BusinessDay 18 Dec 2019

BusinessDay names Ogho Okiti managing director

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he board of BusinessDay Media Limited, publishers of Nigeria’s leading business and financial daily, has appointed Dr Ogho Okiti as its new managing director.

Okiti took a PhD in Development Economics from the University of Manchester and worked as an economic researcher and analyst at the

UK’s Office of National Statistics (ONS), where he helped to develop a robust monthly and quarterly statistics of government output on social security, adult and children social services. He also served in the office of Nigeria’s chief economic adviser to the president.

In a statement, Richard Ikiebe, chairman of the board of BusinessDay, said Okiti would

resume on his new job on Monday, January 6, 2020 and take up a role which has been held since 2001 by founder, Frank Aigbogun, who will stay on as publisher.

“This appointment marks a remarkable milestone in the history of the business and perhaps, more importantly, it is the start of a well-planned succession process which is seeing

a new and younger leadership enthroned,” Ikiebe said.

“Ogho is coming at a time of very interesting developments in the media and especially at BusinessDay. Frank and his team have done a good work of keeping the ship afloat in the face of severe headwinds.

“Stabilising the media unit of Continues on page 39

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igeria has once again returned to the January-Dec e mb e r b u d g e t cycle after President Muhammadu Buhari on Tuesday signed the N10.59 trillion 2020 Appropriation Bill into law.

This is coming seven years after Africa’s largest economy last operated a January-December budget cycle, in 2013, under the then President Goodluck Jonathan.

Buhari’s assent to the budget on Tuesday, less than one week after it was transmitted to him by the National Assembly, marked the fifth time since Nigeria’s return to civil rule that the country would begin its fiscal year in Continues on page 39

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7 years after, Nigeria returns to Jan-Dec budget cycle MICHAEL ANI, Lagos, & TONY AILEMHEN, Abuja

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Investors see green light in smaller African countries as oil investment dries up in Nigeria … Equatorial Guinea expects at least $1.4bn in 2020 DIPO OLADEHINDE

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hen it comes to investment in the oil and gas sector, Africa’s biggest oil-producing country is losing a decisive battle to smaller oilproducing countries. The latest is Equatorial Guinea, which is exContinues on page 39

Inside Lagos blue rail line commences operation in 2021 as Sanwo-Olu kicks off final phase of project P. 38 L-R: Tunde Folawiyo, chairman, Global Citizen Nigeria; Chris Stadler, co-chairman of GC’s Global Board; Justice George Adesola Oguntade, Nigeria high commissioner to the UK; Modupeola Oguntade; Adrian O’Neill, Irish high commissioner to the UK, and Aigboje AigImoukhuede, vice chairman, Global Citizen Nigeria, at the Embassy of Ireland in London on the occasion of Global Citizen Prize Ceremony.

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Rethinking functional education in Nigeria and fearless enterprise Small Business handbook

Emeka Osuji

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he link between education and the prosperity of nations has long been established by authorities that can hardly be faulted.

In like manner, personal prosperity is no longer as detached from education, as it were during the time of our forefathers. It has therefore become a regular pastime, even for uneducated parents, to admonish their children on the importance and usefulness of education. However, such admonitions no longer carry as much weight as they did in the past because education is fast losing its value in Nigeria. One does not seem to need it, or much of it, to get into the most lucrative industry in the country – politics. Nor does one get hired for one’s great grades nowadays.

Connections are better than education these days, it seems.

So, what do the youth do? What should the youth believe? Should they continue to believe their parents and guardians that education, especially higher education is another name for regular meal tickets, or follow their peers who have alternative theories of success? This is part of the dilemma Nigerian youth, who are of school age, are facing.

Some of our youths have also read the famous book, Rich Dad Poor Dad, written in 1997 by Richard Kiyosaki. The book teaches something in the manner of a rebuttal of what most parents teach their kids every day- how they should take schooling very seriously, so as to make good grades and thereafter, get

good jobs. Having got good jobs, the kids are told to conduct themselves very nicely, being prim and proper, so as to climb the corporate ladder and get to the top. Many are beginning to question, and rightly so, some of the things they are taught in school, as unemployment ravages our university graduates, including those with first class degrees, while school drop outs are making it in politics and sundry occupation. Is there more that we can teach the youth? Yes. It is the difference between hard work and smart work; entrepreneurship and the place and nature of money in society.

The current and persisting top priority challenge of every youth in Nigeria is to win their financial freedom and gain economic independence from their parents, and these who have played guardian to them over time.

That those who bore the burden of their education are continuing, years after higher education in Nigeria is a national disaster of immense proportions. Unfortunately, we seem to have spent more time, and for too long, trading blames, leaders and followers, as to who and what is responsible for the disastrous fate of most Nigerian youth of today. They leave school and face perennial difficulties getting employment, and when they do, they are treated like beggars and paid peanuts, even after the so-called minimum wage gets implemented, if it will be paid. As if that is not bad enough some halfeducated leaders and commentators keep singing the song of declining educational standards, as though they had better education than these young people.

For one, Nigeria tends to blame the educational system for the rising unemployment of the youth. Granted that there is a large room for improvement in the educational system, with regard to the need to match output with industry needs, the failure of successive governments to expand the economy is a national shame that dwarfs the errors

in the educational system. An expanding economy is always followed by a rise in entrepreneurship and private investing. Many of us witnessed the boom in entrepreneurship in Nigeria in the decade of the 1990s.

Almost every graduating youth, especially those with financial education and some experience, took the plunge to set up businesses, even if they were mostly financial businesses. The reforms of those years, implemented by Babangida, gave tonic to the entrepreneurial spirit of the youth. The Nigerian economy has now expanded only into the pockets of our leaders, many of whom should be ashamed of the kind of money they have creamed out of the blood of their labouring compatriots.

We must refocus our teaching in schools to give more economic and financial education to our children, even if they study Science, Technology Engineering and Mathematics (STEM). Even with STEM education, such knowledge will produce more prosperity if laced with an understanding of money, its biology and habitat.

Actually, Richard Kiyosaki began his story by telling us that he had two dads from whom he had learned valuable lessons. One, the poor dad, was his own dad (but it has been established that in reality, Richard’s father was not poor), while the rich dad was the father of his friend, Mike. Richard’s two father taught him the art of success but each of them had his own prescription as to the route he should follow to success. For sure, their approaches were not only different but completely and diametrically opposed. Further down into the book however, Richard revealed which of the two fathers was a better one, or the one who taught him the better lessons of life, with regard to the business of prosperity, especially the lessons on money and investment – his rich dad.

The gist of Richard’s story is that the idea of getting good grades in school, getting a good job and then climbing the corporate ladder is a good one but

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We must refocus our teaching in schools to give more economic and financial education to our children, even if they study Science, Technology Engineering and Mathematics (STEM). Even with STEM education, such knowledge will produce more prosperity if laced with an understanding of money, its biology and habitat

it cannot compare to the idea of smart business acumen. Indeed, it is old fashioned. Those with that kind of mindset are the children of a poor dad. Their dad is usually highly educated and professionally schooled. He is however, poor in the sense that he and his offspring are the leading members of the world team of Rat Racers – they have jobs and work for their pay cheques. Before the pay cheques come, bills are already waiting and once settled, they work for the next pay day so as to settle the ever-waiting bills. Life becomes a rat race. They cannot invest and saving money is hard ball because there is nothing to save.

Of course, they get the grades and the great jobs but may end up working for drop outs who have training on money and lack business acumen.

On the other hand, the rich dad teaches his children to study to be prepared in order to understand phenomena, especially money and other economic issues, and to play the system according to its own rules. It begins with the importance of financial literacy. In Nigeria, the Igbo are the most financially literate. They understand money and its workings. They know the pathology and medical history of money. They work for it. This is why, despite their obvious disadvantages in the country, they survive better than most of their compatriots, when conditions get difficult. They make money from dust and can fish it out from any hole. Those who want prosperity must get to know money and the traps that catch it. We must redirect our youth to learn how the Igbo make money out of nothing by being creative, inventive and painstaking. We must nationalize the can-do attitude of the Igbo and their fearless enterprise.

Taken mostly form my new book : Entrepreneurship and Small Business Development Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

How ‘badly’ did MTN Nigeria really fare this year: a comparative analysis of the NCC statistics/report

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ecently, there has been widespread news in the media as to how MTN Nigeria lost over 600,000 data subscribers, a possible outcome of the xenophobic attacks in South Africa and subsequent reprisal in Nigeria in July/August earlier in the year.

Although factual, the true representation of the situation can only be gleaned by a comparative analysis of the statistics released by the Nigerian Communications Commission (NCC) over the past year alongside data by other mobile network operators.

Q4 2018 At December 2018, MTN Nigeria was the market leader for internet subscribers by holding 39 percent of the total 111,632,518 subscribers which amounted to 43,899,957 subscribers. Airtel Nigeria held about 27 percent of the market share with 29,757,791 subscribers while Globacom followed at 25 percent with 28,054,948 subscribers. 9mobile held 8.9 percent with 9,919,820 subscribers.

Q1 2019

By March 2019, the total number of Internet Subscribers in Nigeria according to the NCC was 115,938,225 and of this number, those who subscribed using MTN Nigeria stood at 46,552,185 making a total of 40.2 percent of the entire market share. Trailing behind was Airtel with 31,243,185 subscribers making about 27 percent closely followed by

Globacom with 28,436,386 subscribers which made up about 25 percent.

The remaining 8 percent of the market share was held majorly by 9mobile and then Visafone.

Q2 2019 Taking a step backwards and peering into the second quarter of the year, the total number of internet subscribers (GSM) as at June 2019 was 122,292,079 according to NCC. MTN Nigeria owned 52,254,917 of these subscribers amounting to 42.7 percent of the entire market share with Airtel and Globacom competing for second place with 26.1 percent and 23.7 percent respectively.

Q3 2019 On October 31st 2019, the NCCs Report and Statistics revealed that in September 2019 at the end of the third quarter, the total number of Internet Subscribers (GSM) in Nigeria stood at 122,792,29. MTN Nigeria as usual owned a swooping 41 percent of this figure by accounting for 51,675,658 subscribers. The other operators i.e. Airtel, Globacom, 9mobile and Visafone managed to share the other 48 percent amongst themselves with Airtel leading by 27 percent (33,198,004), Globacom following with 24 percent (29,366,479). 9mobile held about 6.9 percent with their 8,468,940 subscribers and Visafone owned the remaining barely 2 percent.

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What this means: MTN Nigeria v. lead competition (Airtel) From the data above, MTN Nigeria has managed to not only maintain the lead by a wide margin they have gone further to increase this margin when compared to their performance by Q4 2018 and Q1 2019.

By December 2018, MTN Nigeria led by holding 39 percent of the market share while their lead competitor, Airtel Nigeria held 27 percent of the market share thereby leaving a 12 percent gap between both operators.

By first quarter 2019, the dynamics had changed and MTN Nigeria led the industry by holding 40.2 percent an increase from their previous figure and Airtel Nigeria dipped to 26.1 percent, still maintaining their position as lead competition bringing the marginal difference to 14.1 percent.

At the end of the second quarter, MTN Nigeria had once again outperformed the others by controlling 42.7 percent of the entire internet subscription (GSM) market. Airtel Nigeria, although still the lead competition maintained its range at 27 percent of total market share which brought the marginal difference between MTN and the next player in the industry to 15.7 percent.

By September 2019, the marginal difference stood at 14 percent with MTN leading by 41 percent and Airtel trailing behind at their usual 27 percent.

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Increase in total market share v. MTN Nigeria.

As the total number of internet subscribers gradually increased from its initial 111,632,516 in December 2018 to its current 122,792,291 by September this year, MTN Nigeria is the only operator to have maintained an increase in its market share from 39 percent to as high as 42.7 percent in the second quarter and now at 41 percent which even after weathering the Xenophobia crisis and USSD issue is a notable 2 percent increase.

While Airtel Nigeria has mostly maintained its 27 percent market share, Globacom currently stands at 24 percent a dip from their 25 percent share by December last year.

This implies that the increase in total number of internet subscribers can mainly be traced to the increase in the number of subscribers recorded on MTN Nigeria’s network.

In summary, this year, MTN Nigeria has done tremendous work in the mobile internet subscriber market and the narrative that there position is being challenged more than ever by the competition is not only ignorant but largely erroneous.

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comment Character Matters with Daps

Dapo Akande

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read a few weeks ago, during the run up to the general election, that the newly re-elected British Prime Minister was getting some flak from the opposition for displaying racist tendencies. They referred to a comment he made when he was still a journalist.

In an Independent on Sunday publication of October 1999 he had regrettably quipped, “All the young people I know — i.e. those under 30 — are just as avaricious as we flinty Thatcherite yuppies of the 1980s… In fact, they have an almost Nigerian interest in money and gadgets of all kinds.” A remarkably distasteful comment by any standard and how patently unfair it is to paint a whole nationality with the same brush. How I just wish we hadn’t given him the ammunition to shoot us with though.

One thing I know for sure is that we need to change the narrative about us and to do that, we need to ask ourselves, who is the Nigerian?

What do we stand for, believe in or hold dear? What is our general outlook on life and what do we believe life should be about? It behoves us to truly understand who we are and to promote it with much gusto, plenty of swag and much clarity to the world.

We need to deliberately project our strengths and virtues and believe or not, there are many.

We need to tell the world of our hospitable and ebullient nature, our

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For we are Nigerian generosity of spirit, our love for life, the confidence which by nature, we have in our abilities; our can-do spirit even if the face of overwhelming odds, our diligence, dexterity and fathomless ability to innovate. No matter what, we are a good people and we need to present ourselves as such to the world instead of complaining while we allow the foreign media to control the world’s perception about us.

In August 2018 Bloomberg ranked Nigerians working in the United States as the eighth most hard working and most skilled immigrant group. It boggles the mind to think what that could and should have translated to here, if only the environment was more enabling. And that’s what makes our modest achievements here so amazing. In many ways, we still manage to move forward in spite of and not because of.

Believe it or not, Oyinbo isn’t all good either but he has been able to put systems in place which curb man’s natural tendency towards excesses and the focus on self. Of course, like anything, it doesn’t always work but it has certainly gone a long way to making their society a more functional one.

I remember when I was still at boarding school in the UK. The story went around that a Nigerian boy had just been expelled from one of the top schools. The boy’s father quickly offered to donate a million pounds to upgrade the school library. Bear in mind this was about thirty-four years ago and then you’re likely to appreciate just how large a sum that was back then. Pronto! The school swiftly readmitted the boy and explained it away as an unfortunate misunderstanding.

Who told you oyinbo doesn’t like money too?

Until each and every Nigerian sees the success or otherwise of our society as a collective responsibility, we will remain where we are. No, you cannot leave it all to government unless you see yourself as having less stake than government officials. You don’t. There is a part for us all to play and it begins with taking ownership of the Nigerian project backed by sane, rational, intentionally disciplined and civil behaviour which always contributes immensely to corporate progress and well-being in a way that can hardly be measured. We need to guide our adolescents and youth to cultivate the best of habits because no one else will do it for us.

Throwing money at the problem by giving them everything they desire without instilling priceless values simply won’t cut it.

The Nigerian story is not one entirely of doom and gloom. It depends on how we decide to tell it. Of course, we can tell it in a way that quenches any remaining glimmer and kills the spirit or we can decide to tell it in way that restores hope. And we all know hope is an essential commodity in and for life. Hope for a better tomorrow is what pushes us on even when all around us looks bleak. Hope of making it to an infinitely better and eternal after life makes the present situation which in comparison is so ephemeral, more bearable. But when hope is lost, so essentially is life.

Everything loses meaning and value.

To a patient who has come to the painful reality of his mortality as he gradually succumbs to a terminal illness, to surround him at that point with all known luxuries of life shall

‘

The Nigerian story is not one entirely of doom and gloom. It depends on how we decide to tell it. Of course, we can tell it in a way that quenches any remaining glimmer and kills the spirit or we can decide to tell it in way that restores hope

hold no meaning to him. The only hope remaining for him is one that transcends this life. In the same way, all who see our dear country as one in the throes of a terminal sickness, leaving it no hope, no future, will never lift a finger to salvage it. What’s the point? We should never allow the Nigerian spirit to atrophy. We must not allow the Nigerian spirit to die. To inspire the younger generation aright, we need a whole new set of national heroes. Those who have the love of God, love of their fellow man and the genuine love of country.

What makes us Nigerians? Our ability to stand and yet innovate; our boldness not just in conquering the most adverse of circumstances but our cheek in even believing we can.

Faced with daily and often compounding challenges in one of the most unforgiving environments this side of life, we still find time to laugh, to dance and to love. I do not believe that we will be broken, I do not believe will give in for we are Nigerian.

But we must tell our own story and stop leaving it to be told by those who do not understand our nuances, or feel our pain or truly appreciate what motivates us. We must not allow our story to be told by those who love to toy with the little hope we continue to hold on to. We must not let our story be told by those to whom we’re just that, a headline story. Truth is, they have no stake but we do.

Changing the nation...one mind at a time Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Like Dubai, unlike Nigeria: Exploring tourism’s fallow land

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o you know the joy of discovering a huge sum of money in the pocket of an outfit few minutes before doing you do the laundry?

That was how I felt when I visited the only suspended lake in Africa.

Visiting Iyake Lake, at Ado-Awaye was quite a fascinating experience, from the Rocky Mountains and ancient monuments to the Lake itself – a body of water that neither flows nor get dried. History says no one can ascertain the depth of lake or the age of the lake. Isn’t that scintillating? While I was carried away by the serene ambience of the environment, I was quite saddened by the deserted state of the environment as well as the paucity of economic activities. For an historical and culturally symbolic place like Iyake Lake, the dearth of life was a pulsating paradox.

Nigeria has been through a lot of economic topsy-turvy with inflation knocking on the door vigorously and recession being a transient unwanted guest twice in the last three years. Gradually evolving from an agrarian cum oil driven economy into an enterprise-SME driven economy, there are a lot of sectors still under-utilised and tourism is one of them.

Adding a meagre 5 percent to the nation’s GDP in 2018 according to the Nigerian Bureau of Statistics, Tourism has been one

of the underperforming sectors in Nigeria especially when compared with countries like Seychelles, Cape Verde and Mauritius where tourism contributes 20 percent, 17 percent and 12 percent respectively despite having notable places like Ikogosi Springs, a waterbody that allows you to explore the unique scenery of warm and cold spring flowing side by side to form a confluence, each maintaining its thermal properties – it’s first kind in whole world, Iyake Lake, one of the two suspended lake in the whole world, Erin-Ijesha waterfalls, Olumo rock and other notable places. Where did we get it wrong?

Dubai has continuously ranked in the top ten most visited places to visit in the world, with 15.9 million people visiting in 2018 and 8.6 million influx of tourists recorded between January and June. From the functioning infrastructure to the relaxation centres, Dubai seamlessly presents itself as a destination to relax, have fun and do business with pleasure. Isn’t that what we all want? Oh, I forgot to add that the tallest building in the world – Burj Khalifa in Dubai.

Beyond being a centre of attraction, they have been able to brand and build strategic relationship with travel agencies, notable organisations and companies, creating a mutually beneficial relationship that continuously puts the city on the world map and the results are obvious, or don’t you want to

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go to Dubai too?

During the 61st United Nations World Tourism Organisation Commission for Africa (UNWTO-CAF) conference last year, the Statistician-General of the Federation and Chief Executive officer of The NBS, Dr Yemi Kale reiterated the fact that Tourism activities has immense potentials thanks to its lush landscapes, intriguing indigenous culture and exciting experiences however turning this potentials to revenue is the joint duty of every stakeholder.

On Saturday, at the foot of the mountain, I imagined private investors and real estate companies building about 50 to 100 chalets at Ado-awaye, major journalist and pressmen writing about the lake, a major arts and literary festival being held at the lake, popular celebrities taking a visit to the lake and a major movie shot around the lake.

Wouldn’t that shine a torch on the gloomy state of the community?

The ripple effect of tourism cannot be overemphasised, from the provision of employment opportunities for the denizens of the designated tourist attractions to the improvement of infrastructural facilities and the spread of civilisation to the community’ host. Isn’t investing tourism then a worthy venture?

While investments from private individuals, the government agencies and other

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EMMANUEL FAITH

organisations would come handy, deliberate efforts must be made to put Nigerian tourist attractions on the global map. Creating a site that solely talks about Nigerian tourist centres, the indelible experiences as well as opportunities that abound would be a great step. Sponsored photography contests, liaison with travelling agencies are options that might also be considered.

Nigeria’s economy is in dire need of revenue, with huge debt servicing and continuous recurrent expenditure and there is need to optimise every resource available. While there are obvious challenges like insecurity, instability of the local currency and under uncontrollable factors, tourism is a fallow land waiting to be explored.

Emmanuel Faith is a Lagos based writer and human resource enthusiast; He is also the author of “Chronicles of an intern”. He can be found on LinkedIn with the handle- Emmanuel Faith.

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

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Is the Economic Advisory Council in situ?

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hat has happened to the Economic Advisory Council President Muhammadu Buhari inaugurated on September 16?

Did they play any role in some of the economic policies that the federal government has announced since their establishment? Specifically, were they part of the visa-on-arrival policy announced December 12 in Aswan, Egypt?

Doyin Salami, a renowed economist leads seven other respected economists in the Presidential Economic Advisor y Council (PE AC).

PEAC replaced the Economic Management Team hitherto chaired by Vice President Prof Yemi Osinbajo. They met with the President in October following their inauguration in September. Since then, the country has yet to hear from or about them.

A significant foundational task President Muhammadu Buhari charged the Presi-

dential Economic Advis or y Council with is gathering data on the economy. Mr President alleged that the existing data on Nigeria, particularly those published by multilateral agencies, does not reflect the reality.

The government believes the data does not speak to what it has contributed in the last four years. PMB said generating and publishing this data is “the most important national assignment”.

The President stated, “Some of the statistics we get relating to Nigeria are wild estimates and bear little relation to the facts on the ground. This is disturbing as it implies we are not fully aware of what is happening in our own country. We can only plan realistically when we have reliable data. As you are aware, as a government, we prioritised agriculture as a critical sector to create jobs and bring prosperity to our rural communities. Our programs covered the entire agricultural value chain from seed to fertiliser to grains and ultimately, our dishes. As you travel

in some rural communities, you can see the impact. However, the absence of reliable data is hindering our ability to upgrade these programmes and assure their sustainability.”

Another task concerned the Social Investment Programme of the PMB administration.

The President also wants accurate data on funds deployed here and, particularly, the integrity of funds infused by foreign agencies. However, he charged the new Minister of Humanitarian Affairs with the primary duty of gathering data in this area.

PEAC has run its first quarter this December. One of its key deliverables is generating quarterly reports on the economy in addition to meeting with the President monthly. We wonder how far it has gone with its assignment. Nigerians would like to hear from the PEAC. How has it balanced the conflicting mandate of being the primary generator of data on the economy versus the agency with the statutory mandate for eco-

nomic data, the National Bureau of Statistics? How often has the PEAC met with its principal in the last three months? What are the views and recommendations of the PEAC regarding the direction of the Nigerian economy?

For the first time in a long while, the federal government has commendably passed the budget in record time. Budget implementation should commence with a return to the January-December cycle by January 2020, a few days hence. The nation would look forward to some guidance from this distinguished body of experts on how to implement the 2020 budget.

It is crucial for Nigeria that the Presidential Economic Advisory Council confirms that it is active and carrying out its remit. They should share some information, even snippets, that assures that such a significant body is following an accurate compass. Most importantly, how far has it gone with “the most important national assignment” of generating credible data on the economy?

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Visa on arrival: Hasty and untidy

Franklin Ngwu

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n faraway Egypt and possibly enjoying the accolades as the leader of Giant of Africa during the Aswan Forum, President Muhammed Buhari announced that anybody with an African passport need not apply for visa to visit Nigeria as visas will from January 2020 be issued on arrival. The order was made in line with Nigeria’s commitment to free movement of Africans within Africa, the statement maintained! Excellent, this is big brother in action, a friend acerbically shouted!

Without a critical evaluation and with our 30th position in the ranking of 54 African countries on easiness of getting a visa, one will say that it is a good policy that will open Nigeria to the rest of Africans.

However, when it is properly examined, one is left a bit confused as to the need, the urgency, the socio-economic, political and security implications.

With our current position as the poverty capital of the world and almost on the same level with many African countries in the key growth variables such as poverty, skills set, FDI, rule of law, regulatory quality and government effectiveness, it is difficult to understand

the benefits of the policy. Moreover, the planned implementation of the policy in January, just three weeks after the announcement raises further concerns.

Why the urgency? As we are in a democracy, are pronouncements with extensive implications such as this not supposed to be widely discussed and agreed before it is announced and implemented. This is not the first time where orders and policies that are supposed to undergo wide consultation are just announced and even implemented arbitrarily. It is not the appropriate way to govern a plural society. There is a course called effective stakeholders management which I think will benefit the government.

Discussing with an elderly friend over the weekend, he wondered why there is a rush to implement the announcement from January when we delayed signing the Africa Continental Free Trade Agreement (AfCFTA) for several months. Frustrated with the way things are going in our beloved country, he lamented that there might be more to the announcement that we are not privy to. The confusion is too much and unnecessary, he irritatingly concluded! And he is correct! How can we close our borders to reduce or eliminate smuggling of goods and illegal movement of people and at the same time planning to immediately start granting visas on arrival to anybody with an African passport? It does not add up!

A disturbing question with this policy is what kind of African will prefer Nigeria to other countries of the world including African ones such as South Africa, Rwanda, Kenya and Ghana. People mainly migrate in search of opportunities. That is the reason thousands of Nigerians and other Africans migrate to Canada, USA and Europe. With over 100 million

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A disturbing question with this policy is what kind of African will prefer Nigeria to other countries of the world including African ones such as South Africa, Rwanda, Kenya and Ghana.

People mainly migrate in search of opportunities

Nigerians described as poor or extremely poor, it seems that majority of Africans that might prefer Nigeria are the ones that are also poor or poorer than the 100 million poor Nigerians. It seems like the Federal Government is determined to ensure that we maintain our enviable position as the poverty capital of the world, a friend reviewing the announcement stated. If this is the case, then we have a serious problem.

At the peak of Boko Haram crisis and subsequent herdsmen attacks, it was stated that a key cause of the problem is the proliferation of arms, foreigners from Libya and other troubled African countries. Interestingly, it was further affirmed that inadequate manpower and ineffective control of our porous borders significantly contributed to the crisis.

With such disturbing situation which supported the closure of our borders, it is difficult to understand the basis of the visa on arrival policy when the inherent challenges such as the effective control of our borders have not been addressed. As earlier stated, there can be benefits from the policy, but it should be properly conceived, discussed, agreed, announced and implemented. Anything worth doing is worth doing well.

With PMB’s second term remaining about three years, I think it is time to start thinking about the kind of legacy to leave behind. It will be good that after leaving office in 2023, that Nigerians remember the government with good memories. Looking back at the last 5 years, it is not encouraging. Almost all the key economic growth indicators are heading south: poverty, unemployment and insecurity are on the rise, FDI is falling, monetary policies unorthodox and sometimes counterproductive and mis-

aligned with fiscal policies; infrastructure is not significantly improving, and the country remain increasing divided along religious and tribal lines. With such dire situation of our beloved country, it is not the appropriate time for policies that are neither essential nor central to solving our present and emerging problems.

As Nigeria’s population is projected to rise to over 400 million by 2050, 30 years from now, the focus should be on how to innovate home grown solutions to put us on the part of sustainable growth and development. It requires effective leadership that will focus on issues such as: first, how to reduce cost of governance through bold reforms of our structure of governance particularly the national assembly. Is it not possible to have one senator and three house of representatives per state and can they not function as part-time legislators? Second, how to enhance the competitiveness of subnationals through effective devolution of powers to states and local government.

All that will be required to achieve this is the patriotic review of the exclusive and concurrent lists with more items moved from the former to the latter. Third is the need for an effective synergy of monetary and fiscal policies to give the right and convincing signals to the private sector on the intentions and plans of the government. Fourth is the deliberate strategy to improve the education and skills set of all Nigerians to ensure that our greatest asset (human capital) is properly developed and utilised.

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mailfngwu@lbs.edu.ng,

Nigeria’s anti-social media bill is creating a rift between the citizenry and the government

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he Nigerian government’s intention to pass the Protection from Internet Falsehood and Manipulation Bill, popularly termed as the Social Media bill, combined with the Hate speech bill is gathering so much online buzz, with media experts saying that these acts could criminalise news.

But what does this bill really mean?

