishonor payment instructions issued by organizations (Payers) with more than twenty employees, for all forms of salaries, pensions, suppliers and taxes; when the instructions are not transmitted on a CBN approved straight-through electronic payment and collection platform.

This is to ensure that qualifying public and private sector organizations no longer transmit payment instructions and associated schedules to DMBs through unsecured channels. Such channels classified as unsecured by the Regulation include paper-based mandates, flash drives, compact discs (CDs) and email attachments.

The Regulation provides for relevant infractions that may be committed by CBN regulated Stakeholders. The stated infractions and the sanctions prescribed against them (which range from warning, to payment of fines, and suspension of operating licenses/ approvals, or as may be prescribed in applicable CBN circulars) are contained in the two (2) Schedules to the Regulation.

Dispute Resolution The new Regulation makes provisions for settlement of any dispute, controversy or claim that may arise out of the implementation of the Regulation. The dispute resolution provisions also cover any claim for breach, termination or invalidity of any terms made pursuant to the Regulation. Accordingly, such disputes or claims shall be settled in accordance with the CBN’s dispute resolution mechanism, and if unresolved, may be referred to arbitration in accordance with the rules for arbitration of the Regional Centre for International Commercial Arbitration, Lagos, Nigeria.

GUIDELINES ON THE ISSUANCE AND TREATMENT OF BANKERS ACCEPTANCES AND COMMERCIAL PAPERS Objective The Guidelines were issued in furtherance of the CBN’s goal to deepen the Nigerian money market. Thus, it is expected that they will facilitate the effective and efficient functioning of the market for negotiable financing instruments; through a framework that will ensure uniformity and @Businessdayng

standardization in the treatment of BAs and CPs across the banking industry.

General Conditions The Guidelines prescribe general conditions guiding the creation of a BA and CP, which also include applicable restrictions.

Hence, among other things, a BA is required to have an underlying trade transaction which will stand as collateral. This is designed to work by requiring banks to hold the title documents to the associated merchandise as the basis for acceptance; is required to be represented by a physical instrument that should be signed by the drawer and properly executed by the bank; is required to be drawn on and accepted by a bank, pursuant to an acceptance credit line to finance the drawer’s purchases of goods from, or sale of same to, either a resident or non-resident person; shall not be drawn to finance the sale or purchase of services unless otherwise allowed under the Guidelines; shall not be drawn to finance the sale or purchase of goods by individuals; where the two parties to the trade transactions are parts of a single legal entity, or if the two parties are sole proprietorships operated/owned by the same individuals or where the two have related proprietors, and if the transacting parties are partnerships in which the partners are the same individuals or where there are common partners holding majority shares in the partnerships; and is allowed to be drawn where the two transacting parties are related corporations only upon the conditions; that the two related parties are indeed separate legal entities, that the trade transaction was undertaken at arm’s length and involved a genuine transfer of title to goods verifiable through documentary evidence, and if the transaction is to finance cross border trade.

In like manner, there are conditions which a CP must meet under the Guidelines, which include the following: In order for a CP to qualify as a financing vehicle in the Nigerian money market, the issuer must have a three (3) years audited financial statements the most current of which must not exceed eighteen (18) months from the last financial year end. Also, where the CP is guaranteed by the bank, the issuer must have an approved credit line with a Nigerian bank acting as an issuing and payment agent (“IPA”); The identity of the issuer of a CP must be disclosed to the investors; Unlike a BA, a CP cannot be accepted but can only be guaranteed by a bank; When a bank disburses its own funds to invest in a CP, the transaction is required to be reported on the balance sheet and treated as a loan but where the bank merely guarantees the instrument, the transaction is required to be shown off-balance sheet as Continues on page 30

28

Thursday 17 October 2019

BUSINESS DAY

INDUSTRYFILE

BD

LegalBusiness

Highlights from the Africa Legal & Tech (ALT) in Lagos

L

Continued from last week

egaltech presents some level of threat to lawyers and the current practice of law. Although the general view expressed by most of the panelists was that legaltech tools should be viewed as augumenting the work of lawyers and enhancing legal practice, some of their comments highlighted the fact that legaltech tools posed potential threats to the function of lawyers and the

way law is practiced today.

For instance, Seye Amusa of Law Pavilion noted that in addition to Nigerian lawyers and law firms, Law Pavilion’s products were also purchased by private individuals, lawyers in corporate organisations and foreign law firms –particularly UK law firmsthat chose to do their own legal research. This ultimately poses a threat to Nigerian lawyers and law firms.

Lawyers need to adequately prepare for the future.

The panelists agreed that it is inevitable that change and innovation will continue to occur in the legaltech space.

It is almost certain, that some of the legaltech developments in foreign jurisdictions will inevitably trickle down to Nigeria. It was however noted that changes to the way law is practiced is nothing new and that in the not too distant past many lawyers were unable even to type their own documents and processes, while that is now a basic skill for any

lawyer. The lesson therefore is that lawyers need to begin to prepare for the changes that will inevitably occur. Development of legaltech tools do not necessarily mean the extinction of legal practice, but perhaps mark the evolution of legal practice as we know it today. Lawyers were advised to keep abreast of changes in the legaltech space and in technological developments generally.

Regulation and the role of lawyers:

A panel session at the summit

Ajayi, Fayokun, among IFLR1000 leading and “Highly Regarded” lawyers

T

he managing partner of Olaniwun Ajayi, LP, Prof. Konyinsola Ajayi, SAN has been rated in the 2020 Edition of IFLR 1000’s Financial and Corporate Law Rankings as “Highly Regarded” Ajayi was rated “Highly Regarded” in seven practice areas: Banking, Capital Markets; Debt, Equity; Energy & Infrastructure, Mergers & Acquisitions, Project Development and Project Finance practice areas.

Konyin, a leading Senior Advocate, is the Managing Partner at OALP. His expertise spans the disparate yet connected fields of litigation and transactional work and has over 35 years’ experience in banking, project finance, capital markets, power, infrastructure, M&A, energy and natural resources, privatisation and dispute resolution.

He played a key role in the

T

he Capital Market Solicitors Association (CMSA) recently elected new executive committee members to pilot the affairs of the association for the next two years.

At its Annual General Meeting (AGM) which took place at the La Cour Botique Hotel, Ikoyi, Benjamin Obidegwu of Hermon Barristers & Solicitors emerged as Chairman, while Olubukola Olabiyi, a Partner at Odjinrin & Adefulu was admitted as the new Publicity Secretary of the association.

SEE PHOTOS BELOW.

Prof Koyinsola Ajayi, SAN

Nigerian banking sector reforms and the recent power sector privatisation. He represents a wide range of clients in domestic and cross-border commercial disputes.

He recently adviced, advised on the largest single

financial transaction in Nigerian financial history – the NGN 4.7 trillion debt issuance programme by the Asset Management Company of Nigeria (AMCON), under which AMCON issued initial consideration Bonds to 21 Ni-

gerian Banks in consideration of the Non-Performing loans of the banks.

OLUBUNMI FAYOKUN, Partner, Aluko & Oyebode, has also been recognised as a Highly Regarded Lawyer in the IFLR1000 2020 Rankings.

Olubunmi has over 30 years’ experience in all aspects of corporate and commercial law. She heads the firm’s Capital Markets’ and M&A practice groups and has advised a highly diversified clientele on a variety of high-profile transactions in the banking, energy and natural resources, power, aviation, insurance and telecommunications sectors.

She advised Access Bank Plc. on its merger with Diamond Bank Plc.; advised Skyway Aviation Handling Company on its merger with Skypower Aviation Handling Company as well as its subsequent IPO and Listing on The Nigerian Stock Exchange (the

Discussions on this subject traversed almost all the panel discussions and were a central part of the Keynote address given by Odun Eweniyi, co-founder of Piggyvest (a leading Nigerian Fintech company).

It was noted that tech operators generally faced the conundrum of trying to determine whether innovation should follow regulation or vice-versa. In many instances, tech operators created products in sectors that hitherto had no existing regulation. When regulation eventually caught up with the innovation, it had dire consequences for the entrepreneur and in some cases led to eventual close of the business. For instance, the increase of the share capital requirement in the fintech sector has already resulted in many causalities. Regulatory sandboxes as well as consultative regulation were prescribed as options for regulating the tech industry. The conclusion was that this will likely present better outcomes than the punitive regulatory approach often

adopted.

It was also agreed that lawyers had a very important role to play in ensuring tech companies compliance with regulation. Eweniyi stated that in her experience, lawyers play an invaluable role to tech companies as they were able to assist the companies in navigating the regulatory minefield. She stated that it was important for lawyers to work with their clients right from product conceptualisation stage to enable them point out potential regulatory issues early.

It was noted, that even in the absence of regulation, lawyers should identify potential obstacles to tech business and products and be proactive in removing any encumbrance.

Lawyers were also encouraged to engage in policy advocacy as it concerned the tech industry.

However, to perform these functions effectively, it was noted that lawyers would need to ensure that they had a good understanding of the rapidly growing tech sector.

only IPO in the Nigerian capital market in the last 4 years).

Fayokun also advised Unilever Plc. on the Nigerian aspects of the US$8.1 Billion sale of its margarine and spreads business to KKR & Co; advised access bank Plc. on a US$40 Million Green Bond issuance, the first ever Climate Bonds standard cer-

tified corporate green bonds to be issued in Africa; Union Bank of Nigeria Pc on the establishment of a N100 Billion (approx. US$280 Million) Debt Issuance Programme; and ExxonMobil Oil Corporation on its N90 Billion (approx.

US$250 Million) sale of a 60% equity stake in Mobil Oil Nigeria Plc. to Nipco Plc.

Olubunmi Fayokun

Obidegwu, Olabiyi, others elected as CMSA ExCo

Senator Oladipo Odujinrin, Chairman of the Board of Trustees of the CMSA with other Members of the new executive committee.

CMSA Trustees and members of the executive committee. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

29

GLOBALREPORT

BD

More finance officers from law firms are appearing before the Solicitors Disciplinary Tribunal, in the UK

UK Firms urged to publish photos of offices to help disabled clients

• New figures show…

A

Cheltenhambased accountancy firm, Ha z l e w o o d s, which specialises in advising law firms/ legal practices in the UK, have revealed figures which show that a record number of finance officers from law firms are appearing before the Solicitors Disciplinary Tribunal.

A total of 19 compliance officers for finance and administration (COFAs) were referred to the SDT in the year ended 31 March 2019.

This was the highest since COFAs were established

in 2013, with the numbers having grown each year in that period.

The figures were put together by COFAs are personally liable for any issues in the management of a law firm’s finances, with their role including preventing misuse of client funds and the mixing of client money with the firm’s own money. They are also responsible for overseeing the financial stability of the firm and must ‘sign off’ the annual accounts.

Most COFAs are law firm partners rather than employees, because they are

personally liable if accounts are incorrect and so need to be in a senior position.

Andy Harris, partner at Hazlewoods, said the COFA role is not easy, due to them taking responsibility even when someone else has made an error.

Harris said: ‘Given the huge sums of money some law firms hold on behalf of clients, there is a huge burden on COFAs to ensure no mismanagement is happening.

‘In a worst case scenario, theft or money laundering can occur if COFAs take their eye off the ball.’

In the last year, the SDT has struck off a COFA who employed a banned solicitor, banned another for retaining monies intended as payments for professional disbursements, and fined a compliance officer £10,000 for failing to ensure managers and employees at his firm complied with their obligations.

Harris said the rise in COFA referrals to the tribunal reflects the SRA’s crackdown on financial mismanagement and suggests more action is being taken to stamp out irregularities.

LegalBusiness

U

K Law firms should publish images of the inside and outside of their offices to show how they can be accessed by disabled people, a report commissioned by the Solicitors Regulation Authority has recommended.

YouGov was asked to do research with disabled people to explore the reasonable adjustments that firms can make to be more accessible for disabled people.

More than 3,500 disabled people informed the report, published yesterday. Nearly three-quarters said they are rarely or never proactively asked if they need adjustments when accessing professional services.

Secret medical recordings ‘reprehensible’ but allowed as evidence

A

High Court master has urged claimant and defendant lawyers to find common ground on the issue of recordings of medical examinations.

In Mustard v Flower & Ors, Master Davison opted to admit evidence taken of doctors’ medicals despite the experts not knowing their sessions were being recorded.

It was found the evidence, which included two examinations covertly recorded and one accidentally recorded without the doctor

knowing, were not unlawful despite – in the case of the covert recordings – being described by the Master as ‘reprehensible’.

As well as ruling on admissibility, Master Davison suggested that the Association of Personal Injury Lawyers and Forum of Insurance Lawyers work together on a protocol governing the recording of examinations.

‘It is [in] the interests of all sides that examinations are recorded because from time to time significant disputes arise as to what occurred,’ said the Master. ‘In

that situation, it is important to have a complete and objective record of the examination, which is subject to appropriate safeguards and limitations on its use.

It is desirable that the parameters of such recording should be on an “industrywide” agreed model.’

In Mustard, the court heard that the personal injury claimant had been advised by her solicitor Christopher Dickinson, to record examinations on a digital device, after defendants had questioned the validity of her claim.

In two cases, permission was never sought, while in another the expert agreed to part of the examination being recorded. This expert denied permission to record neuropsychological testing, which the claimant accepted, but the claimant mistakenly failed to switch off the recording and the machine went on. The doctor who had been accidentally recorded told the court she felt ‘professionally violated, distressed, angry and disillusioned’.

The claimant submitted that recording and observation of clinical examinations

were commonplace, and could help to detect any potential incompetence or malpractice.

Master Davison decided to admit the evidence secretly or accidentally recorded, rejecting the recordings were a breach of the Data Protection Act or GDPR. Whilst the claimant’s actions ‘lacked courtesy and transparency’, the Master said covert recording had ‘become a fact of professional life’ and were not so reprehensible as to outweigh the overriding objective.

B&I acts for NNPC as it closes $2.5bn gas supply deal with NLNG

T

he B&I team was actively involved in ensuring the close of the NNPC/NLNG $2.5 billion gas supply deal in their capacity as the Nigerian Transaction Counsel to NNPC. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Two-thirds of the 1,270 people who tested standard and adapted versions of a hypothetical firm’s websites preferred the adapted homepage. People felt the firm that adapted its website had more expertise in helping disabled people.

The adapted complaints page was clearer and simpler to understand.

The report recommends that firms proactively ask all clients at the beginning if they need reasonable adjustments made. Leaflets and websites should include images of the office interior and exterior, to help disabled people plan and make them less anxious about what the office environment might be like.

Verbal or written information should be provided at the start on whether there is step-free access, lifts and nearby parking spaces.

Other recommendations include providing contact details for someone in the firm for disabled people to discuss any issues. A disabled charity’s accreditation should be highlighted on the homepage of the firm’s website.

Colour should be used in the layout and presentation of information to make the firm appear warmer and more inviting; dense text should be broken up; the text font should be at least 14 points in size; and screen readers should be able to read images.

SRA chief executive Paul Philip said: ‘All solicitors will recognise that disabled people often have multiple, complex and varying needs that may not be immediately obvious. Accessing legal services can be complex enough without facing such added challenges, which is why it is so important that firms do all they reasonably can to help people overcome any difficulties.

‘This research found that while some firms are clearly good at this, others have more to do. The insights should help firms to make the changes needed to support hundreds of thousands of people to access professional legal support when they need it.’

The report was commissioned after the Competition and Markets Authority reported in 2016 that a major barrier to accessing and understanding legal services was a general lack of accessibility. The SRA says it will promote YouGov’s recommendations to firms.

30

Thursday 10 October 2019

BUSINESS DAY

BD

LegalBusiness

New regulatory framework to govern electronic payment...

Continued from page 27

a contingent liability; and Resale of CPs by banks and discount houses is required to be accompanied by adequate documentation, which Examiners are to be provided with on request.

Documentation Requirements Under the Guidelines, creation of a BA requires the presentation of a complete set of documents evidenced by: Drawer’s declaration that no other source of finance has/is/ would be entered into in respect of the trade transaction; Full set of commercial and/or financial documents in respect of the trade transaction, and A receipt or other documentary evidence of payment (where the drawer-purchaser has already made payment to the supplier prior to the creation of the BA. The Guidelines require that original copies of the commercial and/or financial documents are to be presented to the accepting bank. In the event that the original documents are not available (either immediately or on the acceptance date), copies of such documents which are produced by reprographic or automated/ computerized systems as well as second/carbon copies may be

accepted by a bank; provided that such secondary copies contain a serial number and are authenticated by authorized signatories, where applicable.

The Guidelines also provide alternative documentation requirements for the creation of a BA, where the full set of commercial and/or financial documents may not yet be available on the drawing date or where the transaction is only evidenced by a single document.

Similarly, the standard documentation requirements for a CP transaction in Nigeria is prescribed in the Guidelines to include the following: CP raising mandate Board Resolution to borrow Issuing, placing and paying agency agreement Commercial Paper Note Bank Guarantee, where applicable Investment Instruction/Investment Mandate Investment Advice Custodial Agreement Information memorandum on the issuer in the case of clean CPs Latest rating report from the credit rating agency Backstop loan request for guaranteed CPs. Procedure for Issuance of

www.businessday.ng

BAs and CPs The general procedure to be followed in creating a BA is provided for in the Guidelines. Accordingly, the following steps are required to be followed sequentially: Arrange an acceptance credit line with a bank; Present the required documentary evidence of trade to the bank, for the purpose of drawing a BA on the bank; and The bank accepts the BA, upon satisfactory evidence that: the documents presented are in order; the BA complies with the terms of the acceptance of a normal credit facility; and all the applicable conditions for the creation of BA have been complied with, as specified in the Guidelines.

In the same vein, the procedure to be followed in creating a CP is set out in the Guidelines as follows: A company proposing to issue CPs is required to submit a proposal to the IPA with its rating report issued by a credit rating agency. The IPA is required to scrutinize the proposal and thereafter take it on record (or record the proposal in its blotter) if satisfied with same; The Company is expected to ensure that the proposed issue of CP is completed within the

https://www.facebook.com/businessdayng

period of two (2) weeks from the date of opening of the issue for subscription; After the exchange of deal confirmation between the IPA and the issuer, the IPA is required to issue physical certificates to the investor or arrange for crediting the CP to the investor’s account with a Securities Depository; and All IPAs issuing the CPs are required to advise the relevant Securities Depository on the amount of CPs actually issued, within three working days from the date of completion of issue.

Penalty for Non-compliance Henceforth, all BA and CP transactions in Nigeria are to strictly comply with the provisions of the Guidelines. According to the Guidelines, non-compliance (either wholly or partially) with any of the provisions contained there-in shall attract appropriate penalties; as prescribed in Section 60(1) of the Banks and Other Financial Institutions Act, 1991 (as amended). As further stated in the Guidelines, applicable penalties may also include the debarring of erring stakeholders from the BA or CP market or any other sanction as the CBN may prescribe from time to time.

Other Key Provisions In addition to the above men-

@Businessdayng

tioned provisions, the Guidelines also spell out other governance principles and prudential measures which, from now on, are to guide the issuance and treatment of BAs and CPs in the market. Thus, provisions are also made with regard to rating requirements; tenor & roll-over; denominations; limits & the amount of issue; underwriting; investors; forms of maintaining the instruments; IPAs; mode of payment & issuance; roles and responsibilities of parties; registration; reporting requirements; accounting treatment; provision of stand-by facility; and disclosure requirements. It is expected that full implementation of the Guidelines will positively impact the Nigerian money market, as projected.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 17 October 2019

BUSINESS DAY

31

cityfile NSCDC foils pipeline vandalism in Ogun RAZAQ AYINLA, Abeokuta

N Aderonke Adetoro, vice president, Association of Asset Custodians of Nigeria (AACN), at a mentoring session with SS3 students of Eko Akete Senior Secondary School, Lagos as part of a give-back initiative in commemoration of the association’s 10th year anniversary.

Road repair: Residents want Sanwo-Olu to give every area sense of belonging

S

ome residents in Lagos have urged Governor Babajide Sanwo-Olu to consider their communities in the emergency repairs following the declaration of emergency on roads by the state government.

Residents around Ikotun, Ejigbo and Isolo axis said their community also deserved the same urgency on road rehabilitation.

Obiageli Michael, a 42-year-old media consultant said that Ikotun should make the list of those deserving urgent repairs of roads in the state.

“I have not seen any road as terrible as coming from somewhere like Cele to Ikotun. I’m curious; I honestly need to understand why no road within Alimosho constituency 1 makes it on the first list of roads to be rehabilitated.

“These roads are terr ible, spending more hours than you should

on the road is hazardous, because on rainy days it doesn’t matter when you leave the house,’’ she said.

Following the outcry of Lagos residents about the deplorable road network in the state, Sanwo-Olu on Sunday October 13, declared a state of emergenc y on dilapidated highways.

The roads mapped out for emergency rehabilitation are Ojota stretch of Ikorodu road, Motorsway-Kudirat Abiola Way, Aponbon Highway, Babs Animashaun road, Agric/ Ishawo Road, Ijede Road in Ikorodu, Lekki-Epe Expressway from Abraham Adesanya to Eleko Junction.

Prince Origbagbo, a realtor, said that the state government should have carried out the repair in an alphabetical order to ensure transparency in the selection.

“The thing is if it was done in an alphabetical order nobody will complain, by so doing all areas will be touched, the

way they have gone about it, it will be easy for some areas to be forgotten unknowingly.

“They could have also considered the population of residents in these areas, truth be told if it was done in an alphabetical order nobody will have course to complain.’’ he said.

Ken Agbonkhese, a journalist, however, said it would not be realistic for the government to fix all the roads at once.

“The truth is all the roads can’t be repaired at once but they could have taken one road from each local government and local council development area, but their motivation is different,’’ he said.

Sanwo-Olu had said that in addition to engaging eight construction firms, the Lagos State Public Works Corporation (LSPWC) would be carrying out repairs on 116 inner roads across the state plus 200 other roads already fixed.

Ja m e s L aw re n c e, a

37-year-old lawyer, said that if the contractors are fast enough before another raining season most roads could be repaired.

