BusinessDay 18 Dec 2018 by BusinessDay

Patrick Atuanya takes over as Editor as Anthony Osae-Brown leaves BusinessDay

nthony Osae-Brown, who has been Editor of BusinessDay since October 2016 will be leaving his position with effect from December 31, 2018. OsaeBrown who joined West Africa’s most authoritative business paper from UBA Plc. is leaving to pursue new challenges.

In line with the laid down succession plan already in place, Patrick Atuanya, who is currently the News Editor, will take over as Editor of the paper with effect from January 1, 2019. Patrick joined BusinessDay in 2012 as an analyst and rose to position of Chief Economist. He holds a B.sc in Economics

Atuanya

Osae-Brown

NEWS YOU CAN TRUST I **TUESDAY 18 DECEMBER 2018 I VOL. 15, NO 205 I N300

and an MBA with concentration in Finance from St Joseph’s University, Haub School of Business, Philadelphia, Pennsylvania and has written more than 300 analytical and research reports on the Nigerian economy and financial markets. Continues on page 38

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Access Bank now Nigeria’s largest lender after N27bn Diamond merger T A

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Dying in instalment: How failure of regulation contributed to lead pollution (3)

LOLADE AKINMURELE, IHEANYI NWACHUKWU & HOPE MOSES ASHIKE

ccess Bank Plc is growing fast; swallowing one bank at a time to achieve an old ambition that came closer with the acquisition of Diamond bank. Access Bank’s rise started with its acquisition of a bigger bank in the shape of Intercontinental Bank in 2012, and has followed that up by buying retail banking champion, Diamond bank, six years later, catapulting itself to the very top. The shares of Access Bank jumped 9.40 percent, the bank’s biggest daily gain since January 20, 2016 to a six-week high of N18.15 per share, while those of Diamond Bank appreciated by 9.47 percent to close at N1.04 Continues on page 38

with combined total assets of N6trn, 27m customers Diamond Bank shareholders to receive N3.13 per share See detailed analysis on page A14-A15

L-R: Amaechi Okobi, group head, corporate communications, Access Bank plc, Chinwe GregEgu, brand manager, international brands, Nigerian Breweries plc; Herbert Wigwe, CEO/group managing director, Access Bank plc; Awilo Longomba, Congolese musician, and Darey Art Alade, executive creative director, Livespot Group, at the Born in Festival in Lagos.

ISAAC ANYAOGU he third part of this investigation uncovers how regulatory failure allowed lead acid battery recyclers without the requisite government approvals to operate with reckless abandon and endanger the lives of many Nigerians.

See full story on page ??

Inside

Obaseki unveils Edo security architecture as Imoukhuede heads N2bn Trust Fund P. 2 An economic analysis of Nigerian P. 14-15 States by Ayo Teriba My Youth Minister will be P. A8 under–30 – Atiku

2 BUSINESS DAY NEWS

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Obaseki unveils Edo security architecture as Imoukhuede heads N2bn Trust Fund

... Imoukhuede donates N200m to Trust Fund IDRIS MOMOH

he Edo State Governor, Godwin Obaseki, on Monday in Benin City, the state capital, unveiled the Edo State Security Architecture, a new framework that will boost security in the state. The governor also launched the Edo State Security Trust Fund, with the state government committing N2 billion as seed fund. The components of the state security architecture include: 50 special security cars fitted with modern communication and security gadgets; 30 Toyota Hilux patrol vans; 30 patrol motor bikes and three Tropicalised Armoured Personnel Carriers; three Ambulances; Integrated Command and Control Centre and five special security check points to be manned at all the entry and exit points in the state. Others are Special Patrol Units (land and waterways); Integrated Electronic City Surveillance Unit; Establishment of a Special Force unit/anti-kidnapping squad; establishment of K-9 unit; establishment of paramedics unit; establishment of the Public Works Volunteers (PUWOV) scheme with 3000 trained and kitted workforce and a community police radio network. Speaking at the launch of the initiative, the governor explained that security is central to his administration’s reform agenda, noting, “Thanks to the chairman of the Edo State Security Trust Fund, Aigboje Aig-Imoukhuede for kickstarting and donating N200 million to the fund. I call on all Edo State citizens to contribute to the Security Trust Fund.” Stressing that the new security architecture is a comprehensive programme, he said, “Apart from the police, Military, Department of State Security and other security agencies, we are recruiting 100 young men and women from each ward across Edo State. The first 1,000 of them have been recruited and trained by the Nigeria Police, as they will help in intelligence gathering, and monitoring of government assets across the state. We believe by involving the community, we would be able to obtain enough information as to what is going on in the state. The effectiveness of our new strategy is based on community participation.” The Inspector General of Po-

lice, Mohammed Idris, who was represented by the Deputy Inspector General of Police, Emmanuel Inyang, applauded the Governor Godwin Obaseki-led government for embarking on the ambitious project and urged the private sector to support the fund to bolster policing across the state. “We are very happy to witness this wonderful gesture. I want to call on all on other private and public enterprises to support this initiative so that what succeeded in Lagos will also succeed in Edo State. Gone are the days that people left policing for the police alone. I also want to thank the Chairman of the Trust Fund for deeming it fit to come and assist the state. “With the launch of this security architecture, Edo people and residents will now sleep with their eyes closed. I am also aware that gun boats have been procured in addition to the vehicles and other equipment we are launching today. “This means we will be able to cover activities on land and sea which will be augmented with aerial surveillance using the Police helicopter. With all these efforts, Edo will become very safe for everyone. The security architecture will ginger security agencies to collaborate more, and where there is collaboration there will be coordination among us.” Chairman of the Edo State Security Trust Fund and Chairman, Coronation Capital, Aigboje AigImoukhuede, commended governor Obaseki for his foresight and his commitment to building a strong and peaceful state with initiatives such as the Edo State Security Trust Fund and Edo State Security Architecture, codenamed “WABAIZIGAN”. He assured that he would join efforts with other Edo sons and daughters at home and in the diaspora to replicate the success story of the Lagos State Security Trust Fund, in Edo State. The former Managing Director of Access Bank, donated N200 million to the Security Trust Fund, and explained that he was instrumental to the establishment and success of the Lagos State Security Trust Fund and. “I and the companies I represent donate the sum of N200 million to the fund. I call on citizens of Edo State to join hands with the Edo State government and all the security agencies to make the state safe and peaceful for all.”

Godwin Obaseki (2nd r), Edo State governor; Aigboje Aig-Imoukhuede (r), chairman, Edo State Security Trust Fund; Ukinebo Dare (l), senior special assistant to the governor on Skills Development and Job Creation; Solape Hammond (2nd l), CEO, Impact Hub, and Adetunji Iromini (m), CEO, Solarcentric Technologies Limited, at the inaugural Hack Edo Series themed: ‘Power for Edo Hackathon’ at the Innovation Hub, in Benin City, Edo State.

Banks record higher default rates on credit card, overdraft in Q4 HOPE MOSES-ASHIKE

enders experienced higher default rates on credit card and on overdrafts/personal lending to households in the fourth quarter of 2018, according to the Central Bank of Nigeria (CBN). The CBN on Monday, released its Credit Condition Survey report conducted from November 19 to 23, 2018. The Q4 2018 credit condition survey for households, small businesses and corporate entities indicated an increase in availability of secured credit to households and corporates entities, and increased availability of unsecured credit to households. The banks however, expect improvement in default rates in the next quarter for all loan types. According to the report the overall availability of credit to the corporate sector increased in Q4 2018 and was expected to increase in Q1 2019. This was driven by favourable economic conditions, changing sector specific risks, improved liquidity

conditions, market share objectives and changing appetite for risk. Lenders reported that the prevailing commercial property prices negatively influenced credit availability of the commercial real estate sector in the current quarter. However, lenders expect the prevailing commercial property prices to positively influence secured lending to Public Non-Financial Corporations (PNFCs) in the current quarter. Spreads between bank rates and MPR on approved new loan applications widened for all business sizes except for loans to other nonfinancial corporations (OFCs) in Q4 2018, but were expected to widen for all business sizes in Q1 2019. The proportion of loan applications approved for all business sizes increased in the current quarter, and are expected to further increase in Q1 2019. Lenders required stronger loan covenants from all firm sized businesses in the current quarter. However, they reported that they would require stronger loan covenants for

all firm sized businesses except for small business, which they plan to leave unchanged, in the next quarter. For the current quarter, fees/ commissions on approved new loan applications fell for medium PNFCs and OFCs, and rose for small and large businesses; while for Q1 2019 lenders expect fees/commissions on approved new loan applications to fall for medium PNFCs, remain unchanged for small and large PNFCs, and rise for OFCs. Small and medium PNFCs benefitted from an increase in maximum credit lines on approved new loan applications in Q4 2018, while Large PNFCs and OFCs did not. Similarly, Small PNFCs and OFCs are expected to benefit from an increase in maximum credit lines on approved new loan applications in Q1 2019, while medium and large PNFCs are not. More collateral requirements were demanded from all firm sizes on approved new loan application in Q4 2018. Similarly, lenders will demand for more collateral from all firm sizes in the next quarter.

Nigeria plunges to 133rd on Gender Index Why 2019 could be tough for as women shrink in economy, politics consumer goods’ firms TEMITAYO AYETOTO

BALA AUGIE

onsumer goods firms, who are already feeling the pinch of a tough and unpredictable macroeconomic environment, could face further margin contraction next year. Analysts are of the view that rising

shareholders. Experts added that while election spending is at best expected to deliver marginal boost to spending, the effect of it would only be confined to the first quarter. Also, they said effect of the 67 percent proposed minimum wage hike will only trickle down

ANALYSIS

interest rates and the expectation of tariff hike on power and fuel by federal government- which would further damp consumer purchasing power as sluggish consumer demand continues-could prevent firms from delivering a higher return on investment to

to the pockets of consumers if com-

pliance with the increase spreads across the states and private sector. They however added that firms may maintain stable margins if they intensify on cost cutting strategy, as some of them are sourcing

Continues on page 38

pportunities are shrinking for Nigerian women in terms of participation in politics, attainment of educational heights, health and survival, according to the World Economic Forum’s (WEF) Global Gender Gap Index. The WEF has ranked the country 133rd out of 149th for achieving gender parity. Nigeria failed to make the top 10 list of African nations on the index and fell from the 94th position in 2006 to score 0.621 as Rwanda at the 19th position led the Sub-Saharan region with 0.804, Namibia 0.789, South Africa 0.755 and Uganda 0.724. Burundi scored 0.741, Zimbabwe 0.721, Mozambique 0.721, Botswana 0.715, Cameroon 0.714 and Tanzania 0.704.

The Forum however expressed worry that the sub-Saharan region gender gap has begun to widen again, despite recording progress for six consecutive years. Under economic participation, Nigerian women participation in the labour force was 50.3 percent compared to 59.9 percent for men. Also compared to men, women estimated earned income is at $4,602 less than $7, 081 (PPP). Unlike 61.3 percent literacy rate recorded among Nigerian men, education among women is still lower at 41.4 percent. In politics, the figures are devastatingly low with women in ministerial positions only 12 percent, overwhelmed by 88 percent male dominance. Global gender gap marginally contracted in 2018, although proportionately fewer women than men participated in the labour force and political life, the report stated,

estimating that the gap will generally require 108 years to bridge while economic parity will take 202 years to achieve considering the slow pace of progress in global adjustment. According to the report, the world has closed 68 percent of its gender gap. It hinged the narrowing in economic opportunity on a shrinking income gap between men and women, which stands at nearly 51 percent in 2018, and the number of women in leadership roles, 34 percent globally. Data also suggest that proportionately fewer women than men are participating in the workforce. The report suggests that the worrisome development could be due to automation’s disproportionate impact on roles traditionally performed by women.

•Continues online at www.businessdayonline.com

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NBS denies FG’s claim on 12m job omission by agency ENDURANCE OKAFOR AND BUNMI BAILEY

ational Bureau of Statistics (NBS) has denied an allegation by a presidential spokesman that it omitted 12 million jobs created in the informal sector, saying that neither its head nor agency made any such admission to the government or anybody. Garba Shehu, senior special assistant to President Muhammadu Buhari on Media and Publicity, had said on Channel Television on Monday, December 17, 2018, that the director-general of NBS admitted to the Federal Government that it had paid only attention to employment figures of whitecollar jobs and not those in the informal sector. “The NBS chief had addressed the federal cabinet and made the admission himself that they had concentrated analysis on white-collar jobs and they had not taken cognisance of job creation in the area of agriculture. Rice Producers Association of Nigeria and Rice Farmers Association of Nigeria made open the claim and nobody has challenged them up that they had created 12 million jobs. When he finished addressing the cabinet last week, the government asked the DG of NBS to go out there and tell the public,” Shehu said. Shehu added that Jigawa, Zamfara, Kebbi and Ebonyi were reporting the lowest unemployment figures on account of the agricultural sector. “So the point is that on the data collection on the basis that some of the judgements that have been passed have been misleading and I think that there is now a convergence, the data have been unfair to the administration. They have ignored job creation in the area of agriculture.” Yemi Kale, Statistical General and DG of the NBS, denied this by saying that he and the NBS had never made that known to anyone at any point in time. “Assuming what you claim was said was actually said then I make it very clear that neither the Statistician General nor NBS ever made any such admission at any time to anybody,” Kale said in a tweet Monday. Recently there were insinuations recently that NBS was supporting Nigeria’s ruling All Progressives Congress (APC) on the general elections early next year by not releasing the latest country’s unemployment data.

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Experts floor government optimism on 2020 gas flare deadline HARRISON EDEH, Abuja

mid government optimism to meet the 2020 deadline for stopping Gas Flaring in Nigeria on account that specific measure was being put in place, energy experts still see this deadline as impossible. The Nigerian deputy minister for petroleum resources, Emmanuel Ibeh Kachikwu, had repeatedly at several fora said the National Gas Policy approved by the Federal Executive Council commits to ending the gas flare, while pre-

paring the ground for gas companies who flare gas to participate in gas commercialisation rather than flaring. Despite this minister’s optimism, there are concerns by experts in the sector that the set target of 2020 by the government to put a stop to gas flaring is not achievable, raising concern of poor investment in the infrastructure in the sector, non-passage of the Petroleum Industry Governance Bill, and general opacity that characterise the sector. “As long as some of the challenges we have in the

Power sector privatisation persists, I doubt whether the Gas companies would be willing to make huge investments required to stop gas flaring. Remember they are business people and their goal is to make profit. The liquidity concern in the power sector is also to a threat to investments in the Gas sector by the Gas companies,” Adeola Adenikiinju, an energy professor at the Centre for Petroleum, Energy Economics and Law and the University of Ibadan, told BusinessDay. Suggesting way forward, the energy professor said, “To stop faring, the

government have to look at infrastructure, gas processing facility, pipelines, and other ancillary investments. The major consumers of gas in Nigeria are in the power sector. The economics is not ripe for them to invest because of the liquidity concerns in the power sector, and huge problems in the power sector value chain is a source of worry to this gas flaring targets.” He suggested further to the government to ensure that the right incentives, like the Petroleum Industry Governance Bill, which would also provide the

right kind of legal structure that opens investments into the sector, was passed. Recall, the Nigerian government has outlined measures through its National Gas Policy focused on addressing gas-flaring concerns while expressing deeper worry on the environmental hazards that it has meted out to various Nigerian communities. Apart from the detrimental health and other negative impacts on the environment, the government also acknowledges the fact that the gas flared is an important part of the global energy transition.

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What FG’s N800m lifeline for housing sector seeks to achieve CHUKA UROKO

n a move housing sector stakeholders describe as encouraging, the Federal Government is perfecting plans to raise N800 million from the African Development Bank, the World Bank and other institutions to provide affordable mass housing accommodation for Nigerians. The move, if followed through and implemented, will mark a major paradigm shift in the whole business of building and buying homes. Going by government’s inten-

Afriland Properties CEO, Uzo Oshogwe, wins African Prize for Leadership Excellence Award

anaging director/CEO of Afriland Properties plc, Uzo Oshogwe, has won the 2018 African Prize for Leadership Excellence in the Real Estate category. The prize was awarded in recognition of her commitment, sterling leadership and contribution to Africa’s economic growth. The third edition of the awards took place at the Banquet Hall of Sheraton Hotel and Tower, Ikeja, Lagos, Nigeria. While receiving the award and certificate bearing the seal of African Mark of Leadership Excellence on behalf of the awardee, the director of Business Development, Henry Omoike, appreciated the advisory board for the honour and recognition of African leaders who have contributed immensely to the advancement of the continent. The African prize for leadership excellence is organised by the African Institute of Leadership Excellence in collaboration with Fast Track Brand Communication and Strategy, publisher of African Leadership Review with support from NEPAD and Forbes Africa magazine. The advisory board comprises leading business representatives from diverse industries including Pat Utomi, Mande Samaila, Wendy Ngoma, Aminu Ahmed, Anahul Pal, and Tunde Samuel. Afriland Properties is a property management, investment and development company, offering end-toend services along the real estate value chain, from management to joint-venture investments. With a portfolio size of over N15 billion and one of the largest land banks in Nigeria, Afriland is pioneering the opportunities presented by an institutional approach to real estate, serving niche markets throughout Africa.

sions, the fund goes beyond providing housing for lowincome Nigerians. The fund is part of the Family Homes Funds (FHF) initiative and, according to Femi Adewole, its chief executive, FHF is disbursed in two ways. “We are providing finances for developers who will build homes ranging from N2.5 million to N5 million. In addition to that, we are providing some assistance to the buyers of those houses. We are giving them deferred loans up to 40 percent of the cost of the houses,” he explained. FHF is a housing investment fund owned by the

Sovereign Wealth Fund and the Ministry of Finance Incorporating. It was set up primarily to finance housing for Nigerians who are on low income, meaning that it is for Nigerians who are earning below N100, 000 per month as a household. It targets 500,000 homes, which is why its managers are talking to a lot of development partners. This requires a lot of money, which, Adewole said, was not going to come from the federal government alone. “So, we are developing partnership with a whole range of development institutions, and the African Devel-

opment Bank (AfDB) and the World Bank are just two of the institutions that we are talking to and who are providing support for us”, he revealed. FHF is a relatively young company, having existed for just 45 months. It has commitment of over N200 million on the N800 million target. But, besides that, the fund has invested over N20 billion into five housing projects, which are ongoing some of which are located in Kaduna, Kano, Lagos and Delta states. It is expected that at N2.5 million and N5 million for the housing units being developed, many more Nigerians

will have access to homes. The 500,000 homes target may be surpassed and the country’s housing deficit burden might be lighter. Adewole assured Nigerians that before the end of December, over 200 houses would have been completed. Ugochukukwu Chime, president of Real Estate Development Association of Nigeria (REDAN), emphasised the readiness of the body to work in collaboration with stakeholders in the housing sector to move the sector to a higher level. “It is our sincere responsibility to work with stakehold-

ers in the housing sector to ensure that we move away from the learning curve to a higher pedestal of project feasibility, execution and closure. Knowledge is light and learning/training is key to understanding the dynamics of the business of real estate; it is also an instrument to wipe out ignorance,” Chime said. REDAN is building its own secretariat complex and, according to Chime, the project will cost N500 million and expected to be “partially completed and occupied in one year and fully completed, equipped and furnished in two years.”

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Seeking peace without enthroning justice, equity & fair play

Mazi Sam Ohuabunwa OFR sam@starteamconsult.com

f re c e n t , G e n e ral Abdulsalami Abubakar, former militar y Head of State who ushered in the current civilian democratic governance, which is in its 20th year, has been in the news. His National Peace Committee got the 2019 Presidential candidates to sign a peace accord or rather an accord for peace. Wonderful gesture! This is actually not the first time this committee that seems to have no tenure limit has gone on its missionary assignment of preaching peace in the nation. They did so in the lead up to the 2015 elections and got Jonathan and Buhari to sign an accord for peace. I also noticed that at the heat of the cattle - Fulani/ farmers’ conflict that threatened to consume Nigeria, they were active in preaching peace and arranging some meetings. Over many years, G eneral Yakubu Gowon, the man who led the Nigerian civil war, who is also a member of this national peace committee, has been going round ‘praying’ for Nigeria. If the measure of the efficacy of his prayers is that Nigeria is still one sovereign country, then it can be concluded that the effort has been successful. But if the measure is the peace and unity of Nigeria, then it clear that a lot more work and prayers

are needed, because, most Nigerians who are old enough will agree that Nigeria is more disunited today than she was in 1970, months after the gruelling Nigeria-Biafra war ended. As for peace, Nigeria’s peace is so fragile that at times, many Nigerians wonder if we are at war. Innocent Nigerians are murdered everyday by all kinds of state and nonstate actors that it has become the new normal. There seems to be a lull now as many of the nonstate actors have been engaged in political electioneering duties and indeed many are getting rearmed. I do not make mention of the economic deterioration. Isn’t it troubling that both poverty and unemployment rates today are worse than they were in 1975, despite all the “Nigeria Prays” across several stadia in Nigeria? I have the highest regards for HE, General Gowon and as a Christian, I will never undermine or underestimate the power of prayers. But to me, much of these public prayers is sheer hypocrisy. The Bible says that” the soul that sinneth, it shall die” and that “he that covers his sin shall not prosper”. But that he who ever confesses his sin, repents and forsakes evil, God is faithful and just to forgive him and cleanse him from all unrighteousness. “Sin is a reproach to any nation” but “righteousness exalts a nation”. We cannot be praying for peace and unity when we have loads of sins which we are either so self-conceited or so self-deluded to accept, not to talk of confessing and then forsaking, before we can receive forgiveness. “The sacrifice of the wicked is an abomination to the Lord: but the prayer of the upright is His delight”. If you ask me, what

‘

How I wish, these revered gentlemen and women, will mount a campaign for the enthronement of justice, equity and fair play in the conduct of national affairs. If they do, then the chances of having true peace will be greatly enhanced

’

we must do is to declare a day of confession and repentance and may be have an annual national repentance day! General Gowon should lead Nigeria to confess its sins and acts of wickedness during the progrom of 1966, its acts of wickedness against pregnant women and children during the civil war, several acts of wickedness carried against Nigerians across the nation from the Niger Delta, to the middle belt, to the North East, and to the South East etc. There is no section of Nigeria that has not been subjected to manifest wickedness by the Nigerian establishment since Independence. Barrels of the blood of innocent Nigerians shed in this country is

speaking against the nation and until we come down from our high horses, humble ourselves, pray and seek God’s face and turn from our wicked ways, the Lord may not hear us, nor forgive us, nor heal our land! The choice is ours- to have genuine repentance or continue with ‘political’ and hypocritical prayers. This is why I am often amused when I see or hear the likes of General Abdulsalam Abubakar preaching peace in Nigeria without a mention of justice, equity and fair play. Such preachments sound shallow and indeed are a sham. Sustainable peace can only be built on those three pillars. How I wish, these revered gentlemen and women, will mount a campaign for the enthronement of justice, equity and fair play in the conduct of national affairs. If they do, then the chances of having true peace will be greatly enhanced. They keep mute as evil is being committed and only to come out once in a while to dramatize peace accords. Let’s take the present accord for peace for example and ask a few pertinent questions: How can the presidential candidates maintain peace if the election is rigged? How can peace be assured if INEC decides not to allow the votes of Nigerians to count? How can peace be achieved if the security forces determine to intimidate some voters and prevent or frighten them from casting their votes? How can peace be achieved if EFCC is used by the party in power to harass, arrest and discomfiture opposition party leaders/ contestants? Why is the peace committee silent on the controversy over the 2018 electoral bill? Are they not aware that this could be a major disruption of the peace they are trying to guarantee? It would be

a much more worthwhile effort if this committee can intervene now and use their goodwill to resolve or detonate this potential bomb that could fully destabilize the peace which we desire. Have we considered what will happen if the National Assem bly overrides the President’s veto and goes ahead to pass the bill into law? What will happen, if the Executive and INEC ignore the new law? Have we considered what will happen if INEC goes ahead to conduct the election with the old law or even if it does so with the new law? We have a potentially major crisis brewing and if we are serious about peace, this is what we should be focusing on, not just the drama of signing accords which may fail with the minimum test. 2015 elections ended peacefully, not because an accord for peace was signed but because Jonathan is a man of peace who repeatedly said that no man’s ambition was worth the blood of any Nigerian. And he allowed INEC to conduct the elections to the best of its abilities with no official intervention. There was no reported intimidation of the opposition parties and when the test came, Jonathan lived up to his word. That is what must happen in 2019 if we truly desire a peaceful election. But above all, all votes must count, no one should be disenfranchised and let the vote be counted for whom it was cast for. The moment we can guarantee these, there will be peace. Unfortunately these are not in the hands of all the presidential candidates. They are essentially in the hands of the government of the day. May God help them to do justice to all. Send reactions to: comment@businessdayonline.com

Reporter’s Notebook – In support of the northeast

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

n mid-November, I covered the launch of the “Nigeria Humanitarian Fund – Private Sector Initiative” (NHF PSI) in Lagos for London-based African Business magazine. Edward Kallon, the United Nations (UN) resident/humanitarian coordinator

in Nigeria, calls it a “global first” and says it “provides a blueprint for private sector engagement in humanitarian action through a country-based pooled fund set up and managed by the United Nations.” The NHF PSI is primarily aimed at funding the relief efforts in northeast Nigeria, where over 7 million people are in need of humanitarian assistance. Having already secured more than $70 million in contributions from 17 countries, the launch in Lagos was to get private sector actors to contribute their quota. In attendance were representatives of numerous non-governmental organisations (NG Os) operating in the region, chief executives of banks and oil firms, ambassadors, politicians, and so on. I struck conversations with at least three of the NGO-types in the room. A major point that kept coming up was corruption. There have been quite a lot of money from donors towards helping the

victims of the violence in the northeast. Not nearly enough, of course. Sadly, an ample portion of the little that there is never gets to the actual people in need. The lower house of the federal legislature recently raised concerns about the seeming pilferage of humanitarian assistance for the northeast. Their focus was on government expenditure via the emergency agency, however. And while the motive of their investigations was likely also political, there is genuine concern. Those who have visited the internally-displaced persons (IDPs) in their camps express shock at their plight. They wonder how after so much resources were supposedly put towards assisting IDPs, they could still be in such deplorable circumstances. There has not been similar controversy around the humanitarian efforts of NGOs, private-sector actors and multilateral organisations. What they have in transparency and efficiency, they lack in scale, however.

In other words, while the NHF PSI is likely to avoid some of the problems found to be associated with the government’s efforts, it would require much more heft to have a huge impact. Thankfully, there were generous pledges by the many deep pockets at the launch of the NHF PSI. I am also aware that the Lagos Business School Alumni Association (LBSAA), the governing council of which I am a member, plans to help out in the northeast as well. As do many other similarly-minded bodies in the country. Still, you do not have to be wealthy to help out. Every raised voice in advocacy for more relief efforts in the region matters. And the ubiquity of social media means almost everyone can add their voice to the cause relatively cheaply. Voices must also be raised about the welfare of our men and women in uniform. If they are not able to secure the region, there can be no meaningful humanitarian assis-

tance to the displaced. The recent killing of soldiers by terrorists in the region should be a wake-up call to the government not to become complacent. Our soldiers should be well-equipped and kitted to perform their patriotic duty. Their salaries and welfare packages must be paid in full and on time. Another set of people I had a chat with at the launch were some young medics. It was not long before they started bemoaning the state of the country. I was a little bemused. After all, they were employed. Naturally, they want more. And they were convinced their chances would be better abroad. England, America and Canada were top choices. Having travelled a bit myself, I tried to convince them that things are not as rosy over there as they think. Silence would have been golden.

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comment STRATEGY & POLICY

MA JOHNSON Johnson is an eclectic researcher, writer and columnist whose articles cover maritime, defence, technology and public policy issues and other areas of human interests. He is a member of the BusinessDay Editorial Advisory Board)

“

here is no better time to take stock as it will soon be five years, s i n c e Nov e m b e r 2013, that PHCN/ NEPA was privatized.” – Idowu Oyebanjo, BusinessDay 31 August 2018, pg 10. The above quote was sourced from the article “Reversal of Power Sector Privatization.” It’s over five years that the Power Holding Corporation of Nigeria (PHCN) was privatized. Since 2013, more than four million electricity consumers are yet to get prepaid meters. While about sixty percent of the population have access to epileptic power supply. Many Nigerians including this writer share same sentiment with Idowu Oyebanjo that the time is ripe for an appraisal of the “PHCN privatization.” This is absolutely necessary because over N1.0 trillion has been paid by the federal govern-

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Trapped in “PHCN privatization” ‘ As Nigeria is known ment (FG) since 2013 to electricity generating companies (GENCOs) and electricity distribution companies (DISCOs) without much to show for it. Recently, Babatunde Raji Fashola, Minister for Power, Works and Housing acknowledged at a dialogue in Abuja that there were problems in the power sector, but reminded his audience that it wasn’t the FG’s problem if citizens in the country do not have electricity (see PUNCH Newspaper of 13 December 2018).This writer admires Fashola for his cleverness. But the minister still needs to polish his tact and diplomacy as a public officer especially when addressing Nigerians on public policy issues. It’s from taxpayers’ money that all elected and appointed public officers draw their salaries. The All Progressive Congress (APC), a political party which Fashola belongs, promised Nigerians that by 2019 they would ensure generation of 10,000 Megawatts of electricity. At the time the promise was made, Fashola was mindful of the fact that his ministry wasn’t responsible for the supply of transformer anymore. So, if Fashola’s role is regulatory, oversight and policy formulation as alluded to by him, then he should be bold to suggest a stocktaking of the privatized PHCN to the Federal Executive Council. For how long will Nigerians manage a privatized institution that cannot deliver on its mandate within stipulated timelines in the last five years? Or, is Fashola one of those in the government who believe that there is no alternative to any public policy? With profound respect, there are always alternatives to any policy.

for corruption and underdeveloped ethical standard of business conduct, it is bound to face some challenges when privatizing stateowned enterprises

’

Whenever there is an opportunity to have a national discourse on any policy issue, there must be consistent consideration of alternatives. To say that “there is no going back from the ‘kwashiorkor’ arrangement referred to as “PHCN Privatization” will not be fair to the citizens of this country. This is because the concept of choices and options is always at the heart of policy scholarship in civilized society. In Nigeria, it’s very rare for policy formulators and implementers to accept that a policy has failed and that such a policy needs to be reviewed or changed. Should Nigerians and their businesses perish before those in authority would accept that the policy on PHCN privatization be reviewed? This writer has observed that policies of government fail when there is a misalignment of interests among public policy formulators, implementers, and the general public. In other words, policy of government fails when its content is not conterminous with national interests.

Although, some have argued that most policies are good and that implementation has been the problem. This is debatable. At this stage of our national life, one cannot but come to an understanding of various government decisions that the nation requires a fundamental restructuring to accelerate economic growth and development so that life could be more meaningful to Nigerians. Elected and appointed public officers in authority sleep and wake up pretending that all is well with Nigeria. Or, that all will be well as long as they remain perpetually in office. Truth is, all is not well with the country now. We all know that DISCOs and GENCOs are no more state institutions but funded with government resources. So one keeps wondering what Fashola’s ministry is regulating and overseeing in the midst of squalor in the power sector coupled with excruciating pain to electricity consumers in the country. If the private businessmen who own DISCOs and GENCOs are indifferent to the sufferings of their clients, should the regulator and policy decision makers also, pretend they are deaf and dumb? It is the display of tact and sensitivity to consumers’ challenges by policy decision makers that suggests that the country has a responsible government. When those things do not exist, one is tempted to conclude that either somebody is not doing his/ her work for which there should be a sanction if ours were to be a civilized society. Or, we may begin to smell the rat of a “regulatory capture,” a term deployed by a Professor of international relations to

explain a situation where regulators operate at the behest of those they are to regulate statutorily. As Nigeria is known for corruption and underdeveloped ethical standard of business conduct, it is bound to face some challenges when privatizing state-owned enterprises. That is why this writer is not inspired by Atiku Abubakar, the People Democratic Party Presidential candidate’s promise that he would privatize the Nigerian National Petroleum Corporation (NNPC) if elected as president in 2019. This promise may look attractive but cannot be taken seriously because of grand corruption in the polity. It’s corruption in the society that has disabled Nigerians from benefiting from the privatization of the nation’s power sector. Although, policy consistency has always been advocated by this columnist, but that does not mean that the methodology and processes of privatizing government-owned assets should not be reviewed when the strategic goal is not achieved in a time frame. There is no doubt that all is not well with the power sector reform in Nigeria. The privatization of the power sector with all intent and purpose is to enable Nigeria provide electricity for its US$ 409 billion economy. It’s time to take stock of the “PHCN Privatization.” Recently, a BusinessDay columnist’s suggested in his tweeter handle that the entire arrangement should be decentralized with mini-grids at local, state and federal levels. If not, the nation will be oscillating from darkness to darkness for years to come.

progress in Nigeria. We were not marginalized in the 2nd Republic, when we were most susceptible to marginalization because the then Igbo political elite were dominated by those whose concept and perception of Nigeria and the place of the Igbo in Nigeria were formed before Biafra. Thus, their attitude towards Nigeria were not informed and shaped by the Biafran propaganda. So, despite our obvious weaknesses then, they approached politics with a positive attitude: confidence, trust and optimism in the Nigerian system. They believed that it works for all Nigerians within the limits of human fragilities and the Nigerian factor. With such constructive attitude they achieved impressive political feats. On the other hand, the present Igbo political elite are dominated by those whose concept and perception of Nigeria were shaped by the falsehood of the Biafran propaganda. Unlike the earlier Igbo leaders that encouraged us to make the best of our cultural skills and talents in a unified Nigeria, Chukwuemeka Ojukwu and the Biafran propaganda taught us that only secession from Nigeria can guarantee our survival. They taught us that we had no choice but to turn inwards, fortify our battlements and fight off murderous hordes of Nigerians, who, unified by their intense jealousy and implacable hatred for us, were determined to annihilate

us. They indoctrinated us that we were fighting a war of survival that we must win or face extermination by the enemy – a posse of conscienceless, vicious, bloodthirsty Hausa/Fulani, Yoruba and other ethnic groups of Nigeria. While these were blatant, brazen lies, they, lamentably, captured Igbo minds. They instilled in the Igbo the mindset needed to fight to a finish in a war of “survival” but that is antithetical to the exigencies of co-existing, and forging a common future with the other peoples of our multifarious country. The lingering grip of the Biafran propaganda on Igbo minds makes us paranoid, and fearful and suspicious of other Nigerians, and stokes the feelings of self-pity and victimhood in us. It makes us believe that the other tribes of Nigeria, in their universal hatred for us, have a grand conspiracy to undermine and frustrate us. And consequently, that despite our potentials and resourcefulness, there might be no use in striving, as whatever we do will not amount to much because of the deliberate, unified and concerted attempt of the other Nigerians to thwart all our efforts and hold us down.

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Are the Igbo really marginalized?

Tochukwu Ezukanma Ezukanma writes from Lagos, Nigeria. maciln18@yahoo.com 0803 529 2908

ne Nigeria is not a homogenizing vat where different cultures blend into one. Consequently, although I am an avowed proponent of one Nigeria, I am exceedingly conscious that I cannot be a true Nigerian without first being a consummate Igbo. So, as I brood over the problems of Nigeria, I brood, even more, over the problems of the Igbo. The Igbo are one of the major ethnic groups of Nigeria, with the wherewithal: numerical strength, industry, education, wealth, ingenuity, etc, to secure a robust and extensive niche in Nigerian politics. That we have failed to do this requires an explanation. Many Igbo blame this on the marginalization of the Igbo. Marginalization is the process and the consequences of a deliberate and systematic endeavor by other Nigerians and a continuum of federal governments to deny the Igbo their fair share of the national resources,

and repress their progress across the entire spectrum of the Nigerian social life, especially, in politics. However, because I taught myself very early in my life never to blame others for my problems, it is very hard for me to blame the problems of the Igbo on marginalization without being totally convinced. In musing over the problems of the Igbo, two questions readily popped up in my mind. Why were the Igbo not marginalized in the 2nd Republic, when the scars of the war were still raw, and the Igbo extremely susceptible to marginalization. Secondly, how could Goodluck Jonathan, a president that got overwhelming Igbo electoral support, and appointed the Igbo to some of the most important positions in his administration, marginalize the Igbo? In the Second Republic, the word, “marginalization”, was not part of the Igbo lexicon. In 1979, just nine years after the war, the victors, in their thrill of victory, would have been most disposed to exploit and repress the defeated, and the losers, cringing in the agony of defeat, would have been readily subservient and most vulnerable to marginalization. Ironically, then, the Igbo were not marginalized. Following the 1979 presidential election, there emerged an Igbo Vice-President, Speaker of the House of Representatives, and, in the Senate, the Igbo chaired some of the powerful

Senate Committees. And we got our fair share from the President Shehu Shagari administration. It was in 1999, twenty nine years after the civil war, that “marginalization” made an inroad into the Igbo political lexicon. It has, ever since, remained a central word in our political parlance. After the Obasanjo presidency, the Yar’Adua administration continued to marginalize the Igbo. And perplexingly, after Yar’Adua, the Goodluck Jonathan administration also marginalized us. And presently, the Buhari administration is marginalizing us. But how could have the Jonathan administration marginalized the Igbo? After all, in the election that brought him to power, he garnered more than 90% of the votes casted in Igbo land, and he also appointed Igbo to important and powerful positions in his administration. A man that got ill after a meal at a restaurant can reasonably blame the restaurant food for his illness. But if a man gets sick from everybody’s (his wife, maid, mother and mother in-law) cooking, then the problem is not with the foods but with the man. If every administration since 1999, including the Jonathan administration, marginalized the Igbo, then the problem is not with the different Nigerian governments but with the Igbo. Yes, the Igbo have a problem. Our problem is not marginalization by anyone. Our problem is our attitude towards Nigeria. We are clinging obstinately to a mindset that is antithetical to political

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Tuesday 18 December 2017

Government is responsible for poor power supply

ast week the minister of power, works and housing, Babatunde Fashola, following the template of the administration to deny responsibility for all the country’s ills, attempted to lay the blame of the abysmal electricity supply at the feet of the generating and distribution companies while absolving the government of any blame. Speaking at the Nextier Power Dialogue last week Wednesday in Abuja, the minister told his listeners that if they don’t have electricity, it is not the problem of the federal government. “There are problems without a doubt and we must deal with them. But let me remind you, all of the assets that the ministry of power used to control for power have been sold by the last administration before I came. And so if you don’t have power, it is not the government’s problem. Let us be honest,” Fashola shocked his audience. “The people who are operating the power sector, generation and distribution are now privately owned companies. I am here because I am

concerned. If your telephone is not working, it is not the minister of communication that you go to. Let us be very clear. Logically therefore, people should take their complaints of lack of power to the Gencos and Discos and not him, the ministry or the government. “So for those of you who want to weaponise electricity, face the businessmen who have taken it up...My role is regulatory, oversight and policy... So the people you should be talking to about transformers is not me. The ministry doesn’t supply transformers anymore,” he concluded. Fair enough, the sector has been privatised and the Gencos and Discos especially have been underperforming, but a huge part of the blame lies with the government. Despite the privatisation of the sector, the government has refused to let go, bugging the sector down with over-re gulation and tariff caps that discourage investments and continues to keep Nigerians in darkness. The same government that now wants us to believe it is not responsible for power outages is still the same government that has put an arbitrary cap on tar-

iffs, making power generation and distribution much more expensive than what is being charged. The arbitrary tariff cap and excessive regulation have prevented gas companies from making the necessar y investments needed to end the gas shortages. There is nowhere in the world where this model works except under a subsidy regime. No banker or investor will agree to fund any investment in such an over-regulated sector with no chance of getting back one’s investment not to talk of returns. So, even though the Gencos and Discos have been privatized, it is also true that the government is still responsible for the abysmal electricity generation and distribution in the country. Besides, the minister knew that the sector had been privatized when, in 2014, as a popular governor of Lagos state, he went about town calling the previous government ‘incompetent’ for failure to provide power that, according to him, ‘is not rocket science’, on the eve of the 2015 elections. In fact, we believe he owes his current position to that successful vilification of the previous

administration and his boast that the nation’s power sector could be fixed within a short time. How can it be then that the same minister will now do an about turn, absolving government of all responsibilities in the sector? Is that not the type of hypocrisy that damages reputations and end political carriers in saner climes? What is more, the minister’s party did promise in its manifesto to increase Nigeria’s electricity generation capacity to 10, 000 megawatts by 2019? How did they expect to fulfill that promise now that the minister has denied that the government has any role to play in power generation and distribution? This behaviour and shameful denial of responsibility by the minister is in following a trend in this administration where, haven failed to deliver on promises, it begins to deny the promise made, deny responsibility or shift the blame for its inability to fulfil the promises. This is unfortunate and does not tell well on the reputation of the government and its personnel. We hope the government and the party will issue a rebuttal to this gaffe by the minister.