Fake News is real. The rise of deep fake video’s, identity theft, mis-information, and disinformation is changing the social and political space significantly, and policy actors are struggling to respond. But when people talk particularly about social media, two platforms come to mind: Twitter and Facebook.

Both platforms have been facing serious accusations.

In December this year, former staff of CPL Resources in Dublin, a third party company that provides moderation services to Facebook said it was suing the company for: psychological trauma as a result of poor working conditions and a lack of proper training to prepare employees for viewing some of the most horrific content seen anywhere online.

Nigeria is not alone in this journey to tame the amorphous tech - in Australia, “The Sharing of Abhorrent Violent Material” bill would see social media executives jailed for up to three years or their companies fined 10 percent of annual global turnover if they failed to expeditiously remove the material within a reasonable time. In China, a state-of-the-art system of internet censorship stifles almost all political debate along with hate speech and pornography. In New Zealand, Christchurch attack this year represented the most devastating use of social media and spurred intense political debates around the censorship of Social Media platforms.

But Social Media access is different things for different people. Africa does not share the

same problems as Europe. A lot of Nigerians do not see the same picture. Samson Itodo who runs a youth advocacy organisation that supports transparency in elections across Africa, YIAGA, opines that these acts could limit democracy.

According to Amnesty International, the existing Cyber Crimes Act and the Anti-Terrorism Act, which already cover many of the offences the new bills seek to address, have been used as tools to gag freedom of expression in Nigeria.

The proposed National Commission for the Prohibition of Hate Speech bill, and the Protection from Internet Falsehood and Manipulation and other Related Offences bill, give authorities arbitrary powers to shut down the internet and limit access to social media, and make criticizing the government punishable with penalties of up to three years in prison.

The social media bill contains overbroad provisions that unduly restrict access to and use of social media and seems designed to gag freedom of expression.

For example, section 3, which relates to the transmission of false statements of facts, contains provisions against sharing statements “likely to be prejudicial to the security of Nigeria, public safety, tranquillity, public finances and friendly relations of Nigeria with other countries”. This could be easily abused to punish critics of government policies and actions, and anyone who asks difficult questions could find themselves liable for “diminishing public confidence in the government.”

Should the laws be against citizens, or against social media platforms?

Focus is shifting in-between what people should do with Social Media, into the realms of what Social Media platforms should do to ensure that these risks are reduced.

Social Media platforms are responding to the changes occurring on their platforms. In March

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this year, Facebook founder Mark Zuckerberg wrote an Op-ed which categorically stated that the Internet needed new rules. Zuckerberg opined that: “From what I’ve learned, I believe we need new regulations in four areas: harmful content, election integrity, privacy and data portability.”

Other big platforms are responding. Artificial Intelligence is coming to the rescue for some.

The video-sharing site YouTube has said 7.8 million videos were taken down between July and September 2018, among this number, 81 percent were automatically removed by machines.

One path is clear, there is a need for a regulation of content on Social Media - many agree to this. In January 2019, speaking at a BBC conference on Fake News, current Vice President Yemi Osinbajo lamented the dilemma that such a bill would give birth to: a battle between the effects of disinformation and cracking down on freedom of speech. The bill puts the citizen on the middle ground.

The point in contention, in Nigeria, is that such bill in the hands of a government many fear is capable of abusing power is a dangerous weapon.

How are the Nigerian people responding?

The debate is no longer skewed. There are disturbing sides to the use of Social Media - the proliferation of information without measure, in Nigeria fake or outdated pictures depicting communal violence triggering retaliatory killings, child abuse (child porn), terrorism related content, content that encourages suicide, disinformation, and cyber-bullying. But policy actors are saying that these laws could, and will be used to detrimental outcomes in Nigeria.

Activist Ndi Kato says that Social Media is the only remaining active government opposition in Nigeria.

What is the intention behind this bill? Opposers believe it is targeted at anti-political party

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TAHIR SHERRIFF members, and the citizenry. But this cuts deeper - academics, business people, international and local NGOs (such as Amnesty International), anything that is not accepted by the state as TRUTH will be punishable by this law - it’s more about criminalising statements than it is about Social Media generally. Kato says, at some point, even government officials will be penalised by the bill.

Senior advocate, and now Minister of State for Labour and Employment, Festus Keyamo responds to these accusations stating people should be punished when stories that are false that can lead to an uprising are posted.

Activist Segun Awosanya had even harder words, “A hateful bill was presented on the floor of the senate with the clear goal of tyranny in a democracy. A bill with a death penalty. They want to ensure that freedom of speech is outlawed. The danger itself is in the ambiguity, it can suit anyone at the helm. It is meant to put an end to criticism and difference of opinion should we allow this to scale through. They clearly don’t represent us.”

Others say the bill is just a distraction out there. Like many other things. That the government really doesn’t need this bill for its actions siting Sowore, Zakzaki, Nnamdi Kanu, Dasuki, etc. who have already been detained.

If anything is clear, it is that the relationship between those being governed and those doing the governing is changing - a Social Media and Hate Speech bill, being presented in the Senate not long after the same senate passed an NGO bill clearly shows that the relationship between the citizenry and the government is no longer business as usual.

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How fintech start-ups connect smallholder farmers with investors combined 4,000 acres of farmland in Nigeria for farming purpose and grown over 150,000 organic chickens to date,” Onyeka Akumah, co-founder and C E O, Fa r m c row d y s a i d recently during the firm’s first anniversary in Lagos.

Josephine Okojie

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uwon Gbolade a 45 years old farmer in Lagos, Nigeria’s commercial nerve center, farms rice, soybeans, and maize on 20 hectares of land yet he has never been to a farm.

Gbolade has no practical knowledge about farming and does not understand the fundamentals of agriculture yet he harvest tons of crops yearly and makes over N500, 000 from farming each year. “ I have n o p ra c t i ca l knowledge of farming and I have never been to a farm but I have two farms,” he said.

Not only is the business ver y profitable but also helping Nigeria meets its funding needs to boost food production and ensure food security.

A h m e d Ya k u b u , a n engineer with a top engineering firm in the country is also a farmer by proxy.

“I have been into farming since 2016 and the journey has been exciting and rewarding.

I have a 10 tons rice farm in Kebbi and I have never been to kebbi state before,” Yakubu told BusinessDay.

“I could have these farms through my investments in Thrive Agric- a company that connects sponsors to farmers. The returns have been excellent,” he added.

Just like Gbolade and Yakubu are leveraging on the farming opportunities the likes of Growsel, Thrive Agric, and Farmcrowdy are providing to create wealth and improve their income.

The likes of fintech organisations such as Farmcrowdy, Thrive Agric, Pork Money, Agroyields Nigeria, Agrecourse and Growsel are firms behind the initiative which is reshaping the way people participate in farming and food production using their online platform to invest.

The organisations function through their various

platforms and train farmers in smart farming techniques as well as supplying them with inputs and technical support to boost their output.

The oppor tunity has allowed many Nigerians who do not want to be involved in the farming own a farm and venture into agribusiness.

“Farmcrowdy has recorded close to 1,000 unique farm sp ons ors, aggre gate d a

Nigeria commercialises first transgenic cowpea variety Josephine Okojie

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igeria, Africa’s most populous nation has approved the registration and release of a new Pod Borer Resistant (PBR) Cowpea (beans) variety for commercialisation.

The approval was granted by the National Committee on Naming, Registration and Release of Crop Varieties recently in Ibadan, Oyo state.

T h e c ow p e a va r i e t y , SAMPEA 20-T, was developed by scientists at the Institute for Agricultural Research (IAR), Ahmadu Bello University, Zaria in collaboration with var ious par tners under coordination of the African Agricultural Technology Foundation (AATF).

Mohammed Ishiyaku, principal investigator for the project and executive director, Institute for Agricultural Research, Zaria said both the on-station and on-farm trials demonstrated the superiority of SAMPEA 20-T relative to local, recently released cowpea varieties and improved

breeding lines tested.

“SAMPEA 20-T is high yielding, early maturing and resistant to Striga and Alectra, which are a major constraint to cowpea production in most producing areas in Nigeria and other dry savanna regions,” said Ishiyaku who is also a professor in a statement.

“The protein and nutrients content of variety SAMPEA 20-T is the same as that of other conventional varieties meaning that the Bt gene that was introduced into the variety has no negative influence on the nutritional composition of both grain and folder,” Ishiyaku further said.

He added that the newly released variety does not differ in any way from already existing cowpeas other than the improvements made.

The National Biosafety Management Agency (NBMA) had in January 2019 approved the release of the PBR cowpea.

The ap p rova l by th e biosafety agency paved the way for submission to the National Variety Release Committee for consideration and registration of the first www.businessday.ng

variety containing the PBR Cowpea trait as a commercial crop in Nigeria.

The newly registered SAMPE A 20-T is highly resistant to Maruca vitrata, an insect pest that causes up to 90 percent yield loss in severe infestation cases.

The new variety is early maturing (70 - 75 days) with semi-erect growth habit, insensitive to day-length, and has a medium-large white seeds.

It is also resistant to Striga and Alectra, two notorious parasitic weeds.

The decision to release the variety means that farmers will have access to the seed that will help them significantly reduce the number of sprays they currently apply to their crop from 6 to 7 times to an average of 2 times per cropping season.

It will also ensure that farmers’ yield per hectare is improved upon in quantity and quality.

Similarly, it will contribute to addressing the national cowpea demand deficit of about 500,000 tons and

Helping farmers with finance Over the years, lack of finance has remained one of the major factors bedeviling the country’s agricultural sector and this impediment has continued to prevent farmers from investing in basic inputs, such as quality seeds, fertilizers, and smallscale irrigation facilities among others needed to raise productivity and generate sustainable income.

But all that is fast changing owing to the new league of proxy farmers in the country.

“Despite contributing about 30percent to Nigeria’s GDP and 70percent to the country’s labour force, most farmers in Nigeria are still entangled in poverty, a problem that stems from a lack of funds to access modern farm inputs, which in turn drastically reduces their

output,” Jerry Oche, CEO, Growsel said in a statement.

“To change this for farmers and ensure they have the required finance to expand their production areas and boost productivity, we create a meeting point for farmers and farm sponsors who are willing to invest,” Oche said.

According to experts, such financing models to farmers will increase private capital investment in the country’s primary agriculture and integrate poorer sections of the population into a sustainable process of economic growth and development.

In turn, this will reduce poverty by providing jobs, directly and indirectly, that will serve as a stimulus to the Nigerian economy and agricultural sector.

“We believe an innovative national agriculture system, that supports smallholder farmers, would grow the economy and eradicate hunger. That is why we are committed to providing support for smallholder farmers in Nigeria” said Deborah Adesuwa Ameli, chief op erating officer, Agroyields in an interview with BusinessDay.

UNILORIN keys into FG’s poultry revival scheme also improve the national productivity average yield per hectare of 350kg.

During the Multilocational Advanced Yield Trials conducted across Nigeria’s agro-ecologies, researchers found SAMPEA 20-T to have high stable grain yield across the test locations.

The minimum observed grain yield increase over the conventional cowpea varieties was 20 percent and the maximum was over 200 percent.

The variety yielded over 2.9 tons of beans per hectare and over 3.0 tons of fodder per hectare.

Denis Kyetere, executive director AATF, appreciated the government of Nigeria for releasing the new cowpea variety saying it showed its commitment towards improving the livelihoods of smallholder farmers.

“Cowpea farmers have had to endure difficult farming conditions that required spraying dangerous chemicals on their crop to make a profit which is risking their lives,” Kyetere said.

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…set to commence operations SIKIRAT SHEHU, Ilorin

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s part of measures to further stimulate t h e U n i v e r s i t y ’s mandate of teaching, research and community s e r v i c e, t h e U n i v e r s i t y of Ilorin management has disclosed that it has concluded arrangements to spend a huge sum of money to develop its poultry farming.

The management, however, assured that the institution would soon become a commercial hub of poultry business in Nigeria.

Mikhail Buhari, professor of pathology and deputy vice-chancellor (research, technology, and innovation), of the institution, made the disclosure recently at the research and teaching farm of the institution.

“We are at an advanced stage of discussion with a partner bank and the Central Bank of Nigeria (CBN) on the matter. We are looking at the multi-billion naira business that will be unraveled in a very short while,” he said. @Businessdayng

Buhar i revealed that conscientious efforts have been made by the vice-chancellor, Sulyman Age Abdulkareem-led administration to properly key into the Federal Government’s poultry revival programme.

“The opportunity provided by the CBN and, by extension, the Federal Government, is going to be beyond our wildest dream. We want to go beyond just talking in academic terms, but to now show the practical and commercial aspects of what we teach our students,” he further said. “ We h o p e t h a t t h e University of Ilorin will be the commercial hub of poultry business in Kwara State and some of the neighbouring states in Nigeria,” he added.

On a tour with the deputy vice-chancellor round the institution’s research farm, Job Atteh a Professor of poultry production and monogastric nutrition said that the faculty of agriculture was handling production of 5,000 broilers through a partnership arrangement with Amo Farms Sanders Nigeria Limited.

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Africa left disappointed as climate change summit ends without deal Josephine Okojie

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he UN Climate C h a n g e Conference which concluded on Sunday left Africa disappointed as key issues remained unresolved.

Issues such as finance for adaptation, carbon markets and loss and damage which a re ve r y c r i t i ca l t o t h e continent were left unresolved by parties.

Earlier on Friday at a press briefing, Tongie Gahoma, incoming chair of the Africa Group of Negotiators said that Africa is ready to continue the negotiations at COP26, taking place in Glasgow, Scotland.

“We are ready to continue these discussions next year.

We want to avoid the Kyoto disease,” Gahoma said.

“For us, it is important that the work here is for Africa

by Africa and our concern is mainly adaptation,” he further said.

Africa has been hit by devastating effects of climate

change in 2019 – through heat waves, floods, and droughts in an unprecedented manner.

All progress under the UN system in 2019 to deal with this changing climate that Africa and the rest of the world are facing were halted by the government who insisted that it was business as usual.

“We’re disappointed with the lack of willingness by some parties to work together to ensure environmental integrity, to respond to the needs of the most vulnerable communities, and to build upon rather than undermine the Paris Agreement, including resources for the Adaptation Fund,” said Sonam P Wangdi, chair of the Least Developed Countries Group (LCDs) in a statement.

Africa accounts for 33 countries that are listed among the 47 LCDs. The UN 25th Conference of Parties (COP 25) was meant to achieve five major objectives which are: finalising the rules for global emissions trading mechanisms under

Seynu Nafo, former chair of the African Group of Negotiators (AGN); Mohammed Nasr, current chair of AGN and Tongie Gahoma, incoming chair of AGN during at press briefing at the just concluded COP25 in Madrid, Spain.

Article 6 of the 2015 Paris Agreement, getting finance to deal with loss and damage caused by climate change, making roadmap for long term financing from developed to developing countries and holding developed countries accountable for climate actions.

All these are meant to be achieved before the implementation of the 2015

OER Farms partners UNILORIN to boost agric productivity Josephine Okojie

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ER Farms Ltd has partnered with the University of Ilorin (UNILORIN) on a 21-year land lease agreement to develop a 10,000-hectare me chanis e d agr icultural project that will be managed in line with best industry practice to boost agricultural productivity.

The agreement follows a Memorandum of Understanding signed by both parties recently in line with the Federal Government’s agenda on food security.

Improved crop varieties with high yielding cash crops such as maize, soya beans, and cashew are proposed for the project.

Mu h a m m a d u I n d i m i , founder of Oriental Group- the parent company of the farm, while speaking during the signing ceremony in Maiduguri recently remarked that the initiative - a vision of close to half a decade – speaks of his oranisation’s commitment to support macroeconomic growth through sustainable development and opportunities for all.

The project is also designed to develop the capacity of staff of UNILORIN in agricultural re s e a rc h , i m p rov e f a r m practice and develop youth agripreneurs who will give

farming a different perspective, promote local Inclusion and enhance economic viability in catchment areas.

“The average yield for a crop like maize by Nigerian farmers is about four tons per hectare, while yields global average yields are up to eight tons per hectare. We are curious about that gap and we aim to close it by exposing local farmers and students to best industry practices as well as providing much-needed support over the next 21 years,” Indimi said in a statement.

“Nigeria can achieve better results and own a robust, thriving agriculture sector with vast export value. We are happy to play our modest role in joining President Muhammadu Buhari on the national food security journey,” he added.

He stated that the collaboration will add value to the University’s faculty of agriculture by supporting research and exposing students of the institution to the best industry practice in the sector.

Similarly, hands-on farm manag ement exp er ience will encourage graduates to develop entrepreneurial skills, which will further reduce youth unemployment. It is also expected to positively impact smallholder farmers.

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Nigeria by promoting equitable quality education and lifelong learning opportunities.

Sulyman Age Abdulkareem, a professor and the vicechancellor of UNILORIN stressed that developing the agricultural sector is critical for food security, diversification and job creation.

“This is a public-private sector partnership that greatly benefits our students, local farmers, government and nation’s revival of agriculture.

It would also attract resources to the University,” he said.

“One feels proud as a Nigerian to have someone like Indimi who champions social, economic and humanitarian c a u s e s. We b e l i e v e t h i s joint venture will achieve phenomenal successes in the sector,” he added.

The next phase of the project development will commence in the first quarter of 2020, with site detailing, soil and hydrology tests as well as obtaining a ten-year historical meteorological data.

The information will determine crop options and farming techniques.

It is the goal of both parties that the project will be of value to all beneficiaries, contribute to significant transformation of Nigeria’s agricultural sector, improve crop yield, reduce crop vulnerability as well as increase local and export market potentials.

Pa r i s A g re e m e nt w h i c h takes effect next year with the integration of gender, human and indigenous rights components into all climate actions.

This means that the Paris Agreement will go into implementation next year without adequate finance as pledges by most developing countries to the Paris Agreement to control

carbon emissions and adapt the impact depends on money from the developed countries.

This means the carbon market which is Article 6 of the Paris Agreement will not take effect.

Africa is the most vulnerable in terms of climate change impact despite accounting for less than 4percent of global carbon emissions, says a UN report.

The continent is projected to see the largest relative increase in the size of its population over the coming years.

It is projected by the UN that it will account for 1.68 billion people by 2030.

This means more land will be required for growing more food and constructing more houses for these people, meaning that more forest cover will be destroyed.

The continent still has a low capacity for adaptation, and this is why Africa has continuously requested for more finance for adaptation and technological transfer and capacity building. “ We n e e d a d e q u a t e f i na n c e f o r a d ap t at i o n , capacity building, and technological transfer. We believe that ambition for action must be matched with ambition for response,” said Barbara Creecy, president, Africa Ministerial Conference on the Environment (AMCEN) at the African Ministerial press briefings.

NEPC urges Abia, others to support farmers produce quality cocoa beans …promises to provide market linkages GODFREY OFURUM, Umuahia

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lusegun Awolowo, executive director, and chief executive officer of the Nigerian Export Promotion Council (NEPC) has appealed t o re l e v a n t g ov e r n m e n t a g e n c i e s, i n c l u d i n g t h e Ministry of Agriculture in Abia State, to assist farmers with relevant extension services necessary to produce quality cocoa beans for the export market.

This is as he promised that the NEPC will continue to facilitate market linkages and provide market information to exporters, in addition to product development efforts, in line with its mandate.

The NEPC executive director in a keynote address presented to stakeholders at a capacity building workshop on ‘Cocoa Value Chain’, organised by the Aba Smart Office of the council, in Umuahia, the Abia State capital, described the workshop as a perfect action towards increasing cocoa production the state.

Represented at the forum,

by William Ezeagu, director, product development, NEPC, Abuja, Awolowo, stated that the overseas market for cocoa

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is competitive, as buying countries stipulate stringent quality requirements for exporters, such as certification in sustainability, fair trade and organic among others.

He noted also that the issue of integrated pest management is of paramount importance in managing cocoa beans.

“Last year we organised an event where the council distributed farm inputs such as cocoa seedlings, spray equipment, and good agricultural practices (GAP) quality chart, to farmers in Abia and Akwa Ibom States. It is gratifying to note that some of these seedlings are doing well in the field,” he said.

He urged farmers to use approved pesticides on their cocoa plantations.

“Farmers and local buying agents must, therefore, ensure proper cocoa grading, quality analysis and regulations in line with Federation of Cocoa Commerce (FCC) rules,” he advised.

Michael Okeniyi, head of station, Cocoa Research Institute of Nigeria, Ibeku, Umuahia in a paper titled ‘Good agricultural practices in the production for export of cocoa and its derivatives’, stated that Nigeria is currently losing its global ranking in @Businessdayng

cocoa production, due to poor production practices and non-compliance to importing countries requirements, among other issues.

“As at 2015, while Cote D’Ivore and Ghana boast of production levels of about 1.7 million metric tons and 800,000 metric tons, respectively, Nigeria’s production still hovers around 250,000 metric tons yearly”.

To i n t e n s i f y c o c o a production, he urged farmers, governments and the private sector (cocoa buying companies, input dealers, banks, and credit institutions) to make some structural changes.

He advised farmers to run cocoa farming as a gainful business by planting improved materials (hybrid cocoa), using approved inputs (fungicides, insecticides) at recommended d o sag e s a n d a d o p t b e st management practices such as land preparation, nursery establishment, planting requirements, pruning, weeding and fermentation among others.

He also urged them to use fallow for new farms instead of forest, be experts on their own farms and provide assurance to the buyer and to the consumer of sustainable production and consumption.

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Wednesday 18 December 2019

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COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

FMN’s N64bn Sugar investment wins praise of Trade and Investment Minister SEGUN ADAMS

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onsumer goods maker, Flour Mills of Nigeria (FMN) has been praised by the minister of Industry, Trade and Investment, Niyi Adebayo, on the size of its investment and the company’s performance under the Nigeria Sugar Master Plan (NSMP).

The minister on a recent working visit to the various sugar backward integration programmes in the country commended FMN for its commitment towards Nigeria’s sugar self-sufficiency “I am quite impressed with the level of investment and planning that has gone into this enterprise, also because of the number of people that are employed here,” said Adebayo. “Efforts like these go a long way in reducing the number of unemployed Nigerians” The Sunti Golden Sugar Estates, owned by FMN’s Golden Sugar Company, is Nigeria’s only Greenfield Sugar investment under the Sugar Masterplan currently producing raw sugar.

Since the implementation of the Sugar Masterplan, the Golden Sugar Company (a subsidiary of Flour Mills PLC) has invested heavily and productively towards the goal of helping Nigeria achieve self-sufficiency in sugar production.

In a bid to promote local production of sugar, among other things, the Federal Executive Council had in 2012 approved the Nigeria Sugar Master Plan (NSMP), the implementation of which commenced in January 2013.

Under the NSMP, Nigeria planned to attract over $1billion in both local and foreign direct investments into the agro-allied sector and create over 107, 000 direct jobs locally within the initial 10 years of the plan.

When the National Sugar Development Council (NSDC) carried out its midterm review of the Sugar Industry Backward Integration Program (BIP) in 2017, the council scored Flour Mills’ Golden Sugar Company highest at 58 percent in terms of the efforts made to achieve its commitments under the NSMP. Dangote Sugar Refin-

eries and BUA Sugar Refineries scored 46 percent and 17 percent respectively.

The NSDC based its performance evaluation on the following criteria: available land to grow and harvest sugarcane, Land Development – irrigation, dykes etc, investment amount in mill

processing, community development, job creation and volume of sugar produced.

“We are the most productive BIP, as adjudged by the National Sugar Development Council (NSDC). As you are aware, Honorable Minister, Sunti Golden Sugar Estates was rated the best

performing Sugar BIP under the NSMP with a score of 58 percent,” said John Coumantaros, Chairman of FMN. The NSDC had stated in its 2017 midterm review that flooding and communal clashes may have been factors responsible low performance of some of the BIP

operators.

FMN however overcame the challenges due to its investments in flood protection dykes and the provision of a wide range of infrastructure for its host communities including a 398km network of roads servicing 28 communities.

transform how entertainment is consumed, which is in line with the innova-

tive trait of the 9mobile brand.

“Nextsat TV is a disruptor which delivers competitive value in premium Nigerian and African media contents.

Previously unavailable or inaccessible content due to strict piracy protection will be readily served,” he said.

Malik Ado-Ibrahim, chief executive officer (CEO), Nextsat TV, said he invites all lovers of quality media content to brace-up for a new experience in digital entertainment. He further stated that his company was pleased to work with 9mobile to deliver a thrilling alternative to viewers.

ENTERTAINMENT

9mobile, Nextsat TV ink entertainment deal JUMOKE AKIYODE-LAWANSON

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new deal signed by telecommunications company, 9mobile and media and entertainment platform, Nextsat TV, will see the two companies partner to deliver quality digital entertainment experience to Nigerians by providing new and exciting on-the-go video and audio content.

The exclusive deal is set to unlock access to an exciting array of content from the Nigerian music industry, the Nigerian professional football league, Kannywood, Nollywood and host of other content providers.

In addition to enter-

taining viewers, 9mobile has revealed that the new video entertainment platform will provide a strategic window to project Nigeria and Africa’s rich entertainment talent pool to a global audience.

As an added benefit, subscribers of Nextsat TV will enjoy the power of choice in deciding how they experience entertainment with multiple viewing options including dish-decoder, mobile/Over-the-Top (OTT), Pay Per View, Video OnDemand and e-Gaming.

Commenting on the MoU signing, Stephane Beuvelet, acting managing director, 9mobile said that the telco is partnering with Nextsat TV

because it is positioned to disrupt the digital entertainment space by of-

fering superior quality content and expanding viewing options that will

L-R: Munir Ahmed Chaudhary, president, Aspire World Investment; Saba Rajput, managing director, Aspire World Investment; Darlington Okani, CEO/founder, DBillions PV City Nig. Ltd; Alabi Olugbenga, managing sales international (African Rep), Aspire World Investment, and Temitope Alex-Duduyemi, chief operating officer/head counsel, DBillions PV City Nig. Ltd, at the DBillions PV City programme in Lagos.

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EVENTS

Legal experts convene to address woes in Nigeria’s oil & gas sector DIPO OLADEHINDE

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ingering challenges bedevilling Nigeria’s oil and gas sector and the wobbling economy may receive fresh insight if the Federal Government adopts a new solution being canvassed by global law firm Hogan Lovells, in collaboration with Aluko & Oyebode and Lagos Chamber of Commerce International Arbitration Centre (LACIAC), to host a two-day legal training session for select participants.

Although the oil and gas sector remains crucial to Nigeria’s economy in terms of revenue generation, but prevailing challenges ranging from governance and fiscal loopholes, which stakeholders feared drastically affect the country in the face of growing population and a volatile oil market.

Since crude oil exports accounted for 88 percent of foreign exchange earnings, and made up about 85 percent of government revenue, stakeholders stressed the need for urgent actions to stem these prevailing challenges.

The symposium, which took place at the Nigeria Liquefied Natural Gas (NLNG) premises in Bonny Island, presented a rare opportunity for participants to engage in constructive and interactive sessions with legal experts.

Among the commentators were Hogan Lovells’ Londonbased partners Nathan Searle, Angus Rankin, and Hogan Lovells International Arbitration Lawyer, Ademola Bamg-

bose; Babatunde Fagbohunlu (SAN), Ngo-Martins Okonmah Construction Law and Arbitration lawyer, and Dare Senbore of Aluko & Oyebode; and Funmi Iyayi, Managing Director at LACIAC. Speaking at the event, Nathan Searle, Hogan Lovells partner, expressed confidence in Nigeria’s oil and gas industry and said it has a strong future while also acknowledging that Nigeria has one of the largest gas reserves in the world, with NLNG being the fifth largest producer of LNG in the world.

“NLNG is growing in Africa and looking at Nigeria over the past decade, it has had a significant number of international transactions, despite difficult market conditions,” Searle said.

Searle said there is a need to further harness the sector’s potential by continuing to build on existing knowledge through trainings like these.

Other discussions revolved around the management of legal risk and in particular, international business disputes particularly with regards to Engineering, Procurement and Construction Contracts in the oil and gas sector with an overview of the governing laws of the industry and challenges experienced by arbitration practitioners in the Nigerian context.

“Through this training, we shared global best practices and solutions that can lead to the sustainable growth of Nigeria’s oil and gas sector; and we are glad to be amongst the thought leaders that shape the way this sector addresses key issues go-

ing forward,” Searle said.

Senior partner at Aluko &Oyebode, Babatunde Fagbohunlu (SAN) said large scale projects in the oil and gas sector carry risks and it is important that such risks are properly managed.

“Discussing how to manage such risks at an early stage from both a legal and commercial perspective is critical to minimizing disruption to the business and loss of value,” Fagbohunlu said.