“As long as the state government can guarantee that these contracts will be well executed and managed then it won’t matter if Abaranje road is left out.

“We won’t want situation whereby projects will be abandoned halfway and in the process making lives of commuters more miserable than it was in the beginning.

“If they will be dedicated and treat this with utmost urgency, everything will be fine eventually,’’ he said.

The construction firms engaged by the government include Julius Berger, Hitech, Arab Contractors, Metropolitan Construction, Salvagogu Construction, China Civil Engineering Construction Corporation (CCECC) and RCF Nigeria Limited. NAN

igeria Security and Civil Defence Corps (NSCDC) said on Tuesday that it foiled attempt to vandalise NNPC pipeline at Ipara in Remo North local government area of Ogun.

Hammed Abodunrin, the commandant of NSCDC in Ogun, disclosed this in Ipara.

Abodunrin said that operatives of the corps recovered five vehicles and 150 jerrycans with some filled with petrol e u m p ro d u c t s f ro m the vandals. He said the corps acted on timely intelligence information to bust the vandals.

According to Abodunrin, the vandals abandoned their vehicles and scampered on s ig ht i ng t h e N S C D C anti-vandal squad.

“They came to Ipara as early as 1 a.m.; we got the information and mobilised our anti-vandal squad to bust them. They know the terrain very well, this place is like a jungle but they escaped.

Bu t w e w e re ab l e to impound five vehicles with some products.”

The commandant said that the corps would not allow pipeline vandals to have their way in the state and urged the citizens to cooperate with their operatives by providing useful information.

Troops rescue 4 abducted students in Kaduna

T

roops of Operation Thunder Strike have rescued the remaining four students of Government Day Secondary School Gwagwada in Chikun Local Government Area of Kaduna State, who were abducted on their way to school on October 10.

Ezindu Idimah, army public relations officer, 1 Division Nigerian Army Kaduna, said that the students have been handed over to their parents at Gurmi village.

Recall that bandits operating on Kaduna-Abuja Highway on October 10, abducted 10 students of the school while on their way to school.

However, inter vention by the troops led to the immediate rescue of six out of the 10 students

while the bandits escaped into the forest with the four.

“On Monday October 14, at about 6 am, following a tip off from a reliable source, troops raided the hideout of the bandits and rescued the remaining four students without injury,” Idima said.

According to him, during the rescue operation, the bandits escaped into the forest with gunshot wounds, abandoning the students.

He said that operatives of ‘Operation Thunder Strike’ were drawn from the army, air force, police and civil defence corps.

The spokesman said the General Officer Commanding 1Division; Faruk Yahaya has reiterated the commitment of the division to restore peace to its area of responsibility.

Insecurity: 48 doctors kidnapped in 2 years- NMA

A

dedayo Faduyile, president of Nigeria Medical Association (NMA) says 48 members of the association had been kidnapped in the last two years.

Faduyile, at a session with newsmen in Akure to mark the 2019 Physicians’ Week, said that doctors were faced with various security threats, including kidnapping, harassment/assault by patients www.businessday.ng

and their relations, maltreatment by employers and poor salaries.

He said these challenges had contributed to doctors leaving the country. “In the last one year, Nigerian doctors

have had significant input in the improvement of the health of the nation. In this regard, I appreciate all physicians who have been working assiduously in ensuring that we collectively fulfill our

https://www.facebook.com/businessdayng

key responsibilities to the Nigerian state.

“It is worthy of note that all have not been well with Nigerian doctors; the kidnapping of our members in the course of discharging their duties @Businessdayng

to the Nigerian state with some still in captivity. Despite the various challenges, Nigerian physicians have continued to render desirable health care services, and we thank God for another year,” he said.

32

Thursday 17 October 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

How consumers fare under Ikeja DISCO’s Premium Power initiative Stories by OLUSOLA BELLO

T

he challenge of not getting the appropriate tariff by the electricity distribution companies (Discos) has compelled them to devise means of keeping their business afloat through special window provided by such government policies as eligible customers; willing buyer and willing seller.

In order to provide steady electricity to its customers, Ikeja Electric has worked assiduously to get some organised groups to buy into its initiative called ‘Premium Power initiative’.

Under this initiative, there was a power-purchase agreement which entailed a commitment to specific service level standards by Ikeja Electric, while the customer agrees to pay a tariff that is above the current MYTO tariff (what is myto? Please, spell out) One of such organised groups is Magodo Resident Association. The community recently signed an agreement with Ikeja Electric which has invested in electricity infrastructure in the estate. The residents are now enjoying reliable and quality electricity supply for over 20 hours daily.

However, the residents are paying N47 per kilowatt per hour as tariff as against the N24 per kilowatts hour being paid by majority of electricity consumers.Following the execution of this agreement, residents of Ma-

L-R: Folake Soetan, Chief Operating Officer, Anthony Youdeowei, CEO, both of Ikeja Electric, Muiz Banire, chairman, GRA Ikeja and Kennedy Anyiam-Osigwe, chairman, Electricity Committee, GRA Ikeja, during the signing of Bi-Lateral Power Agreement with Ikeja Electric on 11th October, 2019 in Lagos.

godo who are elated by the development now boast of having stable power supply.

The agreement which came into effect in August this year has given peace of mind to residents of Magodo as far as electricity supply is concerned. They currently enjoy 24 hours supply, a resident who said he was not authorised to talk for the community said.

According to Kunle Eludire, former president of the association, he no longer bothers about buying diesel or fuel as he gets electricity supply for 20 hours a day.

“We have been under darkness before, but now we have seen light”.

He said there is no more noise, air pollutions. While the risks associated with buying fuel is also no more.

We sleep well now in the estate. Stating further, he said,

even if the company wants to carry out any repairs the residents are informed hours before doing that.

“They will tell us how long the repairs will take and most time they don’t stay as long as they had projected before supply is returned”.

He argued that if Ikeja Electric could continue with this initiative, it would not have problems, stating further that all that is required is commitment on the side of the company.

He advised that the company should improve on its infrastructure so that it could be more efficient.

“I will also recommend that other organised estates within the Ikeja Electric franchise area should do the same thing.

Jade Niboro, the current chairman of the association said there has been a lot

Defaulters of Nigerian Content forensic audit to face EFCC

O

ngoing forensic audit of statutory remittances by oil and gas companies into the Nigerian Content Development Fund (NCDF) will end on November 30, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote has said.

He stated this during a recent meeting in Abuja with forensic auditors contracted by the Board, hinting that close out reports from the exercise will be studied carefully, with the aim of forwarding the cases of serious defaulters to the Economic and Financial Crimes Commission (EFCC)for further investigation, in line with the Service Level Agreement signed with the Commission.

In addition, NCDMB is considering other stiff sanctions against defaulters, including the possibility of barring such companies from participating in the tendering system for upstream conOlusola Bello, Team lead,

tracts and instituting a process whereby companies must obtain NCDF clearance before their applications for expatriate quota will be processed by the Board.

Section 104of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act stipulates the deduction of one percent of the value of contracts awarded in the upstream sector of the oil and gas industry and remittance into the NCDF. The Fund is used for funding the development of Nigerian Content in the Nigerian oil and gas industry.

The Executive Secretary said the first phase of the audit commenced in October 2018, while the second and third phases started in November 2018 and February 2019 respectfully. He added that ”the initial target completion period is 6 months. The Board wishes to close out the exercise by December 31, 2019, hence, all audit must conclude before November 30, 2019.”

Graphics: Joel Samson.

Assessing the preliminary feedback from the audit, Wabote reported that”some companies were aware of their obligations before the exercise started and so bluntly refused to cooperate with the Board and the forensic auditors assigned to them. The Board will move against them.

“Some companies adopted delay tactics and partially released documents to the auditors in a manner that impeded a successful audit.

The auditors are required to explore all means to determine their obligations as an interim measure, using Bestof-Judgement approach.”

He regretted that major operating companies came together under the auspices of the Oil Producers Trade Section (OPTS) and sought to define qualifying and nonqualifying items for deduction as well as the manner of deduction, adding that the Board will meetwith theirtop management to address the issues.

www.businessday.ng

difference since the commencement of the agreement between Ikeja Electric and the residents, which now enjoy over 20 hours of power supply.

He said following the agreement, the company decided to install brand new infrastructure or upgraded some of the existing ones in order to make available unterrupted power supply.

Those infrastructure includes installing new transformers, cables, electric poles and other accessories to avoid local faults.

BusinessDay investigations revealed that productivity of the small scale business concerns in the area has improved as their cost of production has gone down. An official of one of the schools in the area said because of this development her school manage-

ment has increased their salaries; while one of the schools is alleged to have even reduced the school fees of it pupils. This is because they no longer buy diesel or fuel to power their generators.

Business operators can now save more money to do some other things or expand their businesses with the money which they would otherwise have spent on diesel or petrol.

We are happy now because we can plan our activities and our business planes can be executed as planned, said a man who operates a business centre.

The business atmo sphere in the area is no longer distorted because of long time of power outages.

Even house wives no longer entertain any fear of their ingredients getting spoilt because of lack of power Anthony Youdeowei, CEO of Ikeja Electric said the plan will show to Lagosians and Nigerians at large that the power sector can work if we have the right mix of customers who are willing to pay for the power and a distribution company who has the capacity to deliver.

“We know there is a lot of cynicism in the sector; however we believe when we have a set of customers who are willing to trust by paying a market price then we can make things work,” Youdeowei said.

Ikeja Government Residential Area (GRA) is now taking a cue from Magodo as it has just signed a bilateral power agreement with Ikeja

Electric to invest in electricity infrastructure in the estate, a development which is expected to guarantee residents over 20 hours daily supply of electricity.

Folake Soetan, the chief operating officer of Ikeja Electric, expressed confidence in the success of the trend-setting agreement which she noted was in line with the Federal Government’s “willing seller, willing buyer” policy.

“We are confident that this agreement will serve as a model for other power agreements in the power sector because, while it is in line with the Federal Government policy, it also reflects our unwavering commitment to our customers. This has also been made possible by the Nigerian Electricity Regulatory Commission’s directive to Discos to provide an enabling environment with exceptional service delivery,” she said.

Before December, Ikorodu, Abule Egba and Akowonjo will also be included in this arrangement, Soetan told BusinessDay. Muiz Banire, the chairman of Ikeja GRA said the journey of negotiations of the contract started almost four years ago with ups and downs, but that the residents remained committed and believed it was achievable.

“This partnership has come to stay and we the residents will play our part to make it work in order to reap the best from this arrangement,” Banire told BusinessDay.

NNPC/Chevron JV, NDPHC and GACN sign GSAA, reinforce Commitment to Socio-Economic Development of Nigeria

C

hevron Nigeria Limited in its capacity as Sellers’ Representative for the Nigerian National Petroleum Corporation and itself, has signed a Gas Sale and Aggregation Agreement (“GSAA”) with Olorunsogo Generation Company Limited, Niger Delta Power Holding Company Limited (“NDPHC”) and Gas Aggregation Company Nigeria Limited (“GACN”).

The agreement was executed on behalf of the four companies by Sanjay Narasimhalu, Director, Downstream Gas, CNL; Chiedu Ugbo, managing director, NDPHC; Ifeoluwa Oyedele, executive director, NDPHC, for Olorunsogo Generation Company Limited; and Morgan Okwoche, of GACN, respectively.

CNL will supply on an interruptible (reasonable endeavours) basis, a daily contract

quantity of 0-63,000MMbtu/d of natural gas to Olorunsogo Generation Company Limited.

The Olorunsogo generation plant at Olorunsogo, Ogun State, is an existing NDPHC electricity generation project designed to supply power of about 750MW into the national grid, support the Federal Government’s drive to develop the power sector and in-turn grow the Nigerian economy. Natural gas is the feedstock of the Olorunsogo generation plant.

The GSAA for the supply of the major input needed to run the power generation plant is another demonstration of the NNPC/CNL JV’s commitment to the domestic gas market.

In his remarks, CNL’s Director, Downstream Gas, Narasimhalu noted that the NNPC/ CNL JV is currently the largest and most on-spec supplier of gas to the domestic market. He

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

https://www.facebook.com/businessdayng

@Businessdayng

stated that the JV continues to collaborate extensively with other stakeholders in finding creative solutions to issues relating to the domestic gas market. “The NNPC/CNL JV is committed to supporting the Federal Government of Nigeria’s policy to boost local industries,” he said.

Chiedu Ugbo, of NDPHC, also emphasised the commitment of NDPHC to continuing in its drive to find lasting solutions to the power generation challenges in the country.

Corroborating the positions of the other partners, the MD/CEO of GACN, Okwoche, affirmed that GACN will continue to collaborate with relevant stakeholders in proffering working solutions to issues around the domestic gas market value chain with the ultimate goal of ensuring growth in the sector.

Thursday 17 October 2019

BUSINESS DAY

33

BUSINESS TRAVEL

Game-changing policies to make local airlines thrive

utilise their airplanes for 24-hour operations. No airplane or factory machine can be profitable only from 7 a.m. to 6 p.m. daylight operations,” Meggison noted.

He therefore calls for the provision of airfield lighting and navigational landing aids at all airports in Nigeria to reduce delays and cancellations and allow for 24-hours operation and better utilisation of airplanes.

IFEOMA OKEKE

T

he average lifespan of a domestic airlines is a mere 10 years and for many, poor government policies hastened their demise.

Domestic airlines are squeezed by high cost of aviation fuel, uneven allocation of destinations that seemed to favour foreign airlines, high operational costs and the inability to pass a Fly Nigeria Act, are fallouts of poor government policies.

The Nigerian Civil Aviation Authority (NCAA) records show that no fewer than 40 registered airlines, scheduled and nonscheduled, have collapsed in the last 15 years.

Some of these carriers include Associated Aviation, Allied Air, Hak Air, Kabo Air, TAT Nigeria, Belview, Sossoliso, Chanchangi, Sky World Express, Virgin Nigeria, ADC, Concord Airlines, IRS and Okada Air. While some airlines struggle to stay afloat and others such as Air Peace is investing heavily on equipment to aid their operations, the government has to play its own part by providing the enabling environment for them to thrive.

Air Peace, no doubt is the highest employing carrier in Nigeria, creating over 5,000 direct and indirect jobs, akin to playing the role of a national carrier. Analysts say the government can do much to support an airline that has created more job opportunities than all foreign airlines put together.

John Ojikutu, a member of aviation industry think tank, Aviation Round Table (ART) and chief executive officer, Centurion Securities, listed some ways government could support domestic airlines.

First, Ojikutu said there should be a careful assessment of their business plans to ensure the airports designated for their operations are well equipped to support and sustain their day and night operations and even during inclement weather.

Secondly, he explained that government policies on open skies and commercial agreements with foreign airlines must limit their operations in domestic routes. He said concessions given to foreign airlines for multiple destinations must be reduced to two in different airports outside Lagos and Abuja.

“The foreign airlines incursion into domestic routes is seriously affecting the growth of local airlines ,” he said.

Fly Nigeria Act Last year, Hadi Sirika, minister of aviation said that as part of efforts to make airlines viable in Nigeria, the ministry is seeking to have the National Assembly pass a fly Nigeria act. This law will require that anybody travelling on a ticket bought with public funds must travel on a Nigerian carrier unless the route is not served by a Nigerian carrier.

The concern of ‘Fly Nigeria Act’ has been on ground for decades but as good as it would have been, each time it came up, lawmakers who are in a position to make it work by passing the legislation, have frustrated it.

Many analysts have wondered why lawmakers are unwilling to back the move. The Aviation Safety Round Table Initiative (ASRTI), an aviation industry think tank said that Nigerian airlines and the industry as whole do not benefit from the many foreign airlines that airlift passengers out of the country and repatriate over 75 per cent of their revenues.

The group said that if the Fly Nigeria Act was introduced, foreign carriers would partner with local airlines to code-share allowing indigenous carriers to earn some revenue from the partnership.

“There is an urgent need to sign the Fly-Nigeria-Act legislation to help protect the Nigeria travel market for both local airlines and travel agents,” the experts said.

BusinessDay’s checks show that 39 foreign carriers operating in Nigeria realised over $3.1 billion dollars from ticket sales, up from $1.7 billion in 2018 and $1.7 billion in 2017. This improved revenue based on the bilateral and multilateral air services Nigeria has www.businessday.ng

signed with other countries shows the extent of funds repatriated to foreign countries.

Single-digit interest rate to airlines While other African Airlines are accessing fund to purchase and lease aircraft at an interest rate of three to six percent, airlines in Nigeria access loan facilities with interests rates of between 21 and 26percent.

“It is better to get new airplanes and get rid of older ones but to make this happen, we need financing. In Nigeria, no bank wants to finance an airline for more than ten years. So, you find out that it is difficult to keep up with payments on a 21 percent interest rate for ten years,” Obi Mbanuzuo, chief operating officer, Dana Air told BusinessDay. Mbanuzuo added “When we send one aircraft for C-check, it cost us almost $1 million and takes between one to two months to get back. On the other hand, a new airplane will only need maybe 20 days ground time. It will be a bit cheaper to maintain because it hasn’t gotten to a point where of doing corrosion prevention works on the aircraft. However, interest rate to acquire more aircraft in Nigeria are scaring operators away,” he added.

Nogie Meggison, chairman, Airline Operators of Nigeria (AON) told BusinessDay that despite the fact that airline business is foreign exchange dominated, Nigerian banks still charge airlines as high as 23percent interest rate on loans.

“How do you expect airlines to survive with a 23percent interest rate? This is why airlines in Nigeria do not survive,” Meggison added.

Experts and stakeholders in the

https://www.facebook.com/businessdayng

aviation sector have also called on the Central Bank of Nigeria to look into funding issue for airlines especially at a time when the air fleet size has drastically reduced.

Addressing multiple taxations Domestic airlines, on the average, pay about 35 per cent to 40 per cent of a ticket cost as taxes and charges that come under the guise of statutory levies in addition to other charges. These include 5 per cent Ticket Sales Charge, 5 per cent Cargo Sales Charge, 5 per cent Value Added Tax (VAT), Passenger Service Charge, Charter Sales Charge, Aircraft Inspection Fees, Simulator Inspection Fees, Landing Charges and Parking Charges.

Others are Terminal Navigation Charge, Enroute Charge, Fuel Surcharge, Airport Space Rent, Electricity Charges, and Apron Pass, Ramp Access Charges, ODC and a newly imposed Registration Fee all of which are paid to government agencies.

Meggisson, has called for a total harmonisation of all agencies’ charges into a single payment system, as contained in the recent proposal of a committee set up by government and supported by the airlines.

He said streamlining all fees and charges by the various government agencies into a single window will remove any confusion and double billing.

Infrastructure upgrade Despite all these charges, many of the airports in the country do not have runway lights and navigational landing aids which meant such airports are only open between 7 a.m. and 6 p.m. daily.

“To this end, airlines can’t fully @Businessdayng

Beefing up on aeropolitics Allen Onyema, Air Peace chairman has urged the government to get more involved in playing aero politics to sustain indigenous carriers on designated international routes.

Onyema said: “If we must succeed on this Dubai route, the government must support us. We cannot do it alone. We can only do our best but the rest lies with the government. The government must stop unfair competition in this sector.

“The United States government did it when the Gulf carriers swooped on them, so the policy of multiple designations and frequencies for foreign carriers is detrimental to our economy. Our airlines will not grow under this policy.

“The government must help us grow the sector and not stifle it, but I know the President is a nationalist who is ready to support our carriers. “Aviation is a very tough business. I plead with Nigerians and the government to support Air Peace.

We promise to give Nigerians modern equipment and unparalleled services.”

He said without government’s support local airlines will lose out on aeropolitics. He said this is why many Nigerian carriers have been unable to sustain their operations on the route.

“I have the plan to sustain operations, but if I am not supported by the government, there is little or nothing I can do. If, for instance, the government allows more frequencies of other airlines from United Arabs Emirates (UAE) into Nigeria, how will Air Peace compete? Air Peace can only be successful with support from the government,” he said.

Air Peace which operates the West coast regions has sustained Sharjah operations (UAE route) almost three months after it commenced, shaking-up competition in the route with cheaper tickets.

Air Peace played the role of national carrier helping evacuate several stranded Nigerians in South Africa following xenophobic attacks in that country at the cost over N300 million.

34

BUSINESS DAY

Thursday 17 October 2019

MADE in aba

Forward Africa equips Aba shoemakers, others with advocacy skills

GODFREY OFURUM, Aba

F

o r w a rd A f r i c a , a non-governmental organization with support from Ford Foundation, has concluded a two-day practical advocacy skills training for executive members of Leather Products Manufacturers Association of Abia State (LEPMAAS), an association of shoe, belt, bag and trunkbox makers.

The practical advocacy skills training was to enable LEPMAAS carry out advocacy to their partners, miniseries, departments and other relevant agencies of government that work with them, Kenneth Amogu, p r o g r a m m e s d i r e c t o r, Forward Africa said.

He explained that the advocacy skill training was part of the capacity building programme, designed to develop the capacity of young people in LEPMAAS, to enable them improve on their businesses.

He also stated that LEPMAAS executives in February, 2019, benefited from a leadership skills

training at Oluaka Institute, Owerri, Imo State, noting that their contribution in that meeting was articulated into a document (advocacy kit) to enable them speak about their issues and challenges faced by the sector. “ We k n o w t h a t t h e y contribute immensely to the gross domestic product of Nigeria, as key stakeholders i n t h e f i n i s h e d l e at h e r products sector, and these problems have been there for a long time, but we believe that it is necessary for them to begin to speak out about these issues.

“They should let government and their partners know about these problems and begin to also see how they can partner them, to address some of these issues.

Some of the issues that have militated against the growth of the finished leather industry include, electricity, illiteracy; lack of raw material and working capital.

According to Amogu, the operators are the ones that are supposed to carry out these advocacies, because it is believed that “he who wears the shoe, knows where

it pinches”. They are the ones in the industry, so they are the ones that can talk about the issues that bother them, better.