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Tuesday 18 December 2018

BUSINESS

COMPANIES & MARKETS

DAY

Siemens tasks Edo youths on power innovation with N3.5m cash prize

Pg. 15

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

MARKETS

Nigerian stocks are now Africa’s worst performers LOLADE AKINMURELE

igerian stocks are in free-fall and are down by a wider margin this year, compared to African peers from South Africa to Egypt, as foreign sell-offs intensify. Only the South African stock market has helped investors to positive returns this year, with a 2 percent gain that has happened on the back of Africa’s most industrialised economy’s emergence from its first recession in almost a decade in the third quarter. The Egyptian, Kenyan and Ghanian markets are all down 14.4 percent, 17.7 percent and 2.2 percent since the start of the year, as foreign investors shun emerging market assets on the back of rising interest rates in the United States. The Nigerian stock market is down some 19.80 percent this year, as political uncertainty, leading into next February’s elections, adds to Abuja’s woes. Depressed share prices in Nigeria present opportunities for value investors to buy fundamentally solid stocks cheap and sell at a bargain when the market corrects. Some consumer goods companies and tier one banks boast some of the largest BUY ratings from investment houses. Here’s how stocks fared in the past week The All-Share Index depreciated by 0.63 percent last week, closing at 30,672 points from 30,866 points at the beginning of the week in what was a mixed bag for oil companies as one was best performer yet another emerged the worst. Forte Oil Forte Oil Plc was the best performing stock last week, following a 33.89 percent rally to N24.10 per share, up N6.10 from N18 the week before. The stock is however down 44.57 percent year to date. John Holt John Holt Plc appreciated by 20% and was the second best performer. The stock opened at N0.40 and closed at N0.48, up N0.08. Year to date, the stock is down 4%. Veritas Kapital Veritas Kapital Assurance climbed 19.05 percent to close N0.25, earning the insurer a spot on the list. Year to date, the stock is down 50%. CAP plc Next in line is CAP Plc, which added 18.25%. The stock opened at N31.50 and closed at N37.25, up N5.75.

Year to date, the stock is up 9.56%. Union Bank Union Bank Plc gained 14.02 percent after the stock gained N0.75 in the course of the week to close at N6.10. Year to date, the stock is down 21.79%. Eterna

Eterna Plc appreciated by 10.71%. The stock opened at N4.20 and closed at N4.65, up N0.45. Year to date, the stock is up 14.53%. First Aluminum Plc First Aluminum Plc opened at N0.30 and closed at N0.33, up N0.03 or 10%. Year to date, the stock is down 34%.

Berger Paints Berger Paints gained 10%. The stock opened at N6.50 and closed at N7.15, up N0.65. Year to date, the stock is down 15.78%. Japaul Oil and Maritime Services Plc Japaul Oil and Maritime Services Plc also gained 10%.

The stock opened at N0.20 and closed at N0.22, up N0.02. Year to date, the stock is down 56%. Niger Insurance Plc Niger Insurance rounded up the top 10 gainers of the week, with a 10% appreciation. The stock opened at N0.20 and closed at N0.22, up N0.02. Year to date, the stock is down 56%.

Losers 11 Plc 11 Plc (formerly known as Mobil Oil Nigeria Plc) was the worst performing stock as it declined by 10.41% opening at N174.80 and closing at N156.60, down 10.41%. Year to date, the stock is down 19.53%.

Continues on page 14

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Tuesday 18 December 2018

COMPANIES & MARKETS TECHNOLOGY

Nigeria’s tech appeal on the rise, experts say JOSEPHINE OKOJIE

igeria is gradually becoming a major tech hub in terms of start-ups generation and entrepreneurs’ preferred location for investment in creating hubs, experts say. The experts made this known during a night out in Lagos which gathered stakeholders in the Nigeria’s tech eco system. “Digital companies in Nigeria have created thousands of jobs and activities within the eco system and this is striving to consolidate the nation’s status as a top-notch international hub by attracting investors and stimulate entrepreneurship in the industry,” Oo Nwoye, executive director, Tech Circle said. Nwoye stated that Nigeria is transitioning into a dynamic ecosystem offering fintech start-ups a platform to potentially grow into milliondollar businesses.

“This year, tech companies such as Paystack and Flutter Wave received huge funding from abroad to strengthen their mobile payment solutions,” he said. He said that Tech Circe i s p a r t o f t h e nat i o na l m ov e m e n t t o i n c re a s e entrepreneurship and innovation in Nigeria and the idea is to work with the industry to help launch many more start-ups. Also speaking during the event, Kola Aina, cof ou n d e r, Ve nt u re Pl atform, said that Nigeria is going to witness the emergence of numerous fintech start-ups, with investments coming in from both public and private investors. He explained that there are growing opportunities in IT, biotech and other f i e l d s, d raw i ng you ng, educated professionals to the industry. Uche Aniche, the convener of Star tupS outh, said that the Nigerian eco system has undergone a transformation in recent

L-R: Kashetolu Lawal, head, client coverage, FBNQuest Merchant Bank; Bisi Salawudeen, relationship manager, First Bank; Bola Oyebamiji, former commissioner for finance, Osun State; Gboyega Oyetola, governor, Osun State; Olugboyega Alabi, deputy governor, Osun State, and Timothy Arowoogun head, public sector-West, First Bank , during the courtesy call made to the Osun State governor in Oshogbo.

years. “Thanks to the wave of fresh young talents. Lots o f s t a r t- u p s a n d s ma l l b u s i n e s s e s h av e t a k e n off, creating a surge of coworking spaces and a collaborative spirit that vital for the success of innova-

tion hubs,” Aniche said. He said investments in Nigerian companies have grown steadily over the past one year, pointing to a relative improvement of the investment in the e c o s y s t e m a n d a hu g e amount of money avail-

able to invest in start-ups. Aniedi Udo-Obong, program manager- developer ecosystem, Google, said the Nigeria eco system has enjoyed the support of local and internat i o na l o rga n i s at i o n s focused on promoting Ni-

geria as a tech stronghold Udo-Obong stated that o r g a n i s a t i o n s, s u c h a s google are working hand in hand to promote and strengthen the technological hub and fostered links between the innovation efforts of start-ups.

MARKETS

OIL & GAS

Nigerian stocks are now Africa’s worst performers

Shell warns Nigerians to stay away from pipeline rights of way

Continued from page 13

FRANCIS SADHERE, Warri

Conoil Plc Conoil Plc shed 10%. The stock opened at N22.50 and closed at N20.25, down N2.50. Year to date, thestockisdown27.68%.Thestockis currentlytradingatayearlow. Cutix Plc Cutix Plc opened at N1.97 and closed at N1.78, down N0.19 or 9.64%. Year to date, the stock is down 11.44%. Livestock Feeds Plc Livestock Feeds Plc declined by 9.62%. The stock opened at N0.52 and closed at N0.47, down N0.05. Year to date, the stock is down 43.37% and is trading at a year low. Chams Plc Chams Plc shed 9.09%. The stock opened at N0.22 and closed at N0.20, down N0.02. Year to date, the stock is down 60%. The stock is currently trading at a year low. Cornerstone Insurance Plc Cornerstone Insurance also declined by 9.09%. The stock opened at N0.22 and closed at N0,20m down N0.02. Year to date, the stock

is down 60%, and is trading at a year low. Daar Communications Plc Daar Communications Plc opened at N0.44 and closed at N0.40, down N0.04 or 9.09% this week. Year to date, the stock is down 20% and is trading at a low. Mutual Benefits Assurance Mutual Benefits Assurance declined 8.70%. The stock opened at N0.23 and closed at N0,21, down N0.02. Year to date, the stock is down 58%. C & I Leasing Plc C & I Leasing Plc opened at N1.94 and closed at N1.78, down N0.16 or 8.25%. Year to date, the stock is up 37.98%. C and I Leasing was placed on suspension last week to enable the company to carry out a share reconstruction that will last till Dec. 27. ABC Transport Plc ABC Transport Plc rounds up the top 10 losers. The stock declined by 7.41%, opening at N0.27 and closing at N0.25 down N0.02 Year to date, the stock is down 50%. The stock is currently trading at a year low.

hell Petroleum Development Company of Nigeria Limited during the weekend warned Nigerians, especially Niger Deltans, to stay away from oil and gas pipeline rights of way. Shell said encroachment on oil and gas pipeline rights of way may lead to death from explosions due to heavy pressure on pipelines and other human activities. Shell’s Lead, Encroachment Management, Amechi Ucheoma, who spoke at a seminar on pipeline vandalism, health of the environment and the Niger Delta people in Warri, stressed that some residents, who were supposed to stay 100 kilometers away from oil and gas pipelines, set up structures close to such facilities. Ucheoma said that apart from fire accident, pipeline encroachment can also lead to economic sabotage and production delays as the time spent on

fixing the damaged pipes will affect operations of the company. Ucheoma explained that although there were laws guiding the protection of pipelines, some people deliberately disobeyed such laws and put themselves and others at risk while building on or close to pipeline rights of way. He therefore, appealed to the media to assist the International Oil Companies (IOCs) to create awareness on the dangers associated with pipeline encroachment, calling on the government and the public for support. He said, “People ig norantly set up business structures close to pipeline rights of way. We are appealing to the media to help us sustain the campaign against encroachment against Shell facilities. “We have in some places erected perimeter fences, used right of way markers, sensitised communities on the need to stay away from pipelines’ right of way and

carried out surveillance through the use of local security contractors. Shell’s Lead, Right of Way and Encroachment, John Okojie, observed that pipeline vandals had become more daring as they vandalised the company’s pipelines in broad daylight. Okojie maintained that the activities of oil thieves in the Niger Delta were responsible for the ongoing environmental pollution, also known as soot, in the region, particularly in Port Harcourt and its environs. He said, “You sleep in the night and inside that darkness is a lot of black smoke; this is as a result of the activities of oil thieves. Most of the pipeline leaks are as a result of interference by oil thieves and attacks on such property causes pollution, which endangers the health and lives of many, including the oil thieves. “Every time a hack occurs, we shut down, plan for repairs, get the spill cleaned up, fix the pipe and

then bring the area back to normalcy. We have had vandalism like hacksaw cuts, dr illed holes and bomb blasts on our pipelines. The audacity of the oil thieves is something else.” While noting that pipeline vandalism has reduced in the Niger Delta, Okojie, however lamented that illegal oil bunkering has been on the increase in the region, adding that illegal bunkering and crude theft accounted for 80 per cent of pipeline leaks while equipment failure is 20 per cent. Shell General Manager, External Relations, Igo Weli, who was represented by Evan Krukrubo also spoke about Shell’S Social Investments Programmes which had gulped over N10billion naira for host communities in the Niger Delta region. “Shell is also involved in various social investments in the communities they operate across the Niger Delta, particularly in the area of primary healthcare services, he said.

Tuesday 18 December 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

POWER

Siemens tasks Edo youths on power innovation with N3.5m cash prize

o less than 60 youths have reached the finals of the Hack Edo Series organised by the Edo State Government in partnership with Siemens’ Impact Hub to improve power supply in communities across the state. The finalists will gather in Benin City, the state capital, on Monday, December 17, for the final phase of a grueling competition that will provide workable and innovative technologies to identify and solve the challenge of power in the state. Senior Special Assistant (SSA) to the Governor on Skills Development and Job Creation, Mrs. Ukinebo Dare, said, “The Hack Edo Series is a multi-dimensional initiative focused on leveraging technology to identify and solve the most pressing problems faced by individuals, businesses and the ecosystem

as a whole. Through a series of practical Hackathons, the Hack Edo series will equip young Nigerian innovators with the skills necessary to make impact in their various communities. She said that 60 finalists have been shortlisted out of over 100 applications received, noting, “The Power for Edo Hackathon was open to innovators, entrepreneurs, and knowledge seekers, including developers, business managers, students, analysts among others withinnovativetechnologytobuild a solution.” Dare added that three winners with the best innovative solutions topower supply challenges will emerge at the event, as the winner of the first prize will go home with N2,000,000.00; 2nd place, N1,000,000 and 3rd place N500,000.00,makingatotalofN3.5 million. She said other 90 participants are expected to attend the event,

whichwillalsohostChiefExecutive Officers of Siemens and Impact Hub. According to her, “the event is intended to achieve the following objectives; increase the number of individuals taking action; build a collaborativecommunitythattackles issues as a whole, and identify thebestideasthatwillbesupported through the incubation phase.” Dare noted that the event will catalyse growth of startups within Edo State, support development of ventures from ideation to commercialisation, promote job creation and economic development, drive and ensure the increased adoption of local technology by government, corporate and development agencies across Edo state and Nigeria, strengthen and raise the standard of startups in the region, and deliver positive social impact returns to communities and people across the region.

L-R , Segun Ajayi-Kadir, director general, Manufacturers Association of Nigeria with Diekola Onaolapo, CEO Eczellon Capital, during the latter’s courtesy visit to the MAN office in Lagos .

GLOBAL WITNESS

Senior execs of top world oil traders implicated in bribery scanda

enior executives in two of the world’s largest companies stand accused of involvementinamulti-milliondollar bribery scandal to secure lucrative oil deals in Brazil, Global Witness can reveal. Trafigura and Vitol, the commodity trading giants, have found themselves embroiled in Brazil’s Car Wash scandal, one of the biggest corruption cases of all time. Earlier this month, Brazilian authorities accused both companies, and major trader Glencore, of paying over $15 million in bribes to officials at state oil company Petrobras. Our new revelations show just how high the corruption allegedly went. Freshly released court documents examined by Global Witness revealtheallegedcomplicityofsome of Vitol and Trafigura’s leading lights in the bribery schemes. A former Trafigura board director was deeply involved in the criminality, and the late founder and former chairman of the company was in the know,

Brazilian authorities say. Meanwhile, Trafigura’s current Chief Operating Officer signed off payments to a middleman that ended up being used for bribes, emails in the court material show. There is no evidence the COO knew ofanybribery,andTrafigurastrongly denies any such suggestion. TheheadofVitol’sUSoperations was knowingly involved in the corruption too, according to Car Wash investigators. The disclosures come less than a month after an investigation by Global Witness and Swiss campaign group Public Eye first exposed how the three multinationals used shady middlemen in their Brazilian oil deals “Accusations that senior execs wereinonthesecorruptdealsshould force Vitol and Trafigura to take a long, hard look at themselves,” said Ed Davey, at Global Witness. “This isn’t the first time we’ve discovered commoditiestradersusingquestionable middlemen to broker shady

deals, and unless they start changing theirapproachtocorruption,itwon’t be the last.” The UK, U.S, and Switzerland provide key operational bases for the companies, and host the bank accounts of middlemen who were pivotal to the alleged schemes. Global Witness is calling on law enforcement in each of these countries to launch immediate investigations. Glencore says it “takes ethics and compliance seriously” and will cooperate with Brazilian authorities. Trafigura said it is “taking these allegationsseriouslyandarecarefully reviewinganyinformationavailable”. Vitol said it would be inappropriate to comment on the allegations, but it had a zero tolerance policy over bribery and cooperates fully with the authorities wherever it operates. The Brazilian authorities made eight arrests in December 2018 in connection with the investigation but are yet to bring any charges in the case.

AWARDS

L-R: Timothy Olawale, director-deneral designate, Nigeria Employers Consultative Association (NECA); Mohammed Yinusa, president, and Taiwo Adeniyi, first vice president, during the NECA’s press briefing in Lagos

L-R: Lanre Onasanya, CEO, H.C. Bonum Limited and Member, Board of Directors, Digital Jewels Limited, Mrs Adedoyin Odunfa, Managing Director, Digital Jewels Limited and Mrs Ibukun Awosika, Chairman, Board of Directors, First Bank of Nigeria Limited at the Digital Jewels Limited 10 Anniversary Celebration/ Awards Dinner event held in Lagos.

Ademosu, Babatope, Okwuosa, others bag HBSAN awards NOMSO ONUOHA

a r v a rd B u s i n e s s School Association of Nigeria (HBSAN) held its Annual Gala and Leadership Awards Night on Saturday, December 8, 2018, at the Eko Hotels and Suites, Lagos. Akinwande Ademosu, CEO, Credit Direct Limited, was presented with the HBSAN Leadership Award for General Management, while Moses Babatope, and Kene Okwuosa, Co-Founders of Filmhouse, jointly received the HBSAN Leadership Award for Entrepreneurship. Joshua Ihejiamaizu, Software Engineering Lead, Generation Enterprise and Temi Marcella Awogboro received the HBSAN Leadership Award

for Social Impact on behalf of Clara Chow, Founder and Chair of Board Chair, Generation Enterprise. The gala was a glamorous evening of food, drinks, electrifying performances, networking and reconnecting with old friends, which commenced at about 6:00pm with an Oscar Trivia Game Show and lasted well into the night. The Chief Host of the event, His Excellency Akinwunmi Ambode, Executive Governor of Lagos State, delivered a welcome address that was well received by the guests. In his address, the Governor mentioned that he had attended a program at the Harvard Kennedy School which helped in preparing him for his current role as the Executive Governor of Lagos State.

The Oscars glam themed event fostered interactions among the guests who were alumni of HBS, Chief Executives of large private sector organizations and alumni members of Ivy League business schools. It provided a medium for the formation of new friendships and business relationships. HBSAN is the HBS alumni group of Nigerians and resident non-Nigerians driven by a primary objective to provide members with resources, relationships and opportunities to enable them build and lead organizations that will create transformational impact in Nigeria and beyond. The association is currently being presided by Fola Ogunsiakan, Managing Director, Cedar Capital.

L-R: Mafe Oluwayemisi, head brand communications department, SUNU Assurances Nigeria Plc; Tony Agenmonmen, president, National Institute of Marketing of Nigeria (NIMN), and Tunji Oyebanji, chairman of the body of fellows NIMN, during the National institute of Marketing of Nigeria fellow’s dinner and awards night in Lagos.

BUSINESS

DAY

Tuesday 18 December 2018

COMPANIES & MARKETS INSIGHT

Despite vast gas reserves, power plants still experiencing shortages DIPO OLADEHINDE

e s p i t e b o a s ting of one of Africa’s biggest reserves, most of the Nigeria’s gas-fired power plants which are responsible for over 70 per cent of the energy being generated continue to suffer gas shortages as the country records huge ga p b e t w e e n i n s t a l l e d capacity and operational capacity. Ni g e r i a h a s a r o u n d 181 trillion cubic feet of proven gas reserves plus much more in undiscovered gas resources. But despite having the largest gas reserves in Africa, only about 25 per cent of those reserves are being produced or are under development. Data from Nigeria Association of Petroleum Explorationists (NAPE) revealed the country is a endowed with large oil, gas, hydro and solar resource, and it already has the potential to generate 14,000 MW of electric power from existing plant which consist of hydro1938 MW and Thermal 1 2 , 2 0 0 M W ) , bu t m o s t days is only able to operate around 4,000 MW, which is insufficient. “It’s a sad story and a c o m b i nat i o n o f s e ve ra l f a c t o r s w h i c h c u t across the value chain; apart from the fact that there is no enough gas to power those plants, there is transmission and distribution infrastruc-

ture problems so until we solve that we won’t be able to bridge the operational and installed capacity gap,” Luqmon Agboola head of energy and infrastructure at Sofidam Capital said. Agboola noted that the cost of bringing gas to the market is as expensive as the cost of bringing oil to the market unfortunately the price of gas equivalent to barrel of oil is not as high as oil so everybody will prefer producing oil rather than gas. “ In c e n t i v e s t o p ro duce gas and being to the market is not there because the people who are suppose to be using it don’t have money to pay,” Agboola noted. Agboola explained that the solutions is in a combination of factors such as consistent regulatory laws, more foreign investment, boarder technical capacity and incentives to attract private funds. “When the price is low or not commercially viable no one would do business with you, for a long time we have always have the problem of gas infrastructure most especially pipelines installations,” Ayodele Oni energy partner at Bloomfield Law practices said. Reacting on how to bridge the gap between Installed capacity and operational capacity, Oni said, “The key is having the right reflective price and enabling environ-

L-R; Oyedokun Ayodeji Oyewole FIIM, president /chairman governing council, Institute of Information Management; Oseni Kolawole FIIM, director training, Institute of Information Management; Abdur-Raheem Adebayo Shittu FIIM, minister of communications, Federal Republic of Nigeria; Adeniyi Adesanya FIIM, special adviser/consultant to His Excellency on Political Matters and Government Administration, Office of the governor Okemosan Abeokuta, Ogun State during the Panel Session at the 2018 Institute of Information Management National Summit, Induction, and Investiture Ceremony in Abuja.

ment for quality investment.” “A lot is being done like the Ajaokuta-Kaduna-Kano (AKK) pipeline, Government need to be consistent with his policy and also enhance the grid system,” Ayodele Oni told BusinessDay. Recall early this year, NNPC awarded the Engineering Procurement Construction (EPC) contract for the $727 million Ajaokuta – Abuja portion of the Ajaokuta-Kaduna-Kano (AKK) pipeline project to Axxela Limited, formerly known as Oando

Gas & Power, and Oilserv Limited. The AKK Pipeline Project was the first phase of the gas transmission system conceived under t h e T ra n s - Ni g e r i a G a s Pipeline (TNGP) initiative to evacuate natural gas from Qua Iboe Terminal in Akwa Ibom State and Cawthorne Channel in the Niger Delta region. The AKK project, when completed, w ill be the larg est gas pip eline in Nigeria, and is expected t o i m p rov e c o n n e c t i vity between the eastern, western and northern re-

gions of Nigeria. Ap a r t f ro m p i p e l i n e infrastructures ; Nigeria also still flares significant quantities of gas, sufficient to fuel 6 GW of power at a 70 percent load factor. According to the Nigerian National Petroleum C o r p o r a t i o n ’s ( N N P C ) latest monthly report said Total gas supply for the period August 2017 to August 2018 stood at 3,093.71BCF out of which 465.84BCF a n d 1 , 3 2 5 . 2 8 B C F w e re commercialized for the domestic and export market respectively while Gas –Injected, Fuel gas

and Gas flared stood at 1,302.59BCF. The corporation said t h e d a i l y ave rag e natural gas supply to gas power plants scaled at 668mmscfd, equivalent to power generation of 2,510MW. NNPC’s monthly report also noted that Nat i o na l Ga s p ro d u c t i o n for August 2018 stood at 251.44BCF translating to an average daily production of 8,381.29mmscfd. This represents 9.16percent increase compared to the previous month of July 2018.

TECHNOLOGY

MTN delivers cutting edge solutions to 139 NNPC locations

s part of its continued effort to provide bespoke and seamless connectivity solutions to individuals and business enterprises in the country, MTN Nigeria has deployed Corporate Wide Area Network Service (CWAN) across 139 locations of the Nigerian National Petroleum Corporation

(NNPC). The deployment of the solution is to improve efficiency and unhindered communication for NNPC locations across the country. MTN conducted an exhibition recently in Abuja to highlight the success of the CWAN service deployment on the 139 NNPC locations in the past 12 Months. Onyinye Ikenna-

Emeka, the general manager of enterprise marketing at MTN Nigeria, while speaking on the collaboration said MTN is committed to the growth of both large and small businesses. “With our capabilities, we feel we have what it takes to move businesses from where they are to where they want to be. We are truly excited to have

provided this innovative connectivity solution to NNPC and we look forward to working together in the coming months to deliver greater quality services to Nigerians,’’ she said. The deployment of the CWAN service to NNPC key locations is part of MTN’s continued effort to improve business efficiency and support eco-

nomic growth in the country. MTN over the years has been a reliable provider of connectivity solutions, enabling business operations and improving efficiencies for both small and large organisations. The partnership between MTN Nigeria and NNPC is a testament to the company’s continuous drive

to offer topnotch data and connectivity services across Nigeria. In a strategic effort to further equip itself for the anticipated datarelated demands, MTN Nigeria recently signed a financing agreement with a consortium of banks to expand its data infrastructure aimed at providing unmatched data experience for its growing customer base.

BUSINESS DAY

Tuesday 18 December 2018

PR practitioners tasked to be innovative, professional to grow, survive competition Stories by Daniel Obi Media Business Editor

ublic Relations professionals in the country have been urged to be awake to innovative ideas that could resolve issues relating to the profession and their clients in order to attain the needed growth required as well as respectable position among their counterparts. This was the submission of the Chief Consultant of TPT International, Adetokunbo Modupe, who was guest speaker at the December 2018 edition of the Lagos PR Clinic of the state chapter of the Nigerian Institute of Public Relations (NIPR) under the theme: Ideapreneurship: The Nature of our Trade. He postulated that PR practitioners are ideapreneurs who should be driven by intellectual ideas that are well tailored towards clients’ needs and their target publics for desired results, and not be inundated with business gains in the manner of entrepreneurs. Modupe, a Harvard-trained ideapreneur with over two decades experience in PR, affirmed that since the profession is dynamic, practitioners should re-examine their business modules as ideapreneurs, think and develop ideas that would invariably translate to income generation.

L-R: Melvin Enoch (Lagos), Leo Obienyi (Abuja), Abdullahi Azabo Ibrahim (Abuja), Ogechukwu Eudora (Lagos), Michael Ehiene (Abuja), Otobong Idoresit (Lagos), the 6 winners at the Malta Guinness Maltavator Challenge Season 2 Grand Finale that held in Teslim Balogun Indoor Stadium, Surulere, Lagos, recently, and who will be representing Nigeria at the Maltavator Challenge Pan African TV show.

“Don’t let the world drive you, drive the world with your ideas. This keeps us in a more respectable position before our clients who should not think that we are in the business just to make money. We should not see ourselves as entrepreneurs but there is nothing wrong in thinking about wealth” he explained. Modupe described ideapreneurs as deep thinkers who create jobs, have a mind of their own; explore alternatives to the norms by fostering ideas and are not motivated by pedestrian or temporary success but enduring legacies. He further stated that PR is about

thinking and managing thought processes for the benefit of other people’s reputation, and likened it to innovation pentathlon, a structured process that removes the risk of failure as ideas progress. According to him, great men like Steve Jobs, co-founder of Apple; Elon Musk, Chief Executive Officer of Tesla Motors; and Jeff Bezos, founder of Amazon who have all made global impact in their various endeavours were driven by creative ideas. “It is time we sit down and say to ourselves, what do we really do? If you do not know you are an ideapreneur, you will let yourself down. So let’s change the way we do our

business, as we need to conquer our fears,” Modupe challenges his fellow practitioners. He noted that the PR industry is hardly recognised, and it is partly responsible for the way clients rate practitioners.One of the reasons he identified as responsible for this is the proliferation of quacks, which is fallout of the porous entry barrier into the profession. “This has earned the profession a depressing image,” he added. The TPT boss however called on the NIPR to take bold steps in checkmating the activities of these quacks in order to attain development in the industry.

AbsolutePR expands focus, joins PRCA

oremost brand and reputation management firm, Absolute PR has joined global public relations and communications membership body, Public Relations & Communications Association (PRCA) to deepen the provision of strategic reputation solutions. According to Lead Strategist/Chief Executive Officer, Akonte Ekine, the move is a focal step in the agency’s drive to boost service offerings and expand its influence as a business entity in the country’s public relations scene. “We took this significant step to associate with the Public Relations Communications Association (PRCA) out of the need to evolve and be better at what we do, in terms of adapting new approaches and strategies to handle client’s demands and interests. By extension, the membership will help to position service offerings and connect our operations with global standards. “PRCA is the largest and most influential PR and Communications Association membership body in Europe with over 24,000 members. Beyond Europe, the body has members operating in other continents across the globe.

Morning Fresh re-brands, launches in new bottle

141 Worldwide unveils new brand identity

n a bid to increase consumer traction, Morning Fresh brand from the stable of PZ Cussons recently organized trade launch event recently in Port Harcourt where it introduced the product in new bottle. Accompanying the brand team was veteran actress, Mercy Johnson, Ahusimere Ejiroghene, Brand Manager, Morning Fresh; Sunday Okereke, Regional Sales Manager, East, PZ Cussons Consumer; and Sunday

… Promises improved creative, digital engagement with clients

Ekpo, Area Sales Manager, Morning Fresh, PZ Cussons Consumer; who introduced the stakeholders to the new Morning Fresh which was unveiled last month. Speaking about the in-market activations Ahusimere expressed delight at the turnout at the event. “We are delighted to re-introduce Morning Fresh in these markets. We have totally revamped the Morning Fresh brand, emphasizing on its premium look and feel, which is in line

with our commitment to constantly innovate and evolve to exceed the expectations of the stakeholders in the country. The elegant transparent bottle delivers both functional and aesthetic value to our stakeholders, making the product stand out on shelves – we are confident that these stakeholders will take completely to our products and aid us in achieving our sales targets,” she said. Morning Fresh has been in Nigeria for 25 years.

SO&U, Insight Publicis, X3M Ideas, DDB win big at 2018 LAIF Awards

O&U, Insight Publicis, X3M Ideas and DDB won the highest number of awards at recent Lagos Ideas Festival, LAIF Awards. While Insight won 24 medals- five gold, 10 silver and nine bronze medals, X3M Ideas won five gold, seven silver and eight bronze medals; SO&U won four gold, 11 silver and eight bronze medals. DDB won six gold, four silver and nine bronze medals. Other big winners on the night Culture with three gold and two bronze medals; Noah’s Ark with one gold, eight silver and 11 bronze medals; Up In The Sky with one gold, five silver and four bronze medals; Etu

Odi with one gold, two silver and two bronze medals. TBWA got four silver and three bronze medals; 7even Interactive won three silver and four bronze medals; 141 Worldwide now Nitro 121 garnered two silver and three bronze medals; Leo Burnett claimed two silver and one bronze medal; while DIJO and LTC Advertising got one silver and one bronze medal respectively. Also rewarded were IMS, who got one silver; and Caritas and Stream Media who won one bronze each. Michael Zylstra, the chief juror, said some of the works assessed were of topmost quality and reflected the

Nigerian environment. “If I have to, by way of explanation, explain the works that caught our attention and would be awarded tonight was the work that really resonated from a Nigerian perspective and had local insight. It was executed in a way that couldn’t be done in any other country,” he said. Zylstra, who is the Chief Strategy Officer of South Africa’s Dentsu Aegis Network, said creative Nigerian works will soon gain recognition at international advertising awards if the current level of quality is sustained. He also thanked his fellow jurors for the professionalism exhibited while assessing the entries.

n an uncharacteristic manner of an integrated marketing communication agency in Nigeria, a Lagos based IMC agency, Nitro 121 marketing communication, formerly 141 Worldwide unveiled its new name and logo and promised a better digital, creative and engagement for the clients and stakeholders amidst spectacle and glitz in Lagos. The launch witnessed in attendance clients from British American Tobacco Nigeria (BATN), GOtv, 9mobile and a host of others as the chairman of the agency, Lolu Akinwunmi welcomed guests to the expansive and colorful venue of the launch in the agency’s office in Ikeja GRA Lagos. Fielding questions from newsmen at the event, Lampe Omoyele, the Managing Director of the newly unveiled Nitro 121 said that, nothing was wrong with 141 Worldwide brand. But what we have done is on evolution and taking an opportunity to use a new name, a new identity to launch ourselves to higher height as a business. “Nitro 121 is a pit stop where brands and businesses come to and working with us their levels of performance improves. So, every brand and business that comes in touch with 121 to the pit stop that we would leave you performing better, “he said.

He stated that the 121 metaphor speaks about the higher level of connection with brands. In motorsports, a pit stop is where a racing vehicle stops in the pits during a race for refuelling, new tyres, repairs, mechanical adjustments, a driver change, as a penalty, or any combination of the above. On the reason the agency is changing its identity at this time, Omoyele said that “there is a high level of competition in the market place, the market is evolving and we cannot afford to be a dinosaur. What we are doing is thinking ahead of the scope, ahead of the market, so why other people are still thinking about what to do, we are moving ahead of the scope.” On the innovation that is added to new identity, the managing director of Nitro 121 informed journalists that the agency has deepened it digital offering by expanding the scope while recruiting some of the best hands in the industry. Nitro 121, formerly 141 Worldwide, was set up in June 2005. In the last 13 years, the agency has established its position as one of Nigeria’s leading, award-winning agencies, with a diverse portfolio of local and international clients.

BUSINESS DAY

C002D5556

Tuesday 18 December 2018

‘Without media monitoring, chances of clients getting value for advert campaigns are slim’ Uche Aligbe is the CEO of Media Monitoring Services Nigeria Limited. In this interview he took BusinessDay through the evolution of media monitoring industry. Aligbe said the idea is to give clients who are spending humongous amount annually on advertising through various media channels value for every kobo spent. He said his company MMS established in 1995 with multi-million Naira investment also provides industry information to allow clients understand trends in other to remain competitive. Aligbe who is passionate about media monitoring business said the 25 years company is driven by integrity and technology. He also spoke on other issues such as how media planners can leverage MMS data for planning. Excerpts What is media monitoring all about? t is simply the capture of compliance of media exposure of clients’ materials. It also involves the provision of vital media, marketing and research information to stakeholders to enhance project and campaign planning and execution. In the past, clients were shooting in the dark but with media monitoring, they can plan accurately, know whether their adverts ran in the media and how the campaigns were running. With data available we are providing the brands owners with information as to what is happening not just around them but around their competitors so that they can take a proactive step. We established Media Monitoring Services Nigeria Limited in 1995 to offer this service which was hitherto a gap that we identified in the industry. Before this time, I was brand manager of a multinational company and we realized that there was absence of real data to do what exactly clients wanted to do in terms of brand communication. Again brand managers didn’t know exactly what was happening between brands and media in terms of communication and communicating to the public. Were the messages passing to the public? How was public receiving it? We needed to fill up this gap because we needed to do a better job for the brands and for industry as whole. So we came to fill this gap and that was the background to Media Monitoring Services Company. Were there modifications to the idea with the world going technological now? Even if the world is not going technological, to be 25 years is to grow old. You garner experience and put it into the system. I can tell you that whole lot has changed. Technology has come in, experience has come in and therefore what you see now is sometimes beyond what technology alone will give to you. So, we are at home with technology, we are at home with experience. With media monitoring, where is the role of media planning agencies? Media monitoring agencies provide media planning firms the pre- and post-information to do their job. For example, you can’t plan for a station you really don’t

Uche Aligbe

know whether it exists, you don’t know how much it is airing; you don’t know the volume of advertising that is passing through it. Not even those people who are watching or not. In the course of our business, we found out that there were electronic media outfits in this country that would come on when there is public electricity, if there is no electricity, they shut down. Sitting down here you won’t know that, you would think that they are running your campaign. There are times station breaks down for months and they keep quiet and the planner keeps buying into what is not in existence. That is our job to identify this and save clients’ money, ensure compliance so that messages will reach the target audience. Could you let us into the technology you are using to monitor the various media in the country? Before I answer that question on technology, we have offices in 14 locations. Whether you have the technology or not, there are limits to number of stations you can pick up no matter the tech-

nology. So, sometimes you need to be specific in some locations to be able to pick it. What technology is doing for us is that we can go to sleep and technology is working. We have top flight technology and this is replicated in other locations in this country. On services, we have been talking about compliance but you don’t plan in the terrain you don’t know. There is what we call competitive advertising service, we tell you how well you are doing and how well your competition is doing, not just in terms of numbers but in terms of all the parameters you required to be effective in reaching your audience. Apart from telling you who you are, we also provide the industry the growth, the trend, and area you are growing and in what direction you are growing. You came in 25 years ago when there was opposition even from those you want to service, what is the magic of your acceptance today? First, we thought that media buyers will be the best target for us because they need to provide this

information to confirm to clients, instead we faced opposition. So we changed our tactics and went to the brand owners, those paying for the service, we strongly believed that they need the information and a whole lot of them said they need it. In fact it got to a point there was war in this industry and the war was to kill the media monitoring business but the advertisers themselves said no-way unless you have an alternative. They put their feet on the ground because they are the ones paying the bills and those who are saying no have to keep quite. They accepted the idea because it’s what they want. Can you let us into the investment profile of your company? The value of investment of the monitoring agency runs into hundreds of millions of naira in the various places but don’t forget that we also drive investment in Ghana and Cote d’ivoire, when you put all these together, we have invested more than N 800 million. Advertising spending is huge and media monitoring is added cost to the clients, don’t you think it is a burden on the clients?