The convener of the symposium, Funmi Iyayi, Managing Director at LACIAC reiterated the body’s efforts towards providing tailored dispute management solutions and assisting businesses not only in the resolution but in the management of disputes through partnerships with local and global thought leaders.

“LACIAC sees an increasing role for arbitration under its rules to be included in contracts including the Nigerian oil and gas and construction sectors to provide for efficient, cost-effective and local dispute resolution of disputes that may arise during a project,” Iyayi said at the event.

The session provided a platform for participants to discuss global best legal practices and trends, as well as explore the issues and opportunities across the Liquefied Natural Gas (LNG) sector in Nigeria.With over 40 offices across the world, Hogan Lovells is committed to providing business-oriented legal advice and high-quality service across its exceptional breadth of practices to clients

L-R: Olusegun Mimiko, immediate past governor of Ondo State; Ademola Idowu, group head, branch servicss, First City Monument Bank (FCMB); Oba Victor Kiladejo, Osemawe & paramount ruler of Ondo Kingdom; Wale Akinterinwa, commissioner for finance, Ondo State; Adelaja Adeleye, regional head, South-West, FCMB, and Emmanuel Adeyemi, manager, Ondo City Branch, at the commissioning ceremony of the new Branch of FCMB in Ondo City, Ondo State

L-R: Obinna Frank, third ranked dealer of the year; John Onyela, second ranked dealer of the year; Vishant Dalamal, group MD, Bhojsons Plc, and Mallam Suleiman, 2019 dealer of the year, Mohammed, at the 2019 annual Bhojsons Dealers Conference in Lagos.

TECHNOLOGY

ZKTeco commences biometric technology operations in Nigeria …to establish R&D centre in Unilag for identity management, security applications JUMOKE AKIYODE-LA-

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KTeco, global provider of biometrics technology solutions, identity management and security applications, has announced plans to set up shop and play in Nigeria’s burgeoning digital identity market, as its hub to service the sub-Saharan market.

With plans to carry out major technology research and development (R&D) in Nigeria, the company which is headquartered in China and has various R&D, design and innovation centers in Silicon Valley, Europe, South Korea, Xiamen, Dalian, Shenzhen, Hangzhou, etc., has already partnered with SB Telecoms and Devices Limited, as its local partner in Nigeria, in a bid to transform Nigeria’s economy and encourage more foreign investment in the ICT sector which currently contributes over 11 percent to the nation’s Gross Domestic Product (GDP), and is a major target in the Government’s plans for economic diversification.

Speaking to journalists at a press conference in Lagos, John Che, president and founder of ZKTeco said Nigeria was considered to act as

hub for the rest of Africa because of the country’s strategic position on the continent, including its population, the market size, the GDP, as well as the government’s efforts to transform the economy via its diversification agenda and encouragement of foreign investments. “ Z K Te c o a l re a d y h a s a presence in South Africa and Egypt, but based on our growth objectives and the fact that Africa has a strong growth prospect, we decided to increase our stake in Africa and we identified Nigeria as the epicenter of Africa, representing the strongest growth prospect on the continent, with opportunities to collaborate on its identity management and biometrics standard needs,” Che said.

The R&D centre will be established in the University of Lagos campus to take advantage of the abundant local talent to create solutions that can run on ZKTeco platforms.

Also speaking, Afolabi Abiodun, chief executive officer of SB Telecoms and Devices Limited, said that ZKTeco’s relationship with Nigeria started about eight years ago when SB Telecoms became its accredited partner in Nigeria,

also servicing the West African sub-region.

“With ZKTeco’s expertise in biometric technology, identity security management, and time management, the company hopes to collaborate with Nigerians, both in the private and public sectors, in line with the company’s growth objectives, to help fast track the country’s development,” he said.

“Identity management through biometrics is very critical to growth and development of every country.

Biometrics helps to drive the efficient management of time and resources, helping to boost productivity,” Che said.

While commending the government for its efforts in building a comprehensive database for the country through its data capture exercises, Che, however, said there is a need to synchronize the different biometric exercises to ensure a national database.

ZKTeco’s tech products are in used in 180 countries, with subsidiaries in over 35 countries, including the US, Russia, Mexico, and South Africa. The company has 14 R&D centres across the world and a wide array of private and public sector clients.

L-R: Mukhtar Sirajo, president, Nigerian Institute of Public Relations; Alero Okoruwa, general counsel, XLR8; Calixthus Okoruwa, CEO, XLR8, and Rotimi Oladele, immediate Past President, NIPR, at the 2019 presidential dinner and awards ceremony where XLR8 won NIPR’s Corporate Practitioner of Excellence Presidential Award for 2019, in Lagos, recently.

Nasir el-Rufai, governor of Kaduna State, exchanging pleasantries with Adam Nuru, MD, First City Monument Bank (FCMB), at a visit by the Bank for the signing of Education Loan Partnership Agreement, with the Kaduna State Scholarship Board, in Kaduna.

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cityfile Gridlock: Lagos threatens shutdown of religious, event centres JOSHUA BASSEY

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L-R: Ifeoma Mbonu, author’s mother; Babajide Sanwo-Olu, governor of Lagos State; Munachi Mbonu, author; Frank Momoh, book publisher; George Anyiam-Osigwe, member, board of trustees, Anyiam-Osigwe Foundation; Norrison Quakers, principal partner, J&G Arttoney, and Abba Kyari, DCP, Nigeria Police, at the launch of Munachi’s book titled: ‘‘Father’s Will’’, in Lagos. Pic by David Apara

Communal crisis: Ebonyi women protest in Government House … demand release of arrested children NKECHINYERE OGINYI, Abakaliki

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t was an ‘ugly drama’ in Abakaliki, the Ebonyi State capital, on Monday, December 16, when about over 100 women of ages between 60 and 90 years protested naked to Government House over a communal crisis rocking Agubua-Igbudu community in Ikwo local government area of the state, leading to alleged arrest of some youths by security forces.

The women alleged that nine of their children were arrested on Saturday, December 14 by security men on the order of officials of the local government. According to the women, there have been incessant arrests in their village

since November when the crisis broke; a development they said was no longer acceptable.

The protesting women want the state governor to direct stakeholders in Ikwo to return home and resolve the crisis, so as to allow peace return to the community, adding that their children were scattered “here and there” due to the fear of being molested and arrested.

“The latest was the arrest of two persons from the village in a wedding ceremony on Saturday in Abakaliki,” said one of the protesting women.

Recall that a bloody clash erupted between two rival groups over a motor park in the community which claimed the life of one Chinedu Nwali, and left many others injured, while houses, cars and other

properties estimated at millions of naira were damaged.

The Agubia motor park is the central park that serves Ikwosouth community. The women noted that since this clash, they have been seeking refuge in nearby communities while many of their children “are nowhere to be found.”

Mercy Nwali, who spoke on behalf of the women, said that the protest was to demand for an urgent amicable resolution of the crisis as their lives and that of their family members have been in danger since then.

“What we demand is that all of them should come home so that we make peace. They shouldn’t be in town and be terrorising us in the village. We no longer sleep in our homes and we want government to

intervene”, Nwali explained, while also calling for the immediate release of their children being held in detention.

Also Juliana Nwali, who gave the names of her children arrested as Igwe Nwali, Chikwendu Nwali and Chineme Nwali, demanded that her children be released to her.

Addressing the women, the state commissioner for internal security and border peace, Stanley Emegha, assured them that the government would work to restore peace in the area.

“You know, you are our mothers. Our governor was not happy to see you in this way and mood. So, whatever is the problem, I assure you it will be resolved,” said Emegha.

EFCC, NDLEA partner to fight money laundering, drug abuse Police arrest 6,531 The NDLEA boss also pledged criminal suspects REMI FEYISIPO, Ibadan her agency’s support for the EFCC

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he Economic and Financial Crimes Commission (EFCC) and the National Drug Law Enforcement Agency (NDLEA) are fostering strategic alliance to enhance the execution of their respective mandates.

This was the tone of discussion between leaders of the two agencies when the new Oyo State commander of the NDLEA, Josephine Ruth Obi, visited to the Ibadan zonal head of the EFCC, Friday Ebelo, at the commission’s Ibadan office on Monday.

Explaining how the NDLEA was preparing its staff for the partnership, Obi said that the agency was raising an elite team of officers for training on money laundering.

“I tell my officers to always look out for evidence of money laundering.

They shouldn’t just be after the drugs.

The agency itself is now emphasising on money laundering.

“Our men are receiving training on money laundering. Some of them have gone on training on financial investigation. We have a lot to do together,” she said.

and also called for same from the anti-graft commission, saying the two agencies were mutually engaged in the business of securing Nigeria against fraud and other criminal acts.

Ebelo on his part noted that the two agencies have more areas of convergence in their respective statutory mandates. This, according to him, was heavier on areas of terrorism financing and money laundering.

He identified drug peddling as the main source of terrorism financing, which, according to him, was among the core areas of focus for the EFCC. Ebelo called for more synergy between the two agencies to effectively tackle drug-related crimes.

“We need to work together to ensure a well secured Nigeria because without Nigeria, there will neither be EFCC nor NDLEA. We just have to come together and work in synergy to see how we can reduce drug abuse and other forms of criminality to the barest minimum,” he said. www.businessday.ng

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he Inspector General of Police, Mohammed Adamu, says 6,531 suspects have been arrested over violent criminal offences across the country in 2019.

Adamu said in Abuja at a conference that the suspects were involved in alleged kidnapping, murder, armed robbery and cultism.

According to Adamu, about “2,627 of the suspects were arrested over alleged armed robbery, 1,627 for cultism, 1,527 for kidnapping and 758 for murder cases while 2,037 were nabbed in connection with firearms, while 166 vehicles recovered from them are at various police formations.

The IGP said that 945 kidnapping victims were rescued in various policeled operations during the year.

He said force would focus on five thematic areas next year; improving the overall efficiency of the force through capacity in policing technology, prosecution and crime prevention.

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agos State government has cautioned operators of event centres, property owners, religious centres and other places of attraction to desist from compounding traffic gridlock on roads around their locations.

Commissioner for transportation, Frederic Oladeinde, said the warning became necessary because owners of event centres and places of attraction have been discovered to a major role in the endemic traffic congestion in the state.

The commissioner specifically cited the LekkiExpressway where manhours are daily lost owing to the blockage occasioned by activities of the event centres. ‘’Henceforth, any social event where the number of expected visitors exceeds 50, organisers of such event must notify the general manager of Lagos State Traffic Management Authority (LASTMA) in advance, especially, if it is perceived that their property would not accommodate large numbers of vehicles that may be brought by their guests.

“The LASTMA authority will be on hand to advise them on what to do rather than allowing their visitors to block roads as this will attract stiffer penalties if caught.

“The state government will no longer condone parking of vehicles on the roadside, failure of the operators/ property owners to make provision for adequate parking space for their guests,” Oladeinde said, adding that it was regrettable that innocent citizens going about their lawful duties were being forced to share in the pains caused by merrymakers.

Oladeinde warned that any commercial event centre, place of worship, night club/lounge, or private property owners caught on account of illegal blockage of roads by their attendants would be closed until their owners paid the stipulated fines.

Also, vehicles towed for infraction or unlawful parking offences, he stressed, would not be released until the corresponding amount is paid.

“Many of these event centres and churches do not have enough spaces for their visitors especially on Lekki/ Epe expressway, most often; public roads are used for their parking. He charged the event centre owners to operate within the ambit of the law. Oladeinde warned that the state government would not hesitate to apply the law on any erring event centre or private property owner whose attendants blocked the road on account of inadequate parking space.

SMEs suffer losses as fire guts factories in Ibadan REMI FEYISIPO, Ibadan

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oods worth millions of naira have been destroyed by a late night fire disaster which engulfed the old business hub in Ibadan, Oyo State.

The hub is believed to have about the highest concentration of Small and Medium Scale Enterprises (SMEs) in Ibadan.

The inferno which started at the midnight on Saturday, December 14, destroyed many factories involved in nylon and plastic production around Oni Memorial Hospital, off Bashorun MKO Abiola Way, Ibadan.

The incident was said to have been triggered from an electric pole when the Ibadan Electricity Distribution Company @Businessdayng

(IBEDC) restored supply to the area. It was gathered that not less than 15 production factories, over 60 machines, raw materials and finished goods ready for delivery were all destroyed.

Machinery and raw materials burnt included cutting machine, extruder, injection, punching machine, printing machine, grinding, recycling and pellet machine.

Business owners and workers were counting their loses when Cityfile visited on Monday. While some could not control their emotions, as they wept profusely. The owners, mostly young university graduates, among other entrepreneurs operating in the hub, were said have relied on series of loan schemes to open their various businesses.

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Wednesday 18 December 2019

BUSINESS DAY

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BUSINESS DAY

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Wednesday 18 December 2019

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Ports & Cargo positions to lead in terminal operations with $20m investment on equipment amaka Anagor-Ewuzie

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igeria, in recent times, has not been doing well on the World Bank’s Ease of Doing Business ranking due to delays suffered by businesses, particularly shippers while receiving services rendered in critical economic gateways such as seaports.

Given the difficulties and delays experienced in doing business at the nation’s seaports, shippers have been paying dearly as demurrage and storage charges to shipping companies and terminal operators for late delivery of their consignments.

BusinessDay investigation shows that in addition to poor infrastructure, lack of equipment and other facilities needed to seamlessly discharge vessels, handle and evacuate cargoes from the ports, are reasons for the high cost and delays.

To deal with these issues, some responsible terminal operators and other service providers in Nigerian port terminals have been investing billions of dollars into the acquisition of equipment to deliver quality services to port users.

Determined to deliver quality services to its clients, especially oceangoing vessels as well as importers and exporters, Ports & Cargo Handling Services Ltd (PCHL), a leading indigenous terminal operator in charge of terminal C, Tin-Can Island in Lagos, Nigeria and subsidiary of SIFAX Group, has invested in the acquisition of series of new equipment to aid the terminal in positioning for future growth.

The new equipment, which include five new harbour cranes, nine Reach Stackers, 10 terminal tractors, and five units of Nissan Pick-Up, were acquired to not only support SIFAX Group’s business growth plan and vision, but to also enhance discharging of vessels calling at the terminal.

Speaking at the commissioning of the newly acquired equipment in Lagos on Monday, Adekunle Oyinloye, Group managing director of SIFAX, said the investment was huge and also very significant.

“We are excited because in the last two years, ship-

L-R: John Jenkins, managing director, Ports & Cargo Handling Services Limited; Adekunle Oyinloye, GMD, SIFAX Group; Aisha Ali Ibrahim, assistant general manager, Operations, NPA representing Hadiza Bala Usman, managing drector, NPA, and Adewale Adeyanju, president general, Maritime Workers Union of Nigeria (MWUN) during the commissioning of new equipment recently acquired by Ports & Cargo Handling Services Limited, the flagship company of SIFAX Group held at terminal C, Tin-Can Island, Apapa, Lagos.

ping liners have started to bring bigger vessels with longer rows of consignment.

So, most of our older equipment, are finding it difficult to be able to deal with those vessels. But with this additional equipment, we will be able to deal with any size and shape of vessels,” he said.

Increasingly, according to him, ease of doing business, turnaround time of vessels and cargo dwell time would improve. This, he said, was why SIFAX was not only buying cranes, but also cargo handling equipment like reach stackers and terminal tractors.

“For us in Ports and Cargo, we want to be ahead and we are excited that we made the statement today.

So far, we have committed over $20 million and we are not stopping at that because there are more to come as it was just the first set that were commissioned today,” he stated.

Projecting that the amount invested in the acquisition of equipment used in the terminal would likely doubled by March next year, Oyinloye pointed out that the important thing was that SIFAX would not leave any stone unturned to ensure that the terminal’s leadership position and customers experience, remained high.

“With our new internal restructuring project code named Quantum Leap, SIFAX Group is re-positioning itself to become the first choice terminal not just in Nigeria but in West Africa. www.businessday.ng

We have also set a target that will increase our revenue with over 300 percent in five years. One of the ways we can achieve our set targets is to first begin with investment in equipment which will complement our excellent personnel asset. These new equipment are the best and latest in town, they will catapult us into the next level growth we are working towards,” he said.

Explaining that the equipment would enhance vessel turnaround, he noted that the poor state of the access road to the port and persistent traffic gridlock have constituted a serious setback in their operations.

“We are hoping that access into the port would improve because efficiency and turnaround can only improve if government helps by improving the state of the roads in and out of the port,” he said.

He commended the government for the ongoing road construction but called for more sustainable solution of linking the ports with a functional rail system to complement the road infrastructure.

John Jenkins, managing director, PCHSL, said the acquisition of the new equipment would not only aid the terminal to deliver quality services to its clients, but also position the terminal for future growth.

According to him, PCHSL has invested over $20 million in the acquisition of the new equipment, adding that

there was need to acquire the latest equipment in order to meet the architecture requirements of modern ships that are calling the terminal.

He further disclosed that PCHS was already engaging several shipping lines in order to boost the company’s clientele base from its present standpoint.

Norman Herzberg, sales manager, Liebherr Mobile Harbour Cranes, who expressed gratitude for the privilege to attend the handover ceremony of three Liebherr Mobile Harbour Cranes to Ports and Cargo, said the event marks a milestone in cooperation and partnership between

Liebherr and PCHSL. Herzberg said that the first and very important step in the partnership between both companies was the delivery of the first Liebherr crane in 2007, adding that PCHSL has gradually expanded its fleet to meet the company’s ever growing needs.

“The objective of this new investment and the expectation from the three Liebherr Mobile Harbour Cranes is to increase capacity and productivity of the handling operation of PCHS. It will also enable the terminal to respond to the growing demand of its clients,” he said.

The remarkable growth of PCHS and its operations during the last years, he said, was a success of itself, which management of Liebherr feels proud to be associated with.

“In order to match with extended market expectations, PCHS made strategic decision by choosing Liebherr as the supplier for the cranes. Generally, Liebherr is a key asset for handling all types of cargoes from containers to bulk commodities, general cargo and even heavy lift,” Herzberg said.

PCHS, according to him, is Liebherr biggest customer in West Africa as the seven existing Liebherr cranes have proven to be the drivers of productivity and growth.

“By adding another three to the fleet, PCHS is prepared to continue its successful development in the future. We trust that your new cranes will achieve its maximum capabilities with the high-

The shore cranes on display

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est possible performance to enhance your overall operation and bring long business prosperity to you organisation,” he said.

Industry stakeholders, who described efforts of PCHS as laudable investment in furthering port business, believed that it would enhance Ease of doing business and efficient port operations.

Hadiza Bala Usman, managing director of the Nigerian Ports Authority (NPA), who assured PCHS of the authority’s continuous support, said investment in plants and equipment, adds value to port operation.

Usman, represented by Aisha Ali-Ibrahim, assistant general manager, Operations, urged the terminal operator to continue in this manner by not only investing in the acquisition of equipment but also putting them into good use.

Andrew Lynch, managing director, Mediterranean Shipping Company (MSC), Nigeria, one of the PCHS biggest customers, said the shipping liner has had long time partnership with the terminal operator.

He said the new investment had gone a long way to reinforcing MSC confidence in Ports and Cargo, adding that the company was looking forward to a long-term relationship in the future.

“Ports & Cargo and MSC have both forged an alliance which has been one of the best partnerships in the maritime sector. We are excited that these new equipment will enhance the discharge of more cargo volumes at the terminal,” he added.

Adewale Adeyanju, president-general, Maritime Workers Union of Nigeria (MWUN), who described PCHS’s investment as a new dawn in the life of the workers, management team of the terminal and the NPA, said the union would continue to support responsible terminals that are delivering efficient services in the port.

He however, called on the Federal Government, through the NPA, to renew the lease agreement of efficient terminals like Ports and Cargo for the next 30 years.

The acquisition of the new equipment was part of SIFAX Group’s strategic investment to delivering quality service to its clientele and to further attract more patronage.

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Haastrup wants more women in shipping, freight forwarding business …Wins WISTA Personality of the Year award amaka Anagor-Ewuzie

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icky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN), has won the Women International Shipping and Trading Association (WISTA) Nigeria Personality of the Year award.

The award was conferred on her at the 2019 Annual Business Luncheon and 25th anniversary of WISTA Nigeria, held in Lagos last week.

Haastrup, who doubles as the executive vice chairman/CEO of ENL Consortium Nigeria Limited, made case for participation of more women in shipping business to bridge gender gap in the industry.

Noting that there seems to be improvement in the level of women participation in the sector, she said there was need for more women to come onboard especially in seafaring and freight forwarding professions.

“If we have more women participate in shipping, the sector will be better modernised because people always have more confidence in women and the industry will be better for it. Those of us, who have been operating in the industry, should encourage younger women and support them,” she said.

On her part, Hadiza BalaUsman, managing director of the Nigerian Ports Authority (NPA), urged women to collectively aspire and to work towards balancing gender gap.

Usman, who was rep-

Vicky Haastrup

resented by general manager in charge of managing director’s office, Chinwe Abama, said gender balancing would enable women get fair advancement that equals their qualifications and experience.

“Women are not asking for equality in terms of power with men but for equal opportunities because they are greatly endowed with special qualities. Institutions with more women leaders have better performance and achieve higher economic growth,” she said.

Us ma n s a i d w h e n a w o ma n i s e mp ow e re d , that invariably empowers a whole generation that will benefit from the quality of leadership that is exceptional to women.

“Emphasis should be laid on innovation. Women

should be enabled to discover themselves, build personal and corporate brands identity that differentiates them in society.

This helps to make them not only unique and authentic but to visibly rise into role of leadership and influential positions,” Usman said.

Urging women to come out of their shells, Mary Hamman, President of WISTA Nigeria, said most aspects of shipping have been computerised, and women could stay in their homes to participate in the industry.

Emeka Akabogu, maritime lawyer, stated that women who aspire to take up leadership positions must be willing to face the challenges that would come with equal opportunity with their male counterparts.

to go through what you have gone through. It is a good start to be able to see it through and acquire the skills.”

Nancy Freeborn, WEPSS project head, congratulated

the beneficiaries for working hard to achieve their dreams.

She charged them to make INTELS proud by putting into use the skills they have acquired.

“When we go for follow-up exercise, it gives us joy to see people who are really putting into use, the skills they have acquired,” she said.

Freeborn said that in addition to tailoring, the beneficiaries were taught soft skills such as personal hygiene, business management, social ethics and responsibility.

E s t ab l i s h e d i n 2 0 1 3 , WEPSS was set up by INTELS to train Nigerian women in fashion designing and tailoring. Since inception six years ago, no fewer than 1,200 women drawn from various communities across the country have graduated from the programme.

INTELS trains another 84 women under WEPSS CSR scheme amaka Anagor-Ewuzie

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s part of its Corporate Social Responsibility (CSR) scheme, INTELS Nigeria Limited, an oil and gas logistics giant, has graduated another set of 84 women under the Women Empowerment Programme Scheme Synergy (WEPSS).

This was the second set of women to benefit from the programme this year as about 80 women graduated earlier in June.

A 29-year old Maltina Thompson, who emerged the best performing trainee, was provided with full start-up kit that includes an industrial sewing machine, steam iron, chair, scissors, box of tailors’ chalk and measuring tape.

At the graduation cere-

mony held at the Federal Lighter Terminal, Onne, Rivers State last week, Thompson expressed appreciation to the management of INTELS for impacting on women through the empowerment scheme.

She assured that the skills she acquired during the training would be put to good use.

Mike Epelle, general manager, Legal and Corporate Services of INTELS Nigeria Limited, described the project as one that was very dear to the heart of both the Group Chairman and the management of INTELS. While commending the beneficiaries for the successful completion of their training, he urged them to make good use of the skills they have acquired during the course of the training.

“The fashion industry in Nigeria is big. You can make

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a living and take care of your needs in life if you apply yourself to what you have learnt. All you need to do is to be dedicated to your work. You can start small and sustain what

you are doing,” Epelle advised.

According to him, over 100 women were admitted but, only 84 graduated. “So, I must commend you because some people don’t have the resilient

L-R: Mike Epelle, general manager, Legal and Corporate Services of INTELS Nigeria Limited; Nancy Freeborn, project head, WEPSS; Maltina Thompson, best graduating trainee of the second batch of the 2019 WEPSS training programme, and Rexford Asaikpuka, manager, Government and Public Affairs, INTELS, during the graduation ceremony of 84 beneficiaries of INTELS’ WEPSS training and empowerment programme at the Onne Oil and Gas Free Zone, Onne, Rivers State.

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Wednesday 18 December 2019

BUSINESS DAY

PENSION today

25

In Association With

Group life insurance is your right, ask your employer

P

ension Reform Act 2004 amended in 2014 makes group life insurance compulsory for all employees covered under the scheme. It is a scheme that can be likened to a death-in-service policy, designed to pay a benefit called the sum assured to the next of kin or dependants of an employee who dies in active service.

Specifically, this Act affects employers in the public and private sector having up to three employees and more.

Section 9 (3) of the Pension Reform Act 2004 as amended in 2014 stipulates that every employer both in the public and private sector which the Act applies must maintain Life Insurance Policy in favour of the employee for a minimum of three times the annual total emolument of the employee.

The policy provides cover to the insured against death and the insurance cover is mandatory for all employees as long as they are in employment. This means that the policy provides for the payment of the sum assured in the event of the death of a member of the scheme from any cause, natural and accidental.

According to the guidelines for life insurance policy for employees jointly issued by the National Insurance Commission (NAICOM) and the National Pension Commission (PenCom), the employer is required to fully bear all costs in relation to procurement of this policy, and this shall be in addition to the contributions to be made by the employer to each employee’s Retirement Savings Account.

Policy coverage The policy provides cover to the insured against death and the insurance cover is mandatory for all employees as long as they are in employment. This means that the policy provides for the payment of the sum assured in the event of the death of a member of the scheme from any cause, natural and accidental.

Similarly, the policy also provides for the payment of the sum assured for those in common employment in the event that an insured person disappears and is not seen for a period of 12 months and there is sufficient evidence to assume that the member is dead. However, the person receiving the sum will sign an undertaking to refund it if the missing person is subsequently found to be living.

The insurance coverage is for 12 months, from January through December, and shall

L-R: Tunde Akinsola, executive director, Trustfund PFA; Susan Oranye executive secretary, PenOp; Nkem Oni-Egboma, managing director/CEO, Zenith Pension Custodian and Bayo Yusuf, managing director/CEO, UBA Pension Custodian during the NASS Retreat in Uyo, Akaw Ibom, State

be renewable at the end of each coverage year. The premium payable on the policy shall be pro-rated as applicable where an employee joins the scheme in the course of the year.

Where an employee leaves the service of the employer before the expiration of 12 months, the premium paid relating to the unexpired period, shall be returned/set aside to the credit of the employer.

Documentation requirements Each employer is required to obtain an insurance certificate from the insurance company as an evidence of having arranged the insurance contract.

Such certificate is expected to be accompanied by a schedule which shall indicate amongst other things, the period of coverage, the number and details of staff at inception/ renewal date, their total emoluments, the benefit payable and the annual premium/date of full payment.

The insurance certificate is usually issued to employers by the insurer within a month from the policy inception/renewal date.

Employers are also mandated to display a copy of the insurance certificate in a conspicuous place within the premises, for the information of the employees, as evidence

of having taken such policies.

Besides, the employers is required to send a copy of the insurance certificate with the schedule of benefits to the National Pension Commission, and the Pension Fund Administrators (PFAs) where the employees maintain their Retirement Savings Accounts (RSAs), not later than 31st March every year.

Employers are required to commence renewal negotiations in writing, within two months to the expiration of the current insurance coverage. Such negotiation must be concluded before the last day of the current cover.

Full payment of the insurance premium shall be made, at the latest, on the first day of insurance cover.

Where an employer fails to effect full payment of premium at the stipulated time, the insurer is expected to report such failure to the National Pension Commission within 14 days of non receipt of premium.

Death of an employee Where an employee dies, the employer is required to immediately commence death benefit claim on behalf of the deceased.

The employer shall notify employee’s PFA and PenCom of the employee’s death stating the claim amount receivable.

Thereafter, the employee’s PFA shall validate claim amount and where discrepancies arise, this must be resolved with the employer.

Missing employee Where an employee is missing, the employer shall report this immediately to the employee’s PFA, insurer and PenCom. Then, the Board of inquiry established by the National Pension Commission shall stipulate the documentary evidence required from employers to process missing person claims. This includes the Police Report, Employee’s passport photograph, newspaper publication of the missing employee, a letter from employer declaring him missing and any other document as may be required from time to time.

The documentary evidence required by the Board of Inquiry set up by the PenCom is expected to be provided within 14 working days after the period of one year, from the day the employee was declared missing.