He commended the group for par ticipating in the var ious training

programmes and promised that Forward Africa and its partners, would continue to support them to improve on their sills and compete favorably in the local and international markets.

“The response that we

are getting from them is encouraging. The turnout has always been encouraging.

For instance, we targeted 30 participants for this training, but had 28 in attendance, which was encouraging. “ T h e y h av e c o m e t o

understand that they need to do a lot of changes in the industry to grow their businesses and that for us is key”.

Okechukwu Williams, president, LEPMAAS, said “The capacity building programme from Forward Africa has greatly impacted positively on our businesses.

“Our production capacity has improved, as well as our market share, which has gone up from 22 percent to 25 percent.

Prisca Egbom, woman leader, LEPMAAS, said, “I learnt the meaning of advocacy, the work plan for advocacy and the means and factors that I will use to carry out advocacy to actualise our aim.

“The workshop helped me to know how to conduct myself, while communicating with Government officials and other partners on our needs”.

She thanked For ward Africa for its support to LEPMAAS, stressing that the capacity building programme, would enhance their skills and grow their businesses.

Lessons from India’s footwear industry Gbemi Faminu

A

ba is Nigeria’s major footwear hub and is estimated at over N120 billion. The activities and value of the industry is big enough to affect economic development in the South-East region and encourage trade relationships between various countries and Nigeria.

India one of the fastest growing emerging markets and has its shoe manufacturing hub located in various areas in the country.

In 2018, the country became the second largest footwear producer and one of the top 10 exporters. Its export was valued at $2.8 million that year, accounting for approximately 9.6 percent of the total global footwear output annually.

Data from a research and markets site show that in 2017, the global footwear market size was approx imately $246.07 billion. Growing at a CAGR of 4.5 percent in the period 2017-2023, the market is projected to reach $320.44 billion by the end of the forecast period.

While India’s success was not overnight, the government supp or te d the industr y through grants and accessible

loans. In 2017, the Indian government established the Indian Footwear Leather and Accessories Development Programme (IFLADP) that grants 20-30 percent subsidy for Micro, Small and Medium enterprises (MSME) for capital expenditure purposes which include building a plant and buying machinery.

Furthermore to encourage the business owners, Rs2, 600 crore ($ 363 million) was set aside as a special package for fuelling the leather and footwear industry and also generate employment.

www.businessday.ng

Provision was also made for 300,000 people to be trained with the aid of government sponsorship annually.

The federal government needs to give due recognition to the Aba industry which has the capability of fostering economic growth. It can do so through provision of infrastructure to aid output and boost production to meet market demand globally and domestically.

The Indian shoe industry focuses on supplying domestic demand and then meeting global demand.

Nigerians should be comfortable patronising m a d e - i n -A b a p ro d u c t s where they have the same quality as foreign products.

Compliance of the Executive Order 003 established by the president, which requires all Ministries, Departments and Agencies of Government to grant preference to local manufacturers of goods and service providers in the procurement of goods and services, should be taken seriously. This will grow the industry, create jobs, especially for the youth,

https://www.facebook.com/businessdayng

@Businessdayng

and generate wealth for the citizens. Products from Aba should be consumed domestically regardless of the influx of foreign products.

India’s footwear industry is driven by technological innovation and advancement.

In line with global best practises and trend, the Aba leather industry must be centered on and driven by technological innovation in its output, design, activities, and branding. This will attract a wider market and improve patronage.

Furthermore, branding and marketing strategy must be indigenous and domesticated. Findings reveal that artisans in Aba brand their products as ‘made in China’ in order to boost market reach and improve patronage locally and globally. While it might serve its function, it kills the prospects of boosting Nigerian-made products and has negative impacts on local consumption of goods.

Shoemakers will need t o w o rk o n reb ra n d i ng and repackaging of their products for higher and wider consumer attraction/ acceptability.

“Branding is important because it helps to change the perception of consumers who think that Aba products are @Businessdayng

inferior,” said Amanchukwu Nwankwo, a shoemaker in Aba. The industry is in need of foreign investors and partners that will foster the much desired growth development.

Ken Anyanwu, national secretar y, Association of Leather and Allied Industrialists of Nigeria (ALAIN), told BusinessDay in Aba that entry of foreign investors and partners into the market would enable the industry to compete globally and make funds for expansion easily accessible.

With the presence of foreign investors, stakeholders in the industry will be exposed to trainings that will inspire new innovations and designs as well as external knowledge from foreign bodies.

Furthermore, access to foreign investors and partners will lead to reduction in infrastructure problems and reduce the lack of necessary machines and instruments.

This will provide a platform for industrialisation and increase output.

Taking cue from India’s shoe industry, Aba has the potential to become more significant in economic development calendar and become a more competitive hub.

Thursday 17 October 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

35

Bank IT Security

Rain of foreign money on Nigeria’s tech space: Is in whose interest?

FRANK ELEANYA

O

n Thursday, when Abdulkar im B a s h i r, t h e young Nigerian who won the Start-up Innovation Competition, defeating 750 contestants from 73 countries returned from the GITEX2019 SuperNova Challenge, which was held in Dubai, his first port of call was the office of the Honourable Minister of Communications, Isa Ali Pantami, for a photo session.

As he held his prize money of $10,000, clasped the hand of the minister in a firm handshake and gave a very fat grin to the camera, Bashir looked proud and full of hope.

His meeting with the minister, as expected, gave birth to a nice speech, but whether it secures the future of his innovation and a real commitment from the government to take proactive steps to encourage tech entrepreneurs to compete on a global scale, Bashir will know later.

Many innovators who were sponsored to attend by the ministry to participate in previous GITEX conferences and who gave very good accounts of themselves have also received the ministerial handshakes and photo opportunities, but that’s where the gesture often ended. They are thrown back into the wild to either survive or die trying.

Nigerian leaders are not big on keeping promises just as Nigerian investors are not too keen on betting on new horses like tech businesses.

Many tech entrepreneurs now know this for certainty.

It is why many of them are quick to look towards Silicon Valley or any of its equivalent

for funding.

But without local investments driving Nigeria’s digital future, the country risks seeing its innovative resources, patents, and talents controlled from outside.

Nigerian tech startups have received funding from virtually every continent, including Asia, Europe, South America, North America, and Australia.

The fight for survival is real but the funding available for Nigerian startups is never enough, they hardly ever are and may never be, at least for as long as local investment continues to shy away from taking on the risky space headlong.

Data from GSMA shows that Nigeria accounts for the most number of tech hubs in Africa with 85 out of a total of 618 active hubs on the continent as of July 2019, which is up almost 100 percent from 314 in 2016. Lagos is ranked as the leading innovative city by the number of hubs.

Inside these hubs are hundreds of tech businesses at

their various levels of development. The more mature tech firms which no longer require incubation have their offices in different parts of the city. Very few have multiple locations across the country and Africa.

Access to funding, nonetheless, is one thing they all have in common.

While early-stage startups whose ideas are still undergoing development - as Bashir’s idea will likely need - may only need seed funding, those which are already businesses with actual products and customers need a lot more money to scale.

Of the about 50 startups that have closed funding so far in 2019, only 15 have received between $1 million and above. In 2018, only 58 startups benefitted from the $95 million funding raised, data from Disrupt Africa showed. It was, however, a boost from 2017 when just 30 Nigerian tech companies raised $63.3 million.

Until Jim Ovia’s $5 million equity investment in

TeamApt, no singular local investors have taken as much risk on a local tech company.

Interswitch needed about seven Nigerian banks to help it scale during its early days.

“It is to be expected that African Billionaires have not made their $ in tech, as mobile penetration (in West Africa) is only about 5 years old, and only this year reached global average level of 56 percent,” Marsha Wuff, cofounder of Loftyinc’s Venture Capital Fund, the Afroprenerus Fund said in response to a recent BusinessDay article: Why Nigerian billionaires are absent in scramble for local tech startups’ equity.

LoftyInc’s team of 80 has trained over 7000 local tech entrepreneurs and has invested in many tech ventures founded by African entrepreneurs, including Flutterwave and Andela from the earliest days.

Local VC activities in the tech space, it must be said, have grown over the years.

Like LoftyInc, VCs like Mi-

crotraction, Trium Networks, TLcom Capital, Venture Garden Group, Cordros Capital, etc are providing funding support to tech businesses in Nigeria.

Nevertheless, while the majority of the VCs are set up by Nigerians, the money they release to startups is not locally sourced. In other words, their existence is to the extent of the foreign capital they can generate.

Apart from VCs, local investors in Africa, in general, are not pulling their weight in private equity (PE), another source of funding for startups on the continent.

According to AVCA’s latest figures, the total value of African PE fundraising between 2013 and 2018 was $17.9 billion. Yet only a small proportion of this capital comes from local investors.

The majority of funds committed come from development finance institutions and international pension funds.

“I believe local communities have a larger role to play in tech than we can imagine,” said Victor Asemota, African Partner at Alta Global Ventures and a tech expert “It is not some “investors” sitting at a high table. The community should be the first investor.”

The traditional investor in Nigeria does not always see tech investment in the same light as buying lands and houses. While they believe a piece of land in a certain location will appreciate faster than any investment, tech entrepreneurs are mostly seen as young people hustling with their computers for the meantime until they find permanent employment.

“As someone close to VCs,

I know that these African VCs are doing the best they can. They are trying to attract foreign investors while also gathering local investors’ money,” said Kyane Kassiri, associate VC at LoftyInc Capital Management. “But then for founders, you have to comply with the level of maturity of the landscape here, which is still nascent.

You need to do your homework, prove yourself and have that traction that we (VCs) are looking for.”

Apart from giving up control of the tech space, the absence of significant local investment is partly responsible for the lack of depth in the tech space in Nigeria.

Startups in the country play ‘safe’ focusing on innovations they believe are easily scalable like platforms and can guarantee immediate returns, marketplaces, web, and mobile applications.

Only very few tech startups in the country are involved in deep tech like virtual reality and artificial intelligence, among others.

A tech space driven by local investment ultimately help in bridging the gap between academia and innovation.

In November 2019, while in Morocco, this reporter met with a 32-year-old doctor in Artificial Intelligence and professor in Machine Learning from the Mohammed VI Polytechnic University, in Ben Guerir, where she also got all her training from an intentional investment of the Moroccan government.

She is a representation of what is possible when government’s involvement goes beyond ministerial handshakes and photographs and when local investment meets opportunities.

Union Systems, Daon partner for easier, safer data capturing in financial services FRANK ELEANYA

T

he stress customers undergo to get their identities registered online by financial institutions may soon be reduced as Union Systems said it has partnered Daon, a global biometrics identity technology firm, to remove any form of friction.

Data capturing and harmonization is said to be an important phase of delivering the digital

economy, but this reality has since eluded Nigeria because data belonging to citizens are housed in different boxes in various institutions. While this creates several authentication issues for the customer, it ultimately leaves important information vulnerable and at the mercy of internet criminals.

The partnership between Union Systems and Daon enables the former which provides financial software solutions and

professional services to major banks in Africa, to leverage the Identity X in removing the friction from the authentication and onboarding processes.

Daon’s Identity X is a universal mobile biometric authentication platform that verifies a person is who they claim to be using biometrics such as their face, voice, and fingerprint. IdentityX clients can customize the platform to meet their own needs. Most nota-

bly, that means that they can automatically screen new accounts based on predetermined criteria, or trigger a manual human review in fringe cases.

“Working collaboratively with Union Systems Limited, we will make our leading identity technology available to an evergrowing wave of African innovators, particularly those in financial services who want to reach more customers and differentiate themselves with a

secure and seamless experience,” Tom Grissen, CEO, Daon said.

The IdentityX platform is particularly popular in the financial sector, with Daon providing solutions for a roster of partners that includes companies like Innovation Finance and banks like Turkey’s Akbank. IdentityX is also certified by the FIDO (Fast Identity Online) Alliance for both FIDO 1.1 (UAF) and FIDO2 protocols.

“This partnership with

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

https://www.facebook.com/businessdayng

@Businessdayng

Daon puts us at the forefront of the efforts by the regulatory authorities to combat financial crimes,” Chuks Onyebuchi, CEO, Union Systems said. “Daon’s technology is cuttingedge and will redefine authentication and digital onboarding as we know it.”

Union Systems brings to the partnership over 20 years’ experience implementing and supporting various global financial software applications around Africa.

36

Thursday 17 October 2019

BUSINESS DAY

news

Private sector investment in early childhood development gets applause Kelechi Ewuzie

C

ommissioner of education, Lagos State, Folashade Adefisayo, says investment by private sector in early childhood development centre would go a long way in addressing the over 13.5 million of out-of-school children challenge in Nigeria.

Adefisayo commended Slum2School partnership effort with the State Universal Basic Education Board (SUBEB) and the Ministry of Education to enrolled 1,487 out-of- school children into public private schools.

The commissioner stated this in Lagos at the commissioning of three early childhood development centres in Anglican Primary School, Makoko.

Speaking at the event, she said this development was exciting, sustainable and durable, saying, “This project is an exciting, sustainable and durable one. We will certainly start to invest more in our schools. What we aim to do now is to start to repair lots of our schools that are in bad shape, which is starting off in a couple of weeks.

“We aim at employing more teachers over 10,000-15000

teachers will be spread across public schools on Nigeria.”

Otto Orondaam, founder/ executive director, Slum2School, said the primary goal was to adopt and reform the primary education centre, noting, “We work hand in hand with the government, to see how we can reform public private schools to modern public private schools not just in Lagos but in other parts of the country.

“More so, we are trying to see how we can work out these policies, see that the government and other private sectors take responsibility so that every Nigerian child gets a quality education, thereby subjecting the rate of illiteracy.

“We are a group of individuals who refuses to sit and complain but to work with the realities we see in our society. We ensure that we build this nation into what we want it to be.

“This is not a one off programme, we have been into this since 2012 precisely 7 years.

We have supported over 55,000 children from Lagos to Port Harcourt, Abuja, Ibadan, Borno and other parts of the country and our team has grown to over 10,000 persons.

FG deports 7 Korean nationals ‘in public interest’ Stella Enenche, Abuja

F

ederal Government Wednesday announced the deportation of seven Korean nationals. The public relations officer of the Nigeria Immigration Service, Sunday James, who made the disclosure in a statement, said the order for the deportation was issued by the minister of interior, Rauf Aregbesola.

He said the order, which was executedbytheComptrollerGeneral of Immigration, Muhammad Babandede, was done in “the interest of the public.” Those deported included: Jo Sun Phil, Jang

Sung Chol,Che Chun Hyok,Pak Yong Gon, Ri Yong IL, Ri Hak Su, and Ri Tong Nam. “The Comptroller General of Nigeria Immigration Service Muhammad Babandede, has carried out the deportation of the followingsevenDemocraticPeople’sRepublic of Korea (DPRK) nationals from Nigeria for life,” James said.

According to him, “They were deported by the order of the HonourableMinisterOfInteriorbased on the powers conferred on him by the Immigration Act 2015.

“They were deported to their country of origin on the available flight on the 15th October, 2019 through Nnamdi Azikiwe International Airport, Abuja.

Firm’s Edu-Tech App to revolutionise Kids’ learning in Nigeria

A

Nigerian educational technology company, 9ijakids haslauncheditsmobileapplication to enhance the learning experience of children and revolutionize kids’ learning in Nigeria.

TheApp,builtaroundtheNigerian schoolcurriculum,addresseschallenges associated with learning, using technology and games, to build fun, alternative learning and instructionalopportunitiesforkids, whilst teaching them core skills and values.

Speaking on the 9ijakids kids learningservice,thevicepresident, Global Business Development and co-founder 9ijakids, ‘Titi Adewusi discloses that the company is passionate about grooming a generation of children to become successful business-people, developanentrepreneurialmind-set, andaregreatcitizenswithintegrity and honesty.

Adewusi says the convenient and easy to use 9ijakids app will help children learn Mathematics, Science, financial literacy, English, Grammar, Music, French, The Bible, Nigerian History, Democracy,

andSports,amongstothersubjects topromotethetotallearningneeds of the Nigeria children.

According to Adewusi, “My passion for kids learning really kickedintohighgearwhenIstarted helping my younger Son, a typical digital native, with his schoolwork and learning needs. I quickly noticed he could play games on any phone or tablet but wasn’t interested in learning when it came to schoolwork and conventional learning, he could make up a million procrastination excuses; I am tired, I am sleepy, I want to drink water, I am hungry, etc.

“However, once he was given a smartphone or a tablet, he transformed into a ‘genius’. I also understood that this was a familiar refrain with many parents. It was at the same I also realized that this was an opportunity to teach my Son the way he wanted to learn.

In this case, make his learning experiencefun,usingsongs,hands on activities, stories, and games; using the power of technology. All of these led to the development of the 9ijakids learning games. www.businessday.ng

L-R: Mark Brooks of Mark Brooks Education; Jide Ayegbusi, chief education officer, and’Titi Adewusi, founder of Edusko Africa, and vice president, Global Business Development, and co-founder of 9ijakids

Global financial condition favours Nigeria for hard, domestic currency bond issuance – IMF HOPE MOSES-ASHIKE in Washington DC

...says undertaking structural reforms to develop economy key

he International Monetary Fund (IMF) on Wednesday said the global financial condition is favourable to Nigeria and that issuing bonds in hard and domestic currencies are possible.

Tobias Adrian, financial counsellor, IMF, said this while presenting the Global Financial Stability Report at the ongoing IMF/World Bank annual meetings in Washington DC. Adrian said flows of investment to sub-Saharan Africa have been strong and are expected to reach record highs this year.

He said both domestic and external debts market are important for economic growth and development and that both markets should be well

developed.

Adrian said “borrowing has to be managed in a responsible manner” and that it “can be helpful for economic growth and investment but it can also be dangerous when negative shocks arise”.

As at June 30, 2019, Nigeria’s total external debt stood at N8.3 billion ($ 27.2 million), according to data published by the Debt Management Office (DMO).

Nigeria spent N2.2 trillion on servicing outstanding loans in 2018 compared to N1.68 trillion expended on infrastructure, data released by the Central Bank of Nigeria (CBN) showed.

“Nigeria has a large exposure to domestic debt particularly from central bank bills. There are a lot of higher

T

IDAN announces GUIDE for business confab 2019 TEMITAYO AYETOTO

T

he Interior Designers Association of Nigeria (IDAN) announces the details of the 2019 GUIDE event. The two-day conference and networking event is scheduled to take place at the Wings Complex, Victoria Island, Lagos, from October 17 – 18, 2019.

The annual exhibition was established to be the foremost Interior Design and lifestyle platform in Nigeria.

Now in its fifth year, GUIDE for Business has broadened the spectrum of its audience. This edition, themed ‘Freedom to Design’, is set to provide creative professionals and entrepreneurs with business and career development tools from a range of industry leaders.

Delivering information in areas such as finance, taxation, human resources, business development, project management, insurance ,

health and wellness to name a few. The event also provides a platform for established and aspiring design professions to network with other service providers.

“IDAN is delighted to introduce GUIDE for Business, a reformed segment of our annual GUIDE Exhibition. The theme of this year’s GUIDE gives us a unique opportunity to take a vibrant and enticing look at the business side of design practice, dissect the concept of ‘freedom’ in the design profession, and allow designers to share their voice and learn from a broad spectrum of speakers in the Nigerian business landscape.

“We are looking forward to engaging, informative and entertaining sessions on both days and we hope this new initiative will help our profession to understand and elevate its role in shaping our economy,” said Omon Anenih - Mordi, president of IDAN.

https://www.facebook.com/businessdayng

redemption and more rollovers going forward. So, those risks, especially with respect to local currency debts, managing debts and behaviour of non-resident debt is very important,” said Evan Papageorgiou, deputy division chief, monetary and capital markets department, IMF. Adrian said the external debts of the emerging and frontier economies have risen to 160 percent of exports on average, up from 100 percent in 2008.

He said a sharp tightening in financial conditions and higher borrowing costs would make it harder for them to service their debts.

“External debt is rising among emerging and frontier economies as they attract capital flows from advanced

economies, where interest rates are lower,” Adrian said.

Total public and nonfinancial private sector debt in percentage of GDP for G20, emerging markets stood at 190.1 percent in 2018 compared to 183.3 percent in 2017 and 99.8 percent in 2007.

In dollar terms, total public and non-financial private sector debt stood at $44.5 billion in 2018 as against $43.2 billion in 2017 and $11.3 billion in 2007, according to the IMF global debt database (2019, forthcoming) preliminary estimates.

Adrian advised policymakers to foster the further development of sustainable finance – an approach to investment that takes environmental, social and governance factors into account.

C&I Leasing seeks reduction in unemployment, launches online recruitment portal

C

&I Leasing plc, foremost leasing and ancillary services conglomerate, is set to launch an endto-end online recruitment platform designed to match talented candidates on the job market with innovative companies looking to grow their staff.

The portal, www.getajobng.com (GetAJobNG), was launched at an exclusive official ceremony on Wednesday, October 16, 2019 at Four Points by Sheraton, Victoria Island, Lagos.

The launch, themed: “Talent is Not Enough,” is the first in a two-phased event and witnessed a gathering of thought leaders, subject matter experts and leading recruitment and human resource operations professionals from across the country.

Amina Oyagbola, a seasoned human resources and management consultant, gave a keynote presentation that speaks to challenges many @Businessdayng

organisations and job seekers face in the recruitment process.

Commenting on the unique advantage GetAJobNG brings to the market, Andrew Otike-Odibi, managing director/CEO, C&I Leasing, said the company had vast experience as a service provider in the Nigerian labour market for almost three decades and would leverage on technology to meet the needs of both recruiters and job seekers.

“Our big Idea is to become Africa’s leading specialized talent marketplace, connecting companies to the best talent available. We cater to both large and small organisations,” he said.

“More than ever before, recruiters want to fill positions easily, quickly and cost effectively, shortlist great talents and test out their compatibility with the job. They don’t want to spend time sorting heaps of applications for candidates who are not the right fit for their vacancies.

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

37

38

Thursday 17 October 2019

BUSINESS DAY

news Tragedy in Onitsha as mother, son, trader ...