It is better to invest N1million naira and get value for N1 million than to invest half a million and get no value at all. Without media monitoring, the chances of getting any value at all are slim. When we started, we told some organizations that we will monitor every kobo invested and they should pay us some percentage from what they saved. But some said they don’t want to save money that they want to keep their brands going. They want to be sure everything that they invest is producing result. That is what a marketing organisation should be doing rather than looking for how to save money. Kindly tell us more about your company and its USP in this competitive market? Media Monitoring Services Nigeria Limited is a private company owned by Nigerian professionals in brand management, advertising, research and in IT. We introduced this monitoring into this market, starting from the basis to where we are now. We monitor all media and there is no other competition that is monitoring all media. When I say we monitor all media, I mean that every time we are looking at all the brands in this market and planners rely on us for planning, for pitch and to talk about the industry. What is the market expecting from MMS Company in next 5 years? We are planning of increasing point value, improving the opportunities of deriving more value for what clients are buying. Sometimes people see data but they can’t read the data and you know that this tendency is on the increase in our system. We are now developing a next level where every data we put out you are able to interpret, able to pick up insight, able to make greater meaning from it. With this, the media planners are better at home doing what they are doing because they get understanding of what is happening with the media data. The owner of the brand who pays the piper will understand even where his brand has gone wrong, what he can do to improve on it, what he can ask for not just saying I have this N1 billion, give me a plan. That is the futuristic thing and by the time we finish with it, this coming year we roll it out quickly to our other locations, Ghana and Cote D’Ivoire and I am sure that it will be an interesting platform for everyone.

Tuesday 18 December 2018

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BUSINESS DAY

Marketing&Pr

Implications of Nigerians’ taste for everything foreign … Politicians key into trend Daniel Obi

country where the models are foreign and the production crew are also foreigners and the Nigerian client and its agency representatives travel abroad to supervise the production or the creative or technical and administrative talents are flown in into the country to work on the production. In both types of productions, foreign exchange is involved to pay for the services, Jide Alade, a communication expert writes. In addition to all these foreign exchange expenses, Peoples Democratic Party (PDP) is said to have contracted the services of Brian Balland, a top US lobbyist for $90,000 (N31.5 million) per month, as communication consultants, ahead of the upcoming 2019 election. Similarly, some Nigerians have also raised concern that the ruling All Progressives Congress (APC) is said to be considering two options in that direction: either to re-engage AKPD Message and Media, a United States-based public relations and public affairs consultancy firm, or hire a fresh agency from South Africa.

‘

AKPD, which was co-founded by David Axelrod, ex-President Barack Obama’s campaign strategist and a former White House Advisor, handled the APC public relations brief during the buildup to the 2015 elections. The firm was paid in foreign currency. Reacting to the preference for foreign agencies who will be paid in foreign currencies against local ones, Akonte Ekine, a public relations analyst, said it is unacceptable for the managers of the Nigerian economy to act this way. “How can the economy grow when we are patronising foreigners and paying them in dollars?” he said. Akonte had complained in 2014 when APC recruited the foreign agency to handle its campaign. “How can APC claim to represent change and yet show clear level of disregard to the business of marketing communication in the country with this appointment when we have communications outfits that can stand head and shoulder with AKPD. There are great Nigerian agencies with huge track records of building great and wonderful

Nigeria could learn from China. At the early stages of its march towards industrialisation, China shut up its economy and insisted on patronage for locally made goods

‘

t is sad that Nigeria’s foreign exchange earnings cloud into insignificance when compared with the real needs facing the country. Even sadder is the penchant for anything foreign that is being exhibited by our leaders. This puts undue pressure on the foreign exchange market in the country. Take for instance, the muchtalked about medical tourism, which has become a drain on Nigeria’s foreign exchange. Earlier this year, the Minister of State for Health, Osagie Ehanire, revealed that Nigeria loses about $1 billion every year as a result of medical tourism by Nigerians to India, USA, UK, among other countries. The preference by Nigerians to seek medical care abroad is unfortunate. This is taking place in spite of Nigeria’s potential to attract medical tourism in different fields of medicine as major and complicated medical issues such as kidney transplant and other surgeries have been carried out in Nigeria. Nigeria’s presidents including Ibrahim Babangida and the current one, Muhammadu Buhari are known to have spent weeks in foreign countries attending to some ailment which cost the nation millions of dollars. Despite several calls for the government to disclose how much Buhari’s treatment in the UK cost Nigeria, the authorities refused to do so. But, even taking just the $1billion yearly loss as indicated by the Minister of State, it is certain that the loss is significant in a country that is deeply getting weighed down by debt. This amount, converted to Naira at the official central bank rate, is N306 billion. The real cost of medical tourism to Nigeria is whatever that money could be used to do in the country each year! Is there any hospital of world standard that could be built at this amount? That is the cost. Perhaps the latest manifestation of this penchant for foreign products and services is the one emerging in the Nigerian advertising industry, which is the trend in the advertising industry. The local advertising industry involved in one form of foreign engagement or the other through advert shooting, though Advertising Practitioners Council of Nigeria, APCON has been able to tame this through its reform. It is either pre-production, shooting and post-production of adverts are done outside the

brands in the country,” he noted. He said this syndrome of the usual choice of white man above the black man is baseless and this cannot hold when a political party claims to stand for change, particularly in Nigeria. He charged the Nigeria Institute of Public Relations and the Advertising Practitioners Council of Nigeria to stand up against the APC and PDP preferences, especially when we have abundant capacity to deliver on strategic reputation and brand management across every phase of the country’s landscape. Akonte further said that in building political brands the following should be the most paramount: the character of the individuals and the character of the party, the ideology that the party represents, and ultimately, the essence of the party in the society. “So what strategy are all the Nigerian political parties looking for in the foreign communications experts that is lacking in the ones that have existed for ages and the young and upcoming ones particularly now that there is huge unemployment in the country?” Akonte wonders what the message that the foreign communications outfits will create that will resolve the various issues facing the country. According to him, the truth is that the challenges facing the communications programmes of the political parties is not the messages to be created or the platform to be used for the message; rather the identity of the parties. Expectedly, the Public Relations Consultants Association of Nigeria (PRCANT), the umbrella body of public relations consultancy firms in Nigeria, has kicked

against the move by the political parties for foreign firms. The body urged the two political parties to lead by example by respecting the provisions of the laws guiding the Nigerian marketing communication practice, which prescribes the protection and patronage of Nigerian businesses. The President of PRCAN, John Ehiguese, told BusinessDay that Nigeria has enough capacity in the form of well-trained and experienced consultants, to handle the political campaigns of Nigeria’s political parties. He stressed that Nigerian PR consultants and agencies understand the terrain better and are, therefore, better positioned to craft and project the right strategies and messages. Like Akonte, Ehiguese argues that the best PR practices are found in local market and political communication is countryspecific. As a communications expert, he said that local issues drive the campaigns, and certified local professionals, who live and do business in the country, are in the best position to understand the issues, as well as the local nuances and peculiarities of our media. Ehiguese pointed out that the propensity of politicians to rush overseas to look for PR consultants smacks of inferiority complex and constitutes a stumbling block to the development of the Nigerian economy and marketing communications industry in particular. Media agencies and other professional firms have positioned themselves through horning their skills to assist political parties in the forthcoming elections, but this will not materialise if the politicians are looking overseas for assistance. The continuous quest to seek medical tourism abroad, foreign education and give foreigners jobs that local professionals can do, will continue to retard Nigeria’s development and keep unemployment always high with its attendant consequences. Nigeria could learn from China. At the early stages of its march towards industrialisation, China shut up its economy and insisted on patronage for locally made goods. Today, the Chinese economy has grown to become the second- largest in the world. While one is not propagating recourse to complete autarky, it is fact that reliance on local goods and services assists a nation’s economy to grow. All that is required is government’s attention to sectors like education, health, and encouraging the citizens to patronise local goods and services.

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BUSINESS DAY

An economic analysis of Abia and how it compares with other regions 4. Budget

1. Economy

Fiscal Aspirations 2018 Aspirations The State’s budget of 141billion Naira is 1.23percent of the total budgets announced by the 36 States and FCT, 4th in the South East, 15th in the South, and 27th in the country. 2. Realities

Structure of Abia State’s Agriculture

Structure of Abia State’s Economy

14.0

Structure Abia State’s estimated Gross State Product was N838.89 billion in 2017, or 0.74 percent of Nigeria’s GDP in 2017, 5th in the SouthEast, 14th in the South, and 26th in Nigeria. Services was 73 percent, Oil, 14 percent, Non-oil industry, 8 percent and Agriculture, 5 percent.

• Fishery is negligible with only N100 million. • Forestry is nil.

Oil output of N117 Billion in 2017 was 1.1percent of the country’s Oil GDP, 2nd in the SouthEast and 8th out of nine in oil producers in the South and the country. • N63.1 billion Non-Oil Industrial output contributed 0.4 percent of the country’s total non-oil Industry, 3rd in the South-East, 12th in the South, and 21st in the country. ManuAgricultural output of N45.59 facturing output of N43 billion (mainly Food, billion contributes the least to the State’s GSP, was 0.19 percent of coun- Beverage and Tobacco and textile and apparel, and wood and wood products) was 66 percent try, 5th in South East, 15th in the and construction output of N20.8 billion was 32 South, and 33rd in the country. percent of the State’s Non-Oil Industry. • N41.7 billion in crops was 92 percent of the State’s agricultural output, • Abia’s Services output of N612.7 billion was 0.96 percent of Service Sector in Nigeria, 3rd in • N3.5 billion in livestock was 8 percent,

the South East, 10th in the South and 14th in the country. Inter-State Comparisons With a Gross State Product (GSP) of N838.89 billion or 0.74 percent of Nigeria’s GDP in 2017, 5th in the South-East, 14th in the South, and 26th in Nigeria. Abia State’s Population of 4 million people accounts for 2 percent of national population, 4th in the South-East, 14th in the South, and 28th in the country. Abia State’s Land Area of 4900 km2 is 0.54 per cent of Nigeria’s, 5th in the South-East, 16th in the South, and 35th in the country. Abia Revenue of N62.3 billion was 2 percent of the 36 States and FCT’s total revenue in 2017, 2nd in the South East,

3. Wellbeing

2. Endowments

100%

Anambra Ebonyi Imo Abia Enugu

65.000

130,000

Capital Spending of N16.9 billion, was 1.6 percent of States’ outlays, 3rd in the South-East, 11th in the South, and 24th in the Country. 2.3 Deficits Abia State is one of the 11 States with fiscal surpluses in 2017. The State had a surplus of N14.3 billion in 2017, 2 percent of States’ fiscal balances, 1st in the South-East and 4th in both the South and the country. 2.4 Debt Abia State’s total outstanding debt of N91.6 billion was 2 percent of States’ total debts, 2nd in the South-East, 12th in the South and 22nd

195,000

260,000

3. 2013-2017 Trends Abia’s Total Revenue: Abia’s Total Revenue fell from N73 billion in 2013 to N43.1 billion in 2016 but grew to N62.3 billion in 2017. The slump in revenue largely came from gross statutory allocations (GSA) as IGR increased from N10.8 billion in 2013 to N20 billion in 2015, then declined to N8.8 billion in 2016 before rising to N18 billion in 2017. Value added tax proved resilient in the face of global oil price slump and concomitant recession in the national economy. Financing Revenue financing: overall deficits of 17.3 percent of total revenue in 2014 and 42.1 percent in 2015 gave way to a surplus of 22.9 percent of total revenue in 2017. Spending finance: overall deficits as a fraction of total spending was -14.7 percent in 2014 gave way to a surplus of 29.7 percent of total spending in 2017. Capital finance: overall deficits of 37.9 percent of capital budget in 2014 and 90.3 percent in 2015 gave way to a surplus of 84.6 percent of the capital budget in 2017.

Land Area

Abia’s Debt Foreign debt stock rose more than fivefold from N5.3 billion in 2013 to N30 billion in 2017; from 7.3 percent of total revenue in 2013 to 49.8 percent in 2017. Domestic debt stock rose almost twofold from N31.7 billion in 2013 to N60.6 billion in 2017; from 43.4 percent of revenue in 2013 to 97.3 percent in 2017. Total debt rose from 50.8 percent of revenue in 2013 to 147.1 percent in 2017. 2017 Inter States Comparisons

Land Area 100%

Abia’s Revenue Use

Abia’s Balances

60 45

Land Area

Land Area (sq kms) 100%

N’Billions

Land Area

Population

2.2. Spending Abia’s actual Total Expenditure in 2017 was 48.1 billion Naira, 2nd in the South-East, 14th in the South, and 34th among all the States and FCT. The spending components in 2017 were: Recurrent Spending of N31.1billion, 1.3 percent of the recurrent outlays of all the States and FCT, 3rd in the South-East, 14th in the South, and 34th in the country.;

in the country. Domestic Debt of N60.6 billion was 1.8 percent of States’ domestic debts, 1st in the South-East, 11th in the South, and 24th in the country. Foreign Debt of N30.9 billion was 2.5 percent of the States’ foreign debts, 2nd in the South-East, 6th in the South, and the 8th in the country.

GSP Per Capita

Abia State was created in 1991 from Imo State. With most of the State’s commercial activities harboured in Abba region of the State, Abba is regarded as the commercial hub of the State. Abia State neither has a boarder nor a coastline but shares boundaries with as many as seven States (four South East and three South-South States: Cross River State to the East, Anambra to the North-West, Enugu to the North, and Ebonyi to the North-East, Imo to the West, Rivers to the South-West, and Akwa-Ibom to the South-East. Abia State has a land area of 4,900km2, 0.54 percent of Nigeria’s land mass, 5th in the South-East, 16th in the South, and 36th in Nigeria (only Lagos State has a smaller land area of 3,700km2). Major Towns and Cities of the State are Aba North and South, Arochukwu, Bende, Ikwuano, Isiala Ngwa North and South, Isuikwuato, Obi Ngwa, Ohafia, Osisioma Ngwa, Ugwunagbo, Ukwa East and West, Umuahia North and South, and Umu Nneochi.

2.1. Revenue The state’s actual revenue of N62.3 billion in 2017 was 2 percent of all States’ actual total revenue, and the largest among the South-East States, 11th in the South, and 16th among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N30.4 billion was approximately 2 percent of the total for all States and FCT, 2nd in the South-East region after Imo State, 10th in the South, and 21st in the country. • Internally Generated Revenue of N18 billion was 1.7 percent of total, highest in the South-East and 8th in both the South and the country. • Value Added Tax of N9.6 billion was 2 percent of States’ total, 4th in the South-East, 14th in the South, and 28th in the country.

Abia State population of 4.04million in 2017 was 2 percent of national population4th in the South-East, 14th in the South and 28th in the country. With a density of 825 people per square kilometer compared to the country average of 219 people/km2, Abia’s density is second only to Anambra in the South-East, 3rd in the South after Lagos and Anambra, and 4th in the country. Abia’s literacy is 3rd in the South East, after Anambra and Imo, and 9th in the country and in the South. Abia’s life expectancy of 51 years is the 3rd in the South East, 9th in the South, and 12th in Nigeria. Male life expectancy of 50 years is the 2nd in South-East after Imo, 6th in the South, and 8th in the Country. Female Life Expectancy of 53 is 2nd in the South-East, 7th in the South, and 10th in Nigeria. Per capita GSP of N207.6 thousand in the State is 2nd in the South-East, 12th in the South, and 26th in the country.

N’Billions

• Economy Abia State contributed 0.74 percent Nigeria’s GDP in 2017, to rank 5th in the South-East, 14th in the South, and 26th in Nigeria. Services was 73 percent, Oil, 14 percent, Non-oil industry, 8 percent and Agriculture, 5 percent. • Endowments Abia State’s Land Area is 0.54 percent of Nigeria’s land mass, to rank 5th in the South-East, 16th in the South, and 36th in Nigeria. The State has neither a boarder nor a coastline and is encircled by seven states- four States from its region (Anambra, Enugu, Ebonyi, Imo) and three States from the South-South (Cross River, Akwa-Ibom and Rivers). • Wellbeing Abia’s Population is 2 percent of national population, to rank 4th in the South-East, 14th in the South and 28th in the country. Abia is the 4th most densely populated State in the country, 9th most literate in the Country, with the 12th life expectancy of 51 years in the CountryMale life expectancy of 50 years is the 8th in the Country, while Female life expectancy of 53 years is 10th in Nigeria. With Per capita GSP of N207.6 thousand, Abia is 2nd in the South-East, 12th in the South, and 26th in the country. • Budget Abia retained 2 percent of States’ revenue in 2017, 16th in the Country, spent 1.3 percent of States’ outlays, 34th in the country, incurred a fiscal surplus, and held 2 percent of States’ total debt, 22nd among the States and FCT.

Abia 100%

Abia State Summary

30 15 0

2014

2015 2016 2017 – Recurrent Expenditure – Current Surplus

40 30 20 10 0 -10 -20 -30

2014

2015

2016

– Current Surplus – Overall Deficit

2017

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An economic analysis of Anambra and how it compares with other regions Inter-State Comparisons With a Gross State Product (GSP) of N918.3billion or 0.81 percent of Nigeria’s GDP in 2017, the 2nd in the South-East, 11th in the South and 23rd economy in Nigeria. Anambra State’s Population of 5.9 million people is 2.8 percent of national population, the most populated in the South-East, 4th in the South and 10th in the country. Land area of 4,900 km2 is 0.54 percent of Nigeria’s land mass, the 4th in the South-East, 15th in the South and 35th in the country. Anambra’s Revenue of N60.5 billion in 2017 was 2 percent of all States’ and FCT’s revenue that year, 2nd highest in the South-East behind Abia State, 11th in the South, and 17th in the country.

• Economy Anambra State contributed 0.81 percent of Nigeria’s GDP in 2017, the 2nd in the South-East, 11th in the South and 23rd in Nigeria. Services made up 84 percent of Anambra State’s GSP, Agriculture and Non-oil industry were 8 percent each. • Endowment Anambra State’s Land Area is 0.54 percent of Nigeria’s land mass, 4th in the South-East, 15th in the South and 35th in the country. Anambra State has neither a border nor a coastline but is surrounded by five States; two from its region (Enugu and Imo), two from the South-South (Delta and Rivers), and one from the North-Central (Kogi). • Wellbeing The State’s population is 2.8 percent

Anambra State was initially created from part of East Central State in 1976 but sub-divided in 1991 to form present day Anambra and Enugu States. Anambra State has neither a boarder nor a coastline but shares boundaries with five States, Kogi to the North, Delta to the West, Enugu to the East, Rivers and Imo to the South. Anambra State’s land area of 4,900 Km2 is 0.54 percent of Nigeria’s land mass, 4th in the South-East, 15th in the South and 35th in the country. Cities and Towns in Anambra State are not limited to; Onitsha, Okpoko, Nnewi, Awka, Abagana, Abba, Agulu, Umueri, Abatete, Anaku, Atani, Awka-Etiti, Ihiala, Igbo-Ukwu, Amawbia, Alor, Ozubulu, Ogidi, Okija, Oraukwu,Iseke, Uga, Uli, Umuoji, Umuoba Anam, and Umuerum.

of national population, the highest in the South-East, 4th in the South and 10th in the country. Anambra is the 2nd most densely populated State in the country after Lagos, the 5th most literate and the 18th life expectancy of 49 years in the country. Per Capita GSP of N154 thousand is the least in the South-East, 16th in the South and the 34th in the country (being only better than Osun, Taraba and Bauchi States).

Land Area 100%

1. Fiscal Realities of Anambra State 1.1. 2018 Aspirations Anambra State’s 2018 Budget of N170.9billion is 1.84 per cent of States’ Budgets in 2018, 3rd in the South East, 13th in the South and 31st in the country. 1.2. 2017 Realities

100%

• Budget Anambra retained 2 percent of States’ revenue in 2017, 17th in the Country, expended 1.3 percent of States’ outlays, 36th in the country, incurred a fiscal surplus, and held 0.6 percent of States’ total debt, the least among the States and FCT

100%

4. Budget

2. Endowments

Anambra State Summary

BUSINESS DAY

100%

Economy

Structure Anambra State’s Gross State Product in 2017 was an estimated N918.3billion in 2017 or 0.81 percent of Nigeria’s GDP in 2017, the 2nd in the South-East, 11th in the South and 23rd in Nigeria. Services made up 84 percent of Anambra State’s GSP, Agriculture and Non-oil industry were 8 percent each.

100%

• Forestry, nil. – N76.7 billion Non-Oil Industrial output contributed 0.5 percent of Nigeria’s Non-Oil Industry, 2nd in the South-East, 11th in the South and 19th in the country. N50.7 billion Manufacturing (Mainly Food, Beverage and Tobacco, Textile and Apparel, and Woods and Wood Products) was 66 percent of the State’s Non-Oil Industry, N24.5 billion in Construction, was 32 percent, leaving N0.9 billion Utilities with 1 percent. – Services output in Anambra State was N767.1 billion, 1.2 percent of gross service output in Nigeria, 2nd in the South-East, 8th in the South, and 12th in the country.

Land Area (sq km) 100%

1.3.2. Spending Anambra State made a total expenditure of N46.6 billion in 2017, 1.3 percent of gross spending by all States, 4th in the South-East, 16th in the South and 36th in the country. The spending components in 2017 were: Recurrent Spending of N22.7 billion was 0.86 percent of the recurrent outlays of all the States and the FCT, 4th in the South-East, 16th in the South and 36th in the country. Capital Spending of N23.8 billion was 2.3 percent of States’ and FCT’s total capital outlays, the highest in the South-East, 6th in the South and 9th in the Country.

3. Wellbeing

1.2.3. Deficit. Anambra State is one of the 11 fiscal surplus States in 2017. The State had a surplus of N13.8 billion, 2nd in the South-East, 6th among the States that had surpluses in the South and the country.

100%

1.2.1. Revenue Anambra State’s actual Revenue was 60.5billion Naira, 2.02 percent of States and the FCT’s total revenue, 2nd in the South-East, 11th in the South-East and 17th in the country. The revenue components in 2017 were: • Statutory Allocations of 28.2billion Naira was 1.93 percent of all States’ allocations, 4th in the South-East, 13th in the South and 27th in the country. • Internally Generated Revenue of N8.8 billion was 1.15 percent of total, 3rd in the South-East, 12th in the South and 18th in the country. • Value Added Tax of N11.2 billion was 2.4 percent of States’ total, the highest in the South-East, 5th in the South and 10th in the country.

1.2.4. Debts A total outstanding debt of N28.8 billion was 0.6 percent of all States’ and FCT’s total debts, the least in the South-East region, the South and the country. • Domestic Debt of N2.6billion in December 2017 was 0.1 percent of States and FCT’s domestic debts, remains the least in the South-East, the South and the country. • Foreign Debt of N26.2 billion was 2.1 percent of the total foreign debts of the States and FCT, the 3rd in the South-East, 8th in the South, and 12th in the country.

100%

1.3. 2013-2017 Trends Anambra’s Total Revenue: Total Revenue declined from N77.5 billion in 2014 to N60.5 billion in 2017. The slump in revenue came from gross statutory allocations (GSA) and internally generated revenue while value added tax proved resilient in the face of global oil price slump and concomitant recession in the national economy. Anambra’s Total Spending: Total Spending fell from N91.2 billion in 2014 to N46.6 billion in 2017. Recurrent spending fell from N51.9 billion in 2014 to N22.7 billion in 2017, while capital spending fell from N39.3 billion in 2014 to N3.3 billion in 2015 before a recovery to N23.8 billion in 2017.

GSP 100%

Agricultural output of N74.5 billion contributed 0.003 percent of country, the 4th in the South-East, 13th in the South, and 30th in the country. • N67.1 billion in crops was 90 percent of the State’s agriculture. • N6 billion in livestock was 8 percent. • N1.3 billion in Fishery was 2 percent.

GSP 100%

With population of 5.9 million people, the largest in the SouthEast, 4th in the South, and 10th in the country and land area of 4,900 km2, Anambra State has a density of 1,217 people/km2 compared with country average of 219

people/km2, the largest in the South-East, 2nd to Lagos State in the South and the country. Anambra’s literacy is the most literate in the South-East, the 5th in the South and the country. Anambra’s life expectancy of 49 years however, is the 4th in the South-East (only better than Ebonyi State in the region), 12th in the South, and 18th in the country; Female life expectancy of 50 years is 5th in the South-East, 13th in the South and 20th in the country while Male life expectancy of 47 years is the least in the SouthEast, 14th in the South and 24th in the Country. The State’s Per Capita GSP of N154 thousand

retains the lowest in the South-East, 16th in the South and the 34th in the country (Osun, Taraba and Bauchi States).

Revenue Use: Anambra State had sustained a growing current surplus with reduced spending since 2015. By 2017, the State’s N37.6 billion current surpluses was enough for its capital budget of N23.8 billion, leaving the State with an overall surplus of N13.8 billion at the end of that year. Financing: Revenue financing: overall deficits of 17.5 percent of total revenue in 2014 gave way to an overall surplus of 22.8 percent of total revenue in 2017. Spending finance: overall deficits of 14.9 percent of total spending in 2014 gave way to an overall surplus of 29.6 percent of total spending in 2017. Capital budget: overall deficits of 34.6 percent of capital budget in 2014 gave way to an overall surplus of 303 percent of capital budget in 2015 and 57.9 percent in 2017. Anambra’s Debt Foreign debt stock rose fourfold from N4.7 billion in 2013 to N26.3 billion in 2017; from 6.8 percent of revenue in 2013 to 43.4 percent in 2017. Domestic debt stock has flattened from N3 billion in 2013 to about N2.6 billion in 2017, from 4.2 percent of revenue in 2013 to 4.3 percent in 2017. Total debt stock rose from 11 percent of revenue in 2013 to 47.7 percent in 2017.

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Tuesday 18 December 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Nigerian teacher among top 50 finalists for 2019 $1m Global Teacher Prize KELECHI EWUZIE

n recognition of his outstanding contribution to the teaching profession, Soji Megbowon, a Mathematics and Computer Science teacher at Jakande Comprehensive Senior College, Ipaja, Lagos, Nigeria, has been included in the top 50 shortlist for the US$1million Varkey Foundation Global Teacher Prize 2019. The Global Teacher Prize now in its fifth year was set up to recognise one exceptional teacher who has made an outstanding contribution to the profession as well as to shine a spotlight on the important role teachers play in society. Soji Megbowon’s own poor primary education did not stop him from becoming a teacher and also starting his own nonprofit enterprise as a social innovator in edtech. Growing up in a rural settlement where his parents were peasant farmers, school equipment was rudimentary and teachers were not in tune with modern teaching methods,

ICAN President, Razak Jaiyeola, presenting prizes to the best overall qualifying candidate in the 2018 ATSWA examination

so he struggled to keep pace. But in secondary school Soji became highly motivated to study computing and mathematics, partly because he had never seen a computer before and previously had no access to computing teachers.

Sunny Varkey, founder of the Varkey Foundation and the Global Teacher Prize, in while congratulating Soji for reaching the final 50 said he hope Soji’s story inspires those looking to enter the teaching profession and highlights the

Ekiti College of Technical Agric to take off in 2019 - Fayemi

kiti State governor, Kayode Fayemi, says the State’s College of Technical and Commercial Agriculture, Isan Ekiti, will commence academic activities next year. Speaking at the 26th Isan Ekiti Unity Day celebration, in Isan Ekiti on Saturday, the Governor reiterated his commitment to the development of agriculture, which is one of the four developmental agenda of his administration. The College which was established in 2014 with focus of mid- level man power development in the agric sector, was neglected by the immediate past administration. Dr Fayemi who was named the Asiwaju Oluomo of Isan kingdom and presented an award of excellence for his contribution to the infrastructure development of the town, said the agric sector, when fully developed, would provide job opportunities for the unemployed youth in addition to food suplus. The Governor stressed

the readiness of his government to fight unemployment stressing that Ekiti “youths are hardworking and can excel in any fied if given the right opportunity. While noting that he had not made up his mind to vie for the July governorship election as at the 2017 Isan Day celebration, Fayemi urged Ekiti people to replicate the support given to him to win the guber elec-

tion during the forthcoming 2019 general elections. Earlier in his speech, the Onisan of Isan Ekiti, Oba Ayodele Adejuwon had described Fayemi’s return as governor as the turning “around of our captivities”. The monarch who prayed God to grant the Governor success in his second tenure, urged him to prioritize the development of the community.

Some pupils who benefited from the Foodco initiative tagged Adegbenga Sun-Bashorun Scholarship

incredible work teachers do all over the world every day. According to him, “Our recent Global Teacher Status Index finally gives academic proof to something that we’ve always instinctively known: the link between the status of

teachers in society and the performance of children in school. Now we can say beyond doubt that respecting teachers isn’t only an important moral duty – it’s essential for a country’s educational outcomes. “We’re also delighted that the Global Teacher Prize, since its launch five years ago, has now inspired over 30 national teacher prizes, which means our ultimate goal of shining a light on great teachers has grown strong national roots, something which is crucial if we’re to return teachers to their rightful position as one of the most respected professions in society,” Varkey said. In 2013 Soji quit his job as a data analyst to focus on providing pupils in rural primary and secondary schools with access to computer skills, two years later establishing the education non-profit, Calculus EDUaids, to research and develop inclusive curriculum-based educational aids to bridge learning gaps created by large class sizes. In his own classroom this has improved the results of

students in Mathematics and Computer Science and he has recorded and maintained a 20% improvement in academic performance in the past two years. Over 50 students from other schools who have attended his organised student leadership programme are now leaders in their respective institutions. In 2017, Soji was one of the local trainers selected for AFRICA CODE week to train over 500 teachers in Ondo State. He has also received the Lagos State Education District commendation, the Creative and Innovative Teacher award, and a commendation from the VicePresident of Nigeria. The top 50 shortlist has representatives from 39 countries and by highlighting their stories the Varkey Foundation hopes that the public will be able to join in passionate debates about the importance of teachers. The top 50 shortlisted teachers are narrowed down to ten finalist teachers by a Prize Committee, with that result announced in February 2019.

Shepherd School wins N5m from KWIRS SIKIRAT SHEHU, Ilorin

he Kwara State Internal Revenue Service (KWIRS) has presented an award of N5 million to Shepherd Senior Secondary School, Lafiaji, Kwara State. The school emerged winner of 2018 Tax Club Quiz Competition. Speaking at the 3rd edition of quiz competition, Muritala Awodun, executive chairman of the agency, disclosed that the gesture was to further encourage citizens to play their civic responsibilities, catch them young and as well as educate people on the importance of tax culture. Awodun, however, reaffirmed commitment towards ensuring that Kwarans get value for what they paid for - as taxes. The agency in its core value to mobilising revenue for strategic development of the state has been assisting people of the state through provision of social amenities and infrastructure, among others. “Tax payment is very important for development of any society. We discovered

that there is a need for tax education. We are pursuing it from secondary schools across the 16 local government areas of the state. “We believe that these children would be able enlighten their parents on why they should pay tax.” He commended the state Ministry of Education and Human Capital Development for collaborative effort towards the success of the programme, urging the ministry to get more schools for the competition. About 128 schools across the three senatorial districts of the state participated in the competition. Six schools participated in the final round where Shepherd won with 43 points. In this year’s edition, Government Unity Secondary School, Kaiama, came second with 39 points and got prize of N2 million while Agbonna High School, Share, in Ifelodun Local government, was 3rd with 32 points and awarded N1million. Muslim Model Secondary School and Government Girls Day Secondary, Oko

Erin, came 4th with 28 points respectively. In his address, Aliyu Mahe, state tax controller of Federal Inland Revenue Service (FIRS), enjoined Awodun to take the idea of tax club to the national Joint Tax Board (JTB) for his colleagues in other states to apply same to expand tax education in the country. He assured the revenue house of collaboration next year in making the programme more successful. In her submission, Bliskis Oniyangi, state commissioner for education and human capital development, charged teachers to become digital and acquaint students with continuous learning, saying the present administration in the state is committed to develop education sector in the state. Oniyangi appealed to parents and teachers to encourage their children to join the global trend of taxation to become responsible citizens in future, as she even noted that the prizes made available by KWIRS will go a long way in lessening the burden of parents by securing the students’ future through scholarship.

BUSINESS DAY

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Tuesday 18 December 2018

EDUCATION Educating the Nation’s growing population

OYIN EGBEYEMI

igeria’s growing population may be an indication of the availability of a market for the education sector. According to the results of the 2006 census and projections from the National Population Commission, the young and active make

up majority of the country’s population. Some people may view this large active population as an indication of strength under the guise of availability of labour. However, with an overall annual growth rate of about 3.5 percent (National Population Commission), policy makers may want to consider the impact this has on the resources available to cater to this large and growing population. It is also important to consider what access this active population has to education and other means through which they can develop their skills, and whether or not they are encouraged or even willing to develop themselves…if indeed the availability or an active population equates to

the availability of labour. Given that life expectancy in the country is 53 years (World Bank), and the negative net migration rate of -0.35 (2015, Kneoma), population growth is assumed to be driven largely by net childbirth. This means that the number of children who need to be educated is going to continue to rise. Policy makers in the education sector should be very weary of this as many scenarios in Lagos State alone are beginning show symptoms of State that is struggling to cope with its growing population: for instance, the number of children begging on the streets during school hours, insufficient number of public schools, inadequately skilled

Inlaks takes solar energy empowerment programme to schools … To partner states to reduce unemployment

ith its efforts to ensure a fast growing economy, increase job creation and the quality life through the generation and provision of affordable clean energy, Inlaks Energy, a unit of Inlaks, has embarked on a series of life empowerment initiatives through its corporate social responsibility programme for secondary school students, undergraduates and yet-to-employed graduates to build capacity in solar energy as an alternative source of power. The company promised to partner state governments to reduce unemployment in the country through the provision of alternative source of energy and training of youth to become self-reliant. Inlaks introduced the project at the just concluded eight-week master class - the basics of solar energy - to 22 senior secondary school students at the Vivian Fowler Memorial College for Girls, delving on the importance of alternative source of energy in the development of the economy. The eight-week long training entailed both theoretical and practical aspect of solar energy component, which brought the students together and exposed them to the intricate of generating solar power for homes and small businesses. Tope Dare, executive director, Infrastructure Business Unit of Inlaks, speaking on the rationale for the solar

energy training said the project was meant to give back to the society as part of the company’s corporate social responsibility. He further revealed Inlaks’ plan to partner states to train young adults, which would go a long way to reduce rates of unemployment in the states. Giving feedback on the impacts of the training, one of the students, Doyinsola Ogunsola, expressed how enlightened she was after the master class, adding that the students have gained more understanding on solar energy, rudiments of its application, to the economic value of solar energy as well as its contribution towards a greener and safer planet. According to Ogunsola,

“The goal of the CSR effort by Inlaks is to ensure that the trained participants acquire the skills needed for financial and career empowerment, and eventually attaining affiliate partner status, installing solar solutions on behalf of Inlaks Energy or venturing into entrepreneurship and specialise in buying and installing solar energy for homes in the country.” Inadequate electricity and affordable clean energy in most African nations is a known difficulty that has grossly affected the economic and development growth of the nations, most especially, Nigeria where over $16 billion has been expended with less than 3,000 megawatts generated in 16 years.

teachers. Another symptom of this dire issue is the rise of “quack” poorly equipped and low standard private schools. The availability of a market for private education becomes apparent because of the failure of public sector schools to keep up pace with the monumental development in the education sector locally and globally. Parents are therefore left with few options for quality education and if they can afford to, the more attractive option would be private schools. What is highly concerning about this is the fact that despite the rise in the number of private schools in the State, not many of them meet up

to local or international standards. Those which do may charge school fees that are not affordable or sustainable for the average Nigerian man. Quality education now appears to have become a luxurious commodity only accessible to the rich, and might not even be viewed as an essential item when analysing disposable income in the light of the current economic climate in the country. Recent trends in consumer spending and disposable income show a sharp reduction in 2016 and slow growth in 2017 (Business Monitor International). So household spending may be predicted to grow steadily over the next 3 years on the back of an im-

proving economic outlook: inflation expected to decrease, thereby reducing the pressure on household budgets; and oil prices expected to continue to increase. Given this, there might be some hope that education may become more affordable. However, the concept of access to quality education being perceived now more as a luxury than a necessity needs to be taken into serious consideration in order to ensure that the growing population in Lagos State and the country could indeed be its strength. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Winners emerge in IFC essay competition, get rewards KELECHI EWUZIE

or emerging winners in the Indomie Fan Club (IFC) essay writing competition, six outstanding students have received handsome rewards from Dufil Prima Foods. The IFC Essay Writing Competition is a child engagement initiative from the stable of Indomie brand targeted at enhancing the writing and creative skills of students who belong to Indomie Fan Club across 3,000 schools in Nigeria. While the competition lasted, the participants were asked to submit beautiful crafted stories of about 300 words each to schools hosting the IFC, using indomitable cartoon characters as subjects of their writings. The competition, which began on July 20 ended in

September, with over 41,000 entries. At the end of the competition, six winners emerged in the highly competitive contest. The first three winners for the competition were Shepherd Duru of Great Flourish Ville School, Salako Oluwatimilehin of Galilee Junior School and Okafor Chiagoziem of Great Flourish Ville School with other three regional winners. There were also other 50 consolatory winners, who got various cash and product prizes from the brand. Te m i t o p e A s h i w aj u , public relations and events manager, Dufil Prima Foods Group at the award presentation in Lagos described the winners as “outstanding writers”, adding that the six winners will be featured in the next edition of the Indomie Comic Books. Ashiwaju said: “Beyond just winning prizes, the Indo-

Cornerstone Insurace PLC Foundation donates reflective jacket and Stop & Go sign to Mindbuilder school, Lagos as part of its 2018 Safe Route 2 School Project

mie Fan Club Essay Writing Competition is designed with the intention of instilling the habit of writing on students. We have noticed that pupils’ reading and writing habits are being endangered by social media and other social distractions. But Indomie brand feels that something must be done to salvage the situation. Hence, the need for creating a writing competition for Indomie Fan Club members. “It is the belief of our great brand that children are future leaders. And to effectively play in that future, they need the ability to effectively think, write and speak. Indomie, through this competition, is enhancing that ability. This is part of our overall strategy to ensure that the Nigerian child is effectively engaged now for future leadership. For years now, Indomie has been sponsoring Lagos Spelling Bee and awarding scholarships to numerous postgraduate students studying nutrition in Nigerian universities.” Faith Joshua, the National Coordinator of IFC, said the contest is one of the ways through which the brand is engaging children by giving them the opportunity to express their creative talents and abilities. Joshua said: “We at Indomie brand congratulate the winners of this competition. We urge the winners not to stop writing. Rather, they should improve on their writing ability and their creativity, because we know that writers are progressive in nature. We use indomitable characters as subject of the competition because IFC wants to inculcate the habit of reading among primary school children.”