The Board of Inquiry shall, also within 30 working days of receipt of complete evidence required for its deliberations, communicate its findings to the employer, insurer and the National Pension Commission, for appropriate action to be taken.

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme.

If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

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Wednesday 18 December 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Winter is coming, get insured or pay the price BALA AUGIE

I

n G.R.R. Martins’ award-winning novel “The Game of Thrones” Winter is coming refers to an inevitable season when harvests are short and misery befalls those that are unprepared.

Mark Musa, 69, sat on a wheel chair in front of his house as the sun shone while the cool breeze stung his eyes that made him squint.

Whenever he stared into space, another great shudder rankles his body, as he remembered the mistakes he had made in the past.

When Musa was young, he owed a very big farmland that was passed onto him by his father.

On several occasions’ insurance had been sold him one time or the other but he declined because he felt he was in control of his own destiny.

“I was a successful farmer and l made a lot of money, but l wasn’t paying attention to insurance. A lot of times l was advised to insure my properties but l refused because l never thought any misfortune would befall me. Moreover, tradition shuns against indemnifying one’s estate or life,” said Musa.

Musa was involved in a ghastly motor accident that left him hospitalized and incapacitated, and his children were withdrawn from school to help on the farm so that they raised money for their father’s treatment.

Musa is one out of millions of Nigerians who, out of ignorance and procrastination do not have one form of cover or the other, which is one of the reasons the country’s insurance penetration is one of the lowest in the world.

Nigeria’s penetration rate of stood at 0.31 percent, that compares with South Africa with a penetration rate of 14.7 percent, Kenya with a rate of 2.8 percent, Ghana with a rate of 1.1 percent and Egypt with a penetration

L-R: Eddie Efekoha, president, Chartered Insurance Institute of Nigeria/CEO, Consolidated Hallmark Insurance Plc; Sunday Thomas, acting commissioner for Insurance; Tope Smart, chairman, Nigerian Insurers Association/CEO, NEM Insurance Plc; Adamu Balanti, head, Lagos Office, National Insurance Commission, and Ebelechukwu Nwachukwu, managing director, NSIA Insurance Ltd, during the Nigeria Insurers’ Committee meeting in Lagos.

rate of 0.6 percent.

When compared to other jurisdiction the Nigerian insurance industry is relatively small and ranked 162nd in the world with a total premium volume of $1.64 billion, according to a recent data by NSE. According to the NSE, the total Nigerian Insurance market accounted for 0.20 percent of the global premium in 2018.

The industry is beset with a myriad of challenges such as apathy toward insurance on the back of religious belief, poor regulation, and a stuttering economy.

Expert say the major problem with the industry is that most insurance companies are based in the city, pursuing corporate and government accounts without consideration for people in the rural areas.

That means there are a lot of people, especially in the rural areas, are financially excluded from the pool, but the regulator

has been formulating policies to ensure that these products get to the grassroots.

People in the rural areas are predominately farmers who do not have formal education, and they require special packages.

“Matching of insurance products to the need of the unreached remains a critical factor as most companies still sell conventional products instead of new products, said Pius Agboola, Director, Authorisation and Policy, National Insurance Commission (NAICOM), “Even in cases where the products are available, there are limited distribution channels to ensure the products get to the consumers. “Apart from the recently-introduced Bancassurance, the sales force of insurance,” said Agbola.

Analysts say farmers need something attractive to convince them to pay premiums, and if insurance companies come up with adequate policies acceptable to farmers, they

A.M. Best affirms Africa Re’s financial rating at A ‘excellent’ with stable outlook Modestus Anaesoronye

T

he financial rating of the African Reinsurance Corporation (Africa Re) has been re-affirmed at A (Excellent) with Stable Outlook by A.M.Best.

The rating agency has categorised AfricaRe’s balance sheet strength as “strongest” and considered its enterprise risk management “appropriate.”

Despite significant exposure to high levels of economic, political and financial system risks associated with operating within the African region, AM Best considers that Africa Re is “able to offset this risk partially through its geographical diversification and conservative asset management strategy…”

Africa Re has recorded a strong operating performance in the last five-years (20142018), and has improved the underwriting performance of the South African subsidiary over the last year. The Corporation is also expected to recover from the significant impact on its investment income in 2018 caused by the decline in North American equity markets and the deterioration of a number of domestic currencies against its reporting currency, the US dollar.

This rating reflects Africa Re’s strong

balance sheet, very good operating performance and an appropriate enterprise risk management. With this financial rating, the Corporation is determined, more than ever, to carry out its mandate of promoting insurance & reinsurance in the African continent and driving the growth of underwriting and retention capacities.

Corneille Karekezi, the group MD/CEO of Africa Re www.businessday.ng

Corneille Karekezi, the group MD/CEO of Africa Re, commenting on the rating reaffirmation by AM Best stated: “We are glad that our efforts during the last 2 years have paid off and we are now coming back to a better business shape. With this achievement, we are even more encouraged to bring superior value to our stakeholders in the coming years.”

Established in 1976 by 36 member states of the African Union and the African Development Bank Group (AfDB), the African Reinsurance Corporation (Africa Re), the leading reinsurance company in Africa and the Middle East, is a pan-African financial institution whose shareholding is split between African shareholders (75%) and non-African investors (25%). African shareholding comprises 41 African states, the AfDB and 114 African insurance/reinsurance companies from the 41 member countries. Headquartered in Lagos (Nigeria), Africa Re has a continental network of regional and local offices in Lagos (Nigeria), Casablanca (Morocco), Nairobi (Kenya), Abidjan (Côte d’Ivoire), Ebène (Mauritius), Cairo (Egypt) and Addis Ababa (Ethiopia) as well as two subsidiaries: Africa Re (South Africa) Ltd in Johannesburg and Africa Retakaful Ltd in Cairo (Egypt).

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would buy into insurance policies.

To ensure that famers and other players in agriculture value chain are protected from loss due to flood and other catastrophe, some insurers have decided to provide farmers with the desired products that will help mitigate risk.

To this end, there is the need for risk mitigation mechanism to ensure that farmers and other players in agricultural value chain don’t run at a loss, whenever an insured risk occurs.

Linkage Assurance, Leadway Assurance, IGI Plc, AIICO Insurance Plc, Royal Exchange Plc, Prestige Assurance PLC, among others, are now offering Agric products in a bid to insure risk in both animal and plant farming.

Musa will spend the rest of days on a wheelchair, but he is preaching to those who care to listen to him that taking a cover when they are young is a way to secure a future.

AIO reaches out to regional associations, markets for cooperation

W

ithin the framework of the implementation of the new strategic plan of the African Insurance Organisation, the Secretary General, Jean Baptiste Ntukamazina has embarked on a tour to some regional organisations and local markets.

Ntukamazina was in Dakar, Senegal to hold talks with officials of FANAF as well as the local insurance market.

His outing falls in line with enhancing the advocacy, market building and networking roles of the African Insurance Oragnisation as prescribed by the new strategic plan.

The AIO Secretary General’s visit will enable him to carry out and on-the-spot assessment of the needs and expectations of the various stakeholder’s vis-à-vis the organisation, as well as get proposals on the best ways the African Insurance Organisation can better serve their interest.

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Wednesday 18 December 2019

BUSINESS DAY

27

insurance today E-mail: insurancetoday@businessdayonline.com

Protect rail infrastructure with insurance, brokers task FG Modestus Anaesoronye

B

rokers under the umbrella of Nigerian Council of Registered Insurance Brokers (NCRIB) have called on the Federal Government to ensure the huge investment in railroad sector is safeguarded by embracing insurance.

Bola Onigbogi, president of the NCRIB made the call at the December 2019 Edition of NCRIB Members Evening hosted by African Alliance Plc, even as she commended the government for the enhancement of public transportation in Nigeria through the strengthening of the nation’s railroad system.

“As a critical stakeholder in the economy, I like to also use this medium to first commend the Federal Government for the enhancement of public transportation in Nigeria through the strengthening of the nation’s railway system.

“Aside from aiding commerce and reducing road accidents, the railway system will also create more jobs for Nigerians. However,

L-R: Rotimi Edu, deputy president, Nigerian Council of Registered Insurance Brokers (NCRIB); Bola Onigbogi, president, NCRIB; Funmi Omo, managing director, African Alliance Insurance; Alice Uwodi, head, Administration, African Alliance at the December 2019 Edition of NCRIB Members Evening held at Lagos

the government is hereby implored to ensure that the huge investment in that sector is safeguarded through embrace of insurance. This, to us, is one of the prudent ways to protect this great national asset and guarantee that it endures,” she said.

She also applauded the government over the closure of the country’s borders with

her neighbouring countries, stressing that to all intents, the move was quite salutary as it would protect local production of goods and services.

She however, advised the government to use the opportunity of the closure to encourage the acceleration of local capabilities so that its strides towards self-suffi-

ciency would be guaranteed.

“It is a fact that no country could wholly depend on foreign countries for survival, but this must come with utmost sincerity on the part of the government,” she added.

She also used the occasion to debunked the allegation credited to the Corps Marshall of the Federal Road Safety Corps, Boboye Oyey-

emi, who was said to had accused brokers of taking advantage of the ignorance of travelers to deny them of compensations in the event of mishaps.

The NCRIB boss posited that the body views the comment as a clear exhibition of ignorance and poor perception of the FRSC about who a broker is and what his roles are in the insurance value chain.

“Marshall of the Federal Road Safety Corps, Boboye Oyeyemi while addressing motorists and stakeholders at the joint stakeholders’ forum of Federal Competition and Consumer Protection Commission in Abuja recently, it was credited to the Corps Marshall that he accused Insurance Brokers “of taking advantage of the ignorance of travelers to deny them of compensations in the event of mishaps.”

“The Council views this comment as a clear exhibition of the ignorance and poor perception of the FRSC about who a Broker is and what his roles are in the insurance value chain. Insurance Brokers do not pay compensation to clients, and

in this case, motorists.

“This type of misinformation has simply underscored the depth of ignorance even in high quarters about who we are and we have to quickly commence our engagements with these critical segments of our society, including the FRSC under my tenure as President,” she stated. She also thanked the management of African Alliance Insurance Plc for electing to host the event.

The Managing Director/ CEO, African Alliance Plc, Funmi Omo, used the event to informed brokers of the giant strides the firm had made in less than two years, whilst restating the management’s commitment to sustaining the upward growth trajectory across all metrics.

“Ours is a business that has seen it all and survived it all. Our position in just two years compared to now is testament to the unstinting leadership and guidance of our Board, the relentless drive of the executive management and a most committed and flexible staff who never shies away from challenges in any form,” Omo said.

Stanbic IBTC Pensions harps on benefits of data recapture exercise Modestus Anaesoronye

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n order to enhance seamless operations and improve customers’ experience, Stanbic IBTC Pensions Managers Limited has enjoined employers to ensure that their employees participate in the on-going Data Recapture Exercise being undertaken for the company’s enrollees.

Speaking at the Stanbic IBTC Pension Employers’ Forum held recently in Abuja, Eric Fajemisin, chief executive, Stanbic IBTC Pension Managers Limited (SIPML), urged employees to always update their information with their Pension Fund Administrators to facilitate easy access to their retirement benefits.

Fajemisin stressed that organisations should encourage their employees to leverage the Enhanced Contributor Registration System, newly deployed by the National Pension Commission, to ensure that their data was up to date.

Eric Fajemisin, chief executive, Stanbic IBTC Pension Managers Limited

The Data Recapture Exercise was introduced to enable Pension Fund Administrators obtain complete and accurate data of all Retirement Savings Account holders (both active and retired), in line with the provisions of Section 23 (e) of the Pension Reform Act 2014.

The 2019 edition of the Stanbic IBTC Employers’ Forum had earlier held in Lagos and Port Harcourt on October 29 and November 7 respectively.

In Lagos, Fajemisin, who www.businessday.ng

was represented by the Nike Bajomo, executive director, Business Development Directorate, SIPML stressed that the importance of data cannot be overemphasised in the pension industry as data is currently being used to sanitize the industry.

He said: “If there was a golden thread that ties discussions in the pensions industry today, it is integrity. It is at the heart of the most of the changes that are taking place in the industry and its importance cannot be overemphasised.”

He however, lamented that some workers take part in the Data Recapture Exercise only when they are close to retirement, or after they have retired, thereby making the process a bit cumbersome for them.

‘The Data Recapture Exercise has been a reoccurring decimal in many of the conversations that we have had this year. We are glad that some organisations had been successfully on-boarded to

the Enhanced Contribution Registration System”, Fajemisin added.

He stated that the pensions industry in Nigeria is being digitised to enable customers enjoy seamless services through various digital platform. Speaking in the same vein, the Acting Director General, National Pension Commission (Pen-

Com), Hajia Aisha DahirUmar, stressed that the Data Recapture Exercise is very critical because it speaks to the integrity of the pension industry.

Dahir-Umar, who was represented by the Deputy Zonal Head, PenCom, South-West Zonal Office, Sola Adeseun, added that the commission intends to

use the data recapture exercise to effectively sanitize the pensions industry.

According to her, “After this industry sanitization is done, we will ensure that the Transfer Credit System, otherwise known as the transfer window, where RSA holders can easily change their PFAs, would become operational in the first quarter of 2020.”

Corporate Affairs Managers of Insurance Companies and Executive Members of the National Association of Insurance and Pension Correspondents (NAIPCO) at the 2019 End of the Year Family Get-Together of NAIPCO held weekend in Lagos

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Wednesday 18 December 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

How should we measure the digital economy?

ERIK BRYNJOLFSSON AND AVINASH COLLIS

FOCUS ON THE VALUE CREATED, NOT JUST THE PRICES PAID. igital media consumes a large and growing share of our waking lives, but these goods and services go largely uncounted in official measures of economic activity such as gross domestic product and productivity (which is simply GDP per hour worked).

The reason the value of digital offerings is underrepresented is that GDP is based on what people pay for goods and services. With few exceptions, if something has a price of zero, then it contributes zero to GDP. But most of us get more value from free digital goods such as Wikipedia and online maps than we did from their more expensive paper predecessors.

Effective management of the digital economy depends on our ability to accurately assess the value of free digital goods and services. That’s why we developed a new technique to measure not only how much consumers pay for digital products but how much they benefit from them.

D

WHAT GDP DOESN’T MEASURE GDP is often used as a proxy for how the economy is doing.

However, GDP captures only the monetary value of all final goods produced in the economy. Because it measures only how much we pay for things, not how much we benefit, consumer’s economic wellbeing may not be correlated with GDP. The good news is that economics does provide a way, at least in theory, to measure consumer well-being. That measure is called consumer surplus, which is the difference between the maximum a consumer would be willing to pay for a good or service and its price.

To understand why GDP can be a misleading proxy for economic well-being, consider Encyclopaedia Britannica and Wikipedia. Britannica used to cost several thousand dollars, meaning its customers considered it to be worth at least that amount.

Wikipedia, a free service, has far more articles, at comparable quality, than Britannica

ever did. Measured by consumer spending, the industry is shrinking (the print encyclopedia went out of business in 2012 as consumers abandoned it). But measured by benefits, consumers have never been better off. Our research found that the median value that U.S. consumers place on Wikipedia is about $150 a year — but the cost is $0. That translates into roughly $42 billion in consumer surplus that isn’t reflected in the U.S. GDP. Consumer spending — the basis for GDP — can be counted at the cash register and shows up on companies’ revenue statements. In contrast, consumer surplus cannot be directly observed, which is one reason it hasn’t been used much for measuring the economy. Fortunately, the digital revolution has created not only tough measurement challenges but also powerful new measurement tools.

In our research, we use digital survey techniques to run massive online choice experiments examining the preferences of hundreds of thousands of consumers. The results allow us to estimate the consumer surplus for a great variety of goods, including free ones that are missing from GDP statistics. We start by asking participants to make choices. In some cases, we ask them to choose between various goods. In others, they choose between keeping access to a digital good or giving it up in exchange for monetary compensation. To make sure that people have revealed their true preferences, we folwww.businessday.ng

low up with experiments in which participants actually must give up a service before they can receive compensation.

Here’s an example of how this works. To measure the consumer surplus generated

by Facebook, we recruited a representative sample of the platform’s U.S.-based users and offered them varying amounts of money to give it up for a month. Bases on the survey and the follow-up experiment, we estimate that U.S. consumers have derived $231 billion in value from Facebook since its inception in 2004.

Facebook operates one of the most advanced advertising platforms, yet its ad revenues represent only a fraction of the total consumer surplus it generates. This reinforces research by NYU Stern School’s Michael Spence and Stanford’s Bruce Owen that shows that advertising revenues and consumer surplus are not always correlated: People can get a lot of value from content that doesn’t generate much advertising, such as Wikipedia or email. So it is a mistake to use advertising revenues as a substitute for consumer surplus.

GETTING THE NUMBERS RIGHT Working with the Canadian economist Erwin Diewert, University of Groningen’s Felix Eggers and University of British Columbia’s Kevin Fox, we developed a method for measuring the benefits associated with the digital economy. GDP-B is an alternative metric that supplements the

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traditional GDP framework by quantifying contributions to consumer well-being from free goods. Policymakers, managers and economists can conduct large-scale surveys asking respondents how much they’d need to be paid to give up a given good for a certain amount of time and then validate those results by running smaller-scale studies with real monetary incentives.

Our method has two important limitations. First, our GDP-B estimates are still far from comprehensive and are not as precise as the traditional GDP measure. We will need to include far more goods and conduct more online choice experiments for each to get a more accurate assessment of the full contribution that free goods make to the economy.

Second, like traditional GDP, our measure does not capture some of the potential negative externalities associated with goods and services, including online platforms.

On a spectrum ranging from traditional macroeconomic indicators such as GDP and productivity, which tend to be very precise, to well-being indicators such as happiness, which are often coarser, our GDP-B metric lies somewhere in the middle. GDP has a very specific definition and value, but it doesn’t capture the consumer surplus generated by the digital economy; happiness assessments have the opposite problem. GDPB strikes a balance between those extremes. As such, it represents a useful improvement for policymakers and @Businessdayng

regulators, who require a full understanding of how technology affects the economy in order to make sound decisions.

THE ANSWERS TO questions concerning how to regulate tech, how much to subsidize digital infrastructure and even what sorts of new digital offerings entrepreneurs ought to create depend on understanding the true benefits derived from the digital economy. Our approach can also help us better quantify the benefits we get from conventional goods.

More ambitiously, it could help generate more-accurate estimates of the benefits associated with changes in nonmarket and public goods such as air quality, health care and infrastructure.

Ultimately, as governments, managers and researchers around the world adopt this approach, our assessments of how both digital and nondigital goods contribute to our well-being will improve, and with better measurement comes better management.

Erik Brynjolfsson is the Schussel family professor at MIT’s Sloan School of Management, the director of the MIT Initiative on the Digital Economy and a research associate at NBER. He is the co-author of “The Second Machine Age: Work, Progress and Prosperity in a Time of Brilliant Technologies.” Avinash Collis is a doctoral candidate at the MIT Sloan School of Management and a researcher at the MIT Initiative on the Digital Economy.

Wednesday 18 December 2019

Harvard Business Review

BUSINESS DAY

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MANAGEMENTDIGEST

Case Study: Did we expand too quickly? — the experts respond 2 DAVID SPIGNER

S

hould Ricardo press on with or pull back from his international expansion plans?

Ascendancy needs to take a step back and reassess its expansion plans. When and where is speed strategically necessary, and where is it not?

Some retail businesses pursue a predatory strategy — establishing footprints all over the place to thwart would-be competitors who could duplicate their offering — even if that means operating unprofitably for an extended time.

But if you feel that urgency, you’d better have something you know people in your new locations will get excited about.

I’m told that this case study is based on one about trampoline parks, which makes sense. Everyone knows how to bounce, and kids love it, so it’s easy to pitch that as a leisure activity in many different geographies.

Ascendancy’s gyms could be a much harder sell, especially where the activity isn’t well-known or broadly practiced. Climbing is niche and requires far greater levels of skill and commitment. So as Ricardo and his team consider their expansion plans, they need to factor in not only basic criteria such as market size, core target demographics and the competitive landscape but also whether the population includes passionate climbers

who will frequent the gym and perhaps encourage others, including novices, to do the same.

It’s critical to understand why people may or may not engage in an experience. Ascendancy might consider moving more cautiously — or not at all — in areas where generating enthusiasm may require substantial amounts of time.

Climbing gyms have obviously caught on in the United States and, for whatever reason, in Singapore. But the U.K. is a different market. The Dave & Buster’s restaurant-and-arcade chain discovered that fact during its unsuccessful foray into the country: English people ac-

customed to intimate pubs may not have understood the massive entertainment venues it was opening.

At Boda Borg we are fortunate to have a product, Questing, that appeals across broad demographics and cultures.

Before my investment group acquired the company and I became CEO, in 2008, I visited its location 150 kilometers from Stockholm and was shocked to see people from five countries.

On another visit I saw two busloads of church ladies arrive.

We work hard to understand why people fall in love with our product and to replicate its success in new locations.

Although Questing is brandnew to most people and nearly impossible to fully explain, the percentage of our guests who are exhilarated by the experience and share their enthusiasm through word-of-mouth is extremely high. So a new Boda Borg location in a well-targeted geography easily serves as a massive marketing vehicle for new guests and future expansion.

Our strategy is long-term: We want to be sure that our product remains highly attractive today and in the future, and we believe it is hard for others to duplicate. So we have been extremely patient over the

past 11 years in deciding where and how to grow. We now have seven locations in Sweden, one in the United States and one in Ireland. We want to ensure that Boda Borg is as strong everywhere as it is in our core locations. That means we take a good long look at new markets and partners before we act.

I would encourage Ascendancy to slow down and do the same.

David Spigner, the president and CEO of Boda Borg, responds to the case study “Did We Expand Too Quickly?,” sent to HBR News Service clients on Dec. 9.)

Making someone a ‘tipping point’ boosts donations

T

he idea that a small action can have a large effect — that it becomes a so-called tipping point — has been used to explain phenomena ranging from bank runs and labor strikes to riots and revolutions. New research explores its potential in another arena: fundraising. Across five studies, people who were told their response would push some aggregate behavior over a desired social threshold (“We are at 74% participation, and your action will get us to our target of 75%”) were far more likely than others to act.

In one of the studies, 331 people were informed of a crowdfunding project to feed hungry children. Some participants were told that one more donor was needed

to reach the organization’s goal; a subset was also told that reaching the goal would trigger matching donations for all the contributions thus far. Members of both groups were much likelier to donate than were members of the www.businessday.ng

control group. Follow-up questions showed that being a potential tipping point sparked feelings of responsibility and guilt: People didn’t want to let their fellow donors down. This did more to drive donations than did

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feelings of obligation to the hungry children themselves.

These findings have implications for anyone using a crowdfunding model, the researchers say, and organizations can maximize their impact by breaking down a large goal into a series of small ones to create multiple tipping points. “Social threshold incentives can be used to increase participation across different domains such as donating to charity, facilitating increased physical activity, and promoting good nutrition,” the researchers write. “[They] offer a novel means of inducing guilt-but this guilt is directed toward other consumers, leading people to engage in behaviors that benefit those others.”

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“On Being the Tipping Point: Social Threshold Incentives Motivate Behavior,” by Lalin Anik and Michael I. Norton (Journal of the Association for Consumer Research, forthcoming)

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Wednesday 18 December 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Okonkwo Cullinan rounds up Rolls-Royce family DNA Chimezie named new CEO at

…Darkest, most urban statement of Black Badge yet MIKE OCHONMA Transport Editor

I

n typical history of superluxury automotive craftsmanship, the Roll-Royce nameplates reverberate more especially in the ears of that customer base that belongs to that exclusive club of the nouvre rich.

In 2016, the superluxury segment Rolls-Royce debuted Black Badge with Wraith and Ghost followed by Dawn in 2017. But the good news today is that, the family is completed with the introduction of Black Badge Cullinan.

The “Black Badge reflects the desires of a distinct group of Rolls-Royce clients: men and women, who take risks, break rules and build success on their own terms.

Before the Black Badge was launched in 2016, the idea of creating a product that would satisfy this subversive cohort considered as highly dynamic and wilfully rebellious in aesthetic caused a great deal of internal debate.

Rolls Royce authorities says that, once the marque’s designers, engineers and craftspeople began pursuing this dramatic alter ego, it became clear that these motor cars could not only exist comfortably beneath this revered and historic brand, but they would define a new space within the super-luxury market. In this spirit, the time has come for Rolls-Royce’s boldest and darkest expression of Black Badge yet. The king of the night, Black Badge Cullinan.”

At the Geneva Motor Show in March 2016, Rolls-Royce Motor Cars presented Black Badge; a permanent Bespoke family of motor cars that defined the taste patterns of an emerging generation of super-luxury consumer.

Superluxury for the privilege few These unapologetic and highly dynamic products responded to those who refused to be defined by traditional codes of luxury and did much to attract new customers to the marque, reassured

by Rolls-Royce’s fluency in their bold aesthetic and uncompromising lifestyle requirements.

This highly successful alter ego is codified by the mathematical symbol that represents a potential infinity, which is placed discreetly within the motor car’s interior. This marking, known also as the lemniscate, was applied to Sir Malcolm Campbell’s record-breaking Rolls-Roycepowered Blue Bird K3 hydroplane, denoting that it belonged to an insurance class reserved for boats with unlimited and therefore infinite engine power.

Rolls-Royce Motor Cars selected this hallmark for Black Badge to reflect its own unrelenting pursuit of power.

Rolls-Royce debuted Black Badge with Wraith and Ghost in 2016 followed by Dawn in 2017.

Today, the family is completed with the introduction of Black Badge Cullinan: the darkest and most urban statement of Black Badge yet.

Cullinan goes black. Created to satisfy overwhelming demand from younger, more adventurous clients, Cullinan in its silver badge guise, was launched to global acclaim in 2018, immediately becoming the world’s pinnacle super-luxury SUV. Combining luxury in its purest form with genuine practicality and off-road capability, Cullinan unequivocally delivered on the promise of an experience that is Effortless, Everywhere.

The Rolls-Royce of SUVs did much to reach a new group of clients looking for unfettered access to the world’s wildest places and most enriching experiences. Yet, within this group exists a subset of individuals who seek to subvert the motor car’s domineering presence by permanently cloaking it in the night.

Cullinan has conquered the

world’s wildest reaches. Now it is time for Black Badge Cullinan to conquer new urban frontiers.

Cullinan benefits from a bespoke transmission and throttle treatment that creates a sense of urgency without ever undermining its Rolls-Royce peerage. The drive-train, ZF 8-speed gear box and both front and rear steered axles work collaboratively to adjust the levels of engagement depending on throttle and steering inputs.

Changes to suspension components and settings add to the suite of dynamic technologies that ensure an appropriate balance between dynamism and refinement. The result is an extremely well-mannered tourer at low speeds and a vivid driver’s device when pressed.

To bolster confidence when exploiting Cullinan’s alter ego, the braking bite point has been raised and pedal travel decreased. Redesigned brake disc ventilation also allows consistency in these changes while braking at elevated temperatures.

Consumers more engulfed with global changes- Ford MIKE OCHONMA

I

n this age of constant connectivity, consumers today feel more alone than ever - and find it harder to trust their peers and companies.

In its 2020 Looking Further with Ford Trend Report, as the 8th annual report of Ford Motor Company identifies trust as a dominant global theme and explores how companies are earning it back.

Surveying 14 countries across the Americas, Asia, Europe and the Middle East, the global report suggests that people’s ability to trust peers, communities, elected officials and businesses has a crucial impact on their day-today lives. Other consumer trends revealed in the report: All Alone: Loneliness has be-

come an epidemic of global proportions. Loneliness is particularly prevalent among young people - 62 per cent of Gen Zers globally agree with the statement “I feel lonely on a regular basis” and 50 per cent agree “I often feel lonely www.businessday.ng

when I’m around other people.”

Below the Surface: There’s growing interest in the unseen elements of building consumer trust. Consumers want to believe that companies are doing the right thing but they need to see behind

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the curtain to believe it. 67 per cent of adults globally agree that “Once a brand loses my trust, there is no getting it back.”

Call to Stand: People are asking brands to move from a productbased mindset to a values-based mindset although it doesn’t always impact their decision to buy: 59 per cent of adults globally say they care more about purchase convenience than brand values.

Great Expectations: As internet commerce grows, so do expectations for brands. 67 per cent of adults globally agree with the statement “I have higher expectations for brands than I did in the past.”

The Green Paradox: Worldwide, consumers are increasContinues on page 31 @Businessdayng

Cheki Nigeria

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heki, the online car marketplace company has announced the appointment of Chimezie Okonkwo as the new chief executive officer of the company. He replaces Gbenro Dara, who left the company in August 2019.