Continued from page 1

four-storey buildings, about 15 vehicles, and goods estimated at over N500 million were also burnt.

Eyewitnesses said the tanker laden with a substance suspected to be Premium Motor Spirit (PMS) lost control and fell into the drainage channel at MCC Bus Stop near Toronto Hospital, Upper-Iweka, Onitsha.

In the process, the tanker head decoupled from the trunk and continued running until it finally stopped at Down Flyover UpperIweka, Onitsha. After some minutes the tanker exploded and its content spilled over and flowed through the drainage system, with fire.

As the fuel flowed in the drainage channels, the fire continued spreading and burning many houses along Iweka road before the fire entered parts of Ochanja market.

The eyewitnesses said that the woman and her child lost their lives when she tried to jump over the big drainage channel with

her child at Ochanja First Gate, but fell into the drainage. They were burnt beyond recognition Another man who had a shop at Ochanja by Zik Avenue went back to collect money he kept inside the shop while the fire was raging and was trapped there, leading to his death.

Some commercial banks shut down as the fire was spreading close to their premises at Ochanja market junction. The fire was still raging at Ochanja market at about 6pm on Wednesday when this report was filed.

Although security men were available at the scene, they could not do anything to stop the fire due to the absence of fire-fighting equipment. Some of the police officers told our correspondent that they could not do anything with their bare hands or guns.

They blamed the spread of the fire on the absence of fire servicemen and equipment which would have been used to stop the fire from spreading to houses and shops.

Buhari slashes travel costs for ministers, ...

Continued from page 2

deficit is projected to be N2.18 trillion. The deficit represents 1.52 percent of estimated GDP, well below the 3 percent threshold set by the Fiscal Responsibility Act of 2007, and in line with the ERGP target of 1.96 percent.

Buhari had stated that “fiscal reforms shall introduce new performance management frameworks to regulate the cost to revenue ratios for government-owned enterprises, which shall come under significant scrutiny”.

“We will reward exceptional revenue and cost management performance, while severe consequences will attend failures to achieve agreed

revenue targets,” he had said, while also announcing government’s plan to sustain efforts in managing personnel costs. “Accordingly, I have directed the stoppage of the salary of any Federal Government staff that is not captured on the Integrated Payroll and Personnel Information System (IPPIS) platform by the end of October 2019. All agencies must obtain the necessary approvals before embarking on any fresh recruitment and any contraventions of these directives shall attract severe sanctions,” he had said.

The Federal Government is also expected to carry overhead costs projected at N426.6 billion following creation of new ministries.

Nigerians spend 60% more for a pot...

Continued from page 2

rice, groundnut oil, turkey and chicken were the major food commodities that increased by market price.

Before the border closure, a bag of imported rice cost N14,500-N15,000 while a bag of locally produced rice cost N13,500 but after the closure, a bag of imported rice now costs N26,000 and a locally produced bag of rice cost N18,000- N19,500.

Also, the price of a kilo of imported turkey has increased by 30.8 percent to N1,700 from N1,300, while a kilo of imported chicken increased by 36.4 percent to N1,500 from N1,100.

It was also noticed that the price of the Nigerian

chicken has increased.

Around the markets surveyed, the prices of major breeds of local chicken such as a whole broiler and old layer increased by 16.7 percent from N3,000 to N3,500 and by 17.6 percent from N1,700 to N2,000, respectively.

Since mid-2018, there had been a general decline in the Jollof Index as the effects of the recession receded, and inflation dipped from highs of 2016/2017, bringing some respite to Nigerians who already spend as high as 60 percent of their income on food.

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

L-R: Tinuade Awe, executive director, regulation, The Nigerian Stock Exchange; Patrick Ezeagu, chairman, Association of Securities Dealing Houses of Nigeria (ASHON); Ify Ejeizie, public relations officer, and Akin Akeredolu-Ale, CEO, Lagos Commodities and Futures Exchange (LCFE), at a courtesy visit of ASHON’s executives to The Exchange and closing gong ceremony in Lagos.

Foreign insurers back local subsidiaries...

Continued from page 1

told BusinessDay in an interview that Allianz Global would make sure that Allianz Nigeria conforms to local regulation. Vrolijk said plans had been concluded to recapitalise Allianz Nigeria and it had been approved.

Being the largest shareholder with about 99.6 percent stake in the company, “we will drop the money”, Vrolijk said.

“We will do over N18 billion as required of composite insurers, maybe around N20 billion before the close of accounts in 2019,” he said.

“We are doing similar recapitalisation in CIMA Region, Ghana and Kenya. As Allianz, we are committed to the Nigerian market and we are going to put the money down,” he further said.

SUNU Assurances Nigeria plc, a member of SUNU Group, has also received the assurance of its parent company for funding to meet the recapitalisation target before the deadline of June 30, 2020.

Samuel Ogbodu, managing director/CEO of SUNU Assurances Nigeria plc, said the insurer would exceed the N10 billion regulatory requirement on recapitalisation to underwrite all classes of general business.

Ogbodu said in order to meet the recapitalisation regime of N10 billion for general business, the company was going through the route of rights issue.

He stated that the Sunu Group based in Paris, France, owned 65 percent of the company and has given its commitment to pick up the 65 percent of the rights.

National Insurance Com-

mission (NAICOM) had on May 20, 2019 increased the minimum paid-up share capital of insurance companies in Nigeria, requiring the existing 59 underwriting firms to shop for capital to comply.

In the new capital regime, life companies’ capital was increased from N2 billion to N8 billion, general business from N3 billion to N10 billion, composite business from N5 billion to N18 billion, and reinsurance companies from N10 billion to N20 billion.

According to the Commission, the minimum paid-up share capital requirement would take effect from the commencement date of the circular (May 20, 2019) for new applications, while existing insurance and reinsurance companies would be required to fully comply not later than June 30, 2020.

In a circular dated July 23, 2019, NAICOM further stated

that the recapitalisation plan should include, among others, capital status of the companies as at the last audited financial statements, board resolution on how to comply with the directives, and detailed action plan on how the funds for the recapitalisation are to be sourced with timeline and deliverables.

The circular also directed that companies intending to seek funds from the capital market were required to submit their plan of action on a file-and-use basis, just as “companies that intend to merge or acquire another should submit their proposal after which they must comply with Section 30 and 31 of the Insurance Act 2003”.

Meanwhile, NAICOM has reviewed insurers’ individual submissions on recapitalisation plan and has since given those with clear plans ‘no objection’ orders to continue with execution of their plans.

FG approves $300m investment in digital, e-Customs ...

Continued from page 1

project.

This was contained in a memo dated September 17, 2019 and signed by Abba Kyari, chief of staff to the president.

The memo with the number SH/COS/08/10/A/225, sighted by BusinessDay, was addressed to the ministers of Justice, Finance, and Budget and Planning for onward implementation.

Analysts have argued that if Customs is made to adopt automation and digital cargo clearing procedures, Nigerian ports would become efficient by reducing demurrage and storage charges paid by importers due to delay in cargo clearing.

The president through the memo also directed the ministers of Justice, Finance and Budget to finalise the

concession agreement between ICRC, NCS and SPV no later than October 31, 2019.

Buhari also directed the trio to ensure that the agreement provides that the Comprehensive Import Supervision Scheme (CISS) and Nigeria Export Supervision Scheme (NESS) revenue sharing arrangement commences on a pro-rata basis against the phase one of the $300 million investment programme.

This, he said, can only take effect upon commissioning of investments, verifiable by the Central Bank of Nigeria’s letters of credit or valid import documentation, and an appropriate termination clause to be effective if the consortium is unable to reach financial close within nine months of the concession agreement being effective.

https://www.facebook.com/businessdayng

The president further directed the ministers to ensure strict performance guarantee are captured in the concession agreement.

He also directed the minister of Finance and Budget to provide monthly project implementation updates and advise on an appropriate date for the president to flag off the Customs Modernisation Project no later than November 30, 2019.

Recall that in 2015, a survey carried out by NAFITH, an international company contracted by the Nigerian Shippers Council (NSC) to study and find solutions to the perennial traffic congestion on the roads leading to the nation’s major economic gateways, Apapa and Tin-Can Island ports, said that Nigeria needs to introduce electronically powered operations at the ports to ease gridlock on @Businessdayng

the roads.

The survey, which was presented then in Lagos, said that Customs needs to introduce single window model of cargo clearance, which is currently the best practices all over the world.

“Nigerian port needs paperless Customs ; epayment of Customs duty; e-container loading list ; electronic risk-based inspection; connecting other government agencies under one platform and e-permit exchange among operators,” said the survey.

It also revealed that automating cargo clearance processes will help in putting proper logistics control in place and this will ensure that only trucks that have businesses at the ports would be allowed to be within the port environment.

Thursday 17 October 2019

BUSINESS DAY

39

news

Security: Enugu purchases 18 automated drones Regis Anukwuoji, Enugu

E

nugu State Executive Council has given approval for the purchase of 18 automated drones for air surveillance within and outside the state for effective security management.

The newly appointed Commissioner for Information, Nnanyelugo Chidi Aroh, announced this to journalists at the end of the state executive council meeting, saying the action was to ensure that all parts of the state were covered security-wise.

The information commissioner said the council ratified the earlier approval given by the state executive council meeting on May 28, 2019, approving the purchase of 100 Innoson Hilux vans to enhance the capabilities of the security agencies in the state.

According to Aroh, 260 vehicles as well as motorcycles and bicycles are to be handed over to Forest Guards, Neighbourhood Watch groups, among others, for community policing.

He noted that the security vehicles had been supplied and that communication gadgets and facilities were being installed on the vehicles to enhance effectiveness, adding that the choice of indigenous manufactured

vehicles from Innoson Motors demonstrated the state government’s commitment to encourage local industries, create jobs for teeming youths and protect local investments.

According to the commissioner, “We have extracted commitment from Innoson Group to establish a service centre in Enugu, consequent upon this purchase. This service centre is going to provide part of the technical services for the maintenance of these vehicles, in addition to a one-year maintenance guarantee that was given to the state government by Innoson Motors in line with our purchase agreement.”

He said the state had now completed the recruitment and training of 1,700 Forest Guards, representing 100 personnel from each local government area, saying their salaries and emoluments including other local security groups were deliberated and approved for them “to move into the field immediately to ensure proper security of lives and property of the people.”

He stated that the council, following the request made by the governor, approved an increase in the allowance payable to members of the Neighbourhood Watch groups “to boost their morale.

Buhari warns against actions encouraging strife, conflict Tony Ailemen, Abuja

....launches 2020 Armed Forces Emblem

P

actions that emphasise our differences.

“There is no doubt that the strength of Nigeria lies in her diversity. It behoves us therefore to engage in activities and endeavours that feed our diversity as a source of strength not weakness.”

The day is also used majorly to acknowledge and commend the sacrifices of the fallen heroes and veterans of First and Second World Wars, Nigerian Civil War and Peace Support Operations around the world.

Aside these however, Nigeria is also currently engaged in internal security operations, battling to contain the senseless war waged against the country by the Boko Haram insurgents.

According to the president, all hands must be on deck to check the attacks on soft targets, mostly innocent Nigerians, as the “peace and security of Nigeria is nonnegotiable and the security agen-

resident Muhammadu Buhari, Wednesday, urged Nigerians to use its diversity as a source of strength, while avoiding actions that promote ethnic strife and differences.

The president stated this as he flagged off activities marking the 2020ArmedForcesRemembrance Day Celebration Emblem and Appeal Fund at the Presidential Villa, Abuja, which will culminate in the celebration of the Armed Force Day in January 2020.

The Armed Forces Remembrance Day Celebration is fixed for January 15, annually, to commemorate the end of Nigeria’s 30-month bitter civil war, adding, “Itremindsusoftheneedtoguard jealously the unity of our country, which was won at a great cost.”

The president stated that “the day calls to mind the negative impact of strife and conflicts, and demands that as responsible citizens, we must at all time avoid

cies must continue to do their work diligently.

“As a government, we will continue to provide necessary logistical support to ensure that our Armed Forces operate with the best modern warfare equipment, while at the same time adequately addressing the issues of their welfare.

“The nation is appreciative of the gallantry and sacrifices of Officers and Men of our Armed Forces in the campaign against insurgency and other Internal Security Operations. This has led to the return of normalcy in affected parts of the nation.

The Boko Haram terrorists have been substantially defeated and degraded to the extent that they are only daring soft targets.

“We shall not rest until all our displaced persons are safely resettled into their communities without fear of further attacks. It is for this reason that the North East

Development Commission and Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development were established.TheExecutiveArmof Government hereby commends the National Assembly for the passage of the Bill establishing the Commission.

“It is our hope that with prudent management of limited resources and support from wellmeaning Nigerians and Corporate bodies, the Commission working in close collaboration with the Ministry and friends abroad will be able to deliver on their mandate.”

He noted that government was mindful of its roles of providing the enabling environment for businesses to thrive, adding, “We will not fail to provide our citizens withanatmospherethatisdevoid ofsecuritythreatsandcriminality, where life is stable and progress is certain.”

Delta proposes N389bn in 2020 budget Francis Sadhere, Warri

D

elta State government has proposed a N389billion budget for the 2020 fiscal year. The state commissioner for information, Charles Aniagwu, disclosed this while briefing newsmen in Asaba on Wednesday.

Aniagwu said that the budget approval was part of the decisions reached at the State’s Executive Council meeting of Tuesday which was presided over by Governor Ifeanyi Okowa at the Government House, Asaba.

Giving details on the proposed budget, the Commissioner for Economic Planning, Barry Gbe, said that the approval for the budget followed a rigorous process.

He stressed that during the process the inputs of Ministries, Departments and Agencies in the state were scrutinised and aligned to ensure compliance and realisation.

Gbe said that the state government Fiscal Strategy Paper (FSP) adopted the crude oil production figure of 2.18 billion barrel per day and 57 US dollars per barrel benchmark in arriving at the budget figure.

“The budget for 2020, is N389 billion which dropped with about N1billion from that of 2019 of N390.3 billion. The Capital Expenditure is about

CHANGE OF NAME

I, formerly known and addressed as Miss Adesina Adebukola Jumoke now wish to be known and addressed as Mrs. Adeniran Adebukola Jumoke. All former documents remain valid. General Public please take note.

N217 billion and the Recurrent Expenditure is N171 billion.

This means that we will do more projects than spend more money on recurrent.

“The personnel cost actually moved up because we put into consideration the payment of the new minimum wage by 2020,” Gbe said.

In another development, Aniagwu announced that the council also approved the recognition of Beneku community as a clan and that the recognition was subject to the approval of the State Assembly.

According to Aniagwu, getting the Assembly’s approval is a precondition for the appointment of a traditional ruler for the community, which in Patani Local Government Area (LGA).

“The council also approved the appointment of Obi Ifeachukwude Chukuka-Okonjo ll as the traditional ruler of Ogwashi-Uku. Approval was also given for the appointment of HRM Johnbull Kolokoiwe, Ongolo l, as Pere of Ogbolubiri Mein Kingdom of Burutu LGA. “It approved the appointment of Obi Christopher Uzu as the traditional ruler of Onicha-Olona,” Aniagwu said.

He also said that approval was given for the construction of Queens Street, Agbor, Ika South LGA at the cost of about N600 million.

CHANGE OF NAME

I, formerly known and addressed as Ubah Prince Chimezie now wish to be known and addressed as Ubah Winners Chimezie. All former documents remain valid. General Public please take note. www.businessday.ng

L-R: Chukwuma Okolo, chairman, C&I Leasing plc; Amina Oyagbola, managing consultant, AKMS Consulting Limited /keynote speaker; Andrew Otike-Odibi, MD/CEO, C&I Leasing plc, and Alex Mbakogu, CFO/executive director of the company, at the launch of the online recruitment portal getajobng in Lagos.

Pic by Pius Okeosisi

‘Industries may ditch Ogun if critical road infrastructure is not fixed by 2020’ RAZAQ AYINLA, Abeokuta

… Abiodun pledges to improve ease of doing business

M

genes and residents of Ogun West Senatorial District, Akin Odunsi, a former senator from Ogun West, stated that the state might witness exodus of industries and investors if cogent and quick action were not made to improve on road and other infrastructure within the industrial area.

Odunsi noted that large chunk of the monthly internal revenue was generated from the region by the state government, yet successive governments abandoned the place and allowed the infrastructure dated back to the Obafemi Awolowo’s Premiership of old Western Region, to decay without tangible replacement and improvement.

He said, “If we don’t want industries to pack and move out of Igbesa, Agbara, SangoOta and Atan-Ota, all in the Ogun West Senatorial Dis-

anufacturing industries, especially in major industrial areas such as Sango-Ota, Atan-Ota, Igbesa and Agbara, may ditch Ogun State, if critical infrastructure such as roads and bridges are not fixed quickly by the state government.

This, and other statements and requests were tendered before Governor Dapo Abiodun of Ogun State during the second round of town hall meeting held against the backdrop of 2020 Ogun State Budget Preparation/ Medium Term Expenditure Framework organised by the Ministry of Budget and Planning in Ilaro, the capital of Ogun West Senatorial District on Wednesday.

Speaking on behalf of traditional rulers, leaders, indi-

https://www.facebook.com/businessdayng

trict, we must quickly provide necessary amenities, if we don’t want to lose them to other states and countries of West Africa.”

He also appealed to state government to resuscitate the moribund state-owned hotel - old Gateway Hotel in Ota as part of investment drive of the state, saying the Gateway Hotel in Ota was one iconic structure that shows presence of government in Ogun West Senatorial District.

Also, Gboyega Nasir Isiaka, governorship candidate of the African Democratic Congress (ADC), who is also from Ogun West, requested Governor Abiodun to declare state of emergency on road infrastructure, saying: there was need for massive road infrastructure across Ogun West. In fact, if the governor declared state of emergency @Businessdayng

on road construction it was not enough.

Responding, Governor Abiodun explained that such statements and requests were very important, hence, town hall meeting was being held across the three senatorial districts of the state as part of measure to collate people’s inputs and opinions that form the ingredients of 2020 Budget Preparation/Medium Term Expenditure Framework (MTEF), spanning 2022.

The governor affirmed that every effort would be directed to improving on ease of doing business, provision of credit facilities for MSMEs, creation of wealth and employment opportunities for the youths, as the present government would be inclusive, participatory and quality-based government and governance.

40

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

41

news

Stakeholders demand regulation of Nigeria’s cocoa industry to attract premium … as production shrinks by 50% ENDURANCE OKAFOR

T

he decline in Nigeria’s cocoa production over nearly five decades is a consequence of the absence of a regulator, stakeholders in the sector have said. To reverse this, they said the local cocoa industry must be firmly regulated to ensure standards and promote growth.

Data by the Nigerian Export Promotion Council (NEPC) puts Nigeria’s cocoa production behind its African peers. The production level in Africa’s largest economy was about 245,000 metric tons as of 2018.

Ivory Coast leads the world in the production and export of cocoa beans used in the manufacture of chocolate, supplying about 33 percent of cocoa produced in the world.

West Africa collectively supplies two-thirds of the world’s cocoa crop, with Ivory Coast leading production at about 2.2 million tonnes and nearby Ghana, the third-largest producer with 1 million capacity coming after Indonesia, the primary nonAfrican competitor of Ivory Coast which went from having almost non-existent domestic cocoa industry in the 1970s to becoming one of the largest producers in the market by the early 2000s.

The latest data of International Cocoa Organisation (ICCO) 2016/2017 season ranked Nigeria as the 6th largest producer of cocoa lagging Ivory Coast, Ghana, Indonesia, Ecuador, and Cameroon.

“Since 1959 when the colonial masters handed over the cocoa

industry back to Nigerians to manage, we have been using the constitution of 1959 by the colonial masters to regulate the cocoa industry. This is so outdated; even Great Britain that handed it to us have changed their ordinance 73 times,” Adeniji, MD/CEO of Starlink Global Ltd, producer and exporter of cocoa said Monday at the Nigeria Cocoa Economy workshop.

Cocoa was a major revenue and foreign exchange earner for Nigeria some years back and it provided millions of jobs for the people, especially those in the southwest region. Several years down the line, following the discovery of oil in commercial quantity, the once major cocoa producer now lags its peers.

Checks by BusinessDay reveal that in 1971, Nigeria’s cocoa production was at 491,000 tonnes, twice the current 245,000 tons.

The reasons for this are not far-fetched. The lack of industry regulator is top on the list. Low levels of investments in the industry, corruption, the Apapa gridlock, among others, are some of the reasons for Nigeria’s loss of ‘cocoa power’ in the global market.

“The low level of production is a result of the many factors including poor grading and quality-related issues,” Olusegun Awolowo, the Chief Executive Officer of the Nigerian Export Promotion Council (NEPC), told BusinessDay on the sidelines of the workshop with the theme: Capacity Building on Cocoa Grading & Regulation in Line with FCC Rules.

W/African waters remain hotspot for pirate attacks as global incident drops - IMB AMAKA ANAGOR-EWUZIE

D

espite a drop in number of incidents of piracy and armed robbery against ships recorded globally in the first nine months of 2019, when compared with same period in previous year, Gulf of Guinea, which houses Nigerian waters, remains a high risk area for piracy and armed robbery, the International Maritime Bureau’s (IMB) report for the third quarter of 2019, states.

According to the report, the Gulf of Guinea region accounts for 86 percent of crew taken hostage and nearly 82 percent of crew kidnappings recorded globally.

For instance, the report stated that in July, a general cargo vessel was hijacked approximately 120 nautical miles South West from Brass where 10 crewmembers were kidnapped from the vessel and released four weeks later.

“In August, a bulk carrier and a general cargo vessel were boarded within hours of each other at Douala anchorage in Cameroon, and a total of 17 crews were kidnapped from the vessels. Within six weeks, all kidnapped crew were released,” IMB report said.

This incident, IMB said, demonstrates the range of piracy activity in the Gulf of Guinea and that all types of ships are

vulnerable to attack. It further stated that Lagos anchorage recorded 11 incidents in 2019, the highest number for any port area.