Tuesday 18 December 2018

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BUSINESS DAY

Harvard Business Review

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Tips & Talking Points Don’t ‘catch’ your colleagues’ stress

TALKING POINTS The Green Wave 150: More than 150 global brands have made the commitment to use 100% renewable energy in their business operations. + Missing From the Boardroom 29%: In the United Kingdom, women comprised just 29% of corporate board hires in 2017, according to research from Egon Zehnder. + Going It Alone 40%: In a survey published by AARP The Magazine, 40% of adults responded that they feel loneliness. + GM Faces Cutbacks 14,000: This year General Motors announced that it planned to cut around 14,800 jobs in the United States and Canada. + Pressure to Reform 150%: According to World Bank estimates, Brazil’s debt to gross domestic product ratio would increase to more than 150% by 2030 if the country does not reform its current pension benefits.

Tuesday 18 December 2018

When talking to customers, be confident and show your expertise

f you work with someone who is constantly stressed out, you’re more likely to feel that way too. But there are ways to keep secondhand stress at bay. For starters, seek out the positive people in your office and spend time with them, even if it’s just to grab a quick coffee. Positive emotions can be just as infectious as negative ones. You can also stave off stress by being a role model for optimistic thinking. If an overwhelmed colleague constantly criticizes or shuts down ideas, counter those comments

by pointing out what you find valuable in them. At the same time, don’t ignore or shun stressed-out colleagues — reach out to them and try to be helpful. You could ask if there’s anything you could do to move their project forward, for example. Being compassionate and action-oriented will also help you avoid “catching” their stress.

(Adapted from “How to Cope With Secondhand Stress,” by Rebecca Knight.)

veryone wants their customers to be happy. And that requires using the right words, especially since more and more customer interactions take place through writing (email, live chat, even Twitter). Start the conversation by establishing a personal rapport. Show the customer that you’re listening to their problem or complaint, and then shift to a take-charge attitude, using confident, assertive language. Research shows that customer satisfaction is higher when you avoid deferential words (“afraid,” “mistake”) and use dominant language instead (“must,” “confirm,” “action”). In addition, customers will see you as more helpful if you use specific words. For example, a clothing retailer should talk about the “white turtleneck” rather than the “shirt,” and the “high-top sneakers” rather than the “shoes.” And don’t be afraid to explicitly endorse a product to the customer (“I suggest this comforter” or “I recommend this album”); doing so implicitly, by sharing your personal preference (“I like this comforter” or “I love this album”), can be less effective. An explicit endorsement signals both confidence and expertise.

(Adapted from “The Words and Phrases to Use — and to Avoid — When Talking to Customers,” by Sarah Moore et al.)

You can find meaning even in tasks you don’t enjoy Doing

If your team is overwhelmed, what can they stop doing?

Talk to remote colleagues about how you’ll work together

e all have parts of our j o b s t hat aren’t fun. But even an unpleasant task can have meaning if you search for it. Try this exercise. Think about an activity that you don’t always enjoy doing — delivering performance reviews, for example. Now ask yourself why you do it, but ask four times. The first time you ask “Why do I do this?” you might answer, “Because I have to” or “I want to let my people know where they stand.” Then ask a second time: “Why do I want to let my people know where they stand?” The answer here might not be inspiring: “Because it’s part of my job.” But the answer might also start to sound

roject overload is real. But as a leader, it can be hard to tell whether your team needs more resources or just could be working more efficiently. Start by asking people to identify their key activities and how much time they spend on them in a typical week. Use that data to assess workloads and priorities. Consider which tasks the team could stop doing and which might benefit from having their process rethought. Pay special attention to low-value projects that have to get done but that take up an inordinate amount

o you have a co-worker who’s in a different office or location? When you work virtually with someone on a regular basis, it can be helpful to talk about how you’ll work together. Have a conversation about the best ways to communicate. For example, you might decide to email for simple matters but get on Skype when something complex requires you to share screens. Also, discuss what times of day are better to call or text, and whether there are particular days of the week you should avoid. If you collaborate on documents, establish a process to ensure you don’t inadvertently delete updates or create conflicting versions. Consider using Dropbox,

more meaningful: “So that people can know how they can reach their career goals.” Then ask a third time: “Why do I care if people know how to reach their career goals?” Continue for one more iteration. By the fourth round, you’re likely to uncover a meaningful reason behind the activity — and a motivation for doing it well. (Adapted from “The Most Powerful Lesson My Cancer Taught Me About Life and Work,” by Dan Cable.)

of time. Are there ways to simplify the workflows to reduce the amount of time your team spends in these areas? And last but not least, look for tasks that simply can be done more quickly. If your team is still struggling after these steps, it might be time to hire more people.

(Adapted from “What to Do If Your Team Is Too Busy to Take On New Work,” by Dutta Satadip.)

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

Google Docs or another service that monitors revisions. Establishing these kinds of ground rules early on demonstrates respect for each other’s time and helps avoid the frustration that can come from mismatched expectations. (Adapted from “The Virtual Work Skills You Need — Even If You Never Work Remotely,” by Barbara Z. Larson and Erin E. Makarius.)

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BUSINESS DAY

Tuesday 18 December 2017

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Unlocking the right 5G spectrum could generate $565 billion for mobile industry Stories by Jumoke Akiyode Lawanson

new report released by GSMA reveals that unlocking spectrum for the mobile industry to deliver innovative 5G services across different industry sectors could add $565 billion to global GDP and $152 billion in tax revenue from 2020 to 2034. Analysts say next-generation 5G services will improve access to healthcare, education and mobility whilst reducing pollution and increasing safety. However, these outcomes rely on government support for the identification of sufficient millimetre wave (mmWave) spectrum for the mobile industry at the next ITU World Radiocommunication Conference in 2019 (WRC-19). Although Nigeria has shown some level of preparedness for 5G, as Umar Garba Danbatta, Executive Vice Chairman (EVC) of NCC said in November that the commission has spectrum bands available for operators to pur-

chase in order to roll out 5G services in the country as at when due. The NCC made no mention of the availability of mmWave spectrum. “We have taken steps to preserve the 26GHz (gigahertz), 38GHz and 42GHz spectrum bands for 5G. There will be a number of slots in all these bands and the commission has also made provision for subsidy payment for infrastructure companies (InfraCos) who wish to deploy 5G. Public private partnership, infrastructure and the right regulatory standards are also necessary to facilitate deployment of 5G services across the country,” Danbatta said. The report, “Socio-Economic Benefits of 5G Services Provided in mmWave Bands”, is the first to examine and quantify the impact of mmWave spectrum on the overall contribution of 5G networks to society. mmWave spectrum will carry the highest capacity 5G services. It has the ideal characteristics to support very high data transfer rates and ultra-reliable, low latency capabilities, which will support new use cases and deliver the

benefits of 5G to consumers and businesses around the world. “The global mobile ecosystem knows how to make spectrum work to deliver a better future,” said Brett Tarnutzer, head of spectrum, GSMA. “Mobile operators have a history of maximising the impact of our spectrum resources and no one else has done more to transform spectrum allocations into services that are changing people’s lives. Planning spectrum

is essential to enable the highest 5G performance and government backing for mmWave mobile spectrum at WRC-19 will unlock the greatest value from 5G deployments for their citizens. “More than 5 billion people already rely on the mobile ecosystem to deliver services that are integral to their daily lives and fundamental to the economic sustainability of the communities they live in. 5G can offer more

benefits and a whole new range of services to even more people, but this will not be possible without access to this vital spectrum.” Industry watchers and stakeholders are worried that Nigeria may not have availability of sufficient spectrum to deploy 5G to its maximum capacity. mmWave 5G will not only provide consumers with ultrafast mobile broadband services including immersive entertainment, but will stimulate a host of applications that will enable citizens and businesses to do tomorrow what they can’t do today. These innovations will include enhanced remote healthcare and education, industrial automation, virtual and augmented reality, and many others. The early lead already being established in 5G in the Asia Pacific and Americas regions are expected to generate the greatest share of GDP attributed to mmWave 5G, at $212 billion and $190 billion respectively. Europe is forecast to have the highest percentage of GDP growth attributable to mmWave of any region, with 2.9 percent.

Bingo9ja to revolutionise gaming with blockchain enabled lottery system

ingo9ja, a new gaming company in Nigeria, is looking to change how people view lottery gaming in Nigeria by using cutting-edge technology for easy gaming across board. Ikorne Games, the parent company of Bingo9ja says the new platform will specifically deploy blockchain technology to make it easy for all gaming enthusiasts to play different kinds of lottery and classified games from the comfort of their homes by using the Bingo9ja blockchain backed mobile app, blockchain node integrated terminals and the USSD applications. With the fast development and adoption of blockchain technology all over the world, Bingo9ja says it is looking to break popular conventions and stigma

attached to playing lottery games, popular known as Lotto in Nigeria, thereby creating a “techy lifestyle” movement of gamers. Speaking with the media on this development Eni Eniola, CEO and founder of Ikorne Games, Eni Eniola, who is also a management consultant, business development and strategy expert, said that the intention of the company is to use the ease and proliferation of mobile phones whilst also leveraging on cutting edge technology to make gaming more accessible to everyone. The Bingo9ja platform which is already live in Lagos State and Osun State, currently has five games, with the highest winning chance of N2.5 million. The mega jackpot of N500, 000 daily rolls over to the next day if no winner emerges and costs N100 to play. The app is only available

for download on Android devices. However, the company has assured that it will soon be available on Apple iOs for iPhone users. “The mega jackpot keeps rolling over till we finally get a winner. Who knows, it might roll over to N100 million for the lucky winner. We also have bonus scratch and win, spin the win games which you can just sit in the comfort of your home to play and win using the app. We are starting with Lagos and Osun, and in the next coming months, we plan to be live in Abuja, Anambra State and Ondo state with our terminals. However, we live in a connected world and with the app, you can play from anywhere in the country,” Eniola said. Adedoyinsola Abitoye, Head of HR and Administration, Lagos State Lotteries Board, said that the board had given approval or Bingo9ja to operate

in the state having successfully satisfied all requirements for lottery services. “Ikorne Games, owners of Bingo9ja have gone through a rigorous process and have submitted all required documents for a lottery license in Lagos State. The LSLB check their books and do regular audit and have found no fault in their dealings,” Abitoye said. Tele Oyegoke, co-founder and COO, said not only will Bingo9ja gamers be able to play the games using multiple channels, they will also be able to use their Bingo9ja loyalty Pass cards in participating stores, petrol stations, restaurants and lifestyle outlets in the near future. “It must be noted that Bingo9ja’s lottery related games have the best winning odds in the country, considering that other lottery platforms choose six or seven winning num-

bers from about 90 numbers, but Bingo9ja picks five to six winning numbers from only 37 numbers,” Oyegoke said. Eniola, also promised that in the coming months, there will be an addition of different types of fun games particularly interactive peer to peer games like ‘Ludo’ that not only allows gamers to play with friend’s home and abroad, but also gives gamers a chance to win numerous prizes and money. “The games will be drawn live on all social media platforms, after which winners using the mobile app can withdraw their winnings instantly while gamers who played via the agent terminals could pick up their winnings from the agents or get credited directed into their bank accounts, whichever is preferred,” he said.

BUSINESS DAY

Tuesday 18 December 2017

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

The birth of global economy changers at GE Lagos Garage Stories by JUMOKE AKIYODE-LAWANSON

ince the establishment of the General Electric (GE) Lagos Garage in November 2016, the use of technology to develop mind blowing innovative solution to solve basic human, business and economic needs have grown enormously in Nigeria. The GE Lagos Garage, a space where basic ideas can be transformed into reality by manufacturing a normal innovative idea with high tech hardware such as CNC mills, laser cutter, 3D printers, injection moulders, Arduino kits and much more, turning it to a creative invention that has major business potentials and can solve economic problems, has since inception graduated 250 people in six classes, transformed 65 ideas into viable businesses and has had 14 of those ventures win international awards. This good news alone was very exciting to me until some of the Alumni narrated their personal experiences at the Garage and their achievement so far gives hope in the future of Nigeria. Fortunately, a lot more people will be able to benefit from GE’s advanced manufacturing training program, as the company recently launched an e-learning portal with the objective of extending the training program to reach a lot more people across the country. In a brief conversation, I got to know Daniel Onimisi, a cardiovascular physiologist seeking to better the lives of ailing patients by providing new-age, highly-functional, and customised artificial hearts. While carrying out some research online, Daniel came across the call for applications

L-R: Patricia Obozuwa, director of communications & public affairs, GE Africa; Kayode Ogunnubi, permanent secretary, Lagos State Ministry of Science & Technology and Ganiat Abidemi Raji, permanent secretary, Lagos State Ministry of Wealth Creation and Employment at the launch of the GE Lagos Garage E-Learning Portal in Lagos recently.

to the GE Garage. He quickly realised that the Garage could provide a platform for him to test and actualise his radical new idea: fabricating an artificial heart that can be transplanted into human beings. Daniel understood that the advanced manufacturing technology on show at the Garage would be essential to creating a prototype of a highly-functional human heart, which would form the basis for sustained research in the future and ultimately save lives, so he immediately applied to participate in the Garage. During his time at the Garage, Daniel successfully 3D printed 3 human heart prototypes. Each new prototype included a new level of detail and sophistication, allowing him to test and verify his hypotheses about the fabricating functional human hearts to solve cardiac defects in hu-

man beings. He also took full advantage of being in the heart of GE, spending his time interacting with members of the GE healthcare team and feeding off their significant knowledge and expertise in the healthcare IT space. “I have always had an interest in creating systems that mimic biological systems. The heart is a very complex organ but I wanted to successfully mimic a system that could perform the functions of a heart to sustain human life and the training at the GE Garage was geared towards making me achieve that goal. We had about eight courses which included training in industrial design, branding, learning integrity in business, collaborative research, the ethical side of business, investments and others were all very helpful,” Daniel said. The training at the GE Lagos

garage has definitely opened up the space for a lot of techpreneurs who are steadily changing the world we live in through innovation. Racheal Inogbedion, who is also n Alumni has created robotic prototypes to help improve the science, technology, engineering and mathematic (STEM) skills of primary school, secondary school and visually impaired students. “With this robot, students with disabilities do not have to depend on their white cane to move around. The robot is applied; in the sense that for physics, gravity and pressure are the things that we didn’t get the opportunity to gain hands on experience on. Cognitive, flexibility skills would be improved on with this robot. Right now, we have started deploying this in two secondary schools,” Racheal said. Alumni Tunji Adeyemi, a

creator and designer of unique, enhanced interactive customer experiences uses design, materials and creativity to help customers find new ways to interact with products and services. As a marketer and a creator of marketing content, Tunji has begun to transition his business operations by providing customers with a heightened experience that allows them to see and feel what they were trying to project or sell. This transition led him to 3D printing technology, and seeing how it has revolutionized prototyping, he immediately began to search out avenues to try his hands at 3D printing technology in Nigeria. His search led him to the GE Garage and he proposed to apply to participate in the Garage as soon as the opportunity arose. Tunji applied for the Spring 2018 program and was selected to participate in the Garage. He instantly set about testing his hypothesis by trying to create an “experiential booth” for one of the largest sellers of fizzy drinks worldwide. His prototypes had to be revamped several times, as he took on feedback from the team of engineers and business minds who came through the Garage. Tunji’s final prototype was a massive hit and he has since moved on to creating pieces for several local retailers within his network. “Even after the training, the Garage is still open for us to come and ask questions, contact people and collaborate. The mentorship opportunity has been really helpful,” he said.

Note: the rest of this article continues in the online edition of Business Day @https:// businessdayonline.com/

Respite for startups as Layer3 provides free internet at innovation lab

ayer3, a tech-solutions and Internet Service Provider (ISP), has collaborated with Civic Innovation Lab to provide high-speed internet services for entrepreneurs and start-ups. Civic Innovation Lab is an Abuja-based incubator for social entrepreneurs focused on leveraging tech and innovation in creating social impact. With numerous challenges faced by entrepreneurs and early stage start-ups in turning their ideas into viable businesses, Layer3’s support to Civic’s tech-incubator will enable a community of social innovators solve civic problems seamlessly. Stephen Agogo, the head of business development of Layer3, said; “We are committed to powering entrepreneurs and start-up businesses using innovative technologies to provide solutions to the peculiar issues in Nigeria. Civic Innovation Lab is one of the innovation hubs we are currently supporting in Abuja and we will continue to encourage initiatives like this to foster the socio – economic development in Nigeria and the rest of Africa”. Speaking on the partnership, Mosope Olaosebikan, CEO of Civic Innovation Lab, said, “At Civic Innovation Lab, we are passionate about creating social impact using tech & innovation. We are keen on improving access to business support services for start-ups and social entrepreneurs. This support from Layer3 will enable a strategic partnership which ensures that our diverse community access affordable and efficient internet services”.

How Facebook ads helped to accelerate Paylater’s growth

s more and more young Nigerians are showing interest in entrepreneurship, the need for access to capital has become even more necessary. However, funding remains a major challenge and startups in Nigeria. The cumbersome process for acquiring bank loans has been a major turn off for a lot of MSMEs, fortunately, one organization has found a way to help millions of budding entrepreneurs across the country. When OneFi, a finance and short-term loan company founded by the Dozie brothers, Chijoke and Ngozi, launched in 2012; it recognized that it had a glaring opportunity to communicate with, and do business with

entrepreneurs and other would-be customers with far fewer strenuous requirements than all the documentations and collaterals required by traditional banks. In 2016, OneFi launched Paylater, an Android mobile app that allows anyone across Nigeria to access short-term loans within minutes. The app saw significant growth in app downloads and loan disbursements and currently has over 1 million downloads on the Google Play Store. To achieve this, the management of OneFi opted to use multiple Facebook products to help drive app installs, including slideshow, carousel and video ads. The carousel ad format—a versatile single unit capable of

hosting up to 10 different images or videos—effectively introduced audiences to the typical user journey experienced on Paylater, while video and slideshow ads were the most eye-catching and efficient way to demonstrate the app’s finer points and functionality. OneFi therefore refined its ad creative after looking at information provided by Facebook Analytics and app events, which can help businesses understand users of its app. With this insight, OneFi could then build new Custom Audiences and lookalike audiences to be sure that its ads were being shown to the right people— namely, those who were likely to be interested in the brand and who were looking

for credit and loans. “After the first few months of using Facebook to promote the app, we noticed that some of its ads weren’t attracting the same interaction and engagement that they had at the beginning of the campaign. After approaching Facebook Creative Shop for advice, OneFi focused on more dynamic imagery and, when possible, video ads with a strong “thumb-stopping” introduction to immediately capture attention,” Chijioke Dozie, the CEO of OneFi said. Taking inspiration from the company’s West African roots, he said, OneFi showed models wearing traditional West African dress as they used the app, focusing on the emotions that the app

could inspire. “These images were used to create new ads that reflected the typical customer journey with the app, from the initial download to loan application to receiving funds instantly in a bank account. This creative resulted in OneFi’s best conversion figures to date: daily loans increased fourfold in about five months. “We are excited to use Facebook to fuel our regional expansion. Knowing we can reach an audience in different countries with practically no additional effort or cost is extremely empowering,” Dozie added. Speaking on their success, Henry Uku, who is in charge of Growth and Marketing at OneFi stated that through high-impact

Facebook ads underpinned by powerful insights and analytics, the company increased the number of loans it administered each day. Between May and August 2017, Uku revealed that the campaign achieved nine times increase in loans administered per day over nine months, about 15 times increase in monthly downloads over nine months while 80 percent of users who installed the app via Facebook ads and are approved for a loan were retained by applying for subsequent loans. “Prior to starting campaigns, we disbursed about 200 loans per day. We’ve been able to grow that 10 times within less than a year of using Facebook,” Uku stated.

BUSINESS DAY

Tuesday 18 December 2017

BDTECH

E-mail: jumoke.akiyode@businessday.com

Smile offers free YouTube access, voice calls to customers in Christmas season campaign Jumoke Akiyode-Lawanson

mile 4G LTE telecommunications network has introduced a brand campaign, in the spirit of the holiday season to keep families and friends connected, entertained with music and videos and updated with what’shappening on social media. The campaign tagged ‘Get into the groove this season’ is aimed at empowering individuals and families to purchase and use Smile’s affordable 4GLTE broadband internet to enjoy their smart TVs, portable tablets as well as voice and video calls. Stay connected to the people and activities they love doing online, watch videos, play games and more. With the campaign, po-

tential customers will enjoy the offer by purchasing a SMiFi device for only N12, 000. The SMiFi de-

vice comes bundled with 10GB data in addition to FREE 1 hour YouTube access daily for 1month, 10

Rex Mafiana wins ‘Tech Company CEO’ award

ex Mafiana, the chief executive officer of FPG Te c h n o l o g i e s & Solutions Limited has been voted Tech Company CEO 2018 by The Nigerian Technology Awards (NITA). This annual award is organised to celebrate technology excellence, and to recognise outstanding technology companies and individuals in Nigeria, who have made contributions during the year, as well as to the technology industry overall. According to the award ceremony organisers, Rex Mafiana as CEO of FPG

technologies & Solutions Limited has demonstrated exceptional leadership while developing and deploying new technological advancements in the Nigerian Information Technology sector. ‘His unique level of understanding and commitment to leadership has not only built FPG Technologies & Solutions limited to become a well recognised IT company today but shaped the industry it serves. From the private sector to public sector, using exceptional technical leadership and thought partnership, he has been able to demonstrate that indigenous IT firms in

Nigeria can deploy world class IT solutions in the country.’ Toheeb Mohammed, head of technology group asserts; ‘This award recognises a visionary known for outstanding leadership in advancing and accelerating the performance and progress of the IT sector and the adoption of technology in Nigeria. Rex Mafiana is considered a mentor; his passion has been to leverage technology to drive digital transformation by helping organisations accelerate growth while achieving extreme business agility with confidence. We are proud to have a leader who advocates technology as a means for changing lives, businesses and governance for good’. Also, FPG Technologies & Solutions Limited, was awarded ‘Tech Consulting Company of the Year’. ‘We are all excited to continue these trends as we continue to adapt and evolve alongside technology and market trends in 2019’ says Ugonna Agujioni, FPG’s business development manager.

minutes calls all local networks,100% data bonus for first 3 months and unlimited on-net calls. The FREE

1 hour YouTube access is available for use between 9am – 3pm daily within the 30days period. Existing customers on the network will also enjoy the FREE 1 hour YouTubeoffer for 30days period by purchasing any 30 days AnyTime data plan with a minimum of 5GB. Commenting on the launch of the season’s campaign in Lagos, Lotanna Anajemba, Smile’s head, brand and communications, emphasized the need for every Nigerian to stay connected to families and friends through voice and video calls by simply downloading and using the SmileApp, streaming andwatching movies as well as sharing memorable moments. He explained further, that Smile will continue to innovate and provide offers that provides value to fulfil

the telecommunications needs of the customers. The company says the offer will be available through all Smile distribution channels including retail shops, kiosks, field sales representatives (FSRs), independent dealer outlets and online. Smile communication was the first to launch VoLTE on its network and has continued with its innovation, having introduced SmileVoice, which is a free mobile app that enables customers with any Android or ios handsets (including those which are not VoLTEenabled) to make clear voice and video calls over Smile’s 4G LTE networks. Smile was also the first to introduce an unlimited offering, which enables SuperFast and SuperReliable data and SuperClear voice, all from one data plan.

NCC reiterates commitment to last mile internet connectivity Jumoke Akiyode-Lawanson

he Nigerian Communications Commission (NCC) has reaffirmed its commitment to ensure that the provision of broadband infrastructure across the country achieves last-mile internet connectivity. Umar Danbatta, executive vice chairman, NCC, stated this at the 4th Quarter Seminar/Induction Ceremony of the Nigerian Information Technology Reporters’ Association (NITRA) held in Lagos on Friday 14 December 2018. With the theme: ‘Achieving Last-Mile Connectivity through Affordable Broadband’, Danbatta, who was represented by Henry Nkemadu, deputy director/ head, special interventions projects, NCC, said that the Commission will ensure the provision of broadband infrastructure across the country to achieve last-mile connectivity. According to him, “The communications sector is a catalyst that would provide the needed infrastructure that will enable other sectors of business, education, health, agriculture, governance and finance to thrive. The sector provides the infrastructure to enable other

infrastructures in the different sectors. “The importance of this sector has continued to enhance human capabilities such as healthy life, knowledge, creativity, collaboration, innovation, self-organisation and participation in the social, economic and political life of the country as well as impact on economic growth through productivity gains.” He also revealed that the commission’s activities have impacted on efficient improvements in service delivery that enable national development. Danbatta explained that telecommunication acts as an enabler to drive socioeconomic growth, developments and modernisation across all sectors of the economy. He added that robust and reliable telecoms service lies on adequate broadband infrastructure which will provide the needed impetus to achieve last mile connectivity. He commended the 15-member committee inaugurated by former president Goodluck Ebele Jonathan to draw up national broadband strategy for a work well done. He further commended NCC for achieving the 30

percent broadband penetration target that was set from 2013 to 2018. Also speaking at the event, Emma Okonji, NITRA Chairman, commended the NCC leadership for the passion for broadband development in the country, adding that it has further deepened broadband penetration and grew it to the 30.9 percent that we currently achieved. On his part, Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON) who was represented by Aremu Olajide, technical committee chairman, ALTON, decried the hostile business environment in the country, noting that it’s the reason why CDMA Company’s died. He therefore called on the media to help in sustaining the environment for the existing and prospective operators by ensuring accurate reportage of the sector. Adebayo condemned the multiple taxation and other regulatory and environmental challenges telecom operators are being subjected to in the industry. Also speaking at the event, Leo-Stan Ekeh, Chairman, Zinox Group, said the future of Nigeria rests on technology.

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Tuesday 18 December 2018

PHOTO SPLASH At the BusinessDay Inspiring Woman series 8 with the theme , Can She Have It All ? In Lagos.

Kemi Ajumobi, editor, Womenâ&#x20AC;&#x2122;s Hub, BusinessDay, during her welcome address.

CSP, Dolapo Badmos, Police Public Relations Officer for Zone Two Command, making a speech

Olusola Adedoyin-Alao, CEO Nitred Ltd., wife of the Olugbon of Orile Igbon, Oyo State

Ibidunni Ighodalo, CEO, Elizabeth R. delivering a speech at the event.

Maymunnah Yusuf Kadiri, Consultant Neuro-Psychiatrist, delivering an address .

Osayi Alile, CEO, Aspire Coronation Trust Foundation (ACT)

Elishama Ideh, Founder Partnership for a New Nigeria (PFANN) and women empowerment advocate, during her speech.

Funmbi Coker and Duru Chinwendu, both of Access Bank, and Dotun Damolekun

BUSINESS DAY

Tuesday 18 December 2018

Chisom Ogbummuo, founder/executive director, The Conversation Cafe

Anne Egbajo and Adeniji Opeyemi

Maymunnah Yusuf Kadiri (r), consultant Neuro-psychiatrist, and Ibidunni Ighodalo, CEO of Elizbeth R (l). Yetunde Musa and Damilola Olutubanjo,CEO,Milolar Signature

L-R: Ini Abimbola, Lead Consultant/CEO, ThistlePraxis Ltd. and Juliana Olayode, Nollywood L-R: Imomoemi Ibisiki, divisional head, human resources capital, management division, Heritage actress Bank plc, with Omolara Adesanya, PPC governorship candidate for Lagos State.

L-R: Princeba Bolou; Bunmi Olubayo, and Moysore Aji

A cross section of participants

Pics by Pius Okeosisi

BUSINESS DAY

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Tuesday 18 December 2018

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

Nigeria remains top destination for foreign portfolio investments - Ogungbesan Chief Executive, Stanbic IBTC Stockbrokers Limited, Mrs. Titi Ogungbesan spoke to Bala Augie on her firm’s consistent leading performance at the Nigerian Stock Exchange, NSE, since 2006,in terms of recording the highest transaction value,plans for the future, the inroads made by the capital market,and the role of market operators in attracting more investments to the market, among other issues… (Excerpts)

ccording to the latest broker performance report from January 2nd 2018 to 31October, 2018, Stanbic IBTC Stockbrokers Limited (SISL) led the top 10 brokers’ chart. SISL accounted for equities transaction valued at N419.021billion, representing 19.66 percent of the total value of stock traded on the NSE in the 10 months period. To what will you attribute this impressive performance? I would attribute this to clients’ confidence in SISL’s execution capabilities, sales, research and other efficient services in helping to achieve their investment objectives regarding trades on the Nigerian Stock Exchange and our ability to generate and match block flows. Adding value to clients is a top priority for us and this has helped us to generate and maintain very strong and lasting relationships with them and in turn, positioned us in good standing to get considerable portion of their trades. Our affiliation with our parent company, Standard Bank group, with offices in different parts of the world is also an advantage as it creates for us a vast global network of relationships and clients for whom we

Titi Ogungbesan

execute trades. Stanbic IBTC’s reputation for big ticket financing deals in Nigeria, debt and infrastructure financing, is quite remarkable. The Bank was involved in Dangote Cement’s N150billion commercial paper issuance, the federal government’s oversubscribed Eurobond and similar deals.

What would you say is behind the confidence corporates and even the federal government repose in Stanbic IBTC when it comes to debt or equity transactions in Nigeria? I would attribute this to our reputation for excellence, professionalism, expertise, quality service and integrity – all factors which are imperative for client

confidence, enabling our client base both domestic and international investors to entrust us with the big ticket transactions. Your banking arm, Stanbic IBTC Bank, has for two years led other commercial banks in the country in terms of capital importation into the economy. This year, Stanbic IBTC Bank accounted for more than half of the total capital importation figure. Remarkably, of the three banks that led the pack, Stanbic IBTC is the only local or African bank. What in your opinion makes foreign investors trust you with their investments? Across the group, we have key business units who deal with these international clients and are leaders in the various finance sub sectors. For example, our custodian business is the largest in the country. SISL is the leading brokerage firm and our Global markets desk is a top participant in the industry also. In addition, our investment banking team has facilitated large primary market transactions in the capital and money market spaces. We are therefore able to offer holistic solutions delivered with high level of efficiency and integrity to clients, which goes a long way in engendering confidence and trust for repeat business and even referrals. Still on the subject of foreign investment, as the year winds down and we take stock of the economic performance, how would you say the economy has fared compared to last year - specifically in terms of capital importation, whether as equity investment (FDI and portfolio investment) or directly into different economic sectors? You would recall that the economy got out of recession in 2017 and there was a lot of optimism about the growth trajectory.However, this growth has been stifled by external and internal headwinds this year. For example, Nigeria was affected by the emerging market sell-offs, which highlighted the risks of investing in emerging and frontier markets and caused foreign investors to be more cautious. The increase in the

BD MARKETS + FINANCE Analysts: BALA AUGIE

anchor rate by the Fed Reserve Bank also encouraged them to invest more in the US (considering safety). The risk aversion typically associated with preelection years has also been a factor. Internally, the continued challenge with the farmers and herdsmen clashes, perceived private sector challenges with regulators and stifled consumer spending have also led to more caution and reduced foreign investment. This year’s Nigeria Economic Summit, the 24th edition was themed “Poverty to Prosperity: Making Governance and Institutions to Work”.The theme clearly indicates a need for structural changes that would unlock Nigeria’s capacity to attain her potential. As one of Nigeria’s leading financial institutions, how are you contributing to the critical sectors and helping to position the Nigerian economy for sustainable growth and development? SISL as a major player in the capital market carries out its business in an ethical way. This has helped boost a lot of confidence from investors both locally and internationally and helped in ensuring Nigeria remains a top destination for foreign portfolio investments. We are always working with stakeholders to ensure the promotion of savings culture among Nigerians. Other emerging economies in Africa like South Africa and Ghana are giving Nigeria a run for her money in terms of attracting investors. As a key player and stakeholder in the nation’s economy, what are you doing to raise investor confidence and what in your opinion, should Nigeria be doing now to attract investors? As a company, we organize an annual flagship conference, the Standard Bank West Africa Investors’ conference, which is a foremost conference in Nigeria designed to connect Nigerian corporates with investors, both foreign and domestic, with the intention of attracting investment into the country. Our parent group also organizes an annual Africa

Conference, which Nigeria is a significant part of. Over the years, we have recorded considerable success with these and other initiatives we undertake in playing our part in the Nigerian project. As a nation, we should continue to enact policies that will aid ease of doing business and encourage diversification of the economy. What is your advice for a potential investor in Nigeria now? Without doubt, opportunities abound in Nigeria but proper due diligence should be undertaken before investment. Investors should seek to partner with credible local stakeholders that would assist them in achieving their objectives. With our experience which spans several decades, we are willing and able to hold our clients’ and other prospective investors’ hands to guide them through the process. The recently concluded chief executive’s innovation challenge was meant to address three business focus areas and subsidiaries, with strategic focus on digitisation, customer centricity within Stanbic IBTC Group and improved efficiencies in businesses, one of which is the stockbroking business. Coincidentally, the eventual winner was one that proffered a solution for SISL. What are your expectations regardingimproving the customer trading experience through the creation of a simplified trading platform for your teeming stockbroking clients? We are constantly working to improve our customers’ experience. We have an online portal which provides direct market access to all our clients. This enables them view their portfolio positions and have online real time access to the trading portal. It affords them the opportunity to trade directly from the comfort of their homes and offices. The just concluded chief executive’s innovation challenge is a testament to the fact that our industry is evolving and technology will play a major role in achieving customer satisfaction.

BUSINESS DAY

Tuesday 18 December 2018

Live @ The Exchanges Top Gainers/Losers as at Monday 17 December 2018 GAINERS Company

LOSERS Opening

Closing

Change

CCNN

N15.7

N17.15

1.45

ACCESS

N7.45

N8.15

0.7

CAP

N30

N30.5

0.5

GUARANTY

N20.55

N21

0.45

UNILEVER

N4.6

N4.95

0.35

WAPCO

INTBREW FLOURMILL FIDSON

Market Statistics as at Monday 17 December 2018

Company

Opening

Closing

Change

N24.1

N21.7

-2.4

N37.25

N34.85

-2.4

N35

N34.05

-0.95

N38.9

N38.05

-0.85

N12.45

N11.95

-0.5

ASI (Points)

30,609.06

DEALS (Numbers)

2,975.00

VOLUME (Numbers) VALUE (N billion)

1.732

MARKET CAP (N Trn

Stock investors lose N63bn in one week ... NSE migrates REITs, Closed End Funds to separate board under equities segment …Capital Hotels obtains Court Order to warehouse N503.6million judgment sum Stories by Iheanyi Nwachukwu

igerian listed stocks lost approximately N63billion in the trading week to December 14, 2018 as investors failed to leverage the opportunity offered by record value decline. Despite a positive outing on Friday at the Lagos Bourse which resulted to 0.37 percent gain at the sound of trading gong, the market still booked week-on-week (WoW)

decline of 0.60percent. The Year-to-Date (YtD) returns currently stands at -19.77percent. The Nigerian Stock Exchange (NSE) All Share Index (ASI) lost 185.32points last week to close at 30,672.79 points against preceding trading week’s high of 30,866.82 points. The value of listed equities also declined from N11.269 trillion recorded in the trading week ended December 7 to N11.203trillion as at trading week to December 14, 2018. The Nigerian Stock Exchange (NSE) said

effective Monday December 17, 2018, it will migrate the Real Estate Investment Trusts (REITs) and Closed End Funds (CEFs) to a separate board under equities. The migration of this asset class is aimed at promoting visibility and liquidity of listed REITs and CEFs in the Nigerian market, the NSE said in a statement last Friday December 14. It noted that the decision follows an earlier notification it made on a restructuring of the framework regarding the trading of Real Estate In-

vestment Trusts (REITs) and Closed End Funds listed on its platform. “The Exchange remains committed to partnering with its issuers, investors and other capital market stakeholders, in providing a multi-asset platform that caters to different classes of investors”, the NSE noted in press release by Joseph Kadiri, its Media Relations Officer. In another development, Capital Hotels Plc updated its shareholders and other stakeholders on the Execution levied on Friday December 8,

2018 via Gamishee Order on the Hotel’s account at GTBank to the tune of N503.6million. Capital Hotels Plc said its lawyers on Tuesday December 11, 2018 obtained an Order from the Court of Appeal, Abuja Division mandating Diamond Bank Plc to warehouse the said judgment sum of N503.6million paid into the account of Ndarani & Co, in an interest yielding account opened in-the name of the Chief Registrar of the Court of Appeal as a neutral Stakeholder pending the hearing and determination of the Appeal.

FCAM’S Legacy USD Bond Fund wins 2018 NSE CEO Award

CAM’s Legacy USD Bond Fund, a US Dollar mutual fund managed by First City Asset Management Limited (FCAM), which recorded an impressive 244.44 percent subscription in its Initial Public Offering (IPO), has won the 2018 NSE CEO Award for FUND MANAGER WITH THE LARGEST LISTED FUND SIZE. The Legacy USD Bond Fund was listed on the Nigerian Stock Exchange (NSE) on April 23, 2018. The result of the IPO which was approved by the Securities and Exchange Commission (SEC) indicated the high level of investors’ confidence in the Legacy USD Bond Fund and FCAM which is a member of FCMB Group Plc. The Legacy USD Bond Fund is an open-ended investment vehicle registered with the SEC and managed by FCAM. It gives investors the opportunity to invest in US Dollar denominated fixed income securities on a continuous basis. It also provides flexibility with respect to the timing of investments in, and redemptions from the Fund. The objective of the Legacy USD Bond Fund aims

at generating stable income over the long-term. The Fund is being managed as a unit trust scheme designed for investors who seek an efficient way to earn stable income in US Dollar, from investing in a portfolio comprising of high quality, registered, and tradeable US Dollar fixed income securities. Also, the Fund provides an efficient means of currency diversification, particularly in an environment where investors seek to hedge against future Nigerian Naira depreciation. In his comments, James Ilori, Chief Executive Officer of FCAM said, “We are delighted to receive this award from the NSE, and dedicate it to investors in Legacy USD Bond Fund, for trusting us to assist them in meeting their investment goals. We encourage investors seeking exposure to credit-rated, US Dollar fixed income instruments to achieve this through Legacy USD Bond Fund. Also, the Fund provides an excellent means for investors to regularly save relatively small amounts in US Dollar. We remain committed to creating additional value for individual and institutional investors”. FCAM which manages

two of Nigeria’s leading mutual funds - Legacy Debt Fund and Legacy Equity Fund, has also opened the offer for its Legacy Money Market Fund and provides services that cut-across collective investment schemes such as mutual funds, that are predominantly for retail

214,961,742.00

investors and specialised discretionary portfolio management for ultrahigh as well as high networth individuals and institutional investors. The company has consistently focused on delivering international standard wealth and investment management services,

aimed at meeting investors’ desire for safety of investments, diversification and good returns. In December 2017, Legacy Debt Fund received a risk rating upgrade by two notches, from BBB+(f) to A(f), by Agusto & Co, the foremost pan-African rating agency.