Okonkwo has over 13 years of experience in the telecommunications sector, where he was primarily responsible for managing and driving revenue for digital products and valueadded services.

Chimezie was previously Manager, Digital Products at 9Mobile, and was responsible for maximising revenue & margin return for the legacy services portfolio among other responsibilities. Before joining 9Mobile, he was the Team Lead, Mobile VAS at Terragon Group.

Okonkwo holds a special executive masters certificate from the Metropolitan School of Business & Management, Dubai.

He also holds a senior management programme certificate

Chimezie Okonkwo

from the Lagos Business School (LBS) and a Bachelors’ Degree in Business Administration. The new CEO joined the Cheki team in November 2019.

Cheki is a digital marketplace for quality vehicles. The online platform provides private car sellers and car dealerships of all sizes with the most qualified leads while simultaneously providing car buyers with a wide variety of quality cars.

Cheki offers a range of supplementary services that include car loans, insurance, and car buying concierge. Cheki is a division of Ringier One Africa Media (ROAM) - Africa’s largest digital classifieds group.

Reacting to his new appointment, the new CEO said; “I am delighted to be leading Cheki’s drive to continued market dominance in Nigeria’s online auto marketplace industry,”.

He expressed delight that Cheki has a team of brilliant, young professionals who have done outstanding work to get us where we are today, and I am relishing the opportunity to drive the business to even greater heights”.

Wednesday 18 December 2019

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Cars45 inspects 40,000 vehicles in 2019 …As Nigerians taste to own used, new cars grow MIKE OCHONMA

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ars45, Nigeria’s leading automotive trading platfor m has inspected over 40,000 vehicles in 2019 alone as many Nigerians who are desirous of buying both second hand vehicles and new ones are finding the thriving online marketing platform very useful and key in their automobile purchase decision making decisions.

Etop Ikpe, managing director and chief executive of Cars45 who disclosed this at opening of the company’s new facility in Lekki, Lagos however lamented that one of the problems discovered by his team in the course of carrying out assessment of vehicles under its dealership has to do with documentation.

To address this challenge, he said the company had introduced the ShipEasyDirect service to help buyers with documentation to avoid running into problem with the Nigeria Customs Service (NCS).

According to him, the main goal of the Cars45 as a platform is to guarantee the protection of buyers and sellers when it comes to vehicle documentation. This, he said, has been largely achieved through entrenchment of best practices which every individual on its platform must adhere to.

He said, “This year alone, we have inspected over 40,000 vehicles across the country and one of the things we found is documentation when it comes to customs duty.

People pay some agents, the cars come in, and they are not sure whether the documentation has been done or not. And in most situations, it was discovered that, they are innocently cheated. It is not something they consciously do, it is just that they don’t understand what processes go behind it’’.

Ekpo explained that, the main goal is to ensure that people pay the duty. There is a lot of things that happen at the back end but we are saying come to us and ensure that you have nothing to worry about, get best pricing and most importantly all your

relevant taxes, duty and levy will be paid and you can be rest assured that when you are driving your car around, if any customs officer stops or any other relevant authority stops the vehicle owner, it is assured that all necessary paper work is 100 per cent complete.

Meanwhile, Autopreneur’s platform network of Cars45 has empowered thousands of entrepreneurs nationwide in the automotive value chain through the Autopreneur recently introduced by the organization with a recorded sign-ups of over 40,000.

According to him, “Today our entrepreneurial network has more than 4000 sign-ups and more sign-ups every day.

So you can see that through our platform, we are empowering more and more people and that has always been our goal’’.

Consumers more engulfed with global...

Continued from page 30

ingly worried about climate change. Yet, that worry isn’t translating into urgency: 64 per cent of people who aren’t changing their behaviour to help fight climate change say they think they can’t make a difference.

T h e S e c o n d Ti m e Around: New upcycle companies around the globe have modernised resale shopping. The so-called re-commerce movement is on the rise for sophisticated and market-savvy shoppers, breathing new life into previously owned fashion pieces, appliances, electronics, household items and other goods - and more and more consumers are opting in. 60 per cent of adults globally agree “I am more open to buying used goods than I was five years ago’’.

“The rate of change globally has been on the rise - and without the trust in the institutions, brands and peers to rely on, a majority of people is feeling extremely overwhelmed,” notes Sheryl Connelly, Ford’s Global Consumer Trends and Futuring Manager.

Sheryl Connelly was of the submission that consumers want to believe that companies are doing the right thing, but companies also need to give them a clear reason to do so. ‘’At Ford, we remain deeply focused on improving the lives of consumers and their communities, so we can continue to have a trusted relationship that moves us forward together.”

Ford’s Global Consumer Trends and Futuring Manager noted.

Ekpo stated that one interesting thing to point out here is that the average age, the average employee in Car45 is 26 year old and this shows that, we are heavily reliant on the energy that the youths have.

He admitted that, if properly channeled, the youth population can be the actual key factor that can move Nigeria into the right place. If we can properly channel the energy that the youths have, we can properly provide the support; you can see that we would move in the right direction. ‘’So Cars45 is a company that relies on the energy and potentials of the youth and our company will continue to grow based on the fact that we will continue to believe in empowering young people.”

Cars45 concluded.

Cosmas Maduka, president/CEO, Coscharis Ford Nig..

International Energy Agency warns over global appetite for SUVs MIKE OCHONMA

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he growing global consumer appetite for bigger and heavier sports utility vehicles (SUVs) could offset the emission benefits set to arise from electric cars, the International Energy Agency (IEA) warns in its latest World Energy Outlook.

The global fleet of SUVs increased from 35 million in 2010 to over 200 million in 2018, becoming a major force in rising oil demand and the second-largest reason for carbon dioxide (CO2) emissions growth since 2010.

Energy-related CO2 emissions hit another historic high in 2018, with the 1.9 percent rise marking the highest yearly increase since 2013. The power sector was the main driver,

with global coal use rising in 2018 for the second straight year, but remaining some 160-million tons of coal equivalents below the level of the 2014 peak.

SUVs, the World Energy Outlook 2019 notes, are more difficult to electrify fully, while conventional SUVs consume 25 percent more fuel per kilometre than medium-sized cars.

The share of SUVs in global car sales has more than doubled over the last ten years to reach 40 percent, the report states.

The trend is also not confined to the US, where almost 50 percent of new car sales are SUVs, with strong growth in Europe, China and India.

Under the report’s stated policies scenario, which reflects today’s policy intentions and targets, the increase in electric vewww.businessday.ng

hicle (EV) sales and more stringent fuel economy standards together lead to a peak in oil demand from passenger cars in the late-2020s. By 2040, it is projected that the 330-million EVs on the road in this scenario could displace around four-million barrels a day of oil use.

The projection is sensi-

tive to what happens with SUVs, however. “On the one hand, if their popularity continues to rise in line with recent trends, then this could add another two-million barrels per day to 2040 oil demand. If, on the other, the share of SUVs in new sales levels off at around 50 percent and if in addition a higher share

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of the SUV fleet is electrified by 2040, the effect would be in the opposite direction.”

Under the report’s sustainable development scenario, which is calibrated to global climate commitments and meeting sustainable energy goals, electrification of mobility proceeds more quickly and the EV fleet may get to almost 900-million by 2040.

The report warns, however, that electrification alone is not sufficient to secure the steep decline in transport oil demand required to meet climate targets. To achieve the goal will require additional improvements in fuel efficiency, as well as the use of other alternative transport fuels, such as advanced biofuels and hydrogen.

T h e Wo r l d E n e r g y Outlook 2019 report also @Businessdayng

cautions that, while the global power mix is being re-shaped by the rise of renewables, significantly more ambitious policy action will be required to align the energy sector to the goal of holding the rise in global temperatures to well below 2 °C and pursuing efforts to limit it to 1.5 °C. “The world urgently needs to put a laser-like focus on bringing down global emissions. This calls for a grand coalition encompassing governments, investors, companies and everyone else who is committed to tackling climate change. “Our sustainable development scenario is tailor-made to help guide the members of such a coalition in their efforts to address the massive climate challenge that faces us all” IEA executive director Fatih Birol says.

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Wednesday 18 December 2019

BUSINESS DAY

BANKING Credit condition improves as banks scramble to meet 65% LDR next week HOPE MOSES-ASHIKE

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he objective of growing the economy through marking credit available to the real sector of the economy seems to be responding positively as the banking sector credit condition is improving, leading to gradual reduction in interest rate.

The banking industry gross credit stood at N1.16 trillion between May and October 2019, supported by the Central Bank policy measures.

Interestingly, deposit money banks that have over the years preferred to invest in government securities to lending to the real sector are now aggressively pushing credit to the economy through various initiatives and product designs in order to meet the December 31, 2019 deadline for the 65 percent Loan to Deposit Ratio (LDR).

The Central Bank of Nigeria (CBN) had in June announced a new policy measure, which require banks to maintain a minimum 60 percent loan to deposit ratio. This, the regulator later raised to 65 percent and set December 2019 as deadline for compliance by banks.

Loan-deposit ratio is a ratio, represented in percentage, between the banks total loans and total deposits.

Operators in the real sector have always complained about shortage of funds to run their operations, as such, this policy is meant to tackle loan defaults while increasing lending to the sector.

In July 2019, the CBN wielded the big stick on 12 banks for LDR default to demonstrate its determination to jumpstart the economy.

Consequently, the CBN deducted N500 billion from the accounts of 12 banks for failing to meet the target to provide credit to their customers.

The affected banks and the money deducted include Zenith Bank N135.629 billion; Citibank N100.743 billion; United Bank for Africa – N99.676 billion; FirstBank –N74.669 billion; Standard Chartered Bank – N30.027 billion and GTBank – N25.148 billion and FBNQuest – N2.697 billion.

Also,FCMB’s was debited N14.371 billion; Jaiz Bank – N7.525; Keystone Bank – N4.163 billion; Rand – N2.823 billion, and Suntrust – N1.703 billion.

However, most of the banks fined by the Central Bank were refunded after meeting the 60 percent Loan-to-Deposit requirement.

The banks in the country are now able to recover delinquent loans from customers’ accounts in other banks, even as the measures now placed Nigerian banks in a much better position towards supporting a stronger economic recovery.

Are the banks going to fully comply to this directive at the end of the deadliZne given by the Apex bank?

Ayodele Akinwunmi, www.businessday.ng

relationship manager, corporate banking, FSDH Merchant Bank Limited said banks have increased lending since the order was given.

Looking at their position as at the end of third quarter (Q3) 2019 and following the increase to 65 percent, he said it is possible that a few banks may not be able to meet up the 65 percent loan to deposit ratio.

“We have also noticed a situation in which many large corporate borrowers are paying down on their loans with banks and they are taking advantage of the low yields in the fixed income market to issue Commercial Papers,” Akinwunmi said. The Monetary Policy Committee (MPC) noted in its last meeting in November 2019 that the CBN policy measures have assisted in boosting credit to the agricultural and manufacturing sectors, hence, the positive outcome on the Gross Domestic a Product (GDP).

The MPC is hopeful that the LDR initiative must be sustained as interest rates being paid by borrowers have so far dropped by up

to 400 basis points between June and October 2019.

These have happened with corresponding decline in the industry’s Non-Performing Loans (NPLs) to 6.5 per cent at the end of October 2019.

Ayodeji Ebo, managing director, Afrinvest Securities Limited, sees more interest in banks trying to turn out loans to customers through various initiatives and products.

Some banks have unveiled to the public their loan portfolio plans, targeting key sectors of the economy while some others are sending SMS to their customers for access to quick cash up to N5 million.

For instance, one of the messages from a tire one bank reads: “dear customer, need cash urgently? Dial ….. to get QuickCredit of up to N5 million instantly. Repay, at 1.75 percent monthly. No collateral. No hidden charges”.

Godwin Emefiele, governor of the CBN had at the Monetary Policy Committee meeting in July 2019 explained that the core role required of the banks is to act as financial intermediaries to provide credit to

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the private sectors of the economy.

Another SMS to customers from another tier one bank reads: “Congratulations! You have prequalified for PaDay loan.

Dial …. Now for instant cash. Terms and Condition (T&Cs) apply. Enquiries?

Call ….”.

“We give them incentives that when they lend to the SMES, private sectors they will be granted certain dispensations to make them happy while failure to comply will result into taking 50 percent of the un-lent portion of their loans into the CRR,” Emefiele said.

Tier-2 banks recorded average Loan to Deposit Ratio (LDR) of 68.3 percent in the first half of 2019 with Fidelity Bank Plc leading with a record 95.7 percent LDR. This was followed by FCMB 80.5 percent LDR, Sterling Bank plc 78.4 percent, Stanbic IBTC 69.2 percent, and Wema Bank Plc 65.1 percent.

Union Bank Plc and Unity Bank Plc recorded 59.2 percent and 29.7 percent respectively, which is below the 65 percent mini@Businessdayng

mum ratio pegged by the CBN. The banking sector report by Afrinvest West Africa, revealed that tier-1 banks recorded 58.0 percent average LDR in the first half of the year with Access Bank leading with 68.1 percent LDR. This is followed by Zenith Bank 62.7 percent, Ecobank 58.0 percent, GTB 57.9 percent, FBNHolding Company 52.6 percent, and United Bank for Africa (UBA) 48.5 percent.

Non-Performing Loans for the tier-2 banks averaged 5.5 percent in the first half of 2019 from average of 6.2 percent in full year 2018.

NPLs of tier-1 banks stood at an average of 8.9 percent in the first half of 2019 from 10.1 percent in the full year 2018.

Industry gross earnings projected to recover strongly in 2019 to N4.9 trillion from N4.1 trillion in 2018. The industry turnover stood at N2.4 trillion in the first half of the year.

The banking sector total assets is expected to hit N44.2 trillion by the end of 2019, which is 7.8 percent compared with N41.0 trillion in 2018.

At the end of the first half of 2019, the sector recorded N43.7 trillion in total asset, according the banking sector report by Afrinvest West Africa which was launched on Monday.

“Total asset remain strong,” said Ike Chioke, group managing director, while presenting the report with the theme, ‘Beyond the Precipice…Pulling Back from the Brink’, in Lagos.

The industry’s total deposits is expected to reach N29.1 trillion by the end of 2019, growing at 25.4 percent as against N23.2 trillion in 2018. Total deposits stood at N25.6 trillion in the first half of 2019.

The report showed that the total loan of the banking sector stood at N15.7 trillion in the first half of 2019 and is expected to hit N16.1 trillion by the end of the year.

Wednesday 18 December 2019

BUSINESS DAY

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BUSINESS DAY

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BUSINESS DAY

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Live @ The Exchanges Market Statistics as at Tuesday 17 December 2019

Top Gainers/Losers as at Tuesday 17 December 2019 LOSERS

GAINERS Company

ASI (Points)

Opening

Closing

Change

Company

Opening

Closing

Change

PRESCO

N43.5

N47.5

4

DANGCEM

N142

N140

-2

GUINNESS

N32.4

N35.6

3.2

NASCON

N14

N13.25

-0.75

N7

N7.2

0.2

INTBREW

N10.1

N9.5

-0.6

VOLUME (Numbers)

ACCESS

N9.8

N10

0.2

UPDCREIT

N4.45

N4.05

-0.4

VALUE (N billion)

UCAP

N2.2

N2.3

0.1

WAPCO

N14.2

N13.9

-0.3

MARKET CAP (N Trn)

UBA

26,660.44

DEALS (Numbers)

3,358.00 331,915,565.00 4.780 12.867

Global market indicators FTSE 100 Index 7,515.85GBP -3.20-0.04%

Nikkei 225 24,066.12JPY +113.77+0.47%

S&P 500 Index 3,195.15USD +3.70+0.12%

Deutsche Boerse AG German Stock Index DAX 13,307.59EUR -100.07-0.75%

Generic 1st ‘DM’ Future 28,282.00USD +19.00+0.07%

Shanghai Stock Exchange Composite Index 3,022.42CNY +38.03+1.27%

Market fails to sustain gain as Dangote Cement lead laggards Stories by Iheanyi Nwachukwu

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record value loss seen in shares of Dangote Cement Plc made the Nigeria stock market not to sustain previous day’s gain.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) recorded a decline

of 0.13percent on Tuesday despite earlier expectations that the bullish outing observed on Monday will be sustained throughout the week.

Though this week, the market has advanced by 0.47percent, it has decreased by 1.27percent this month.

The stock market’s yearto-date (ytd) negative return printed at -15.18percent. The NSE ASI closed at

26,660.44 points as against 26,695.18points recorded on Monday. The value of listed stocks decreased to N12.867trillion. Dangote Cement Plc recorded the highest price decline after its share price dropped from N142 to N140, losing N2 or 1.41percent, followed by NASCON Plc which decreased from a high of N14 to N13.25, losing 75kobo or 5.36percent.

Presco Plc led the gainers

league after its share price rose from N43.5 to N47.5, adding N4 or 9.20percent, while Guinness Nigeria Plc advanced from N32.4 to N35.6, adding N3.2 or 9.88percent.

In 3,358 deals, equity dealers exchanged 331,915,565 units valued at N4.780billion. Access Bank, GTBank, Zenith Bank, Transcorp, and FCMB were actively traded stocks.

Seplat completes acquisition of Eland …further enhances footprint in Nigeria Iheanyi Nwachukwu

T L - R: Olumide Bolumole, Head, Listing Business Division, The Nigerian Stock Exchange (NSE); Oscar N. Onyema, chief executive officer, NSE; chief Anthony Idigbe, chairman, Capital Hotel Plc; Alex Ugwuanyi, Company Secretary, Capital Hotel Plc during the Capital Hotel Plc Facts Behind the Figures presentation for capital market stakeholders at the Exchange in Lagos.

Debt capital raising: IOSCO seeks feedback on measures to reduce conflict of interests

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he Board of the International Organisation of Securities Commissions (IOSCO) is requesting feedback on proposed guidance to help IOSCO members address potential conflicts of interest and associated conduct risks arising from the role of market intermediaries in the debt capital raising process.

Conflicts of interest and associated conduct risks can weaken investor confidence and undermine debt capital markets as an effective vehi-

cle for issuers to raise funds.

To help regulators identify and address these risks, IOSCO has published the consultation report titled “Conflicts of interest and associated conduct risks during the debt capital raising process.”

Among other things, the consultation seeks public comments on the use of Distributed Ledger Technology (DLT) in bond issuances and the potential benefits and risks of using this technology, including for managing www.businessday.ng

conflicts of interest.

The report describes the key stages of the debt raising process where the role of intermediaries might give rise to conflicts of interest.

The proposed guidance is comprised of eight measures grouped according to three key aspects of the debt raising process: pricing of debt securities and risk management transactions; quality of available information to investors; and allocations of debt securities.

While the guidance fo-

cuses on traditional corporate bonds, it may prove useful to IOSCO members considering raising capital through other types of debt securities.

The guidance is the second part of a two-stage project on conflicts of interest in capital raising. The first stage focused on the equity capital raising process with the final report Conflicts of interest and associated conduct risks during the equity capital raising process being published in September 2018.

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he Court Order sanctioning the acquisition of Eland by Seplat Petroleum Development Company Plc has been delivered to the Registrar of Companies. Accordingly, the Scheme has now become effective and the entire issued and to be issued ordinary share capital of Eland is wholly owned by Seplat.

Admission to trading of the Eland shares on AIM (Alternative Investment Market) will be cancelled with effect from 7.00 a.m. on December 18, 2019.

As a result of the Scheme becoming effective, share certificates in respect of Eland shares have ceased to be valid and of value and entitlements to Eland shares held in uncertificated form in CREST – a UK-based central securities depository will be cancelled.

Scheme shareholders on the register at the Scheme record time, being 6.00 p.m. on December 16, 2019 will receive 166 pence in cash for each Scheme share. The consideration due to the Scheme shareholders will be sent by no later than

@Businessdayng

December 31, 2019. Each of the non-executive Eland directors has resigned as a director of Eland with immediate effect.

“We are delighted to successfully complete the acquisition of Eland, which further enhances Seplat’s footprint in Nigeria and provides oppor tunities for enhanced scale, diversification and growth.

We w e l c o m e o u r n e w colleagues and Nigerian partners as we look forward to working together in this exciting phase of our development,” said Austin Avuru, Chief Executive Officer, Seplat.

On October 15, 2019 the boards of Seplat and Eland reached agreement on the terms of a recommended cash acquisition by Seplat of the entire issued and to be issued ordinary share capital of Eland to be implemented by way of a court sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.

A scheme document was posted to Eland shareholders on October 28, 2019 setting out the terms of the acquisition. On December 12, 2019 Seplat and Eland announced that the Court had sanctioned the Scheme.

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Wednesday 18 December 2019

BUSINESS DAY

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BUSINESS DAY

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Wednesday 18 December 2019

BUSINESS DAY

news Lagos blue rail line commences operation in 2021 as Sanwo-Olu kicks off final phase of project

… announces 4 additional rail projects, eight bus corridors JOSHUA BASSEY

T

he integrated mass transportation initiative of the Lagos State Government has recorded a huge progress with the successful completion of an elevated sea-crossing track of the Lagos Blue Line Rail Mass Transit project.

Governor Babajide SanwoOlu, on Tuesday, led members of the State Executive Council to inspect the 5kmlong Continuous Beam Bridge constructed from Iganmu to Marina, which is part of the fourth phase of the Blue Line Rail project, and inaugurate the final phase of the project.

The ceremony also marked the commencement of construction activities on the final phase of the Blue Line rail project, which the governor promised to complete next year.

Sanwo-Olu said the completion of the sea-crossing track indicated his administration’s commitment towards completing the state-funded rail project started in 2009.

“The completion of this project is top priority for our administration, as it is critical to the achievement of our prioritised pillar of traffic management and transportation in our six-point development agenda, known as project THEMES,” Sanwo-Olu said.

“The aim of this rail project is basically to reduce travel time through an effective and efficient intermodal transport system. It is also key to the

building of a 21st century economy, which is central to the vision of a Greater Lagos aspiration. We are committed to delivering this project next year and ensuring its operation starts in 2021,” he said.

The construction of the Blue Line rail tracks, Sanwo-Olu noted, was being implemented in strict adherence to the state’s StrategicTransportMasterPlan, which prescribes six rail lines and one monorail for the longterm strategic goals of the state.

Apart from the Blue Line, the governor disclosed that his administration would be starting the construction of the Red Line rail project from Agbado to Marina, pointing out that advertisement had been published in the media to invite investors for the construction of four other rail lines under a Design, Build, Operate, Maintain and Transfer model of Public-PrivatePartnership arrangement.

According to the governor, the advertised rail projects include the 68-kilometre Green Line, 60-kilometre Purple Line, 34-kilometre Yellow Line and 48-kilometre Orange Line.

The Green Line will start from Marina through Victoria Island, Lekki Phases 1 and 2, Ajah, Ogombo, Lekki Airport to LekkiFreeTradeZone,whilethe Purple Line is expected to start from the Redemption Camp goingthroughOgba,IyanaIpaja, Igando and terminating at Ojo.

•Continues online at www.businessday.ng

Arik Air sweeps 3 industry awards

A

rik Air, Nigeria’s leading airline, got triple recognition at the weekend, carting away the most awards in the industry in the airline category.

The airline bagged the awards for “Airline of the Year 2019” and the “Best Cabin Crew (Domestic)” at the 10th edition of the Nigeria Aviation (NIGAV) Awards which held at Oriental Hotel, Victoria Island, Lagos.

Congratulating Arik Air, Fortune Idu, managing director and chairman of NIGAV Awards, said, “The NIGAV Awards are a fantastic opportunity to celebrate the airline.

Arik Air has gone above and beyond and accomplished great things over the years.

I cannot congratulate them enough for their contributions to the aviation industry; they should be very proud of their success.”

Arik Air has continued to improve since the inception of the current management.

Despite the challenges it met on ground, the current management has improved the airline’s operations financially and technically.

Similarly, at the maiden edition of Air Transport Quarterly

Magazine awards held at the Welcome Centre Hotel in Lagos, Arik Air was awarded the Most Punctual Airline of the Year 2019.

Speaking at the presentation of the awards celebration tagged ‘Air Transport Industry Awards’, Supo Atobatele, publisher of Air Transport Quarterly Magazine and organiser of the event, stated that the ceremony was put together to distinguish individuals and brands whose contributions to the sustained growth of the aviation industry have been tremendous.

He commended Arik Air for carving out a reputation for innovation and excellent customer experience in the industry.

“This is a great recognition for the team at Arik and I am delighted that our professionalism, hard work and dedication have been acknowledged and honoured especially with the Airline of the Year Award,” said Roy Ilegbodu, Arik Air’s chief executive officer. “We will continue to strive to give our customers the best service possible, founded on core values such as reliability, quality and above all safety.” www.businessday.ng

R-L: Babajide Sanwo-Olu, governor, Lagos State; his deputy, Obafemi Hamzat; Michael Jiang, managing director, China Civil Engineering Construction Corporation (CCECC) Nigeria; Chu Maoming, consul general of China in Lagos, and Frederic Oladeinde, commissioner for transportation, during the ceremony to mark the completion of the Continuous Beam Bridge for the Sea-Crossing of the Lagos Rail Blue Line Project at Marina, yesterday.

FG initiates new 5-year national broadband plan … sets up committee to achieve 70% broadband penetration by 2025 … funding, infrastructure deficit may impede target achievement – Experts Jumoke Akiyode-Lawanson

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aving surpassed the 30 percent penetration target of the 2013-2018 National Broadband Plan (NBP) approved by former President Goodluck Jonathan’s administration, the Federal Government of Nigeria, through the minister of communications and digital economy, Isa Ali Pantami, has released a new plan for 2020-2025 to boost broadband penetration levels from its present coverage of 37.8 percent of the population to over 70 percent in five years.

Pantami inaugurated a 25-member committee of industry experts in Abuja on Tuesday to help achieve this new target, including Funke Opeke, CEO of MainOne Cable Company Limited, as chairperson.

Other members of the committee include Bahir

Gwandu, chairman of Commonwealth ITU (International Telecommunications Union) Group, as co-chairman, and Ubale Maska, executive commissioner, technical services, Nigerian Communications Commission (NCC), as secretary.

Pantami said pervasive broadband penetration of over 70 percent population reach would certainly make Nigeria a truly digital economy.

The 25-member committee also has representatives from the academia, NCC, Galaxy Backbone, MTN, Google, NiRA, Defence Space Administration, National Financial Intelligence Unit (NFIU), National Information Technology Development Agency (NITDA), Nigerian Communications Satellite Ltd (NIGCOMSAT), Association of Telecom Companies of Nigeria (ATCON), Nigeria Computer Society (NCS), GSM

Association, among others.

The committee is to develop a new National Broadband Plan that will be the guiding template for the development of this very important area of telecommunications.

“The committee is to take a critical look at where we are after painstaking review of the 2013-2018 phase and the status of penetration now. The members are enjoined to also examine the challenges with a view to proffering solutions thereto. They should also look at the position of growing and emerging technologies, among others. The new NBP has the collaboration and support of the United Kingdom (UK) Government,” he said.

Industry stakeholders applaud this first step, saying that a number of initiatives, including plans to provide adequate lastmile infrastructure, should be established and executed timely in order

to fast-track the development of the ICT sector.

“We need investors to facilitate the build-out of a robust and cost-effective broadband network aimed at increasing internet penetration within the country,” Paul Udochi, a telecoms industry analyst, told BusinessDay in a telephone interview.

The inauguration of this new committee is a follow-up to the launch of the National Policy for Digital Economy and Strategy by President Muhammadu Buhari in November.

The policy has eight pillars among which are developmental regulation, digital literacy and skills, solid infrastructure, service infrastructure, digital services development and production, digital society emerging technologies and indigenous content development.

•Continues online at www.businessday.ng

Concerns as inflation soars 19-month high to 11.85% ...food, core inflation all jump CYNTHIA EGBOBOH, Abuja

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he price of goods and services in November rose for the third-straight month since Nigeria shut its land borders, raising concerns on the state of local production to plug supply gaps.

Headline inflation reached a 19-month high of 11.85 percent in November, the highest since May 2018 when the numbers showed up at 11.61 percent in line with analysts’ expectation.

However, both food and

core inflation moved up to 14.48 percent and 8.99 percent, respectively, according to Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Tuesday.

On a monthly basis, headline inflation slowed to 1.02 percent.

Core inflation measures change in the costs of goods and services excluding food and energy.

Concerns about rising price levels come at a time the Central Bank of Nigeria (CBN) hoped it was nearing its 6-9 percent inflation target,

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amid authorities’ claim that the country was close to attaining food sufficiency.