“Although, incidents are down, the Gulf of Guinea continues to be a concern for piracy and armed robbery-related activities with kidnappings of crew members increasing in both scale and frequency,” said Pottengal Mukundan, director, International Chamber of Commerce (ICC) of IMB. According to Mukundan, “It is important that shipmasters and owners continue to report all actual, attempted, and suspected incidents to ensure that an accurate picture of these attacks emerge and action is taken against these criminals before the incidents further escalate.”

Meanwhile, IBM stated that about 119 incidents of piracy and armed robbery against ships were reported to the IMB Piracy Reporting Centre (IMB PRC) in 2019, compared to 156 incidents for the same period in 2018.

“Overall, the 2019 incidents include 95 vessels boarded, 10 vessels fired upon, 10 attempted attacks, and four vessels hijacked. The number of crew taken hostage through the first nine months has declined from 112 crews in 2018 to 49 crews in 2019,” it said. www.businessday.ng

L-R: Mohammed Ajiya, president, Digital Bridge Institute (DBI); Umar Danbatta, executive vice-chairman/CEO, Nigerian Communication Commission (NCC); Odunayo Sanya, GM, planning and customer management, MTN Nigeria, and Bode Oke, vice-president, finance and administration, Digital Bridge Institute (DBI), at the DBI, GSMA and MTN sponsored workshop on Child Online Protection in Abuja.

Temitayo Ayetoto

W

ith the growing rate of cancer detection in children and rising awareness of the public, there is a vacuum experts say can only be filled by specialised centres that treat nothing other than paediatric cancer, and this makes investment sense. It is like an existing market for demand that is locally starved of supply, they say.

Adedayo Joseph, a clinical oncologist and founder of The Dorcas Cancer Foundation (TDCF), in an exclusive interview, tells BusinessDay that the Foundation routinely refers at least three Nigerian parents to identified specialist centres in India, the United States, Dubai, the United Arab Emirates and the United Kingdom.

There, these troubled families throw thousands of dollars at treatment, spending unavoidable funds on accommodation, travel arrangements and feeding, among others.

Why paediatric cancer centre deserves investment attention “All of that money can be kept in the country. If we create centres where people can be treated, people will pay for that service,” Joseph says.

“We have created tracks of good places we can refer them to. We connect them and they take it up from there. They are going there to spend money.

That treatment they are going to receive is not free. If we have it here, they will stay here and pay for it,” she states.

There are no centres in Nigeria fully committed to the management of cancer such as Alzahra Cancer Centre of Dubai, for instance. The available ones are embedded as units under general healthcare services in a handful of private hospitals and mini departments at public facilities, including the Lagos University Teaching Hospital, the University College Hospital

Ibadan, and others.

Most childhood cancers, however, are initially present with non-specific sign or symptoms, often leading to late detection.

The causes of cancer in children also vary, as some children have a higher chance of developing a specific type of tumour because of certain genes they inherit from a parent. These children need careful, regular medical check-ups that include special tests to identify early signs of cancer, all which access is limited, as parents and guardians travel long distances in search of care within the country.

To resolve this, Echolab Services Limited is considering a $100 million investment in cancer centre in Nigeria, showing an example for others to follow.

Benson Ayodele, Echolab chairman, says it will be drawing support from private funders

mainly because banks in Nigeria don’t often provide the type of patient fund able to nurture a healthcare business before return on investment sets in.

Ayodele says the firm will place emphasis on balancing the humanitarian and the business component together in building the cancer centre.

“Where we bring in the business component is such that having invested that money, you shouldn’t lose your money. You shouldn’t be going cap in hand every month looking for money to pay salaries,” he explains.

“That’s where we come in as professionals to ensure the business runs profitably to sustain itself. It is not your best business to do if the aim is to make money. It is totally different from manufacturing or agribusiness where you plant crop and in six months and you are harvesting and selling.”

FirstBank hosts fintech summit 3.0 FEC approves N3bn for oil, gas park

F

irst Bank of Nigeria Limited hosted the third edition of its annual Fintech summit themed “Banking + Tech = Solving Real Problems”. The event held on Wednesday, in Lagos, with a conference and panel sessions comprising tech experts, start-ups, regulators and other stakeholders to deliberate pressing issues, trends and upgrades in the application of technology in the financial services industry.

Victor Asemota, founder, Swifta Systems & Services, was the keynote speaker at the event.

With the evolution that has taken place in the financial services industry in recent times, especially through the advent of technological inclusion in business operations across all industries, this year’s event focused on how technology can aid the solving of large scale societal problems within the context of financial services in Nigeria.

The event cuts across multiple panel sessions to deliberate issues and prospects in the business management across the financial technology ecosystem with a view to having participants exposed to the trajectory of current and future opportunities in the Fintech ecosystem.

According to Gbenga Shobo, deputy managing director, First Bank of Nigeria Limited, “Our Fintech Sum-

mit 3.0 was convened to set the tone for discussions that promote disruptions in the digital space, especially in the financial industry, as we recognise the opportunities for inclusive growth and influence of FINTECH not just in banking but also business operations across all industries. The 2019 edition of our FINTECH summit would build-up from the successes achieved in the last two editions.”

He added, “FirstBank, in the last few years, has used technology to deliver solutions to promote financial inclusion. With over 33,000 Firstmonie Agents in 36 states doing over N2 trillion worth of transactions, we are reducing poverty with our Agency Banking footprint. Our Firstmobile application has become the foremost mobile banking application in the country with over 3 million users doing over 14 million transactions monthly. It is one of the major gateways for Financial Inclusion where everyone can download the app and open an account at their own convenience! This was not the case a few years ago. Our USSD channel, *894#, is also solving Financial Exclusion problems for those who do not have easy access to internet data. With over 8 million users today, transactions worth over N4 trillion have been consummated using this channel.’’

https://www.facebook.com/businessdayng

Tony Ailemen, Abuja

T

h e Fe d e ra l E x e c u tive Council (FEC) on Wednesday approved the sum of N3 billion for the construction of an oil and gas park estimated to create about 1000 jobs.

Minister of State for Petroleum Resource, Timipre Sylva, disclosed this while briefing State House correspondents after the FEC meeting presided over by President Muhammmadu Buhari.

Sylva said the petroleum resources ministry had presented a memo for the establishment of two oil and gas parks, one in Akwa Ibom and the other in Bayelsa State, saying, “These parks are to support the development and manufacturing of oil and gas tools. As some of you know, in some countries, service sector of the oil industry is sometimes even bigger than the oil industry itself. Unfortunate in Nigeria that sector has not really grown so much.”

The minister said the current administration was committed to developing the service @Businessdayng

sector and that was why the oil and gas parks were being built, adding, “The parks will create a lot of jobs, we are looking at about 1000 additional jobs, and of course it will also improve the security of the Niger Delta.”

Minister of Aviation, Hadi Sirika, also disclosed that FEC approved another N2.4 billion for the construction of an indoor shooting range, even as he added that the FEC also proved that airport staff could now bear arms as part of plans to improve security at the nation’s airports.

“Council approved two memoranda, first is construction of indoor shooting range for aviation security.

“Recall some time ago Mr. President in conformity with the Act established Federal Airport Authority of Nigeria (FAAN) had approved that aviation security carry arms for improved security, and you also recall that these aviation personnel were trained and still receiving training and profiling and all things that would make them efficient at the DSS and other sister organisations.

42

Thursday 17 October 2019

BUSINESS DAY

Investing in Rivers State

Bonny king seeks an economy outside oil/gas Says despite NLNG presence, poverty is still written all over Bonny Kingdom Looks up to Bonny Chamber of Commerce to drive the new economic dream Wants Bonny Ring Road, else, the upcoming road to Bonny may be a problem Ignatius Chukwu

T

he Nigeria Liquefied Natural Gas (NLNG) may be awash with gasdollars but the land on which the gas flows may have a different interpretation of its economy. Thus, from afar, many would conclude that everybody in Bonny Island of Rivers State is a born millionaire with financial problems and that poverty is now a stranger in the stead of Bonny people. The contrary may be the case.

The reality was painted by the King of Bonny, the Amanyanabo of Grand Bonny, Edward Asimini William Dappa Peple 111, who is Perekule X1, when the entire management and former leaders (legends) of the Nigeria Liquefied Natural Gas (NLNG) over the years paid a historic visit to the king’s court to mark the conclusion of the first 30 years of the NLNG and gas and to kick-start the start of another 30 years.

After listening to a glowing speech by Tony Attah, the managing director of NLNG, the king commended them but did not fail to point to what he called poverty on the rich island.

Tony Attah (2nd r) NLNG MD and Sadeeq Mai-Bornu, NLNG DMD, give a model of an NLNG ship to the Amanyanabo of Bonny Kingdom, Edward Asimini William Dappa Pepple III, Perekule XI. With them are Claude Wilcox, chairman, Bonny Chiefs’ Council and Abel Attoni, Bonny chief, as well as Yusuf Usman, NNPC ​chief operating officer, ​Gas & Power, .

His words: “There are signs of needs and poverty in Bonny Kingdom. Brown roofs tell the story of what needs to be done. The palace is still the same way; entrepreneurs thought they would blossom but they are still the same. Something must be fundamentally wrong.”

He was painting a picture of conflict of prosperity where the NLNG carries Nigeria like a pillar but poverty still strikes the sons of prosperity. He however thinks the solution lies not in sharing money to everyone but by creating an economy that gives opening to the

island people to pursue economic careers.

His words again: “So, how do we create a local economy not based on oil/gas. We need to open Bonny to a local economic system. That is what our people crave for.’

He said the Bonny Chamber of Commerce, Industry, Mines and Agriculture (BOCCIM), has been reactivated after some decades to pursue the task of creating a Bonny economy. The king is said to be behind the push for BOCCIMA to be reactivated and for it to go beyond a club of business jesters but a constructive think-tank as well as an economic push-button with investment valves everywhere.

The king gave little hint, saying; “BOCCIMA is revived and big things will happen soon” He admitted that no one company can solve all the problems of Bonny kingdom. “We admit all our problems cannot be solved by one company. All projects are geared toward developing the people.”

The palace described by the palace spokesman as the biggest throne in Ijaw land with respect as far as Europe had good words for the NLNG, though. “We have come a

long way. It has been good corporate partnership with the NLNG. Its one family, a win-win project.

“We are fully aware that if the NLNG succeeds, we as a kingdom will succeed too. This visit is an opportunity to see my old friends who were former managing directors and deputy managing directors (DDs) of the company with whom we negotiated to and fro in the past. Some of them have become my private advisers.

There is so much we shared together.

“NLNG is a blessing to us. They do things that government should do for us. During negotiations, we adopted several strategies. We could disagree. Everything may not be perfect but we have come a long way.

He said the N3Bn per annum offered by the NLNG may sound big but its small. We are working to make the signing of the MoU see the light of day.

“Bonny Ring Road is more important because if its not ready, the one coming will rather create problems. Bonny kingdom is happy with you.. Nobody on this island will do anything to make Train-7 not to be a reality. Nobody in this kingdom will be the reason that would hinder the project.”

CEO of NLNG: We are bringing 10,000 jobs to fight poverty, plus N3Bn development fund per year for 25 years

T

he managing director of the NLNG, Tony Attah, who lead the large team to pay the historic homage said; “It is 20 years of happy partnership with the Bonny kingdom.

This is a homecoming of most MDs and Deputy MDs. Its 30 years dream of harnessing gas, monetizing it, and reducing gas flaring.

Many people played different roles in this struggle and Gen Yakubu Gowon explained his own role of 1974 yesterday (Friday, October 11, 2019) in one of anniversary events in Abuja.

“It is about 1989 when the NLNG was incorporated and 1999 when the first gas cargo was exported from Bonny. Another 30 years starts now and here in this palace.”

Successes of first 30 years We recorded many successes in our partnership with the Bonny people. The Bonny Utility Company was set up to give power to the Bonny Island which has ensured 95 per cent power supply stability in the kingdom; the only place in Nigeria with such record..

“Bonny Vocational Centre has pursued youth empowerment with huge success. Scholarships have been awarded to the kingdom.”

Next 30 years: The next 30 years will even see

more successes between us. The Bonny-Dubai Scheme is the highest project we are pursuing. The MoU for it has been signed some years back. We would appreciate support to the BKDF) Bonny Development Foundation to take off immediately.

“N3Bn has been set aside for each year for 25 years for the development of Bonny. Bonny-Bodo Road is part of this scheme and it will be a land link to Port Harcourt, the state capital. It is a historic development because it would be the first time that a road is entering Bonny. About 10km is already done. The issue of compensation that has stagnated the project is over following the intervention of the Bonny King. As soon as the rains are over, Julius Berger will resume work.

“Bonny Health Insurance Scheme is about to start. So far, 600 persons have registered in the upcoming scheme. It is a gamechanger. It should work in Bonny because it has been tested elsewhere.

“War against Malaria: We did a survey and found that the most prevalent illness to people around here is malaria. So, while we execute the health insurance scheme, we have also launched a research work on prevention of malaria as a component of the health scheme. www.businessday.ng

“Communication: We are establishing a radio station and a WiFi system in the city so that the king can easily communicate with his people on the island. It will promote education and interaction.

Tremendous progress has been done on this.

“Bonny Consulate Building: This building does not exist anymore. So, a tourism consultant is doing a research on this. Part of the

project is to rebuild the Consulate Building. The foundation stone is to be laid right after here. It was the city centre in the past and it defined the city. It has good and bad history. For instance, the British Consul in Bonny was recalled and he demanded that the king that time should pay for the building. The king could not understand such logic, to pay for a building in his land? The British leader said

Osobonye LongJohn, NLNG board chairman; Tony Attah, NLNG MD; Sadeeq MaiBornu, DMD; Lars Richter, Julius Berger MD and Edward Asimini William Dappa Pepple III, Perekule XI, Amanyanabo of Bonny Kingdom during the unveiling of the plaque at the ground breaking of the Bonny Consulate Building to commemorate NLNG’s 20-30 Anniversary

https://www.facebook.com/businessdayng

@Businessdayng

he would have to demolish it, if nobody was ready to pay for it. He went ahead to demolish it.

“We are going to build a modern version to replace the old one, but we would capture the old on a gigantic painting and hang it at the hall for everybody to see both the old and the new.

“Train-7: It’s the beginning of the next 30 years. We were number four but now number seven due to the delay in building Train-7.

If we do nothing, we will slip to number 10.

“Poverty: We expect not less than 10,000 jobs out of the construction of Train-7. It will reduce poverty on the island. We are considering fallouts such as where the workers will stay during the period.

We learnt that in the construction stage, people stayed in schools and churches, such that in the morning, children will wait for workers to leave for school to start. We are asking, how will Bonny receive the 10,000 workers this time? We will do something about it, this time; something creative. Train 7 is a big deal for our survival and for the partnership with the Bonny Kingdom. We started with an ambition of trains one and two but we are now on seven. We may go to eight, nine and 10. We thus see a solid partnership for the next 20 years.”

Thursday 17 October 2019

BUSINESS DAY

43

Garden City Business Digest Mobile money agents cry out to CBN, banks, police, others SANEF takes complaints to drawing board Ignatius Chukwu

T

he Shared Agent Network Expansion Facility (SANEF) in conjunction with the Enhanced Financial Inclusion and Access (EFInA) organized the south-south segment of th forum series for mobile money and bank agents in the financial inclusion scheme of the Central Bank of Nigeria (CBN) at The Dome on Peter Odili Road in Port Harcourt last week Thursday.

The CEO of SANEF, Ronke Kuye, and that of EFInA, Henry Chukwu, who spoke at the forum said, it was aimed at encouraging the agents to tell their experience and challenges to enable the authorities and those concerned bring solutions; all aimed at meeting the 500,000 targeted agents before December 2020. These agents are expected to help the CBN get at least 100m Nigerians to open bank accounts. The floodgate seemed to open.

A panel was put on stage to hear the complaints and offer solutions.

Agents pour their hearts: Onuoha Oti Onuaha Oti, a super agent and member of the Association of Mobile Money and Bank Agents of Nigeria (AMMBAN), who spoke on ‘Business Training: Experience-Sharing and Tips for Running a Successful Agent Business’, threw some light on what an agents does in the banking sector. He was a bank manager who resigned to pursue a career in the opening sector. He said he saw prospects in it, though many problems abound.

He gave what he felt were experiences vital to operators: He talked about dispense error issue, poor access to cash, fraud that is now growing in it, knowledge-gap especially on the police and members of the public, etc.

The super agent who said he has over 300 agents under him said network issues cause major headache. “There are reconciliation problems between agents and the banks. Banks need to retrain their customer service staff to handle agents issues better.

“Police arrests: Remittance delays lead to police problems for us. Beware of demand for large withdrawals. Some come to make inquiries so they can attack you. Watch out for strange faces coming to withdraw funds from you. CCTV is very key. Use your phone camera to snap persons withdrawing large sums or persons

Super agent, Onuoha Oti, reeling out the challenges facing agents

unknown to you.’

He also said fraud is growing in the business especially family members of customers. He talked about the critical services being rendered by the agents. “Agents need funding to have access to money to pay out.

Agent-banking has truly driven crowds out of the banking halls. Please consider paying the agents for their contribution to financial inclusiveness. Mass employment has come from agent-banking.”

He enjoined the super agents to screen their employees because of bad eggs that can ruin their business. For profitability, he urged the agents to do good business analysis and check their profit. “We find that profitability is an issue. Many are closing down because of no profit. The N50 stamp duty on every withdrawal has scared away many customers.

The CBN must intervene here. Agent-banking, financial inclusion, and such other scheme have gaps in the north. That is why our body is coming up with a national conference in Kano’.

The major hassles, he lamented, include police arrests and intimidation by some customers.

When the police arrest an agent, the credibility built around that area dissolves. He closes down.

“Agents are ready to push this agenda to the deepest areas. Most police officers are good but there are overzealous ones. They call us YahooYahoo boys. The foot soldiers in the police are the worst. This is a community-based scheme and

Okwuchi Ugorji (WEMA Bank) with CBN’s Joseph Bassey

so, once an agent is arrested and handcuffed, the place shuts down.”

Panel issues: Many issues exploded when the panel began taking reactions from the agents.

How CBN may protect the agents: Security, Liquidity Charge back: Banks do not reply early the emails sent by agents to clear a transactions. The result is that after 72 hours, they charge it back from the agent’s reserve. When the customer eventually gets paid, the agent loses both ways.

The scheme empowers us to do BVN registration and take the details to a bank to link up with database but when we do, some banks scold us. Our services are sensitive and highly helpful especially in the rural areas. In Ebonyi State, the villagers jubilated for one week when agent-bankers landed in their areas because they used to spend a full day getting to a bank to pick small amounts.

The N50 stamp duty charged on agents per transaction is eroding the agents profit base seriously. We need the CBN to intervene in this. Police arrests members with aggression and handcuffs.

Reactions: CBN: The CBN official from the financial inclusiveness secretariat, Joseph Attah, threw some advice. “There should be no too much cash (float) at a time with an agent to reduce risks (attacks).

CBN is now to involve police in each state in the

clearer understanding of the financial inclusion scheme. This will reduce the issue of arrests in disputes with customers.”

On liquidity, he said it is advisable to keep records to monitor seasonal floats for an agent to plan his liquidity with his bank.

BVN: We know this will be a problem. Long process to process BVN needs to be simplified and use mobile devices. We are looking into this.

We might ask people to open accounts first and pursue BVN registration later.

On N50 stamp duty: We are going to table this at the financial services inclusion committee.

Maybe it will be passed to the customer instead of to agents. We may get a new position on the matter. Disputes between agents and banks: Let SANEF bring banks and agents together to sort it out.

Charge back: We are working to produce a charge back suitable to agents.

SANEF CEO on sustainability: We are bringing in more products plus rewards, pricing to make more profits, etc. We are working with the regulatory agencies to encourage the agents.

Police; The Assistant Commissioner of Police, Ewa Bassey, said; The IG has asked us to cooperate with Agentbankers. We are doing our best. Let the agents reach out to the nearest police authorities to them to respond to emergencies better.

Beware of who you pay. Install cameras, etc.

MTN’s 510 projects create champions in communities Who is the true hero, the nominator or MTN? Port Harcourt

by Boat

IGNATIUS CHUKWU

W

hen the MTN Foundation came to Port Harcourt last week Thursday to celebrate the 110 projects they executed in various communities in Nigeria (including those in the south-south and east), it became difficult to pin-point who actually should be celebrated; MTN or those who nominated the projects?

The officials kept toasting the nominators as the heroes of the night. But, many wondered what the fellows did to be hyped so much as heroes far and above the company that raised the funds and executed the projects.

It is normal for communities who benefited from companies to celebrate the benefactor-

company on the day of commissioning. Here, the MTNF rather threw up the men and women who nominated the projects as the champions and rather took the back seat.

First, who paid the piper? The MTN officials said the money to execute the projects is a percentage of the company’s profit. In which case, the company paid every kobo that went into the projects.

What did the 110 nominators do to warrant such hype and toasting? According to the MTNF officials that came to PH, the nominators passed through a long and tasking process. The nomination contest is usually thrown open to all Nigerians. A panel is set up to assess the nominations. Those selected were to pass through another tasking screening.

The panel would ensure that the situations painted by nominators were real and deserving of intervention. They would make sure that a benefiting community was not repeating the favour. The nominators include Obigha Smart in Ajakurama community of Ovia South West LGA in Edo State, Temaso Benjamin in Okochiri community of Okrika LGA in Rivers State, and Joseph Emetu in the Umuchieze Community, Ahiazu Mbaise LGA of Imo state.

The process is that MTN provides the fund,

www.businessday.ng

but the nominator is seen as the owner of the fund. The nominator leads and MYN executes,.

So, the MTN wants the world to toast the nominator, not the financier. Also, on the day of celebration, MTNF bear full cost of the mega night, the nominators take all the shine.