L-R: Justin Essien, digital manager, Seven-Up Bottling Company (SBC), Lekan Fagbuyi, business development manager, Marathon Pizza Hut, Nigeria; Ewan Davenport, general manager, Pizza Hut Africa; Segun Ogunleye, senior brands manager, Seven Up Bottling Company Ltd; Tony Ozanne, CEO Marathon Restaurant Group - Africa and Norden Thurston, head of marketing, Seven Up Bottling Company Ltd at the pre-opening event of Pizza Hut for Partners in Ikoyi Lagos.

11.180

Winners emerge in 2018 NSE CEO Awards

he Nigerian Stock Exchange (NSE), the sustainable Exchange championing Africa’s growth announced the winners of the 2018 NSE CEO Awards at a ceremony held on Wednesday, December 12, 2018, at the Stock Exchange House in Lagos. Initiated in 2012, The NSE CEO Awards is designed to reward and motivate listed companies, Dealing Member Firms, Fund Managers and Issuing Houses to attain higher levels of corporate governance, compliance and performance that reinforce investor confidence in the Nigerian capital market. This year, The Exchange enhanced the award categories from three to ten to reflect the dynamic nature of the market. The categories for this year include Most Digital Broker of the Year (which was presented earlier in the year to Meristem Stockbrokers Limited) at The Exchange’s Market Data Conference held on Friday, 19 October 2018); Best Dealing Member Firm in terms of Volume; Best Dealing Member Firm in terms of Value; Most Compliant Dealing Member Firm; Most Compliant Listed Company; Listed Company with Highest Number of Disclosures; Issuing House with the Largest Value in a Single Deal; Issuing House with the Highest Number of Primary Market Transactions (Equity); Issuing House with the Highest Number of Debt Issuance (Corporate Bonds); and Fund Manager with the Largest Listed Fund Size. Pilot Securities Limited was named the Most Compliant Dealing Member Firm for 2018, having demonstrated the highest degree of compliance with the rules and regulations Governing Dealing Members of the Exchange in 2018. Stanbic IBTC Stockbrokers Limited won two awards for Dealing Member Firm with the highest volume and Dealing Member Firm with the highest value of trades.

38 BUSINESS DAY NEWS Why 2019 could be tough for consumer... Continued from page 2

raw materials locally. “Profit margins are expected to remain stable at current levels – with downside factors arising from slight increase in interest rates in the coming year,” said Ifedayo Olowoporoku, a consumer goods analyst at Vetiva Capital Management Ltd. “On balance however, steady inflation levels and raw material costs will support margin stability but not an improvement,” said Olowoporoku. Christian Orajekwe, equity research analyst at Cordros Capital , is of the view that possible increase in price may not be good from a consumer perspective, adding that interest rates are up and it might balloon the financing costs of firms that have debt

in their capital structure. “Yields on short term security have been going up and interest rates in the OMO rates and commercial papers have also been increasing, Flour Mills and Nigerian Breweries are big players in the commercial paper market,” said Orajekwe. Yields on Treasury bills (T-bills) are over 17 percent, from between 12 to 14 percent as the start of the year as the central bank continues to mop up liquidity. Dwindling purchasing power among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing grid lock at the Apapa Ports have made it practically difficult for consumer goods firms to grow profit or bol-

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ster margins amid sky high cost of production. The economy has been growing sluggishly as GDP expansion of 1.80 percent in the third quarter is lower than the 2.10 percent recorded in the fourth quarter of 2017 when the country exited its first recession in 25 years. The headline inflation rate rose marginally to 11.28% y/y in November, from 11.26 percent in the month of October. To further exacerbate the already anaemic position of firms, consumers have refused to open their wallets, as Nigerians are getting poorer by the minutes, while unemployment rates are rising amid growing population. According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins.

Tuesday 18 December 2018

Patrick Atuanya takes over as Editor as... Continued from page 1

Patrick’s unique insight was honed during the global financial crises of 2008 in the USA while pursuing his MBA and getting to understand how global markets work. He has first-hand knowledge about trading global stocks, bonds, commodities and derivatives (options and Futures). His knowledge spans Asset valuations, Fixed Income trading, Business Strategy, Corporate Finance, Loan Restructuring, Technical and Fundamental Analysis, and Change Management. In 2014 Patrick earned a Capital Markets development and regulation certification from the International Law Institute, Washington DC, USA, and in 2016 an advanced financial journalism Certificate was earned from the Press Association in London, U.K.

Frank Aigbogun, publisher and CEO of BusinessDay thanked OsaeBrown for his contribution to the growth of the paper while editor and wished him the very best in his future endeavours. He also welcomed and congratulated Atuanya as the new editor of BusinessDay, while assuring that the paper will continue to lead in providing insightful and informed analysis to its ardent readers. Also speaking on his time at BusinessDay, Osae-Brown said; “It has been a privilege editing the country’s most authoritative and credible business newspaper. The decision to leave has been one of the most difficult decisions in my life. But I have no doubt that I am leaving the paper in the hands of very good and highly dedicated staff who will continue to take the paper to new heights, especially in our push to build a modern news platform with a global reach” Osae-Brown said.

Access Bank now Nigeria’s largest lender after... Continued from page 1

per share, their highest level in

five (5) weeks. The Diamond deal will make Access the biggest lender in Nigeria by assets and across other key indicators. Access Bank had total assets of N4.5 trillion as the end of September 2018, but that will now increase by N1.5 trillion- being the asset base of Diamond bank, to hit N6 trillion. Zenith Bank comes closest to Access in second place with N5.6 trillion worth of assets, according to data derived from the financial statements of the banks. The new entity’s assets, loan and deposit market share increases to 16.5 percent, 18.2 percent and 16.1 percent respectively, according to estimates by Renaissance Capital, the largest share of any bank in the sector. “The immediate obvious benefit of this transaction is the retail deposit base that Access will be acquiring,” analysts at Rencap said in a note to clients Monday. As at the end of September 2018, Diamond bank’s savings deposit balance was N452 billion, twice the size of Access’s savings deposit. “This should be beneficial to Access’s funding cost and by extension the bank’s Net Interest Margins,” Rencap analysts added. The new bank will now have 27 million customers and bring Diamond’s more than 250 retail branches into Access’s similar-sized retail network. Access Bank confirmed news of the merger on Monday after saying it signed a Memorandum of Agreement with Diamond Bank. Access said in a statement that it emerged the preferred bidder after a competitive process undertaken by the Board of Diamond Bank. The proposed merger involves Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by both parties, Diamond Bank shareholders will receive N3.13 per share, comprising a cash consideration of N1.00 (one Naira) per Diamond Bank Share representing a total cash amount of N23.16 billion (US$ 75.58 million). They will also be allotted roughly 6.6 billion new Access Bank ordinary shares, representing 2 new Access Bank ordinary shares for every 7 Diamond Bank shares. The offer represents a premium

of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer. The completion of a transaction would be subject to formal regulatory and shareholder approvals. “Diamond bank’s strong retail franchise coupled with Access’s high quality management team will allow for synergies that will make the combined entity achieve very strong returns on equity,” said Miguel Azevedo, head of investment banking for Middle East and Africa at Citibank, which advised Access on the acquisition. Access Bank Plc’s latest acquisition move fully authenticates its determination to prosecute to the letter its strategic intent: growing inorganically to the pinnacle of Nigeria’s banking industry. It has remained steadfast to this target since its emergence at the end of the Charles Soludo-led banking consolidation. Its eventual acquisition of Diamond Bank, will take it much closer to this target. Access was one of the 25 bank groups made of 75 banks that emerged at the end of that 18-month exercise that ended officially on December 31, 2005. Thus, by January 2, 2006, the first working day of that year when the list of successful banks was released, the Access that emerged from that process was made up of Access Bank, Marina International Bank, and Capital Bank. The group had a share capital base of N28.5 billion, versus the N25 billion minimum capital that the Central Bank of Nigeria (CBN) prescribed. On that same day, two of the groups that crossed the hurdle were Diamond Bank group, with a capital base of N33.25 billion; made of Diamond Bank and Lion Bank, and Intercontinental Bank group, with a capital base of N51.1 billion; comprising of Intercontinental Bank, Equity Bank, Global Bank and Gateway Bank. At the end of the first consolidation, it was quite clear that the structural transformation in the industry had opened opportunities for further consolidations, only that this one would be market-driven. Clearer still was the fact that these opportunities were there for the taking by banks that had the knack for identifying them, and one such bank was Access. The management of Access Bank at that time realised right from the onset that the transformation in the

Babatunde Fashola (r), minister of power, works and housing; Louis Edozien (l), permanent secretary, Power, and Isiaka Gboyega Oyetola, governor, Osun State, shortly after a meeting on Osun State’s infrastructural development at the Ministry of Power, Works and Housing headquarters, Mabushi, Abuja yesterday.

local banking landscape provided a great chance for inorganic growth to propel it to a market-leader position. The management set targets for the realisation of this dream, and to their credit, have consistently achieved or exceeded them. For example, Access said in 2002 that it aimed to be among the top 10 banks in the country by 2010. By 2007 it was ranked 9th, Access said in a medium-term strategy it presented to the Nigerian Stock Exchange on July 3, 2013. Similarly, it said in 2007 that it planned to be one of the top-five financial services groups by 2012. As usual, by the end of that year, Access had exceeded that target, being ranked the 4th-biggest bank by assets. Here we return to the two of the bank groups that survived the consolidation: Diamond and International. Each of the groups had a bigger capital base than Access, but that did not deter its aggressive growth drive. It went for Intercontinental and by the end of 2012 it swallowed the bigger company. With that, Access entered the Big League in Nigeria’s financial sector, joining the likes of Zenith Bank Plc, Guaranty Trust Plc, United Bank for Africa (UBA) and First Bank of Nigeria Plc in the Tier-1 banks category. But Access was not yet done, as it still has its eyes on the top position in the industry. It is this zest that has led to the latest acquisition move, long denied by both the target and acquirer. Finally, the news came out this week: Access is acquiring Diamond Bank. In other words, the three bank groups with a combined capital base of N112.85 billion at the end of Soludo’s consolidation will now be in

one group: an expanded Access, with a wide network of branches. From 2013 to November 2017, Access Bank has increased its total assets at a CAGR of 18percent and delivered shareholder returns of 90percent. The bank has also grown its customer base from 90,000 in 2002 to over 8 million in 2017 and in the same period opened 351 new branches. In its next phase of a transformation, Access Bank’s CEO Herbert Wigwe said the bank will adopt a new organisational structure. The retail bank will have a customer segment focus, driven by digital and payments. The corporate bank will build deep sector expertise and deploy global relationship managers. Access Bank’s subsidiaries will be organised around strategic clusters, with strong collaboration between them to secure trade finance and correspondent banking. The bank’s transformation programme will be underpinned by robust risk management together with high levels of automation to enhance the compliance and risk functions and drive customer insights. Internationally it will develop an integrated global franchise by strategically developing its presence in key African markets, enhancing collaboration in global financial gateways including London and New York, Asia and the Middle East, and strengthening its trade hubs in India, Dubai and China. A strengthened presence in key African markets, and the creation of Universal Payments Gateway combined with an integrated global franchise, ideally positions Access Bank to be Africa’s Gateway to the World. Despite concerns that the com-

mencement of election cycle poses risk to returns from Nigerian equities, one of the nation’s tier-1 lenders Access Bank Plc remains in the basket of analysts’ stock-picks. Access Bank Plc scorecards for the nine months (9M) ended September 30, 2018 shows top-line earnings of N375.2billion, up 3percent from N365.1billion recorded during the corresponding period in 2017. Though the bank’s Profit Before Tax (PBT) at N70.26billion in Q3’18 against N72.91billion in Q3’17 represents 3.6percent decline, its Profit After Tax (PAT) increased by 12percent to N62.9 billion from N56.4 billion of which subsidiary contribution increased to 32percent, from 15percent in the corresponding period. Loans and Advances totalled N2.08 trillion as at September 2018 (December 2017: N2.06 trillion). Access Bank stock price hit a 52week high of N11.35 and a 52-week low of N6.80. Further analysis of the lender’s results showed Non-performing loans stood at 4.7percent as at September 2018 compared to 4.8percent in December 2017. Cost of risk decreased to 0.5percent in 9 months to September 2018 from 0.9percent in 2017 on the back of prudent risk management practices during the period. “The Bank will remain resilient in the achievement of its strategic imperatives; maximizing our strong market position and solid capital base, while leveraging digital innovation to improve service touch points as we sharpen our retail play with emphasis on cheaper funding sources,” Wigwe said during a presentation to investors.

Tuesday 18 December 2018

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BUSINESS DAY

INVESTIGATION

Dying in instalment: How failure of regulation contributed to lead pollution (3) The third part of this investigation uncovers how regulatory failure allowed lead acid battery recyclers without even the requisite government approvals to operate with reckless abandon and endanger the lives of many Nigerians, writes ISAAC ANYAOGU.

onfronted with test results showing high levels of lead in the blood of people living close to its lead battery recycling operation in Ipetoro, Sagamu, local government area of Ogun State, Everest Metals Nigeria Ltd’s first line of defence was that it had all the government registrations required for the business. This is not true. Nigeria is signatory the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, an international treaty that was designed to reduce the movements of hazardous waste between nations and specifically to prevent transfer of hazardous waste from developed to less developed countries. Therefore to be eligible to move hazardous waste, of which used lead acid batteries (ulabs) are part of, the Ministry of Environment issues a company dealing with hazardous waste a certificate to export the waste material. Without this certificate, when a container carrying waste material arrives in a different country, it is seized and returned to the country of origin. So to ascertain the company’s claim of having the right registrations, we visited the Ministry of the Environment in Abuja and secured a list of approved lead battery recyclers permitted to export lead recycled locally and found that it does not include Everest Metals Nigeria Ltd. However, a source inside the ministry informed us that the

company’s registration was withdrawn after a non-profit, Sustainable Research And Action For Environmental Development (SRADEV) published a study last year, indicating high levels of lead in the soil samples taken from the company’s facility. One senior official of the ministry confirmed that Everest Metals Recycling was operating illegally because they have not been awarded clearance to export hazardous waste. The same is true for Metalworld Recycling in Lagos, the official said. Recently, Metalworld Recycling Ltd’s consignment was reportedly sent back from Spain to Nigeria because it was not issued an approval from the ministry, a source in the ministry told us. The ministry of environment is yet to respond to requests for comments at the time of publication. Yet Everest Metal was issued an export license by the Nigerian Export Promotion Council (NEPC) for the same waste it did not secure approval to export by the Ministry of Environment. Vikas Das, managing director of Everest Metals presented an exporter registration certificate issued by the NEPC (REF. NO 0003356) valid till 16/02/2020 raising questions about coordination and synergy in the ministries. The NEPC has not responded to questions on the process that led to awarding Everest Metals an export license as at the time of publication. ‘We will do something about it’ Environmental monitoring

Companies approved to export hazardous waste in Nigeria

falls under the jurisdiction of the ministry of environment through the Ogun state environmental Protection Agency (OGEPA). We sought the opinion of Bolaji Oyeleye, the state commissioner of environment on how the company could be allowed to carry on with its dangerous activities in the state. “We have had problems with those companies in that community in the past, but it is something we are looking into. We will definitely do something about it.” Oyeleye said by phone. However, civil servants who didn’t want to be named confirmed that the ministry is seeking to balance attracting investments and protecting the people’s health. It is not difficult to see that business clearly is winning. “It is clear the community is seriously polluted, this should call for an emergency,” said Leslie Adogame, executive director of SRADEV. “What needs to be done is to carry out remedial activities on the land and move everyone out.” However, Vikas Das, the managing director of Everest Metals Ltd presented an environmental approval issued by the Ogun State Environmental Protection Agency (OGEPA) as evidence that it was complying with the state’s laws. The only problem is, it expired in March this year. Enquiries at OGEPA showed that when the company was being established, it was compelled to install facilities that will mitigate the consequences from its activities. According to the statutes setting up the agency, it has to serve series of notices before it can seal up a defaulting company. While the government agency checks off each box on its bureaucratic forms, residents in the community endure lead pollution. Blood tests conducted on residents showed children had average blood levels of 19.8 micrograms per decilitre, adults had average levels of 21 micrograms per decilitre and workers in the factory had average levels of 44.6 micrograms per decilitre. At above 5 micrograms per deciliter, the US Centre for Disease Control (CDC) regards it as a reference level at which it recommends initiating public health actions.

The World Health Organisation (WHO) says blood lead above 10 micrograms per deciliter, is a high level of concern and classifies it as lead poisoning. Funmilayo Kuti, the general manager of OGEPA when contacted requested for a letter before she can issue a response. This was sent to her through her email, but she did not respond until publication date, almost one week later, through her press officer. “She wants you to come to her office and submit it physically,” Kemi Oyeleye, the press officer said on the phone. It was understandable why the community leaders said they made representations to the National Environmental Standards and Regulations Enforcement Agency, (NESREA) office in Ibadan. The officials merely visited the community and went into the company and nothing has since been done. Antonio Ayodele, general manager of Lagos State Environmental Protection Agency (LASEPA) in an interview identified funding as one of the challenges militating against the organisation’s efforts to enforce provisions of Lagos environmental regulations guiding the practice as well as other infractions by operators but said the state will continue to ramp up enforccement of environmental laws. Since state officials were not permitted to speak on record to the press, we visited NESREA office in Abuja to meet with the director general. But on the agreed date, he was summoned by the national assembly and the meeting could not hold. However, the result of this investigation was shared with a senior director of the agency. The response mirrors the same remarks made by the director general Lawrence Anukam, when I interviewed him in his office in February last year on a related story about hazardous artisanal lead acid battery recycling. He mentioned poor funding to effectively monitor the state and inability of operators to operationalize and Extended Producer Responsibility (EPR) The Federal Government has developed a National Environ-

mental Regulations with provision for the EPR. The EPR shifts the responsibility for waste management from government to private industry, obligating producers, importers and/or sellers to internalise waste management costs in their product prices and ensure safe handling of their products. The battery producer is tasked with monitoring of their products from cradle to cradle and administers recovery and recycling programmes through the PRO. On the other hand, the government would monitor compliance, ban designated hazardous materials from use in products and/or disposal, establish relevant environmental standards, register and accredit recyclers as Authorised Treatment Facilities (ATF), and issue permits. NESREA has developed operational guidelines that explore the use of economic instrument to ramp up compliance but enforcement as regards ULABs has not received the attention it required leading to the pollution in Ipetoro. Over a year after, Anukam, said sector players have now nominated a PRO and would soon operationalize the EPR, operators are yet to fully agree on the modalities for setting up the organisation. In November, President Muhammadu Buhari signed a new NESREA amended law which empowered the agency to tackle perceived environmental threats, pollutants as well as impose stiffer penalties and fines on illegal trafficking in wildlife, endangered species and poaching. “In the past, environmental crimes attract paltry fines and levies, with the amendment, the courts are now at liberty to impose stiffer fines that are commensurate to the gravity of the crime committed,” says a statement by Oyofo Sule, deputy director of information of NESREA. So it seems the only thing holding back the agency now is money to buy petrol for their cars.

•This investigation was supported by the European Centre for Journalism and the Bill and Melinda Gates Foundation. Petra Sorge, freelance journalist from Germany assisted with the research for the story.

Energy Report BUSINESS DAY

Oil & Gas

Power

Renewables

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Tuesday 18 December 2017

Environment

Gas supply, debt reduction, peace in N/Delta help boost power generation

ABB to focus on investments in order to create more opportunities

.. as WAGPC invests N400 million on empowerment

OLUSOLA BELLO

he hope of improved electricity generation in the West African sub region is now very bright as the West Africa Gas Pipeline Company (WAGPC) said that things have really improved in term of gas supply and settlement of debts by off takers. The relative peace enjoined in the Niger Delta has also helped the operations of the company as the level of disruption to gas pipelines by militants have been low this year when compared to the previous years. According Harriet Wereko-Brobby, the general manager, Corporate Affairs of the company, she said the off takers are now paying for the gas they consumed. While the legacy debt has been reduced drastically and also ring fenced. So the company is making money through the gas it delivers currently. “Because of this, it has also been able to honour it obligations to its shareholders. This year the company has been making the quarterly payment is suppose to make to its shareholders”. The company started with

N-Gas being it sole shipper of gas from Nigeria to the regional gas company but it has now registered other shippers on the pipeline. About four new companies have come on board by expressing interest to ship gas from the Niger Delta through the WAGPC pipeline It recently signed an agreement with one of them, Axxela Limited to transport gas through the pipeline. She also said the company’s operational team has been able to make some modifications at the various substations. This would enable the company pick

gas even when the pressure is low. This is unlike before when the company was restricted in the amount of gas it can actually pick . So anytime the pressure was low from supply from supply end the company was always at a disadvantage. With the modifications, it is now able to flow whatever gas that is nominated in the pipeline. It has also expanded the facility in Tema , Ghana which is the largest off taker from WAGPC. Meanwhile the company has invested over N400m in community youth empowerment scheme within its

host communities to boost capacity development. It disclosed this at the official handing over of startup tools to beneficiaries in Otta, Ogun State The WAGPC livelihood program was tagged ``Community Youth Enterprises Scheme (CYES)’’. The CYES initiative was introduced five year ago to support and empower brilliant young needy Nigerians to obtain tertiary education and vocational technical training. The program was considered as an opportunity to directly impact a large number of people within our host

communities, which consists of a scholarship program for students for the entire duration of their stay in any Nigerian tertiary institutions. “Under the CYES scheme, WAGPC has also trained 80 young Nigerians on vocational technical training and empowered them with tools to start up their business. “We have make-up tools boxes, gas cookers and gas cylinders, industrial tailoring sewing machines and iron, electrical tool box and welding machines to those student who has successfully graduated from the 2-years training technical school,’’ she said. The WAGPC general manger said that they decided to equip the successful graduates to enable them set up their own businesses. She said that the scheme provides young persons in the host communities, who had completed basic education but cannot pursue further studies due to financial constraints, the opportunity to learn a trade of their choice in recognized vocational and technological institutions in Nigeria. “The graduands have been trained in vocations such as welding and fabrication, fashion and design, catering and hotel management, woodwork and capentry.

Oil price seen falling despite decreasing rig counts in Canada, Nigeria, US STEPHEN ONYEKWELU

ecreasing oil rig counts in Canada, Nigeria and U.S. will not keep oil prices from falling a recent report by Oilprice.com states. The Organisation of Petroleum Exporting Countries and its allies (OPEC+), concerned about rising inventory and failing oil prices reached a consensus to cut oil production by 1.2 million barrels per day out which Nigeria accounts for 50, 000 bpd but this has not stemmed the tide of falling oil prices. The number of oil rig counts in Nigeria decreased by 6 from 34 in October to 28 in November, according to the

Organisation of Petroleum Exporting Countries’ (OPEC) Monthly Oil Market Report published 12 December. “Continued delay to tackle the Petroleum Industry Governance Bill (PIGB) sends a wrong signal to current and would-be investors. It is either government wants to amend the laws regulating oil and gas or they don’t. Whatever it is, they should come out clear” Ayodele Oni, energy partner at Lagos-based Bloomfield Law Practice said. “Otherwise, it will delay projects, spending and certain activities in the industry, because of the uncertainty and lack of stability.” Similarly, Baker Hughes reported a 4-rig decrease for oil and gas in the United States last week—a loss in rigs for

the third week in a row. The four-rig decline was all on the oil-rig side, with gas rigs holding steady. The total number of active oil and gas drilling rigs now stands at 1,071 according to the report, with the number of active oil rigs decreasing by 4 to reach 873 and the number of gas rigs holding steady at 198. Rig count is a function of the level of exploration, development and production activities occurring in the oil and gas sector. A drop in active rig count means oil exploration and production activities in Nigeria or elsewhere have decreased. This will reduce supply to the global market and Crude oil prices fell sharply near the close of the week on Friday despite production

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

losses in OPEC’s Libya and an agreement within OPEC+ to cut 1.2 million bpd from the expanded cartel’s October production. The Western Texas Intermediate benchmark was trading down 2.26% (-$1.19) at $51.39—a loss of more than $2 per barrel week over week—at 11:39am EST. Brent crude was trading down 1.84% (-$1.13) at $60.32—also down more than $2 per barrel from last week. Canada’s oil and gas rigs for the week ending December 14 decreased by 12 rigs this week after losing 17 rigs last week, bringing its total oil and gas rig count to 174, which is 64 fewer rigs than this time last year, with a 7-rig decrease for oil rigs, and a 5-rig decrease for gas rigs. The Energy Information

Administration’s estimates for US production for the week ending December 7 continues to weigh on prices, averaging 11.6 million bpd—a drop off from the previous 11.7 million bpd for the previous four weeks. Nigeria’s falling rig count is attributable to a reduction in foreign investment into the sector. According to data obtained from the National Bureau of Statistics, (NBS) Nigerian Capital Importation report for the second quarter of 2018, foreign capital inflow into the oil and gas industry declined by $60.77 million, about N18.6 billion, to $24.85 million, about N7.6 billion in the second quarter of 2018, compared to $85.62 million, about N26.2 billion recorded in the first quarter.

OLUSOLA BELLO he ABB Group says it is focusing more on investments in the country being the largest economy in Africa. In addition to this, it is also working on diversifying its operations to create more opportunities to support local engineers with more job opportunities. According to the company, its value areas are: safety and integrity; customer focus and quality; innovation and speed; ownership and performance; plus, technical and commercial collaboration. ABB in -country managing director, Hany AbdElazim stated this during the commissioning of its new facility in Lagos. The new facility enables easier communication across the company, is more spacious and is fitted with unique features, including a Turbo charging service workshop which is the first in Nigeria. It also features a training center for its customers and a state-of-the-art show room fitted with the latest designs and solutions Commenting further on the new Turbo Charging Service Workshop, Hany Abd-Elazim, said that the company was poised to satisfy its teeming customers. He said: “Before now, companies had to take their Turbo Chargers outside the country for repairs and servicing. The nearest service center was in Senegal. As a forward-thinking company, we decided to open this workshop right here in Nigeria. This means we are saving time and money for our customers thereby making their businesses more profitable”. The company which operates in more than 100 countries, has embedded health, safety, safe environment, security and sustainability into all aspects of its business. It is also committed to achieving excellence and continuous improvement while doing so. In particular, safety is a core value, the bedrock of the organization and central to its operations and services. “ABB has been operating for over 40 years in Nigeria. The future of the industry lies with the full digitalization to increase both the speed and quality of decision-making.

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

Tuesday 18 December 2017

Energy Report

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BUSINESS DAY

‘We are looking at the oil and gas space to forge collaboration between Nigeria and Norway’ Taofik Adegbite is the chief operating officer of Marine platforms, an oil servicing company. He was recently appointed as an Honorary Consul of the Norwegian government in Nigeria. In this interview with Olusola Bello, he enumerates how he would forge closer collaborations between Norwegian companies and their Nigerian counterparts in oil and gas, energy and other sectors of the economy. Excerpts: Where do you see NigeriaNorway relations in short and long terms? or Norway- Nigeria businesses I have not looked into the short and long term plans. What I will look at is how we can create values which would stand the test of time. So that we can bring like I said the advantages of Norway into Nigeria in key areas of the economy as we heard the ambassador say. Of course traditionally in an oil and gas space, we have a lot to do there and in an energy space such as renewable, aquaculture, marine and maritime sectors. So the execution strategy would now be how we can do sectorial linkage, how do we do peer to peer review introduction. You know that there are a lot of ambiguities around strategy. But through seminar, conferences and direct linkages we would be able to create values. We are looking at the oil and gas space. We have seen Equinor, the major Norwegian E and P Company, it has preference in Nigeria, and it is trying to do some sensitisation and awareness in the Nigerian space. It equally has the potential of being operators in the country in Nigerian oil and gas space.

When we look at the oil service space there are

many Norwegian oil service companies backing Nigerian service companies. But how do we now formalise these relationships, how do we evaluate these, how do we electrify it so that we can identify areas of improvement. Honestly, how do we tap from the Norwegians experience in the area of local content, so that we can now do a kind of linkage where there would be common wealth creation where a Nigeria company would be able to create value, wealth for its people and the Norwegian company would be able to do same also? They have done local content successfully, For instance, in the Marine space we are talking about. It would have been a zero sum game if vessels are built in Norway and they are owned by Norwegian, crew by their people and they come here to work and they carry away the profit and every other thing. If the vessels are to be built in Norway, it means the factories in Norway are working, it means the people are prosperous. But if is owned by Nigeria company , it will bring value to the country because Nigerians would be brought on board, it will get revenue and of course the revenue will be retained in the country for common good . So what you have done is that you have created a win situation. Gradually maintenance can

Electricity Regulatory Commission (NERC), so that we can further propagate those ideas in the country.

Taofik Adegbite

be done in-country you. So that they wealth is not just seated in one country to disadvantage of the other. These are the areas I want look into so that values can be created. In respect of the fishing sector Norway is very mature and is doing very well. We would want to see that sector is repackaged better, do more market penetrations and sensitisations Are there areas of more collaboration in the Oil and gas sector? You know Equinor an equity partners in Agbami field, one of the biggest deepwater fields in the country. In future the Norwegian

companies would want to be operators and it is when they become operators that their involvement in the in oil and gas sector would be felt the more. This is what we would like to see a company like Equinor come to be. Which areas of the economy would you want to bring your influence to bear as an honorary consul of Norway? Where we are yet to tap into which I see is hydro power and various renewable from Norway to Nigeria. We need to smoothen things in this direction. These are linkages we are looking at with the Lagos chambers of Commerce and the Nigeria

How can funds be sourced by Nigerian investors to do business with Norwegian companies? Norway has effective and very robust export guaranty scheme which can help Nigerian importers purchase equipment and materials into the country at maximum 7 or 8 per cents interest rates. This is better. So if your start-up cost is below 10 per cent interest, I think it would really help in the kind of industrialisation Nigeria is crying for. Norway is part of the Scandinavian countries and it is so interesting that the Export Guaranty Scheme of the country is based on the OECD rate. It is a template for borrowing and it allows for competitiveness among members states. The member countries are gradually being known for their competitive advantages. So if you go to Norway you look at your areas of competitiveness and key into it. If you look at offshore business, Norwegians do not have competitive edge in tankers, cargo ships, you give this to the Asian countries such as China or Koreans. United Kingdom as you can see in Brexit discussions is moving away from industrialisation to service, you talk about the financing

and other areas these are not the core selling for Norway. In the fishing industry we would be talking more about the Nordic countries there you see Denmark or Norwegian speaking to that. Where is Norway on transition from fossil to cleaner energy? On diversification from fossil fuel, the irony of this is that a country that produces very huge volume of crude oil has now set a date for itself for its citizens to transit to electric cars. It is a country that is leaving itself off fossil fuel and now looking at exporting renewable and campaigning for cleaner energy. Then of course, there is the like of Statoil which has now changed its name to Equinor. It is more gas focused. One of the projects it is looking into in Nigeria is the Nwadoro gas field development. Are there areas of more collaboration in the Oil and gas sector? You know Equinor is an equity partners in Agbami field, one of the biggest deep-water fields in the country. In the future Norwegian companies would want to be operators and it is when they become operators that their involvement in the in oil and gas sector would be felt the more. This is what we would like to see a company like Equinor come to be.

Supreme Court Judgment enables IPMAN synergise with oil marketers for better service delivery ...as association hails judgement Olusola Bello

eace may have finally returned to the embattled the Independent Petroleum Marketers Association of Nigeria (IPMAN) as the Supreme Court gave judgement in favour Chinedu Okoronkwo and validate him as the substantive National president of IPMAN. The judgment will enable the association to maintain the serenity it normally enjoyed in the distribution and dispensing of petroleum products to Nigerians in all nooks and crannies of the country. Consequence upon this

the executives of the association has entered into an agreement with oil marketers for better synergy in meeting product availability in the country since DAPPMA has better strength in storage. IPMAN controls 80 per cent of the retail outlets and has the better trend in distribution and dispensing of petroleum products in both urban and hinterland in the country. Reviewing the judgement after the national executive meeting (NEC) of the association ,Danladi Passali who is the National Secretary of IPMAN commended the supreme Court for its verdict and stated that this new

development would address the issues of misconduct and mismanagement which is currently plaquing the association. He said that Okoronkwo remains the substantive national president of IPMAN based on the Supreme Court judgment delivered on December 14, 2018. According to him, the interest of all members of the association will be a top priority of the president. The scribe said that the judgment was a welcome development to IPMAN members, and the oil and gas industry nationwide. “Now that Okoronkwo is on the IPMAN association’s driver seat, members will get

their allocation accordingly. It would be recalled that Okoronkwo won at the High Court, Appeal Court and Supreme Court judgment against Lawson Obasi over the leadership tussles that lingered for over four years. In a unanimous judgment from the supreme court that struck out the appeal of Chief Lawson Obasi in the suit, the court also fined two million against Obasi to be paid to Chinedu Okoronkwo Chinedu Okoronkwo while commenting on the ruling, said that the Supreme Court ruling of December 14, 2018, is a reaffirmation of the Judiciary role of settling dispute without

going to war or shedding innocent souls blood carelessly. ``I welcome everybody to today’s world press conference which is historical in the anal of IPMAN since 1978 when IPMAN was established by military decree. ``IPMAN, as a family has become stronger with a direction and solid foundation. The founding board of trustees members of IPMAN as registered with Corporate Affairs Commission in 1983 constitution has all passed away and one day, we at the leadership of IPMAN today will also bequeath IPMAN to our children yet unborn. ``That is the more reason we should drop our personal

interest for better IPMAN and a virile association that will challenge the future threats to our businesses,’’ he said The IPMAN helmsman said: ``We have lost trillions of naira globally in our businesses while many of our members have lost their lives in the last five years because of lack of leadership in IPMAN to coordinate our business within the government circle, NNPC/PPMC, PEF, PPPRA and other stakeholders in the downstream sector. He said that IPMAN is not represented when major policy decisions are being taken to move our businesses forward.

BUSINESS DAY

Energy Report

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Tuesday 18 December 2017

Nigeria’s DisCos illiquid as electricity attracts largest energy investments globally STEPHEN ONYEKWELU

lectricity Distribution Companies (DisCos), which interface with endusers, occupy a critical position in Nigeria’s power value-chain but struggle to stay afloat because of illiquidity and stifling legal framework, while electricity continues to attract the largest energy investments, globally. On July 17, 2018, Alex Okoh, director general of the Bureau of Public Enterprise said most of the DisCos are technically insolvent. Okoh made this known during an interactive session held at the instance of House Committee on Power, with critical stakeholders in Nigeria’s power sector including Nigeria’s Bulk Electricity Trading Company (NBET), Electricity Distribution Companies (DISCOs) and Generation Companies (GENCOs). Globally, the scenario is different. According to Paris-based International Energy Agency (IEA), in a report ‘World Energy Investment 2018’, 2017 was the third consecutive year of decline in global energy investment with energy efficiency the lone sector of growth. Despite a 6 percent decline in spending, the electricity sector again attracted the largest share of energy sector investments, exceeding the oil and gas industry for the second year in row, as the energy sector moves toward greater electrification. In 2017 newly sanctioned coal power fell 18 percent, driven by a slowdown in China, India and Southeast

Asia. Although, despite declining capacity additions - and a wave of retirements of existing plants - the global coal fleet continued to expand in 2017. While investment decisions signal a continued shift towards more efficient plants, 60 percent of currently operating capacity uses inefficient subcritical technology. Meanwhile, sanctioned gas power fell nearly 23 percent, due mainly to the Middle East and North Africa (MENA) region and the United States. In Nigeria the DisCos have failed to attract adequate investments because of their debt burden and lack of competitive tariffs. A n a ss e ssme nt c o n ducted by BPE showed that many of the DisCos are technically insolvent. Their current liabilities are in excess of their assets, most are owed to NBET. They are

unlikely to pay because of poor tariff. DisCos need to improve infrastructure that consumers can pay for, “but technically they do not have the capacity to do so,” Okoh said. Eugene Edeoga, NBET Director of Procurement lamented that the company is “technically dead and insolvent with huge liabilities” arising from over N800 billion owed it by the DisCos. To find sustainable solution to the power sector woes and attract investments inflows, four action steps must be taken, people with knowledge of the sector have suggested. BusinessDay’s check shows that the highest percentage of revenue paid by the distribution companies for electricity received from the generation companies is 29 percent. One of the radical first

steps towards revamping Nigeria’s power sector is for government to find a way of renegotiating, absorbing or setting aside the N800 billion electricity debt stocks, a source who have worked at both the BPE and one of the founding commissioners at the Nigerian Electricity Regulatory Commission (NERC) told BusinessDay, and requested not to be identified. Secondly, the government needs to give up its 40 percent equity holding in the DisCos, in stages. First, it could be managed by a consortium and some commercial banks. However, the government will have to ultimately give up its equity entirely. This is not completely novel because, September 25, 2017, Babatunde Fashola, minister of power, works and housing, stated that the federal government

would be open to welcome new and tangible offers that would lead to it divesting its 40 percent shares in Nigeria’s 11 electricity distribution companies (DisCos). “The other point is to ensure that government, going forward, would not owe Discos. It must budget for power in the way that it budgets for diesel and travels. We have done that in the 2017 budget; we will do it again in the 2018 budget, and enforce compliance by agencies to pay their debt” Fashola said. This will help in bringing stability to liquidity problems in the power sector, ultimately for the benefit not only of the DisCos but the entire value chain. Thirdly, transmission company Nigeria (TCN) needs to be broken-up and privatised. Experts say this is necessary if the market it to be optimally deregulated. In other countries where the electricity industry was formerly a government owned, vertically integrated, monopoly the reforms have generally involved splitting the industry into separate generating, transmission and distribution sectors. The transmission system often remains a government-owned common carrier, or is kept under extensive regulatory control as a natural monopoly. Stakeholders in Nigeria’s power industry say Nigeria’s TCN needs to be broken up into mini privatised operations to make the system work. The fourth solution on the list is that those who get a concession must present two evidences: proof of experience doing something similar in a similar economy and proof of liquidity or money to pull off the deal.