The CBN earlier admitted that inflation was accentuated by the border closure, an expected temporary food supply shock and hoped it would adjust over the medium-tolong term as the economy increases investments in food production.

Ken Ife, ECOWAS economist consultant, said effort should be targeted towards boosting agricultural production to meet people’s needs.

According to NBS figures, @Businessdayng

the rise in food inflation was caused by increases in prices of bread, cereals, oils and fats, meat, potatoes, yam and other tubers, and fish.

On month-on-month basis, the food sub-index increased by 1.25 percent in November 2019, down by 0.08 percent points from 1.33 percent recorded in October 2019.

Core inflation, which showed a marginally monthon-month decline in October, went up to 8.99 percent.

•Continues online at www.businessday.ng

Wednesday 18 December 2019

BUSINESS DAY

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news BusinessDay names Ogho Okiti managing...

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the business via its now es-

tablished digital offerings and growing it into conferences and events as well as research are some of the key strengths of the company today. Now it will be the lot of Ogho and his younger team to grow the business faster and sustainably,” he said.

Aigbogun, who was inspired to launch BusinessDay during his work on the Vision 2010 committee which was charged with drawing up a long-term economic vision for Nigeria, said it has been a rollercoaster ride for him these past 19 years.

“When we walked into an empty space in Amuwo-Odofin, Lagos that early morning in 2000, we could not have imagined that we will be here today,” Aigbogun said.

“I am delighted to be handing over this role to Ogho at this time and I now hope to give some attention to supporting the practice and quality of our journalism along with the urgent task of pushing our digital migration and making it a sustainable business,” he said.

Aigbogun worked at the Guardian where he began his journalism career in 1982, and Vanguard where he rose

to become editor of all the newspaper’s titles. He also spent years as the Lagos correspondent of the Associated Press (AP).

“Whatever we have done, we did simply because God helped us. Nothing more fulfilling for a business owner than to look into the future with hope and satisfaction.

It is our duty while we can, to help Ogho and his team to succeed,” he said.

Okiti, who says he stumbled into the media in 2007 when he first joined BusinessDay as its pioneer chief economist and chairman of the Editorial Board, is delighted to be back at BusinessDay where he first developed his passion for journalism and media business.

“I am excited about the opportunity to be part of the future of this great company and look forward to working with all the journalists and supporting staff that make BusinessDay a great place,” Okiti said.

“The industry is more dynamic than ever and my immediate focus will largely be on leveraging the disruption emerging from digital and technological innovations to make BusinessDay even more competitive in the domestic and global market,” he said.

Investors see green light in smaller...

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pecting at least $1.4 billion

from foreign investments.

Equatorial Guinea’s bumper harvest of Foreign Direct Investment (FDI) is coming at a time Nigeria is stuck in the wilderness, with aggregate FDI for 2019 estimated to fall further to less than $1 billion.

In Africa, a host of new finds from Equatorial Guinea to Mozambique, Senegal, Mauritania, Tanzania and Uganda are looking very attractive for foreign direct investors who are willing to explore new frontiers in oil business.

Equatorial Guinea is expecting $1.4 billion to be invested in the country in 2020 fiscal year, with a mix of exploration and appraisal drilling.

The country has also renewed ExxonMobil’s licence in the offshore, even while the US super major is said to be in talks for a sale of its assets.

“We expect 2020 to be the biggest year of investment in Equatorial Guinea’s hydrocarbons industry in years,” Gabriel Obiang, the country’s minister of mines and hydrocarbons, said in a statement on the website of the Johannesburg-based African Energy Chamber.

New investments in the sector are expected to help Equatorial Guinea’s economic recovery from the collapse of oil prices in 2014.

Tanzania has the fastestgrowing economy among its oil and gas-producing peers in the region and the secondlargest natural gas resources.

While production is low, the discovery of new offshore fields has the potential to transform the economy. Its closer location to Asian markets gives Tanzania a geographical edge over peers, which makes it favourable for foreign investments.

Senegal, for instance, has seen investment from oil exploration companies such as United Kingdom’s Cairn Energy and Texas’ Kosmos Energy, who discovered some of the largest offshore gas deposits between Senegal and neighbouring Mauritania’s territorial waters.

Senegal has seen predominantly natural gas discoveries offshore in recent years, most of which are shared with neighbouring Mauritania.

“Energy companies would be able to evaluate the blocks’ potential between the end of January and end of July 2020,” said Mahamadou Makhtar Cisse, Senegal’s oil and energy minister. Abdirashid Ahmed, Somalia’s minister of petroleum and mineral resources, also said his country was on a path to transform its petroleum industry and attract the attention of new investors.

Senegal has seen significant progress in recent years, including the passing of the petroleum law earlier this year – key features of which were a commitment to transparency and revenue-sharing, the minister said.

•Continues online at www.businessday.ng www.businessday.ng

R-L: Godwin Obaseki, governor, Edo State; Godwin Emefiele, governor, Central Bank of Nigeria (CBN), and Philip Shaibu, deputy governor, Edo State, at the launch of Edo Oil Palm Programme, in Benin City, yesterday.

7 years after, Nigeria returns to Jan-Dec...

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January.

Apart from the years 2001, 2007, 2009 and 2013, Nigeria since 1999 has had the signing of its annual budgets delayed late into a new fiscal year, leading to poor implementation of the budget, especially the capital component.

Analysts say returning to a January-December budget cycle was a good signal as it would remove some of the uncertainties associated with delayed budget, including delayed investment decisions.

“Returning the budget to the January-December fiscal year will, to a large extent, remove some of the uncertainties associated with delayed budget,” said Johnson Chukwu, CEO of Lagos-basedinvestmenthouse, Cowry Asset Limited.

“The delay has been known to make business leaders and operators apply brakes in order to know the budget direction before taking their investment decision,” he said.

Chukwu said that since the budget is the strongest fiscal tool that the executive arm of government uses to impact on the economy, its delay or absence woulddeprivemajoragenciesof government of funds to embark on key projects that would boost growth in the economy.

Signing the budget in his office in Abuja at exactly 3:39pm on Tuesday, in the presence of Vice President Yemi Osinbajo, Senate President Ahmed Lawan, among others, Buhari said the 2020 budget passed by the National Assembly provides for aggregate expenditures of N10.594 trillion, an increase of N263.95 billion over the executive’s proposal that was submitted in October 2019.

“We have examined the adjustments and may revert to the National Assembly with a request for a virement or other relevant amendments,” he said.

Buhari also said the government was optimistic that it would be able to finance

the 2020 budget, hinging his optimism on the prevailing global oil market outlook and the government’s strategic approach to revenue growth.

He said being a deficit budget, an appropriate 20202022 borrowing plan would in due course be forwarded to the National Assembly.

“To optimise the desired impact, I have directed the Ministry of Finance, Budget and National Planning and all federal MDAs to ensure effective implementation of the 2020 budget,” Buhari said.

With the budget now signed into law ahead of the commencement of the fiscal year, Chukwu expressed the hope that the government would be able to disburse the cash-backed capital expenditure budget early enough so the country could take advantage of the dry season to implement capital projects in the first quarter of the year.

This, he said, was a departure from “the previous years when the signing was done in the thick of the rainy season, making the country underperform in the implementation of capital budget”.

“It is a good thing that the budget cycle is back to the January-December year,” said Boboye Olaolu, macroeconomic analyst at Cordros Capital Limited.

“What this goes to show is that there is synchronisation between the legislative and the executive arm of government. Hence, when the latter tries to push up any policy that can spike up the economy, we might be seeing the same positive reaction from the legislative arm, which is a

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positive one for the economy,” he said in a phone response to BusinessDay. Buhari had presented the budget on 8th October, 2019 which the 9th Senate promised to pass before end of the year in order to revert the nation’s fiscal year to January to December.

President Buhari had proposed N10.33 trillion while the National Assembly increased it to N10.59 trillion.

Thebreakdownofthebudget revealed that out of the N263 billion increment, the National Assembly increased its budget fromN125billiontoN128billion.

The House on Thursday passed harmonised version, which Senate had earlier passed to ensure that the budget runs from 1st of January to December 31st 2020.

The new budget appropriated N110 billion for the judiciary, Niger-Delta Development Commission got N808 billion.

The National Assembly also increased oil benchmark price to $57 per barrel as against the proposed $55 but maintained the daily crude oil production rate at 2.18 million per barrel, GDP growth rate

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2.93 percent, inflation rate 10.81 percent, and exchange rate 305/US$1 as proposed by the executive.

President Buhari, who marked his 77th birthday yesterday, appears to be in the good books of the 9th National Assembly,afterhisanointedcandidates clinched headship of both the lower and upper houses of the chamber, respectively.

Just two days back, President Buhari was granted approval by the legislature for a loan request to borrow as much as $30 billion, which the president said was necessary to fix the country’s dilapidated infrastructure across various sectors of the economy. The move was hitherto rejected by the 8th Assembly, which its members said was presented without a draft plan, and if approved, would skyrocket the country’s already ballooning debts.

The Senate has also got President Buhari’s assent on a N37 billion fund disbursement for the renovation of the Senate chamber, a move analysts say affirms the harmonious relationship between the current executive and legislature.

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Abia State University,Uturu & general public please take note.

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news

90% of Nigeria’s processed food will be fortified by 2020 – Dangote, others pledge CALEB OJEWALE

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ood processors in Nigeria have expressed commitment towards achievement of 90 percent fortification of processed food in the country by 2020.

In 2018, when the Nigeria Food Processing and Nutrition Leadership Forum was first held, the level of fortification in processed foods was 50 percent, and has now increased to 75 percent, following a year of strategic efforts towards the goal of food fortification in Nigeria. A target of 90 percent has now been set before the forum reconvenes next year.

Aliko Dangote, president/ CEO, Dangote Group, and vicechair (private sector) of the Nigeria Industrial Policy and Competitiveness Council, disclosed this while briefing journalists Monday after a closed-door meeting of leading food processors in Nigeria.

The meeting, which was coconvened by Dangote, had participation of Bill Gates, co-chair, Bill & Melinda Gates Foundation, who was said to have joined the earlier closed door meeting via video conferencing, and also in

attendance were Adeniyi Adebayo, minister of industry, trade and investment, and Osagie Ehanire, minister of health.

The forum sought to sustain momentum on food fortification and compliance to standards, which currently targets edible oil, salt, sugar, and wheat flour.

The goal is however for every processed food in Nigeria to be fortified, including rice, a widely consumed staple by millions of Nigerians.

While the ‘big food processors,’ which had some of their CEOs in attendance at the meeting have expressed their commitment to increasing the volume of fortified food in Nigeria, Dangote stressed that “regulatory agencies should not only focus on the big ones but also the smaller companies.”

This, he said, is to ensure that the smaller players, who together account for substantial shares in the food market, are also complying with the stipulated standards for the benefit of all Nigerians.

The fortification of processed food is a way of addressing micronutrient deficiencies in diets, ensuring processed food can deliver specific nutrients required for good health.

Senate rejects Buhari’s free visa policy, summons interior minister Solomon Ayado, Abuja

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enate on Tuesday rejected the policy of President Muhammadu Buhari, which gives all African travellers visas on arrival from January - suspending the necessary requirement that they apply in advance.

The Senate said with the uprising of insecurity, it was premature for the President to take the decision because it would aid influx of terrorists in the country.

Consequently, the Senate has summoned the minister of interior, Rauf Aregbesola, to appear before it, alongside

the Comptroller General of Immigration, to explain the legality, logistics and technicality of the free visa agreement.

President Buhari had signed an African free trade zone treaty and recently backed it with a free visa policy to enable free movement of African nationals into the country, saying the policy aimed at fostering investments into the country.

But Nigerian senators are peeved that the said visa agreement does not have any legal backing and that it is not domesticated. The rejection of the policy followed a motion by Adetunbi Olubunmi

(Ekiti North), which urged the Senate to reject the visa policy.

When the motion was presented in plenary on Tuesday, lawmakers took turns to fault Buhari for taking such an injurious decision.

Senate minority leader, Enyinnaya Abaribe, in his submission said with the rising crime wave in the country, if such a free visa policy was not quickly reversed, criminals and terrorists would troop into the country and make it more insecure.

For senators Gabriel Suswam (Benue North East) and Ibikunle Amosun, they agreed that the policy would

enhance economic growth, but insisted that before the treaty would be perfected, the President should contact National Assembly for proper legislation by way of sending to the senators the Immigration Act for amendment and domestication.

However, Barau Jibrin had an opposing view to the submissions of the senators who rejected the policy, saying the policy, as announced

by Buhari, was a global trend, and should not in any way be faulted.

In his ruling, Ahmad Lawan threw the matter to vote and majority of the senators voted against the policy.

Julius Berger wins NIPR President’s Award as Nigeria’s ‘Corporate PR Ambassador of the Year’

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ast weekend in Lagos, Julius Berger Nigeria plc won the ‘Corporate PR Ambassador of the Year 2019’ from the chartered regulator of public relations practice in Nigeria, the Nigerian Institute of Public Relations (NIPR).

At the event held in Lagos, the NIPR described Julius Berger Nigeria as a leading construction company offering integrated solutions and related services, specialising in executing complex works that require the highest level of technical expertise and Nigeria-specific knowhow.

In the citation to justify the company’s qualification for the award, the President/chairman of Council of the NIPR, Mukhtar Zubairu Sirajo, said: “…since its pioneering project in 1965, Julius Berger has played a pivotal role in the development of Nigeria’s industrial and civil infrastructure. The company utilises state-of-the-art construction methods and technologies to ensure that quality and innovation are prioritised for the benefit of clients. Just as Julius Berger has never failed to deliver its projects with remarkable success in the country, so has the company also been in total compliance with the highest expected standards and

ethics for the advancement of the practice of public relations in line with the NIPR Act. “It is worthy of note that this is the second time that this coveted award is being bestowed by the NIPR on this truly worthy company and great patriotic corporate citizen, because of its unwavering compliance with excellence and best practice in its operations.”

The President of the NIPR noted that Julius Berger Nigeria’s core competence covers all project phases, including planning, design, engineering, construction, maintenance and operation for infrastructure, industry and building projects, adding that, “Julius Berger’s business is supported by vertically integrated operations which augment efficiency and timely project execution,” NIPR said subsidiaries and additional facilities make it possible to realise multifaceted construction projects at the highest level of performance.

In presenting the Award to the company, the Institute said that alongside the certification of the International Standards Organisation, IOS, Julius Berger won the Award in recognition of its outstanding contributions to the growth and development of the NIPR.

International Breweries CEO, Degroot leaves Nigeria for other assignment Daniel Obi

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nternational Breweries is restructuring its management as its managing director, Annabelle Degroot, is leaving Nigeria at the end of this month, BusinessDay gathers.

Sources say she has been redeployed to another assignment within the AB Inbev Group. She will be replaced by another expatriate yet to be made public

by the multinational company.

During her tenure, the competition in the beer market jolted as International Breweries opened its $250 million Sagamu factory and deepened its product market penetration.

International Breweries is part of the world largest brewer, Anheuser Busch InBev. International Breweries was established in 1971 and listed on Nigerian Stock Exchange in 1995. www.businessday.ng

L-R: Oladehinde Nelson-Cole, acting company secretary, Forte Oil plc; Abdulwasiu Sowami, chairman; Olumide Adeosun, chief executive officer, and Moshood Olajide, chief financial officer, at the extraordinary general meeting in Lagos, yesterday.

Pic by Olawale Amoo

Access Bank showcases African art, fashion, film, music in second edition of BAFEST

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he second edition of the Born in Africa Festival (BAFEST), an initiative of Access Bank aimed at celebrating African creativity, held December 15, 2019, at Eko Atlantic City, Victoria Island Lagos. Following a successful maiden edition last year, this year’s edition themed “More For The Culture,” was a dynamic fusion of African art, film, fashion and music, attracting thousands of fun lovers from across Africa.

The day-long festival commenced with the fashion, art and film park, where various artists, fashion designers and filmmakers showcased their works.

Short films, feature-length films and Accelerate Filmmaker project films were screened in the film section; films such as ‘Black Monday’ by Adetola Films, ‘Blast’ by Tosin Ibitoye, ‘Last’

by Olabisi Akinbinu, ‘Scars’ by Miriam Dera, among others, were featured. Eye-catching and fascinating artworks and clothing were also on display as artists and designers were on ground to engage guests.

The festival then got into high spirits with the fusion of music and fashion, all on one stage. Fans were thrilled with captivating music performances from some of Africa’s biggest and finest acts including Niniola, Seyi Shey, Becca from Ghana, Patoranking, Teni, Joeboy, Fla-

vour, 9ice, Mr Real, Naira Marley and Burna Boy. The stage was lit by runway models displaying the works of top-notch African designers such as Tokyo James, Emmy Kasbit, David Tlale and a host of other talented fashion designers.

A notable highlight of the festival was the electrifying opening dance performance coupled with a daring aerodynamic performance by the Drumstatic band, who were all suspended in the air. The ambience at the BAFEST 2019 was a lively one; guests had several options of refreshment as there was a food court packed with vendors dishing tasty meals and drinks.

Commenting on the event and its significance, Access Bank GMD Herbert Wigwe explained that “BAFEST is not just a means of providing quality entertainment to Africans, but a platform Access Bank has created to spotlight Africa through its enormous creativity and talents. We believe it is time the world knows the true story of Africa. I believe that this year’s BAFEST will further strengthen this new African narrative we are creating.”

Born in Africa Festival is a celebration of the unparalleled dynamism of the true African spirit. This highly entertaining fusion of music, art, film and fashion is designed uniquely to help shape a positive African

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Turnaround from life challenges possible in Jesus - Kumuyi …as Deeper Life announces 2019 December retreat Seyi John Salau

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t a time when many people are losing hope because of the current challenges of life, Pastor William Folurunsho Kumuyi has proposed the ultimate solution to man’s needs.

Kumuyi, the General Superintendent of Deeper Life Bible Church, declares that faith in Jesus Christ holds the key to the problems that overwhelm many people today. He was speaking while announcing this year’s National December Retreat of the church.

He said the theme of the Retreat: ‘The Final Solution – Jesus’, is the most assured means by which people can experience a turnaround for the better in the challenges they face today. “This is the promise of the December Retreat, this year,” he explained.

The retreat commences on Saturday, December 21, and ends on Christmas Day. It holds in all local government areas of the country, in nearly 50 African countries, and the rest of the world.

In Lagos, the Retreat will hold at the Deeper Life Conference Centre, Km 42, LagosIbadan Expressway. @Businessdayng

Kumuyi announced a special invitation to all and sundry, quoting Jesus Christ who beckoned on all people: “Come unto me all ye that labour and are heavy laden, and I will give you rest”.

He noted that every solution proffered by Jesus Christ does not just momentarily solve the problems of men, but keeps them in that blessing. He was optimistic that whatever spiritual or physical challenge is brought to Jesus at the Retreat will receive His loving attention and solution.

He urged members of the church and all invited guests not to allow anything, however desirable, to hinder them from receiving what God had prepared for them at the Retreat.

“The retreat period offers a great opportunity for drawing closer to God and preparing every heaven-bound saint to keenly await the soon return of the Lord Jesus Christ,” Pastor Kumuyi said.

The General Superintendent emphasised the need for all men to become spiritually awake and committed to the service of God to enable them receive the reward of the faithful when their time on earth is over.

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Wednesday 18 December 2019

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news Seplat completes acquisition of Eland Iheanyi Nwachukwu

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ourt Order sanctioning the acquisition of Eland by Seplat Petroleum Development Company plc has been delivered to the Registrar of Companies. Accordingly, the Scheme has now become effective and the entire issued and to-be-issued ordinary share capital of Eland is wholly owned by Seplat.

Admission to trading of the Eland shares on AIM (Alternative Investment Market) will be cancelled with effect from 7.00am on December 18, 2019.

As a result of the Scheme becoming effective, share certificates in respect of Eland shares have ceased to be valid and of value and entitlements to Eland shares held in uncertificated form

… further enhances footprint in Nigeria in CREST – a UK-based central securities depository will be cancelled.

Scheme shareholders on the register at the Scheme record time, being 6.00 p.m. on December 16, 2019 will receive 166 pence in cash for each Scheme share. The consideration due to the Scheme shareholders will be sent by no later than December 31, 2019. Each of the nonexecutive Eland directors has resigned as a director of Eland with immediate effect.

“We are delighted to successfully complete the acquisition of Eland, which further enhances Seplat’s footprint in Nigeria and provides opportunities for enhanced scale, diversification and growth. We welcome our new colleagues and Nigerian

partners as we look forward to working together in this exciting phase of our development,” said Austin Avuru, CEO, Seplat.

On October 15, 2019, the boards of Seplat and Eland reached agreement on the terms of a recommended cash acquisition

by Seplat of the entire issued and to be issued ordinary share capital of Eland to be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.

A scheme document was posted to Eland shareholders on October 28, 2019 setting out the terms of the acquisition. On December 12, 2019, Seplat and Eland announced that the Court had sanctioned the Scheme.

NECA disagrees with Senate on payment of stipends to unemployed Joshua Bassey

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igeria Employers’ Consultative Association (NECA) has disagreed with the resolution by the Senate for the Federal Government to commence payment of stipends to unemployed Nigerians till they are able to secure a means of livelihood.

Director-general of NECA, Timothy Olawale, told journalists, “Though the resolution of the Senate seemed plausible as the implementation might increase the disposable income of unemployed youths and stimulate consumption. It is, however, not sustainable in the long run.”

Giving insight into the fundamentals critical to the

success of the programme, the NECA director-general argued: “One critical success factor is the availability of accurate data.

“It is important to know the number of Nigerians that are actually unemployed to forestall the programme becoming another scheme bedevilled with patronage.

“Also of importance is the funding and administration of the project. The project was not captured in the already passed 2020 appropriation bill, thus it is worrisome where the funds to bankroll it will come from. It is hoped that government will not further burden the already overtaxed private businesses.”

Olawale further observed that all the social intervention programmes of the gov-

ernment had so far been “cosmetics and short-term in nature without potential to solve the real issues of unemployment in Nigeria.”

He, therefore, advised government at all levels to take a more than cursory look at the private sector, noting that more deliberate efforts should be put in place to support the organised private sector to grow and create employment by ensuring a favourable operating environment.

“Businesses are currently overburdened with different forms of taxes and levies, inadequate infrastructures and unfriendly regulatory environment. Herein lies the solution to the teething unemployment scourge of our nation,” he said.

Unity Bank, Veritas Kapital partnership to roll out Bancassurance products SEGUN ADAMS

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nity Bank has launched its Bancassurance partnership with Veritas Kapital Assurance to create a robust financial solution that provides customers access to insurance services while carrying out their banking transactions, the lender said Tuesday.

Bancassurance is a partnership between a bank and an insurance company to sell insurance products to the bank’s customers.

As such, Veritas Kapital will be leveraging the customer base and distribution channels of Unity Bank to sell products that offer financial protection, covering wideranging policy and risks in areas such as Motor, House Owner, Personal Accident and House Holder insurance.

Veritas Kapital representatives will be present in designated flagship branches of Unity Bank in Lagos and Abuja, both companies said.

“Bancassurance has been largely developed in other climes, but is just gaining traction in Nigeria,” said Tomi Somefun, managing director/ CEO, Unity Bank. “Veritas Kapital, which used to be a part of the Unity Bank family, is the ideal choice for this partnership.”

To boost insurance penetration in Nigeria, the Central Bank of Nigeria and the National Insurance Commission issued guidelines in 2018 for Banks and Insurance companies wishing to go into collaboration based on referral model for Bancassurance product.

Somefun said the bank’s longstanding relationship with Veritas Kapital Assurance makes the implementation of the agreement work best for all parties, particularly, the bank’s customers.

In addition, the collaboration will see Unity Bank’s strength in agribusiness complement the offering of Veritas Kapital in agricultural products such as Area Yield Index-Based Insurance, Livewww.businessday.ng

stock Insurance, Property and Produce Insurance to provide a unique solution that will enhance the customer’s experience.

“The new synergy will bolster the bank’s agribusiness and its value chain as customers in livestock and crop production can be effectively offered an insurance cover,” Somefun said.

Kenneth Edore Egbaran, MD/CEO, Veritas Kapital, said the partnership would open new opportunities to offer innovative financial solutions to customers, and enable them to access numerous benefits that are available through insurance products.

He also said the partnership would have a positive impact on Verita Kapital bottom-line as players in the insurance industry innovate to improve performance.

Since 1984, Veritas Kapital Assurance has been offering non-life Insurance products and services to individuals and institutions across Nigeria. https://www.facebook.com/businessdayng

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Igue Festival: Obaseki congratulates Benin Monarch …cautions residents over fire incidents

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do State governor, Godwin Obaseki, has congratulated the Benin Monarch, Omo N’ Oba N’ Edo, Uku Akpolokpolo, Ewuare II, on the celebration of this year’s Igue Festival.

In a statement, Obaseki said: “On behalf of the Government of Edo State, I congratulate the Omo N’ Oba N’Edo, Uku Akpolokpolo, Oba Ewuare II, the Oba of Benin, all Benin people and our friends on the annual Igue Festival celebration.

“We pray that the new year brings more blessings and a strongerbondbetweentheRoyal House and the Government of Edo State to deepen on our programmes and policies in transforming the lives of our people across all sectors of the state.”

The governor wished the Benin Monarch “a glorious celebration, excellent health and the divine wisdom to continue to lead us, his people to greatness.”

The celebration started Thursday, December 12 and will be concluded on Tuesday, December 31.

Meanwhile, the state government has cautioned residents to be cautious and circumspect as the dry season sets in, so as to prevent fire disasters and other related hazards to lives and

property in the state.

In a statement, special adviser to the governor on media and communication strategy, Crusoe Osagie, urged residents in the state to shun practices and habits that might lead to fire disasters, even as the state government strengthened its emergency response system to be proactive to fire incidents and other such hazards in the state.

He also said the fire incident at the popular Oliha Market in state was confined to one building and had been contained even as investigation was ongoing to ascertain the cause of the fire.

According to Osagie, “Edo residents are enjoined to be careful and circumspect as we enter the dry season. The likelihood of fire incidents is high due to the weather condition.

So, we urge people to be careful and mindful of their actions and habits this season.”

Noting that the preliminary details of the fire incident at Oliha Market are being reviewed by relevant agencies of government, he said, “We are investigating the immediate and remote cause of the fire. The relevant agencies will review the details and make the necessary recommendation where necessary.”

Lagos opens bid for 4th Mainland Bridge, unveils other projects

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agos State government is set to open bids for prospective firms to express interests in the construction of the Fourth Mainland Bridge, as it gave account of the progress recorded in the last 200 days of the Babajide Sanwo-Olu administration.

Commissioner for information and strategy, Gbenga Omotoso, during an interactive session with journalists, said the state government would be hosting a live ceremony on Wednesday, to open the bids.

Omotoso said, “The Government will be announcing the bids at the ceremony, which will officially set process in motion to realise the project,” saying local and international construction firms had expressed interest in the construction of the 37-kilometrelong Fourth Mainland bridge.

The commissioner said the Sanwo-Olu administration had beamed a special focus on infrastructure, traffic management and transportation, to reduce gridlocks.

He said state had sustained its ‘aggressive response’ to rehabilitating bad roads across the metropolis to ease vehicular movement, noting that about 116 deplorable highways were being fixed by eight construction firms and the Public Works Corporation.

The Sanwo-Olu administration, Omotoso said, is deploying Public Infrastructure Improvement Partnership (PIIP) as a strategy to improve the state’s infrastructure by

signing agreements with banks and other private institutions to embark on rehabilitation of adopted roads as Corporate Social Responsibility (CSR).

He said: “I boldly state, here, that the THEMES Agenda of the Sanwo-Olu Government is on course and will be achieved. The speed of projects implementation has now increased, especially since the last 100 days. The intensity is going according to the plan, which is to apply the right treatment at the right time to achieve the desired level of service.

“The government is leveraging the private sector, which controls about 80 per cent of the State’s Gross Domestic Product (GDP), as crucial in the government’s drive to bridging the infrastructure gap and building the smart city of our dream. Access Bank is partnering with the State Government in the upgrading of a network of roads in Oniru under PIIP arrangement.

“To further bring relief to our people, we will be setting the process in place for the construction of Fourth Mainland Bridge. Next Wednesday is the final day for the submission of Expression of Interest; we will be unveiling the process that will lead to the realisation of the project on day.”