One particular lady did not feel much of a heroine (shero). She is from Bayelsa State and when interviewed by the moderator, she said

Chukwuemeka Solomon, MTN WCWDT Nominator; Reginald Okeya, director, MTN Foundation; Dennis Okoro, director, MTN Foundation; Pretty Velia, MTN WCWDT Nominator, and Dennis Obi, Nze Igwe of Ndoni, Rivers State, at the Eastern Region Nominators appreciation event of the MTN What Can We Do Together (WCWDT) Initiative that took place in Port-Harcourt Rivers -State on Thursday, October 10th, 2019.

https://www.facebook.com/businessdayng

she did not get any sense of being celebrated back home. She said nobody behaved like she did anything wonderful. Many could not understand or interpret the reason.

In most riverine areas with heavy oil presence, doing projects for them is not regarded as a favour. They rather demand for compensation to allow you do it. A man who wanted to tar a road for a community in Atali in Rivers State was asked to drop N1m for the community first. He sold off and left. But, the NDDC later came and did all the roads there, sure; they paid compensation first. Elsewhere, communities rather lure companies to do projects for them and even cook for the contractors.

That is by the way. What matters is that the MTN has executed 510 projects in three phases of 200 (phase one), 200 in phase two and 110 in phase three. These include equipping hospitals, schools, building boreholes, etc.

In a welcome address, the regional manager, Innocent Entonu, said it was good that men and women took action to solve problems in their communities.

Also speaking, MTNF director, Reginald Okeya, said; “All 110 nominators made the bold decision to make a lasting and positive impact by partnering with the MTN Foundation.’ MTN called it, ‘What Can We Do Together’ initiative.

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

51

POLITICS & POLICY APC, PDP clash at INEC/stakeholders’ meeting in Bayelsa Nigeria must tackle …As police deploys 30,000 personnel for guber poll JAMES KWEN, Abuja

S

upporters of the All Progressives Congress (APC) and the People’s Democratic Party (PDP) in Bayelsa Wednesday clashed at a stakeholders’ meeting with the Independent National Electoral Commission (INEC) in Yenagoa.

Trouble started when Francis Topolo, a chieftain of the PDP, revealed that thousands of people in Nembe Local Government have been internally displaced for refusing to vote for candidates of a particular political party during the Presidential and National Assembly elections and something must be urgently done to enable them exercise their franchise at the November 16 governorship elections.

He was interrupted by an APC chieftain, Dennis Otiotio, who charged at him not to mention the name of Nembe, and this caused a roar at the venue of meeting which ended abruptly to avoid escalation as supporters of both parties were ready to exchange blows despite efforts by security operatives to restore order.

INEC chairman

Meanwhile, the police announced at the meeting that they have deployed over 30,000 policemen for the Bayelsa governorship election.

Inspector-General of Police, Ibrahim Idris, represented by Deputy InspectorGeneral Operations, Abdulmajid Ali, said the Force has made adequate deployment for the election as it is its responsibility to protect the people, INEC officials, and

election materials.

Ali warned politicians against utterances that may likely lead to breach of peace before, during and after the election.

“The police will not be here for a Tea Party. Campaigns must be done according to rules and regulations. We will provide enabling environment for all the aspirants.

“We are also aware that some people are planning to

wear police uniforms. That I can tell you will be met with strict resistance. Our men will be on ground three to four days to election,” he stated.

Earlier, INEC Chairman, Mahmood Yakubu warned that the Commission would no longer tolerate attacks on its officials and reiterated commitment to free, fair and credible polls in Bayelsa.

“We want to remind candidates and their supporters that attacks on officials of the commission will this time attract severe sanctions. It has happened before where we refused candidates who attacked our staff their Certificates of Return.

“In one of such cases, the court ordered that we give the candidate his COR and as a respecter of court order, we did. But we are determined to follow the matter to the Supreme Court to ensure that the matter is decided once and for all,” he said.

The Chairman added that the issue of voter inducement and buying has been a major concern for the commission, saying voters should be allowed to freely elect their choice as INEC on its part is neutral.

....Secures 2.7 hectors in Abuja for AFLPM project

P

resident Muhammadu Buhari has approved new aides for the office of the First Lady, Aisha Buhari Government has also secured a piece of land measuring 2.7 hectares in Abuja, for the construction of the permanent secretariat of the African First Ladies Peace Mission (AFLPM) A statement by the Media Aide to the First Lady, Suleiman Haruna, listed the new aides approved by the President to include Mairo Almakura , Special Assistant on African First Ladies Peace Mission (AFLPM), Muhammed Albishir – Special Assistant on Organization of African First Ladies for Development (OAFLAD) and Wole Aboderin – Special Assistant on Non-Governmental Organisations.

Others include Aiyu Abdullahi – Special Assistant on Media and Publicity, Zainab Kazeem – Special Assistant on Domestic and Social Events and Funke Adesiyan – Personal As-

President Buhari

sistant on Domestic and Social Events The First Lady, Aisha Buhari, who met with First Ladies from various states, led by wife of the Vice President, Dolapo Osinbajo at the Presidential Villa on Wednesday, hinted that land had been secured for the construction of the regional secretariat for the African First Ladies Peace Mission (AFLPM).

The Mission, which was established after the Beijing Conference of 1995, has been in the custody of Nigeria, with leadership rotating among African First Ladies.

“I have successfully se-

cured 2.7 hectares of land in Abuja for this purpose and the foundation laying will soon be conducted in the presence of African First Ladies,” she said.

Also Speaking on the advocacy project for the improvement of maternal and child health, which is supported by Bill and Melinda Gates Foundation and implemented by Future Assured Programme in partnership with the states, Mrs. Buhari said it will come to an end in December 2019.

She used the opportunity to commend the first ladies for the good work they have been doing in their various states, and the successful collaboration they did with Future Assured, calling on the new First Ladies to do the same.

She called on them not to succumb to distractions by social media.

Commenting on the videos circulating on social networks, Mrs. Buhari extended her apology to her children, her immediate family members and all well-meaning Nigerians over the embarrassment

INIOBONG IWOK

T

he Alliance for New Nigeria (ANN) has advised the Federal Government to urgently tackle increasing spate of impunity and restructure the country to attain meaningful progress.

In recent time the incumbent Muhammadu Buhari administration has come under criticism for its human right record, the administration tendency to disobey courts orders has exacerbated the situation.

In recent years, political leaders have been agitating for a restructuring of the country, proponent blamed the current system for the nation’s woes, while suggesting a return to true federalism or regional form of government as practised in the first republic.

Speaking in an interview with BusinessDay, Wednesday, Emmanuel Dania, national chairman of the, ANN, equally blamed the lack of respect for the constitution and the rule of law for the nation’s woes, noting that the problem has worsened under the current administration.

Dania added that little progress could be achieved if the best professionals in all fields are recruited to implement

government policies.

“For me, the fundamental problem in Nigeria now is that the constitutional rule of law is not followed; any government that does not submit to the law is dead on arrival.

“Even if you bring the best professionals in all the fields to work in Nigeria and implement government policies, there would still be a problem if they don’t obey the law,” he said.

According to him, “There is impunity in Nigeria, the President is not obeying Court orders, and there is impunity everywhere; no one is held accountable for offence and for violating the law.”

The national chairman further clamoured for the restructuring of the country among regional lines or amendment of the country so that true federalism could be practised, stressing that the current system was lopsided.

“We need to restructure because the current system is not working; it is either we go back to true federalism or regional government. This is a place where people break the law and go away without being prosecuted. Look at the police, they said they are not enough to guard us but we still see them as escorts to the elite,” Dania added.

Bayelsa guber: Dickson accuses APC of money politics

Buhari approves new aides for First Lady TONY AILEMEN, Abuja

impunity; restructure to make progress - ANN

that the videos had caused.

She expressed appreciation to the President for approving a new set of aides to assist her in carrying out her various responsibilities.

Earlier, First Lady of Borno State, Falmata Umara Zulum, representing Northern First Ladies’ Forum and Betsy Obaseki, representing Southern First Ladies’ Forum spoke during the occasion.

Zulum said they were at the Villa to welcome her back after a long absence, and expressed their unalloyed loyalty and support to her initiatives especially through the Future Assured Programme, which she said has made her a role model even to other African women.

Obaseki on her part said they received news of the First Lady’s return with great excitement, praying God to continue to protect her.

She used the opportunity to thank the President for approving additional special assistants for her, saying this is an indication of the regard he has for her work.

SAMUEL ESE, Yenagoa

A

s campaigns intensify for the forthcoming governorship election in Bayelsa State, Governor Henry Seriake Dickson has alleged that the opposition All Progressives Congress (APC) is playing money politics.

Dickson, who made the allegation during a live media chat on Wednesday, said the APC is offering between N10 million and N20 million to some politicians to defect based on their status.

He also alleged that the APC is also using promises of federal appointments as bait to secure defections, but warned the opposition to beware as those who are defecting can easily leave if offered more money.

The governor said the APC is in disaster and that an organogram of the party he saw does not contain names of members who fought in the 2015 election, saying only new names were on it.

Governor Dickson criticised the Federal Government over the manner it handled security breaches at Peremabiri in Southern Ijaw Local Government Area and Bassambiri in Nembe Local Government Area during the past general election.

He said the Independent National Electoral Commis-

sion (INEC) knew full well that voters had been chased out of Bassambiri, but went there the next day to conduct election without the use of voters’ cards.

According to him, the internally displaced persons (IDPs) from the crisis at Peremabiri are yet to return and he assured that since the IDPs are registered voters, they would be resettled so that they can participate in the forthcoming election.

Dickson appealed to the Minister of State for Petroleum Resources, Timipre Sylva to focus on how to use his office to benefit the people and not use his position to engage federal security officers to intimidate his own people during the election.

He, however, assured that the Peoples Democratic Party (PDP) campaign he is leading would come out victorious as the party remains the most populous in Africa with a message of hope for the people and that the crowd at campaign grounds is a confirmation of the party’s strength.

Dickson praised the efforts of the various reconciliation committees that have been set up at both the federal and state levels to reconcile aggrieved members following the outcome of the primary election disclosing that several have returned except one.

Thursday 17 October 2019

FT

BUSINESS DAY

45

FINANCIAL TIMES

World Business Newspaper FT REPORTERS

N

egotiators in Brussels were racing to settle the terms of a revised Brexit deal on Wednesday, as Boris Johnson battled to win support from Northern Ireland’s Democratic Unionist party and hardline Eurosceptic Conservative MPs. The EU’s chief Brexit negotiator Michel Barnier told the European Commission he believed that an agreement was possible before a meeting of the bloc’s leaders on Thursday, according to one EU official briefed on the discussions.

The EU and the UK are seeking ways to avoid a hard border on the island of Ireland after Brexit as part of a British withdrawal agreement.

EU officials said that outstanding questions in the Brussels talks included how the system for value added tax would work and how to give the Northern Ireland assembly at Stormont — currently suspended — a say on the arrangements.

Negotiations are also continuing over Mr Johnson’s insistence that the UK should be free to deviate from EU regulations after Brexit.

But while talks advance in Brussels, there are signs that Mr Johnson will face a difficult task selling the deal at home.

One EU diplomat said negotiations were “mired in difficulty in London”, as Mr Johnson struggled to persuade the DUP and Eurosceptic Conservative MPs to accept a deal that would see a customs border introduced between Northern Ireland and the rest of the UK. A British government official

Brexit talks go down to wire as Boris Johnson battles for support Two sides haggle over deal as time runs out before EU leaders’ summit

Michel Barnier, the EU’s chief Brexit negotiator, arrives in Brussels on Wednesday © AFP via Getty Images

close to the negotiations said the DUP had privately accepted Mr Johnson’s customs proposals, but the major sticking point was over a potential mechanism to give Northern Ireland democratic consent over any arrangements.

The official added there was

relief in Downing Street after the DUP did not reject Mr Johnson’s plan outright following a meeting between the party’s leader Arlene Foster and Mr Johnson on Tuesday night, but added: “There is no sugar-coating in Downing Street that last night’s meeting did not go

that well.”

The DUP said in a statement after the meeting that “gaps remain and further work is required”.

Leo Varadkar, Ireland’s prime minister, said after speaking to Mr Johnson on Wednesday that he saw “a pathway to a possible deal”.

“There are many issues that still need to be fully resolved, particularly around the consent mechanism and also some issues around customs and VAT,” Mr Varadkar said in a speech in Dublin. “I do think we are making progress and hopefully that can be done today.”

Mr Johnson is expected to brief his cabinet in London this afternoon, and Mr Barnier is due to update diplomats from the 27 other EU member states on the state of the talks in Brussels.

With a deal not assured, Brexit secretary Steve Barclay confirmed to MPs that Mr Johnson would write to the EU seeking an extension to the Article 50 divorce process if no withdrawal agreement had been approved by the House of Commons by Saturday.

One EU diplomat said there was “genuine enthusiasm” in Brussels about securing a deal, but that the EU27 wanted to be certain that the DUP was on board and that Mr Johnson could pass any deal in the Commons.

There is also a strong feeling that the EU holds the cards in the negotiations and that the longer talks drag on, the more pressure Mr Johnson will be under to make concessions to get a deal across the line.

BofA outshines rivals with growth South Africa hit by another wave of rolling blackouts in investment banking fees Power utility Eskom struggles to deal with plant breakdowns and debt crisis Bank reports better than expected quarterly results despite slower US economy ROBERT ARMSTRONG IN NEW YORK

B

ank of America reported industry-leading growth in investment banking fees, driving better than expected quarterly results despite headwinds from a slower US economy, lower interest rates, and choppy markets.

Investment banking fees surged 27 per cent, to $1.5bn, with the strong growth across debt underwriting, debt syndication, and merger advisory. The performance outpaced rivals, indicating that BofA is taking market share.

At JPMorgan Chase and Citigroup, investment banking fees rose 8 per cent and 4 per cent respectively in the quarter. At Goldman Sachs they fell 15 per cent.

September set industry records for debt issuance, as companies rushed to refinance at lower rates, and BofA’s chief executive Brian Moynihan attributed the strength to participating in many of the quarter’s biggest deals.

The results impressed industry analysts. “Bank of America has the eye of the tiger — they see what they want and they go after it,” said

JOSEPH COTTERILL IN JOHANNESBURG

Wells Fargo analyst Mike Mayo, referring to the growth in investment banking fees “We heard adjectives such as ‘bumbling’ used a few years ago [of BofA’s investment bank] but this is best in class performance.”

Earnings per share were 75 cents for the third quarter, adjusting for a charge related to the bank’s sale of a joint venture, up 14 per cent from a year ago and ahead of Wall Street expectations of 69 cents. Revenue was flat from the year before at $22.8bn.

As for all banks, falling interest rates were a significant barrier to growth, and BofA is particularly sensitive to falling rates; its large base of low-cost retail deposits means its cost of capital falls relatively little as rates decline.

Net interest income, at $12.1bn, hardly grew, despite good loan growth.

Still, analysts were impressed that net interest income did not fall, and that lending margins compressed only slightly. James Shanahan of Raymond James said Bank of America was proving to have “a pretty good ability to manage though a challenging environment”. www.businessday.ng

S

outh Africa braced for the return of rolling power blackouts as Eskom, the state power monopoly that is battling to avoid collapse, imposed cuts for the first time in months.

Eskom, which generates nearly all of the electricity for Africa’s most industrial nation, said on Tuesday that it had to impose the blackouts “due to high levels of unplanned breakdowns” at its coal power plants.

“We unreservedly apologise to South Africans for the negative impact this may have and want to assure the nation that we continue to work tirelessly to ensure security of energy supply,” Eskom said.

The outages are the first since Eskom imposed even worse blackouts early this year that ravaged South Africa’s economy and exposed the depths of a $30bn debt crisis that has threatened to push the monopoly into bankruptcy.

https://www.facebook.com/businessdayng

The return of the blackouts will embarrass President Cyril Ramaphosa who has been on a drive this month to encourage foreign investment. He has promised to reform the stricken utility.

The latest cuts will take 2,000 megawatts of demand from the South African grid and may last a week, Jan Oberholzer, Eskom’s chief operations officer, told local media.

South Africa’s economy suffered its worst slump in a decade as a result of this year’s power cuts, which left factory floors, shops and smelters in darkness for hours at a time.

Years of corruption and mismanagement under Mr Ramaphosa’s predecessor, Jacob Zuma, left Eskom with surging costs, falling revenues and a fleet of breakdown-prone coal power stations. Older plants are near the end of their productive lives while work on two newer giant coal stations has fallen behind schedule, causing Eskom’s debts to balloon. @Businessdayng

Eskom now cannot pay back the debts without regular state support — endangering South Africa’s credit rating, which is on the verge of being cut to junk.

The ruling African National Congress has unveiled billions of dollars in bailouts for Eskom this year but failed to agree on reforms to end the utility’s debt spiral.

The president has backed a plan to split Eskom into three state-owned businesses that would be easier to finance. But trade union allies of the ANC have resisted the restructuring, saying it would lead to wholesale privatisation.

Eskom has also lacked stable internal leadership for years. At the moment it lacks a full-time chief executive.

Mr Ramaphosa told the FT’s Africa summit this week that the government was working on “innovative ideas” to turn round Eskom’s debts and that the utility’s governance would be strengthened” with new appointments.

46

Thursday 17 October 2019

BUSINESS DAY

FT

NATIONAL NEWS

US accuses Turkey’s Halkbank of violating Iran sanctions Federal indictment comes as US vice-president is due to visit Ankara amid Syria crisis LAURA PITEL IN ANKARA AND ROBERT ARMSTRONG IN NEW YORK

O

ne of Turkey’s largest banks has been hit with charges of fraud and money laundering by US prosecutors in connection with a multibillion-dollar sanction-busting scheme.

In a move likely to sharply escalate growing tensions between Ankara and Washington on the eve of a visit by Mike Pence, the US vicepresident, to Turkey, New York prosecutors filed an indictment against Halkbank accusing it of violating US sanctions on Iran.

The charges against the stateowned lender are the culmination of a long-running investigation into an elaborate gold-for-oil scheme that was allegedly carried out with the help of several former ministers in the government of Recep Tayyip Erdogan, the Turkish president. Mr Erdogan has previously described a related inquiry into one of the bank’s senior executives as a grand conspiracy that amounted to an “international coup attempt”.

Although it is rare for the US Department of Justice to intervene in investigations, the timing of the charges is likely to be viewed with deep suspicion among the Turkish leadership, coming as Washington seeks to turn the screws on Ankara over its military incursion into Syria.

The Southern District of New York, which led the investigation, is renowned for its independence.

But Jonathan Schanzer, a former US Treasury official who followed the case closely, described the prosecution as “just one of the measures” that was being deployed by Donald Trump while “scrambling to deter Turkey” from its Syrian operation.

He said that Halkbank had refused to negotiate a fine, believing it “could outlast the Department of Justice through prolonged obstinacy”.

Mr Schanzer said the strategy “began to unravel” as friction mounted between the US president and Mr Erdogan over the Turkish incursion.

Announcing the charges, US attorney Geoffrey Berman described Halkbank’s conduct as “audacious”, adding that it had been “supported and protected by high-ranking Turkish government officials, some of whom received millions of dollars in bribes”. He added: “Halkbank will now have to answer for its conduct in an American court.”

Prosecutors allege that proceeds from the sale of Iranian oil and gas to Turkey were deposited at Halkbank, which then used various sanction-busting schemes to make some $20bn of the funds available to the government of Iran, including facilitating sham purchases of food and medicine by Iranian customers.

Halkbank has in the past denied violating US sanctions. Halkbank said in a statement that the charges were filed as part of the Trump administration’s sanctions imposed this week on Turkey in response to Ankara’s military offensive against the Kurdish forces. The US on Monday announced sanctions on several Turkish ministers and departments, and raised tariffs on the country’s

steel exports.

Following the news of the prosecution, the Istanbul stock exchange announced it had “temporarily prohibited” short selling in the shares of seven banks, including Halkbank — which is part publicly traded — and several of the country’s biggest private lenders. It did not say how long the ban would last.

The decision to prosecute the lender came just hours before Mr Pence was due to arrive in Ankara with a delegation of senior officials to discuss Turkey’s contentious military offensive against Kurdish militias in north-east Syria.

The assault, which began last week after Mr Trump seemingly gave the green light by pulling American troops out of harm’s way, has been met with an international backlash and forced the US president on to the defensive.

While Turkey views the Kurdish forces it is targeting as terrorists, they have received weapons and training from the US and spearheaded a campaign against Isis jihadis in the region.

Mr Trump, who had threatened to “obliterate” Turkey’s economy if its operation went “off limits”, on Monday imposed US sanctions on the country. The measures were greeted with relief by foreign investors, who had feared much harsher steps. The news of a Halkbank prosecution risks reigniting volatility in the Turkish financial markets.

The case has been followed closely

by Mr Erdogan, who found several of his senior ministers entangled in the gold-for-oil scheme when the accusations first became public in 2013.

At its centre was Reza Zarrab, a Turkish-Iranian millionaire married to a Turkish pop star who frequently rubbed shoulders with Turkey’s political elite.

Mr Zarrab, 36, was arrested in March 2016 at Miami airport on his way to Disneyland with his family, and charged with being the scheme’s mastermind. Mr Erdogan personally tried to secure his release, while Mr Zarrab enlisted the help of Rudy Giuliani, who later become the personal lawyer of the US president.

Although officials in the US administration have always insisted that the investigation is out of their hands, Bloomberg News agency reported last week that Mr Trump in 2017 pressed his then secretary of state Rex Tillerson to lean on the DoJ to drop the case against Mr Zarrab.

Mr Tillerson refused, according to the report, and Mr Zarrab remained behind bars.

Later, the gold trader accepted a plea bargain and turned state witness. He played a key role in the conviction last year of Hakan Atilla, a former senior Halkbank executive, on six counts of bank fraud and conspiracy to evade US sanctions.

The prospect of a prosecution into the bank itself — or a US Treasury fine — has long hung over Halkbank.