‘FG stabiles business environment in O/G industry’ Olusola Bello

he federal government said it has stabilised the business environment in the oil and gas industry and also stem the tide of decline through the unleashing the new Oil and Gas policies, to sorting out the legacy cash call problems in the upstream sector to putting in place mechanisms to address supply hiccups in the downstream sector with the refinery roadmap. The minister of state for Petroleum, Emmanuel Ibe

Kachikwu disclosed during the practical content conference in Yenogoa, Bayelsa State. This is despite the lull that has characterised the entire value chain of the oil and gas industry for the past few years He said steadily, the big jigsaw puzzle is falling into place and that he is already seeing signs of investments finding their ways back into our shores. “The time is therefore ripe for us to put into practice all the wonderful ideas, initiatives, and frameworks put in place to unleash the full potentials in our industry”.

According to him, government on its part, have rolled up its sleeves to put in place and implement frameworks that are beginning to deliver the type of outcomes we desire in our industry. He informed participants at the conference that the government is about launching the Project 100, adding that the concept framework has been finalised while it target is that before the end of the year the government will launch the program. “This is meant to be a practical demonstration of Nigerian Content in Action

with the goal of shattering any glass ceiling preventing our local oil and gas entrepreneurs from coming into prominence and execute activities in the scale they have never done before”. The government he stated wants to practicalise those wonderful propositions from Nigerians that have been held down by one bottleneck or the other. He said the Ministry of Petroleum Resources and its agencies are poised to facilitate and unblock the obstacles stopping these initiatives from propulsion. “Therefore, for all those beautiful ideas about LPG

penetration, local refining, infrastructures for security of supply and built-in redundancies, technology and automation, flares capture and utilisation, field development and several others, the time has come for true practicals”, he said. He said the Ministry of Petroleum Resources is proud of Nigeria Content achievements, moreso that some of these achievements have stimulated other sectors like Information & Communication, Automobile, Construction and Power to adopt some of our templates in their policy formulations.

Oil prices to average $61 per barrel in 2019

he Energy Information Administration (EIA) has predicted that Brent spot prices will average $61 in 2019 and that West Texas Intermediate (WTI) crude oil prices will average about $7/b lower than Brent prices next year. NYMEX WTI futures and options contract values for March 2019 delivery that traded during the five-day period ending December 6, 2018, suggest a range of $36/b to $77/b encompasses the market expectation for March WTI prices at the 95% confidence level. It said the EIA estimates that U.S. crude oil production averaged 11.5 million barrels per day (b/d) in November, up 150,000 b/d from October levels because of platforms resuming normal operations after hurricanerelated outages in October. It however expects that U.S. crude oil production will average 10.9 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 12.1 million b/d in 2019. EIA forecasts total global liquid fuels inventories will increase by about 0.3 million b/d in 2018 and by 0.2 million b/d in 2019. Global liquid fuels production is forecast to increase by 1.4 million b/d in 2019. While it of the view that production growth in the United States to be partially offset by declining production elsewhere, notably in the Organization of the Petroleum Exporting Countries (OPEC), where EIA forecasts that liquid fuels production will decline by 0.9 million b/d in 2019. EIA expects global liquid fuels consumption to increase by 1.5 million b/d in 2019, with growth largely coming from China, the United States, and India. Meanwhile decreasing oil rig counts in Canada, Nigeria and U.S. will not keep oil prices from falling a recent report by Oilprice. com states. The Organisation of Petroleum Exporting Countries and its allies (OPEC+), concerned about rising inventory and failing oil prices reached a consensus to cut oil production by 1.2 million barrels per day out which Nigeria accounts for 50, 000 bpd but this has not stemmed the tide of falling oil prices. The number of oil rig counts in Nigeria decreased by 6 from 34 in October to 28 in November, according to the Organisation of Petroleum Exporting Countries’ (OPEC) Monthly Oil Market Report published 12 December.

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Fragile economy, low income, credit keep real estate sector in recession …contracted for 11th consecutive quarter by -2.68% in Q3 2018 Endurance Okafor

igerian real estate sector has yet again contracted in Q3 2018, in what is the 11th consecutive quarter in recession since the first quarter of 2016, figures available on the sector on the National Bureau of Statistics (NBS) website reveal. At the end of the 9th month of 2018, the real estate sector reported growth of -2.68 percent as against the -3.88 percent growth rate recorded for Q2. The sector performance in the review period was linked by economists to Nigeria’s fragile economy, low credit and insufficient income. Although the Q3 figure released by NBS was better than Q2 figures by 1.21 percentage points. Responding to the report, Rafiq Raji, chief economist at Macroafricaintel said real estate prices were previously driven by a booming economy fuelled by higher oil prices. “A loose public purse was also a catalyst. The current depression in the sector is symptomatic of the slow pace of the economy and perhaps the anti-corruption efforts of the current government,” Raji told BusinessDay. The sector growth rate in the review quarter was, however, higher than the growth recorded in Q3 2017 by 1.44 percentage points. It contributed 6.50 percent to real GDP in Q3 2018, which is 0.30 percent lower than the 6.80percent it recorded in the corresponding quarter of 2017 and 6.83 percent in the preceding quarter. Nigeria with the highest population in Africa has about

of the smallest portions of loan in the 3rd quarter of 2018. The figures compiled from the state stats showed that Nigeria’s property sector was only able to attract N710.2 billion in the third quarter of 2018 as against the N744.56 billion and N784.2 billion it got in Q2 and Q1 2018 respectively. “For the banks, before they were saying let’s take a bit of risk by investing in the real estate sector but now what you hear is let’s not even take any risk at all,” Olurogba Orimalade, the current chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State Branch, told BusinessDay. Meanwhile, Nigeria’s GDP in the third quarter of 2018 grew by 1.81 percent (year-on-year) in real terms, driven by non-oil sector. The growth rate report in the review quarter represents an increase of 0.64 percentage points when compared to the 1.17 percent rate recorded in the third quarter of 2017. Q3 GDP figures was 0.31 percentage points better than Q2 2018 figures of 1.50 percent.

The non-oil sector grew by 2.32 percent in real terms in Q3. This is higher by 3.08 percentage points compared to the rate recorded same quarter of 2017 and 0.28 percentage point higher than the second quarter of 2018. The -2.68 percent contraction figures reported by the real estate sector in the quarter under review is the fourth lowest negative growth of the real estate sector after Q2 2018, Q1 and Q2 figures of 2017, as they reported -3.88 percent, -3.10 percent and -3.53percent respectively. BusinessDay analysis of the real estate sector revealed that the contraction recorded for the first quarter of 2018 is so far the worst contraction the property market has reported since BusinessDay started tracking it in Q1 of 2016. The worst quarter contraction of the sector that follows after the Q1 2018 figures was in the fourth quarter of 2017 when the sector expanded negatively by -9.27 which was 0.13 percent points better than the 2018 Q1 figures.

FMBN raises confidence in NHF, refunds N12.4bn, registers 224,752 contributors CHUKA UROKO

he interest and confidence level in the National Housing Fund (NHF) has been raised significantly in the last 12 months by the management of the Federal Mortgage Bank of Nigeria (FMBN) which supervises the operations of the fund. Perhaps, for the first time in its over three decades of operation as a homeownership vehicle for low income earners, a positive report is being given on the fund. The last one year has witnessed the processing of N12.4billion refunds to contributors to the fund while 224,752 new contributors to the fund have been registered. This is a landmark achievement and Ahmed Musa Dangiwa, MD/CEO of FMBN, who made this revelation during the visit of the Senate Committee on Housing to the bank in Abuja, added that within the same period, FMBN dis-

bursed N40.9 billion housing loans to 1,843 contributors, and provided Home Renovation loans totaling N14.072billion to 16,031 Nigerian workers. Dangiwa also pointed out the innovative housing products that FMBN has created to tackle the housing affordability challenge for contributors to the NHF. These include the rent-toown scheme, where contributors can own homes and pay by monthly or yearly rents over a 30-year period. There are also the NHF Individual Housing Construction loans that are payable over a 15-year period at interest rates of 7 percent and the reduction of equity contribution requirements for accessing NHF loans from 10 to zero percent for sums of money up to N5 million and from 20 and 30 percent to 10 percent for loans of up to N15 million. The committee, which was excited by this performance, commended the management

of the bank for their efforts at reforming and repositioning the bank as Nigeria’s leading mortgage institution and provider of affordable social housing. Barnabas Gemade, the committee chairman, said they were particularly impressed by the the ability of the management to create a professional work culture and their sustained push for the N500billion recapitalization of the institution, which has led to the passage of the NHF and FMBN amendment bills by the National Assembly. The committee also commended the development of innovative housing products to cater to the unique needs of the Nigerian worker, adding that the bank’s aggressive drive to leverage technology to increase transparency and accountability in the operations of the bank was also commendable. Gemade stated that in the last two years of carrying out their constitutional role of su-

pervising and over-sighting the bank, they had noted a strong sense of direction and accountability by the management. “In the past two years, we have seen tremendous turnaround in terms of management and organization of this agency. This gives us a sense of comfort that whatever investment government has made, and whatever appropriation the Nigerian people have committed here, either directly or through government, is in safe hands,” he said. Dangiwa assured that the bank would continue ongoing efforts to fully automate its business operations to improve efficiency and timeliness in the delivery of its services to Nigerian workers. He stated that a key component of this strategic policy was achieving end-to-end automation of all its operations ranging from NHF collection, loan processing, issuance of statement of accounts, NHF refunds amongst others.

Infrastructure Maintenance With Tunde Obileye

Private sector involvement in road maintenance within FM framework

20 million housing deficit and BusinessDay survey has revealed that about 90 percent of house acquisition in the country is funded by individual savings, owing to the funding challenges in the country’s property industry. Again, the country has one of the highest mortgage rates in Africa. Its mortgage to GDP ratio is less than 1 percent, as against 2 percent in Ghana and over 30 percent in the more developed countries. “Mass housing, for which there is huge demand, is probably not attractive because incomes are low and credit is dear. More high-end property, plenty of which are empty in places like Abuja, have not enjoyed much customer-patronage because the rent economy, fuelled by political patronage, has been in dire straits for the past 3 or more years. That is good for Nigeria but bad for the real estate economy, Raji explained. Nigeria’s real estate industry was also among the least attractive sectors to the country’s commercial banks as it got one

BUSINESS DAY

n Nigeria, roads represent the epitome of public finance and are often used by public officials, especially our governors, to demonstrate achievements. We are often inundated with public announcements indicating how many kilometres of roads have been built since they assumed office. In a political climate like Nigeria, it is understandable to link road construction with achievements – roads facilitate intra-country trade, aiding movement of goods/services and allowing for higher productivity that leads to further economic growth. Road construction is also critical in an unexpected way. According to Transparency International, contracts for public works/ construction has the highest propensity for corruption through bribery on bidding and super inflated costs of such construction. So, apart from the fact that road costs are often very high, not usually financed by development aid, costs skyrocket even more when corruption and political instability are present, according to the World Bank. Particular attention then needs to be paid, not just to roads construction, but to roads maintenance as they take a good chunk of public finance in a country like Nigeria with a poor corruption index. Usually costs are high because of many factors, one of which is the different terrain. For example, roads in certain parts of the country would cost more than in other parts because of the soil conditions. However, other negative factors increase the cost further. Involving private sector in roads maintenance has gained traction since the 2000s when low and high income countries started to implement what is known as the Performance Based Maintenance Contracting (PBMC), outsourcing road maintenance to private firms with clear performance indicators, using long term contracts for specific sectors of roads, and often with negotiated price upfront. The advantages include cost savings for as much as 30 pecent for government, sharing of risks by government and the contractors, reducing the need for highly specialised people on permanent government payroll while allowing better specialisation and skills of the private/local construction

companies, contributing to the growth of that sector. As the contracts are often performance-based, governments would only pay based on how targets set are met. PBMC often focuses on routine maintenance including fixing of potholes, guardrail and lights maintenance and litter pick up on highways, urban roads, bridges, etc. The contracts would exclude major repairs like bridge repair. To have a successful PBMC in place, there must be enough skilled personnel available to the contractor to undertake successful maintenance on a long term, while saving costs, as well as advance financing since governments will only pay after specific performance indicators set have been met. Even with the advantages to government and growth of the construction sector, this is still a difficult process to implement. Corruption and high cost necessary to start affects bidding, discouraging competition and participation. Even when successful, local construction companies have to grapple with the highly specialised skills and equipment necessary for road maintenance, they could be frustrated by staff of government public works agencies who risk losing their jobs, except when an arrangement is made for government skilled workers to be taken over by the contractors. In making PBMC work, political patronage and corruption have to be eradicated. Technical schools and engineering colleges must be restructured to ensure relevant engineering skills are taughtand government has to make certain waivers on importation of equipment. Government must also be willing to let go of some control, and provide flexibility to contractors to determine an optimized mix of technical solutions and execution schedule with little or no interference from key stakeholders. In concluding, this road maintenance model has the potential to solve the problem of bad roads and, by extension, the traffic congestion experienced on these roads. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

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Tuesday 18 December 2018

‘Vacancy created by movements out of properties is a reflection of economy’ The poor state of the Nigerian economy has manifested in various sectors including real estate where falling demand, rent default, high vacancy rate, etc define market reality. In this interview, GBENGA OLANIYAN, an estate surveyor and valuer, offers insights into a struggling market that has remained in negative growth territory for 11 consecutive quarters. He speaks with CHUKA UROKO.

ore than 12 months after the economy walked out of recession, the property market is still recording negative growth. What is going on? The good news about this year, from my own perspective, is that unlike last year when people expected miracles to happen and so did not believe that things were really bad, a lot of people are now adjusting. For instance, rents on properties have come down to a level where we see people rent properties again. There is a property in Osborne Phase 1 that was rented out for N15 million per annum three years ago. Now, the landlord has collected N6.5 million per annum. This shows that people are now being more realistic on both the rental and sales side. However, it is those on the sales side that are being heavily hit because, on the rental side, majority of the property owners are not owing banks. For those who have houses for rent, all that has reduced is their income, unlike the man who has borrowed from the bank with mounting interest rate. We are at a point now where people are sitting down with the banks to renegotiate their loan terms. There are some landlords out

Gbenga Olaniyan

there called ‘legacy landlords’ who would rather leave their properties empty than drop their rents. What is your take on such landlords? These are people who don’t want money and so, would rather hold on to their property. They would not drop their rent. Some of them even feel insulted by tenants coming for a downward review of their rents. But this is not affecting the mid-level market where demand is still strong. What some people are doing at the commercial space is to find a way to give allowances to the ten-

ant. Where rent is $800 per square metre, the landlord may decide to give back, say 30 percent, of this to the tenant as fit out allowance. The rent remains $800 but the tenant pays effectively $500 per square metre. The advantage of this is that when the market returns, renegotiation starts from $800, not $500 the tenant has paid. In the past 24 months, there have been observable movement of people from one location to another where rents are considered more affordable. What does this mean for

the market? The vacancy created by people moving out of properties is a clear reflection of the state of the economy. But people moving out properties are not dying, but are somewhere. Offices are shrinking. We had a client who was about to sign for a 2,000 square metres space in a new location, after one year they came back to ask us to rent out half of the 500-square metre space they have been operating from. This is because they have reduced their operation and that means some staff have gone. Again, there is another company that moved out of a commercial property into a guest house. They are now using upstairs for offices and the downstairs for residential. By this action, they have cut the cost of office space. The market is obviously taking a hit from all these. What is the situation like in the residential segment of the market? A lot of people have downgraded. If you look at apartments between Lekki Phase 1 and Chevron, they are occupied. This is because the N3 million to N3.5 million property renters in Lekki Phase 1 have move down to this axis to pay N2 million rent. A company has just relocated from an apartment in Ikoyi where it was paying $70,000 per annum to a

flat where it is paying just N6 million per annum. What they have done is to leave a more luxurious property to another that is cheaper. Presently, in the housing market, what people are looking at, over and above facilities, is security. Once there is security with generator to give light and pump water, the house is good to go. By this, the definition of luxury flat has changed a bit. What lessons are there for players in this market to learn? We have this herd mentality where everybody just follows the guy in front. Before this lull happened, we were advising developers who cared to listen, especially since we bounced back from the 20072009 downturn, that there were too many luxury properties coming up on the island and they are always the worst hit whenever there is a glut. Many did not heed this advice. Right now, properties in the middle market are not hit at all. If they cannot be sold, they can be rented. As for the high end, they cannot sale and they can’t rent. Research is still lacking in real estate. Many of the developers are not researching. My advice for those still planning to do a development, is to slow down and wait till when the market is expected to pick up again.

TrustBond Mortgage beats analysts’ expectations amid economic headwinds CHUKA UROKO

rustBond Mortgage Bank, one of Nigeria’s few primary mortgage banks (PMBs) operating with national licence, has beaten analysts expectations with its 2017 financial year results which, in the estimation of its shareholders, is a good and commendable outing. Though there was relative stability in 2017 compared to the year before it in terms of the impact of recession on macro-economic environment, analysts’ expectation was a dismal performance by the organised private sector operators, especially those in the financial system for whom hyper inflation and volatile exchange rate regime meant so much. Again, a pervading perception is that the mortgage industry in Nigeria is underperforming. To some people, Nigeria has no mortgage industry at all and so they do not expect anything wonderful from that industry in terms of performance, more so in a

recessing economy. But at their 9th Annual General Meeting in Lagos recently, TrustBond excited its shareholders, disclosing that during their financial year that ended December 31, 2017, their profit after tax from continuing operation rose about 13 percent to N23,443 million, up from N18,016 million in the previous year. Adeniyi Akinlusi, the

bank’s CEO, who gave this hint, added that despite the economic headwinds that characterized the year under review, particularly the high inflationary environment, the bank was able to reduce its cost-to-income ratio to 0.64, down from 0.89 in 2016. It also recorded total assets of N13, 593 billion in December 2017, representing 9 percent increase over the previous

year’s figure of N12,411 billion. Akinlusi told the bank’s shareholders that besides some business restructuring and the adoption of a new one that they did which yielded these results, they also undertook what he called ‘Share Reconstruction’, leading to the reduction of an accumulated loss to N886 million in their balance sheet, down from N2,177 billion.

L-R: Amira Obi-Okoye, director; Adeniyi Akinlusi, MD/CEO; Etigwe Uwa, chairman; Mark Okoye, company secretary, and ‘Tayo Alabi, director, all of TrustBond Mortgage Bank Plc, at the 9th Annual General Meeting of the company in Lagos recently

The shareholders were excited by this performance and, according to Sunny Nwosu, a shareholder and member of the audit committee, “this shows that the management worked very hard and followed our advice. They were advised not to do certain things and they followed the advice. That caught shareholders’ admiration and they were happy”. Though there was no dividend pay-out, the shareholders were happy and optimistic. Binuyo Sharafa Teju, another shareholder, reasoned that for the management to have been able to reduce the bank’s debt burden to N886 million from N2,177 billion, in the next three years, they would wiped it out and be able to pay dividend. “From what we have seen today, I want to believe that by the time we will be doing 2018 account, they shall have wiped off the debt, creating avenue for dividend payment”, he said, adding that compared to other mortgage banks in the same market,

Trustbond had done pretty well and was well ahead. Akinlusi assured of a better performance in their 2018 results, saying, “in 2018, we will place greater emphasis on growing our mortgage business volume, while impacting positively on our environment by working with other stakeholders to improve home ownership for Nigerians”. Etigwe Uwa, the chairman of the bank, shared this optimism even though he acknowledged that mortgage sector’s 1 percent contribution to GDP remained dismal considering its huge prospects. He noted that there have been interventions by the government, through programmes and policies, to increase mortgage finance and promote home ownership in Nigeria, citing the ‘My Own Home Scheme’ which is a public private partnership that seeks to increase access to housing finance in Nigeria through mortgages, mortgage guarantee/insurance and housing micro-finance.

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What growing interest, confidence in JVs means to real estate consumers CHUKA UROKO

hough joint venture (JV) agreements may not be new in the Nigerian real estate market, in the last couple of years, the market has seen growing interest and confidence in JVs now sweeping across private and public sectors of the economy. While JVs means shared risk, guaranteed capital inflow, increased volume of production and increased expertise based on experience, to the products and se3rvices consumers, JVs mean quality assurance and timely delivery of products and services, all things being equal. This, exactly, is what the new JV involving CEBRE and Excellerate promises to offer. Following the end of its JV agreement with Broll Property Group CBRE Group, Inc. (CBRE) formed a joint venture with Excellerate Property Services (Excellerate) to meet the growing demand for high-quality real estate services in Africa and the Middle East. Broll, a leading African commercial property services firm, has been in an affiliate agreement with CBRE since 2004 to serve their global clients in key countries such as Nigeria, Ghana and South Africa among others. Since coming into Nigeria, Broll has been offering top notch services in the country’s real estate market. In most cases in Nigeria, investors or developers collaborate or go into JVs for reasons of capital

inadequacy, inaccessibility or unaffordability. Udo Okonjo, Fine & Country’s CEO/Vice Chair, underscored this at a recent real estate forum in Lagos where she stressed the need for collaboration in environment where credit is dry and risk is high. “The case for collaborating in real estate cannot be stronger than now with a sluggishly recovering economy, where there’s not only massive infrastructure and protracted housing deficit, but also huge amount of underutilised and idle asset,” she said. But for CBRE Excellerate JV, it is a case of shared expertise which is why, according to an Estate intel report, the JV will merge CBRE’s facilities management operations in Africa and the Middle East with several of Excellerate’s businesses, including corporate real estate services, facilities management, valuation and pro-

ject management services. “Our partnership with CBRE aligns with our core values and by structuring our relationship as a joint venture, rather than an alliance, we will pool our respective skills and expertise and foster intense collaboration, which will drive superior client outcomes,” Gordon Hulley, CEO, Excellerate Holdings, assured in his comment on the new JV. The new JV will find the Nigerian market an interesting destination which is confirmed by Andrei Ugarov, partner at PricewaterhouseCoopers (PwC) who said, “Nigeria is still a viable market. Capital is a challenge but deals are happening. It means funds are available. Players in the industry are making use of other financing options to fund real estate development project ts”. Meanwhile, Broll Group has moved on and is currently pursu-

ing a Black Economic Empowerment (BEE) acquisition deal. The BEE programme was launched by the South African government to redress the inequalities of Apartheid by giving black South African citizens economic privileges not available to Whites. Explaining the circumstances that led to their over a decade agreement with CEBRE, Jonathan Broll, chair of the Broll Group, said, “as South African society changed, we realised we have a responsibility to ourselves, our shareholders and the public to conclude a BEE deal as soon as possible. After a protracted period of negotiations to be acquired by CBRE, it became apparent that an agreement satisfying this condition would not be reached. I believe that events have therefore unfolded to the advantage of all parties”. Malcolm Horne, Broll’s Group

CEO, also explained, “we maintain a diversified portfolio of clients and services across 16 countries in Sub-Saharan Africa...Our success is built on relationships, high performance and service excellence, and we continue to actively seek out new business opportunities.” It should be noted, however, that the formation of CBRE Excellerate is subject to customary closing conditions, including government approvals, and is expected to be completed in the first half of 2019. Excellerate’s property management operations in South Africa and its soft-services business, which provides cleaning, security, and catering services across Africa, will not be part of the joint venture and CBRE will continue to operate a wholly-owned advisory services business in the Middle East and North Africa.

Agust & Co proposes Cargotecture innovation in bridging housing deficit in Lagos Endurnce Okafor

gusto & Co. Limited, the foremost Pan African Credit Rating Agency and one of the leading providers of industry research, in its 2018 real estate (Lagos Residential) industry report suggested Cargotecture innovations for solving housing problems in the state. “Going forward, Agusto & Co. believes that Cargotecture innovations in housing may be a solution to the rising housing deficit in Lagos, especially for low-income residential real estates, as this solution combines low cost, speed and environmental friendliness,” it said in the report. Cargotecture or shipping container architecture is a form of architecture using steel intermodal containers (shipping containers) as structural element. It is also referred to as a portmanteau of cargo with architecture, or ‘arkitainer’. Data obtained from Agust & Co revealed that Lagos government requires about N3.5 trillion to deliver one million

housing units annually in line with the government’s desire. If the state’s 2018 budget for capital expenditure is fully devoted for housing, it will only be able to cover less than 10 percent of its annual housing requirement. Thus, an estimated 19 years of similar expenditure will be required to bridge the current housing deficit, estimated at 3million units. Lagos population in 1871 stood at

28,000 and grew to about 252,000 in the 1970’s. Today, Lagos population is about 20 million and it is the most populous city in Africa—almost same size as the population of Ghana. BusinessDay survey reveals that the use of containers as building material has grown in popularity in other parts of the world due to their inherent strength, wide availability, and relatively low expense.

But in Nigeria, it is not an initiative that is well known or frequently used as a means of constructing housing project. Tempohousing Nigeria (THN), one of the real estate firms that uses cargotecture, while addressing misgivings of Nigerians on houses not done with bricks, said one of the biggest hurdles they have with alternative building methods is education and knowledge about cargotecture. “What we hear is, this is container; going forward we intend to educate people and let them see what the so called container actually looks and feels like, and once you enter you realize that it even looks better than a normal building. It’s easier to control, not using cement, no cracks and all that. It’s just about education and doing things that people can walk in and see,” Tempohousing Nigeria said in statement. Agust & Co’s survey of the residential real estate market in Lagos reveals that, as at the end of March 2018, Yaba had the highest rental yields in the mid-

income residential segment, thus showing steady appreciation in rental yields. Whereas Apapa (degraded by major traffic gridlock caused by indiscriminate parking of trucks on major roads) had the lowest annual rental yield of 3.1percent as at end of March 2018, evidencing weak demand for residential housing as well as decline in real estate values. Agust & Co expects continued improvements in the near term regarding new residential real estate developments mainly in the mid-income segment as well as mixed-use developments. “We believe developers will start construction of some erstwhile abandoned residential projects and new developments especially in the mixeduse segment,” it said in its 2018 report. The report by the rating agency provides information on the Lagos residential Real Estate Market (‘the Industry’) and covers the following: overview, size and structure of the Nigerian real estate industry and that of Lagos residential Real Estate Industry.

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Tuesday 18 December 2018

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National Discourse Defections, endorsements but no value to citizens JOSHUA BASSEY

igeria can well pride itself as the country in the world with the highest rate of political crosscarpeting across political lines. With what we have so far seen since 2015 till date, not a few may have lost count of the number of defections and endorsements made by political gladiators in the country. Well known faces and high-

flying politicians have jumped and continue to jump ship. It is not surprising though; there are no marked differences between the various political parties, no clear or well defined ideologies that stand one party out from the others. The case is worse with the two leading political parties- the opposition People’s Democratic Party (PDP) which ruled the country for 16 years - 1999 to 2015 before losing power to the ruling All Progressives Congress (APC). Indeed, political protagonists who dumped the PDP and aligned forces with the APC to defeat the PDP in 2015, have again moved back to the PDP in the desperation to seize power in the 2019 general elections. For this set of politicians, it is not about the people but the struggle to secure a space and remain in government. While they held sway in the PDP, the com-

plaints were from within, and within the APC, the complaints have become even louder, but not in the interest of the people. It is about personal interest and position seeking. While this goes on, the economy is bleeding, businesses are dying, unemployment is rising, educational standard is falling, poverty is deepening, with more and more people going to bed hungry and waking up in the morning without hope. What more than the recent reports that Nigeria, with a population estimated at about 200 million has overtaken India with a population of 1.324 billion as the country with the highest number of people living in extreme poverty. The report released in June by the Brookings Institution, says the number of Nigerians living in extreme poverty increases by six people every minute. The report reads: “At the end

of May 2018, our trajectories suggest that Nigeria had about 87 million people in extreme poverty, compared with India’s 73 million. What is more, extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall. “In fact, by the end of 2018 in Africa as a whole, there will probably be about 3.2 million more people living in extreme poverty.” The development speaks to the concern by many that political leaders in Nigeria are yet to come to terms with the essence of governance. In spite of the defections, alignments and endorsements so far seen since 2015, the citizens are yet to reap the benefits of governance. According to Olusegun Osinowo, director-general of the Nigeria Employers’ Consultative Association (NECA) the country is plagued by an absence of good

governance, as the leaders do not have a clear idea of how to positively impact the citizens and lift them out of poverty. Oshinowo is of the view that unlike other countries where governance is targeted at the welfare of the people, Nigerian leaders have vague understanding of why they are government. He believes the barometer to judge how good a government has done is to look at how the citizens have fared. “Any government with no evidence of taking people out of poverty has no business being in government.” His views are not different from those expressed by Christopher Onyeka, the Deputy General Secretary of United Labour Congress, who believes that government in Nigeria has not translated to the welfare of the people. “Good governance should be about the welfare, secure, creation of enabling environment for living and doing of business. It is about boosting the confidence of the people that you can close from work today and wake tomorrow to return to work without the fear of losing your job because the company is struggling to meet its bottomline,” says Onyeka.

NEWS

inister of power, works and housing, Babatunde Fashola, has described infrastructure as the foundation for national prosperity and unity, saying it is the most dependable fortress against tomorrow’s bad weather, bringing people together and laying the foundation for job creation, economic growth and agricultural development, among others. Fashola, who spoke at the LokoOweto Bridge and road project site while on inspection of the project, said by investing in infrastructure renewal, President Muhammadu Buhari was creating wealth and securing the future of Nigeria as well as building a solid foundation for employment and for prosperity. The minister, who had earlier inspected projects in Anambra and Benue states, told the gathering of the Loko and Oweto communities, including traditional rulers, who gathered at the project sites to receive him, “President Buhari has demonstrated commitment to infrastructure renewal, building roads and bridges like the Loko-Oweto Bridge, the Loko – Oweto Road, the EnuguOtukpo Road, the Township Road in Otukpo, the Second Niger Bridge, the Federal Secretariat in Awka. That is the foundation for prosperity.

Infrastructure: Buhari building foundation for employment, prosperity – Fashola “Infrastructure built the American Nation out of the Great Depression and Recession; whether it is the Second World War or Marshal Plan in Europe; whether it is the ascent of the Chinese Empire today, the backbone is infrastructure-Road and Rail and Airports. It was after that they could host the Beijing Olympics to show off what they had built,” the minister said. Reiterating that infrastructure is the foundation of unity, he said, “It is an unfailing foundation. It is the most dependable fortress against tomorrow’s bad weather, tomorrow’s oil prices going back and forth. Once you invest in what President Buhari is doing, that is what creates wealth, that is what secures the future; that is the foundation for wealth, for employment, for prosperity.” He thanked the contractors, Messrs Reynolds Construction Company (RCC), and Federal Controllers of Works for Benue, Celestine Shausu and Nasarawa State, Wasiu Adetayo Taiwo as well as the director, North Central, Dayyabu Mamman for their untiring

work in helping to rebuild the country. “Work continues here. If you hear those (politically opposed) people tell you that the country is divided tell them they divided it. If they had built this road, there would have been unity. “This road unites two traditional rulers-the Ada Agatu (of the Agatu Community of Oweto in Benue State) and the Mai Loko (of the Loko Community in Nasarawa State). It is uniting farmers; so infrastructure is the basis for national unity. It brings people together, it brings prosperity, it is the foundation for jobs, it is the foundation for Agriculture, it is the foundation for industry and this is what President Buhari is committed to. Very soon and very soon this road and this bridge will connect and unite Nigerians forever irrevocably,” he said. Earlier, while welcoming the Minister to the site, the Federal Controller of Works, Nasarawa State, Engr. Wasiu Adetayo Taiwo explained that the Loko-Oweto Bridge connects Nasarawa State at Loko with Benue State at Oweto adding that the Bridge has

reached 91 per cent completion; the main bridge is 1.835-kilometre length while the smaller bridge is 220 metres bringing the total length to 2.055 km. He said the contractor has been doing a good job on the project pointing out that the Loko bound (Eastern) portion of the bridge had been completed including the parapet walls and the walkways and other accessories while the Oweto (Western) portion has just about three pier axis to be connected to round off work on it. According to him, the two smaller bridges had been completed structurally leaving only the connecting roads from Oweto and to link it to the Loko Road coming from the other side. He said the road, when completed, would reduce travel time to the South Eastern part of the country by not less than two hours adding that it would be the best road linking the South Eastern borders with people of the Northern Central and the entire Northern zone. “It will also increase agricul-

tural produce and, as you know, the people of this area are agrarian. So it is going to be a very big achievement for the Federal Government and the Loko and Oweto people”, the Controller said adding that trade would be enhanced especially in agricultural produce as traders across the country would have reduced travel time and better travel experience connecting the communities to purchase the commodities. Other community leaders who spoke at the brief but impressive briefing of the Minister of Power, Works and Housing and his Agriculture and Rural Development counterpart, Chief Audu Ogbe, were the Traditional Ruler of Loko, Mai Loko Abubakar Ahmed Sabo, the Chairman of Oweto Community, Achoda Comfort Alhassan and the President, Oweto Farmers, Ada Agatu Chief Godwin Onah all of whom testified that the project has impacted positively on the two communities and commended the Buhari administration’s resolve to complete the Bridge. The contract for the construction of Loko-Oweto Bridge was awarded to R.C.C. Nigeria Limited on November 2, 2011 with an initial completion period of 48 months but take off was delayed by issues bordering on change of project alignment which affected the original design.

Benin-Abraka Road reconstruction: Orhionmwon residents laud Obaseki for awarding contract ... as work progresses on St Saviour, other roads

ays after the award of contract for the reconstruction of the Benin-Abraka Road, some residents in Orhionmwon and Ikpoba-Okha communities have lauded the Governor Godwin Obaseki-led administration for embarking on the ambitious project. Their commendations are com-

ing as work on the reconstruction of St Saviour Road and several other roads in the state are ongoing. Inhabitants of communities in Orhionmwon said that “on completion, the Benin-Abraka Road will spur socio-economic activities, rural-urban migration of youths will be stemmed while agribusiness, in particular, will receive huge boost.”

The 106km road provides access to hundreds of communities in Ikpoba-Okha, Orhionmwon and parts of Delta State. A tour of portions of the road showed that while the Upper Sokponba end of the road seems hitchfree, this is not the case a few kilometres away as ditches, potholes and bumps are common sights as

motorists have hectic moments driving on the road. Sometimes motorists will have to wait for one another and when some fail to cooperate, skirmishes, traffic congestion take a toll on the road users. “The award of the contract to reconstruct the road by Governor Obaseki is a gesture that was received with applause by many of us,” Mr Osaro Osarobo who lives in Evbarue said. He explained that the execution

of the contract will facilitate movement of farm produce to city centres while motorists will reduce their visits to mechanics. According to Emmanuel Odigie, who is the State Chairman, All Farmers Association of Nigeria, “the reconstruction of the road will engender more involvement of people in agricultural activities, encourage processing industry and stem the drift from rural communities to urban centres.”

BUSINESS DAY

AVIATION

GUIDE

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Tuesday 18 December 2018

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Ease-of-doing-business policy boosts visa-on-arrival - MMIA Comptroller Stories by IFEOMA OKEKE

he Ease-of-DoingBusiness policy of the Federal Government has been lauded by the Nigeria Immigration Service (NIS), saying that it has improved the visa-on-arrival policy, thereby facilitating movement into the country by foreigners. Dikko Yashe, the Comptroller, Murtala Muhammed International Airport (MMIA), Lagos stated this over the weekend in Lagos, during a ceremony organised for retirees and presentation of awards of excellence for deserving officers of the command. According to Yashe, since the policy came on stream in 2017, it had further improved the visa-on-arrival policy of the government as more potential investors visit the country more regularly without the rigours of visiting the embassies. He emphasised that the airport command had keyed

into the policy of Mohammed Babandede, the comptroller general of NIS by reducing the contacts of its officers with travellers. He explained further that on the average, the command issues 150 visas for travellers weekly, stressing that most of the travellers preferred the new policy to the former. Yashe, however, pointed out that some of the travellers don’t want for the approval of the Comptroller-General of Immigration for their visa applications before embarking on journeys to Nigeria, stressing that in the past 10 months, no fewer than 278 foreigners had been sent back from the Lagos Airport for lack of entry visas into the country. He said: “I know that visaon-arrival policy has tremendously increased travellers through the Lagos Airport Command. On the average, we issue about 150 visas on arrival or more, it depends on the influx of passengers. We observe that most of our passengers prefer to get their visas on ar-

Longest serving staff with the managing director of Omnicom Solutions. L-R-Wunmi Akande, Lanre Olaniyan(MD) and Lekan Afolabi.

rival, but the challenge we have is that some of the passengers don’t wait for approval from the CG. That is why we keep on returning people. “Within my few months at the airport, I have returned over 278 people without visas

Dana Air bags Humanitarian award, partners Rotary club on blood donation

n recognition of its corporate social responsibility, Consistent support to Project Pinkblue and contribution to Cancer control in Nigeria, Dana Air has been honoured with the Humanitarian Partner’s Award by Project Pinkblue, a nongovernmental organization in Abuja The airline was honoured alongside select Governors, Celebrities, Wives of Governors, volunteers, Senators, Ministers and sur vivors for their contribution to the fight against cancer in Nigeria, at an event to raise funds for victims of cancer held recently at Transcorp Hliton Abuja. Speaking on the airline’s recent award, Obi Mbanuzuo, the accountable manager of Dana Air, said, “We wish to

thank Project Pinkblue for recognizing and appreciating our contribution to the fight against cancer in Nigeria and other initiatives, CSRs that we have carried out just to show commitment to the wellbeing of Nigerians. We care and we believe that the only way to fight cancer is by first supporting the survivors and creating massive awareness about cancer.’’ Obi assured that the airline, being a proudly Nigerian brand will continue to support initiatives that will contribute to the wellbeing, growth and development of Nigeria as part of its broad corporate social responsibility. Similarly, the airline in a bid to save lives and contribute greatly to the healthcare of Nigerians, has also partnered

Rotary Club on blood donation camp aimed at bridging the ever-increasing demand for blood due to shortage of voluntary blood donors across the country. In the recently conducted blood donation camp, a large pool of its employee volunteered in the program to help contribute to the Rotary club’s call on corporate bodies to provide blood and meet up with the needs of the country’s population of over 180 million people. The blood donation drive is to help ensure blood is never missing from hospital shelves and to reduce the surging rise of postpartum hemorrhaging, which is the leading cause of maternal mortality, accounting for over 27 percent of all maternal deaths in Nigeria.

in the past 10 months.” On retirees, he said that 13 officers of different cadres retired from the command in recent time, while other seven officers were recognised for discharging their duties professionally.