Omotoso said the Government had almost doubled the resources committed to education and healthcare to boost human capital. www.businessday.ng

L-R: Yahaya Maikori, chairman, eminent focal group, Nigerian Economic Summit Group (NESG); Udeme Ufot, board member, NESG; Sunday Dare, minister of sport and youth development; Nkechi Obi, lead, NESG Sports Industry Thematic Group (STIG); Niyi Yusuf, vice chairman, NESG, and ‘Laoye Jaiyeola, CEO, NESG, at the signing of MoU between the NESG and the Ministry on the promotion of Sports as a Business in Nigeria, held at the Summit House in Lagos, yesterday.

CBN threatens to suspend account of saboteurs of investment in palm oil sector IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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he Central Bank of Nigeria (CBN) on Tuesday said it would suspend account of any person, hiding under the ECOWAS Trade Liberation Scheme, to sabotage the Federal Government’s investment in reviving the palm oil sector.

The governor of the bank, Godwin Emefiele, said this at his goodwill speech during the plantation owners’ forum of Nigeria oil palm discourse in Benin City.

Emefiele also threatened that accounts of corporate entity including their cronies and supply chain enablers involved in smuggling palm oil and its products into Nigeria would

also be suspended.

The apex bank governor, who said the Nigerian palm oil industry was at a crossroad, noted that the national economy continued to be threatened by inadequate local production and continued reliance on imports.

He said the CBN under its Oil Palm Development and Expansion Initiative had so far disbursed over N30 billion to the oil palm sector.

The disbursement is being monitored to ensure efficient utilisation and maximum output while oil majors and apex associations are being encouraged to adopt the Out-Grower Scheme to maximise inherent

Court fixes December 23 for convicted Orji Kalu’s bail application Joshua Bassey

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ormer Abia State governor and current Senate chief whip, Orji Uzor Kalu, is to wait till December 23, 2019, to know what the court will say in respect of his application for bail, pending an appeal against his conviction.

Kalu approached the court via an application for bail to enable him get out of prison ahead of his appeal against his 12-year jail term The Federal High Court, Ikoyi, Lagos, presided over by Justice Mohammed Idris, had on December 5, 2019, jailed Kalu for 12 years after finding him guilty of N7.56 billion fraud.

The court also ordered Kalu’s company, Slok Nigeria Limited, which he used to defraud Abia State govern-

ment, to be forfeited to the Federal Government of Nigeria.

Equally jailed 10 years by the High Court was Kalu’s aide, Jones Ude, who was the director of finance in the Government House, while Kalu served as governor.

However, Kalu through his counsel filed for bail on health grounds, pending his appeal.

But the Economic and Financial Crimes Commission (EFCC) opposed the bail on the ground that bail is for accused persons on the presumption of innocent, but that since he had been convicted, he could no longer enjoy such privilege.

The presiding judge, Mohammed Liman, adjourned till December 23, 2019, for ruling.

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opportunities, he said.

He noted that if the strategic potentials of the agricultural sector and its value chain were well harnessed, it had the potentials for rural employment generation, ensuring food security and foreign exchange conservation through reduced imports into the country.

According to Emefiele, faced with this stark reality, the CBN decided to intervene with a view to changing the narrative and in line with the ambitious attempt to reposition agriculture as the mainstay of the Nigerian economy.

“Furthermore, in our bid to restore the country’s preeminent status as the third global net exporter of palm

oil, the Central Bank of Nigeria on 23rd June 2015 included palm oil and palm oil products alongside other commodities in the exclusion list of items not valid for foreign exchange at the Nigerian Foreign Exchange window.

“As you may be aware, the journey to revive the oil palm sector began with the discovery that over $500 million of our scarce foreign exchange was being expended on the importation of palm oil to meet identified unmet demand gap of 1.25 million metric tons.

“The country’s total domestic palm oil demand and consumption stood at 2.5 million with local production capacity availing 1.25 million metric tons only,” he said.

Manual Customs processes, overtime goods hamper port efficiency - Haastrup AMAKA ANAGOR-EWUZIE

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fficiencyofNigerianseaports is being hampered by poor stateoftheportaccessroads, manual cargo examination by the Nigeria Customs Service (NCS) and the preponderance of overtimegoodsatthenation’sseaports, VickyHaastrup,chairman,Seaport Terminal Operators Association of Nigeria (STOAN), says.

Speaking in Lagos recently at the 2019 Annual Stakeholders’ Appreciation Night organised by Nigerian Shippers’ Council (NSC), Haastrup said bad roads had become “the largest single obstacle working against the efficiency of Nigerian ports.

“Port operators and users are groaning under the weight of severe stress posed by severely dilapidated port access roads. While terminal operations at all the ports have attained varying degrees of efficiency, the severely dilapidated roadsleadinginandoutoftheports are fast eroding the gains of the port reforms we all worked hard to achieve.”

According to Haastrup, port workers, government officials and @Businessdayng

other stakeholders daily endure avoidable stress to resume work and return to their homes.

“Recently, I read the newspaper account of a Customs Controller who said that officers serving at his command frequently fall ill becauseoftheApapagridlockand the attendant stress induced by commutingdailytoandfromwork on motorbikes, which many have resorted to because the roads are no longer passable. There is only so much the body can endure,” she said.

She also identified manual clearing processes as another major issue hindering the efficiency of the ports.

“The scanners at the port are not working, while almost all the cargoes landed at our ports are subjected to 100 percent physical examination. This certainly slows down the cargo delivery process and increases the cost of doing business.WeurgetheFederalGovernment to, as a matter of urgency, work on automating Customs processes at our ports and installing functional scanners to reduce manual clearing processes,” she stated.

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Wednesday 18 December 2019

FT

BUSINESS DAY

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FINANCIAL TIMES

World Business Newspaper LAURA NOONAN

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oldman Sachs has unveiled a Blackstonelike alternative investments group, previewing a key element of the strategic plan to be presented at the company’s much-anticipated investor day next month.

In a memo to staff on Monday, David Solomon, Goldman’s chief executive, and his two top lieutenants described the Alternatives Capital Markets and Strategy Group as a “unique opportunity” to attract more funds from outside investors.

The alternatives platform will cover everything from the private equity, infrastructure and debt investments offered by Goldman’s merchant bank to the partnerships, co-investments and funds offered through Goldman’s investment management arm.

Attracting more third-party funds has been a key aim of Mr Solomon and his lieutenants, who have spoken about creating an investment business like Blackstone, perhaps the world’s most powerful alternative money manager.

Goldman executives hope that boosting its investing division will help lift its share price, now languishing near post-crisis lows on a price-to-book value basis.

The alternatives group will be run by Chris Kojima, who currently heads the Alternative Investments & Manager Selection Group, and Mike Koester, who is the chief commercial officer for Goldman’s merchant bank. Both men have been Goldman partners since 2008.

One person familiar with the bank’s plans told the FT the new

Goldman unveils Blackstone-like investments group

More details of alternative investments platform will be provided at January investor day

Attracting more third-party funds has been a key priority for David Solomon, Goldman’s chief executive © Bloomberg

structure would help Goldman offer a more “holistic” service to its investors, ultimately leading to clients signing up to a broader array of products.

“It’s about bringing the entire firm (to clients),” a second person familiar with the plans said.

“There’s a danger when some of these solutions are siloed, that you get siloed thinking . . . We’re now

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October for a “clear conflict” for providing recruitment and remuneration advice to Thomas Cook’s board while it audited the travel group between 2007 and 2012.

The FRC had banned the provision of such advice by an auditor of a public interest entity in 2016 but with caveats, such as around seniority of staff. The revised 2019 standard totally prohibits all such services.

The new guidelines set out a list of permitted non-audit services for auditors. They are a departure from the old standard, published in 2016, which instead told them which services were prohibited.

“The issue we had was that the prohibited list was too open to interpretation,” said Mark Babington, audit director of the FRC. He said the regulator had also moved to “absolute prohibition” of a number of services, removing caveats to its previous rules.

Mr Babington added that the revised standard also removed a number of “grey areas” around what was considered essential non-audit work. “I found that the audit firms talk about offering ‘essential’ non-audit services, but their list of what was essential was a lot longer than mine,” he said, www.businessday.ng

results of a year-long “front to back” review of the company’s businesses and will chart its future strategy under Mr Solomon.

Investors are hoping for more detail on the earnings outlook for Goldman’s newer ventures, including pushes into consumer banking and cash management, whose investment costs have been dragging down returns.

Risks of ‘cliff-edge’ exit from EU heightened by new government plans

FRC ban on firms offering number of advisory services set to hit revenues at Big Four K regulators have banned audit firms from providing a number of advisory services to listed companies and financial institutions in an effort to strengthen auditor independence after a series of scandals.

The Financial Reporting Council on Tuesday issued a “radical” update to its ethical standards for audit firms, which have been scrutinised over poor audits and possible conflicts of interest in the wake of corporate collapses such as at Carillion, BHS and Thomas Cook.

The regulator banned accounting firms from providing all recruitment and remuneration services and due diligence from the public interest entities they audit — mostly listed companies, banks and insurers. It also prohibited them from giving tax advice, advocacy and acting in any management role.

The move could strip out millions of pounds of revenue from the so-called Big Four of PwC, KPMG, Deloitte and EY. This year they have increased audit fees to shore up their practices ahead of a possible forced break-up.

PwC was criticised by MPs in

the bank’s plans would not disclose the level of assets under management in its alternatives businesses, beyond saying it is one of the top five in the market. More details on its size, and growth potential, are expected to be revealed at Goldman’s investor day on January 29.

Goldman has promised that the investor day will reveal the

Pound gives up post-election rise as Johnson signals hard Brexit deadline

UK regulator tightens rules to strengthen audit independence TABBY KINDER

bringing this ‘one Goldman Sachs’ (approach).”

Mr Solomon, who is a year into his stewardship of Goldman, has invoked similar strategies at the company’s investment banking and trading divisions, encouraging his employees to think in terms of clients’ total relationships rather than individual business lines.

The two people familiar with

ADAM SAMSON

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terling has surrendered its post-election gains as Boris Johnson signalled he will seek to pass legislation that could cause a “cliff-edge” Brexit at the end of next year.

The currency slid as much as 1.4 per cent to $1.3141 in afternoon action, bringing it below the $1.3173 level the pound traded at just before an exit poll projected Mr Johnson’s election victory. It fell by a similar margin against the euro to €1.1792.

The pound has tumbled 2.8 per cent from the peak of around $1.35 that was reached on Thursday night after it became clear Mr Johnson had secured a sweeping victory.

London’s FTSE 250 index, which includes medium-sized UK companies that are considered to be sensitive to shifts in the domestic economy, dropped more than 1 per cent in its worst day since October after sharp rises in the two trading days following the poll.

Companies that were seen as beneficiaries of Mr Johnson’s victory such as banks — including Barclays, Lloyds and RBS — and homebuilders pulled back.

Analysts had warned that even

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as the election result would help to alleviate political uncertainty, risks over Brexit and domestic politics still lingered.

Line chart of $ per £ showing Sterling surrenders post-election rise Less than a week after election day, those concerns have come to fruition. Mr Johnson’s government has signalled that it will attempt to ram legislation through parliament this week that would leave the prime minister obliged to make a trade deal within months or take Britain out of the EU on World Trade Organization terms.

“The pound’s latest slide is symptomatic of the fact that Brexit is a way off being done, and will remain important for sterling over the coming months,” said Dean Turner, economist at UBS Wealth Management. “The risk of the UK reverting to trading with the EU on WTO terms could still drive larger sterling moves, particularly given the latest noises coming out of Downing Street.”

The decision may quash the hopes of some executives, investors and EU diplomats who had expected Mr Johnson to use his decisive parliamentary majority to push for a business-friendly Brexit deal that would marginalise hardline Eurosceptics. @Businessdayng

But the new plans suggest Mr Johnson will seek rapidly to forge a Canada-style free trade agreement that would focus on goods trade and not services. It would also set a tight deadline for complex talks, creating yet another point in the next 12 months in which the UK could crash out of the EU with no deal in place.

Investors are also beginning to take a closer look at UK economic fundamentals with the election now out of the way, according to Thu Lan Nguyen, currencies analyst at Commerzbank. She said the release on Monday of a gloomy survey on the factory sector “did not constitute a good start in this respect”. An upbeat report on the labour market, released on Tuesday, prompted essentially no move in the currency.

“What would be particularly important would be to find out to what extent the recent weakness of the British economy was due to the Brexit uncertainty, to the trade conflict or even structural factors,” she said.

“If the real economic weakness was to be deeper and therefore longer term this would constitute an ideal breeding ground for rate cut speculation which might weaken sterling at least temporarily.”

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NATIONAL NEWS

Boeing’s 737 Max suspension hits global supply chain

France’s Safran and UK’s Senior shares are among those worst-hit by decision SARAH PROVAN AND ARCHIE HALL

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oeing’s decision to suspend production temporarily of its 737 Max airliner has hit the shares of UK and European suppliers to the US group, as concern deepens over when the aircraft will return to the skies.

Shares in France’s Safran, the world’s third-largest aerospace supplier, were one of the steepest fallers on the Stoxx 600 aerospace and defence index on Tuesday, declining about 3 per cent.

The Paris-based company warned in September that the grounding of the 737 Max would hit its cash flow by about €300m a quarter, up from the €200m that it estimated in the first quarter of the year.

Its forecasts were based on the Max being back in the air by the end of this year. The timetable for when regulators will allow the 737 Max, which was grounded after two fatal crashes, to return to service remains unclear.

Safran produces engines for Boeing through a joint venture with General Electric called CFM International.

In the UK, Senior, an engineering company that counts Boeing as one of its top customers, was the biggest decliner among suppliers, falling 9 per cent. The FTSE 250 group warned in August that margins at its aerospace business were going to be squeezed by the prolonged grounding of the Max. The Hertfordshire-based company, which makes sensors and other high-tech components for equipment manufacturers in the aerospace, defence and power sectors, said on Tuesday that it will provide a further update on “the

potential implications to its 2020 performance once it has clarification from its customers”. It added that its expectations for its performance in 2019 are unchanged.

Shares in a rival UK supplier Meggitt fell almost 2 per cent. The company said in November that margins would be “constrained” by the Max grounding, and would be towards the lower end of the 17.7 per cent to 18.2 per cent it had forecast.

Sheila Kahyaoglu, an analyst at Jefferies, said the decision would likely result in lay-offs across the supply chain. “The supply chain is unlikely to carry workers for 2-3 months in furloughs . . . that’s why this decision was so difficult and that’s why [Boeing] waited to December to do it.”

Boeing’s 737 Max supply chain also runs through a range of smaller suppliers in the UK. Relative minnows like Aeromet International, a Worcester-based supplier of advanced aluminium cast parts, and Maher, a Sheffield steel machinist, have also done work on the 737 Max. Airlines have already been forced to delay their plans to return the Max to their fleets until March, a year after the second of two fatal crashes that killed 346 and forced the grounding of the fleet.

Boeing’s plans to suspend production of the 737 Max from next month comes as the company grapples with a lengthy regulatory review. The US group is to provide information regarding the production halt when it releases quarterly earnings next month.

Europe’s Airbus, Boeing’s major rival, was one of the index’s few risers, with a gain of 0.5 per cent.

Former Pakistan dictator Pervez Musharraf sentenced to death

General who took power in bloodless coup in 1999 judged in absentia FARHAN BOKHARI

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Pakistani court on Tuesday sentenced the country’s former dictator General Pervez Musharraf to death for treason in an unprecedented verdict against a onetime military ruler of the country.

The landmark case against Gen Musharraf, who has been living abroad since 2016 when he left Pakistan to seek medical treatment, represented the first time a former president of the country has faced the death sentence.

“This [verdict] indicates the path we are going to take in future.

This is a defining moment in our history,” Ashtar Ausaf Ali, former Pakistan attorney-general, told the FT. Gen Musharraf seized power in a bloodless coup in 1999 after the then prime minister, Nawaz Sharif, tried to install a new army chief to replace him. He resigned in 2008 and has since mostly lived in exile, dividing time between London and Dubai.

The case against Mr Musharraf stems from his 2007 decision to impose a nationwide state of emergency when he faced growing public protests after he sacked

the chief justice of the Supreme Court.

Pakistan and the United Arab Emirates do not have an extradition treaty, meaning Gen Musharraf is unlikely to be forced to return against his will to his home country.

Tuesday’s verdict allowed the former military ruler to appeal to Pakistan’s higher courts, including the Supreme Court.

Analysts said the decision was symbolically significant in a country in which the military had traditionally dominated most areas of public life, including the judiciary.

Retired General Talat Masood, a former military commander and now commentator on security affairs, told the FT: “This verdict will be difficult to swallow by the military but they will have to accept it. The decision is still subject to appeal so it’s more symbolic than real.”

Prime Minister Imran Khan’s information minister Firdous Ashiq Awan said after the ruling the government would “review in detail today’s verdict”.

“It is a milestone ruling but unlikely to be implemented,” said Asfandyar Mir, South Asia analyst at Stanford University. www.businessday.ng

US tech groups rebuff Trump’s new anti-Huawei push Industry rejects statement of principles that could cut out Chinese companies KIRAN STACEY

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S technology companies have rebuffed a Trump administration request that they pledge to stop sourcing supplies from some Chinese companies, amid concerns that such a policy could break competition laws.

The state department asked telecoms carriers and chipmakers to sign up to a set of principles which would have in effect shut out Huawei, and possibly others, according to three people briefed on the proposals.

The initiative, led by Keith Krach, under-secretary of state for economic growth, energy and the environment, and a former tech industry executive who oversees its Office of Global Partnerships, was aimed at securing support for what the department called a Global Digital Trust Standard.

One person who saw the plans said the principles included not buying from companies that were deemed to have broken sanctions, or whose domestic intelligence agencies could have accessed their data.

“These were quite obviously aimed

at Huawei,” the person said.

The same industry executive consulted on the plans said: “This was the latest attempt by the Trump administration to get us to shut out Huawei. But if we had come together to act against a global competitor like this, we would almost certainly have been sued.”

The Trump administration has already sanctioned Huawei, the Chinese telecoms equipment maker, taking steps to shut it out of the US 5G market and forcing its US suppliers to seek a licence before selling to the company. Officials in Washington argue the company poses a threat, saying its equipment could be used

by Beijing for spying.

But Mr Krach has been exploring another way to target international technology companies deemed to pose a threat to the US. In the past few months he approached a group of 13 different companies and trade associations to ask them to sign up to the principles, including big telecoms carriers such as AT&T and Verizon and several large chipmakers.

Following discussions with the state department, industry representatives consulted lawyers, who told them that co-operating in such

a way to shut out a global competitor could leave them open to being sued on antitrust grounds for acting as a cartel, and they backed out.

Mr Krach had organised a dinner last Friday to pursue the idea, but invitees were wary about the meeting and the event was postponed.

The state department said: “Working in conjunction with Secretary [of State Mike] Pompeo, undersecretary Krach has been engaging with leaders to leverage the innovation and resources of the private sector to advance global economic security and prosperity around the world.

“As part of that effort, he invited leaders from the business, education and social sectors to a gathering at the state department this month which was postponed due to scheduling conflicts until early 2020.”

Mr Krach, who has been undersecretary since June, was previously chairman of document signing software group DocuSign and describes himself on his website as a “transformational leader on a global scale”.

The Office of Global Partnerships helps the private sector invest in fields which support the US government’s foreign policy goals.

EU-China investment treaty talks in jeopardy Progress stymied by slow pace of negotiations and lack of political commitment JIM BRUNSDEN, MICHAEL PEEL AND ALAN BEATTIE

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he EU’s top trade official has warned that plans to broker an investment treaty with China by the end of next year are in jeopardy, saying talks are moving at a “snail’s pace” and urging more political commitment from Beijing.

The treaty is a priority for EU capitals as they seek greater access to the Chinese market for European investors and businesses — potentially outflanking the US, which recently concluded a “first phase” deal with Beijing on trade.

But Sabine Weyand, the European Commission’s directorgeneral for trade, said on Tuesday that commitments from Beijing earlier this year to intensify talks had yielded little real progress.

The two sides pledged in April to make “decisive progress” in the negotiations during 2019, paving the way for “an ambitious EUChina comprehensive investment

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agreement” to be concluded next year.

“At the moment we are not yet on a pathway to that,” Ms Weyand told an event organised by the European Policy Centre in Brussels. The talks “need more political commitment on the Chinese side”.

The EU and China are expected to make a new round of offers during negotiations this week, but people familiar with the talks said it was unlikely that Beijing’s would be generous enough to yield a breakthrough.

Brussels has been striving to secure the deal for six years, as it seeks to prove it has the negotiating muscle to broker meaningful agreements with Beijing that can defend European companies from unfair competition. The European Commission and the bloc’s foreign policy chief signalled a tougher approach to China in March in a landmark document that branded it a “systemic rival” in some areas — an allegation Beijing denies.

Ms Weyand, the chief official @Businessdayng

working for Phil Hogan, the EU’s trade commissioner, said that “we are moving at a snail’s pace on the investment agreement”.

Ms Weyand’s comments were in sharp contrast to the positive assessment given by Wang Yi, China’s foreign minister, at an EPC event the previous day.

“China and the EU should be partners for free trade,” he said.

“Apart from a high-quality investment agreement, we should work for an early start of negotiations on a free trade agreement, or at least the launch of feasibility studies on that front.”

Diplomats say the investment treaty negotiations are now part of a broader power struggle ahead of a high-profile EU-China summit provisionally planned in Leipzig in September, when Germany will hold the European bloc’s sixmonth rotating presidency. Berlin hopes the gathering will be attended by Xi Jinping, China’s president, rather than Li Keqiang, the country’s premier.

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@ FINANCIAL TIMES LIMITED

Saxo Bank targets Chinese market with Geely joint venture Danish bank’s chief sees great opportunities in ‘monster big market’ RICHARD MILNE

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axo Bank and its Chinese majority owner Zhejiang Geely are setting up a joint venture in China to supply financial and regulatory technology solutions such as trading platforms and robo-advisers to local lenders.

The Danish bank, best known for its trading platforms that allow customers to deal in everything from currencies and commodities to equities and derivatives, has been plotting its entry into China ever since carmaker Geely surprised markets two years ago by taking a stake in Saxo that it has since increased to 52 per cent.

The 50-50 joint venture will seek to sell Saxo’s technology to Chinese banks and fintechs but is hoping eventually to gain a banking licence to offer products directly to local traders.

“It’s already a monster big market and we see it growing significantly,” Kim Fournais, Saxo’s chief executive, told the Financial Times. “We believe we have a very good opportunity for coming in and helping regulators as well as market participants to obtain better services.”

Mr Fournais argued that China was well-developed in terms of fintechs offering payment services but that it was less advanced in capital market infrastructure, particularly Saxo’s speciality of trading multiple asset classes on one platform.

“In our niche, we are very well positioned. But we are not underestimating the competition,” he added.

The biggest Chinese player in trading software is Hundsun Technologies, owned by Alibaba billionaire Jack Ma. Several big western groups are jostling for position in the hope that Chinese capital markets will open up. Vanguard, the world’s second-largest asset manager, formed a joint venture with Chinese fintech Ant Financial, part of ecommerce group Alibaba. BlackRock, Vanguard’s larger rival, has held talks with Chinese internet group Tencent about a possible partnership, according to a report in the Wall Street Journal in October.

Mr Fournais said the support of Geely had been crucial in helping Saxo enter China and that the joint venture had big ambitions. “We hope to be the gateway to China . . . With this deal, we can be supporting the markets that are open to people outside. If and when [China] opens up further, we are well positioned,” he added.

Saxo’s chief executive said the joint venture had already had “good discussions” with financial institutions in China.

He dismissed concerns from some policymakers and analysts in neighbouring Sweden — where Geely owns Volvo Cars in one of the most high-profile Chinese acquisitions overseas — over increasing ties with China and its companies.

“We are focused on building a good commercial business. We think it’s important that people on this relatively small planet collaborate . . . We want to democratise investing and trading,” he said.

US industrial output rebounds driven by auto production Return of striking GM workers helps boost manufacturing in November MAMTA BADKAR

U

S industrial production rebounded in November, notching its biggest onemonth gain in more than two years, driven by the return of General Motors autoworkers.

Industrial production, a gauge of output from factories, mines and utilities, climbed 1.1 per cent month-on-month in November, marking its biggest monthly increase since October 2017, the Federal Reserve said on Tuesday.

That exceeded economists’ expectations for an 0.8 per cent increase following two consecutive months of declines.

The increase came as manufacturing output jumped, driven by a bounceback in the output of motor vehicles and parts, “following the end of a strike at a major manufacturer,” the Fed said in its report.

Roughly 48,000 hourly workers at General Motors’ US plants went on a nearly six-week long strike amid fraught negotiations over pay and production plans, which

ended in late October. The return of striking workers also helped boost US jobs in November.

Stripping out motor vehicles and parts, the gauges for overall industrial production and manufacturing moved up 0.5 per cent and 0.3 per cent respectively.

The US-China trade war has weighed on sentiment and curbed businesses’ spending plans. It is unclear whether the phase one deal agreed last week would do much to better manufacturers’ circumstances.

“The trade war currently isn’t hitting activity as hard as it’s hitting sentiment, though we don’t know if this can last,” said Ian Shepherdson, economist at Pantheon Macroeconomics. “The trade deal agreed last week does little for manufacturers, leaving in place the 25% tariffs on most imported Chinese capital and intermediate goods.”

Tuesday’s report also showed output from utilities increased 2.9 per cent amid colder weather, while mining production edged down 0.2 per cent. www.businessday.ng

Muddy Waters questioned NMC Health’s asset values, cash balance, reported profits and debt levels © Reuters

Healthcare group NMC shares drop after short-seller’s warning

Muddy Waters raises ‘serious doubts’ about company’s financial statements DANIEL THOMAS AND SIMEON KERR

NMC Health lost more than a third of its value on Tuesday after short-seller Muddy Waters warned that it had “serious doubts” about the FTSE 100 company’s financial statements.

The healthcare operator’s shares dropped 37 per cent, knocking more than £1.4bn off the company’s market value, after Muddy Waters questioned the group’s asset values, cash balance, reported profits and debt levels.

NMC owns and manages a network of hospitals, medical centres and fertility clinics across 19 countries, centred around the Middle East. It was founded in 1974 in Abu Dhabi, listed in London in 2012 and joined the prestigious FTSE 100 index in 2017.

The company, which reported revenues of $2.1bn last year, has grown quickly since its flotation through a series of acquisitions, as well as its building its own developments.

In a report, Muddy Waters said that “at the worst of times, the company has invested in large assets at costs that we find too high to be plausible — including from

parties we believe are de facto under common control”.

NMC is one of the most heavily shorted stocks in the FTSE 100, with about a quarter of its free float out on loan for use by hedge funds. Muddy Waters, founded by US short-seller Carson Block, said it has a short position but did not disclose its size.

“NMC’s reported cash balances show two red flags that indicate they could be materially overstated,’’ Muddy Waters alleged.

It added that NMC’s margins appear “too good to be true” relative to peers focused in the United Arab Emirates: Mediclinic International and Aster DM Healthcare.

The biggest short position is held by hedge fund AQR, followed

by Portsea Asset Management, Gladstone Capital Management and PSquared Asset Management.

With short interest at about 25 per cent, this would translate to a gain of as much as £383m for the hedge funds, according to analysts at Breakout Point.

NMC’s founder, BR Shetty, is one of the UAE’s most prominent expatriate businessmen who arrived in Abu Dhabi in the early 1970s soon after the federation’s

formation. He still owns about 7 per cent of stock.

Mr Shetty also founded UAE Exchange to facilitate remittances for the region’s large expatriate population. The company, which acquired Travelex in 2014, developed into financial services group Finablr, which launched an initial public offering in London earlier this year.

Finablr shares dropped about 16 per cent on Tuesday after the Muddy Water’s report on NMC. Mr Shetty is one of three individuals who control NMC. The others are powerful Abu Dhabi investors Saeed Mohamed Al Qebaisi, or Saeed Bin Butti as he is known, and his relative Khalifa Butti Al Muhairi, often referred to as Khalifa Bin Butti.

Khalifa Bin Butti, executive vice-chairman, is a 15 per cent shareholder. He is also the chairman of Travelex. The biggest shareholder in NMC is Saeed Bin Butti, with 17.4 per cent, according to Bloomberg data.

Bankers in the UAE say Mr Shetty has stepped back from the business in recent months as he focused on building a healthcare

Unilever: appetite suppressant Flagging sales suggest the consumer goods group might need to invest more in the business

H

igh expectations generate resentment later, warn psychologists. Incoming bosses therefore lower the hopes of investors while predecessors can still bear implicit blame. But Alan Jope waived the opportunity for a “reset” of goals when he took over at Unilever in January. That now looks a mistake. On Tuesday, the Anglo-Dutch company said it would miss its full-year revenue growth targets. The share price fell more than 6 per cent.