Earlier this month the rating agency Fitch warned that a fine or other punitive measures imposed

by US investigators could “materially weaken solvency, increase refinancing risks or negatively affect other aspects of the bank’s credit profile”. www.businessday.ng

Joe Biden accused Elizabeth Warren of being ‘vague’ in her campaign promises © Reuters

Democrats take aim at Elizabeth Warren in TV debate

Massachusetts senator is seen as a frontrunner in race to take on Donald Trump in 2020 LAUREN FEDOR IN WASHINGTON

D

emocratic presidential hopefuls took aim at Elizabeth Warren in a televised debate on Tuesday, in the latest sign that the Massachusetts senator is seen as a frontrunner in the race to take on Donald Trump next year.

Ms Warren is neck and neck with former US vice-president Joe Biden according to an average of national polls compiled by the website Real Clear Politics, and raised almost $10m more than him in the third quarter.

She has largely avoided attacks from rivals in previous debates but came under sharp criticism for her support for Vermont senator Bernie Sanders’ “Medicare for All” plan, which would effectively eliminate private health insurance in the US. Ms Warren refused to concede the plan, which is estimated to cost more than $30tn over 10 years, would result in higher taxes for the middle class. Rather, she insisted

healthcare “costs” would fall for most Americans.

Pete Buttigieg, the mayor of South Bend, Indiana, accused Ms Warren of avoiding a “yes or no answer”. His criticisms were echoed

by Amy Klobuchar, the senator from Minnesota, who said: “We have to tell the American people where to send the invoice.”

Ms Klobuchar, who has positioned herself as a moderate, also clashed with Ms Warren over her plans for a wealth tax, after the Massachusetts senator said she was the only candidate standing up to billionaires.

“I want to give a reality check to Elizabeth. No one on this stage wants to protect billionaires. Not even the billionaire wants to protect billionaires,” she said in a reference to Democratic presidential hopeful Tom Steyer. Mr Steyer also participated in Tuesday’s debate and called for Mr Trump’s tax cuts for the wealthy to be rolled back.

Mr Biden accused Ms Warren of being “vague” in her campaign

promises, leading to a fiery exchange over the senator’s record in setting up the Consumer Financial Protection Bureau. The former US vice-president claimed he “went on the floor” of the Senate and garnered votes for Dodd-Frank, the 2011 legislation that established the bureau.

Tuesday’s debate marked the first time the candidates shared the stage since House Democrats launched an impeachment inquiry into Mr Trump.

All of the candidates said they supported impeachment proceedings but Mr Biden faced questions about Mr Trump’s unsubstantiated claims that he acted improperly in relation to his son, Hunter, and his business interests in Ukraine and China.

Hunter Biden said in an ABC television interview on Tuesday that he did not regret serving in an unpaid role on the board of a Chinese private equity group, or taking up a lucrative board position with the Ukrainian energy company Burisma.

Goldman Sachs chief executive appeals for patience on profits David Solomon says bank is sacrificing short-term returns to ‘strengthen the franchise’ LAURA NOONAN IN NEW YORK

O

n Tuesday Goldman Sachs missed earnings expectations for the first time since David Solomon took over a year ago. For its chief executive, the underperformance had the added edge of coming months before the bank’s long-awaited investor day in January, increasing the pressure on his team to show a pathway to better returns.

Mr Solomon’s response was to appeal for patience on profitability, pledging that investments in projects such as Goldman’s online bank Marcus, its Apple credit card and a transaction banking platform would pan out — despite collectively costing the Wall Street bank a net $450m this year.

https://www.facebook.com/businessdayng

“We are willing to sacrifice some short-term returns to make these investments better position and strengthen the franchise and allow us to better deliver for our clients in the long run,” Mr Solomon said.

In the third quarter, Goldman’s earnings of $4.79 per share were worse than the $4.86 expected by analysts in a Bloomberg survey — even though estimates had been pared back by more than 15 per cent in the four weeks before results day.

Net income fell 27 per cent.

Goldman lost $80m on its proprietary investment in WeWork and another $267m on its public equity holdings, chiefly Uber, Tradeweb and Avantor. Investment banking fees fell 15 per cent year-on-year, in a quarter when rivals JPMorgan Chase and Citigroup posted rises of 8 per cent and 4 per cent, @Businessdayng

respectively.

Shares in Goldman Sachs dropped more than 3 per cent in morning trading, a fall that Sandler O’Neill analyst Jeffrey Harte said partly reflected “pretty weak” advisory revenues and higher credit losses, as well as the news that Goldman had bought back fewer shares than expected in the quarter.

On an 11am call with analysts, Goldman calmed fears about the stock repurchases by explaining that the programme had been halted because of negotiations with the US Department of Justice over its role in the 1MDB bribery scandal, and that the repurchases had resumed.

Goldman shares closed up 0.3 per cent at $206.46, on a day when the KBW bank index gained 1.83 per cent.

Thursday 17 October 2019

BUSINESS DAY

47

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Erdogan attacks ‘ugly’ US decision on Turkey’s Halkbank Tensions run high ahead of US vice-president Mike Pence’s visit to Ankara LAURA PITEL IN ANKARA

T

urkey’s president Recep Tayyip Erdogan has attacked an “ugly” decision

by US prosecutors to file criminal charges against a Turkish state-owned bank as he warned that he would not be cowed by threats over his contentious incursion into Syria.

Speaking ahead of the arrival of Mike Pence, the US vice-president, in Ankara for talks aimed at halting the military operation, Mr Erdogan questioned the timing of the announcement by New York prosecutors that Halkbank would face six counts of bank fraud and conspiracy to evade US sanctions.

“It had seemed like this issue was closed,” he told reporters. “Now, by opening it again, southern New York prosecutors have unfortunately taken an unlawful, ugly step.”

Mr Pence’s visit, due to begin on Thursday, comes amid mounting tensions between the two countries over the Turkish decision to launch an offensive against Kurdish militias in north-east Syria. Ankara views the group’s terrorists but Washington sees them as key allies in the battle against Isis jihadis in the region.

Donald Trump, the US president, appeared to give the green light for the operation when he announced last week that he would pull US troops in the region out of harm’s way. But, facing a harsh backlash at home and abroad, he has sought to limit the Turkish offensive.

On Monday, as the US imposed sanctions on Turkey, Mr Trump warned that he would “aggressively use economic sanctions to target those who enable, facilitate and finance . . . heinous acts in Syria”.

Although the measures were milder than many had expected,

Mr Trump said he was “fully prepared to swiftly destroy Turkey’s economy” if the country’s leaders continued on their “dangerous and destructive path” in Syria.

The Southern District of New York, which announced the prosecution against Halkbank, one of Turkey’s biggest lenders, is known for its independence. But the timing of the charges against it will be viewed with deep suspicion in Ankara.

Halkbank said in a statement that the charges were filed as part of the Trump administration’s sanctions package in response to Turkey’s military incursion, which the bank said had been “heroically launched by the Turkish Army to secure our borders and establish peace in the region”.

Members of Mr Pence’s delegation — which includes Mike Pompeo, secretary of state, and Robert O’Brien, the new White House national security adviser — will use meetings with their Turkish counterparts to push for an agreement to halt the Turkish offensive, his office said before the visit.

But Mr Erdogan warned ahead of the meeting that he had no interest in negotiating with Kurdish “terrorists”, adding that Turkey was “not looking for mediation for that”.

In a speech to the Turkish parliament, he vowed that Turkey would push on with his goal to clear Kurdish forces from a 32km deep and 480km stretch of land that runs from the town of Manbij, west of the Euphrates river, to the Iraqi border.

He called on Kurdish militias to “lay down their arms, leave their equipment, destroy the traps they have created and leave the safe zone we as designated, as of tonight”. He added: “If this is done, our Operation Peace Spring will end by itself.”

MGM Resorts divests $5bn in Las Vegas real estate Company strikes deals with Blackstone and business partner of Donald Trump MARK VANDEVELDE IN NEW YORK

M

GM Resorts has divested real estate assets worth $5bn, striking two deals that will see iconic Las Vegas properties pass to the Blackstone Group and to Donald Trump’s business partner in the gambling capital.

At the north end of the Strip, Circus Circus is to be sold for $825m to an affiliate of Treasure Island tycoon Phil Ruffin, who joined with Mr Trump to develop the Trump International, a noncasino hotel and condominium in Las Vegas.

Meanwhile, Stephen Schwarzman’s Blackstone Group is leading a $4.25bn deal to acquire real estate assets of the Bellagio Hotel and Casino, and lease them back to MGM for an initial rent of $245m a year. MGM will receive 5 per cent of the equity in the real estate joint venture.

“As big believers in MGM Resorts and Las Vegas, we are thrilled to partner with MGM to acquire the Bellagio,” said Jon Gray, Blackstone’s president and chief operating officer.

Mr Ruffin said his relationship with MGM “goes back to my friendship with Kirk Kerkorian”, the billionaire who in 1969 built The International as Las Vegas’s largest hotel. He later went on to buy a film studio and to create, in the MGM Grand, the Las Vegas mega-resort that is the centrepiece of the modern group.

Earlier this month, MGM agreed to pay up to $800m to settle with survivors and family of victims killed in a 2017 mass shooting that was the deadliest on US soil. Stephen Paddock killed 58 people and injured more than 500 when he opened fire on revellers at an outdoor concert from the 32nd floor of MGM’s Mandalay Bay Hotel and Casino. www.businessday.ng

Roberto Campos Neto, president of Brazil’s central bank © Reuters

Bolsonaro’s central bank chief vows to ‘reinvent’ Brazil economy Roberto Campos Neto tries to cut red tape to boost private enterprise in pursuit of growth BRYAN HARRIS IN SÃO PAULO

B

razil’s central bank chief has put his institution at the heart of President Jair Bolsonaro’s sweeping programme of economic reforms, promising to roll back regulation to lure back investors.

Roberto Campos Neto said Brazil wanted to “democratise” the financial sector and usher in more private capital as the country fights an economic downturn.

“We need to reinvent ourselves with private money,” Mr Campos Neto told the Financial Times in his first interview with international media since taking the job in February.

Mr Bolsonaro took office this year after campaigning on a rightwing deregulatory agenda that he said would save the country, once a darling of emerging market investors, from the “brink of socialism”.

However, his economic team

is under pressure to show results.

While the country has avoided recession this year, growing in the second quarter after the economy contracted in the first three months of the year, unemployment remains high at nearly 12 per cent.

Economists point to tepid industrial production, weak investment, lagging technological standards and decaying infrastructure.

Since his inauguration, the president has largely left the economy in the hands of Paulo Guedes, the finance minister, and Mr Campos Neto — US-educated policymakers who have embarked on an ambitious agenda of deregulation and changes to Brazil’s costly social security regime.

Mr Campos Neto said Brazil was going through difficult times but public spending was not the answer.

“We need to cross the desert to get to the promised land. The desert is going to be long and not everyone is going to make it. But we don’t have another choice,” the 50-year-

old central banker said.

“What are we going to do? Disrespect the [fiscal] ceiling and start spending public money again? We all know that does not work.”

Market reaction to promises of rectitude has been mixed. In the 12 months to July, foreign direct investment in Brazil reached almost $95bn, up from $67bn the previous year. However, in the 12 months to August, it dropped to $71bn, according to central bank data. “[Attracting investment] is a continuous process of gaining credibility. Credibility is very hard to get and very easy to lose. Unfortunately for us, global growth is not going favourably and people are showing signs of risk aversion,” Mr Campos Neto said.

“So even though rates are low and that should be conducive for people putting money in emerging markets, when you look at flows it has been very erratic. Because there are trade tensions, there is political polarisation, there is Brexit.”

Mike Pence refuses to give information to impeachment inquiry US vice-president and Donald Trump’s lawyer step up resistance in Ukrainegate scandal DEMETRI SEVASTOPULO IN WASHINGTON

T

h e W h i t e Hou s e ha s stepped up its resistance to the impeachment inquiry into Donald Trump, as top officials including Mike Pence told the House committees leading the Ukraine probe that they would not provide information to investigators.

Th vice-president told the Democratically-controlled committees through a White House lawyer that the impeachment inquiry was not valid because the full House of Representatives had not voted to open an inquiry. His argument comes a week after the White House counsel told Democrats that their Ukraine investigation “violates the constitution”.

https://www.facebook.com/businessdayng

Earlier on Tuesday Rudy Giuliani, the personal lawyer to Mr Trump who is under intense scrutiny over his role in the Ukrainegate scandal, refused to comply with a subpoena from the congressional committees investigating the US president.

In a letter to the House of Representatives intelligence committee, Jon Sale, a lawyer representing Mr Giuliani, said his client would not provide documents related to what he described as an “unconstitutional” impeachment inquiry.

“Mr Giuliani will not participate because this appears to be an unconstitutional, baseless and illegitimate ‘impeachment inquiry’,” Mr Sale wrote in the letter, which was obtained by the Financial Times.

“Moreover, documents sought @Businessdayng

in the subpoena are protected by attorney-client, attorney work product and executive privilege.”

The refusals by Mr Pence and Mr Giuliani to co-operate with the impeachment inquiry raise the stakes in a battle that most experts believe will eventually lead to the House drawing up — and passing — impeachment articles against Mr Trump. The Democrats on Tuesday did not make clear how they would respond to the White House refusals.

“House Democrats can go to court to enforce subpoenas, but that will take a lot of time and it looks like they are trying to wrap this up before the [2020] presidential campaign swings into high gear,” said Renato Mariotti, a lawyer at Thompson Coburn in Chicago.

48

Thursday 17 October 2019

BUSINESS DAY

ANALYSIS

FT

Why ‘100% remote’ jobs work for the West Coast In San Francisco, one way to beat high rents is to keep your Silicon Valley job but to do it from elsewhere ELAINE MOORE IN SAN FRANCISCO

T

he conundrum of working in San Francisco is how quickly the city’s insanely high cost of living can eat up even the most outsized incomes in the tech industry.

When renting a one-bedroom flat costs $4,000 a month, you can see why software engineers on six-figure salaries are still living in house shares.

The answer is to get a job in the San Francisco Bay Area and then move away. Among my US friends who work in tech, fully remote work is a highly sought-out solution to the price squeeze. Since living here, I feel as if I have had the following conversation on repeat: Friend: “I’ve applied for a new job. If I get it, I’ll be leaving San Francisco.”

Me: “I’ll miss you! Where’s the company?”

Friend: “Well, it’s here. But I’ll be in Virginia/Mexico City/Missoula/ Chicago.”

I know working from home is commonplace in lots of jobs but, as someone who has spent most of my career at a news organisation, I thought you needed an office to go to at least some of the time.Yet here on the West Coast, where space is tight and start-ups leap at the chance to save cash on rent, jobs that are 100 per cent remote are fairly common.

Glassdoor, the employee review site, published an article titled “100% Remote! 13 Cool Companies to Apply to Today”. GitHub, a website where developers collaborate on code, has a list of largely or fully remote companies operating in fields such as software development, blockchain and analytics.

Most jobs are, unsurprisingly, computer-based. It is hard to be a doctor, bank manager or chef who works remotely. But give it a few years and maybe video conferencing, 3D printing and robotics will change even that.

An ecosystem of companies already exists to make it easier for employees to communicate without being in the same place.

Video conferencing company Zoom had the very good idea of allowing participants to use a digital background so no one need know they were in their kitchen, or a supermarket car park, while on a work call. Its shares listed at $36 earlier this year and have more than doubled to $74.

Fully remote work tends to be targeted at millennials, which makes sense when you think about the size of their student loans and the cost of rent in cities with big job markets such as London, New York and San Francisco.

Why wouldn’t they want to live somewhere else and cut out long commuting times while still earning a good salary?

Working from home can also ease some of the impracticalities of urban life. In August, a designer at the payments software company Stripe received 94,000 likes for his tweet: “Still have no idea how people can work a full-time job, cook dinner often, exercise regularly, enjoy weekends, keep the apartment clean. Seems basic but I can’t consistently do it.”

Amid a healthy smattering of snark, the replies were mostly helpful. Try meal prep; laundry services; Roomba robotic vacuum cleaners. But one of the most popular involved rethinking the traditional set-up of office work.

Hong Kong chief Carrie Lam says city is in ‘technical recession’ Pro-democracy lawmakers shout down financial hub’s leader as she tries to make key speech ALICE WOODHOUSE, NICOLLE LIU AND SUE-LIN WONG IN HONG KONG

H

ong Kong chief executive Carrie Lam said the city had entered a “technical recession” on Wednesday, after she was forced to suspend her annual policy speech when pro-democracy lawmakers shouted her down and called for her resignation.

Ms Lam had to make her comments — Hong Kong’s equivalent of the US president’s State of the Union speech — by video, announcing measures focused on the property market and other economic sweeteners in the latest bid to resolve the city’s deepening political crisis.

Pro-democracy lawmakers held posters outside the legislative chamber depicting Ms Lam with blood on her hands and chanted the protest slogan “five demands, not one less” as she entered. Once

inside, the legislators heckled her and projected the slogan on to a wall. Two lawmakers wore masks featuring the face of Xi Jinping, China’s president.

“Today we used a projector to project the demands of the people on her body, on her face,” said Tanya Chan, a pro-democracy lawmaker. Ms Chan used a speaker to broadcast to the chamber sounds of screams and exploding tear gas canisters recorded during the protests.

Ms Lam has struggled to end four months of protests that have roiled the financial hub and have combined with the US-China trade war to hit the economy hard.

Retail sales dropped by almost a quarter in August — the largest fall on record — and visitor numbers plunged 40 per cent, the latest month for which data are available.

The IMF on Tuesday downgraded its GDP growth forecast for Hong Kong for 2019 to 0.3 per cent, down from 2.7 per cent in April. www.businessday.ng

A bet on America: the sports gambling gold rush Banned for decades, US betting is back and European gaming companies want a piece of the action ALICE HANCOCK IN ATLANTIC CITY

T

he boardwalk in Atlantic City, New Jersey, looks like a forgotten film set.

Scant tourists look in vain for its Prohibitionera glory. The windows of the Central Pier Arcade are grey with dirt.

The nearby Trump Plaza stands empty. Snarkier non-residents call the town “America’s armpit”.

But Franco Guerrero, who has worked in Atlantic City’s casinos for 29 years, says that after dark days following the 2008 recession, the town — its resorts and railroad once the inspiration for the US version of the Monopoly board game — has new hope courtesy of the legalisation of one activity: sports betting.

“A lot of people lost a lot of money and they moved out . . . but now there are more jobs and opportunities,” says Mr Guerrero. He moved from one of the boardwalk’s oldest surviving casinos, Harrah’s, to work at the Hard Rock resort’s sportsbook — the US answer to a bookmaker’s shop but with big live sports screens and alcohol on sale — which opened in June last year.

Atlantic City is the frontier town for a new American gold rush. The gambling hub of New Jersey was the first state to adopt legislation allowing sports betting after the US Supreme Court overturned a federal bill banning the practice in May 2018. A host of European and American operators have since built sportsbooks in its casinos.

The mistrust of betting is buried deep in the DNA of many US states — an historical attitude that went hand-in-hand with fears of mob violence and corruption in sport.

Increasingly stringent legislation was adopted during the 20th century as match fixing and other scandals prompted public outcries.

The 1992 Professional and Amateur Sports Protection Act outlawed sports betting in all but a handful of scenarios.

The Supreme Court’s decision opened up a fresh market, unhampered by the public and media

https://www.facebook.com/businessdayng

clamour against problem gambling in mature markets such as the UK. Peter Jackson, chief executive of Flutter, which owns the Irish betting company Paddy Power Betfair, describes the opening up of the US as the most exciting development since the advent of online betting.

A combination of population size and the passion for sport could make it one of the most lucrative sports betting markets in the world, analysts say. Now legal in 14 states, five others have legislation pending.

Estimates for the size of the potential market vary wildly. Gambling Compliance, an industry research firm, values the market at up to $8.1bn in revenue terms by 2024. If the American Gaming Association’s $150bn estimate for the illegal sports betting market is accurate, it could be much bigger.

But as with any gold rush, the glut of fortune-seekers makes competition tough and the depth of the mine is unclear. European gambling companies last circled the US market more than 10 years ago but had their fingers burnt when several executives were arrested for providing online sports betting into the US from bases in the Caribbean.

Mark Blandford, then chief executive of Sportingbet whose chairman Peter Dicks was one of those detained in 2006, remembers being “totally shocked”. “He was handcuffed to a murderer,” he says.

Sportingbet paid US prosecutors $33m to settle the case.

But for newcomers, it is too good to be true. “It’s a once in a lifetime opportunity,” says Jason Robins, chief executive of fantasy sports company DraftKings, which has the second largest share of sports betting revenues in New Jersey. “[Here is] a market that is going from unregulated to regulated in the largest economy in the world.”

Chart showing On-site and online market share of gambling in New Jersey Since 1992, Americans wanting to bet on sports in the US have had three options: go to the Las Vegas sportsbooks in Nevada, seek out a local bookie in a bar, or bet via @Businessdayng

offshore websites.

The Supreme Court has fundamentally changed that. Many in the industry say its 2018 ruling was the work of one man: Dennis Drazin, a New Jersey lawyer who is also chairman of Monmouth Park racetrack in New Jersey. Looking to boost revenues in the state’s fast-failing horseracing industry, he figured that if Monmouth Park could host a sportsbook, punters would come. Mr Drazin fought a series of legal battles to allow sports betting in New Jersey on the basis that it should be a decision for the states, rather than the federal government.

“People said I was tilting at windmills like Don Quixote . . . But at the end of the day, I made a lot of people very rich,” Mr Drazin says.

The fight took him seven years.

His efforts were boosted by the emergence in the 2010s of daily fantasy sports games in which people choose fantasy teams across various sports but win points based on the real-life performance of the players. For many it was a way to take punts on sport in a legal grey area outside of PASPA’s reach.

DraftKings and FanDuel, the two biggest daily fantasy sports sites, came to the attention of regulators in 2016 after advertising by the two companies caused a backlash. Some asked whether fantasy sports was merely sports betting under a different guise but the companies successfully argued that fantasy sports are games of skill not chance and therefore did not constitute gambling. Their combined customer base of more than 13m players, however, showed that there was an appetite for the betting-like activity they offered.