He urged the recipients of the awards to continue to be professional in their duties and challenged others to emulate their conducts. Yashe insisted the service would not promote mediocrity among its officers, rather would reward hard work and dedication. “What we are doing is what the CG wants. If the leadership is transparent, you expect the followership to follow suit. So, that is the key success and we have a very good synergy with other security agencies and other key stakeholders in the aviation industry. We do our best to minimise interface with passengers as directed by our Comptroller-General. That has really helped in sanitising our airports, improve relationship and I am proud of that. “We know it is not easy to start a career and end it either at the mandatory age of 60 or 35 years in service. Some of our colleagues died along the line. It is a thing of join that that they are alive to receive their honours themselves and not

through any next-of-kin. “I am also happy that two of my officers at the MMIA Command were recognised by award of excellence. The recipients represent the whole command. The awards are for them as individual, but it was for us collectively. I am indeed proud of all of them.” Also commenting at the occasion, Udeje Usman, former assistant comptroller of Immigration, who acted as the Chairman of the day, commended the conducts of officers of the command. He said that since the Merit of Service Award was inaugurated by Babandede some few years back, at least an officer from the Lagos Airport Command had been nominated for the award annually, stressing that despite the volatility of the command, officers posted there had displayed high sense of professionalism. He enjoined them to continue to be professional and civil when dealing with travelers and lauded Yashe for instilling discipline among the officers of the command.

Air Peace expands operations to MMA2 January

ir Peace has said it will move a part of its flight operations to the Murtala Muhammed Airport 2 (MMA2), Lagos on January 2, 2019 to position itself for better service to its customers. The airline, which has its main hub at the General Aviation Terminal (GAT) of the Murtala Muhammed Airport, Lagos, said it would now operate its LagosAkure, Lagos-Asaba, LagosKaduna and Lagos-Port Harcourt NAF Base flights from MMA2. A statement issued by Chris Iwarah, Air Peace Corporate Communications Manager, said the development was in line with its expansion plan and strategy to deliver a much better experience to members of

the flying public using its services. The airline added that the expansion to MMA2 would address the space constraints it was facing at the General Aviation Terminal of the Murtala Muhammed Airport, Lagos. “We are pleased to announce the extension of our flight operations from our main base, the General Aviation Terminal (GAT) of the Murtala Muhammed Airport, Lagos to the Murtala Muhammed Airport 2 effective from January 2, 2019. We will now operate our Lagos-Akure, LagosAsaba, Lagos-Kaduna and Lagos-Port Harcourt NAF Base flights from MMA2. Other new domestic routes we plan to launch soon will also be done form the

facility. “Other domestic flights out of Lagos will, however, operate from our main Base, the General Aviation Terminal of the Murtala Muhammed Airport, Lagos. We are quite hopeful that the expansion of our Lagos base to MMA2 will afford us the space and convenience to deliver first-class flight experience to our loyal customers. “The extension of our operations could not have come at a better time than the Yuletide season. As is the experience around this time of the year, we anticipate a great leap in the demand for air travel. Already, we are creating more flights to cater to the expected rise in the demand for air travel this period,” Air Peace said.

Tuesday 18 December 2018

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BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Xi challenged over direction of China’s economic reforms

The president’s approach is being debated on the 40th anniversary of openness moves Tom Mitchell and Yuan Yang

ive months after Chinese scholars and officials quietly grumbled about Xi Jinping’s unprecedented political power grab this year, an unusual and relatively open debate has emerged about the nature and direction of China’s economic reform programme. Unlike the largely anonymous summer carping about Mr Xi’s elimination of term limits in March — which positioned him to be president for life if he chooses — in recent weeks economists have argued publicly whether the president’s rapid centralisation of power over the past six years would enhance or constrict China’s next phase of development. Mr Xi will wade into the middle of this debate on Tuesday when he addresses the nation on the 40th anniversary of China’s era of “reform and opening”. Deng Xiaoping, the country’s former “paramount ruler”, is credited with launching the economic reforms that powered its remarkable rise at a meeting of the Communist party’s Central Committee that opened on December 18 1978. “Chinese intellectuals are giving voice to enduring disagreements about substantive policy matters such as the balance of the state and market in the economy,” said Julian Gewirtz, a Harvardbased scholar and author of a book about the early years of Deng’s reforms. The fundamental question at the heart of this debate, he added, was whether “China developed because of the persistent rule of the state in

the marketising economy — or despite that?” Mr Xi appears to believe the former proposition — that a unique “China model” characterised by a powerful party-state has been the foundation of the country’s economic success over the past 40 years. Speaking at the October 2017 congress that marked the beginning of his second five-year term as party general secretary, Mr Xi said that China’s experience “offered a new option for countries that want to speed up their development while preserving their independence”. He added: “Government, military, society and schools — north, south, east, west and centre — the party is ruler of all.” Despite the most repressive political climate in Beijing since the 1989 Tiananmen Square massacre put Deng’s reforms on hold for three years, an increasing number of Chinese economists have dared to disagree openly with policies associated with Mr Xi. Most have, however, been careful not to criticise the president directly. Their voices are also useful for powerful officials, such as Vice Premier Liu He, who do worry about market distortions and trade frictions caused by powerful state-owned enterprises and rigid industrial polices “China’s rapid growth over the past 40 years has come from marketisation, entrepreneurship and technological [learning] from the west rather than the so-called ‘China model’,” Zhang Weiying, an economics professor at Peking University said in a speech in October. “Emphasising a China model

Xi Jinping appears to believe that a unique ‘China model’ characterised by a powerful party-state has been the foundation of the country’s economic success over the past four decades © AFP

will lead to strengthened stateowned enterprises, expanded government power and reliance on industrial policies, reversing the reform process. The economy will eventually descend into stagnation,” he added. Copies of Mr Zhang’s speech were posted online only to be taken down by censors. Other liberal economists were last month prevented from travelling to a Harvard forum about Chinese economic reform. But the debate has nonetheless continued over recent weeks in reform-anniversary seminars held across Beijing’s university district. At one such event last week Justin Yifu Lin, a Peking University professor and China model enthusiast, advised African economists present that “[in] a hostile environment, it’s better to follow your own economic development policies” rather than western ones. But Xiaodong Zhu from the

University of Toronto countered that “it’s dangerous for professors to admire governments too much — our African friends should be careful”. Edmund Phelps, a Columbia professor and 2006 Nobel Prize winner for economics, added: “China needs broad innovation from ordinary people and the government can’t help much with that.” Such arguments have seemingly been bolstered by slower economic growth in China and Donald Trump’s punitive tariffs on Chinese exports, which have depressed market sentiment and business confidence. As China’s stock markets declined a further 8 per cent over the past three months, falling share prices forced many private sector companies to sell shares pledged as collateral against state bank loans. The shares were often snapped up by state-owned rivals or government-controlled lenders, adding to the malaise now hanging over China’s private sector.

Many Chinese economists now hope that Mr Xi will use Tuesday’s anniversary to finally embrace a vision of reform closer to that originally articulated by Deng. But similar hopes were dashed at two equally hyped speeches this year — at the Chinese government’s Boao Forum in April and its “inaugural export fair” in October. If Mr Xi delivers another address that is long on rhetoric and short on substance, chances are the economic debate will quickly fade away as the party braces itself for a series of sensitive commemorations next year, including the 30th anniversary of Tiananmen. “Experts who voice their worries about the enormous challenges facing China’s economy are taking a significant risk,” says Mr Gewirtz. “We should pay attention to their warnings. [Otherwise] China’s leadership may make mistakes that more vigorous and open debate could have helped to avoid.”

Malaysia files charges against Goldman Sachs and 2 bankers

Salvini and Di Maio swing behind Italy budget concessions

US bank accused of helping ‘dishonestly misappropriate’ $2.7bn from bonds issued by 1MDB

Miles Johnson

Edward White, John Reed and Stefania Palma

alaysian prosecutors have filed criminal charges against Goldman Sachs and two of its bankers for their role in the alleged embezzling of billions of dollars from the country’s scandal-wracked state investment fund, 1MDB. The Malaysian attorney-general’s office is seeking fines worth more than $3bn from Goldman subsidiaries and its former bankers, accused of helping “dishonestly misappropriate” $2.7bn from bonds issued by 1MDB in 2012 and 2013. The charges brought by Malaysia on Monday are the first time that Goldman has been directly targeted by prosecutors for its alleged role in the widening scandal. Kuala Lumpur’s move intensifies the scrutiny over the conduct of the investment

bank after the US Department of Justice last month indicted the two former bankers on similar charges. Tommy Thomas, Malaysia’s attorney-general, said he was filing charges against subsidiaries of Goldman and former bankers Tim Leissner and Roger Ng Chong Hwa, whom he described as Goldman’s “key employees” in the case. The two bankers are accused of bribing Malaysian officials to secure involvement in the auction of $6.5bn of bonds for 1MDB. Goldman received $600m in fees for its role, according to Mr Thomas, a total that was “several times higher than the prevailing market rates and industry norms”. Law enforcement agencies from multiple countries, including the US justice department, allege that as much as $4.5bn was misappropriContinues on page 50

Coalition’s leading political figures accept overtures to Brussels over deficit plans

he leaders of the two parties in Italy’s populist coalition have backed proposals by the country’s prime minister to cut planned spending for next year in a bid to avoid sanctions from Brussels. Matteo Salvini, leader of the anti-migration League, and Luigi Di Maio, leader of the anti-establishment Five Star Movement, said after a meeting on Sunday that they had given their blessing to Giuseppe Conte’s revised budget plan. There was “complete agreement between Conte, Salvini and Di Maio on the numbers and content of the proposal to send to Brussels”, a League spokeswoman said. The changes are expected to be submitted to Italy’s senate this week before being approved by parliament by the end of the year. The changed budget, which is likely to result in a dilution of the coalition’s flagship policies, such

as the Five Star’s so-called citizens’ income welfare payments and a reduction in the retirement age, marks a sharp reversal for Mr Salvini and Mr Di Maio, both who had previously pledged to stick to their plans no matter what. Under Mr Conte’s proposal to the European Commission, Italy will pass a budget law by the end of the year that will produce a budget deficit of 2 per cent of gross domestic product in 2019, instead of the 2.4 per cent first put forward by the government. But the offer has so far not satisfied the commission. Pierre Moscovici, EU economy commissioner, last week said it was a “step in the right direction, but we are not there yet”. The commission had rejected Italy’s earlier budget plans, describing them as an “unprecedented” breach of bloc spending rules, and raised the prospect of levying fines on Rome if it failed to alter its course.

The League also denied a report by an Italian newspaper that Mr Conte had threatened to resign if his new budget plan was scuppered by intra-coalition fighting between the League and Five Star. Following the meeting Mr Salvini told reporters: “We have found an agreement on further fiscal reductions that will probably be appreciated by the European Union,” according to Italy’s Ansa news agency. The government is also discussing additional budget measures to raise taxes on luxury cars to fund incentives for electric and hybrid vehicles, as well as cuts to so-called “golden pensions” of state employees. Mr Di Maio did not explain in detail in a blog post on the Five Star Movement website how his party’s main policies would remain intact after the changes to the budget, saying only that “there is very little time left to approve a budget law that contains measures that everyone said would be impossible to implement”.

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Malaysia files charges against Goldman Sachs...

Congo campaign violence sparks election fears

Continued from page 49

ated from the investment fund. The scandal has already engulfed former prime minister Najib Razak, founder of 1MDB, who has pleaded not guilty to charges of corruption. A Goldman spokesperson said the bank disputed the allegations and would defend itself against the accusations. “We believe these charges are misdirected, we will vigorously defend them and look forward to the opportunity to present our case,” the spokesperson said. “The firm continues to co-operate with all authorities investigating these matters.” Shares in Goldman Sach fell 2.3 per cent in early trading in New York on Monday. Malaysia also filed charges against Low Taek Jho, the fugitive Malaysian businessman also known as Jho Low who is being sought by Malaysian, Singaporean and other authorities in connection with 1MDB, and Jasmine Loo Ai Swan, the fund’s former general counsel. A spokesperson for Mr Low said he maintains his innocence and “will not submit to any jurisdiction where guilt has been pre-determined by politics and there is no independent legal process”. If found guilty of breaching Malaysia’s securities law, the individuals charged on Monday face a maximum prison sentence of 10 years and a fine of at least RM1m ($239,000). A partner at a Malaysian law firm involved in the financial services sector said Goldman could “at the very least” be liable for the $600m in bond fees it charged 1MDB. Recouping more than that will depend on whether Goldman can successfully argue that its former bankers embroiled in the scandal acted independently, he said. This person described the severity of Malaysia’s accusations against Goldman as “unprecedented” in the country’s banking sector and said they would “send chills down the spines of one or two expat bankers”. The Malaysian charges closely mirror similar allegations filed by US prosecutors last month, which also charged Mr Ng and Mr Leissner for their role in the bond offerings. The US charges indicated Mr Leissner may be co-operating with authorities. Malaysia said the offering circulars and private placement memorandum issued by Goldman for the three bonds contained statements that were “false, misleading, or from which there were material omissions” because they said proceeds of the bonds would be used for legitimate purposes. “Offering circulars and private placement memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds,” it said. Malaysia said the bond issues were structured for “ostensibly legitimate purposes when [the accused] knew that the proceeds thereof would be misappropriated and fraudulently diverted”. “In addition to personally receiving part of the misappropriated bond funds, those employees and directors of Goldman Sachs received large bonuses and enhanced career prospects at Goldman Sachs and in the investment banking industry generally,” the attorney-general’s office alleged.

Tuesday 18 December 2018

Opposition presidential candidate has faced obstacles as shots and tear gas are fired Tom Wilson

W John Bolton depicts US relations with Africa as a geostrategic board game in which Africans have less agency than a pawn © Cliff Owen/AP

America’s scrambled approach to Africa

Washington’s Hobbesian new strategy belongs to a bygone era

he Trump administration has unveiled what John Bolton, the national security adviser, has billed as a “new” Africa strategy for the US. On the commercial front there is indeed some fresh thinking. But much of what Mr Bolton says has emerged from a detailed inter-agency debate about America’s future engagement with the continent, seems to belong in the past. If his speech on Friday is the guide, Washington’s take on Africa is stuck somewhere between the 19th century scramble and the cold war, when the continent played proxy for superpower rivalry. Mr Bolton depicts US relations with Africa as a geostrategic board game in which Africans have less agency than a pawn. Whatever “predatory” moves by Chinese and Russian policymakers may be going on, he somehow finds America to be the principal victim. “Great power competitors, namely China and Russia, are rapidly expanding their financial and political influence across Africa. They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States,” Mr Bolton claims. It is unlikely many Africans will welcome the prospect of returning

to the era of “us or them” development partners depicted in this vision, or feel much sympathy if America is the one left behind. If the US has lost ground to rivals, it is successive administrations that are to blame. Washington has responded with complacency to the past two decades of changing dynamics on the continent, where bouts of rapid economic expansion have meant the emergence of more assertive governments, a growing consumer class and a host of new suitors from around the world. The pioneering spirit with which Americans built their nation has been notably absent from US-Africa policy. This has increasingly focused on combating militant Islamists and terrorism, at the expense of a more multi-faceted approach. Mr Bolton is wrong to see China’s role on the continent as uniquely negative. While Washington has been otherwise occupied, Beijing has adopted a long-term view of Africa’s potential, marrying its own quest for resources and new markets to Africa’s need for infrastructure development and fast money. Moscow, like Washington, is arriving late to the party. Mr Bolton is wrong on an-

other front: past development aid, which he dismisses as “aid without effect” and a waste of US taxpayers’ money. That is not true of the health initiatives launched by George W Bush, the previous Republican president, and which saved countless lives. Moreover, the benefits — in terms of exerting stronger US influence — of the stricter aid conditionality he recommends have been diluted by China’s willingness to provide billions of dollars in investment, free of politicised conditions. If there is a positive to draw, it is that Washington is waking up to the need to re-engage and that to do so effectively it must place economic ties to Africa up the priority list. The recent passage of legislation that doubles the spending power of the Overseas Private Investment Corporation is one step in the right direction. Giving a bigger role to the US government agency that handles private sector lending abroad plays to America’s strength by promoting closer business ties. It is a pity, however, that Mr Bolton depicts such measures as designed explicitly to project US power in Africa, rather than to promote reciprocal interests, and to counter the influence of “great power” rivals. Such language is out of step with the times.

Tech groups hid extent of Russian meddling in US election

Study for US Senate claims Facebook, Twitter and Google failed to disclose information Kiran Stacey

ig American technology companies have not told Congress the truth about the extent of Russian manipulation in the 2016 presidential election, according to a report prepared for US senators to be released this week. Facebook, Twitter and Google failed to disclose key information about how their services may have been used by the Kremlin to promote a pro-Trump agenda, said the report by New Knowledge, a cyber security company. The report is one of two written for the Senate intelligence committee, which lay out in detail the extent of Russia’s attempts to interfere in US politics both before and after the 2016 election. Their conclusions provide further ammunition for those in Congress who want to take stronger action against the US technology industry and those who want to ramp up investigations into President Donald Trump himself.

Mark Warner, the committee’s Democratic vice-chairman, said: “This should stand as a wake-up call to us all that none of us are immune from this threat, and it is time to get serious in addressing this challenge.” He added: “I hope these reports will spur legislative action in Congress and provide additional clarity to the American public about Russia’s assault on our democracy.” Mr Warner is at the forefront of efforts to impose stricter regulations on technology companies. The senator has proposed new rules such as forcing social media users to share their real location to combat foreign interference. The study by New Knowledge found that the Kremlin-backed Internet Research Agency used every social media platform, Google search and even online games such as Pokémon Go to spread disinformation and social division. It detailed how Moscow targeted African-American voters using websites with names such

as blackmattersusa.com to sow messages that were hostile to Mr Trump’s rival Hillary Clinton, and, occasionally, falsehoods such as that she took donations from the Ku Klux Klan. The study criticised some of the biggest US companies for withholding information that, it says, could have helped tackle some of these abuses. “None of the platforms (Twitter, Facebook, and Alphabet) appears to have turned over complete sets of related data to [the Senate intelligence committee],” it said. “Each lacked core components that would have provided a fuller and more actionable picture.” It added: “Regrettably, it appears that the platforms may have misrepresented or evaded in some of their statements to Congress. “One platform claimed that no specific groups were targeted (this is only true if speaking strictly of ads), while another dissembled about whether or not the Internet Research Agency created content to discourage voting (it did).

hen one of the Democratic Republic of Congo’s leading opposition presidential candidates campaigned in the mining town of Lubumbashi last week, security forces reportedly sprayed his convoy with tear gas and live ammunition, leaving at least three people dead. Martin Fayulu was heading from the airport towards the city centre surrounded by thousands of supporters, when the clash took place. The next morning the shells of burnt out vehicles littered the tree-lined streets and torn ruling-party campaign posters flapped in the wind. “First we felt the tear gas, and then they fired shots,” Mr Fayulu told the Financial Times in an interview in Lubumbashi. “How can we continue campaigning in this atmosphere?” Congo’s elections next Sunday are set to be historic — the country’s first transition of power by the ballot box as President Joseph Kabila steps down after 17 years in office. But Mr Fayulu’s experience has raised fears they will be far from democratic. Backed by the wealthy opposition leaders Moise Katumbi and Jean-Pierre Bemba — both of whom have been disqualified from standing — Mr Fayulu has been crisscrossing Congo in a private aircraft for the last two weeks. But even with significant financial resources at his disposal, his campaign has faced huge obstacles. From Lubumbashi in the country’s southeast, Mr Fayulu flew north the following day to the town of Kalemie to be met with a similar show of government force which left one young woman dead and nine people injured, according to the UN. The week before, though candidates should have free access to the whole country, the military prevented his plane from landing in the town of Kindu, a stronghold of President Kabila’s chosen successor, Mr Fayulu said. Even if the vote is smooth, free and fair — which is seen as unlikely given the electoral commission’s decision to roll out untested electronic voting machines for the first time — Congo’s political system makes democracy difficult. Presidential candidates pay $100,000 to register and campaigns cost millions. The country is twothirds the size of western Europe, roads are poor, rail virtually nonexistent and aviation costly. For a presidential candidate to visit even a handful of constituencies during the four-week campaign period, a private plane is a base-level requirement. Then there is the entrenched power of the state. The face of the ruling party’s candidate Emmanuel Shadary is omnipresent on posters in Kinshasa and Lubumbashi, the country’s two biggest cities. He flies on the ruling party’s aircraft and is welcomed by officials from Congo’s large government bureaucracy in every town and village. His campaign team, which is 400 strong, includes Mr Kabila’s brother and sister and sitting cabinet ministers.

Tuesday 18 December 2018

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Google to open $1bn office in lower Manhattan Investment in New York campus comes after Amazon announced push into city Aliya Ram

oogle will invest $1bn to open a new office in New York, giving it the room to more than double its staff in the city over the next decade. The Silicon Valley search company said on Monday the new 1.7m sq ft campus would be centred in Hudson Square, a neighbourhood in Lower Manhattan. The investment comes after Google paid $2.4bn earlier this year for nearby Chelsea Market, a former biscuit factory-turned shopping mall and office complex. The new Hudson Square campus is located between Soho and the Holland Tunnel. It includes two buildings on Hudson Street and an office at 550 Washington Street, an old freight terminal, where Google has signed a “letter of intent”. “New York City continues to be a great source of diverse, worldclass talent — that’s what brought Google to the city in 2000 and that’s what keeps us here,” Ruth Porat, chief financial officer, wrote in a blog post. “Our investment in New York is a huge part of our commitment to grow and invest in US facilities, offices and jobs.” According to Ms Porat, Google hopes to start moving into the Hudson Street buildings by 2020 and the Washington Street office by 2022. Google’s announcement is

the latest vote of confidence in New York from the tech industry after Amazon said it would open a major new office in Long Island City, Queens. The industr y’s breakneck growth has prompted many tech businesses to search for offices outside Silicon Valley to house increasing numbers of staff and tap new pools of workers. Cities have clamoured to be selected for these new offices, offering financial incentives and promising to invest in better transport links and other infrastructure. Amazon last month chose New York and the northern Virginia suburbs of Washington DC for a second headquarters after a much-publicised search that lasted more than a year. Amazon’s expansion has received a mixed reaction in New York, prompting jubilation from property developers and politicians but protests from some residents in Queens, who argue they will not benefit from the influx of investment. New York is well-known as a hub for finance and creative industries but has also attempted to position itself as a leader in technology following the 2008 financial crisis. Together, Google’s new offices in Chelsea and Hudson Square will allow it to more than double its staff in the city from 7,000 at present. Amazon is looking to hire 25,000 staff in New York.

Russia’s Polymetal sells Khakanja project to private buyers for $30m Nastassia Astrasheuskaya

ussia’s gold and silver miner Polymetal has sold its Khakanja mine to a group of private Russian buyers for $30m, the company said Monday. The sale, initially planned for 2019, comes as part of the company’s strategy of shrinking its asset portfolio to focus on its largest and most promising projects in Russia and Kazakhstan. “The disposal of Khakanja advances our strategy of selling smaller shortlived assets”, chief executive Vitaly Nesis said in a statement. Polymetal said it expected to receive $5m in cash and $25m in the form of assumed net debt for Khakanja. The sale follows a $50mn deal in October to sell the Kapan mine in Armenia to Kyrgyzstanbased Chaarat Gold Holdings. Earlier this year, Polymetal also sold its Svetlobor asset and a 50 per cent stake in Dolinnoye, and plans to commence a 74 per cent share sale in Veduga early next year. The Khakanja sale was driven

by the asset’s shrinking production — which Polymetal estimated would account for 2 per cent of the company’s total in 2020 — high production costs, depleted reserves, and limited exploration potential near the mine, the company said. The sale includes a processing plant, old stockpiles at Khakanja, deposits at Avlayakan and Ozernoye, as well as advanced exploration properties at its Kundumi site, which has mineral resources worth around the equivalent of 140,000 ounces of gold, according to the company. Polymetal, which commissioned Khakanja in the Far Eastern Okhotsk hub in 2003 and has produced 2m ounces of gold equivalent from it since then, expects to complete the transaction by the end of the year. Meanwhile, the company said it would focus on ramping up output at the recently launched Kyzyl mine in Kazakhstan and was working to begin production at Russia’s fourth largest gold site, Nezhda, in 2021.

Wall Street follows European stock markets lower Indices fall as investors look ahead to policy meetings in US and China

all Street suffered further falls in early trade on Monday as participants took their cue from a sell-off across European bourses ahead of the final meeting of the year from the US Federal Reserve. The S&P 500 was down 0.8 per cent in mid-morning New York trade at 2,578 while the Nasdaq Composite was 0.6 per cent lower — taking both gauges further into correction territory. Across the Atlantic, the benchmark Stoxx Europe 600 index was down 1.2 per cent in early afternoon trading, with retail shares the hardest hit. The slide in European equities followed a lacklustre trading day in Asia, where most indices dipped after jitters about the outlook for global growth had weighed on Wall Street late last week. Monday’s subdued global performance comes as analysts look ahead to crucial meetings in the US and China this week. In China, the Central Economic Work Conference on Tuesday is being closely watched for any signs that Beijing is considering further stimulus as the economy slows. The Fed, which meets on Tuesday and Wednesday, is expected to raise

rates and provide its outlook for the economy and monetary policy in 2019. “Investors will likely keep sidelined awaiting the Fed’s dot plot later in the week with protracted Brexit drama and poor economic data out from China giving traders all the incentive to remain defensive,” ING analysts noted. Equities Shares in European retailers dropped across the board on Monday after leading online fashion retailer Asos warned its trading had “significantly” deteriorated during November. That sent its stock tumbling more than 40 per cent, and was enough to unsettle the shares of other retailers. Next saw its shares drop by 6 per cent. Other stocks affected included Berlin-based online fashion retailer Zalando, which tumbled as much as 16 per cent and Swedish fashion retailer H&M Hennes & Mauritz, which fell 9 per cent. Earlier the CSI 300 index of major Shanghai and Shenzhen stocks closed 0.2 per cent down. Hong Kong’s Hang Seng also finished marginally lower. The picture was brighter in Japan, with Tokyo’s Topix adding 0.2 per cent. Forex and fixed income

The dollar index dipped 0.2 per cent to 97.21 but moves across foreign exchange markets were generally muted. The onshore renminbi exchange rate, which moves within a trading band of 2 per cent either side of a daily midpoint set by the People’s Bank of China, was flat against the greenback at Rmb6.8948. In the sovereign debt markets, the yield on the benchmark 10-year Treasury — which moves inversely to its price — was down 2 basis points at 2.87 per cent. Commodities Brent crude oil, the international marker, was down 0.6 per cent at $59.91 a barrel while the main US contract, West Texas Intermediate, was 1.2 per cent lower at $50.57. After an initial lift, oil prices have failed to build any momentum since Opec producers and Russia agreed to cut supply earlier this month. “Concerns about rising US shale output continue to weigh on the oil market. Despite Opec and Russia agreeing to reduce oil production . . . prices have fallen as the market awaits evidence that the cuts will balance the market,” noted ANZ analysts.

US burger chain Jack in the Box explores potential sale Pan Kwan Yuk

ack in the Box, the burger chain best know for its two-for-99 cents taco deal, is exploring strategic alternatives, including a possible sale of the company, less than a month after reporting a slump in full-year sales and earnings. In a statement on Monday, the San Diego-based group said it has held discussions with potential buyers but stressed that there is no guarantee that a deal would take place. “..in the absence of a strategic transaction the Company remains committed to its previously communicated plan to have a new capital structure in place by the end of the first half of fiscal 2019,” it added. “That capital structure could include, among other things, a securitisation or bond issuance.” Like many of its industry peers, Jack in the Box, which have more than 2,200 outlets across the US, has been battling a confluence of headwinds in recent quarters,

with growing consumer demand for healthier fare and food price deflation making it more appealing to cook at home rather than eat out. An explosion of entrants in the fast-casual food space in recent years and rising labour costs have further added to the sector’s pain. The chain’s woes have attracted the attention of activists investors, with Jana Partners and Blue Harbour taking a stake in the company this year. In response Jack in the Box sold off its struggling Mexican fast-casual chain Qdoba to Apollo Global Management for about $305m in March. Flagging sales have also drawn the ire of the fast-food chain’s franchisees, which in October demanded the company replace chief executive Lenny Comma. The National Jack in the Box Franchisee Association, whose members operate the bulk of the burger chain’s locations, said the company’s current strategy has hurt business and led to a loss of confidence in leadership. Same-store sales edged up

only 0.6 per cent for the fiscal year ending on September 30. Total revenues fell nearly 21 per cent to $869.7m during the period while net income came in 10 per cent lower at $121.4m. Long-term debt meanwhile stood at $1bn as of end of September, against a market capitalisation of about $2.1bn. A sale of Jack in the Box would mark the latest deal sweeping the US dining industry Last month, Bojangles’, the Charlotte-based chicken and biscuits chain, was taken private by investment firms Durational Capital Management and The Jordan Company for $593m. Buffalo Wild Wings owner Inspire Brands struck a $2.3bn deal to buy Sonic, the drive-in burger chain, in September. Papa John’s International has reportedly put itself up for sale. Restaurant International, the company behind Burger King, acquired Popeyes last year. Shares in the company, down 18 per cent so far this year, were unchanged in pre-market trading.

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Tuesday 18 December 2018

ANALYSIS Trump renews attack on Federal Reserve over interest rates US president says it is ‘incredible’ central bank is ‘even considering’ a hike this week Pan Kwan Yuk

Lex in-depth: SoftBank’s credibility problem The group’s shares trade at a discount but an IPO of its mobile unit could change attitudes Jonathan Guthrie and Sujeet Indap

he “singularity” is the theoretical point at which machines can out-think humans and technological change becomes unstoppable. It justifies breakneck investment in businesses with disruptive potential, according to Masayoshi Son, founder and chief executive of Japanese tech group SoftBank. “This is the biggest revolution in human history,” he told analysts in August. “Artificial intelligence will change or will redefine all the industries . . . the winners in AI will be winners in the future.” For the moment, the real singularity is Mr Son. As an iconoclast from consensual Japan, he embodies big contradictions. Fans see him as a tech investment genius. Some traditionally-minded Tokyo business people dismiss him as a reckless chancer. Chart on Softbank Japan mobile IPO SoftBank hopes to undercut hostility with one of the largestever initial public offerings. This month the group is floating a Japanese mobile phone operation with a mooted equity value of more than $60bn. Executives believe this will reassure investors about the debts carried by the business and trigger a re-rating. SoftBank is the world’s largest focused tech investor. Yet for all Mr Son’s futuristic talk, it sometimes buys relatively mature businesses. Mr Son and his fans believe it takes no unhedged risks. Critics decry it in the terms Warren Buffett once reserved for derivatives: as a financial weapon of mass destruction. SoftBank’s credibility problem is reflected in a big gap between the value of its investments and the price of its shares. “They are the buyer of first resort,” says one Asia fund manager, reflecting on the group’s fondness for snapping up shares in wellhyped tech plays, such as Uber and WeWork. “They always want to supersize their investments. They have an issue finding companies willing to take the amounts of money they want to hand out.” The flotation will bring greater clarity to a tangled structure that reflects Mr Son’s restless quest for innovation rather than any conventional corporate strategy. But an FT analysis suggests the move could heighten risks for SoftBank’s shareholders and lenders rather than dampen them. Dangers are already understated by the group’s optimistic account of its own finances. The technological evangelism of Mr Son divides opinion. “He is a

visionary,” says Dan Baker, an analyst at Morningstar who rates the company a buy. “He is extremely bullish and rarely mentions negatives. Investors are wary of what is not being talked about.” These include “complexity, opacity and leverage”, according to Chris Hoare of New Street Research. Even compiling a sumof-the-parts valuation — a simple exercise for most conglomerates — is tricky for SoftBank. But the discount between the impressive value of the group’s investments and its lowly Tokyo-listed shares is over 60 per cent, according to FT analysis of S&P Global data. The chasm is hardly flattering for Mr Son. It implies his investment skills — or a perceived lack of them — have a negative impact equivalent to $148bn. The boss of a quoted private equity group in the US or UK could be fired for a discount as big as this. One part of the calculation involves nothing harder than totting up the value of stakes in listed companies such as Yahoo Japan and Sprint, a US telecoms business. Another part requires bold assumptions. Lex followed the lead of many analysts in knocking 30 per cent off the $100bn market value of a stake in Chinese ecommerce group Alibaba— SoftBank’s key asset — to allow for tax on any sale. Lex assumed Arm, a chip designer, is worth the full $32bn SoftBank shelled out for it. By some measures, SoftBank overpaid for the UK business. This is a mature supplier to smartphone makers that has much to prove in a nascent métier: the internet of things. Deeper controversy bedevils SoftBank’s $97bn Vision Fund. Saudi Arabia, its largest backer, lost much of its cachet as an investment partner after its agents murdered journalist Jamal Khashoggi in Turkey in October. Some analysts fear Silicon Valley start-ups will now spurn Vision Fund financing on ethical grounds. Keeping track of SoftBank’s contribution to the fund is a more prosaic difficulty. Lex went with the company’s most recent official valuation of $35.8bn, implying a jump of almost $8bn in a few months, though the real value of the shares is in the eye of the beholder. Paradoxically, the higher the number SoftBank puts on these stakes the greater the dismaying share price discount. No wonder Mr Son is trying to address this. We value SoftBank’s investments at a total of $235bn, while its market worth is just $85bn. The flotation of the Japanese mobile business is the first step in a plan to lift market capitalisa-

tion. It works brilliantly on paper, inspiring Bernstein analyst Chris Lane to describe it as “alchemy”. Transmuting base metal into gold may be harder in practice. In the eyes of most Japanese consumers, SoftBank is a mobile phone company with a newsworthy entrepreneur attached. The household name, combined with fat dividends, should lure retail investors. That has emboldened SoftBank Group and its legions of bankers to attach an aggressive float price to the unit. At ¥1,500 ($13.20) per share, the telecom company would have an equity value of $64bn. The sale of a 37 per cent stake for $23.3bn should hopefully increase SoftBank’s market worth by the same amount. An optimist would expect the shareholding in the mobile operator retained by SoftBank to be priced into its market worth in a similar way. The gap between the parent’s implicit and market values should narrow as a result. This contraction would be helped by a change in stock analysts covering SoftBank from earnings-obsessed Japanese telecoms specialists to asset management analysts, some of them based in the tech-friendly US. There are three caveats. First, the re-rating of the retained stake is conjectural, until shares in the phone unit start to trade. Second, Mr Son is likely to sink at least half the IPO proceeds into new tech investments, where their value will once again become opaque. The third caveat is the most significant. The mobile operator is coming to the stock market when a telecoms price war in Japan is threatening to erupt. SoftBank Group’s racy pricing of shares in its subsidiary is only justifiable if fat dividends from the latter are sustainable. The mobile operator should be able to keep a pledge to pay out 85 per cent of net income. But that will count for little if net income itself is tumbling. The problem would be more acute for SoftBank Group than the consequent reduction in the value of its shareholding in the phone unit. SoftBank is heavily dependent on cash flows from Japanese mobile phone charges to service its $130bn net debt mountain. About a quarter of that debt is the result of a sally into US telecoms. In 2012, SoftBank spent $20bn to buy 70 per cent of the shares of Sprint. Mr Son’s plan was to create a telecoms juggernaut to challenge AT&T and Verizon. He hoped to merge Sprint with T-Mobile. But an exercise in empire building became a lesson in humility.

resident Donald Trump renewed his offensive against the Federal Reserve and chairman Jay Powell on Monday, saying it is surprising that the US central bank “is even considering” raising interest rates again this month. “It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!,” he said in a tweet just a day before the start of the final Fed policy meeting of the year. US presidents have typically refrained from commenting on the Fed’s decisions in an effort to emphasise the bank’s indepen-

dence from political pressure. But in a marked departure from his predecessors, Mr Trump has voiced his opinions on the Fed’s actions and his unhappiness with the strength of the US dollar on multiple occasions this year. He took aim at the Fed earlier in October amid one of Wall Street’s worst sell-off in years, calling the US central bank at various turns “out of control”, “crazy” and “his biggest threat.” Having already raised rates three times this year, the Fed is widely expected to increase rates one more time this week. However the outlook for further rate rises in 2019 has become murkier amid trade worries, market turmoil and what has been deemed as dovish comments from Mr Powell.

Nissan decides against appointing a replacement for Carlos Ghosn Japanese carmaker’s directors want more time before picking a new chairman Kana Inagaki, David Keohane and Peter Campbell

issan was unable to name a replacement for its ousted chairman Carlos Ghosn after the Japanese carmaker postponed the decision until an overhaul in its skewed governance structure. Hiroto Saikawa, chief executive of Nissan, had earlier been expected to double as interim chairman. But the company’s three external directors, who have been given authority to select the new chairman, requested more time for discussions. At a news conference following Monday’s board meeting, Mr Saikawa said he would not set a deadline for choosing Mr Ghosn’s replacement and suggested the company may wait until the end of March when a newly established committee of external experts plans to compile proposals to improve governance. The board meeting came after its alliance partner and biggest shareholder Renault urged Nissan’s board to call an extraordinary general meeting, in a move that would allow the French carmaker to make key appointments at the Japanese company after the ouster of Mr Ghosn. In a letter dated December 14, Thierry Bolloré, Renault’s acting chief executive, wrote to Mr Saikawa to express the French company’s deep concerns about last week’s indictment of Nissan along with Mr Ghosn on allegations of financial misconduct. At the news conference on Monday, Mr Saikawa did not confirm the request from Renault. But he said it would be better for the company to hold an EGM after the governance proposals are made. The proposals, including on setting director compensation, would be made by a seven-mem-

ber governance committee led by a former prosecutor and including three other governance experts and three of Nissan’s external directors. Until the appointment of two independent directors in June, Nissan’s sole outside director was a retired Renault employee. It also had no board committees — the mechanisms for oversight on executive remuneration, appointments and auditing. The external directors felt choosing an interim chairman under the currently flawed governance structure was “not logical”, according to a person close to the board. They also had reservations about Mr Saikawa doubling as chairman, considering that he had also been critical about concentrating too much power in Mr Ghosn’s hands. “I currently focus on the CEO’s role to rebuild the company,” said Mr Saikawa when asked about whether his potential appointment as interim chairman would put too much power in one individual. The person added that there was little discussion about Renault’s request for the EGM at the two-hour board meeting. Under Japanese rules, Nissan has eight weeks to respond to Renault’s request for an EGM. Mr Ghosn, who is also chairman and chief executive of Renault, remains as a director of Nissan’s board even after he was arrested and ousted as chairman last month. Meanwhile, the French government is ramping up its preparations to replace Mr Ghosn at Renault if he is unable to return and head the company. The search process is at an early stage, according to two people familiar with the matter, and should be considered precautionary, since Mr Ghosn maintains his innocence.