Not a great start for Mr Jope, a company lifer. But Unilever insists difficult trading conditions are to blame, particularly in south Asia and west Africa. Certainly, it is hard to make headway amid slowdowns such as India’s, where economic growth has halved since the start of 2018.

That is not the case in the US,

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where Unilever is struggling to combat a resurgent Procter & Gamble. And despite some recent signs of improvement, it has problems in the ice cream market. Unilever is the global leader in the sector but things could get tougher still.

Froneri, a private UK business, will become a closer challenger after buying Nestlé’s ice cream brands, including Häagen-Dazs, last week.

Rival Nestlé has been growing faster than Unilever this year. The categories where it competes, such as pet food and coffee, are better performers. That helps explain Nestlé’s premium rating. It trades on a price of 22 times forward earnings, compared with Unilever’s 20 times. Its shares are up 32 per cent this year, nearly twice the increase for Unilever.

Unilever could try to reshape its portfolio, jettisoning slow-growing @Businessdayng

brands. But M&A is no panacea.

Despite buying a number of fashionable “insurgent” brands in recent years, Unilever generated only about 0.5 percentage points of growth from its acquisitions and disposals in the first half year.

Mr Jope might be better off re-evaluating Unilever’s margin targets, established after the “near death” experience of Kraft Heinz’s failed hostile bid in 2017. Unilever set itself an ambitious cost-cutting programme, adopting some of the “zero-based budgeting” techniques employed by its foiled predator. It believes it can keep up the pace. Cost savings will go on giving it the scope to reinvest in its brands while boosting profitability.

But flagging sales suggest it might need to invest more in the business.

If they continue to disappoint, it should be prepared to think again.

51

Wednesday 18 December 2019

BUSINESS DAY

FT

ANALYSIS

JAB to list Peet’s and Douwe Egberts in €3bn coffee IPO Plan to merge businesses would create largest publicly traded coffee company LEILA ABBOUD AND ARASH MASSOUDI

J

AB Holdings is combining some of the world’s bestknown coffee brands to create a stronger challenger to Nestlé and Starbucks, aiming to raise as much as €3bn from a European listing next year, according to people with knowledge of its plans.

The investment company will merge Jacobs Douwe Egberts Group, the world’s second-largest coffee roaster by volume after Nestlé, and Peet’s Coffee, a premium retail US coffee brand, into a single entity to prepare for the listing. If the float takes place, JDE Peet’s will be the largest publicly traded coffee company with roughly €7bn in annual sales. It will be run by Peet’s chief executive Casey Keller.

The listing will be one of the largest European initial public offerings slated for 2020. JAB

and not simply a dealmaking machine.

The IPO plans come following a difficult year in which JAB has had to rebuild after one of its trio of managing partners, Bart Becht, left amid disagreements about strategy. One of JAB’s oldest investments, the cosmetics maker Coty, has also stumbled.

The stakes are high for one of JAB’s two remaining managing partners, Olivier Goudet, who came up with the idea of building a global coffee business and pitched the plan to the Reimann family and JAB chairman Peter Harf in 2012, when he was still at Mars. Mr Goudet then joined JAB to carry it out.

JAB is in the process of raising additional funds from outside investors and is on track to collect $8bn by the middle of next year.

JDE Peet’s business is mostly focused on selling packaged

A barista prepares coffee at a Peet’s outlet in Chicago © Bloomberg

has yet to decide on a venue but is strongly considering the Amsterdam bourse, given the centuries-old Dutch lineage of Douwe Egberts.

The main reason for the IPO was to allow an exit for investors that had backed JAB as it embarked on a deal spree costing more than $50bn across the consumer sector in recent years, said one of the people.

To fuel its expansion, JAB has raised about €12bn since 2012 from university endowments, sovereign wealth funds and rich families, with coffee acquisitions the main focus. US consumer goods group Mondelez will also have the option to sell down its 26 per cent stake in JDE Peet’s, which it received through the merger of its European coffee business with JAB’s Douwe Egberts brands in 2015.

Bar chart of Market share, 2019 (%) showing Largest coffee companies worldwide A listing will be an important test for JAB, which was created to manage the wealth of Germany’s billionaire Reimann family, as it seeks to prove that it can be a successful operator of businesses

roasted coffee beans and capsules under brand names including Tassimo, Senseo, and L’Or but a small part of its sales come from preparing hot drinks for customers in Peet’s coffee shops in the US. JDE Peet’s also owns upmarket speciality US coffee shops such as Intelligentsia Coffee & Tea, as well as Stumptown Coffee Roasters.

Annual profit has not been disclosed, nor the estimated valuation that JDE Peet’s is seeking from the listing.

Although coffee bean prices paid to farmers remain depressed because of oversupply, business is booming for companies that roast and package coffee.

As a result, the still-fragmented sector has been consolidating, with Nestlé seeking to maintain its leadership position and relative newcomers such as JAB and Coca-Cola, which bought the UK’s Costa Coffee last year, striking deals to catch up.

In addition to JDE Peet’s, JAB’s coffee portfolio includes a 67 per cent stake in Keurig Dr Pepper, which sells packaged coffee and capsules for Keurig-branded machines. www.businessday.ng

Time to make some money: the business career of Rudy Giuliani

Even before his role in the Trump impeachment drama, the former mayor had become another ex-politician earning a living JOSHUA CHAFFIN

I

t was January 2002, and Rudy Giuliani had just left City Hall after two terms as New York’s mayor.

He was an American hero and a global celebrity, saluted even by the Queen, for his resolute response to the September 11 terror attacks.

Time Magazine’s “Man of the Year” for 2001 seemed destined for the White House.

But Mr Giuliani had a weak point: his bank account was constrained by a career in public service and a costly divorce. It was time to make some money.

Mr Giuliani did so with zest. He opened a consultancy, Giuliani Partners, that attempted to spin cash from his reputation as the ultimate crisis manager and turnround expert — the executive who not only stabilised New York City after the attacks but had also previously managed to tame its crime and clean up its streets.

Giuliani Partners began with a bang, nabbing such clients as Delta Air Lines, Nextel Communications — maker of the mobile phone Mr Giuliani was toting on September 11 — and insurer Aon among others. Over the years its proprietor would become involved in a dizzying array of moneymaking ventures, from restructurings and real estate to a Texas law firm and Japanese consultancy.

Yet even in the early days of Mr Giuliani’s private sector career there were signs of the same tendencies that would eventually entangle him in a web of business and political intrigue in Ukraine and place him at the centre of an impeachment process that now threatens the Trump presidency.

Alongside respected clients, Giuliani Partners also advised penny-stock outfits that seemed like strange prospects for a consultancy that billed itself as a smaller McKinsey. He may have been driven by bulging expenses.

A mayor once known as a “slice of pizza kind of guy,” as his one-time communications director, Ken Frydman, put it, had monthly expenses by 2018 of about $232,000, according to a court hearing related to his third divorce. Among other extravagances, these included the cost of six homes — two in Palm Beach — 11 country club memberships and a high-end cigar habit.

As Mr Giuliani’s celebrity began to fade at home he was forced to look elsewhere for opportunities, associates say. “He was casting his net further and further from shore,” says a person who worked with Mr

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Giuliani. “The calibre of people who were reaching out became more and more questionable. At one point, you had the chief executive of Delta calling. Fifteen years later, you had Igor Fruman.”

Mr Fruman is one of the two south Florida businessmen indicted in October for allegedly funnelling foreign money into campaign groups aligned with Mr Trump. Before their arrests, Mr Fruman, who owned a bar in Odessa called Mafia Rave, and Lev Parnas became close associates of Mr Giuliani — both hiring him to further their business ventures and serving him in his mission to dig up dirt in Ukraine on one of Mr Trump’s political rivals, former vice-president Joseph Biden.

It is the latter mission that is at the heart of the impeachment case against Mr Trump, whom Democrats accuse of abusing power by withholding desperately needed military aid from Kyiv unless it announced an investigation into Mr Biden’s son, Hunter, and his ties to a Ukrainian energy company.

Mr Giuliani, famed for taking on the New York mafia, is himself now under investigation, according to several reports, with federal prosecutors from the Southern District of New York — the office he once led — scrutinising his past business dealings. Mr Giuliani has denied any wrongdoing.

The taint of scandal is a world away from the acclaim showered on Mr Giuliani after September 11.

The adulation was such that people would stand to applaud when he entered a restaurant. He struggled to walk through airports, say former aides, because so many adoring fans would stop him to pay tribute.

Giuliani Partners hung out its shingle in a wood-panelled office near Times Square that was tasteful if unremarkable. Mr Giuliani brought along a cast of loyalists from City Hall, including former city lawyer Michael Hess, police commissioner Bernard Kerik and aide Anthony Carbonetti, among others.

“They had done some amazing things for redeveloping things in New York. I was intrigued with how to use those skills again,” Steven Oesterle, a former Ernst & Young vice-chairman who advised Mr Giuliani on his post-mayoral career and took a senior role with him, told a Michigan newspaper in 2007.

A former aide was more succinct. “The business was Rudy,” this person says, recalling how even powerful chief executives were awestruck to be in Mr Giuliani’s company. “People were throwing money at him.”

The security arm was its anchor, @Businessdayng

given Mr Giuliani’s early fame for using computers and statistics to better target New York City’s crimefighting efforts, and his embrace of the “broken window” theory of aggressively policing small crimes to prevent larger ones.

One early assignment was a $4m contract, paid by business leaders in Mexico City, to help tackle crime there. Mr Giuliani made 146 recommendations, all of which were accepted by Mexican officials. Yet they had little immediate impact.

“The improvement in overall crime in 2003 was marginal and in some cases actually went up,” says Facundo Rosas, an official at the attorney-general’s office who dealt with Mr Giuliani, and called his diagnosis “a bit generic.”

The results might have been better, Mr Rosas allowed, if the measures had been applied over a longer period.

Giuliani Partners would also train security services in Qatar and consult on safety issues for a nuclear plant seeking to have its licence extended in New York. At the time, a spokesman for Entergy, the plant owner, explained Mr Giuliani’s unique stature to the Wall Street Journal: “All you’ve got to do is look at the polls: if he says the plant is safe, people are going to believe him.”

Mr Giuliani had done only a few stints in private practice as a lawyer in between his terms as a prosecutor and then mayor. Still, a person who worked at Giuliani Partners in those days described the boss as taking eagerly to the private sector.

“He likes solving big problems,” the person recalls. “He approached Giuliani Partners the way he approached running New York City.

It was that Rudy.”

But Mr Giuliani’s very first business engagement has since come back to haunt him, and indicates how his considerable reputation could be put to questionable use.

Purdue Pharma turned to him in 2002 when federal prosecutors were beginning to connect a growing opioid epidemic to its sales of OxyContin, the powerful and addictive pain medication.

During a speech to public relations executives, Robin Hogen, the Purdue executive then trying to counter a blitz of bad publicity, explained that the company concluded it needed to think politically — not scientifically — to defend OxyContin.

“We certainly need a spokesperson that has the reputation and integrity Mr Giuliani has for this issue,” Mr Hogen told the New York Post at the time.

52

Wednesday 18 December 2019

BUSINESS DAY

POLITICS & POLICY

Reps reject six-year single tenure for president, governors, legislators James Kwen, Abuja

T

he House of Representatives on Tuesday rejected a Bill for an Act to alter the Constitution of the Federal Republic of Nigeria (1999) to provide for a Single Term of six years for the president and governors.

The Bill, sponsored by John Dyegh (APC, Benue) also proposed a six-year term for members of the National Assembly and States Houses of Assembly.

During debate on the general principles of the Bill, it received divergent arguments for and against, and when eventually put to voice vote, by the Deputy Speaker, Idris Wase who presided over the plenary, it was loudly voted against.

In a lead debate, Dyegh argued that the need for the amendment Act was against the backdrop that, a single term especially for federal and state lawmakers will

allow them to have more experience instead of being rejected or reelected every four years.

He said the six-year single term will equally help the president or governor to be more focused, more dedicated and the usual do or die battles for reelections will be eliminated while no lives will be lost and money will be saved.

“Hon. Speaker, Hon. Colleagues, you will agree with me that the present four years + four years tenures of 8 years is not helping matters, it is taking us backwards. Practically speaking, the occupier of the seat spends only two years in the 1st tenure and the remaining two fighting for reelection which in Nigeria is many times more expensive than the first election and mostly dependent on lean resources of the state allegedly.

“In the second tenure he spends two and half years working on the remaining 1½ years preparing his exit/ soft landing and installation

Idris Wase

of a successor. So the total times spent for actual work for the state is not more than 4½ years of the 8 years.

“Speaker, Hon. Colleagues, if we must deepen our democracy, we must reduce ‘wars’ that occur during reelection of Presidents and Governors by supporting a

single term of 6 years.

“Amending the constitution to provide for a six year consecutive term for the Legislature (State and National Legislature) is a progressive idea and should well be considered by this Honourable House.

“The high turn-over of leg-

islators in our Nation Constitutes loss of experience and institutional knowledge, not deepening democracy and failure of entrenching loyalty to the electorate. This is as opposed to the Civil Service practice where a fresh graduate rises through the ranks using over 30years to become a Director or Permanent Secretary and sets as a custodian/ bundle of knowledge of all that pertains to the service”, Dyegh affirmed.

Sergius Ogun (PDP, Edo) supported the Bill as according to him, the proposal will help in addressing the energy and resources being channelled to retain power at all costs by elected representatives, which he said sometimes begin immediately after the elections.

However, Gagdi Yusuf (APC, Plateau), opposed the Bill as he said bringing the Bill at this time will add to the already existing apprehension about 2023 which he said will portray the 9th Assembly as planning to make laws that

will extend their tenure.

Gagdi argued that the present four years term for President and Governors should be retained warning that tampering with the present arrangement will have negative consequences.

Also, Haruna Dederi (APC, Kano) opposed the Bill hence, bringing the Bill will heighten the speculations that, the 9th assembly is planning with the executive to extend the tenure of the president and governors.

On his part, Acting House Leader, Peter Akpatason said, the President had made it clear that, he is not interested in any tenure elongation and will not condone or support any move in that regard.

The sponsor of the Bill emphasised that he was not advocating for tenure elongation for the President or anybody as the Bill was for the 2023 general election to help reduce the desperation involved in the four-year periodic elections and its attendant losses.

Crisis looms as sacked Oyo LG chairmen, councillors threaten to resume today

APC refutes rumour over Ken Nnamani’s alleged plan to return to PDP

…as Makinde appoints caretakers for LGs, sole administrators for LCDAs

E

REMI FEYISIPO, Ibadan

T

he sacked local government chairmen and councilors on Tuesday vowed to resume at their duty posts in all the Local Government and Local Government Development Secretariats on Wednesday (today).

Governor Seyi Makinde had last week forwarded the names of caretakers for local government areas and sole administrators for Local Council Development Areas (LCDAs) to the State House of Assembly.

The House is presently screening the nominees and they are likely to resume any moment from now.

But Ayodeji Abass-Aleshinloye, chairman, Association of Local Government of Nigeria (ALGON), Oyo State Chapter, in a statement said: “In line with our resolution to defend democracy and the mandate freely and fairly given to us by the electorate, all chairmen and councillors are hereby directed to resume tomorrow, Wednesday, 17th December, 2019. We shall resume and defend democracy and rule of law peacefully”.

According to him, “We advise the Local government employees, including HLAs,

DAGs, DFAs, and other Council employees not to allow the illegal caretaker appointees or the state government to implicate them in the illegal administration and operations plotted for our local councils.

“We urge you not to allow yourselves to be used by these political usurpers to spend by proxy, statutory funds of councils which our laws and the Nigerian Financial Intelligence Unit (NFIU) have forbidden caretakers from accessing”.

“A Monitoring Committee will be on ground to enhance coordination and effective engagement for the next one month,” the statement added.

Aleshinloye said despite assurance less than 72hours ago, that he would not disobey Supreme Court judgement on the illegality in Nigeria of any Caretaker Committee, a contraption unknown to law, Governor Makinde has finally eaten his words and dignity to breach the constitution and flouted the judgments of the highest court in the land by setting up Caretaker Committees and Sole Administrators in all the local government councils and council development areas in the state.

“It is now clear that Governor Seyi Makinde, the Oyo State House of Assembly and the Attorney General of Oyo state, Oyelowo Oyewo have www.businessday.ng

declared war on our constitution, and drawn a battle line with the Supreme Court and the Judiciary as a whole by disregarding all the judgments of the Supreme Court, and the Oyo State High Court which declared Caretaker Chairmen over Local Governments an illegality to our Constitution, and forbade the Governor from removing Elected Local Government Chairmen via unconstitutional dissolution of councils.

“In spite of the several judgments of the Supreme Court in two recently decided cases declaring Caretaker Chairmen illegal and barred such action, despite the judgment of Justice A.A. Aderemi of the Oyo State High Court restraining the removal of Elected Local Government Chairmen, injunction perpetually restraining the Governor of Oyo State from appointing Caretaker Chairmen over local governments in Oyo State and voiding the unconstitutional practice in the state, the Oyo State House of Assembly on Monday at a secret session held 6pm at the House chamber hurriedly conducted the screening of 68 nominees forwarded by the Governor to the House for appointment as Caretaker Chairmen over the LGs and LCDAs in Oyo state”.

Regis Anukwuoji, Enugu

nugu State Chapter of the All Progressives Congress (APC) has dismissed as rumours the allegation that a former Senate President, Ken Nnamani had concluded plans to return to the People’s Democratic Party (PDP).

APC said there was no iota of truth in the speculation making the rounds, and that those spreading the rumours were mischief makers.

Recall that an online media had recently exclusively reported that the former Senate boss and APC chieftain was making plans to return to his former party.

Reacting to the report, Ben Nwoye, chairman of APC in

Enugu State, said those behind the rumour hated APC and restated that it was a falsehood.

He described the former President of the Senate as a patriotic Nigerian, pointing out that the former number three citizen worked hard for the re-election of President Muhammadu Buhari in the last general election.

He recalled that when the former Senate President joined the party, he spoke to the press and wondered why people were speculating that he was defecting.

The Enugu APC chairman further recalled that Nnamani was in charge of the Buhari Campaign in the entire South in the last general election and played a useful role that helped the party to succeed

in the south.

He appealed to people to show some respect to leaders before they make any statement that would tarnish their image.

Nwoye further advised people to consider the political interest of the South and the overall interest of the country as a whole before spreading falsehood.

He insisted that politics is not driven by falsehood and character assassination, adding that Nnamani has the capacity to communicate to the public about his political position.

“He has remained an active and valuable member of the APC and his reasoned opinion is highly valuable to the APC both at the regional and national levels,” he said.

BMO commends early passage, signing of 2020 Budget

A

group, Buhari Media Organisation (BMO) has commended the quick passage of the 2020 Budget proposals by the National Assembly and subsequent assent by President Muhammadu Buhari on 17 December 2019, saying it is an indication of the progressive leadership evolving under the present administration.

The group recalled that since the return of civil rule in 1999, “Nigeria’s budgetary cycle has remained problematic, disconnected and in most

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cases militated against the development of the country.

In fact, the 2019 Budget was passed in April 2019.”

In a statement signed by its Chairman, Niyi Akinsiju and Secretary, Cassidy Madueke, the BMO said that President Buhari’s desire that Nigeria returns to the January-December budget cycle has spurred the National Assembly into action as members speedily passed the budget on schedule.

“This positive development will bring about a lot of gain for the country, both within @Businessdayng

and outside, as even development partners will easily align their projects, plans and programmes with our new budget cycle.

“The passage of N10.59 trillion by the National Ass embly re corde d ab out N263.946billion addition by the National Assembly. It is worthy of note also that based on the importance the Federal Government attaches to education in the country, the education sector was allocated the second largest budget of N490billion, after Defence.

Wednesday 18 December 2019

BUSINESS DAY

53

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The African farmers taking on big chocolate

Ghana and Ivory Coast want a fairer share of profits from global confectionery industry David Pilling

I

n a little clearing in a Ghanaian forest, not far from where grapefruit-sized cocoa pods hang heavily from the trees, 67-year-old Yaa Asantewaa breaks into song.

Dressed in a threadbare skirt and purple T-shirt, she dances to her uplifting lyrics: “If you want to buy fine cloth — it is cocoa. If you want a meaningful life — it is cocoa.”

Farmers have been singing variations of this song — about how planting cocoa will make you rich — for decades in Ghana, the world’s largest producer after neighbouring Ivory Coast. In the first decades of the 20th century, smallholders in west Africa rushed into cocoa farming as if it were the new gold.

Today, between them, Ghana and Ivory Coast produce nearly two-thirds of the global supply of cocoa, the main ingredient in a chocolate industry worth more than $100bn a year in sales. On Christmas Eve, nearly all the chocolate treats hidden inside stockings by the tree will almost certainly contain cocoa from one of those countries.

But Ms Asantewaa knows only too well that the words to her song are fanciful. Cocoa has not made her rich.

Like most of the 2m cocoa farmers in west Africa, she is a smallholder — and extremely poor. She owns a tiny forest plot from which she harvests just four bags of cocoa beans a year. For that, at last year’s prices, she would have earned about £300. The mud houses in her village of Wawase in southern Ghana have no electricity or running water.

The penury of many farmers at the bottom of the chocolate industry’s multibillion-dollar pyramid reflects a much broader issue: why is it so difficult for poor countries to break out of poverty by extracting higher prices for their raw materials and controlling more valuable areas of the supply chain?

Ghana supplies about one-fifth of all cocoa beans, for which it earns about $2bn a year, less than one-fiftieth of the value of the chocolate that is manufactured, branded and sold. Nana AkufoAddo, Ghana’s president, says his country is locked in a colonialstyle relationship with the world’s chocolate manufacturers in which it provides raw materials only to import finished goods.

“Chocolate is a $100bn industry and we who produce 65 per cent of the raw material make less than $6bn from the sweat and toil of our farmers,” he says, referring to the combined sales of Ghana and Ivory Coast. What prevented these two countries, he asks, from earning more by turning beans into cocoa liquor and cocoa butter or even manufacturing finished chocolate bars?

In practice, both Ghana and Ivory coast, which have high electricity costs and where little choco-

Workers at an agricultural co-operative break cocoa pods in southern Ivory Coast © Issouf Sanogo/AFP/Getty

late is eaten, have found it hard to wrest a greater share of profits from an industry that keeps most of the added value near the western consumer markets it serves.

The chocolate industry has been accused of more than keeping its adult farmers in poverty. As long ago as 2001, chocolate makers, including Mars, Nestlé and Hershey, signed an agreement to eliminate child labour from their supply chains in Ghana and Ivory Coast where the problem is most acute.

Yet in 2015, the US labour department found that the number of children working on cocoa farms — some carrying out dangerous tasks such as spraying pesticide, lugging heavy sacks or wielding machetes — had actually gone up to 2.1m. The industry has since signed up to a less ambitious target of reducing child labour by 70 per cent by next year. Most observers think it will fail.

As if that were not enough, cocoa farming has also been linked to rampant deforestation, particularly in Ivory Coast. Its cocoa production has nearly doubled to 2m tonnes over the past decade as farmers clear new forest land.

After years of talk, African governments have decided to act to improve their leverage in the chocolate industry. In July, Ghana and Ivory Coast unilaterally announced a fixed premium of $400 a tonne over the benchmark futures price from October 2020.

“If you look at Opec, they are only controlling about 30 to 40 per cent of the global oil supply and they control prices,” says Mahamudu Bawumia, Ghana’s vice-president, referring to the oil cartel. “If they have Opec, we can have Copec.”

The determination of producer countries to squeeze more value from chocolate might appear to be putting them on a collision course with industry. Business logic suggests that manufacturers, such as

Nestlé and Ferrero, and trading houses, including Cargill and Olam, are not keen to pay more for ingredients.

Yet, in many ways, the rhetoric coming from Africa chimes with that of the chocolate industry itself.

“We are a food business, so it is absolutely critical that our supply chains are sustainable,” says Victoria Mars, a fourth-generation member of the family and former chairwoman of Mars. “If we don’t have the raw materials, we can’t make our products.”

A combination of self-interest and reputational risk is forcing manufacturers to clean up supply chains that are linked to grinding poverty, child labour and environmental degradation. Some, including Barry Callebaut, a Switzerland-based chocolate maker that is the world’s biggest cocoa buyer, have cautiously welcomed the $400 premium.

Consumers are increasingly interested in the sourcing of their products and under what conditions they are produced. Nongovernmental organisations have ratcheted up the pressure on manufacturers by exposing the darker side of chocolate and most of the big chocolate makers have responded with bold-sounding initiatives.

Mars has committed to spending $1bn over 10 years on its “Cocoa for Generations” programme that, it says, will fundamentally overhaul a supply chain it admits is broken. Barry Callebaut has launched a “Forever Chocolate” initiative, which aims to hit four audited targets by 2025: lift 500,000 farmers out of poverty, reduce child labour to zero, become carbon- and forest-positive, and have fully sustainable ingredients.

Companies say these efforts represent a step-change in their thinking. “It’s getting away from old-fashioned corporate social

responsibility and creating real impact,” says Nicko Debenham, Barry Callebaut’s head of sustainability, who criticises what he regards as the piecemeal certification programmes such as Fairtrade and Rainforest Alliance.

“We can’t just hit replay on what we’ve done and what other people have done. To create impact, we’ve got to do this at scale.”

As well as protecting their reputations, chocolate makers worry that their supply of cocoa could dry up if farmers are destitute. “If our farmers are not able to thrive, if they are not able to make a decent living, if they are not able to educate their children, then they are not going to stay farmers,” says Ms Mars. “We all have to work this out together.”

With industry and producer countries now purportedly on the same side, surely something can be done to improve cocoa-farming conditions that some compare to modern slavery?

Mr Debenham has been banging his head against the problem for years. Since 2016, he has been overseeing Barry Callebaut’s “Forever Chocolate” initiative.

He describes it as the industry’s best effort yet to tackle structural problems that, he says, can only be solved by co-operation between governments in producer and consumer countries as well as NGOs and the industry.

“Everybody has to play their role, not just by telling industry we’re going to ban you, we’re going to punish you, we’re going to beat you,” he says.

Barry Callebaut, he says, is rolling out a combination of initiatives that can be carried out at scale. In Ghana, it has bought a licensed buying company, Nyonkopa, to get around a ban on foreign firms purchasing cocoa directly from farmers, allowing it to distribute seedlings, shade trees and yieldenhancing advice to smallholders.

India emerging markets treemap After decades in which inherited plots have been split between children, farm sizes are simply too small, says Mr Debenham. “It’s not an acceptable living. It’s below the poverty line,” he says, adding that, in the long run, the answer is bigger farms and fewer farmers.

If the overarching goal is alleviating poverty, defined by the World Bank as living on less than $1.90 a day adjusted for prices, Mr Debenham has concluded that the key is diversification away from chocolate. Raising yields, say experts, is not the whole solution since, if too many farmers are successful, aggregate output will rise and prices inevitably fall. In 2017, cocoa prices tumbled by nearly 40 per cent, a disaster for farmers blamed partly on surging production in Ivory Coast.

Instead, Barry Callebaut has collected data from 230,000 cocoa farmers and is offering tailor-made business plans to help them increase income by growing vegetables, making soap, selling honey or keeping livestock. One option is to raise hens whose eggs provide both protein and cash. Eggs sell for half a cedi each, or around $2.65 for a crate of 30.

John Afful, a 43-year-old cocoa farmer in Ghana’s southern Ashanti region, says. “Before I had poultry, things were tough. It was even hard to send my kids to school.” Asked what ambitions he has for his five children, Mr Afful replies definitively: “I don’t want them to be cocoa farmers.”

Barry Callebaut has also signed up to so-called Scope 3 carbon targets which means not only being carbon neutral in its energy and supply-chain footprint, but also accounting for historical land use changes. By 2025, it has pledged that none of its cocoa will come from farms that were converted from forest after 2005, a claim backed up through laborious farm-boundary surveys and satellite imagery. It has organised child protection committees to report violations on about one-quarter of its cocoa farms.

According to PwC, which audits the programme, these actions are having some impact. Barry Callebaut has nudged 185,000 farmers above the $1.90 poverty threshold since 2016 and achieved a 6.7 per cent reduction in emissions in the year to the end of August. There were 3,867 cases of reported child labour in the period, though 2,200 are being dealt with.

Many are sceptical about how effective industry programmes can be in tackling what campaigners consider a structural imbalance in power between huge multinationals and the poor farmers who supply them. “I think it’s bullshit quite frankly,” says Victoria Crandall, who is a Lagos-based former commodities analyst for five years in Ivory Coast.

•Continues online at www.businessday.ng

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