The 22-window sportsbook at Monmouth Park is run by William Hill, the UK bookmaker which has had a presence in the US since it bought a Las Vegas counterpart for $50m in 2012. Late on a Saturday afternoon at the tail-end of the racing season, few punters are watching the horses. Yet the sportsbook — where they can bet on everything from basketball to golf — is packed.

Thursday 17 October 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 16 Oct. 2019

Top Gainers/Losers as at Wednesday 16 October 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

STANBIC

N37.05

N36.25

-0.8

WAPCO

N16

N15.35

-0.65

MTNN

N129

N128.5

-0.5

N7.2

N7

-0.2

N1.95

N1.8

-0.15

Opening

Closing

Change

N1215.1

N1220

4.9

DANGFLOUR

N22.45

N23.2

0.75

GUARANTY

N26.65

N27

0.35

AFRIPRUD

N3.9

N4

0.1

ETI

NB

N46

N46.05

0.05

NESTLE

STERLNBANK

ASI (Points)

26,472.20

DEALS (Numbers) VOLUME (Numbers)

2,487.00 138,470,030.00

VALUE (N billion) MARKET CAP (N Trn)

3.604

Stories by Iheanyi Nwachukwu

T

Nikkei 225 22,472.92JPY +265.71+1.20%

Generic 1st ‘DM’ Future 26,976.00USD -26.00-0.10%

Deutsche Boerse AG German Stock Index DAX 12,670.11EUR +40.32+0.32%

S&P 500 Index 2,990.10USD -5.58-0.19%

Shanghai Stock Exchange Composite Index 2,978.71CNY -12.33-0.41%

Okomu Oil Palm proposes interim dividend of N2 per share

T

he Board of Directors of Okomu Oil Palm Nigeria Plc met last Monday October 14 where the company’s unaudited financials for the third-quarter (Q3) to September 30, 2019 was considered and approved.

The board approved the payment of interim dividend of N2 per share for the period ended September 30.

L L – R: Emeka Madubuike, ex-Officio, Association of Securities Dealing Houses of Nigeria (ASHON); Rasheed Yussuff, council member, ASHON; Tinuade Awe, executive director, Regulation, The Nigerian Stock Exchange (NSE); Patrick Ezeagu, chairman, ASHON; Ify Ejezie, council member, ASHON; Akin Akeredolu-Ali, first vice chairman, ASHON and Bunmi Ajayi, treasurer, ASHON during the Closing Gong Ceremony to interact with the Executive Management of the NSE and Stockbrokers ahead of its Annual General Meeting (AGM).

losing 80kobo or 2.16percent.

Lafarge Africa Plc was also on the top losers table after its share price decreased from N16 to N15.35, losing 65kobo or 4.06percent. MTNN dipped from a preceding day high of N129 to N128.5, losing 50kobo or 0.39percent. The share price of ETI Plc dropped

from N7.2 to N7, losing 20kobo or 2.78percent, while Sterling Bank Plc decreased from N1.95 to N1.8, after losing 15kobo or 7.69percent. Nestle Nigeria Plc shares recorded the highest capital appreciation on the review day, moving from N1215.1 to N1220, adding N4.9 or 0.40percent.

Dangote Flourmills Plc

also rose from N22.45 to N23.2, adding 75kobo or 3.34percent; GTBank Plc advanced from N26.65 to N27, adding 35kobo or 1.31percent. Africa Prudential Plc rose from N3.9 to N4, adding 10kobo or 2.56percent, while Nigerian Breweries Plc increased from N46 to N46.05, adding 5kobo or 0.11percent.

...share price gains on NSE

G

FTSE 100 Index 7,167.95GBP -43.69-0.61%

The company’s approved unaudited financial statements will be released at the Nigerian Stock Exchange (NSE) on or before October 30, 2019.

At N 54.95 per share the stock closed on Tuesday October 15, the share price is midway to its 52week high of N85 after a record 52-week low of N40.15.

London Stock Exchange launches global equity segment for trading in international securities

GTBank grows Q3 pre-tax profit to N170.7bn uaranty Trust Bank Plc (GTBank) has released its unaudited Interim Financial Statements for the thirdquarter (Q3) ended September 30, 2019.

The Tier 1 lender reported Profit Before Tax (PBT) of N170.65billion, which represents an increase of 3.9percent when compared with PBT of N164.24billion in Q3’2018, according to its scorecard released on Wednesday October 16, 2019 at the Nigerian Stock Exchange (NSE).

Global market indicators

12.886

Stanbic, Lafarge, MTNN, other stocks spur market’s N20bn loss he Nigerian Stock Exchange (NSE) All Share Index (ASI) depreciated further by 0.16percent on Wednesday October 16. The market’s negative close pushed the NSE ASI to 26,472.20 points from a high of 26,513.65 points recorded the preceding day.

Thirteen (13) stocks gained as against 11 losers. Investors lost N20billion while the Year-toDate (YTD) negative return stood at -15.78percent. The value of listed equities decreased from N12.906trillion to N12.886trillion.

In 2,487 deals, dealers exchanged 138,470,030 units valued at N3.604billion. Access Bank Plc, Global Spectrum Energy Services Plc, Zenith Bank Plc, Transcorp Plc, and FBN Holdings Plc were actively traded stocks on Wednesday on the Nigerian Bourse.

Stanbic IBTC Holdings Plc led the laggards’ league after its share price decreased from day-open high of N37.05 to N36.25;

49

Following the impressive result, investors rushed to raise its equity bet which led to its share price rising from N26.65 to N27, adding 35kobo or 1.31percent.

GTBank gross earnings of N326.03billion in Q3’19 as against N 337.27billion it earned in Q3’18 represents a decline of about 3.3percent.

Profit After Tax (PAT) of N146.99billion against N142.22billion in Q3’18, implies 3.4percent increase. Interest Income decreased by 5.6percent to N224.18billion compared www.businessday.ng

with N237.54billion in Q3’18.

The group’s Net Interest Income of N172.93billion in Q3’19 as against N170.64billion in Q3’18 represents 1.3percent increase.

GTBank’s loan impairment loss of N2.76billion as against N1.73billion in Q3’18 shows growth of 59percent; Non-Interest Income (NII) of N99.96billion against N97.21billion in the corresponding thirdquarter period of 2018 represents an increase of 2.8percent.

GTBank grew its Loans

and Advances to customers by 6.8percent to N1.451trillion from a corresponding year low of N1.359trillion.

Deposits from customers stood higher by 5.1percent to N2.390trillion in Q3’19 from a low of N2.273trillion in Q3’18.

The group’s Cost to Income Ratio (CIR) of 37.8percent in Q3’19 as against 41.1percent in Q3’18 represents a decline of 3.3percent, while Loan to Deposits Ratio (LDR) of 54percent in Q3’19 against 53.5percent in Q3’18 implies 0.4percent increase.

https://www.facebook.com/businessdayng

ondon Stock Exchange Group (LSEG) has launched the Global Equity Segment (GES) on London Stock Exchange plc, following the completion of its first trade.

The Global Equity Segment will offer trading in 95 international securities including US blue chips and Chinese ADRs on the MTF (MIC code XLOM) operated by London Stock Exchange and available during regular London trading hours. The new segment will provide investors the opportunity to reduce time zone risk whilst accessing exposure to global securities.

Traded in USD, GES utilises a well-established CREST Depository Interest (CDI) workflow allowing quick and efficient cross-border settlement between the UK and US within a T+2 settlement cycle. BNP Paribas Securities Services provides custody services to global clients trading GES securities, including moving positions between the UK and US. Brian Schwieger, Global Head of Equities, London Stock Exchange Group said: “The Global Equity Segment allows a diverse set of investors to trade major international stocks, including the likes of Amazon, General Motors and major American Depository Receipts (ADRs) such as Alibaba and Ctrip in the world’s most convenient financial time zone.

“The new segment builds on broker relationships already established through Shanghai-London Stock Connect and leverages London’s location as a global bridge between the Americas and Asia.

@Businessdayng

Moreover, existing connections to CREST’s CDI workflow facilitates cost effective and efficient cross border settlement. The Global Equity Segment is a great example of the uniqueness of London’s time zone, trading expertise, and global investor community.”

Yi ZHOU, Chairman of Huatai Securities said: “Being the first listed GDR issuer under ShanghaiLondon Stock Connect has opened doors for us to new and broader markets.

Huatai is very pleased to see more impressive and innovative progress, such as GES, which has been made by LSE to further facilitate the interactions between UK and Asian capital markets. As a leading broker in China and a new member of LSE, we do see tremendous opportunities and look forward to deepening our relationship with LSE on many fronts in the future.”

Luc Renard, Head of Financial Intermediaries & Corporates, Asia Pacific, BNP Paribas Securities Services said: “Supporting cross-border investments is part of BNP Paribas’ DNA and we have developed unrivalled expertise to support clients to access new investments opportunities across the globe including the GES. Our job is to make sure that the post-trade infrastructure is in place to allow a seamless, simple and efficient operating model which is supported by a strong and global client relationship framework.”

50

Thursday 17 October 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 17 October 2019

BUSINESS DAY

51

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 16 October 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 263,034.67 7.40 1.35 151 20,717,555 UNITED BANK FOR AFRICA PLC 203,486.56 5.95 - 85 1,277,630 ZENITH BANK PLC 560,427.41 17.85 -0.28 304 14,881,329 540 36,876,514 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 190,245.05 5.30 1.89 112 10,866,741 112 10,866,741 652 47,743,255 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,615,554.93 128.50 -0.39 65 2,776,449 65 2,776,449 65 2,776,449 BUILDING MATERIALS DANGOTE CEMENT PLC 2,470,873.57 145.00 - 63 174,683 LAFARGE AFRICA PLC. 247,254.66 15.35 -4.06 64 957,098 127 1,131,781 127 1,131,781 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 3 1,927 3 1,927 3 1,927 847 51,653,412 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 2 25,862 2 25,862 2 25,862 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 2 25,862 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 52,417.35 54.95 - 48 227,043 OKOMU OIL PALM PLC. PRESCO PLC 38,400.00 38.40 - 16 13,742 64 240,785 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 6.38 10 220,625 10 220,625 74 461,410 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 2 298 JOHN HOLT PLC. 214.03 0.55 - 2 1,392 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,460.95 1.02 0.99 37 14,357,126 19,304.69 6.70 -0.75 67 1,108,475 U A C N PLC. 108 15,467,291 108 15,467,291 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 18 23,912 ROADS NIG PLC. 165.00 6.60 - 0 0 18 23,912 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,884.22 1.11 - 2 38,325 2 38,325 20 62,237 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 8,142.68 1.04 - 2 1,200 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 64,287.74 29.35 - 31 65,782 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 7 8,811 368,257.34 46.05 0.11 46 3,889,881 NIGERIAN BREW. PLC. 86 3,965,674 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 116,000.00 23.20 3.34 83 1,764,453 DANGOTE SUGAR REFINERY PLC 122,400.00 10.20 - 46 479,423 FLOUR MILLS NIG. PLC. 60,480.60 14.75 - 57 423,464 HONEYWELL FLOUR MILL PLC 7,850.90 0.99 - 14 252,870 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 100 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 10 51,596 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 211 2,971,906 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,500.29 9.85 - 17 28,330 NESTLE NIGERIA PLC. 967,040.63 1,220.00 0.40 46 1,770,941 63 1,799,271 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,878.29 3.90 - 11 84,288 11 84,288 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 24,418.43 6.15 - 16 43,221 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 22 48,121 38 91,342 409 8,912,481 BANKING ECOBANK TRANSNATIONAL INCORPORATED 128,446.86 7.00 -2.78 48 1,649,594 FIDELITY BANK PLC 48,677.66 1.68 1.82 35 767,628 GUARANTY TRUST BANK PLC. 794,641.84 27.00 1.31 171 2,937,412 JAIZ BANK PLC 14,732.12 0.50 - 11 524,434 STERLING BANK PLC. 51,822.75 1.80 -7.69 89 4,787,206 UNION BANK NIG.PLC. 203,845.27 7.00 - 29 735,289 UNITY BANK PLC 7,364.28 0.63 - 7 51,010 WEMA BANK PLC. 22,758.93 0.59 - 19 1,491,231 409 12,943,804 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,366.03 0.63 - 1 10,000 AXAMANSARD INSURANCE PLC 17,850.00 1.70 - 11 556,130 CONSOLIDATED HALLMARK INSURANCE PLC 2,439.00 0.30 - 0 0 CONTINENTAL REINSURANCE PLC 23,857.31 2.30 - 35 7,271,683 CORNERSTONE INSURANCE PLC 5,449.92 0.37 - 5 58,050 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,050.56 0.28 - 3 13,200 LAW UNION AND ROCK INS. PLC. 2,062.24 0.48 9.09 3 150,000 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 2 91,700 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 4,522 NEM INSURANCE PLC 12,145.16 2.30 - 13 284,100 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,691.28 0.50 2.04 1 1,748,890 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 0 0 4,483.72 0.48 - 0 0 STACO INSURANCE PLC STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 -8.57 27 1,653,782 102 11,842,057 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 4 120,000 4 120,000

www.businessday.ng

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 2.56 21 394,572 CUSTODIAN INVESTMENT PLC 33,232.53 5.65 - 8 17,631 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,486.31 1.59 -0.62 49 2,544,648 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 0 0 379,662.63 36.25 -2.16 23 868,382 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,540.00 2.09 -0.48 47 1,384,782 148 5,210,015 663 30,115,876 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,345.44 4.00 - 9 57,700 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,653.61 6.40 - 45 614,710 3,450.47 2.00 - 8 137,988 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 759.66 0.40 - 5 117,074 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 67 927,472 67 927,472 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 5.00 5 641,970 5 641,970 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 292.02 0.59 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,033.13 0.22 -8.33 14 2,483,899 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 100 15 2,483,999 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 3 973 3 973 23 3,126,942 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 4 2,200 CAP PLC 17,885.00 25.55 - 19 25,911 CEMENT CO. OF NORTH.NIG. PLC 208,324.49 15.85 - 14 17,804 MEYER PLC. 313.43 0.59 - 0 0 1,769.32 2.23 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 37 45,915 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 2,465.85 1.40 1.45 8 107,116 CUTIX PLC. 8 107,116 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 3 315 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 315 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 48 153,346 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 3 1,502 3 1,502 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 272,000 2 272,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 5 273,502 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 27 3,233,002 27 3,233,002 INTEGRATED OIL AND GAS SERVICES OANDO PLC 42,391.12 3.41 -2.57 60 883,248 60 883,248 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 10 25,286 CONOIL PLC 10,686.86 15.40 - 15 106,250 ETERNA PLC. 4,108.06 3.15 - 9 75,250 FORTE OIL PLC. 20,839.70 16.00 - 20 141,716 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 4 10,000 TOTAL NIGERIA PLC. 41,829.09 123.20 - 21 20,979 79 379,481 166 4,495,731 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 2 1,000 2 1,000 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 4 83,100 361.01 0.77 - 2 117,500 TRANS-NATIONWIDE EXPRESS PLC. 6 200,600 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 2 1 2 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,452.98 1.18 - 7 127,256 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 1,000 8 128,256 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 0 0 LEARN AFRICA PLC 948.88 1.23 - 2 4,033 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 496.12 1.15 - 0 0 2 4,033 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 757.44 3.20 - 2 300 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0 2 300

https://www.facebook.com/businessdayng

@Businessdayng

industry Insight Energy: Indispensable ingredient for Nigeria’s industrial journey

BUSINESS DAY

Thursday 17 October 2019 www.businessday.ng

Odinaka Anudu & Gbemi Faminu

E

of poor power supply from energy distribution companies.

In 2017, manufacturing companies in Nigeria spent as much as N117.38 billion in fuelling their plants to run daily operations, according to data from the Manufacturers Association of Nigeria (MAN).

An analysis of the financials of Dangote group, a key player in the manufacturing industry, shows that in five years, the group spent N485 billion on fuel and power consumption, accounting for 35 percent of the group’s production cost over the years. Many manufacturers have been unable to expand operations, acquire new machinery and produce more to give juicy returns to shareholders owing to energy issues.

“The biggest challenge facing manufacturing companies as well as small- and medium-scale enterprises is power. This has led the deaths of many businesses in the country,” Muda Yusuf, director general, Lagos Chamber of Commerce and Industry, told BusinessDay. The nexus between increased power supply and productivity is clear. When there is steady energy supply, operating costs of manufacturers fall, leading to the production of cheap products that can compete.

This is not the case today as locally made products are much more expensive that imported ones owing to high production costs borne by few manufacturers that still have the courage to remain in business. When manufacturers produce competitively, they export and earn foreign exchange. Rather than seek foreign exchange to import inputs, they earn

enough to buy inputs and also free it for the economy.

Today, Nigerian manufacturers are in a dilemma as they face cashstrapped and poverty-ravaged consumers, half of who earn N21, 000 or less a month. All the poverty indices show that Nigerian consumers are getting poorer.

Brookings Institute said in 2018 that 87 million Nigerians, or around half of the country’s population, were extremely poor or lived on less than

”

nergy is a critical element in achieving economic growth, reducing inequality and boosting employment.

It is important to every economy as water is to fish. It is, perhaps, most critical for industries. Show us any industrialised economy and we will show you an economy that is energy efficient.

Recognising the importance of energy, most industrialised economies in the world today, including emerging markets like India, take bold steps to achieve energy efficiency.

India’s energy sector is one of the most diversified in the world today.

Apart from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power, the country has gone unto non-conventional sources such as wind, solar, and agricultural and domestic waste, according to India Brand Equity Foundation, an arm of the Indian government’s ministry of commerce.

For fixing the power problem, its rank in the World Bank’s Ease of doing business’ ‘Getting Electricity’ segment rose from 137 in 2014 to 24 in 2018.

As of 2017, India generated around 1,160.1 billion units of electricity, up 4.72 percent from the previous year. The country is behind only to China which produced 6,015 terrawatt hours (TWh. 1 TW = 1,000,000 megawatts) and the US (4,327 TWh), and is ahead of Russia, Japan, Germany, and Canada.

The impact is felt by industries.

India is world’s biggest exporter of beef and several finished products.

Just like China, India is a leading exporter of leather, sugar, aluminium, textile and several other products. It earned $16.37 billion from garment in 2018—more than five times what Nigeria earned from all the non-oil export products put together.

This is not the same story with Africa’s biggest economy that generates about 5,000 megawatts (MW) and distributes between 2,000 and 3,5000MW. A report by the United States Agency for International Development (USAID) says that Nigeria has the capacity to use oil, gas, hydro and solar as sources of power. It adds that it has the potential to generate 12,522 megawatts (MW) of electric power, but it is doing far less.

In combination with other manmade gridlocks, local manufacturers bear ballooning costs of production which make their products uncompetitive in both local and global markets. Many of them cannot produce on a larger scale and export to other markets because they struggle to get cheap energy sources in the face

The biggest challenge facing manufacturing companies as well as small- and medium-scale enterprises is power.

This has led the deaths of many businesses in the country

$1.90 a day. Just recently, the United Nations Development Programme (UNDP) said slightly over 98 million Nigerians are living in multidimensional poverty.

Data from the National Bureau of Statistics on Gross Domestic Product (GDP) by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace since it rose by 1.5 per cent in 2015. This has a far reaching implication for these companies with regard to sales.

Final consumption of households has declined by 8 percent from N43.1 trillion in 2014 to N39.66 trillion in 2018. Regular power supply cuts manufacturers’ production costs and enable them to meet the needs of a majorly poor population.

It would traditionally enable these firms to employ more people in an economy where almost one out of four people are jobless.

Currently, manufacturers selfgenerate a little over 13,000MW through alternative sources of energy in order to stay afloat.

In 2016, the Manufacturers Association of Nigeria, through its recently formed MAN Power Development Company, signed an agreement with Tower Energy Solution & Systems Limited for the supply of six to 10 megawatts (MW) of electricity to Henry Carr Industrial Cluster in Ikeja, Lagos. The impact of these agreements is yet to be known.

In major advanced economies of the world, the manufacturing sector takes the front burner in driving investment, creating jobs

and reducing poverty. The reverse has been the case for Africa’s largest economy as many firms have either been squeezed out of business, or produce below capacity.

In the first quarter of 2019, growth in the manufacturing sector slowed to 0.18 percent from the 2.35 percent growth in the previous quarter, based on NBS data. Even though the percentage share of foreign exchange earnings got from the sector grew, it still accounts for a meagre 10.9 percent of total foreign receipt in the period under review. Analysts argue that the sector has a great potential to grow if the challenge of power is fixed.

They add that it is time to embrace energy mix, just like India.

In September 2017, a report by David Gardiner and Associates, a strategic advisor to organisations seeking a sustainable future, reviewed 160 of the largest global manufacturing firms in the United States. According to the report, entitled, ‘The Growing Demand for Renewable Energy Among Major US and Global Manufacturers’, 25 percent of manufacturers, including General Motors, Anheuser-Busch InBev, and Mars, have renewable energy targets while 83 percent have greenhouse gas reduction goals.

The report says that renewable energy, particularly wind and solar, is now among the cheapest and cleanest generation resources. It stated that manufacturers were pursuing that type of energy to help reduce costs.

As reported by Alyssa Danigelis of energymanagertoday.com, of the 160 companies surveyed, 18 have 100 percent renewable energy targets. Even though some may dismiss this as an American example, the fact remains that this is happening across the world and manufacturing concerns world over are working towards being energy efficient.

The International Energy Agency predicts that renewable energy will comprise 40 percent of global power generation by 2040.

Nigeria has an advantage over the US, China and many countries in Europe, in that it is located in the sub-Saharan Africa where sunshine and wind are not in short supply.

More so, solar panels are becoming increasingly cheaper, though reduction in cost will be determined by how much number Nigerian businesses and homes can buy.

Experts say Nigerian manufacturers must begin to take energy mix more seriously to bring down costs in the long-term.

Renewable energy may have shortcomings, but it is the future.

As the African Continental Free Trade Area draws near, only the competitive will survive. And Nigerian manufacturers need to be in this mix.

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