Tuesday 18 December 2018

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Evidence proved Eni, Shell knew of shady payments to Nigerian officials - judge DIPO OLADEHINDE

n an ongoing court trial involving scandals in Africa’s most valuable oil bloc worth about $1.3 billion, an Italian judge has recognised both Eni and Royal Dutch Shell were fully conscious that their 2011 purchase would result in corrupt payments to Nigerian politicians and officials. According to Reuters, Judge Giusy Barbara on Monday explained her written reasons for the September conviction of two middlemen Nigeria’s Emeka Obi and Italy’s Gianluca Di Nardo, who were both found guilty of corruption and thereafter sentenced to four years imprisonment. “The management of oil companies Eni and Shell ... were fully aware of the fact that part of the $1.092 billion paid would have been used to compensate Nigerian public officials who had a role in this matter and who were circling their prey like hungry sharks,” Judge Giusy Barbara said in her reasoning.

In her reasoning, Judge Barbara alleged that Shell executives, including former Shell head of upstream Malcolm Brinded, had known that Etete would keep a part of the purchase price for himself and use the rest to “pay people”, including Nigerian politicians and public officials who had helped him to take possession of the field in 1998. “It was not mere connivance, but a conscious adhesion to a predatory project damaging the Nigerian state,” she said. Reacting to the court statement, Shell said neither Obi nor Di Nardo had worked for Shell, therefore there was no basis to convict any of its former staff of alleged offences related to the oil deal while Eni who had also previously denied any wrongdoing said it would analyse the judge’s remarks, noting that a fuller account of the facts and evidence surrounding the deal would emerge only from the main trial. Last week, the Federal Government filed a lawsuit against the oil companies in London to the tune of $1.1 billion.

Recall, earlier in September Italian prosecutors proved that Emeka Obi received a mandate from Dan Etete to find a buyer for OPL 245, collecting $114 million while Di Nardo took $24 million of that amount for putting Emeka Obi in touch with Eni. Both Obi and Di Nardo, accused of being middlemen and taking illegal kickbacks, had asked for a separate fasttrack trial which, under Italian law, allows sentences to be cut by a third. The Malabu oil scam, which has been under investigation for over four years, relates to the billions of dollars paid by oil giants, Shell and ENI, into a Federal Government account, for OPL 245, considered the richest oil block in Africa. OPL 245 is perhaps, the most talked-about asset in Nigeria’s oil industry. It covers 1958 square kilometres and holds over 9 billion barrels of crude oil, equivalent to nearly one quarter of Nigeria’s total proven reserves. Experts claim that the deposit can power the whole of Africa for twenty years.

NCC reviews service level agreement to speed up complaint resolution JUMOKE AKIYODE-LAWANSON

igerian Communications Commission (NCC) has commenced the review of its customer Service Level Agreements (SLAs) for the resolution of consumer complaints and escalations to service providers in order to ensure faster and more effective resolution of consumer complaints in the telecoms industry and improve overall consumer experience on all telecoms networks. BusinessDay gathers that the review will be carried out by a joint NCC-industry working committee, which the commission has set up so as to ensure robust stakeholder participation in the exercise, and in furtherance

of its consultative approach to rule making. Speaking during the inauguration of the NCC component of working committee, at the NCC headquarters in Abuja, Sunday Dare, executive commissioner, stakeholder management of NCC, re-emphasised the commission’s commitment to ensuring superior consumer experience on all telecoms platforms. Dare noted that as a consumer-centric telecoms regulator, the NCC believed that effective and timely resolution of consumer complaints is fundamental in consumer protection, pointing out that these are also fundamental statutory obligations of the commission as detailed in Sections 4 and 105 of the Nigerian Communications

Act (NCA), 2003; the Quality of Service Regulations 2013, the Consumer Code of Practice Regulations, 2007 and other similar instruments. He therefore charged the Committee to ensure that reviewed SLAs entrench the commission’s consumercentric focus, whilst also taking due cognizance of the relevant ecosystem, technology and other factors affecting quality of service. It would be recalled that the NCC had met with service providers and the Association of Licensed Telecommunications Operators of Nigeria (ALTON), the umbrella industry organisation in Lagos on September 26, 2018 to discuss ways of enhancing the speed and quality of complaints resolution.

NCS revenue profile hits N1.1trn in 11 months of 2018 over enhanced automation AMAKA ANAGOR-EWUZIE

nhanced automation and strict implementation of import and export guidelines have pushed up the revenue generated by the Nigerian Customs Service (NCS) in the first 11 months, January to November 2018, to N1.1 trillion, compared with N1.037 trillion recorded same period in 2017. Joseph Attah, national public relations officer of Customs, who disclosed this to newsmen on Monday, also attributed the performance to robust stakeholders’ engage-

ment and effective suppression of smuggling to the barest minimum. Attah said Customs also recorded 4,010 seizures with duty paid value of over N40 billion including the recently announced seizures of 59 by 40 feet containers of tradmadol and other controlled drugs intercepted in Tin-Can, Apapa and Onne ports. He said that the service also impounded a total of 234,094 bags of 50kg of parboiled rice. “Customs introduced the e-auction platform in July 2017 and has so far uploaded 806 units of vehicles out of which

753 winners have emerged and a total of N346,146,349 generated through the electronic auction platform. “In terms of seized rice, a total of 424,391 bags of 50kg rice worth N4,047,615,000.00 and other perishable goods have been distributed to the internally displaced persons (IDPs) in Borno, Yobe, Adamawa and Edo States,” Attah said. According to Attah, suppression of smuggling remains the most challenging aspect of Customs operations as antismuggling operations are seen differently by different people.

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Nigeria’s deepwater Bonga hits 800mb mark OLUSOLA BELLO

he flagship of the Nigerian deepwater Bonga has through Bonga vessel of the Shell Nigeria Exploration and Production Company (SNEPCo) recorded another milestone as it marked it 800 million barrels marks in it 13 years of existence. Bayo Ojulari, managing director, SNEPCo’s in his review of the performance of the Bonga Floating Production, Storage, and Offloading (FPSO) vessel for 2018, expressed satisfaction with the consistent availability and optimal performance of the vessel that began operation at the Bonga field in OML 118 in 2005 under a production sharing contract with the Nigeria National Petroleum Corporation (NNPC). “We are relentless in our

pursuit of excellence on all fronts, and this we have consistently demonstrated with the management of Bonga to the satisfaction of our government and co-venture partners,” Ojulari said in Lagos on Monday. “We leverage the Shell Group’s global expertise in technology and new advancements in the industry to continue to unlock Bonga’s huge potential, one such example was the completion and inauguration of the Bonga North West Cross Over module in 2014, a first in the history of Shell, which launched the beginning of a new phase delivering the reservoirs proven volumes and maintaining production of the FPSO at full capacity,” he said. According to Ojulari, SNEPCo, with the support of NNPC and the co-venture partners – Total E & P,

Nigerian Agip Oil Company, and ExxonMobil – has also done so much for Nigeria and Nigerians in its years of operations in revenue and taxes accruable to the government, and social investments in education, sports and health across the country. In the last three years, SNEPCo has spent over $3 million yearly in scholarships and other intervention in schools across Nigeria, including the popular NNPC/ SNEPCo Cradle-to-Career scholarships for the six years of secondary school for children from rural areas. The scholarships with over 375 beneficiaries since its commencement in 2014 cover tuition, boarding and maintenance allowances in leading schools in select Nigerian cities. Ojulari said, “Our health and education programmes

are aimed at improving healthcare; bridging the educational opportunity gap between urban and rural school populations; providing educational grants; improving ICT education; and supporting displaced persons.” Elohor Aiboni, Bonga asset operations manager, described the FPSO as a jewel, noting however that SNEPCo’s achievements did not come without their challenges. “We overcome our challenges with the ingenuity and integrated delivery approach of our staff who work together every day to deliver one of the best assets in the world. “I’m proud to say that over 95 percent of SNEPCo’s staff are Nigerians and they have distinguished themselves as some of the best in the industry within and outside Nigeria,” Aiboni said.

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Edo okays solar solution in rural schools, seals deal with youths at Innovation Hub

n what is best described as a game-changing effort to mainstream innovative youths in community-focused solution to power problems in Edo State, Governor Godwin Obaseki has approved the deployment of a 1.5KVA solar box developed by youths at the Edo Innovation Hub in addressing electricity supply challenge in rural schools across the state. Obaseki stated this while delivering his keynote address at the “Power for Edo Hackathon 2018” organised by the state government in collaboration with Siemens’s Impact Hub. The governor said his administration was collaborating with Green Fusion Energy Ltd. to provide solar energy installation to power schools in rural areas of the state. The innovators, who founded the company, Green Fusion Energy, were groomed at the Edo Innovation Hub, the state government-backed innovation cluster located in

Benin City, the state capital. According to the governor, “During the 2018 Alaghodaro Youth Summit, we met with Green Fusion Energy Ltd., a team made up of EdoJobbers, who invented a solar box with a 1.5KVA capacity. “I have contracted them to provide 100 of such devices to power schools in rural areas in the state in collaboration with the State Universal Basic Education Board (SUBEB).” He said the essence of the hub was to help young people tap into their creative potential to create solutions for problems in the society. The governor commended Siemens for its partnership on the Power for Edo Hackathon, urging youths to utilise the opportunity to strive for excellence and horn their creativity. “I have confidence in Edo youth because they are aspirational and I know they will come up with brilliant ideas. I look forward to partnering with a crop of you in the programme,” he assured.

Okowa committed to peace building across Delta communities - Otuaro FRANCIS SADHERE, Warri

L-R: Egie Akpata, director, Union Capital Markets Limited; Oscar Onyema, CEO, Nigerian Stock Exchange, and Funso Akere, CEO, Stanbic IBTC Capital, during the 2018 Nigerian Stock Exchange CEO Awards where both companies were presented with the “Issuing House with the largest value in a single deal’ award.

eputy Governor of Delta State, Kingsley Burutu Otuaro, on Monday said the state governor, Ifeanyi Okowa, was committed to building peace across all the communities in the state. Otuaro said the state government was unwavering in its commitment to maintaining peace towards developing all parts of the state. Otuaro, who is also chairman of Delta State Advocacy Committee Against Vandalism of Oil and Gas Facilities, gave the assurance in Warri

while addressing newsmen shortly after a tripartite meeting of the state government, representatives of Ogulagha/ Forcados communities and the Shell Petroleum Development Company Ltd (SPDC). The deputy governor, who said the engagement was one of periodic meetings geared towards reviewing the security situation in the area, expressed satisfaction with the outcome of the meeting. “It is a tripartite meeting for peace building among representatives of communities in Ogulagha/Forcados area, SPDC and the Delta State government.

NOVA Merchant Bank confirms appointment of Anya Duroha as substantive MD/CEO

N8bn fraud: Skye Bank ex-chair, Ayeni; MD, Oguntayo get 36 hours to fulfil bail conditions

oard of NOVA Merchant Bank has confirmed the appointment of Anya Duroha as the substantive managing director/CEO. The Board’s confirmation made at its meeting of Thursday, December 6, is subject to the approval of the Central Bank of Nigeria. Duroha has been in acting capacity since August 30, 2018. Commenting on the appointment, Phillips Oduoza, chairman of NOVA Merchant Bank, said, “The Board believes that Anya has the necessary attributes to successfully lead the team of young professionals and execute on the Bank’s strategy. “He is a well-rounded banker with requisite experience and knowledge in key areas of banking having

INNOCENT ODOH, Abuja

started his career in operations and systems. It is expected that he will bring his over twenty-five years relationship management experience and performance driven focus to achieve the vision of the bank.” Duroha, the CEO, commented, “I am honoured to be appointed the CEO of

an organization that is designed to deliver high quality services and innovative financial solutions to clients. I will do my best to develop our young talents into world class leaders and drive innovations in the industry.” Anya has previously served as the Executive Director, Wholesale Banking, responsible for development and management of the Bank’s corporate banking relationships. He has also held senior executive positions at various banks in the industry. He holds M.Sc. in Banking & Finance from the University of Benin and a B.Eng. in Civil Engineering from the University of Nigeria, Nsukka. He is an alumnus of Wharton Business School, University of Pennsylvania and Lagos Business School.

conomic and Financial Crimes Commission (EFCC), on Monday arraigned a former chairman, Board of Directors, Skye Bank plc, Tunde Ayeni, before Justice Nnamdi Dimgba of the Federal High Court, Abuja, on an eight-count charge, bordering on money laundering to the tune of about N8 billion. This was disclosed in a statement issued on Monday by the acting head of media and publicity of the Commission, Tony Orilade, saying that Ayeni was arraigned alongside Timothy Ajani Oguntayo, for allegedly conspiring at different times to fraudulently divert depositors’ funds domiciled at the bank. After the arraignment, the judge, in a dramatic twist,

granted the defendants 36 hours freedom, to meet the bail conditions or be remanded in Kuje Prison. They were asked to go home, the statement said. One of the counts read: “That you Dr. Tunde Ayeni whilst being the Chairman Board of Directors of Skye Bank Plc and Timothy Ajani Oguntayo whilst being the Managing Director and Chief Executive of Skye Bank between the years 2014 and 2015 conspired at different times to do an illegal act, to wit; caused cash delivery to you, Dr. Tunde Ayeni of the sums of money totalling N4,750,000,000 (Four Billion, Seven Hundred and Fifty Million Naira) and USD5,000,000 (Five Million United States Dollars) belonging to Skye Bank Plc, contrary to the provisions of Section 1(a) of the

Money Laundering (Prohibition) Act 2011 (as amended) read together with Section 18 (a) of the Money Laundering (Prohibition) Act 2011 (as amended) and punishable under Section 16(2) (b) of the Money Laundering (Prohibition) Act 2011 (as amended).” They pleaded “not guilty” to all the counts. In view of their pleas, prosecuting counsel, Abba Mohammed, prayed the court for a trial date and prayed that the defendants be remanded in prison custody, pending the hearing of their bail applications. Before the court’s ruling, Counsel for the first defendant, Dele Adesina, who held brief for the lead counsel, Wole Olanipekun, informed the court of their pending bail application, which was served on the prosecution on December 13, 2018.

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My Youth Minister will be under-30, Atiku pledges …As Secondus warns INEC, security agencies against rigging Zebulon Agomuo

he Presidential Candidate of the People’s Democratic Party (PDP), Atiku Abubakar, has said he would appoint a youth below 30 years of age as his Youth Minister, if voted into power next year. Abubakar, who made the pledge in Lagos at a Youth Town Hall meeting, said he would not renege on his promise. “Let me repeat what I have said before. I have pledged 40 percent of my appointments to the youth. My Minister of Youth is going to be a person below 30 years. It is my promise. I am not going to break it. This is simply because youths are the future of the country and we want to make sure that we bequeath a good future for the youth,” he said. The Presidential candidate, who stormed the venue of the meeting with eminent members of the party and a retinue of his campaign team, took a swipe at the All Progressives Congress (APC) government, saying he wondered why they still seek a return to power having openly acknowledged that the economy

has completely collapsed under their watch. According to him, “If the economy is good, we prosper, individually and collectively. If the economy is bad, we all perish. There is no single economist in their team. They said that the economy has collapsed. If it is so, why are they asking you to return them to power? Is that the kind of people you want to return to power?” In his remarks, Peter Obi, vice presidential candidate and Abubakar’s running mate, said that the current government had failed in two most important aspects of governance in the country. According to Obi, “Your country today is not investing in education. The more a country invests in education, the more developed it becomes. Atiku administration will invest in education. Again, the economy is collapsing and the President has said he can no longer run the country.” Obi also said that it takes longer period of time and costs more money to clear goods from Apapa port than it takes to import the goods from foreign countries. “Currently, it is more expensive to bring out goods from Apapa port than it is to bring in goods from Europe. You are just paying for the delay in importation, the number of time cargos stay in the ports and so on. We can’t continue to pay for inefficiency in this country. “Do not vote Buhari again. He doesn’t understand what is happening here. We can’t continue this way. We must get the youths employed. You desire a job. You

Agbaje group accuses Lagos APC of compromising PVCs for 10,000 … PDP frustrated – APC Iniobong Iwok

he campaign organisation of the People’s Democratic Party (PDP) governorship candidate for Lagos State, Jimi Agbaje, has accused the ruling All Progressives Congress (APC) of cloning and compromising Permanent Voters’ Cards (PVCs) for N10,000 preparatory to rigging the 2019 polls in the state. A statement by Felix Oboagwina, director of Media and Publicity of Agbaje gubernatorial campaign group, accused APC agents of moving from one resident to other convincing unwary voters to submit their Voter Identity Numbers (VINs) in return for instant cash transfers. The group further disclosed that the agents often usually ask for people’s VINs, snap their photographs and collect their account details, upon which money was then instantly transferred to those

who complied. “Each target is usually given N10, 000. If you say you have no account, they will send the money into the account of someone around to assist you in cashing the money,” “Information reveals that on election day, all such procured VINs will be remotely deactivated from each owner’s card and automatically activated to vote APC. APC has cloned hundreds of thousands cards that will be used to neutralise the compromised cards”. However, responding the Publicity Secretary of Lagos APC, Joe Igbokwe, denied the report, saying that the PDP was frustrated after realising it had lost the support of Lagosians and was likely to lose next year’s election. “It is not true, the PDP is frustrated because it is obvious it had lost the support of Lagosians, they know they will lose next year’s election, that is why all this is coming up”.

L-R: Agbaje, Obi, Atiku, Udeh-Okoye and Secondus at the event.

desire government support, not ten, ten, thousand naira trader moni. That is vote-buying; it is vote bribe and must be stopped. The truth is that Buhari must go. He has said it himself that he cannot do anything again; the economy is in difficulty. Let him go so that we bring somebody who can manage the economy. Atiku will manage the economy and be productive.” Addressing the crowd, Uche Secondus, national chairman of the PDP, said that change of government next year, through the ballot, was a fait accompli, warning the Independent National Electoral Commission (INEC) and security agencies to stay within their jobs. “We are not here for rhetoric. But to present to you the President that can interact, interface and feel the pulse of the youth. You can see his presence and communicate with

him. We are in for a serious business. There will be no cabal. We don’t know who is in charge of government today. General Buhari does not take responsibility. He is not aware of what is happening. He is not aware that Nigerian youths are suffering. They said Nigerian youths were lazy. But Nigerian youths are innovative, industrious,” Secondus said. According to him, “When it comes to February 16, you will be voting for your freedom; for your liberation. The President is not aware that people are killed everywhere in this country. He acknowledged that the economy has collapsed. Everything in Nigeria has collapsed- security has collapsed; economy has collapsed. The social contract of our candidate with the youth is that it will not be business as usual; he will work with the youth.”

“Let me warn INEC and advise the security agents that Nigeria is already tensed up. This time around, it can’t be like Ekiti and there is no way it will be like Osun. You cannot rig the election. By the grace of God, PDP will win the election. The Nigerian security agents are one of the best in the world, but they are being misused now. It cannot be so in 2019,” Secondus added. Earlier in his welcome address, Sunday Udeh-Okoye, national youth leader of the PDP, urged the youth to vote en masse for Atiku Abubakar, saying that the PDP presidential candidate “is an advocate of peace; he is not a tribalist, and that his campaign team is made up of people from all parts of the country.” Udeh-Okoye further said: “He will not be the person that will give some people 97 percent and give some others 5percent. Whether you vote for him or not, he will treat everybody equally and without segregation.” In their various remarks, Jimi Agbaje, governorship candidate of the party in Lagos State; Gbenga Daniel, a former governor of Ogun State, and Ayodele Fayose, immediate past governor of Ekiti, said it would benefit the youths more to vote for Abubakar than to return President Buhari. They also expressed the optimism that Atiku would create the needed jobs for the youth and all Nigerians. Also at the event was a former governor of Cross River State, Liyel Imoke, deputy director general, PDP Presidential Campaign Organisation.

2019: INEC to adopt special arrangement for internally-displaced persons …Denies plans to create polling unit in Chad, Niger Iniobong Iwok

head of the 2019 general election, the Independent National Electoral Commission (INEC) has said it had adopted a framework for internally displaced persons to vote in the election within their state of settlement. There have been increasing fears among political stakeholders in Nigeria that thousands of residents displaced by the raging clashes between Farmer/ Herdsmen and the Boko Haram insurgents attacks which have calmed thousands of lives since 2009 may be disfranchised. The internally-displaced persons are predominantly in the northern part of Nigeria. However, speaking at an interactive section between INEC chairmen, leaders of the com-

mission an INEC Youths Ambassadors, National Commissioner, Festus Okoye, said that the commission was aware of large numbers of internally-displayed person across some states in the country and had finalised arrangement for the displaced persons to vote in the general elections. Okoye however, stressed that the displaced persons sheltered outside their state of origin could only votes in the presidential elections. “The commission is aware of large internally displaced persons in some states in the country as a result of conflict in some part of Nigeria. We have adopted a framework for the internally displaced person to vote in the general elections. “Individuals displaced outside their states can only vote in the presidential election, they can’t

vote in the gubernatorial election, while those sheltered within their states can vote in all the elections,” Okoye said. Speaking the commission chairman, Mahmood Yakubu, said that the commission decided to appoint Youth ambassadors in 2015 across the media, entertainment and creative industry, to help create awareness about the commission’s activities and help sensitise the youths on the electoral process, stressing that the commission had appointed more Youths ambassador ahead of next year’s election. “The commission had in 2015 appointed youths who are successful in their chosen career as ambassadors to engage the youths encourage their participation in the electoral process and for the 2019 general elections; we are appointing more of them ahead of 2019 elections”.

Tuesday 18 December 2018

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BUSINESS DAY

Why Buhari must participate in presidential debate on Jan 19 Stories by ODINAKA ANUDU

igerians must prevail on President Muhammadu Buhari to participate in the upcoming presidential debate to explain his three-and-half-year policies himself and what he is bringing differently in the next four years. In 2014/15, Buhari had avoided presidential debates as an opposition candidate for the All Progressives Congress(APC). Some faceless groups, like they did in 2015, are already popping up emotions, urging Buhari not to participate in the debate. Whether it is out of fear of being dwarfed in the debate by other candidates or not, Nigerians must put pressure on all candidates, including Buhari, to come out and talk to them on what they wish to bring to the table if elected, or reelected in case of Buhari. The debate, which is being organised by the Nigerian Elections Debate Group (NEDG) and the Broadcasting Organisations of Nigeria (BON), will have presidential candidates from five parties, including Allied Congress Party of Nigeria (ACPN), Alliance for New Nigeria (ANN), All Progressives Congress (APC), Peoples Democratic Party (PDP) and Young Progressives Party (YPP). The vice presidential version was held on December 9. The economy is in bad shape. According to the Brookings Institution, Nigeria is now the poverty capital of the world with a record 87 million people living in extreme poverty and 8,000 people sliding into extreme poverty on a daily basis. Nigeria is fourth on the Misery Index in the world. The

President Buhari

population grows at 2.6 percent per annum, while GDP growth in the third quarter of 2018 was 1.81 percent, according to the National Bureau of Statistics (NBS). Inflation, which stood at 11.28 percent in November, has been double-digit for more than one year. The economy slipped into recession under Buhari. Unemployment rate is 18.8 percent. The NBS said that the country’s foreign debt at the end of the first half of 2018 (H1’18) was $22.08 billion, representing a 17 percent rise over the $18.9 billion recorded at the end of 2017. The country’s fortunes are also stymied by high domestic debt and extremely high-cost debt ser-

vicing. Nigerians deserve Buhari’s explanation on all these. The President also needs to tell Nigerians why Apapa that provides N3 billion to N7 billion every day for Nigeria is left to totter. About 5,000 trucks seek access to Apapa and Tin Can ports in Lagos every day, according to a latest maritime report by the Lagos Chamber of Commerce and Industry (LCCI). These trucks have continued to plunder Apapa and Tin Can despite that access roads and the two ports were originally meant to accommodate only 1,500 trucks. Consequently, Nigeria loses N600 billion in customs revenue, $10 billion (N3.6trn) in non-oil export sector and N2.5 trillion in

corporate earnings across various sectors on annual basis due to the poor state of Nigerian ports. The LCCI report notes that 25 percent of cashew nuts exported from Lagos to Vietnam in 2017 went bad or were downgraded owing to delays at Lagos ports. Similarly, only 10 percent of cargoes are cleared within the set timeline of 48 hours now while the majority of cargoes take between five and 14 days to clear. The report even notes that some cargoes take as many as 20 days to be cleared at the ports. This means that executive orders on ease of doing business in the ports are violated. Babatunde Ruwase, president of LCCI, had recommended the finalisation of concessioning of Onitsha seaport, urging the government to improve the security situation along and within the Warri port in order to ward off militants and touts. Three and a half years after Buhari’s first term, these ports have remained the way they were in previous administrations. “It is our fault if Buhari refuses to attend the debate. If he does not speak to us, then he is either unfit to stand for a long time during the debate or he does not have the capacity to argue his points, which are both bad signs,” Kolawale Odunjo, an Ogun Statebased businessman, said. Nigeria has allocated only 2.9 percent of its total budget on health in the last three years, as against South Africa’s 13 to 15 percent over the same period, according to BusinessDay calculations. Consequently, everything in the health sector is getting worse. The WHO puts standard health budget allocations at 26 percent, especially for developing coun-

tries. Nigeria has demography of 198 million, which presents a market opportunity but also a health burden on the government. The 2017 was marred by outbreaks of diseases such Lassa fever, which occurred in 718 cases wherein 68 persons died. Between January and July 2018, there have been 115 deaths in confirmed cases and 10 in probable cases. Cerebrospinal meningitis was suspected in 14,518 cases, across 181 local government councils, with 1,166 people reported death. Other outbreaks of include monkey pox and cholera. Cancer is responsible for the deaths of 72,000 Nigerians yearly, according to Wellbeing Foundation Africa (WBFA)’s 2019 research. “The World Health Organisation has a standard benchmark that should be followed by developing countries with high rates of diseases. Compare that ratio with what we have in Nigeria and you will see why we still struggle with health issues,” Okey Akpa, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (MAN), told BusinessDay on the phone. “This is a global benchmark that is a product of research,” Akpa added. President Muhammadu Buhari, on coming to power, had barred civil servants from seeking medical treatment abroad, promising to visit local hospitals himself. Ironically, he became the first to visit a London hospital when he fell sick. More so, Buhari needs to tell Nigerians his plan for the education sector in the face of Academic Staff Union of Universities (ASUU) strike and 10.5 million out of school children.

manufacturing, among others, as key focus areas in these markets. EY also has a project called EY Ripples, which helps it to, in a better way, do more investments in corporate social responsibility, he added. Ben Afudego, partner and advisory leader for West Africa, said EY wants to give experience to the people in the AIM markets instead of letting them go abroad. “We want to keep EY business outside the country’s cyclical family,” Afudego said. Nigeria’s population grows at 2.6 percent per annum, while GDP growth in the third quarter of 2018 was 1.81 percent, according to the National Bureau of Statistics. Afudego said Nigeria needs to carry out some reforms. “We cannot continue to run an economy where GDP growth is lower than population growth,” he said.

“Tax policies need to be reviewed. Nigeria can have a tax policy targeted at consumption,” he said. He stated that a credible election is necessary in 2019 in order not to erode the confidence of investors. “In 2019, there will be more expenditure on media, advertising and the like. There will be less funding to other sectors,” he forecast. “Government may stop funding construction-related projects, which will create some effect on wages and earnings. It can also have an effect on GDP. We have to pray so that oil price will remain stable and there will be no militancy. I am not seeing a significant improvement next year because of these issues. “Let us see if Nigeria can have ministers ready as soon as the election is over. Let us not create uncertainty in the system. We need to pay enough attention to governance in Nigeria and rest of Africa,” he added.

Why Nigeria needs reforms—EY

rnst & Young (EY) says Nigeria needs reforms on many fronts, especially in the areas of taxes and economic diversification. EY adds that the country has a lot to learn from Saudi Arabia’s diversification drive, which is helping the country to fix most of its problems. In the wake of oil price crisis in 2014 to 2016, Saudi Arabia took clear measures to diversify into manufacturing, tourism and healthcare. Saudi Arabia’s tourism revenues are expected to exceed SR211 billion ($56.67 billion) by end of the year, compared with SR193 billion recorded in 2017, said a report. The travel and tourism sector in Saudi Arabia has grown at a much faster rate, according to Tourism Information and Research Center (MAS) of the Saudi Commission for Tourism and National Heritage

(SCTNH). “Saudi is an oil-dependent economy like Nigeria, but they now focus on tourism, building massive city. They are offering $500 billion tourism opportunity,” Paul Sommerin, financial services leader for Africa, India and the Middle East (AIM), EY, said at an interactive session with the media in Lagos. “They are also paying a good attention to manufacturing. The third area of focus is the healthcare. Most Saudis used to go to London to get medicals, but things are changing. They also opened up the furniture market and built a big city in Riyadh,” Sommerin explained. He further said that India is doing a similar thing in technology, manufacturing, healthcare and tourism, which Nigeria can emulate. EY has created AIM to achieve borderless advisory services for their clients. The borderless services

help EY clients benefit from streamlined, cross-border sector specific advice, enhancing greater growth and efficiency across these three markets, which have a combined GDP of over US$5 trillion. “About two years ago, we started looking at our markets. We were looking at achieving integration, accelerating our services, increasing resilience and profitability,” said Hennie Human, advisory and market leader, EY. “AIM gives us the opportunity to be more resilient. It gives us the opportunity to integrate our intellectual property (IP) since we have an incredible IP across these markets. It gives us vehicles to utilise specific skills by pulling 7,000 consultants across geographical regions,” Human said. He added that EY has identified financial services, public sector, technology, energy, assets and

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NEWS YOU CAN TRUST I TUESDAY 18 DECEMBER 2018

INSIGHT/INNOVATION My encounter with an Uber driver

OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

ermit me to start with a confession – I was a late adopter of Uber. The reason is simple – I am not a techy person and I have always been a late adopter of any new technological developments. More so, I rarely require taxi services, but on the few occasions that I have (before Uber), I have found the Nigerian taxi set up and environment frustrating. So, for a little while, I have been enjoying Uber services, whenever I use them. But last week, I had a very interesting discussion with one of their drivers. The discussion started with my frustration at what I call our refusal to seek to make the right changes until they are forced on us. I have often been frustrated by the sheer scale of the informal sector in the Nigerian economy. I believe the scale of that sector does not serve the Nigerian economy, nor the Nigerian people, including those engaged in it, well. I believe the scale of the informal sector means that millions of talented people, and

PROPHYLAXIS

AYULI JEMIDE Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

atching the Vice-Presidential candidates’ debate on Friday 14th December was for me listening to an unfolding story about Nigeria. The different voices, varying analysis, pitches, the questions and the answers told me a lot about the future of this country. The first positive thing that seemed clear is that the vibrant young people of Nigeria are becoming adequately represented in the political process.The Vice-Presidential candidate for the ANN, Khadijah Abdullahi-Iya is 44 and the Vice-Presidential candidate for the YPP Mrs. Umma Getso is 37. This is very good for our political landscape because the Not Too Young To Run flag was soaring high at the debates. The second positive thing was the gender balance. It was good to see two women up there debating and representing the women folk. It would be good to see a female vice president and perhaps a female president in Nigeria in the near future.

their labour are being wasted. I also believe that it provides little room for growth in productivity. So, on our journey to the Island, from the Mainland in Lagos, I expressed my frustration that, neither the State government, nor the federal government, have been able to direct Nigeria’s vast economic activities away from the informal sector. While this time, the point was made in relation to the litter of small shops everywhere in Lagos, mind you, it is worse in Ibadan, where I grew up, it triggered one of the most basic economics discussion with a non economist. In response, he said that its impossible and difficult because that is what the people have always known. Then I started with my arguments. First, the statement “its what people have always known, always done” is a resistant statement. It is said everyday in every circumstances to justify a refusal to make progress. However, I argued that there is nowhere that changes have come easy, and that I blame successive government for refusing to show Nigerians a better way. Foreign businesses, such as Uber, have been able to bring about positive changes that Nigerian government has failed to implement. After my initial arguments on the process of real change (not the one advocated by APC), he agreed that I was right and then went on to describe how he joined Uber. Now, follow how technology and its adoption disrupts established economic dynamics, lowers costs, improves productivity, create jobs, and better lives. According to him, a few years ago, he was a “car hire” service man, operating from Lekki, but lives in Orile, a distance of about 30 kilometres. He said he would normally leave Orile early on a Monday morning for Lekki, would work for about five days and return to Orile during the weekends. During the week, while working in Lekki, he would sleep in the vehicle every night and wake up

‘

When Uber came, he told me, their economic activities started to decline, but it took a while for them to notice it, and then trace the cause. But eventually they did. Initially, they were very dismissive of Uber

as early as 4am to freshen up for the day. But what I found very interesting is that, because it was a hire service, he and his colleagues would take turns and were rarely busy. Also, as would be expected the fares were relatively high, targeting only the well-off people in the Lekki axis. He and his colleagues maintained this routine for many years until Uber came. When Uber came, he told me, their economic activities started to decline, but it took a while for them to notice it, and then trace the cause. But eventually they did. Initially, they were very dismissive of Uber. They argued that it would close and leave Lagos within six months, since it was not sustainable. They also argued that Uber was all about the hype, and would soon realise that Nigeria is not ready for them. But few weeks after continuous condemnation of Uber, one of them joined. They called him to ask why he was no longer coming to the park, and he told them he had joined Uber. Few weeks after, he (my Uber driver) was convinced to make enquiries and, as they often say, the rest is history. Now, there is resistance to Uber every-

where, even in developed countries, but I will like to focus on Nigeria. Prior to Uber, there were serious issues with Nigeria’s taxi business that made it easy for Uber to quickly assume a major role. First,Uber removes the haggling side of Nigeria’s taxi business. I have always found this bit very frustrating. Indeed, it usually get so bad because in a place like Lagos, the driver will want to change fares midway, perhaps thinking he had originally been short changed. This creates uncertainty for the passenger. Tied to this is that Uber allows you to pay with your card and therefore in most cases, reduces the need to hold cash. But most importantly, the platform, by providing connection between drivers and passengers, reduces what we economists call “search costs”, in this case, the time both spend looking for each other. More importantly, before Uber, taxi drivers were idle most of the time. This drives the economics of the taxi industry. In order to pay for their long periods of idleness, taxi drivers often charged the few customers that they were able to get higher prices, even though their vehicles are without air-conditioning, sometimes dirty, and passengers often feel uncomfortable. Uber has made it possible for drivers to utilize their time more efficiently, which allows them to charge passengers less by providing scale. Of course, there is still significant resistance, especially at the Abuja airport, where it is not unusual for the drivers to make one trip in two days. The model is weak. In conclusion, we can change things in this country, we can change our environment, and we can certainly change our approaches to business and technology. This will bring benefits to the country and its people. Just ask my Uber driver, who now goes home everyday to see his family, while making more money than he did few years ago. I thank you.

Vice presidential debates and the Nigerian story The third good thing is that statistics has become a weapon of choice for our politicians. Stats, stats and more stats were flying around particularly from Peter Obi and Yemi Osinbajo. I heard about number of out of school children, misery index, terrorism index, GDP, you name it. This is commendable. It shows that we are becoming more issues based in our approach to communicating with the citizens. The fourth good thing is that the debate showed the power of social media in Nigeria. I was very impressed with how people were challenging false statements and false statistics reeled out by candidates on an online real time basis. This is good for our country. Politicians should not lie to us or give us false statistics and get away with it. We must challenge them and expose them. That said, I think a few things were not exactly salutary about the debate. Some of the questions for example were just blah,

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Did we get a sense from listening to the debate that the newer parties (YPP, ANN and ACPN) have demonstrated from their choices of Vice-Presidential candidates that they are a new political class to whom we can entrust our commonwealth? Did their candidates give the main parties (PDP and APC) an intellectual contest?

for want of a better word. For example, how could you ask someone: ‘’You have been Vice President for three and half years how tasking has this been for you? What kind of question is this? Where is the debate element in this question? Off course he will say it is tasking and yet fulfilling. So how does this show anything? Also, on a sad note, I am not sure I understood how you stage a debate and people are asked different questions? This does not allow for transparency if you ask me. A proper debate should ask the same questions to everybody and give each person an opportunity to say something about that issue and challenge each other’s perspectives. It was also not very nice to see people who aspire to be the number two citizens dodge some questions by answering what was not asked or embarking on a merry go round. I think that sometimes the candidates actually didn’t have enough depth on economics or the subject matter to answer some of the questions and deflection was the best approach. I am also not quite sure how the organizers picked these 5 candidates out of the 31 candidates vying for this same office.The moderator announced that this was one of the most difficult decisions and they used online polls and surveys. These polls and surveys were not made public and Nigerians do not know how the decision was reached. It smirks of lack of transparency and surely does not give equal opportunity. It also lets some other candidates who don’t want to debate off the hook. It is understandable that we have 31 candidates, and this poses a problem, then we should have 6 debates back to back. Every voice must be heard! It is not a bad thing that 31 people have the audacity to vie for the highest office in the land. It makes a statement that Nigerians are not content with the caliber of politicians we

have bred in our democratic dispensation. On this matter the organizers issued the following statement: ‘’We wish to emphatically state that the NEDG and BON were not influenced or induced by anyone to include or exclude any political party from the debate. We understand the disappointment of some political parties who would have wished to see their candidates share their visions for the country at the Debates. However, Nigerians have spoken through the multi-stage process and we urge all Nigerians to respect their choice as we abide by the outcome of the independent party selection process.” Perhaps we should ask the organizers when and how Nigerians spoke? Who heard them? How many of them spoke? Can they make the poll results public? On a lighter and less acrimonious note I enjoyed some of the humour between Peter Obi and Yemi Osinbajo when Peter Obi said ‘’You cannot lock your shop and chase after thieves’’ and Yemi Osinbajo responded that ‘’if you leave thieves to steal the inventory, there will be no shop’’. There have been online debates about these statements and the logic behind the statement and the rebuttal. At least this has kept Nigerians mentally alert. Finally, if I use my telescope to do a bit of star gazing for a minute, some questions surely do arise: Did we get a sense from listening to the debate that the newer parties (YPP, ANN and ACPN) have demonstrated from their choices of Vice-Presidential candidates that they are a new political class to whom we can entrust our commonwealth? Did their candidates give the main parties (PDP and APC) an intellectual contest? Yes or No. If your answer is No, then there is cause for concern for those who would like to see a new breed of public office holders that make the former brigade look as bad as most of us have painted them.

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